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The construction of the APEC list

The construction of the APEC list. John Deng Deputy Permanent Representative The Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu. Outline. Mandates to construct APEC list - Sectors nominated for EVSL EVSL results APEC environmental goods list Aims Approach

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The construction of the APEC list

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  1. The construction of the APEC list John Deng Deputy Permanent Representative The Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu

  2. Outline • Mandates to construct APEC list - Sectors nominated for EVSL • EVSL results • APEC environmental goods list • Aims • Approach • - Comparison between APEC and OECD lists • Lessons learned from the APEC list

  3. Mandates to construct APEC list • 1995 (Osaka, Japan): Call by Leaders to identify industries for tariff reduction • 1996 (Subic Bay, Philippines): Trade Ministers directed to submit recommendations • 1997 May (Montreal, Canada): Trade Ministers directed to identify candidate sectors for EVSL; Environmental goods proposed as distinct category by 4 economies • 1997 November (Vancouver, Canada): Environmental goods identified as 1st tier fast-track sector

  4. Sectors nominated for EVSL • “A+” (Fast-Track sectors): Environmental goods and services, fish and fish products, forest products, medical equipment and instruments, energy, toys, gems and jewellery, chemicals, and a telecommunications mutual-recognition agreement. (9 sectors) • “A” sectors: Oilseeds and oilseed products, food, rubber, fertilizers, automotive and civil aircraft. (6 sectors)

  5. EVSL results • 1998 June (Kuching and Kuantan, Malaysia): consolidated environmental goods list finalized • 1998 November (Kuala Lumpur, Malaysia): Resultant proposal: a comprehensive package including undertakings on four elements - Tariffs - Services - Non-tariff measures - Economic and technical co-operation (Ecotech) EVSL tariff proposal referred to WTO

  6. APEC environmental goods list • Aims • Approach • Comparison between APEC and OECD lists

  7. Aims of APEC list Obtain more favourable tariff treatment for environmental goods Promote sustainable economic growth

  8. APEC approach Started with nominations Compiled list of goods Experts discussion to determine product coverage and tariff classification

  9. APEC approach • Benefits to include environmental sector in EVSL: Dual benefits being sought - Economic benefits - Environmental benefits • Participation of developing countries

  10. APEC approach • Economic benefits: • Importing members can acquire environmental goods and technologies at lower cost • Both developing and developed exporting countries can enjoy expanded market opportunity

  11. APEC approach • Environmental benefits: • Improving the effectiveness of environmental investment programmes undertaken by business and government • Direct quality of life benefits

  12. APEC approach • 10 categories: • APC = Air Pollution Control • H/E = Heat/Energy Management • M/A= Monitoring/Analysis • N/V = Noise/vibration abatement • ORS = Other Recycling Systems • PWT = Potable Water Treatment • R/C = Remediation/cleanup • S/H = Solid/Hazardous Waste • WWM = Waste Water Management • REP = Renewable Energy Plant

  13. APEC approach • Challenges: • Classification Can product distinctions be practically implemented by customs officials? • Dual use • Parts & Components • WTO legal issues

  14. APEC approach • Classification issues (1) • End-use certificate method was not adopted • Goods designated as environmental on the basis of their PPMs were not included

  15. APEC approach • Classification issues (2): Many HS headings contain more than just environmental goods • Few HS headings are comprised uniquely of goods that could be considered part of the environmental industry • Consideration was based both upon the prevalence and importance of the environmental goods in a given tariff heading • Core environmental products at the 6-digit HS category

  16. APEC approach • Classification issues (3) National HS tariff lines are not uniform below 6-digit level • A product was included with a detailed break-outs in their own tariff schedule • Example: solar cells

  17. APEC approach • Solutions: • Practical approach • Bottom-up • “Ex-out” heading

  18. APEC approach • Other points: • Chemicals excluded • Medical equipment and instruments + energy sectors also excluded, but there are overlaps

  19. Comparison between APEC and OECD lists • Reasons for the lack of overlap: • Some goods on APEC list assigned to different • categories on OECD list • Difference of emphasis • In several cases, APEC list provides greater • specificity

  20. Lessons learned from APEC list 1.EVSL negotiation failed on: - Tariff elements - Forest and Fisheries sectors 2. Broad coverage and sector segmentation of EVSL enabled APEC to focus on environmental goods listing 3. APEC list limited only to goods readily distinguished by customs agents and treated differently for tariff purposes 4. APEC approach is practical

  21. Lessons learned from APEC list • Negotiators may have to consider how to treat goods that have “dual uses”, but if there’s a will to include goods within these categories, there’s usually a way.

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