This report provides an overview of approaches to environmental issues in Regional Trade Agreements and summarises countries’ experience in the negotiation and implementation of relevant provisions. The report was declassified by the JWPTE at its meeting of 5-6 December 2006.

This report explores the connections between trade in environmental services and trade in environmental goods. As the OECD has long argued, many of the goods that it and other organisations have identified as essential for environmental protection and remediation are so important, in fact, because they are used in the provision of environmental services. When discussing the benefits of liberalising trade in environmental goods and services it is salutary to keep this synergy in mind.

Merely asserting that there are synergies is not likely to be convincing, however. This paper is addressed to those involved with, or interested in, the current WTO (DDA ¶31(iii)) negotiations on environmental goods and services, and seeks to help them better understand, in as concrete a fashion as possible, why environmental goods on the OECD and APEC (Asia-Pacific Economic Co-operation1) lists are essential inputs for environmental services.2 It: (i) describes the different environmental services; (ii) highlights the main key environmental goods that are vital for carrying them out; and (iii) shows how trade in particular services stimulates the demand for certain goods.

The final section demonstrates, through real-world examples, why liberalisation of environmental services functions best when trade in the environmental goods they require is also made freer. These examples focus on business-to-business trade in different environmental services, such as between chemical companies or steel plants, which have decided to turn over the management of their wastewater treatment to companies that specialise in that activity. The reasons why businesses choose to do that are many: to focus on their core areas of expertise, to reduce their debt burden, to ensure that the technologies and techniques used to manage their waste streams are the best available. In virtually all the cases examined, some goods used in the provision of the service were imported, but many were procured locally. Indeed, there is tentative evidence suggesting that as the market for environmental services expands in particular countries or regions, so does the number and scope of local suppliers of associated goods.

Summary of OECD efforts to enhance public expenditure in the environmental sector.
The governance of public expenditure in the environmental sector is often weak in the EECCA countries. This has diminished environmental benefits of public spending and rendered many environmental programmes unsatisfactory to Ministries of Finance and foreign donors. Hence, members of the EECCA Environmental Finance Network of the EAP Task Force stand committed to improve transparency, accountability and efficiency of public environmental expenditure programmes.

Briefing on the UNEP-UNCTAD Capacity Building Task Force on Trade, Environment and Development Activities for 2005, Geneva, Switzerland: The Secretariats of the United Nations Conference on Trade and Development (UNCTAD) and United Nations Environment Programme (UNEP) jointly organised a briefing for Geneva based missions, donors, Inter-governmental Organisations (IGOs), Non-governmental Organisations (NGOs) and delegates to the World Trade Organisation (WTO) Committee on Trade and Environment (CTE) to inform them of the activities of the UNEP-UNCTAD Capacity Building Task Force on Trade, Environment and Development (CBTF) and to reflect on the successful cooperation between UNEP and UNCTAD. This briefing was convened on 6 July 2005 during the lunch break of the WTO CTE regular session to facilitate the participation of capital-based delegates in Geneva. The briefing was attended by 120 delegates, including many CTE delegates from the capitals.

Trade Liberalization and Water Services Presentation by D. Drouet. UNCTAD Expert Meeting, 2003.