SERVICES: SECTOR BY SECTOR
Environmental services are a dynamic segment of the environment industry. The demand for environmental services has grown significantly in recent years, in part due to increasingly stringent standards and regulations aimed at addressing global challenges such as climate change, resource depletion and waste generation.
Public utilities have traditionally played an important role in the supply of environmental services. However, the trend towards the privatization of public utilities has increased the participation of private sector operators and created more opportunities for trade.
The development of new technologies has also boosted international trade in this sector. The provision of environmental consulting services online or the remote monitoring of renewable energy systems are examples of how technology has facilitated the cross border supply of environmental services.
Environmental services encompass infrastructure services, including sewage, refuse disposal and sanitation as well as "non-infrastructure" services, such as those related to air pollution prevention and mitigation, noise abatement and the remediation of contaminated sites.
Current commitments and exemptions
Compared with other sectors, such as tourism, financial services or telecommunications, members' level of commitments on environmental services is modest.
As of 1 December 2020, 59 WTO members (counting EU-25 as one) had made commitments in at least one environmental service sub-sector. Specifically, 52 members have undertaken commitments for sewage services; 50 members for refuse disposal services; 51 members for sanitation and similar services; and 51 members for "other environmental services".
"Other environmental services" include the cleaning of exhaust gases, noise abatement services, nature and landscape protection services, and "other environmental protection services", which correspond to the four other environmental services sub-sectors identified in the Provisional Central Product Classification (CPC).
Given that the supply of certain environmental services requires access to infrastructure, trade in environmental services often takes place through the commercial presence of a foreign company (mode 3 of the General Agreement on Trade in Services), with the accompanying presence of individuals crossing the border to provide the service (mode 4). Technological developments have also facilitated cross-border supply (mode 1).
No exemptions to most-favoured nation (MFN) treatment (i.e. non-discrimination) have been undertaken in the environmental services sector.back to top
Treatment of the sector in negotiations
Environmental services were included in the services negotiations that began in January 2000.
Several negotiating proposals were submitted in the first years of the negotiations by developed and developing members, including Australia (S/CSS/W/112), Canada (S/CSS/W/51), Colombia (S/CSS/W/121), Cuba (S/CSS/W/142), the European Union (S/CSS/W/38), Switzerland (S/CSS/W/76) and the United States (S/CSS/W/25).
These proposals acknowledged the potential benefits of further trade liberalization in the environmental services sector, both for the protection of the environment and for economic growth. The proposals also highlighted the shortcomings of the sectoral classification in W/120 and the Provisional CPC, which in their view does not reflect the scope of the environment industry.
Following the exchange of bilateral requests for enhanced market access, offers of improved commitments were exchanged among members, including on environmental services.
After the Hong Kong Ministerial Conference in December 2005, a group of 23 members submitted a plurilateral request on environmental services to a group of 20 other members. This collective request sought commitments across all environmental services sub-sectors, in the four modes of supply, with a particular emphasis on mode 3.
Information on sectoral and modal negotiating objectives expressed by members is contained in reports from the Chair of the negotiating group issued in 2005 (TN/S/20 and TN/S/23). The Chair of the Special Session of the Council for Trade in Services provided an assessment of the plurilateral negotiations in different sectors and areas in a report to the Trade Negotiations Committee in 2011 (TN/S/36).
In parallel to the negotiations in the Special Session of the Council for Trade in Services, environmental services were also singled out in Paragraph 31(iii) of the Doha Declaration, which calls for “the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services” with a view to “enhancing the mutual supportiveness of trade and environment”.