Tariff-Free Solar Panels Aim of New Global Trade Negotiations

Jul 08, 2014 3:00 am ET

July 8 (Bloomberg) -- The U.S., European Union and 12 other governments in the World Trade Organization have opened negotiations on a trade deal aimed at ending tariffs on environmental goods such as wind turbines and solar panels.

The WTO members agreeing to the talks announced today in Geneva account for 86 percent of global trade in the products, the U.S. Trade Representative’s office said. The U.S. exported $106 billion in goods such as turbines, solar panels and filters to treat wastewater in 2013, the USTR said.

President Barack Obama’s administration is beginning initiatives to damp the effects of climate change, and getting started on the accord is part of that effort. The administration on June 2 proposed standards to cut greenhouse gas emissions from existing power plants, a step that has rankled Republicans and utilities that make electricity use coal-fired generators that release carbon dioxide.

“Today’s launch of the Environmental Goods Agreement underscores environmental protection on all fronts,” U.S. Trade Representative Michael Froman said in a statement.

The agreement may also help American exporters gain from the burgeoning international market for clean-energy goods. The U.S., China and the 28-nation European Union are among participants in the talks that have been ensnared in trade disputes over solar-energy equipment in recent years.

According to the U.S. trade office, tariffs on environmental goods can be as high as 35 percent of the value of the products. The nations that participate in Asia-Pacific Economic Cooperation meetings have agreed to cut tariffs on 54 environmental products by 5 percent by the end of next year.

The governments involved in the talks intend to expand the list, which includes solar panels, catalytic converters and waste incinerators, according to a fact sheet. Froman notified Congress on March 21 of the administration’s intent to participate in the accord.

In addition to the U.S., China, and the EU, the WTO members in talks are Australia, Canada, Costa Rica, Hong Kong, Japan, Korea, New Zealand, Norway, Singapore, Switzerland and Chinese Taipei.