In March, the U.S. Trade Representative announced its intent to negotiate a WTO agreement “aimed at eliminating tariffs on a wide range of environmental goods.” How wide a range of products falls under USTR’s aim? That depends on what you consider to be an “environmental good.” USTR requested public comment on WTO negotiating objectives, including products. The public responded, with many companies scrambling to get their products into USTR’s sights, and a few scrambling to get theirs out.
“Ceiling fans are able to work so efficiently because they cool people, not air. Using very little energy, fans produce an airflow that generates a wind chill, providing a cooling effect on those in the room. Because a person must be present to feel these effects, ceiling fans can and should be powered off when a room is empty, saving even more energy. On the contrary, air conditioners are often run continuously in an empty room to maintain a comfortable temperature for when people re-enter.”
Of course, fans are less environmentally friendly than, say, sweating. As WTO negotiations proceed, except this to be a major sticking point. Is a product an “environmental good” just because it is better for the environment than an alternative? Is a blanket an environmental good if it helps you use less heat? How about clothing in general?
Coca-Cola wants to include the plant-based plastics used in its PlantBottles. These PET plastic bottles are made from 30% plant material (sugarcane ethanol). That’s better then, well, the bottles Coke was using before. When a company improves its own environmentally unfriendly product, does that make the improved product an environmental good? What if another company invents a 50% plant-based bottle? Should Coke’s 30% bottle be delisted? How often must we make updates as the products on the list fall behind emerging technologies? WTO negotiations aren’t known for their speed. By the time an agreement is reached, will today’s “green” technologies have turned “brown”?
It’s still good, right?
And yet this potential trade agreement doesn’t have every company seeing green. Some companies benefit from existing tariffs on their products. For example, a U.S. producer of a product that has low foreign tariffs and high U.S. tariffs might enjoy that it has foreign market access and limited competition for its U.S. sales.
Timken wrote to tell USTR that certain of its products (ball and roller bearings) emphatically were not environmental goods.
“While bearings may be incorporated in such environmental goods, they are also incorporated in a wide variety of other goods. Indeed, bearings are used in virtually everything that moves or turns. Thus, bearings, in and of themselves, are not environmental goods even if these products can in various circumstances help in the reduction of energy use.” (emphasis in original)
Seriously, we don’t even turn the lights out when we go home for the night. Please stop accusing us of helping the planet. (Just kidding, Timkin. Love those HTS 8482’s – keep ’em coming.)
Clearly, the biggest issue facing this WTO negotiation is how to define an “environmental good.” Expect lots of wrangling and horse-trading (wait a minute . . . is a horse an environmental good? How about a horse-drawn carriage? A butter churn? Are we headed toward an Amish export boom?) before this agreement gets the green light.