As many of you probably know, there is lots of talk these days about free trade in environmental goods. APEC has a list of such goods on which tariffs are to be removed, and President Obama has proposed a tariff-lowering agreement at the WTO.
But there's a flaw in this plan: Trade remedies. The tariffs they are talking about removing are only normal tariffs, not trade remedy tariffs. And recently, there have been lots of these tariffs imposed, at fairly high rates.
Which leads to an obvious suggestion: If we want free trade in environmental goods, we have to eliminate trade remedy tariffs as well.
Trust me, I am aware of the political difficulty of such a proposal. Trade remedy reform of any sort is quite a challenge. Actually eliminating trade remedy tariffs for particular products is a daunting prospect!
While the chances of such a proposal generating widespread support may be slim, it definitely won't happen if nobody proposes it. So my Cato colleague Bill Watson and I are proposing it in this short Cato paper: http://www.cato.org/publications/free-trade-bulletin/free-trade-environmental-goods-trade-remedy-problem
Will this ever happen? I don't know, but it should. I'll leave you with the conclusion from the paper:
Whether a proposal to exempt environmental goods from trade remedies is politically realistic remains to be seen. No one will really know the answer to this question until a government makes the proposal. In recent years, governments have talked a lot about supporting the environment and about promoting free trade. If they are serious about these goals, a proposal to eliminate all tariffs, including trade remedy tariffs, on a wide range of environmental goods would be a good way to accomplish both.
