APEC leaders commit to green trade liberalization

HONOLULU Mon Nov 14, 2011 2:59am EST

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HONOLULU (Reuters) - Asia Pacific leaders, including the United States and China, committed on Sunday to slash tariffs on environmental goods and services in a bid to boost trade in products that cut fossil fuel use and reduce pollution.

The green trade initiative represented an achievement for U.S. President Barack Obama at the Asia Pacific Economic Cooperation summit in Hawaii, overcoming reservations from China -- a major manufacturer of solar power products.

A document issued by the leaders estimated that tens of trillions of dollars of investment would be required in the coming years to meet the region's clean energy, clean air, sanitation and other environmental goals.

"We agreed to reduce tariffs on environmental goods and make it easier to export clean energy technologies that create jobs," Obama said at the end of the APEC summit.

The pledge is a victory for Obama, whose administration pushed over the past year for a strong APEC "green growth" commitment. APEC economies account for about 60 percent of current trade in environmental goods and services.

Obama has touted solar, wind and other renewable energy technologies as a way to create jobs and boost economic growth. He suffered a setback in his administration's decision to give solar panel maker Solyndra a $535 million loan guarantee that became an embarrassment after the company went bankrupt.

CHINA SIGNS UP

"The commitment on environmental goods and services is huge. It's a tremendous deliverable for APEC," said Jake Colvin, a vice president at the National Foreign Trade Council, whose members include major U.S. manufacturers.

Chinese President Hu Jintao signed onto the plan to cut tariffs to 5 percent on an undesignated list of environmental goods by the end of 2015, even though earlier this week Chinese officials criticized the cuts as too ambitious.

China also had warned that the U.S. decision to launch a probe that could lead to anti-dumping duties on Chinese-made solar cells and modules could strain energy cooperation.

Hu told business leaders on Saturday that the region should pursue green growth "on the basis of (each APEC members') resource endowment, stage of development and capacity."

The plan reflects the Chinese concern by instructing negotiators to decide over the next year on the precise list of goods that will be subject to tariffs cut.

U.S. officials have identified solar panels, wind and hydraulic turbines, air pollution filters and sewage treatment pumps as goods they would like included.

Together, the 21 economies of APEC -- which also include Japan, Russia, Canada, South Korea and Mexico -- account for more than half of world trade.

The United States and China are the world's two biggest sources of greenhouse gases blamed for global warming.

Another commitment calls on APEC countries to strive to cut their aggregate energy intensity -- a measure of a country's energy use and efficiency -- by 45 percent by 2035.

Pang Sen, a deputy director general in China's foreign ministry, stressed that was an aspirational goal and that the APEC commitments are "voluntary and nonbinding."

APEC members also pledged by the end of 2012 to eliminate domestic content requirements that distort environmental goods and services trade. That is a victory for U.S. companies such as General Electric that been stymied in China and Asia Pacific by public works projects rules that lock them out.

A U.S. Commerce Department report last year said the global market for environmental technologies was $782.4 billion in 2008, with the United States by far the largest single market at $299.5 billion.

(Additional reporting by Michael Martina; Editing by Will Dunham)

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