Promoting and Facilitating Trade in Environmental Goods and Services: Lessons From Regional Trade Agreements

The paper analyzes how regional trade agreements (RTAs) act as 'incubators' for promoting trade in environmental goods and services (EGS) in the absence of significant multilateral progress at the WTO. It examines various RTA approaches to defining EGS, implementing market access commitments, coordinating regulations, and providing support measures for developing countries. The authors highlight that RTAs often go beyond WTO rules, utilizing tools like specific EGS lists, 'ex-outs' for precise product classification, and sectoral chapters to address non-tariff barriers. These regional experiences are presented as potential models for the WTO's Trade and Environmental Sustainability Structured Discussion (TESSD) and the Informal Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (IDP).

• Regional trade agreements (RTAs) have become the primary venue for promoting trade in environmental goods and services (EGS) because multilateral efforts at the WTO stalled after 2011.
• RTAs use three main methods to incorporate EGS provisions: horizontal chapters (often non-binding and excluded from dispute settlement), individual schedules of commitments, and dedicated sectoral chapters or annexes for specific technologies.
• Defining environmental goods is a major challenge; while some RTAs use broad liberalization, others use specific lists, such as the 2012 APEC voluntary commitment of 54 goods, the ANZTEC list of 132 goods, and the New Zealand-UK FTA list of 293 HS subheadings.
• To address 'dual-use' concerns where goods have both environmental and non-environmental applications, RTAs employ 'ex-outs'—additional product specifications that go beyond the 6-digit Harmonized System (HS) level.
• Environmental services are often too narrowly defined by the UN's Central Product Classification (CPC) Division 94; RTAs address this by including services related to specific EGS lists or using 5-digit CPC 'ex-outs'.
• RTAs address non-tariff barriers through regulatory cooperation, including the harmonization of standards, mutual recognition of conformity assessments, and the use of international standards (such as ISO and IEC).
• Some RTAs implement more stringent disciplines on local content requirements and subsidies than the WTO, such as the CPTPP's prohibition of performance requirements for all investors.
• The New Zealand-UK FTA includes advanced provisions to eliminate harmful fossil fuel subsidies and end new direct financial support for fossil fuel energy in non-parties, unless aligned with the Paris Agreement.
• Green public procurement is identified as a powerful tool to drive EGS demand, and many RTAs allow parties to set environmental criteria in procurement, though they generally do not expand the scope of the WTO Government Procurement Agreement (GPA).
• Support measures for developing countries in RTAs typically focus on the transfer of environmental technology and capacity building, often through 'best endeavour' clauses rather than hard obligations.

APA

Bellmann, C., & Sugathan, M. (2022). Promoting and Facilitating Trade in Environmental Goods and Services: Lessons From Regional Trade Agreements. Forum on Trade, Environment, & the SDGs. https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Technical-Paper-Promoting-and-Facilitating-Environmental-Goods-and-Services.pdf?dm=1678460883

Chicago

Bellmann, Christophe, and Mahesh Sugathan. Promoting and Facilitating Trade in Environmental Goods and Services: Lessons From Regional Trade Agreements. Forum on Trade, Environment, & the SDGs, 2022. https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Technical-Paper-Promoting-and-Facilitating-Environmental-Goods-and-Services.pdf?dm=1678460883.

Wikipedia

{{cite report |last1=Bellmann |first1=Christophe |last2=Sugathan |first2=Mahesh |title=Promoting and Facilitating Trade in Environmental Goods and Services: Lessons From Regional Trade Agreements |publisher=Forum on Trade, Environment, & the SDGs |date=June 2022 |url=https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Technical-Paper-Promoting-and-Facilitating-Environmental-Goods-and-Services.pdf?dm=1678460883 |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bellmann2022promoting, author = {Bellmann, Christophe and Sugathan, Mahesh}, title = {{Promoting and Facilitating Trade in Environmental Goods and Services: Lessons From Regional Trade Agreements}}, institution = {Forum on Trade, Environment, \& the SDGs}, year = {2022}, month = jun, url = {https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Technical-Paper-Promoting-and-Facilitating-Environmental-Goods-and-Services.pdf?dm=1678460883}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }