The 2008 APEC Ministerial Meeting (AMM) endorsed the Environmental Goods and Services (EGS) Framework for the development by the 2009 Meeting of Ministers Responsible for Trade (MRT) of a concrete EGS work program. Australia and Japan hereby propose that the following project should be endorsed by MAG2 and thus should be added as a part of the EGS work program.

Proposal on Survey of Major Impediments and Market Drivers to the Development of Trade in Goods that are Necessary for Climate Change Mitigation and Adaptation

Workshops conducted in recent years by APEC economies on trade in environmental goods have highlighted the existence of factors likely to impede or retard the expansion of international trade in environmental goods. Impediments may be caused by a range of factors, such as high tariffs, improper handling of customs classification, quotas and import ceilings, insufficient protection of intellectual property rights, impediments concerning investment, and any other regulatory problems etc. If these factors could be properly managed, however, they would contribute to creating more transparent, open and well-functioning markets of environmental goods and thus they could function as market drivers.

We consider that discussions in APEC on trade in goods that are necessary for climate change mitigation and adaptation would benefit from a clearer understanding by all participants by producing a compilation of the information concerning impediments to expanded trade in goods that are necessary for climate change mitigation and adaptation, based on which APEC will have a more sophisticated discussion on how APEC members can properly design and manage their policies relating to environmental goods in a way that such impediments could be reduced and that such policies could rather perform as market drivers in the future time. Australia and Japan propose that the APEC should compile the information concerning impediments to expanded trade and consider policy options to achieve well-functioning markets of goods that are necessary for climate change mitigation and adaptation in the following manner.

1. MAG will adopt this proposal at MAG 2 on May 20 2009, which would be incorporated as part of the APEC EGS work program.
2. APEC EGS work program is to be adopted by the MRT in July 2009.
3. MAG will adopt TILF budget proposal for this project at MAG 3 in July 2009.
4. Assuming that this project will be endorsed for funding, Australia, Japan and other proponents are to select a consultant to conduct this survey in October 2009.
5. Once a consultant has been selected, MAG will request Member economies to submit their views on the existence of systemic impediments to goods that are necessary for climate change mitigation and adaptation no later than January 2010. Any identified impediments will not be ascribed to any particular economy. The Member economies will be encouraged to include in their submission the findings of reports prepared by private or academic research institutes.
6. At the same time with 5 above, MAG will request ABAC to provide a commercial perspective on perceived impediments to trade in goods that are necessary for climate change mitigation and adaptation within the region no later than January 2010. (See the note below for information possibly requested from Members and ABAC under 4 and 5.)
7. The consultant will also conduct research and reviews based on existing reports and materials on trade in goods that are necessary for climate change mitigation and adaptation.
8. The consultant will be required to submit a report compiling all the information collected in the processes from 5 to 7 above to MAG. The report, which will be examined by MAG, will then be submitted to CTI and then SOM for consideration as a deliverable to Trade Ministers in 2010.

Note: Members and ABAC would submit contributions on the basis of their own understanding of what might be included in the term "goods that are necessary for climate change mitigation and adaptation". They would be requested to submit information concerning impediments to expanded trade in such goods respectively with which they are concerned, such as high tariffs, improper handling of customs classification, quotas and import ceilings, insufficient protection of intellectual property rights, impediments concerning investment, and any other regulatory problems, etc. The entire study, including the submission by Members, shall not do anything to the prejudice of the submitting Members with regard to their position on the definition of environmental goods and any other relevant issues related to environmental goods.