Submitted by Singapore

AIM

This paper seeks CTI's endorsement on a work programme framework for environmental goods and services (EGS) in APEC.

INTRODUCTION

Under the Committee for Trade and Investment (CTI), many projects have been endorsed and implemented to advance APEC's interest in EGS. These include the 2007 and 2008 EGS Workshops and the 2008 trade in Environmental Services project.  Other than CTI, there is also significant progress in the Energy Working Group (EWG) to promote energy efficient goods and energy standards.

The latest call for work in EGS comes from the APEC Ministers Responsible for Trade (MRT) Ministerial Statement in Arequipa, Peru, where the ministers instructed "officials to elaborate a work program to advance APEC work on environmental goods and services."

EGS WORK PROGRAMME FRAMEWORK

Following the instruction from MRT, an EGS work programme is proposed to advance APEC work on EGS.  Our objectives for developing a framework for the work programme are two-fold:  The underlying main objective is to support the development of the EGS sector in APEC; the secondary objective is to link up the projects related to EGS in separate APEC working groups under a coherent and holistic framework.

This EGS Work Programme framework ("the Framework") uses the basic value-chain of EGS as a framework to holistically address all aspects of EGS.  There are four main components to this Framework: R&D, Supply, Trade and Demand.

• R&D. For both goods and services, this refers to developing new and better EGS through innovation and R&D which address not only trade in EGS but also environment and development (i.e. rural development, job creation and applied technology).  APEC economies can share ideas and best practices on innovation and R&D programmes that spur the development of EGS.
• Supply. For goods, this includes the incorporation of cleaner, more resource and energy efficient technologies. For services, this includes the training of skilled personnel. Both entail a need for more focus and investment in the EGS industry.  APEC economies can explore ways to facilitate investment in EGS and share best practices in developing the EGS industry sector.
• Trade. This component aims to improve trade in EGS through trade facilitation and trade liberalisation.  For the former, APEC MAG (Market Access Group)/GOS (Group on Services) can come up with projects that facilitate trade in EGS. For trade liberalisation, this component adheres to the Doha Para 31(iii) mandate.  Recognising that the negotiations will be done in the WTO, APEC MAG/GOS can come up with ways to support the negotiations in the WTO.
• Demand. An increase in demand will create incentive for the market to increase R&D and investment in EGS. APEC economies can look into sharing best practices in public education on EGS and pro-EGS consumer policies, such as measuring and showing the impact of EGS on the environment.

A diagrammatic form of this Framework is shown in Figure 1.  An improvement in all the components of the Framework will improve the entire EGS sector and naturally lead to greater EGS trade among APEC economies.

FITTING THE EGS WORK PROGRAMME FRAMEWORK WITHIN APEC

The Framework is designed to be multi-discipline and span across the different committee/working group silos.  Projects relating to the 4 components can be identified or proposed to meet the Framework objective.  These projects, once endorsed, will become an integral part of the work programme and can come from MAG, IEG (Investment Experts' Group), GOS, SCSC (Subcommittee on Standards and Conformance), EWG or other APEC groups.

The CTI will be responsible for maintaining and overseeing the Framework.  For non-CTI fora like EWG and ISTWG (Industrial Science and Technology Working Group), progress reports on relevant projects under the Work Programme can be provided to CTI through their respective head Committee for CTI's monitoring purpose.

THE NEXT STEP

If the Framework is adopted, the next step is to operationalise this with projects addressing the four different components. Economies are encouraged to consider existing project proposals, with a view to their early endorsement, and to propose new projects for this purpose.  The attached annex, submitted for CTI's further discussion, serves as a living list of possible EGS projects that are either under discussion or awaiting project proposals.

SUMMARY

The proposed Framework is designed to meet the MRT instruction to advance APEC's interest in EGS.  Instead of just focusing on any single aspect of EGS, the work programme should address every aspect of EGS sector holistically with a clear main objective of promoting the development of the EGS sector in APEC.  The four components of the framework for the work programme, namely R&D, Supply, Trade and Demand, will address the different aspects of the EGS sector value-chain.  To develop the EGS sector, we will need to integrate and evaluate the analysis of each component holistically and strengthen the entire value-chain.