Abstract
Environmental services is one of the salient topics in the services negotiations which are taking place in the World Trade Organization (WTO), under the aegis of the Doha Development Agenda (DDA). The importance attached to this sector contrasts with its quasi inexistence during the first multilateral negotiations on trade in services, which took place in the context of the Uruguay Round (1986–1994). Various reasons can explain the sharper profile acquired by this sector.
Views and opinions expressed in this paper are personal and cannot be attributed to WTO Members or the WTO Secretariat.
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Notes
- 1.
Note that, in the WTO, cross-border trade in waste for the purpose of recycling is a goods issue, and, hence, falls under the GATT and other Annex IA agreements. Similarly, it is considered that recycling amounts to the production of goods, and not to the supply of a service. Consequently, recycling does not fall under the GATS.
- 2.
World Bank, Reforming Infrastructure – Privatization, Regulation and Competition, 2004, p. 42.
- 3.
United States International Trade Commission, Solid and Hazardous Waste Services: An Examination of U.S. and Foreign Markets, USITC Publication 3679, 2004.
- 4.
UNCTAD, World Investment Report – Transnational Corporations and the Infrastructure Challenge, 2008, pp. 112, 115; United States International Trade Commission, Solid and Hazardous Waste Services: An Examination of U.S. and Foreign Markets, USITC Publication 3679, 2004, p. I-4.
- 5.
For a more detailed description, see Geloso Grosso, Regulatory Principles for Environmental Services and the General Agreement on Trade in Services, Issue Paper No. 6, ICTSD, 2007.
- 6.
United States International Trade Commission, Solid and Hazardous Waste Services: An Examination of U.S. and Foreign Markets, USITC Publication 3679, 2004, p. 8–11.
- 7.
UNCTAD, World Investment Report – Transnational Corporations and the Infrastructure Challenge, 2008.
- 8.
Butkeviciene, GATS Negotiations and Issues for Consideration in the Area of Environmental Services from a Development Perspective, UNCTAD/UNEP, 2002.
- 9.
Sawhney/Chanda, Trade in Environmental Services: Opportunities and Constraints, WTO Research Paper Series No. 3, Indian Council for Research on International Economic Relation (ICRIER), 2004.
- 10.
The GATT, which entered into force in 1947, provides a framework for international trade in goods. It is now under the umbrella of the WTO Agreement.
- 11.
With the only exception of the air transport sector which Members have explicitly excluded from the scope of the GATS.
- 12.
For more details on this issue, see Cossy, Water Services at the WTO, in: Weiss/Boisson de Chazournes/Bernasconi-Osterwalder (eds.), Fresh Water and International Economic Law, 2005.
- 13.
This is no longer true, however, for Members which have acceded to the WTO over the last 10 years and which have undertaken an overall – much – higher level of specific commitments than Members having negotiated their commitments during the Uruguay Round.
- 14.
Services Sectoral Classification List, Note by the Secretariat, MTN.GNG/W/120, 10 July 1991 (hereinafter “W/120”).
- 15.
See Guidelines for the Scheduling of Specific Commitments under the General Agreement on Trade in Services (GATS), adopted by the Council for Trade in Services on 23 March 2001, S/L/92.
- 16.
See Appendix 1 for the complete CPC definitions of environmental services.
- 17.
The scattering of environment-related activities across various sectors is a consequence of the “slicing up” inherent to any classification system requiring that activities be listed in a mutually exclusive manner. The same problem arises in other sectors (telecommunications, transport, etc.). The perfect classification system remains an illusion. It seems indeed virtually impossible to design a detailed classification system capable of describing in details each major sector, without overlapping. “Classifying” services necessarily entails arbitrary decisions as to where to draw the line between various activities. The very concept of “major sector” results from an arbitrary choice.
- 18.
Written proposals on environmental services were tabled by the United States (S/CSS/W/25), the European Communities (S/CSS/W/38), Switzerland (S/CSS/W/76), Australia (S/CSS/W/112), Colombia (S/CSS/W/121), and Cuba (S/CSS/W/144).
- 19.
On the issue of water services, see Cossy, Water Services at the WTO, in: Weiss/Boisson de Chazournes/Bernasconi-Osterwalder (eds.), Fresh Water and International Economic Law, 2005.
- 20.
However, whenever a Member includes, by cross-reference, a CPC definition into its schedule, it is bound by this definition.
- 21.
See Nartova, Assessment of GATS’s Impact on Climate Change Mitigation, in: Cottier/Nartova/Bigdeli (eds.), International Trade Regulation and the Mitigation of Climate Change, 2009.
- 22.
Hassan/Scholes/Ash (eds.), Millennium Ecosystem Assessment, Ecosystems and Human Well-Being, (Vol. 1), 2005, p. 27.
- 23.
“Whether or not climate-related and some other ecosystem services can be considered environmental services and potentially benefit from preferential treatment in trade is a question for the future”, cit. Vikhlyaev, Environmental goods and services: Defining negotiations or negotiating definitions?, JWT 38 (2004) 1, pp. 93–122.
- 24.
See for instance, the Transcript of Internet chat with WTO Director-General Pascal Lamy, 18 October 2006, at http://www.wto.org/english/forums_e/chat_e/chat_transcript_oct06_e.doc.
- 25.
GATS Article I:1 and I:2.
- 26.
GATS Article XXVIII:(g) and (j).
- 27.
Transcript of Internet chat with WTO Director-General Pascal Lamy, 18 October 2006, at http://www.wto.org/english/forums_e/chat_e/chat_transcript_oct06_e.doc.
- 28.
This count is based on the EC-12 schedule of commitments, which is the schedule still in force at the time of writing this contribution.
- 29.
The number of commitments is as follows: Sewage services (49); Refuse Disposal Services (48); Sanitation and Similar Services (49); Other (49). Hence, the total number of commitments amounts to 195. No Member has undertaken commitments on water distribution services.
- 30.
For instance, in the tourism sector, which also consists of 4 sub-sectors, 133 Members have commitments, for a total number of 327 commitments.
- 31.
Of course, limitations listed in the horizontal part of schedules apply to commitments in environmental services (such as restrictions on foreign equity, land ownership, subsidies, etc.).
- 32.
“Unbound” means that no commitment is undertaken for the mode of supply concerned.
- 33.
Incidentally, this contradicts the argument that the current W/120 classification “largely overlooks the provision of environmental services directly to industry”. See OECD, Environmental Goods and Services – The Benefits of Further Global Trade Liberalization, 2001.
- 34.
In a footnote, the EC clarifies that “[p]ublic utilities exist in sectors such as related scientific and technical consulting services, R&D services on social sciences and humanities, technical testing and analysis services, environmental services, health services, transport services and services auxiliary to all modes of transport. Exclusive rights on such services are often granted to private operators, for instance operators with concessions from public authorities, subject to specific service obligations. Given that public utilities often also exist at the sub-central level, detailed and exhaustive sector-specific scheduling is not practical” (GATS/SC/31).
- 35.
Article XIII:1 stipulates that: “Articles II, XVI and XVII shall not apply to laws, regulations or requirements governing the procurement by governmental agencies of services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of services for commercial sale.” Members have been negotiating on possible disciplines for government procurement of services for the last 15 years, but without success so far.
- 36.
They might nevertheless be subject to the disciplines of the plurilateral Agreement on Government Procurement (GPA) for those countries which have signed it. Several Members (Canada; European Communities; Hong Kong, China; Israel; Japan; Korea; Liechtenstein; Norway; Switzerland; and the United States) included sewage services in their list of services covered by the GPA. Except for Hong Kong, China, all of them have also undertaken specific commitments on sewage services under the GATS.
- 37.
For more details on the issue of government procurement and concessions, see Cossy, Water Services at the WTO, in: Weiss/Boisson de Chazournes/Bernasconi-Osterwalder (eds.), Fresh Water and International Economic Law, 2005.
- 38.
WTO, Council for Trade in Services, Communication from Australia, The European Communities, Hong Kong China, Japan, New Zealand, The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Joint report on informal discussion on environmental services in the context of the DDA, TN/S/W/28, 11 February 2005.
- 39.
Ministerial Declaration, adopted on 14 November 2001, WT/MIN(01)/DEC/1.
- 40.
G8 Hokkaido Toyako Summit Leaders Declaration, 8 July 2008, para. 34, at http://www.g8summit.go.jp/eng/index.html.
- 41.
WTO, Synthesis of Submissions on Environmental Goods, Informal Note by the Secretariat, TN/TE/W/63, 17 November 2005.
- 42.
Doha Work Programme, Ministerial Declaration adopted at Hong Kong, December 2005, Annex C.
- 43.
The collective requests are available on the website of the European Services Forum (ESF), at http://www.esf.be/003/009.html.
- 44.
Bilateral requests are confidential documents, exchanged between the Members concerned. They are not notified to the WTO.
- 45.
The requesting Members are: Australia, Canada, EC, Japan, Korea, Norway, Switzerland, Chinese Taipei, and the United States. Moreover, requesting Members are also deemed to be recipients of this request. There is no official list of recipients, but we know that the request was not sent to any least-developed country.
- 46.
WTO, Council for Trade in Services Special Session, Report of the Meeting Held on 15 November and 6 December 2007, Note by the Secretariat, TN/S/M/28, 5 May 2008.
- 47.
The report of the Conference indicates that “[m]any indications of improvements were given across the range of environmental services, including: sewage services; sanitation services; refuse and solid waste disposal services; waste water management services; soil remediation and clean-up; environmental laboratory services; and other services related to air pollution control and noise abatement. In addition to expanding sectoral coverage, several participants were willing to expand the modal scope of their commitments, and to reduce or eliminate restrictions such as joint venture requirements and foreign equity limitations. Several participants expressed aspirations for new commitments on all modes of supply across the range of environmental services. A specific request was made for commitments on advisory services under mode 1.” WTO, Services Signalling Conference, Report by the Chairman of the TNC, JOB(08)/93, 30 July 2008, available at http://docsonline.wto.org/DDFDocuments/t/jobs/ext08/93.doc.
- 48.
WTO, Council for Trade in Services Special Session, Report by the Chairman to the Trade Negotiations Committee, TN/S/20, 11 July 2005.
- 49.
See also Adlung, GATS’ Commitments on Environmental Services: ‘Hover Through the Fog and Filthy Air’?, in: Cottier/Nartova/Bigdeli (eds.), International Trade Regulation and the Mitigation of Climate Change, 2009.
- 50.
The expression “Members involved in the plurilateral services negotiations” presumably refers to the 9 Members which have signed the plurilateral request on environmental services in March 2006 and the 21 Members to which this request was sent. It is somehow regrettable that the proposal limits its ambitions to some 30 Members from the start.
- 51.
WTO Members subject to formula cuts in the non-agriculture market access negotiations include all Members, except least-developed countries, and so-called small- and vulnerable economies (SVEs). Hence, tier two concerns a broader membership than tier one.
- 52.
See Summary of U.S. and EC Proposal for Liberalizing Trade in Environmental Goods and Services in the WTO DDA Negotiations, at http://trade.ec.europa.eu/doclib/docs/2007/november/tradoc_136955.pdf.
- 53.
The Ministerial Declaration on Trade in Information Technology Products (ITA) was concluded at the Singapore Ministerial Meeting, in December 1996, by 29 Members. The number of participants has grown to 70, representing about 97 per cent of world trade in IT products. The ITA provides for participants to completely eliminate tariffs and other duties on all IT products covered by the Agreement. Developing countries have been granted extended periods for some products. Commitments undertaken under the ITA are on an MFN basis, and, thus, benefit to all WTO Member. For more information, see http://www.wto.org/english/tratop_e/inftec_e/itaintro_e.htm.
- 54.
See Council for Trade in Services Special Session, Report of the Meeting Held on 15 November and 6 December 2007, Note by the Secretariat, paras. 279–308.
- 55.
Peter Mandelson, then EU Trade Commissioner, made a reference to the EGSA in October 2008. See Le commerce international au secours de l’environnement, Les Échos, 3 October 2008.
- 56.
Cottier/Baracol-Pinhão, Environmental Goods and Services: The Environmental Area Initiative Approach and Climate Change, in: Cotter/Nartova/Bigdeli (eds.), International Trade Regulation and the Mitigation of Climate Change, 2009.
- 57.
United Nations Conference on Trade and Development, World Investment Report – Transnational Corporations and the Infrastructure Challenge, 2008.
- 58.
The complete CPC is available at http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=9&Lg=1.
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Annex 1
Annex 1
Environmental Services as Defined in the 1991 UN Central Product Classification
DIVISION 94 SEWAGE AND REFUSE DISPOSAL, SANITATION AND OTHER ENVIRONMENTAL PROTECTION SERVICES
940 | Sewage and refuse disposal, sanitation and other environmental protection services | |
9401 | 94010 | Sewage services |
Sewage removal, treatment and disposal services. Equipment used are waste pipes, sewers or drains, cesspools or septic tanks and processes utilized may be dilution, screening and filtering, sedimentation, chemical precipitation, etc.
Exclusions: Collection, purification and distribution services of water are classified in subclass 18000 (Natural water).
Construction, repair and alteration work of sewers are classified in subclass 51330 (Construction work for waterways, harbours, dams and other waterworks).
9402 | 94020 | Refuse disposal services |
Refuse collection and disposal services. Collection services of garbage, trash, rubbish and waste, whether from households or from industrial and commercial establishments, transport services and disposal services by incineration or by other means. Waste reduction services are also included.
Exclusions: Dealing services in wastes or scraps are classified in subclass 62118 (Sales on a fee or contract basis of goods n.e.c.) and 62278 (Wholesale trade services of waste and scrap and materials for recycling).
Research and experimental development services on environmental issues are classified in division 85.
Regulatory administrative services by the government related to environmental issues are classified in subclass 91123 (Administrative housing and community amenity services), 91131 (Administrative agriculture, forestry, fishing and hunting related services) and 91132 (Administrative fuel and energy related services).
9403 | 94030 | Sanitation and similar services |
Other sanitation and similar services including outdoor sweeping services and snow- and ice-clearing services.
Exclusion: Disinfecting and exterminating services for buildings and other non-agricultural structures are classified in subclass 87401.
Pest control services in connection with agriculture are classified in subclass 88110 (Services incidental to agriculture).
9404 | 94040 | Cleaning services of exhaust gases |
Emission monitoring and control services of pollutants into the air, whether from mobile or stationary sources, mostly caused by the burning of fossil fuels. Concentration monitoring, control and reduction services of pollutants in ambient air, especially in urban areas.
9405 | 94050 | Noise abatement services |
Noise pollution monitoring, control and abatement services, e.g. traffic-related noise abatement services in urban areas.
9406 | 94060 | Nature and landscape protection services |
Ecological system protection services, e.g. of lakes, coastlines and coastal waters, dryland, etc., including their respective fauna, flora and habitats. Services consisting in studies on the interrelationship between environment and climate (e.g. greenhouse effect), including natural disaster assessment and abatement services. Landscape protection services not elsewhere classified.
Exclusion: Forest and damage assessment and abatement services are classified in group 881 (Services incidental to agriculture, hunting and forestry).
9409 | 94090 | Other environmental protection services n.e.c. |
Other environmental protection services not elsewhere classified, e.g. acidifying deposition (“acid rain”) monitoring, controlling and damage assessment services.
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Cossy, M. (2011). Environmental Services and the General Agreement on Trade in Services (GATS): Legal Issues and Negotiating Stakes at the WTO. In: Herrmann, C., Terhechte, J. (eds) European Yearbook of International Economic Law 2011. European Yearbook of International Economic Law(), vol 2. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-14432-5_10
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