Ecuadorian officials trained on green industrial policy measures

24 February 2016

​Ecuador's Ministry of Foreign Trade and UNCTAD held a seminar for government officials to examine policy tools they could use to encourage businesses to adopt production processes that are more respectful of the environment, while at the same time respecting the country's multilateral trade agreements.

More than 40 officials from ministries and agencies working in the areas of trade, industry, agriculture, science and technology, intellectual property, and technical standards attended the seminar, which addressed the following questions:


• What public policy space exists today to develop alternative production processes that are more environmentally friendly?
• What tools are available to promote such green industrial policies within the context of multilateral trade agreements?
• How can we make better use of such policies to promote national development and make our businesses more competitive?
UNCTAD walked the participants through a number of policy options—regulations, bans, taxes, fiscal and financial incentives, certification schemes—that Ecuador could use to promote green growth: an increase in the production of goods and services that does not diminish natural resources.
An area of concern for many was the topic of tariffs, and the policy makers in attendance showed a strong interest in identifying green industrial policies that are consistent with the rules of the World Trade Organization (WTO) and Ecuador's obligations, as a member, to not discriminate between national products and services and those of other WTO member countries.
This is an important consideration because if the measure used to promote green growth were in violation of WTO regulations, then Ecuador would run the risk of being taken to the WTO dispute settlement body.  
A group of participants with presenters from UNCTAD and the Ministry of Foreign Trade

For this reason the seminar looked closely at the use of tariffs within limits fixed under the WTO; at horizontal and consumer subsidies and subsidies to services in areas where WTO binding commitments do not exist; and at areas where flexibility exists within the intellectual property system, such as research and development exceptions for green technologies.

Specific country cases were presented to illustrate how governments have used such policies without violating their WTO obligations. For example, Marco Flores, Director of Multilateral Relations of the Ministry of Foreign Trade, presented how Singapore effectively used border tariffs, tax schemes, rebates and environmental regulations to increase the demand for vehicles that use less energy and produce less pollution.
Thanks to Singapore's Carbon Emissions-Based Vehicle Scheme (introduced in January 2013), over 65% of new cars and imported used cars in 2014 were very low carbon emission vehicles.
Santiago Garcia, Dean at the National Institute of High National Studies, noted that Ecuador already has some green industrial policies in place, such as tax incentives for research and development and new investments in green technology, especially in poorer regions. 
But for the moment only big businesses have taken advantage of these incentives. The participants agreed that the government should target small and medium-sized businesses and make sure they are aware of the incentives. This is because smaller businesses are the main producers and distributers of many consumer products in the country, such as stoves, light bulbs, food and construction material, and thus have a key role to play in promoting green growth in the country.
The workshop is a continuation of the close collaboration between UNCTAD and the Ministry of Foreign Trade, who worked together from 2013 to 2015 to design the country's National Action Plan for Green Exports and Products, which focuses on making the cocoa-chocolate and fisheries sectors more environmentally and socially responsible.