Enabling Global Green Free Trade

9 October 2012

Aligned with this spirit of Public-Private cooperation, the World Economic Forum’s Green Growth Action Alliance (G2A2) has released an open letter at the Global Green Growth Forum advocating the creation of global green free trade regulations. In the letter, national leaders are asked to engage with multilateral trade organizations to liberalise trade in clean technologies, as well as calling on other organizations to join a drive towards a pragmatic solution to the challenges of Green Free Trade.

Green Trade Relations

This release has been prompted by increased trade tensions between some of the world’s largest markets. For example, EU solar firms have sought to impose tariffs on Chinese solar manufacturers after the US enacted similar measures earlier this year. As a result, global growth of the renewable energy industry is currently facing a slowdown because of growing green trade difficulties between these major world economies, and deadlock at the World Trade Organisation (WTO).

Fortunately, work has already begun on reversing this trend through other intergovernmental processes. Leaders at the Asia-Pacific Economic Cooperation (APEC) meeting held September 8th and 9th this year in Vladivostok, Russia, agreed to cap tariffs affecting trade for green goods and services at 5%. When fully implemented, tariffs will be reduced from as much as 35%, to the maximum 5%. These tariff reductions should have a significant positive impact in terms of increasing trade in green goods and services—and protecting the environment—in the Asia-Pacific region, which currently represents more than 50% of world trade.

More Work to be Done

However, while the APEC decision is a welcome move in the right direction, the rising tide of green import tariffs, local standards requirements, market-distorting subsidies and other nontariff barriers demonstrates that more action is needed. Work needs to be done to build on the work of the APEC leadership in order to develop a truly global initiative to lower the barriers to green free trade.

The information and communications technology (ICT) industry faced similar challenges in the 1990s and successfully developed a groundbreaking Information Technology Agreement that led to the elimination of tariffs. The result was the substantial growth of the ICT industry: from 1996 to 2008, total trade in products increased more than 10 percent annually, from $1.2 trillion to $4.0 trillion

Green Free Trade Open Letter

The signatories of the open letter have agreed to work proactively with governments and civil society organizations to develop a green free trade approach that delivers economic growth and preserves environmental prosperity. Through such coordinated industry action, it is envisioned that barriers to Green Free Trade can be removed in order to allow the rapid global dissemination of clean technologies that is crucial to the world’s transition to a green growth economy.

Financial institutions, industry organizations and individual clean-tech companies have signed the open letter including Applied Materials, Bank of America Merrill Lynch, Barclays, Canadian Solar, General Electric, Novozymes, SEMI PV Group, Solar Energy Industries Association, Suntech, Suzlon Group, Trina Solar, Vestas Wind Systems, Wal-Mart Stores,Welspun Energy and Yingli Solar.

The Green Free trade letter was launched by Ditlev Engel, President and CEO of Vestas at the Global Green Growth Forum on October 9th.

The original letter can be found at:

Global Green Growth Forum 2012

The Global Green Growth Forum, is a partnership between the Governments of Denmark, Republic of Korea, Mexico, China, Kenya, and Qatar, leading global corporations and international organisations working to create large-scale green projects as part of a bottomup economic transition to a greener economy. Danfoss and Vestas are official corporate partners to the Global Green Growth Forum. The Global Green Growth Forum 2012 is being held on the 8th and 9th of October in Copenhagen, Denmark.

For more information, please see: www.globalgreengrowthforum.com