REGIONAL WORKSHOP ON TRADE AND ENVIRONMENT FORASIA AND PACIFIC ECONOMIES

18-19 SEPTEMBER 2017, COLOMBO, SRI LANKA

RAJAN SUDESH RATNA

ECONOMIC AFFAIRS OFFICER

TRADE AND INVESTMENT DIVISION, ESCAP

RATNA@UN.ORG

PRESENTATION STRUCTURE

• DISCUSSIONS

• CONCEPTUAL FRAMEWORK

• ASIA-PACIFIC RTAs

• PROVISIONS IN RTAs

• SOME EVIDENCES

• WAY FORWARD

Rajan Ratna 2

DISCUSSION POINTS

• WHAT IS YOUR EXPERIENCE/OBSERVATION

ABOUT RTA PROVISIONS ON ENVIRONMENT?

• DID YOU LOOK AT LIBERALISATION IN THE

CONTEXT OF ENVIRONMENT OR GENERAL

LIBERALISATION:

• YOUR BILATERAL AGREEMENTS

• ASEAN

• ASEAN +1 AGREEMENTS

• SAARC

• RCEP

• TPP

Rajan Ratna3

RVCS AND GVCS

• MULTILATERAL AND REGIONAL TRADE LIBERALISATION

CAN PROMOTE THE REGIONAL AS WELL AS GLOBAL VALUE

CHAINS, AS THEY HAVE COMMITMENTS TO:

• MARKET ACCESS:

• GOODS

• SERVICES

• INVESTMENTS

• COOPERATION AREAS

• NON-TARIFF MEASURES

• RULES OF ORIGIN IN RTA

• INTRA-INDUSTRY TRADE

Rajan Ratna4

Rajan Ratna 5

Source: WTO website, 24 April 2017, https://www.wto.org/english/tratop_e/region_e/regfac_e.htm

ASIA-PACIFIC RTAS

• AS OF JULY 2016, THERE WERE 260 RTAS IN ASIA-

PACIFIC REGION WHICH ARE EITHER IN FORCE,

SIGNED OR BEING NEGOTIATED.

• GLOBALLY 267 “PHYSICAL” RTAS IN FORCE, AND

169 (63%) ARE FROM AP

• 12 - SIGNED BUT NOT IMPLEMENTED

• 78 - UNDER DIFFERENT STAGES OF NEGOTIATIONS.

Rajan Ratna 6

CUMULATIVE NUMBER OF PTAS (NOTIFIED AND NON-NOTIFIED TO WTO) PUT INTO FORCE BY ASIA-PACIFIC ECONOMIES, 1971-

JULY 2016

Rajan Ratna 7

0

20

40

60

80

100

120

140

160

197

3

197

6

197

7

198

1

198

3

198

9

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

Developing-Developing Developing-Developed Developed-Developed

Source: ESCAP (APTIR 2016) - calculation based on data from APTIAD

CUMULATIVE NUMBER OF PTAS (NOTIFIED AND NON-NOTIFIED TO WTO) PUT INTO FORCE BY ASIA-PACIFIC

ECONOMIES, 1971-JULY 2016

Rajan Ratna 8

0

20

40

60

80

100

120

140

160

197

3

197

6

197

7

198

1

198

3

198

9

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

Within subregion* Within Asia-Pacific Outside Asia-Pacific

Source: ESCAP (APTIR 2016) - calculation based on data from APTIAD

BREAKDOWN OF TRADE AGREEMENTS, BY TYPE AND NUMBER OF PARTNERS

Rajan Ratna

9

Source: ESCAP (APTIR 2016) - calculation based on data from APTIAD

TPP

SAFTA/SATIS

EU

Jordan

United

States

of

America

@

Bloc-to-bloc or bloc-to-country Country-to-country Under negotiation, awaiting ratification

Taiwan, Province

of China

Macao, China

Egypt

*Not all members shown / @Withdrawals: PNG (PACER Plus) ; USA (TPP)/ PTAs not represented: GSTP, D-8 PTA and PTN (in force) and TPS/OIC (under negotiation) / ** Suspended

Georgia

Hong Kong, China

PICTA*

IsraelMauritius

Serbia

MERCOSURArgentina-Brazil–

Paraguay-Uruguay

Trans-Pacific SEP

CISFTA

ECO

Papua New

Guinea@ Fiji

MSG*

Morocco

Mongolia

APTA

China

SACUBotswana

Lesotho

Namibia

South Africa

Swaziland

Ecuador

SPARTECA*/

PACER Plus*

Pakistan

Maldives

Afghanistan

BIMSTEC

Islamic

Republic

of Iran

Republic of

Korea

Colombia

Canada

PeruMexicoChile

Australia New

Zealand

ASEAN

ECONOMIC

COMMUNITY

CEZ

Republic

of Moldova

GUAM

Customs

Union

Armenia

Azerbaijan

Panama

Costa RicaCentral America*

GCC*

Bahrain

Other Turkey’s

PTAs:

• Albania

• Bosnia and

Herzegovina

• Former

Yugoslav

Republic of

Macedonia

• Montenegro

• State of

Palestine

• Syria**

• Tunisia

Other Turkey’s

negotiations or

PTAs awaiting

ratification:

• Cameroon

• Democratic

Republic of

the Congo

• Faroe Islands

• Ghana

• Kosovo

• Lebanon

• Libya

• Seychelles

EAEU

Russian

Federation

Kazakhstan

Kyrgyzstan

Tajikistan

Uzbekistan

EFTA*

Switzerland

Norway

Iceland

RCEPTurkmenistan

CIS

1994

Japan

Ukraine

Negotiations

Japan-China-

Rep. of

Korea

Sri Lanka

BangladeshNepal

Bhutan

India

Turkey

Belarus

Rajan Ratna 10

PRESENT RTAs: ISSUES COVERED

Goods ServicesNon-Tariff

BarriersInvestment

Competition Labour Mobility EnvironmentLabour

standards

Government Procurement

E-commerceIntellectual

Property RightsDispute

Settlement

Customs cooperation/

Trade FacilitationMRAs

Technical Assistance

Areas of cooperation

Rajan Ratna 11

0% 100%

Labour

Accession

Environment

Tariff-rate quotas

Denial of benefits

Government procurement

Domestic regulation

Mutual recognition (services)

Investment

Subsidies

Competition

Balance of payments measures

Export restrictions

Countervailing measures

Sanitary and phytosanitary measures

Anti-dumping measures

Technical regulations, standards, technical barriers to trade

Intellectual property rights

Safeguard measures

Customs-related procedures

Rules of origin

Dispute settlement

Exceptions, general or for security

Rajan Ratna 12

ASIA-PACIFIC RTAS AND ENVIRONMENT PROVISIONS

Rajan Ratna 13

Entry into force Signed and pendingratification

Under negotiation

50

5 2

169

13

78

Nos. having environment related provisions Total agreements

Rajan Ratna 14José-Antonio Monteiro (2016).Typology of environment-related provisions in

regional trade agreements, WTO Working Paper ERSD-2016-13

Rajan Ratna 15

ENVIRONMENT: WHAT IS IN THE ASIA-PACIFIC RTAS

• PREAMBLE

• BINDING COMMITMENTS:

➢MARKET ACCESS IN GOODS AND SERVICES

• DISPUTE RESOLUTION

• COOPERATION

• TECHNICAL ASSISTANCE

• TRANSFER OF TECHNOLOGY

Rajan Ratna 16

ASEAN

• DO YOU FIND EGS IN CEPT OR ATIGA TEXT?

• HAS THE GOODS TARIFF LIBERALISATION

PROGRAMME DEALT THE ENVIRONMENTAL

GOODS THROUGH A SEPARATE MODALITY?

• HOW DID ASEAN BRING THE EGS ON

AGENDA?

Rajan Ratna 17

ATIGA

▪ ATIGA TEXT DOES NOT HAVE A WORD ‘SUSTAINABLE’.

▪ THE WORD ‘ENVIRONMENT’ ONLY APPEARS ONCE AT ARTICLE 45:

WORK PROGRAMME ON TRADE FACILITATION AND ITS OBJECTIVES

“MEMBER STATES SHALL DEVELOP AND IMPLEMENT A COMPREHENSIVE

ASEAN TRADE FACILITATION WORK PROGRAMME, WHICH SETS OUT ALL

CONCRETE ACTIONS AND MEASURES WITH CLEAR TARGETS AND TIMELINES

OF IMPLEMENTATION NECESSARY FOR CREATING A CONSISTENT,

TRANSPARENT, AND PREDICTABLE ENVIRONMENT FOR INTERNATIONAL

TRADE TRANSACTIONS THAT INCREASES TRADING OPPORTUNITIES AND HELP

BUSINESSES, INCLUDING SMALL AND MEDIUM SIZED ENTERPRISES (SMES), TO

SAVE TIME AND REDUCE COSTS.”

Rajan Ratna 18

AEC & SAFTA

• ASEAN ECONOMIC COMMUNITY 2025 CONSOLIDATED

STRATEGIC ACTION PLAN ENDORSED BY THE AEM AND AEC

COUNCIL ON 6 FEBRUARY 2017 HAS MANY PROVISIONS

RELATING TO ‘ENVIRONMENT’ BUT NOTHING ON EGS.

• HOWEVER, THERE ARE MANY PROVISIONS WHICH CAN BE

INDIRECTLY CORRELATED TO EGS.

• SAFTA: THE WORD ‘ENVIRONMENT’ IS NOT THERE IN TEXT.

Rajan Ratna 19

COMMITMENTS - BEYOND COOPERATION

• SINGAPORE – US (2003)

• AUSTRALIA – US (2004)

• NEW ZEALAND – THAILAND (2005)

• REPUBLIC OF KOREA – US (2007)

• MALAYSIA – NEW ZEALAND (2009) – SEPARATE

AGREEMENT ON ENVIRONMENT

• REPUBLIC OF KOREA – EU (2010)

• TPP (2016) – CHAPTER 20

Rajan Ratna 20

COOPERATION

▪ JAPAN – MALAYSIA (2005)

▪ CHINA – NEW ZEALAND (2008)

▪ ASEAN – JAPAN (2008)

▪ ASEAN – ANZ (2009)

▪ MANY AGREEMENTS EITHER DO NOT MENTION

ANYTHING OR JUST REITERATE THE WTO

ARTICLE XX ON ENVIRONMENT.

Rajan Ratna 21

APEC• IN SYDNEY IN 2007 APEC LEADERS COMMITTED, THROUGH WIDE-RANGING

AND AMBITIOUS ACTIONS, AS SET OUT IN THE SYDNEY ACTION AGENDA, “TO

ENSURING THE ENERGY NEEDS OF THE ECONOMIES WHILST ADDRESSING THE

ISSUE OF ENVIRONMENTAL QUALITY AND CONTRIBUTING TO THE REDUCTION

OF GREENHOUSE GAS EMISSIONS.” LEADERS ALSO AFFIRMED THAT “AN OPEN

GLOBAL TRADE AND INVESTMENT SYSTEM IS CENTRAL TO OUR CLEAN

DEVELOPMENT OBJECTIVES AND MARKET OPENING IN THE WORLD TRADE

ORGANIZATION (WTO) WOULD ADVANCE OUR CLIMATE AND ENERGY

SECURITY GOALS.” AND RECOGNIZED THAT “JOINT RESEARCH, DEVELOPMENT,

DEPLOYMENT AND TRANSFER OF LOW AND ZERO EMISSION TECHNOLOGIES

WILL BE CRUCIAL IN OUR SHARED EFFORTS TO ADDRESS CLIMATE CHANGE.”

• THE APEC EGS PROGRAMME FRAMEWORK WAS ENDORSED BY MINISTERS AT

THE 2008 AMM. THE OBJECTIVES OF THE FRAMEWORK ARE TO SUPPORT THE

DEVELOPMENT OF THE EGS SECTOR IN APEC AND TO PROVIDE A COHERENT

SETTING FOR THE WORK UNDER WAY IN VARIOUS APEC BODIES. THE

FRAMEWORK HAS FOUR COMPONENTS: (A) RESEARCH AND DEVELOPMENT, (B)

SUPPLY, (C) TRADE AND (D) DEMAND.

Rajan Ratna 22

APEC (2)

• 13 NOVEMBER 2011, HONOLULU, USA (LEADER’S DECLARATION:ANNEX C):

• “IN 2012, ECONOMIES WILL WORK TO DEVELOP AN APEC LIST OF

ENVIRONMENTAL GOODS THAT DIRECTLY AND POSITIVELY CONTRIBUTE

TO OUR GREEN GROWTH AND SUSTAINABLE DEVELOPMENT OBJECTIVES,

ON WHICH WE ARE RESOLVED TO REDUCE BY THE END OF 2015 OUR

APPLIED TARIFF RATES TO 5% OR LESS, TAKING INTO ACCOUNT

ECONOMIES’ ECONOMIC CIRCUMSTANCES, WITHOUT PREJUDICE TO APEC

ECONOMIES’ POSITIONS IN THE WTO.

• ELIMINATE, CONSISTENT WITH OUR WTO OBLIGATIONS, EXISTING LOCAL

CONTENT REQUIREMENTS THAT DISTORT ENVIRONMENTAL GOODS AND

SERVICES TRADE IN THE REGION BY THE END OF 2012, AND REFRAIN

FROM ADOPTING NEW ONES, INCLUDING AS PART OF ANY FUTURE

DOMESTIC CLEAN ENERGY POLICY.”

• THE EG PRODUCT LIST WAS NEGOTIATED FROM MARCH TO

SEPTEMBER, 2012.

Rajan Ratna 23

APEC (3)

• ENVIRONMENTAL PRODUCTS WERE IDENTIFIED ON 54 ITEMS OF THE

HARMONIZED SYSTEM (HS). IT WAS AGREED TO BRING TARIFFS AT OR

BELOW 5 PERCENT, REDUCING TARIFFS AS NEEDED BY JANUARY 1,

2016.

• COUNTRIES WITH TARIFFS ALREADY AT OR BELOW 5% IN 2012:

AUSTRALIA, HONG KONG, JAPAN, NEW ZEALAND, AND SINGAPORE

• COUNTRIES TO REDUCE TARIFFS: BRUNEI, CANADA, CHILE, CHINA,

INDONESIA, KOREA, MALAYSIA, MEXICO, PAPUA NEW GUINEA, PERU,

THE PHILIPPINES, RUSSIA, THAILAND, THE UNITED STATES, AND

VIETNAM

• COUNTRIES REDUCED TARIFFS ON A TOTAL OF 375 PRODUCT LINES.

Rajan Ratna 24

SOME EVIDENCES

GOODS - LISTS

• ENVIRONMENTAL GOODS:

• OECD (132)

• WTO (480, 153, REQUEST LIST)

• APEC (54)

• CLIMATE FRIENDLY LIST

• WORLD BANK (43)

• CLIMATE SMART GOODS AND TECHNOLOGIES

• UNESCAP (64)

Rajan Ratna 26

TARIFFS• DOHA ROUND: REDUCTION AND ELIMINATION OF EGS

BEING DISCUSSED.

• APEC LIST OF 54 ITEMS: AUTONOMOUSLY DECIDED TO

BRING DUTIES TO 5% LEVEL.

• IN VARIOUS PTAS/FTAS COUNTRIES ARE

UNDERTAKING COMMITMENTS TO ELIMINATE DUTIES

ON SUBSTANTIALLY COVERED ITEMS INCLUDING

ENVIRONMENTAL GOODS.

• NTBS AND TRANSFER OF TECHNOLOGY IS AN ISSUE….

Rajan Ratna 27

ENVIRONMENTAL GOODS

• WTO – EGS NEGOTIATIONS

• PLURILATERAL LIBERALIZATION BEING DISCUSSED

• APEC LIST – 54 ITEMS

• ESCAP LIST – 64 ITEMS (CLIMATE SMART GOODS AND

TECHNOLOGIES)

• OECD LIST – 248 ITEMS

• NO CLEAR-CUT DEFINITION - DEBATED

Rajan Ratna28

Rajan Ratna 29

APEC AVERAGE MFN TARIFF

Rajan Ratna30

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

APEC 54 ESCAP 64 OECD 248

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

Singapore Vietnam Myanmar Malaysia Philippines Thailand Indonesia Lao PDR Brunei Cambodia

ASEAN Average MFN Tariff

APEC 54 ESCAP 64 OECD 248

Rajan Ratna31

0

5

10

15

20

25

Afghanistan Sri Lanka India Nepal Bangladesh Pakistan Bhutan Maldives

SAARC Average MFN Tariff

APEC ESCAP OECD

Rajan Ratna32

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

RCEP Average MFN Tariff

APEC ESCAP OECD

Rajan Ratna33

INTRA INDUSTRY TRADE

Rajan Ratna

34

An intra-industry trade (IIT) index was calculated using the

Grubel-Lloyd method, with the index ranging between 0

and 1. A higher IIT indicated an existence of international

production network (IPN).

INTRA-INDUSTRY TRADE: APEC LIST

Rajan Ratna35

0.52

0.69

0.91

1.00 1.00

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

SARRC ASEAN APTA APEC OECD

INTRA-INDUSTRY TRADE: ESCAP LIST

Rajan Ratna36

0.72

0.89

0.97 0.97 0.98

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

SARRC ASEAN APTA OECD APEC

INTRA-INDUSTRY TRADE: OECD LIST

Rajan Ratna37

0.67

0.77

0.97 0.98 0.99

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

APTA APEC ASEAN SARRC OECD

WTO: NOTIFIED SPS AND TBT MEASURES

Rajan Ratna38

0

100

200

300

400

500

600

700

800

900

1000

Total SPS and TBT measures (APEC - 25 at 4 digit HS) Total SPS and TBT measures (ESCAP - 40 at 4 digit HS)

Total SPS and TBT measures (OECD - 106 at 4 digit HS)

Source: Compiled on the basis of Centre for WTO Studies, India database on SPS and TBT

RCEP: INTRA-INDUSTRY TRADE (AVERAGE OF 2013 TO 2016)

Rajan Ratna 39

RULES OF ORIGIN

• CUMULATION PROVISIONS FOSTER RVCS.

• OPEN AND FULL CUMULATION PROVISIONS WILL PROMOTE

THE RVCS AND GVCS.

• EXAMPLES:

• NAFTA – TEXTILES AND AUTOMOBILE FOR USA AND MEXICO

• INDIA – SRI LANKA FTA (WIR 2003)

Rajan Ratna40

SERVICES

• THE FRAMEWORK EXISTS IN RTAS BUT EFFECTIVE MARKET

ACCESS IN SERVICES IS YET TO BE ACHIEVED IN ASEAN OR

SAARC.

• SOME BILATERAL OR ASEAN + 1 AGREEMENTS HAVE THE

COMMITMENTS, EVEN THOUGH THEY ARE WTO PLUS, AT BEST

THEY ARE AT THE EXISTING LEVEL OF AUTONOMOUS

LIBERALISATION.

• IN A FEW SECTORS THERE EXISTS RVC ESPECIALLY IN TOURISM

AND COMMERCIAL PRESENCE - FINANCIAL SECTOR (MODE 3).

Rajan Ratna41

SERVICES, INVESTMENTS AND TOT

• NOT MUCH PROGRESS IN WTO NOR IN FTAS

• IMPORTANT SECTORS:

• PROFESSIONAL SERVICES (ARCHITECTURAL SERVICES,

URBAN PLANNING AND LANDSCAPE ARCHITECTURAL

SERVICES, OTHER)

• RESEARCH AND DEVELOPMENT SERVICES

• OTHER BUSINESS SERVICES (BUILDING-CLEANING

SERVICES)

• ENVIRONMENTAL SERVICES (SEWAGE, REFUGE

DISPOSAL, SANITATION AND SIMILAR SERVICES, OTHER)

Rajan Ratna 42

SERVICES AND INVESTMENT

• ENVIRONMENTAL SERVICES (SEWAGE, REFUGE DISPOSAL, SANITATION

AND SIMILAR SERVICES, OTHER)

• PROFESSIONAL SERVICES (ARCHITECTURAL SERVICES, URBAN PLANNING

AND LANDSCAPE ARCHITECTURAL SERVICES, OTHER)

• RESEARCH AND DEVELOPMENT SERVICES

• OTHER BUSINESS SERVICES (BUILDING-CLEANING SERVICES)

• ISSUES:

• IS IMPORT BAD ALWAYS?

• IF NO DOMESTIC PLAYER PRESENT, WHAT PREVENTS

LIBERALISATION?

• HOW TO PROMOTE INVESTMENT?

• HOW TO ATTRACT TECHNOLOGY AND INNOVATION?Rajan Ratna 43

WAY FORWARD

• RTAS CAN FACILITATE RVCS WHILE MULTILATERAL

LIBERALISATION CAN FACILITATE THE GVCS.

• AVOID DUPLICATION OF RTAS WITH SAME COUNTRIES

• APPROPRIATE RULES OF ORIGIN – CUMULATION

• IF ITEMS ARE LIBERALISED IN RTAS; SHOULD THERE BE

PROBLEMS IN LIBERALIZING UNDER WTO OR

UNILATERALLY?

• EXAMINE HOW BEST IT CAN BE USED AS A TOOL TO

ADDRESS THE NON-TARIFF MEASURES.

Rajan Ratna44

REFERENCES• PALIT, AMITENDU (2014). REGIONAL SUPPLY CHAINS IN ASIA: EXAMINING INDIA’S PRESENCE AND

POSSIBILITIES IN RCEP, WORKING PAPER NO. CWS/WP/200/20, CENTRE FOR WTO STUDIES, NEW

DELHI.

• RATNA, RAJAN SUDESH (2016). PREFERENTIAL ROO: FACILITATORS OF REGIONAL AND GLOBAL

VALUE CHAINS. JOURNAL OF INTERNATIONAL TRADE, VOLUME 1 (2016), 29-46; CENTRE FOR WTO

STUDIES, NEW DELHI.

• UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (2003). WORLD INVESTMENT

REPORT AVAILABLE AT HTTP://UNCTAD.ORG/EN/DOCS/WIR2003LIGHT_EN.PDF

• UNITED NATIONS, ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC (2013).

ASIA-PACIFIC TRADE AND INVESTMENT REPORT 2013: TURNING THE TIDE: TOWARDS

INCLUSIVE TRADE AND INVESTMENT. SALES NO. E.14.II.F.2. AVAILABLE FROM

WWW.UNESCAP.ORG/TID/TI_REPORT2013/HOME.ASP

________APTIAD BRIEFING NOTE 8 (AUGUST 2016)

HTTP://WWW.UNESCAP.ORG/SITES/DEFAULT/FILES/APTIAD-BRIEF-AUGUST2016.PDF

_______ASIA-PACIFIC TRADE AND INVESTMENT PREFERENTIAL AGREEMENTS DATABASE – APTIAD:

WWW.UNESCAP.ORG/TID/UPTIAD

• WTO RTA DATABASE HTTPS://WWW.WTO.ORG/ENGLISH/TRATOP_E/REGION_E/REGION_E.HTM

Rajan Ratna 45

THANK YOU

Rajan Ratna46