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Title: Sin t


1
Ministry of Development, Industry and Trade MIFIC
The Situation of Environmental Goods in Nicaragua
with Reference to the APEC and OECD Lists
A study conducted within the framework of the
UNCTAD project Building Capacity for Improved
Policy Making and Negotiation on Key Trade and
Environment Issues (INT/0T/AQ).
José Guillermo López López Head of Foreign Trade
Policy, (DPCE), MIFIC.
2
MIFIC
  • Trade and Environment in the Global Context
  • Much progress made in the legal field.
    International agreements for the protection and
    preservation of the environment.
  • Severe imbalances in the production and
    distribution of goods and services.
  • A high proportion of the worlds population lives
    in extreme poverty.
  • Rapid technological change on a global scale
    not matched by coordinated environmental
    management, which always lags behind social and
    economic development.

3
Study on Environmental Goods in Nicaragua
  • Conducted within the framework of the WTO
    Ministerial commitments made in Doha, Qatar.
  • The WTO Ministerial mandate to negotiate
  • the reduction or, as appropriate, elimination
    of tariff or non-tariff barriers to environmental
    goods and services.

Doha Ministerial Declaration, paragraph 31(ii).
4
Development of the Environmental Goods Issue in
Nicaragua
  • Has not been developed in a manner specifically
    linked to trade

5
Aims of the Study
  • To contribute to securing the basic tools for
    building capacity for policy-making and
    negotiation on environmental goods with a view to
    eliminating tariff and non-tariff barriers.
  • To identify the need to use these goods in
    conditions that favour the preservation and
    protection of the environment.
  • To propose a conceptual framework that allows the
    negotiation process to be defined by means of
    clear rules.
  • To determine what constitutes an environmental
    product, an environmentally preferable product
    (EPP) or an organic product.
  • To evaluate environmental goods in Nicaragua by
    examining trade flows, tariff protection levels,
    production and production limitations.

6
Functions of the Environment
Provides resources needed for production
A place to deposit wastes and residues that
generate production and consumption
A source of services related to enjoyment of the
environment scenic beauty, clean air, etc.
7
Environmental Goods Arising From These Three
Functions
Capital goods
Inputs and raw materials
Equipment
Medicines
Etc.
Natural medicine, etc.
Air purifiers, water purifiers, aspirators, etc.
Chlorine, chemicals, etc.
Cleaner machinery
8
WTO Negotiations on Environmental Goods
  • Remove non-tariff barriers

Eliminate bound tariffs
  • Import licensing
  • Quotas
  • Quantitative restrictions
  • Permits
  • Import controls
  • Etc.

Reduce import tariff to 0
Result to allow access free of trade barriers,
so as to encourage their use in less costly
conditions, thereby promoting an environment that
is better protected and preserved.
9
A clear definition of environmental goods is
needed for the purpose of trade negotiations
  • The standard definition used in some countries
    does not relate to trade
  • Tangible resources used by human beings as
    production inputs or for final consumption and
    which are used up and transformed in the process.

10
The definition normally usedMakes no reference
to any environmental properties.Covers products
of all types.Relates more to friendly
production methods and processes.
  • Wood, fruit, animal hides, meat, seeds,
    medicines, etc.

11
Definition proposed by Nicaraguas consultant
  • Environmental goods are goods which allow raw
    materials, inputs, capital goods and consumer
    goods in general to be produced and marketed
    under technologically and ecologically rational
    conditions, which allow compliance with
    environmental requirements in international
    markets, and which aim to preserve and protect
    the environment and human, plant and animal
    health. This includes cleaner technologies and
    products which reduce environmental risks and
    minimize pollution and the use of resources.

12
Indicative Lists Compiled by APEC and the OECD
  • Were drawn up before trade negotiation objectives
    were undertaken in the WTO.
  • Are based on the interests of highly
    industrialized developing countries (USA, EU,
    Japan, etc.).
  • Were drawn up taking into account the expansion
    and facilitation of trade rather than
    environmental effects.
  • A common list accommodating the interests of all
    WTO Members must be drafted within the WTO.
  • Nicaragua must negotiate the inclusion of a list
    of goods not yet included in the APEC and OECD
    lists, e.g. medicines, chemicals, etc.
  • Nicaragua liberalization in other countries
    could serve to attract investment in these goods.

13
Trade Based on the APEC and OECD Lists
  • There is no tariff classification of any kind,
    but Nicaragua does grant unilateral preferential
    treatment to all.
  • Environmental goods do not feature in WTO,
    regional or bilateral integration agreements.

14
Trade FiguresTotal APEC and OECD
In thousands of US dollars In thousands of US dollars In thousands of US dollars In thousands of US dollars In thousands of US dollars In thousands of US dollars In thousands of US dollars
Year Total Exports Exports of environmental goods of Nicaraguas total exports Total imports Imports of environmental goods of Nicaraguas total exports
2000 629,351.10 3,880.12 1 1,720,629.40 49,603.04 3
2001 532,243.20 5,697.11 1 1,774,847.00 57,301.35 3
2002 634,827.97 9,943.25 2 1,798,753.90 53,147.67 3
Total 1,796,422.27 19,520.48 1 5,294,230.30 160,052.06 3
Source Ministry of Development, Industry and Trade (MIFIC), Nicaragua. Source Ministry of Development, Industry and Trade (MIFIC), Nicaragua. Source Ministry of Development, Industry and Trade (MIFIC), Nicaragua. Source Ministry of Development, Industry and Trade (MIFIC), Nicaragua. Source Ministry of Development, Industry and Trade (MIFIC), Nicaragua. Source Ministry of Development, Industry and Trade (MIFIC), Nicaragua. Source Ministry of Development, Industry and Trade (MIFIC), Nicaragua.
15
Individual Figures for APEC and OECD
List Exports Exports Exports Imports Imports Imports Total Exports Total imports
Year 2000 Year 2001 Year 2002 Year 2000 Year 2001 Year 2002 Period Period
OECD 3,842.8 5,371.52 8,813.52 43,646.6 45,349.9 44,628.8 44,628.8 133,625.4
APEC 187.6 570.93 3,671.16 18,878.0 26,575.2 23,580.8 23,580.8 69,034.1
Source MIFIC (Documentation Centre, OECD and APEC lists). Source MIFIC (Documentation Centre, OECD and APEC lists). Source MIFIC (Documentation Centre, OECD and APEC lists). Source MIFIC (Documentation Centre, OECD and APEC lists). Source MIFIC (Documentation Centre, OECD and APEC lists). Source MIFIC (Documentation Centre, OECD and APEC lists). Source MIFIC (Documentation Centre, OECD and APEC lists). Source MIFIC (Documentation Centre, OECD and APEC lists). Source MIFIC (Documentation Centre, OECD and APEC lists).
16
Destination of Exports from Nicaragua Based on
APEC and OECD Lists
COUNTRY EXPORT 02
TOTAL 9,943.25 100
DOMINICAN REPUBLIC 3,278.14 33
COSTA RICA 2,010.52 20
GERMANY 1,938.94 20
CANADA 1,834.19 18
UNITED STATES 295.69 3
HONDURAS 252.59 3
GUATEMALA 106.87 1
UNKNOWN 67.25 1
AUSTRALIA 47.92 0
PANAMA 42.37 0
BOLIVIA 33.74 0
EL SALVADOR 18.01 0
ARGENTINA 9.95 0
BELIZE 3.77 0
IRELAND 1.73 0
COLOMBIA 1.48 0
MEXICO 0.05 0
NORWAY 0.04 0
Source Statistics Department, MIFIC, Nicaragua. Source Statistics Department, MIFIC, Nicaragua. Source Statistics Department, MIFIC, Nicaragua.
17
Provenance of Imports to Nicaragua Based on APEC
and OECD Lists
COUNTRY IMPORT 02
TOTAL 53,147.67 100
GERMANY 42,790.69 80.5
BRAZIL 3,456.32 6.5
COSTA RICA 2,177.30 4.1
CHINESE TAIPEI 1,435.88 2.7
EL SALVADOR 1,145.72 2.2
CHINA 645.92 1.2
CHILE 523.97 1
UNITED STATES 355.36 0.7
COLOMBIA 140.65 0.3
SPAIN 117.59 0.2
CANADA 97.93 0.2
BELGIUM 83.39 0.2
AUSTRIA 64.24 0.1
ITALY 50.38 0.1
REPUBLIC OF KOREA 31.71 0.1
AUSTRALIA 30.56 0.1
GUATEMALA 0.06 0
Source Ministry of Development, Industry and Trade (MIFIC), Nicaragua Source Ministry of Development, Industry and Trade (MIFIC), Nicaragua Source Ministry of Development, Industry and Trade (MIFIC), Nicaragua
18
WTO MFN and Bound Tariff Levels in Effect in 2003
19
Environmental Goods OECD and APEC Lists
Exports Exports Exports Imports Imports Imports Total Total Lines Lines
Import tariffs 2000 2001 2002 2000 2001 2002 Export Import
0 1,156.08 3,439.48 4,978.61 34,817.11 38,432.29 37,712.05 9,574.17 49 110,961.45 69 147
5 122.50 310.23 1,488.67 10,802.23 15,222.98 11,175.10 1,921.40 10 37,200.31 23 23
10 15.76 10.73 45.74 1,537.48 1,492.64 1,481.02 72.23 0 4,511.14 3 2
15 6.51 12.45 42.74 1,775.61 1,919.92 2,527.84 61.70 0 6,223.37 4 6
40 2,579.27 1,924.22 3,387.49 670.61 233.52 251.66 7,890.98 40 1,155.79 1 1
Total 3,880.12 5,697.11 9,943.25 49,603.04 57,301.35 53,147.67 19,520.48 100 160,052.06 100 179
Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua. Source Ministry of Development, Industry and Trade, Nicaragua.
20
WTO Bound Tariffs - 2003
  • 168 items. Tariffs 40
  • Tariff item 44, but in 2004 40
  • No major sensitivities at WTO level as no APEC or
    OECD products were bound at levels higher than
    the overall 40. Of these, 70 enjoy 0 MFN.

21
Environmental Goods of Export Interest
HS HS 6-digit description MFN-Import-tariff Bound Category OECD APEC 2000 2001 2002
HS HS 6-digit description 2003 WTO 2003 USE OECD APEC EXPORT EXPORT EXPORT
3,589.77 4,963.33 6,231.81
2207.10 Ethanol 10 44 Other energies X 2,579.27 1,924.22 3,387.49
2522.20 Slakes (hydrated lime) 5 40 Chemical recovery systems X 3.57 25.01 32.97
2835.23 Phosphates of trisodium 0 40 Chemical recovery systems X - 656.11 -
3209.90 Other paints and varnishes, in aqueous medium 15 40 Cleaner technology and products X 6.51 9.22 1.52
3802.10 Activated carbon 0 40 Chemical recovery systems X 932.91 2,040.61 655.83
22
Environmental Goods of Export Interest (CONTD)
HS HS 6-digit description MFN-Import-tariff Bound Category OECD APEC 2000 2001 2002
HS HS 6-digit description 2003 WTO 2003 USE OECD APEC EXPORT EXPORT EXPORT
3,589.77 4,963.33 6,231.81
3924.90 Household and toilet articles of plastic 10 40 Waste collection equipment X 15.76 10.62 42.66
3926.90 Other articles of plastic 5 40 Screens/ strainers X X(ex) 26.51 74.88 180.74
7309.00 Tanks, vats etc. 5 40 Sewage treatment X 14.49 41.90 82.34
8409.99 Parts for diesel or semi-diesel engines 0 40 Mufflers/ silencers X 10.75 180.76 1,633.66
8419.19 Other instantaneous or storage water heaters, non-electric 5 40 Renewable energy plant X X(ex) - - 214.60
Source Own, based on data from APEC, OECD and the Ministry of Development, Industry and Trade of Nicaragua (MIFIC). Source Own, based on data from APEC, OECD and the Ministry of Development, Industry and Trade of Nicaragua (MIFIC). Source Own, based on data from APEC, OECD and the Ministry of Development, Industry and Trade of Nicaragua (MIFIC). Source Own, based on data from APEC, OECD and the Ministry of Development, Industry and Trade of Nicaragua (MIFIC). Source Own, based on data from APEC, OECD and the Ministry of Development, Industry and Trade of Nicaragua (MIFIC). Source Own, based on data from APEC, OECD and the Ministry of Development, Industry and Trade of Nicaragua (MIFIC). Source Own, based on data from APEC, OECD and the Ministry of Development, Industry and Trade of Nicaragua (MIFIC). Source Own, based on data from APEC, OECD and the Ministry of Development, Industry and Trade of Nicaragua (MIFIC). Source Own, based on data from APEC, OECD and the Ministry of Development, Industry and Trade of Nicaragua (MIFIC). Source Own, based on data from APEC, OECD and the Ministry of Development, Industry and Trade of Nicaragua (MIFIC).
23
Environmentally Preferable Products (EPPs) and
Organic Products
Organic products Certified In transition

1. Coffee X
2. Sesame X
3. Cocoa X
4. Beans X
5. Vegetables X
6. Soya X
7. Tobacco X
8. Flowers and foliage X
9. Manioc X
10. Annatto X
11. Turmeric X
12. Ginger X
13. Neem X
14. Cashews X
15. Medicinal plants X
16. Maize X
17. Chayotes X
18. Sorghum X
19. Tomatoes X
20. Avocados X
21. Organic fertilizer X
Source Pedro Cussianovich, Consultant, IICA Source Pedro Cussianovich, Consultant, IICA Source Pedro Cussianovich, Consultant, IICA
24
Conclusions
  • The definition of environmental goods must not
    cover agricultural, organic or environmentally
    preferable goods.
  • Environmental goods must lend themselves to
    specific functions for achieving friendly
    production methods and processes.
  • Importance of tariff and non-tariff
    liberalization of environmental goods within the
    WTO.
  • Need for clear identification of these goods in
    the Harmonized Commodity Description System at
    international level.
  • OECD and APEC lists must be treated as
    indicative, i.e. as a reference for the purpose
    of establishing a common list.
  • Nicaragua has a high level of unilateral tariff
    liberalization with regard to APEC and OECD
    environmental goods.
  • Nicaragua must negotiate and request reciprocal
    access levels in line with its unilateral
    liberalization, with a view to promoting
    investment in environmental goods.

25
THANK YOU FOR YOUR ATTENTIONglopez_at_mific.gob.
ni
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