Summary

• Green manufacturing, a way for production that minimises waste and pollution, has become an increasingly important corporate strategy in the global business arena.  While consumers in overseas markets are now more concerned about the environmental impact of the products they consume, governments worldwide have been tightening their environmental regulations governing products.

• In the US, despite its relative indifference in the past, environmental protection and clean energy have been gaining relevance over recent years, and are expected to place high on the agenda of the Obama administration and Congress in 2009 and beyond.  One of the administration’s major trade priorities is making trade an important policy tool for achieving progress on national energy and environmental goals.

• Meanwhile, US states continue to address a number of pressing environmental concerns in order to fill the vacuum left by the federal government.  Legislative and regulatory action at the state level has covered a wide array of environmental issues, including the use of hazardous substances in and recycling of electrical and electronic equipment, commercialisation of incandescent light bulbs, sale of mercury-added products, use of phosphorous in dishwasher detergents, etc.

• Such increasingly stringent requirements clearly favour competent manufacturers who are able to churn out the required green products.  But they discriminate or even bar market access to suppliers who fail to act accordingly.  It is thus essential for Hong Kong exporters to keep up-to-date on information about the development of existing and prospective green product requirements, in order to be able to sell in the US market.
  

I. The Green Manufacturing Trend

Green manufacturing, a process for production that minimises waste and pollution, has become an increasingly important corporate strategy in the global business arena.  As a growing number of Hong Kong manufacturers turn out to be more environmentally responsible, they are aware that green manufacturing, despite higher incurred costs, offers a distinct competitive advantage over the laggards.  Indeed, green manufacturing is not only a more responsible way for Hong Kong manufacturers to do business, but also a means to enhance their corporate image, sales and profits.

At the consumer level, there is rising concern about deteriorating environmental quality, particularly that which has a direct impact on an individual’s health and living conditions.  With the growing popularity of so-called green consumerism, consumers in overseas markets, including the US, are now more concerned about the environmental impact of the products they consume.  Not surprisingly, they are in general willing to pay more for products incorporating green attributes and environmentally-friendly end-of-life conditions.

More importantly at the government level, countries worldwide have been tightening their environmental regulations governing products.  In particular, advanced economies, again including the US, have set up different regulatory requirements and product standards on environmental and health grounds.  Such stringent requirements clearly favour competent manufacturers who are able to churn out the required green products.  But they discriminate or even bar market access to suppliers who fail to act accordingly.  Against this background, Hong Kong manufacturers should keep a close eye on relevant regulatory developments in overseas markets and respond accordingly.

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