./.WORLD TRADE
ORGANIZATIONS/CSS/W/51
14 March 2001
(01-1407)
Council for Trade in Services
Special SessionOriginal:  English/
French
COMMUNICATION FROM CANADA
Initial Negotiating Proposal on Environmental Services
The attached communication has been received from the delegation of Canada with the
request that it be circulated to Members of the Council for Trade in Services.
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1. Canada reserves the right to modify this pro posal at any time. This proposal does not prejudge
Canada’s position on other service sectors, nor any future offer on this or other sectors. This proposal
should be read in conjunction with the principles and objectives as outlined in Canada’s initial
negotiating proposal.
A. INTRODUCTION
2. Further to our general negotiating position tabled in accordance with the “Road Map”
exercise, Canada submits this initial proposal on environmental services for the consideration of WTO
Members.
B. IMPORTANCE OF ENVIRONMENTAL SERVICES
3. The environment industry, particularly its service component, exerts multiplier impacts across
all sectors of the economy. It is considered to be a knowledge-based, enabling, high valued-added,growing component of the new economy. Over th e years, there has been growing worldwide
recognition of the importance of environmental services to improve environmental protection,
remediation and prevention. This new context has given rise to an increasing global demand for
environmental products and services which has been  mainly fuelled by the existence and enforcement
of domestic environmental regulations and greater consumer and community awareness. As a result, aglobal market for environmental services has boomed during the nineties accounting for about
50 percent of total demand of environmental goods and services.
4. For most WTO Members, in particular for developing countries, substantial benefits can be
derived from greater trade liberalization of environmental services in the context of GATS
negotiations. A wider access to foreign markets as well as improving the current framework of rulesallow greater transparency and predictability for both small and large environmental services
providers. It allows service exporters to diffus e their knowledge and technical expertise worldwide
while importers benefit from a broad range of environmental services at lesser costs. In this context, it
is likely that trade liberalization will lead to potential win-win scenarios, considering the global nature
of environmental issues. There are two main types of win-win scenarios that can be generated byincreased liberalization: environmental protection gains (e.g., healthier environment) and economic
development gains (e.g., diffusion of expertise  and development of local skills). The magnitude ofS/CSS/W/51
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these expected benefits, however, remains linked to the existence of domestic institutional and legal
frameworks.
5. An important aspect of the environmental services sector is the regulatory framework in
which this sector operates. The GATS affirms Members’ right to regulate. It also obliges Members to
be transparent about their regulations. Canada encourages Members to increase their regulatorytransparency in the area of environmental services.
C. S
ECTORAL COVERAGE
6. Environmental services are defined according to the current W/120 classification as follows:
• sewage services;
• refuse disposal services;
• sanitation and similar services; and
• other (e.g., cleaning services of exhaust gases, nature and landscape protection, etc.).
7. Canada recognizes that there are related services found elsewhere in the W/120 that are
important to the delivery of environmental services, such as technical testing and analysis services,
scientific and technical consulting services, engineering services and construction services.
8. Extensive discussions have taken place recently in the Committee on Specific Commitments
on the issue of “core” versus “cluster” environmental services. In our view, this discussion is
primarily about classification of environmental services. However, the discussion on clusters has also
been important for identifying related environmental services that exist in the W/120. We believe it is
important for Members to seek greater liberalization for both the activities contained in the core list ofenvironmental services as they are currently defined in the W/120, as well as in other related sectors
(e.g., technical testing and analysis, scientific and technical consulting, engineering and construction).
Clusters should be used primarily in the negotiations as a “check list”.
D. P
ROPOSAL
9. Liberalization of environmental services is paramount for a number of goods and services
industries. The Canadian environmental service sector is competitive and knowledge intensive and is
open in all sub-sectors of environmental services of the GATS. However, there are still many WTO
Members who maintain a range of barriers affecting trade and investment which are likely to be an
inhibiting factor in the potential growth of this industry.
10. During the ongoing negotiations, there is an opportunity for Members who have taken no
commitments in the core list of environmental services sector to make bound commitments in all
sub-sectors and modes of delivery. For the 49 Member countries who have commitments in the core
list, they should aim at reducing or eliminating existing restrictions on national treatment and market
access and broadening their commitments to related services. The most significant categories of
restrictions are those related to the lack of transparency of regulatory regimes and practices,investment/establishment, entry and stay of services managers, professionals and experts and
licensing requirements. A combination of these barriers can also have a “multiple barrier” effect
across sectors. The cost of maintaining barriers in the environmental service sector may not only have
a significant impact on costs and the variety of services provided, but act as a disincentive for the
global diffusion of environmental technology, skills and expertise.
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