China, the EU and the US have begun negotiations that could see an end to trade tariffs between a 14-strong group of regional and national governments.
The Environmental Goods Agreement covers 54 products, including PV cells and modules. The annual trade value of these is around US$1 trillion. Negotiations will initially centre on the removal of tariffs and customs duties.
The group also includes Taiwan, Hong Kong, Japan and Singapore, Australia, with South Korea close to agreeing participation. The group officially announced the start on Tuesday at a press conference in Geneva with talks beginning in earnest on Wednesday.
“Over the years the EU has been at a forefront in protecting the environment and fighting against climate change,” said EU Trade Commissioner Karel De Gucht.
“This initiative is an excellent example how trade policy can positively contribute to the global objective of sustainable development, i.e. facilitating access to clean energy and rapid urbanisation process.
“This is equally important for developed and developing countries and we hope that more WTO [World Trade Organization] members will join our ambitious efforts,” said De Gucht, adding that “green trade means also green growth and green jobs for the EU, and our companies who are world leaders in these advanced green technologies".
The countries involved cover most of the major trade disputes in the PV industry with the India the only absentee currently involved in a high-profile dispute. At present, tariffs imposed as part of trade disputes are not up for negotiation but could be included in the future.
“The Obama Administration is advancing a trade policy that reflects our core values and unlocks new economic opportunities for American exporters and families – especially when it comes to fostering exports of Made-in-America environmental goods,” said US trade representative Michael Froman. “By eliminating tariffs on the technologies we all need to protect our environment, we can make environmental goods cheaper and more accessible for everyone, making essential progress toward our environmental protection and trade policy goals.".
The Alliance of the Sustainable Energy Trade Initiative (SETI Alliance) welcomed news of the talks.
“Using trade measures is very disruptive and they have a tendency to stay in the market place for around five years with typically high tariffs. It’s a very violent instrument,” Peter C. Brun, managing director of SETI Alliance told PV Tech.
“The logic behind this [process] is to drive down tension in the sector; it’s been rising and has reached a high-level following a number of trade defence and anti-dumping cases and disputes at the WTO. That’s not what we need. This will make a major contribution to scaling that back.”
“The ambition is to move relatively fast to produce a result by the end of next year,” said Brun with the UN climate change summit in Paris and a biannual WTO ministerial meeting coinciding in 2015 providing extra incentive.