Specialists See Need to Link Trade Measures With Climate Talks

In an op-ed published today by the Washington Post, C. Fred Bergsten, director of the Peterson Institute for International Economics, and Lori Wallach, who directs the Global Trade Watch division at Public Citizen, suggested ways to avoid the imbroglio of a trade war linked to climate policy. Although often on opposing sides of trade arguments, the two wrote that "we agree on a surprising number of aspects of the climate-change debate and on the related need to overhaul global trade negotiations, which are stalled by disagreements and the worldwide financial crisis."

Major trade partners have criticized the inclusion in U.S. climate change legislation of tariffs on imports from nations that have not agreed to cut GHG emissions. However, Bergsten and Wallach wrote: "We agree that it is politically unrealistic--and unwise--to try to enact a cap-and-trade system that puts manufacturers in the United States at a competitive disadvantage with those operating overseas that do not produce under comparable requirements. It makes no sense to impose a cost on those producing steel, autos and other goods, only to have them shift jobs and pollution to China or India--which are wary of binding international obligations on emission reductions."

Add that to the rising call for green-technology transfers to under-developed nations, and, the authors said, it is time for the U.S. to lead: "One path would be to launch an 'Obama Round' of talks that would include, as a centerpiece, addressing these potential commercial and climate trade-offs and updating the negotiating agenda. Earlier this year, the Peterson Institute recommended a new code of 'best practices' on greenhouse gas emissions controls, including establishment of 'policy space' for countries to limit emissions without sacrificing the competitive position of their industries. The institute also recommended that countries adopt a time-limited 'peace clause' in which pursuit of new trade barriers would be suspended while the negotiations proceeded, and that a global climate accord be linked to a new global trade accord."