In Geneva, Switzerland, on July 9, 2014, the United States, European Union, China and eleven other countries1 commenced formal negotiations to eliminate tariffs on “environmental goods and related products,” which include a broad range for products including airport passenger bridges, honey, magnets, manholes, pipe fittings, power transformers, pumps, reservoir tanks, solar panels, seamless stainless tubing, valves, wind turbines, among many others.  The Environmental Goods Agreement (EGA) negotiations are intended to remove unnecessary costs—of tariffs as high as 35 percent—of goods and technologies needed to protect the environment.

The first stage of the negotiations will reportedly focus on defining “environmental goods” and tariff reductions.  Nontariff barriers, such as discriminatory standards, regulations  and “clean energy” subsidies, may be addressed in a second stage of negotiations. 

The U.S. International Trade Commission (ITC) is conducting two investigations to assist the U.S. Trade Representative (USTR) in the negotiations.2  While the ITC and USTR conducted public hearings on the environmental goods negotiations in May and June, respectively, USTR Michael Froman ensured that “USTR will continue to consult with {Congress, business, environmental groups, and labor unions} and other stakeholders as the negotiations progress in order to ensure that the EGA is commercially meaningful and environmentally credible, and delivers concrete benefits for the United States.”

Whether your company is focused on the U.S. market or expanding operations abroad, these negotiations and the related investigations could be critical to your business in several ways—some beneficial and some adverse.  The elimination of tariff and non-tariff barriers on environmental goods provides a unique opportunity for U.S. companies to improve their market access and competitiveness in key markets.  On the other hand, these negotiations could lead to increased competition for sensitive domestic products and services in the U.S. market.