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VOL. 124 | NO. 125 | Monday, June 29, 2009

WTO: Some Trade Limits OK to Stop Climate Change

FRANK JORDANS | Associated Press Writer

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GENEVA (AP) - The World Trade Organization acknowledged Friday that some limits on free trade may be necessary to stop runaway climate change – provided the restrictions aren't a cover for protectionism.

"WTO case law has confirmed that WTO rules do not trump environmental requirements," the global commerce body said.

Import taxes on goods coming from countries that fail to meet environmental standards might be among the measures exceptionally permitted under global free trade laws, WTO said.

Such measures are among a wider set of so-called border tax agreements that have been proposed as a means of ensuring that carbon trading programs don't result in companies moving energy-intensive production to countries that refuse to join the programs.

WTO's opinion on green taxes, contained in a 166-page joint report with the U.N. Environment Program, is an indicator to policy-makers that the Geneva-based body won't allow its trade rules to be used as a catch-all excuse for rejecting laws aimed at combating climate change.

"Trade is a friend and not a foe of the environment," said WTO Director-General Pascal Lamy in presenting the report.

He stressed that trade's contribution to global carbon emissions – considered by most scientists as the driving force behind climate change – can be offset by its ability to help spread green technology.

The report also examines whether government subsidies for green industries and energy efficiency rules are allowed under global trade rules. It concludes that such measures would require careful scrutiny to determine whether they are really aimed at fighting climate change or merely a roundabout way of protecting domestic industries from competition.

China this week defended its curbs on exports of industrial raw materials by saying the measures are meant to protect the environment.

The United States and European Union filed WTO complaints Tuesday accusing Beijing of unfairly favoring its domestic steel, chemicals and other industries by restricting foreign rivals' access to key materials.

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On the Net:

PDF version of WTO/UNEP report: http://tinyurl.com/mvl9sn

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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