The construction of the APEC list

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• The construction of the APEC list

John Deng Deputy Permanent Representative The
Separate Customs Territory of Taiwan, Penghu,
Kinmen, and Matsu
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Outline

• Mandates to construct APEC list
• - Sectors nominated for EVSL
• EVSL results
• APEC environmental goods list
• Aims
• Approach
• - Comparison between APEC and OECD lists
• Lessons learned from the APEC list

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Mandates to construct APEC list

• 1995 (Osaka, Japan)
• Call by Leaders to identify industries for
  tariff reduction
• 1996 (Subic Bay, Philippines)
• Trade Ministers directed to submit
  recommendations
• 1997 May (Montreal, Canada)
• Trade Ministers directed to identify
  candidate sectors for EVSL Environmental goods
  proposed as distinct category by 4 economies
• 1997 November (Vancouver, Canada)
• Environmental goods identified as 1st tier
  fast-track sector

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Sectors nominated for EVSL

• A (Fast-Track sectors)
• Environmental goods and services, fish and
  fish products, forest products, medical
  equipment and instruments, energy, toys, gems and
  jewellery, chemicals, and a telecommunications
  mutual-recognition agreement. (9 sectors)
• A sectors
• Oilseeds and oilseed products, food, rubber,
  fertilizers, automotive and civil aircraft. (6
  sectors)

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EVSL results

• 1998 June (Kuching and Kuantan, Malaysia)
• consolidated environmental goods list
  finalized
• 1998 November (Kuala Lumpur, Malaysia)
• Resultant proposal a comprehensive package
  including undertakings on four elements
• - Tariffs
• - Services
• - Non-tariff measures
• - Economic and technical
  co-operation (Ecotech)
• EVSL tariff proposal referred to WTO

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APEC environmental goods list

• Aims
• Approach
• Comparison between APEC and OECD lists

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Aims of APEC list
Obtain more favourable tariff treatment for
environmental goods
Promote sustainable economic growth
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APEC approach

• Started with nominations
• Compiled list of goods
• Experts discussion to determine product coverage
  and tariff classification

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APEC approach

• Benefits to include environmental sector in EVSL
• Dual benefits being sought
• - Economic benefits
• - Environmental benefits
• Participation of developing countries

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APEC approach

• Economic benefits

• Importing members can acquire environmental goods
  and technologies at lower cost
• Both developing and developed exporting countries
  can enjoy expanded market opportunity

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APEC approach

• Environmental benefits

• Improving the effectiveness of environmental
  investment programmes undertaken by business and
  government
• Direct quality of life benefits

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APEC approach

• 10 categories
• APC Air Pollution Control
• H/E Heat/Energy Management
• M/A Monitoring/Analysis
• N/V Noise/vibration abatement
• ORS Other Recycling Systems
• PWT Potable Water Treatment
• R/C Remediation/cleanup
• S/H Solid/Hazardous Waste
• WWM Waste Water Management
• REP Renewable Energy Plant

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APEC approach

• Challenges
• Classification
• Can product distinctions be practically
  implemented by customs officials?
• Dual use
• Parts Components
• WTO legal issues

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APEC approach

• Classification issues (1)
• End-use certificate method was not adopted
• Goods designated as environmental on the basis of
  their PPMs were not included

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APEC approach

• Classification issues (2)
• Many HS headings contain more than just
  environmental goods
• Few HS headings are comprised uniquely of goods
  that could be considered part of the
  environmental industry
• Consideration was based both upon the prevalence
  and importance of the environmental goods in a
  given tariff heading
• Core environmental products at the 6-digit HS
  category

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APEC approach

• Classification issues (3)
• National HS tariff lines are not uniform below
  6-digit level
• A product was included with a detailed break-outs
  in their own tariff schedule
• Example solar cells

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APEC approach

• Solutions
• Practical approach
• Bottom-up
• Ex-out heading

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APEC approach

• Other points
• Chemicals excluded
• Medical equipment and instruments energy
  sectors also excluded, but there are overlaps

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Comparison between APEC and OECD lists

• Reasons for the lack of overlap
• Some goods on APEC list assigned to different
• categories on OECD list
• Difference of emphasis
• In several cases, APEC list provides greater
• specificity

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Lessons learned from APEC list
1. EVSL negotiation failed on - Tariff
elements - Forest and Fisheries sectors 2.
Broad coverage and sector segmentation of EVSL
enabled APEC to focus on environmental goods
listing 3. APEC list limited only to goods
readily distinguished by customs agents and
treated differently for tariff purposes 4. APEC
approach is practical
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Lessons learned from APEC list

• Negotiators may have to consider how to treat
  goods that have dual uses, but if theres a
  will to include goods within these categories,
  theres usually a way.

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