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As Climate Accord Takes Shape, NFTC Urges Integration with Global Economic Framework
Date: 12/19/2009
Written By: Jennifer Cummings, The Fratelli Group, 202-822-9491

In Copenhagen, U.S. business group highlights role of unilateral trade measures and IP in climate talks

Copenhagen, Denmark – A leading U.S. business association today welcomed efforts of U.S. and international negotiators to take a first step towards a new multilateral framework on climate change, while urging attention to key issues at the intersection of climate policy and the global economy as the United States works to develop national climate solutions.

In the wake of reports of a new political framework, the Copenhagen Accord, the National Foreign Trade Council (NFTC) highlighted two issues of importance to the U.S. business community in the international negotiations: the protection of intellectual property rights and use of unilateral trade measures.

The Council noted that issues involving the role of intellectual property rights in the development and deployment of clean technologies continued to have a high profile in the negotiations. "It's clear from the negotiations this week that governments cannot solve global warming by themselves," said John Stubbs, who directs the Council's Global Innovation Forum (www.globalinnovationforum.net). "The private sector must be a majority partner in developing solutions, and that would start with encouraging greater private sector investments in clean technology." NFTC observed that the intellectual property discussions had been moving in the opposite direction, and certain proposals on the table would have discouraged investment in clean energy technologies. While the Accord appears free of such references, the Council will continue to monitor discussion of IP and technology issues in the United Nations Framework Convention on Climate Change (UNFCCC) process, including the call for the establishment of a technology mechanism.

Opposition to the use of unilateral trade measures turned out to be an important sleeper issue in the negotiations. China and India led efforts to include language which would have committed countries to oppose efforts to include border adjustment measures or carbon tariffs in domestic climate policies. "The fact that trade developed such a high profile in the talks should surprise no one," said Jake Colvin, NFTC Vice President for Global Trade Issues. "Developing countries recognized trade was a red line for the United States, and used the negotiations as an opportunity to highlight their opposition to carbon tariffs." Trade is unlikely to diminish as an issue, said Colvin, who lead NFTC's participation in the Copenhagen climate talks.

Given the important linkages between trade, investment, and climate change, the presence of officials from the World Trade Organization and World Intellectual Property Organization as observers to the negotiations was welcome.

NFTC expressed appreciation for the work of the United States Government in Copenhagen. "The tireless efforts of the U.S. delegation helped to ensure that the climate talks advanced as far as they did," said Colvin. "The United States brought their A game, and did everything they could to tee up an agreement. We commend U.S. negotiators for their efforts to ensure transparency in the negotiating process and their willingness to brief U.S. NGO observers."

As the world now looks towards achieving further progress at the next climate summit in Mexico in 2010, the Council notes that challenges remain for U.S. policymakers. "To the extent that these efforts lead to a successful international outcome, the real challenge for the United States will be implementing domestic climate policies in ways which are consistent with an emerging global framework," said Colvin.

One challenge for Congress will be how to address concerns about U.S. competitiveness and carbon leakage in ways that acknowledge actions by countries such as China and India which may be taken under an international framework. "There is a difference between the kinds of actions developing countries would be required to take under a global agreement and what the U.S. Congress would consider ‘comparable,'" according to Colvin. "If countries are perceived as complying with their international obligations and the United States still decides to slap a tariff on their exports through U.S. climate legislation, it would set the stage for a nasty confrontation with our trading partners."

Another challenge for the United States will be to secure the levels of funding that would be required under a deal. Legislators have already come under pressure to scale back financing and capacity building programs that would help fund the deployment of clean technologies in developing countries. Concerns have also been raised about private financing mechanisms. Delivering on financing will be essential to the success of an international effort.

"It has been clear for some time that Copenhagen would be the first step in a longer process," said NFTC President William A. Reinsch. "Now that it's behind us, the United States should focus on integrating domestic policies into the international climate framework and ensuring that those efforts support U.S. economic growth and a rebalancing of the global economy."

The National Foreign Trade Council (NFTC) is a leading business organization advocating an open, rules-based global trading system, whose member companies include Boeing, Caterpillar, General Electric, Microsoft, United Technologies Corporation and Wal-Mart Stores. The Council is an accredited observer organization to the UNFCCC climate talks, and led a delegation of U.S. businesses to participate in Copenhagen Conference of Parties (COP-15). NFTC advocates multilateral cooperation on climate change, promotes strong global protection of intellectual property rights, and encourages robust financing and capacity building efforts to help mitigate climate change. NFTC also supports open and transparent trade in green goods and services and urges that U.S. climate policies be compliant with WTO rules and complementary with the global trading system.

For more information about the NFTC's climate-related efforts, please click here: http://www.nftc.org/?id=260&cat=Issues_ClimateChange

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.