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Scrap Tariffs On Green Goods

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Tariffs should be scrapped for green goods like solar powered stoves, water saving showers and wind turbine parts, Gareth Thomas argued yesterday. 

Speaking at the World Trade Organisation (WTO) in Geneva, the Minister for Trade and Development said the move would encourage the widespread use of environmentally-friendly low-carbon products.  At present, applied tariffs on these products can be as high as 27%.

Low carbon production is the most cost effective way to produce energy and could help to reduce poverty in some of the world's poorest countries, as well as allow people to work, trade and live in a more environmentally-friendly way. 

Speaking at the WTO, Gareth Thomas said:

"Low carbon technology has huge untapped potential in many developing countries and could offer massive environmental and financial benefits.  For too long, the opportunities for green growth in developing countries have been held back by restrictive import taxes.  

"If we really want to promote green technologies then we all have to do our bit to get trade flowing freely.  As we approach the Copenhagen summit, rich and poor countries alike need to take urgent steps to reduce or remove the tariffs that green imports are subjected to."

The move is not without precedent.  In 1997, after the Uruguay Round on trade, tariffs on IT goods were abolished in order to get the sector moving.  As a result of this, by 2005, members of the agreement made up 97% of the world trade in IT products.

A similar strategy on green goods would make a crucial difference to the distribution of products like wind turbine parts and solar powered cookers.

Over 30 members of the WTO have no commitment at all to set tariff levels in key products such as wind turbine masts or solar powered cookers.  Very small numbers have committed to applying no tariffs at all on a number of these products.  

Some developed countries are still applying tariffs of up to 27% on wind turbine masts for example, and a significant number of developing countries have very high tariffs on these products.

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