The Obama administration wants to ensure that legislation being crafted by Congress to fight global climate change does not violate international trade rules and backfire on U.S. exports, the top U.S. trade official said in a letter to a Republican lawmaker.
The letter from U.S. Trade Representative Ron Kirk, released late on Tuesday, was in response to questions Rep. Joe Barton raised about Energy Secretary Stephen Chu's recent suggestion that the United States may need to impose a border tax on Chinese goods.
Despite Chu's comment, the administration does not support any specific measures, including border measures, at this time to address concerns about the climate bill relating to trade, Kirk told Barton, the top Republican on the House of Representatives Energy and Commerce Committee.
Many energy-intensive U.S. industries, such as steel, are worried that proposed new taxes on carbon emissions could cripple their competitiveness if developing country rivals such as China and India do not take similar steps to cut their own greenhouse gas emissions.
President Barack Obama has made passing climate change legislation a top priority. House Democrats have proposed a bill that would cut U.S. carbon emissions 20 percent below 2005 levels by 2020 and also help industries that would struggle to meet the proposed requirements.
In addition to fears about potential U.S. job losses, there are concerns about carbon leakages from one country to another if all major emitters do not agree to make cuts.
Last month, Chu told the Energy and Commerce Committee the United States may need to raise import duties on China to maintain a level playing field because we don't want to disadvantage our industries at home.
'KILLING DOMESTIC JOBS'
Larry Neal, deputy Republican staff director on the Energy and Commerce Committee, said Kirk's letter tries to make up in cheery confidence what it lacks in facts.
It leaves unanswered questions about whether other nations will be able to take strategic advantage of higher energy prices that U.S. manufacturers would face under the climate bill, Neal said.
Kirk also does not answer whether the administration has any evidence that our world leadership on global warming will have much impact beyond killing domestic jobs, Neal added.
Including some sort of trade-protection language in a climate change bill could be vital to securing enough support for passage in Congress.
But depending on how such border measures are crafted, they could run afoul of World Trade Organization rules and lead to retaliation against U.S. exports, trade experts say.
Kirk said the administration was sensitive to concerns raised by energy-intensive industries but also believes transforming the United States to a low-carbon economy would create new agricultural and manufacturing jobs.
The White House wants to work with Congress to ensure that the design and implementation of domestic energy and climate policy are compatible with our international trade obligations and minimize incentives for our trading partners to pursue countermeasures that could negatively impact U.S. exports, Kirk said.
The best solution would be to negotiate a new international climate change agreement that ensures all the major emitters take long term, significant action to reduce greenhouse gas emissions, Kirk said, referring to ongoing efforts to reach such a deal by the end of this year.
(Reporting by Doug Palmer; editing by Will Dunham)