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In Senate Testimony, NFTC Urges Aggressive Green Trade Component to U.S. Climate Agenda
Date: 11/17/2009
Written By: Jennifer Cummings, The Fratelli Group for NFTC, 202-822-9491

Warns carbon tariffs could “damage the ability of American companies to compete in key markets”

Washington, DC – National Foreign Trade Council (NFTC) Vice President for Global Trade Issues Jake Colvin today urged Congress to more fully incorporate green trade into climate policy, which would boost U.S. economic growth and advance global environmental goals. Noting the challenge of addressing competitiveness issues in cap-and-trade legislation, Colvin also warned policymakers against including well-intentioned, politically popular measures such as carbon tariffs that could undermine U.S. competitiveness abroad and global cooperation.

“The Administration and Congress can promote green jobs at home and advance global environmental objectives by incorporating a more robust green trade component into the international climate agenda. In particular, efforts to expand overseas markets for U.S. climate technologies by reducing trade barriers are critical for creating new green collar jobs in the United States and can aid global climate goals,” Colvin stated in his testimony.

He noted that U.S. exporters selling environmental goods and services face disproportionately high tariffs, as well as non-tariff barriers that present even larger obstacles. “Reducing these impediments would allow U.S. companies to capture a larger share of the more than $600 billion environmental goods and services market, which is growing at twice the rate of all trade,” he said.

Colvin pointed out that green trade “has not received a great deal of attention in international climate negotiations despite the clear environmental benefits,” and highlighted that the NFTC and eight other leading U.S. business organizations sent a letter to the president in July, urging the Administration to lower green trade barriers and pursue a green trade agreement “through all appropriate international economic and environmental forums.”

In contrast, he stated, “Two issues that have received a great deal of attention in international climate discussions are intellectual property rights and financing. Ensuring the global protection of intellectual property rights and addressing funding and capacity needs in developing countries will promote investment environments abroad that are better able to adopt and develop clean technologies.”

With respect to U.S. competitiveness, Colvin cautioned, “As Congress seeks to address competitiveness and carbon leakage concerns from implementing an emissions reduction program, one popular option – the use of border adjustment measures – could damage the ability of American companies to compete in key markets and global environmental cooperation. Given the increasing reliance on exports to grow the U.S. economy and create new jobs, it is essential to avoid introducing measures that could cause unnecessary friction with U.S. trading partners.” He noted that the international reserve allowance program included in the House-passed American Clean Energy and Security Act, which could lead our trading partners to argue that “such a program is as likely to be fueled by a desire to protect domestic industry as by an interest in protecting the environment.”

Colvin concluded by stating, “Aggressive and innovative green trade policies can assist efforts to advance U.S. economic priorities and environmental goals, but attempts to impose new tariffs could harm both,” said Colvin. “Efforts to open markets abroad for U.S. businesses and workers in the clean technology arena will be essential to rebalance the global economy and create the next generation of green manufacturing jobs in the United States.”

For Colvin’s full testimony, please click here. For an archived Webcast of this morning’s proceedings, please visit http://energy.senate.gov/.
 
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About the NFTC

Advancing Global Commerce for 95 Years -The National Foreign Trade Council is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.