SOURCE: USCIB

January 25, 2008 09:29 ET

A Green Light for "Green" Tariffs? New Study Scrutinizes How International Trade Rules May Impact Limits on Carbon Emissions

NEW YORK, NY--(Marketwire - January 25, 2008) - Are efforts to limit greenhouse gas emissions under agreements like the Kyoto Protocol compatible with World Trade Organization rules? As Congress and many European policy makers weigh the imposition of "green" border taxes to punish more carbon-intensive products from abroad, a new report by a leading industry group raises troubling questions about WTO rules and jurisprudence and their possible application to climate policy.

The study by the United States Council for International Business (USCIB) looks specifically at the issue of whether countries might decide the U.S. has an unfair trade advantage as the result of its decision not to adhere to the Kyoto Protocol. It is an update of a 2002 paper issued soon after the Bush administration announced its intention not to sign the Kyoto agreement.

"When we published our original paper six years ago, the issue was largely speculative," said Timothy E. Deal, USCIB's senior vice president and the author of the study. "Now we have politicians on both sides of the Atlantic talking more openly about some form of carbon tax regime."

Two separate bills currently before the U.S. Senate would combine a national cap-and-trade system for reducing carbon emissions with fees or taxes on imports from countries that do not adequately limit such emissions. Meanwhile, the European Commission has floated the same idea in proposing a new European emissions regime.

"This issue could cause an absolute train wreck to the multilateral trading system," said Mr. Deal. "Clarification of the relationship between multilateral environment agreements and international trade rules, as called for in the WTO's Doha Development Agenda, may be necessary to avert such a clash."

Founded in 1945, USCIB promotes an open system of global commerce in which business can flourish and contribute to economic growth, human welfare and protection of the environment. Its membership encompasses over 300 leading U.S. companies, professional services firms and associations whose combined annual revenues exceed $3.5 trillion. As the American affiliate of several leading global business groups, USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade. More information is available at www.uscib.org.

The USCIB study, "WTO Rules and Procedures and Their Implication for the Kyoto Protocol," is available at http://www.uscib.org/docs/wto_and_kyoto_2008.pdf

Contact Information

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    Jonathan Huneke
    VP Communications
    USCIB
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