Canada signs-up to free trade in green technology

World Economic Forum

By Maura Forrest

January 30, 2014

Canada’s green technology industry may benefit from a new international agreement to achieve global free trade in environmental goods. Together, the signatories represent more than 85 per cent of world trade in green products and technology.

The commitment was signed last week at the World Economic Forum in Davos, Switzerland, by the world’s largest economies, including the United States, the European Union, China, and Japan.

In a joint statement, the participating members declared their commitment to “eliminate tariffs for goods that we all need to protect our environment and address climate change”. The statement says the agreement will take effect once a “critical mass” of World Trade Organization members participates.

The agreement could provide a much-needed boost to Canada’s lagging green technology export market.

A 2010 report published by the Conference Board of Canada found that “Canadian businesses as a whole have failed to seize new – or even maintain existing – opportunities to sell [green] technologies globally”.

Moreover, the value of Canada’s climate-friendly technology exports, estimated at $4 billion in 2008, was “flat or declining” between 2002 and 2008. In 2008, Canada was the 14th- largest exporter of environmental goods, coming in well behind Mexico and many European countries.

The report recommended eliminating tariffs and other trade barriers as a way to help Canada access international markets.

But Marjorie Griffin Cohen, a political economist at Simon Fraser University, says that the inability of Canadian jurisdictions to subsidize local renewable technology presents a barrier to development here at home.

She said that other developed nations “have manufacturing sectors in these industries that are far ahead of Canada’s”.

Griffin Cohen referred to the 2011 WTO decision that Ontario’s green energy program broke international trade rules by forcing companies selling clean energy to buy a portion of their products and services in that province.

We can’t use government subsidies to promote green technology,” she said. “It’s a bit of a damper on the manufacturing side.”