International Trade in Services.pdf - DSpace at Khazar University

326 International Trade in Services
Trade in environmental services
Reform in environmental regulation, greater public awareness, and growing private
participation are contributing to the development of the environmental sector, but
also to the increase in the international trade in environmental services. In trading
internationally, environmental firms may deliver remote monitoring services electronically
and provide consulting services online. An example of crossborder trade
(Mode 1) is offered by a Brazilian firm that electronically monitors wastewater in
Peru from a facility in Brazil. Firms may also serve foreign investors in the domestic
market. For example, a Brazilian environmental testing firm might consult with a visiting
Peruvian executive (consumption abroad). Environmental service firms often
establish offices abroad. Thus, for example, a Brazilian firm provides hazardous waste
management to a Peruvian plant in Peru (commercial presence). Firms might also
visit clients in the home market to provide services. For example, a Brazilian environmental
analyst might travel to assess a Peruvian facility in Peru (the movement of
natural persons). Given the largely physical nature of the industry, the primary
means of trade is commercial presence (Mode 3), but there is also substantial crossborder
movement of environmental professionals (Mode 4) (USITC 2004).
Statistics on trade in environmental services are scarce. Using various commercial
statistical sources and anecdotal evidence, we derive a broad picture of the
trade in environmental services, emphasizing the variation between developing
and developed countries and the variations across the segments of the industry.
Evolution and current situation
Data limitations do not permit an exact estimation of the volume of trade in environmental
services. Rough estimates indicate that global exports of environmental
goods and services reached US$79 billion in 2002. 2 The European Union,
Japan, and the United States were the leading exporters that year, together
accounting for approximately 90 percent of total environmental exports.
According to Geloso Grosso (2004), based on information from Environmental
Business International, developing countries are net importers of environmental
services, though their exports are increasing. Currently, the exports
of developing countries tend to be oriented mainly toward regional markets.
(For example, see the case of Mexico in box 10.3.)
In the middle of this decade, UNCTAD, the United Nations Development Programme,
and the Organisation for Economic Co-operation and Development each
carried out surveys of environmental markets, in total covering 17 developing or
emerging economies (Kennett and Steenblik 2005). 3 Many of the studies attempted
to quantify the exports and imports of environmental goods and services. The results
of these reports have confirmed some of the broad statistics presented here. The studies
indicate that imports of environmental goods and services account for 5–10 percent
of total goods and service imports in the countries examined, and imports and