Major trade powers pledge free trade in green goods

DAVOS (REUTERS) - The world's biggest trading powers committed on Friday to achieving global free trade in environmental goods, though they gave no timeline for a deal they said would boost the fight against climate change.

A joint statement by the United States, the European Union, China, Japan and several other developed economies said the agreement would take effect once a critical mass of members of the World Trade Organisation participate.

That gets around the WTO's requirement for unanimity on trade deals. The initiative is in line with new WTO chief Roberto Azevedo's drive to break a decade-old deadlock in world trade negotiations by tackling the most promising areas for agreement first.

Last month, the WTO reached its first trade reform agreement at talks in Bali, potentially adding hundreds of billions of dollars to the global economy.

The WTO estimates that the global market in green goods, technologies and services - ranging from solar panels to wind turbines and water recycling plants - at some $1.4 trillion (S$1.79 trillion).

US Trade Representative Michael Froman put the value at US$1 trillion, noting that the signatories of the initiative jointly represented 86 per cent of world trade.

"We announce our commitment to achieve global free trade in environmental goods and pledge to work together, and with other WTO members similarly committed to liberalisation, to begin preparing for negotiations in order to advance this shared goal," the statement said.

"We are convinced that one of the most concrete, immediate contributions that the WTO and its members can make to protect our planet is to seek agreement to eliminate tariffs for goods that we all need to protect our environment and address climate change." But it mentioned no date for an agreement and Froman said:"Ultimately the timetable will be determined by the negotiations themselves." This was just the start of the process and governments now had to consult stakeholders, including the US Congress, before negotiations begin, he said.

Asked whether he hoped to reach a deal in the lifetime of the Obama administration, which leaves office in January 2017, he said: "Yes." Few developing nations were among the signatories with the exception of Costa Rica, which urged others to join the group.

Azevedo did not attend a joint news conference by trade ministers in an apparent sign of the political sensitivities with some WTO members. However, a WTO official said he strongly supported the initiative.