US-EU Trade Proposal is "Old Wine in New Bottles"

BALI, INDONESIA — Oxfam criticized a new trade proposal, likely to be presented this weekend at the WTO negotiations on the sidelines of the UN Conference on Climate Change in Bali, as lacking in development dimensions.

The US and EU have billed their proposal to eliminate tariffs and non-tariff trade barriers on a list of 43 climate-friendly goods as bold and new, but according to Oxfam, it is neither.

“The UN conference on climate change is being used as a pretext to dust off old proposals that haven’t gotten anywhere at the WTO,” said Oxfam spokesperson Barry Coates. “The EU and the US are passing around old wine in new bottles, but developing countries aren’t fooled.”

The list of goods proposed for liberalization includes products relating to wind, solar, and clean coal energy technologies, drawn from a list of in a recent World Bank study. The proposal also seeks to eliminate tariffs on an additional list of 150 environmental goods, as previously submitted by OECD countries in the context of current WTO negotiations, such as all laboratory equipment. The proposal goes further to include very ambitious objectives in services liberalization, calling for a binding of existing levels of market access and national treatment as well as new liberalization on a large number of services.

“Similar proposals have been floated in Doha negotiations by the US and the EU before, but discussion at the technical level in the WTO negotiations has been unable to resolve the difficulties inherent in such a list based on approach,” said Coates. “Liberalization of goods and services in developing countries, including in the environmental sector, has been the modus operandi for the US and the EU in the Doha round, while steadfastly refusing to undertake the reform of their unfair trade practices.”

Many of the products and services on the list are from developed countries and have uses far beyond that of environmental benefit and certainly beyond greenhouse gas reductions. Green technologies developed in rich countries are usually too expensive and not the most appropriate for developing countries. Furthermore, the opening of sectors such as sanitation, as included in this proposal, has often resulted in poor quality of services and little if any improvement in affordable access for poor communities.

“This proposal attempts to perpetuate the perception that the climate change challenge at the WTO can be easily addressed through promoting trade in a select few goods and services,” said Coates. “Any liberalization of environmental goods and services has to be debated within the context of development, be pro-poor, and meet defined objectives for addressing climate change without undermining the policy space of developing countries.”

For these negotiations to deliver an appropriate pro-poor outcome, a broader, more sustainable development dimension must be undertaken, one that is not based solely on trade liberalization, according to Oxfam. This includes ensuring the reflection of the principle of special and differential treatment and less than full reciprocity.

“Ensuring that clean technologies are effectively and sustainably transferred to developing countries—with appropriate policy measures to support adoption, adaptation, research and development, and product innovation—is the way to go,” continued Coates. “But so far, we’ve only had broken promises on finance, broken promises on technology transfers, and overly restrictive intellectual property rights.”