But Removal of Barriers on "Related" Services May Increase Trade in the Sector

There are few trade barriers that apply specifically to the provision of core environmental services, but the removal of barriers affecting "related" services including architectural, engineering, and construction services, among others could increase trade in the environmental services sector, reports the U.S. International Trade Commission in its publication Environmental and Related Services.

The USITC, an independent, nonpartisan, factfinding federal agency, produced the report at the request of the U.S. Trade Representative.

In the request letter, the USTR stated that since the 2004-2005 publication of USITC reports on trade in the environmental services sector, the U.S. and global markets for such services have undergone significant change. The USTR noted that although overall demand in the environmental services market has continued to rise, factors such as new technologies, tightening government budgets, and growing interest in environmental sustainability have altered the means through which such services are supplied. The USTR asked the USITC to provide updated information "to assist us in better understanding recent developments in the environmental services ... sector."

As requested, the report provides estimates of the U.S. and global markets for, and discusses barriers to, trade and investment in three core environmental services industries: water and wastewater services, solid and hazardous waste management services, and remediation services. The report also examines the critical role of several related services. Highlights of the report follow.

• Between 2000 and 2010, revenues in the global environmental services market increased by 41 percent to $505.5 billion. Water and wastewater services accounted for 49 percent of the market in 2010, solid and hazardous waste services accounted for 32 percent, and remediation services accounted for 8 percent.

   

   

• The United States accounted for the largest share of the global environmental services market in 2010 (38 percent), followed by Western Europe (28 percent) and Japan (11 percent). Developing countries accounted for a very small share of the global market.

   

   

• While environmental services markets have grown in recent years due to factors such as population growth, increasing economic activity, regulation, and rising environmental awareness, trade continues to account for a very small share of revenues in these markets.

   

   

• The United States ran persistent trade deficits in water and wastewater services and solid and hazardous waste services during 2000-2010. In 2010, these deficits were approximately $2.4 billion for water and wastewater services, and $352 million for solid and hazardous waste services. By contrast, the United States posted a $245 million trade surplus in remediation services in 2010.

   

   

• Trade barriers affecting environmental services primarily include general investment restrictions and measures that impede the provision of related services.

   

   

• Results from a gravity model estimated by the USITC suggest that the reduction of certain regulations on architectural, engineering, electricity, and transportation services is associated with a substantial increase in sales by environmental services firms operating abroad.

   

Environmental and Related Services (Investigation No. 332-533, USITC Publication 4389, March 2013), will be available on the USITC's Internet site at http://www.usitc.gov/publications/332/pub4389.pdf. A CD-ROM of the report may be requested by emailing pubrequest@usitc.gov, calling 2202-205-2000, or contacting the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.

USITC general factfinding investigations, such as this one, cover matters related to tariffs and trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analysis on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requestor. General factfinding investigations reports are subsequently released to the public, unless they are classified by the requestor for national security reasons.