Table Of ContentU.S. International Trade Commission
COMMISSIONERS
Deanna Tanner Okun, Chairman
JenniferA. Hillman, Vice Chairman
Marcia E. Miller
Stephen Koplan
Charlotte R. Lane
Daniel R. Pearson
RobertA.Rogowsky
DirectorofOperationsandActingDirectorofIndustries
ThisreportwaspreparedbytheOfficeofIndustries
JenniferBaumert,ProjectLeader
[email protected]
MichaelFerrantino, Economist
Staffassigned:
WilliamChadwick,LisaFerens,TomJennings,
DennisLuther,andLindaWhite
Withspecialassistancefrom:
LynetteGabourelandCynthiaPayne
Underthedirectionof:
RichardW.Brown
DivisionChief
Address all communications to
Secretary to the Commission
United States InternationalTrade Commission
Washington, DC 20436
U.S. International Trade Commission
Washington,DC20436
www.usitc.gov
Solid and Hazardous Waste Services:
An Examination of U.S.
and Foreign Markets
Investigation No. 332-455
Publication 3679 April 2004
ABSTRACT
The environmental services sector, including the solid and hazardous waste services
industry, is the focus of increasing international attention. The sector has received
special emphasis in the World Trade Organization (WTO), as the reduction or
elimination of barriers affecting trade in such services has been identified in the Doha
Ministerial Declaration as one of the principal goals of the present negotiating round.
Moreover, environmental issues have become increasingly tied to international trade
and investment, such that the environmental impact of trade agreements is more
likely to be evaluated and considered as a critical component of the policy under
consideration.
This report provides an overview of U.S. and foreign markets for solid and hazardous
waste services; examines trade and investment in solid and hazardous waste services
markets, including barriers affecting such trade and investment; and discusses
existing regulatory practices. With regard to the geographic coverage of this report,
information is presented on both developed- and developing-country markets.
The global market for solid and hazardous waste services is dominated by developed
countries, with the United States, Western Europe, and Japan ranking as the world’s
largest markets for such services. In most developed countries, the solid and
hazardous waste services sector is considered a mature and competitive industry,
while solid and hazardous waste services markets in many developing countries are
small, but rapidly growing. Among the countries discussed in this report, high-
income economies typically generate more solid waste than the middle-income
economies. In addition, high-income countries manage a greater share of their waste,
are more likely to employ modern waste management techniques, and are more likely
than developing economies to maintain and enforce strict waste management
regulations, as developing economies may lack the economic and political capacity to
finance extensive waste management programs or maintain strict regulations.
The extent of cross-border trade and investment in solid and hazardous waste
management services differs dramatically among the countries examined in this
study, but is greatest among high-income countries where stringent regulation and
consistent enforcement create steady demand for waste management services and
encourage the development of waste management capacity. Few of the countries
selected for discussion in this report have explicit restrictions on trade in solid and
hazardous waste management services. However, regulations and practices that
pertain to all sectors, or to related sectors such as architecture and engineering, can
potentially affect trade in the waste management industry.
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PREFACE
On July 1, 2003, the U.S. International Trade Commission (Commission) received a
letter from the United States Trade Representative (USTR) requesting that the
Commission conduct two investigations under section 332(g) of the Tariff Act of
1930 on discrete segments of the environmental services industry.1 The USTR
requested that the first of these reports focus on solid and hazardous waste services.
In response to the request, the Commission instituted investigation 332-455 on July
29, 2003.
The USTR requested that the Commission’s report include:
• an overview of foreign and domestic markets for solid and hazardous waste
services;
• an examination of trade and investment in solid and hazardous waste services
markets, including barriers affecting such trade and investment, if any; and
• a discussion of existing regulatory practices.
The USTR requested that, for the purposes of this investigation, the Commission
define the solid and hazardous waste industry to include the collection of solid and
hazardous waste from households and industry; the treatment and disposal of solid
and hazardous waste by various means; the collection, separation, and sorting of
recyclable materials; waste compacting; waste reduction services; and incidental
services. The USTR also requested that the Commission include information on both
developed- and developing-country markets.
Copies of the notice of investigation were posted at the Office of the Secretary, U.S.
International Trade Commission, Washington, DC, 20436, and the notice was
published in the Federal Register (68 F.R. 46223) on August 5, 2003.2 Nothing in
this report should be construed to indicate the Commission’s finding in an
investigation conducted under other statutory authority covering the same or similar
subject matter.
1 See appendix A.
2 See appendix B. For summaries of the public submissions received in response to this
investigation, see appendix D.
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Executive Summary
Introduction
On July 1, 2003, the U.S. International Trade Commission (Commission) received a
letter from the United Stated Trade Representative (USTR) requesting that the
Commission conduct two investigations under section 332(g) of the Tariff Act of
1930 on discrete segments of the environmental services industry, with the first of
these reports focusing on solid and hazardous waste services (appendix A). The
environmental services sector has received special emphasis in the World Trade
Organization (WTO), as the reduction or elimination of barriers affecting trade in
such services has been identified in the Doha Ministerial Declaration as one of the
principal goals of the present negotiating round. The USTR indicated that
information on environmental services markets would be useful in conducting WTO
negotiations on environmental services, the environmental review of this element of
the current WTO negotiations, and future negotiations and reviews.
The Solid and Hazardous Waste Services Market
In 2001, the year for which the most recent global data are available, solid waste
management services and hazardous waste management services respectively
accounted for 43 percent and 6 percent of the $279 billion worldwide environmental
services market. The United States is the world’s largest market for solid and
hazardous waste services, while other key markets for such services include Western
Europe and Japan. In 2001, the world’s largest solid and/or hazardous waste services
firms included Onyx (a subsidiary of French firm Veolia Environment, solid and
hazardous waste services), Sita (a subsidiary of French firm Suez, solid waste
services), Waste Management (United States, solid waste services), Allied Waste
(United States, solid waste services), and RWE Entsorgung (Germany, solid waste
services).
Relevant literature indicates that differences in technology (between methods of
disposal, between countries, and over time) influence the conditions of supply in the
industry. Changes in the amount of waste generated and in the state of regulation
influence the conditions of demand. These fundamental determinants of supply and
demand, in conjunction with other forces such as economic growth and the relative
prices of energy and recyclable materials, influence the market structure of the
industry.
There seems to be a significant relationship between economic welfare and the
character of national solid and hazardous waste services markets. In most developed
countries, the environmental services sector as a whole, and the solid and hazardous
waste services segments in particular, are considered mature industries characterized
by reduced profitability and excess capacity, which are driving consolidation.
Further, high-income countries manage a greater share of their waste, are more likely
to employ modern waste management techniques, and are more likely to maintain
and enforce strict waste management regulations than developing economies. By
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contrast, solid and hazardous waste services markets in many developing countries
are small, but are experiencing rapid growth. Many developing countries have
expressed significant interest in environmental issues, going so far as to pass strict
environmental legislation, but they sometimes lack the resources to enforce their
environmental policies. Private sector participation in the solid waste industry also
seems to be related to per capita income levels. Solid waste management industries
in high-income countries tend to be dominated by private firms, while in many
middle-income countries, waste removal is still considered a public-service that state
and local governments undertake themselves.
Certain other market characteristics, particularly in the hazardous waste segment,
seem to be unrelated to income. Although high-income economies typically generate
more solid waste than middle-income economies, hazardous waste generation in a
given country does not seem to be closely related to a country’s level of
development. Additionally, the hazardous waste management industry is dominated
by the private sector in almost all of the sample countries in this investigation,
regardless of income level.
Trade and Investment
The extent of cross-border trade and investment in solid and hazardous waste
management services differs dramatically among the economies examined in this
study. Such activity tends to be most common among high-income countries where
stringent regulation and consistent enforcement create steady demand for waste
management services and encourage the development of waste management capacity.
Affiliate sales associated with direct investment in the waste management services
industries are likely one or two orders of magnitude larger than cross-border trade of
such services.
Approximately 30 percent of WTO member states– and eight of the twelve
economies1 discussed in this report– made commitments on refuse disposal services
under the General Agreement on Trade in Services (GATS) (appendix C).
Restrictions specific to trade in refuse disposal services are limited. However, broad
measures that apply to purchases or rentals of property, equity holdings, residency
requirements for directors, tax and subsidy measures, and visa provisions such as
quotas and length of stay may have an impact on the foreign provision of solid and
hazardous waste management services, as may measures specific to related sectors
such as architecture and construction.
1 Among the economies discussed in this report, Australia, Canada, China, the Czech
Republic, the European Union, Japan, South Africa, and the United States scheduled GATS
commitments on refuse disposal services. Chile, Egypt, Malaysia, and Mexico did not
schedule GATS commitments on such services.
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