Ten Senators and four former U.S. Trade Representatives (USTRs) offered sharply contrasting views on climate change legislation in letters to the White House and Congress this month.
As the Senate prepares to begin work on climate change legislation centering on a cap-and-trade program to limit greenhouse gas emissions, a group of ten Democratic senators wants to ensure that the program does not hurt U.S. manufacturers by forcing them to compete with foreign manufacturers who are under no such limitations.
The group, which includes Senators from states that have seen thousands of manufacturing jobs lost to overseas competition-including Ohio, Pennsylvania and West Virginia-sent a letter earlier this month to President Obama promoting increased tariffs on products made in countries without climate change regulations. In particular, the ten senators said, "We believe that a border adjustment mechanism is critical to ensuring that climate change legislation will be trade neutral and environmentally effective." The ten Senators also stated that failure to address the trade implications of climate change would make it "extremely difficult" for them to support a final bill.
Read the Senators' letter here.
Earlier this summer, the House of Representatives narrowly passed climate change legislation that provided the President with discretion to impose a border measure after 2020 to countries where comparable international climate change restrictions have not been adopted. Shortly after the House bill was passed, the President stated that he did not want "protectionist" measures included in cap-and-trade legislation, and opposed inclusion of a border measure as set forth in the House version of the bill.
The four former USTRs sent a letter to the Senate Energy and Natural Resources Committee on August 18, providing a statement of principles on climate and trade. The statement called for creation of a climate change regime that "avoids disguised protectionism, the use of impermissible subsidies, improper discrimination, or costly economic distortions." With regard to trade and border measures, the statement urged negotiations over any specific trade sanctions imposed through legislation. "A 'stick approach,' unilaterally applied through legislation, is, in our view, destined to fail. One cannot legislate what must be negotiated."
This conclusion by the former USTRs stands in contrast to a World Trade Organization report also issued earlier this summer. The report provided background on how international trade rules could be interpreted to accommodate a carefully drafted border measure.