By Lee Anderson, Director of Legislation and Policy for the BlueGreen Alliance.
For the last year and a half, while much of the world has been focused on two of the largest international trade agreements ever proposed—the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP)—the United States has been simultaneously working on an under-the-radar trade agreement with a seemingly benign title, the Environmental Goods Agreement (EGA). Working with 13 other World Trade Organization (WTO) members, the U.S., to hear the U.S. Trade Representative’s office tell it, has simply been negotiating the EGA in order to remove tariffs on hundreds of items deemed to be “environmental goods.”
So, what’s wrong with that, you ask? After all, wouldn’t it be great if environmentally beneficial things like clean energy technologies could be traded around the world as easily as possible? Well, maybe, but first we’d all have to agree what is meant by that innocent sounding term: environmental good. For instance, would you consider a yacht to be an environmental good? How about bulldozers, lasers or, my personal favorite, human blood? All those things, and many, many more items of uncertain relation to the environment are on a lengthy list of goods slated for inclusion in the EGA and, as a result, a removal of tariffs on their trade.
As a part of the negotiation process, the U.S. International Trade Commission (USITC) has been asked to evaluate the probable economic effects of providing duty-free treatment to the various items being proposed for duty-free trade under the EGA.While recognizing that America’s economy depends in large part on our ability to export domestically manufactured goods to markets around the world, we at the BlueGreen Alliance asked USITC, via public comment, to first take a step back and consider what is meant by that term environmental good. After all, how can the economic impacts of trade in a particular good be assessed without understanding the environmental—and human—costs such trade might cause?
While some of the goods on the proposed list are arguably beneficial to the environment, the list has grown to increasingly include a host of goods for which the connection to environmental benefit is at best tangential and, at worst, actively detrimental to the environment. In fact, a recent Transport & Environment study found that 120 items on the list are either potentially environmentally destructive or have no environmental connection.
In order to maintain basic credibility, it is essential that this agreement not be undertaken simply to seek reduced duties for a host of traded goods under the auspices that these goods are “environmental,” inferring that they are—simply by virtue of being included on the list—somehow of environmental benefit. The potential of products being added to the list, absent criteria as to why, significantly erodes the very purpose of such an agreement. Without objective criteria, this just becomes a back door for countries and industries that are giving no commitments on either labor or environmental standards to receive preferential treatment in the U.S. market, making the EGA a cash cow for those merely seeking to achieve hundreds of millions of dollars in duty savings.
The very fact that these products would be transported across oceans would lead to an expansion of greenhouse gas (GHG) emissions. For example, the environmental costs associated with moving dense, bulk materials on the list, materials such as glass cullet, multitudes of scrap metal, and pulp scrap paper, must be acknowledged and accounted for in any economic evaluation of removing trade tariffs purportedly for environmental reasons. Nor does the list begin to account for the GHG emissions associated with making or processing certain products in countries with poor or unenforced environmental standards as compared with the U.S. or other countries with well-developed environmental safeguards.
Here’s another example. U.S. steel producers emit far fewer greenhouse gasses per ton than producers in China, Russia, Brazil, and other foreign countries. Nonetheless, the U.S. is already experiencing the negative environmental impacts of weak environmental regulations in foreign countries. The National Academy of Sciences recently identified unregulated manufacturing in China of goods intended for export to the United States as the source of significant air pollution in the western United States.
Lowering tariff barriers for reasons divorced from environmental criteria would have the perverse effect of further encouraging environmentally irresponsible manufacturing abroad, and increasing rates of global GHG emissions. Failing to account for the economic follow-on effects of such environmentally disastrous practices would only further compound this mistake and undermine the basic credibility of the goals purportedly being pursued through negotiation of the EGA.
While we appreciate the concept being advanced of promoting trade in goods that are truly beneficial to the environment, we call on the Obama administration to first engage with the public to define the term environmental good in a thoughtful, responsible manner. We must be sure the EGA aims to enhance our natural environment, and help to fight climate change—offset against any potential costs to the environment, and to workers and communities. Millions of hard-working American women and men, upon whose livelihoods international trade agreements can have such a profound effect, deserve no less.