Greening the WTO Environmental Goods Agreement, Tariff Concessions, and Policy Likeness

This paper considers the Asian Pacific Economic Cooperation (APEC) and Environmental Goods Agreement agreements, which grant tariff concession through Harmonized System classifications beyond the six-digit level (‘ex outs’) in favour of ‘green’ goods and discuss how these initiatives fit into the WTO legal regime. Even if the practical significance of the APEC agreement should not be overestimated as it involves modest tariff concessions over a subset of goods, which are not heavily traded, these agreements involve a paradigm shift to the extent that they use tariff concessions negotiated on a plurilateral basis as a policy instrument to meet public policy concern, instead of making market access conditional on meeting national regulations. We find that there is a tension between the current definition of likeness for the enforcement of most favoured nation provisions and the use of ex outs and a risk that improved market access for ex outs could be seen a de facto discrimination. One way out of this conundrum is to define likeness in terms of policy rationales.