26 September 2007
For Personal Use Only

• Source: Kyodo News

TOKYO, Sept. 26 — Japan and the United States are considering proposing that the Group of Eight major industrial powers eliminate or lower import tariffs on energy-saving products such as fuel cells, solar cells and wind power generators to help reduce greenhouse gas emissions, Japanese government sources said Wednesday.

The two countries may float the proposal during a two-day U.S.-sponsored meeting of major greenhouse gas emitters starting Thursday in Washington, the sources said. Japan wants to make it one of the major achievements at next year’s G-8 leaders’ summit in the country.

The Japan-U.S. initiative, which Japan is tentatively calling the ‘’Tariff Elimination Initiative for Climate Change,'’ is aimed at fighting global warming through the expansion of trade in energy-saving products that Japan excels in, according to the sources.

With the initiative, Tokyo wants to take the lead in crafting a post-Kyoto Protocol framework beyond its expiration in 2012. Japan has already secured support from its G-8 partners for a plan to halve global greenhouse gas emissions from current levels by 2050.

Japan hopes the initiative will lead to the greater use of energy-saving products in major emerging greenhouse gas emitters such as China and India.

The European Union is unlikely to oppose the initiative, but the 27-nation bloc may disagree with Japan over a list of goods subject to tariff removal or cuts, the sources said, alluding to Japan’s call to include hybrid vehicles in the list.

The United States is also reluctant to include hybrid cars in the list due to concern over the impact of trade liberalization in hybrid cars on U.S. automakers. Japan’s Toyota Motor Corp. has a dominant market share in the field, with cumulative sales of 1.15 million units worldwide since the introduction in Japan in 1997 of the Prius sedan.

The G-8 groups Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

According to the sources, the United States floated the idea of liberalizing trade in environmentally friendly goods during high-level bilateral talks on climate change on Aug. 8 in Tokyo.

Japan has agreed to the idea. The nation has called for cutting import tariffs on energy-saving products in the ongoing Doha Round of trade liberalization negotiations under the 151-member World Trade Organization.

Japan has told the United States that regardless of what outcomes the WTO talks will produce, Tokyo plans to propose the G-8 nations voluntarily eliminate or lower import tariffs on goods that would lead to reductions in greenhouse gas emissions, such as hybrid vehicles, fuel cells, wind power generators, hydroelectric power generators and solar power hot-water heaters.

A senior U.S. administration official said Japan’s proposal would gain support from the United States, or Europe, if coverage of the list is limited to items related to renewable energy, according to the sources.

The U.S. official said hybrid cars have far bigger impact in the U.S. and European markets than solar cells or wind power generators, they said.

Along with Toyota, Sharp Corp., the world’s top maker of solar power generators with a 30 percent market share, is expected to increase exports if the United States or other G-8 nations agree to liberalize trade in the product under the initiative.

Similarly, the market size for fuel cells will swell to 8 trillion yen in 2020 from 1 trillion yen in 2010, providing growing business opportunities for manufacturers, according to an estimate by Japan’s Ministry of Economy, Trade and Industry.

Japan’s proposal would also benefit consumers in these countries by allowing them to buy energy-saving products at lower prices.

Developing countries, for their part, appear not ready to take part in the Japan-U.S. initiative, fearing that it would lead to further reductions in import tariffs on other industrial goods.

Filed by Ivana Jankovic under Multilateral Trade, The Environment, Climate Change, Energy and Nuclear Safety