US embassy cable - 05GENEVA2316

UNCLAS SECTION 01 OF 03 GENEVA 002316 
 
SIPDIS 
 
PASS USTR FOR DDWOSKIN, JPRESCOTT, MLINSCOTT 
STATE/EB/OT FOR WCRAFT, TNISSEN, JBROOKS 
USDOC FOR SJONES, LODOM 
USDA FOR EARENA 
EPA FOR DWAGNER, JFERRANTE 
 
E.O. 12958: N/A 
TAGS: ETRD, USTR, WTRO, Trade 
SUBJECT:  WTO COMMITTEE ON TRADE AND ENVIRONMENT (CTE) 
NEGOTIATIONS - SEPTEMBER 15-16, 2005 
 
REFTEL:  State 157878 
 
1.  Summary:  The WTO Committee on Trade and Environment in 
Special Session (CTESS) meeting on September 15-16, 2005, focused 
on making progress on environmental goods (EGs), in the run-up to 
the Hong Kong Ministerial meeting, per Doha sub-paragraph 
31(iii).  Positions continue to be divided among those that 
support a list of environmental goods and others that support the 
consideration of an alternative approach proposed by India, which 
would identify goods for preferential tariff treatment on an ad 
hoc basis depending on national environmental projects. 
Following up on widespread praise for an environmental  goods 
workshop held by the United States the day before the meeting, 
the United States and several other friends of environmental 
goods plan to provide similar information on their lists of 
environmental goods at the October 13-14 CTESS meeting.  End 
Summary. 
 
2.  The September meeting of the CTESS was requested by several 
delegations (including the United States, EC, Canada, New 
Zealand, Japan, China, Korea, and others) at the July meeting who 
noted that an intensification of work on environmental goods 
would be needed in the fall if the CTESS were to achieve a 
concrete result on EGs for the Hong Kong Ministerial, scheduled 
for mid-December.  While the July CTESS agenda was packed with 
seven new papers, the September meeting was much more low key and 
reflective, with no new papers and reduced participation from 
capitals.  The only new document released at the meeting was the 
updated compilation of environmental goods submissions (a 
Secretariat document that is not available to the public), which 
 
SIPDIS 
includes a matrix of 400-plus products that have been proposed by 
nine Members in the negotiations thus far. 
 
 
-Sub-paragraphs 31(i) and 31(ii)- 
 
3.  Continuing the trend of focused attention on environmental 
goods, there was little discussion of the Multilateral 
Environmental Agreement (MEA)-related mandates charged to the 
CTESS.  On subparagraph 31(i) - the relationship between specific 
trade obligations set out in MEAs and WTO rules - only the EC and 
Switzerland made statements.  The EC merely noted its continued 
interest in making progress in this area, but underscored its 
focused interest in 31(iii).  Switzerland responded to questions 
posed at previous meetings as to how its proffered "principles" 
related to international, law by offering an intervention 
purporting (inaccurately) to set out inapplicable law.  The main 
point seemed to be that there is no legal hierarchy between WTO 
and MEAs, but it went beyond that concept to suggest that "the 
integrity of each system can only be maintained by paying 
deference to each other."  The Swiss went on to say that there is 
no need for savings clauses in MEAs, and that WTO rules should 
"always be interpreted in a manner that they do not constitute a 
conflict with MEA rules.and vise versa."   The Swiss also seemed 
to suggest that the WTO's "necessity test" should not apply to 
measures taken in fulfillment of MEA obligations.  No delegation 
reacted to the Swiss intervention but many requested a copy so 
that they could share with legal experts in capital.  On 
subparagraph 31(ii) dealing with MEA information exchange and 
observership, there was no discussion at all. The MEA-related 
discussions are expected to continue at the October meeting, but 
the focus is likely to continue to be on environmental goods in 
the run-up to Hong Kong. 
 
-Sub-paragraph 31(iii)- 
 
4.  In an effort to advance the discussions on environmental 
goods, on September 14, the afternoon before the formal meeting, 
the United States hosted a workshop to further explain the 155 
products on its proposed list of environmental goods (contained 
in TN/TE/W/52) and to answer questions.  The workshop attracted 
excellent participation among developing country delegates (with 
India being the notable exception), and many delegations 
complimented the U.S. delegation for its efforts in the formal 
CTESS meeting, noting that the workshop was informative and 
calling for similar information exchanges in the context of the 
October CTESS. The workshop began with an overview of the U.S. 
environmental goods list and focused on particular goods through 
four case studies:  1) solar energy used to provide clean water 
to rural areas; 2) wind energy used to provide clean water to 
rural areas; 3) automotive emissions control and related air 
pollution; and 4) wastewater treatment.  Handouts, as well as the 
overview presentation, are available electronically.  Please 
contact Jennifer Prescott (jprescott@ustr.gov). 
 
5.  In the formal meeting, positions continue to be divided among 
those that support a list of environmental goods (concrete list 
of products organized by harmonized system code) and those that 
support the consideration of an alternative approach (notably 
that proposed by India, which would identify goods for 
preferential tariff treatment based on their input into national 
environmental projects).  But the proponents of a list approach 
(e.g. USA, Canada, EC, Japan, Chinese Taipei, Korea, New Zealand 
and Switzerland) underscored the need to put aside the form of an 
initiative as well as the potential modality for achieving 
liberalization, and instead to focus on substance, which in all 
cases involve concrete products.  Most delegations seemed to 
agree.  The US delegation benefited significantly from the 
responses received from posts that delivered the demarche 
requested in REFTEL. 
 
6.  The Indian position seemed to harden against the list 
approach, despite taking care to note that their proposed 
"alternative approach" is not the "only option."  India 
reportedly made the rounds among developing countries over the 
summer break and garnered some support for its approach from 
Indonesia, given that it also provides unilateral duty-free 
treatment for inputs into large domestic environmental projects. 
India promised a new paper at this meeting on its "alternative 
approach" but delivered only the following week, after the 
meeting.  India also committed to provide more information on its 
proposed approach in October.  India also said that it would be 
useful to discuss: 1) criteria for environmental goods (criteria 
was also mentioned by Brazil); 2) how non-tariff barriers (NTBs) 
to EGs might be addressed by the CTESS; 3) how the environmental 
services piece of the mandate might be addressed by CTESS; and 4) 
how the products listed by other Members address environmental 
and developmental problems.  India noted that this type of 
exchange will allow the CTESS to "progress faster," which the 
delegate from New Zealand seized upon in his intervention. 
 
7.  Many delegations (e.g., Chile, Thailand, Ecuador, Singapore, 
Switzerland and Japan) noted the need to "clean-up" the 
compilation document, which currently includes over 400 products, 
about half of which have been proposed by more than one Member. 
This was an encouraging sign that seems to denote delegations' 
comfort in engaging in a detailed product discussion in October. 
But despite attempts by the list proponents to get a detailed 
discussion of products going at this meeting, there was a clear 
lack of substantive engagement.  Instead, most Members seemed to 
be looking to October to get more information on the table and to 
engage in more detailed, technical discussions.  Several Members 
mentioned the U.S. workshop and noted that its case study more 
contextual format might be a useful way to structure the 
discussions in October. 
 
8.  The Chair, Ambassador Ali (Bangladesh), summarized the 
meeting by saying that there was clearly a desire for more 
detailed information exchange among Members and noted that the 
U.S. workshop seemed to help this.  He further underscored that 
regardless of the approach advocated, Members needed to discuss 
the environmental and developmental benefits of particular 
products.  He asked delegations that had submitted lists to come 
prepared in October to further explain the benefits and linkages 
to environment and development.  He further noted that experience 
with the national project approaches could also be useful in 
October.  Canada suggested that the CTESS structure the October 
session by focusing on goods that are related to three key 
environmental and developmental objectives:  1) sanitation; 2) 
wastewater treatment; and 3) renewable energy.  There was not a 
great deal of comment on Canada's suggestion.  The Chair 
committed to consult with delegations on how to organize the work 
in October so that concrete progress can be made, noting that an 
information exchange session might be useful. 
 
9.  The United States plans to coordinate closely with the 
proponents of a list approach in preparing for the October 
meeting, particularly given that October marks what will likely 
be the final CTESS before Hong Kong.  While the United States and 
the other proponents continue to advocate for a list of goods to 
be agreed by Hong Kong, we need to carefully consider other 
options that can also deliver a concrete result on EGs in time 
for the Ministerial meeting. 
 
10.  The next CTESS meeting is scheduled for the week of October 
10, described by the Chair as "environment week." The week will 
begin with a WTO-sponsored symposium on "Trade and Sustainable 
Development within the Framework of Paragraph 51 of the Doha 
Ministerial Declaration," October 10-11 (half day).  The CTE 
Regular Session will take place on October 12.  The Chair has 
called a meeting beginning on the afternoon of October 12 to 
permit an information exchange on the "considerations that have 
guided" delegations in proposing certain approaches, such as 
identifying specific products.  During the same week, the Friends 
of Environmental Services (USA, EC, Switzerland, New Zealand, 
Australia and Canada) plan to make detailed presentations at a 
workshop. The CTESS will take place on October 13-14.  Shark