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Trade Penalties Weighed in Climate Bill |
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Written by LNC
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Monday, 29 June 2009 |
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The following appeared in the Wall Street Journal on June 26, 2009 and was written by Stephen Power and Greg Hitt with contributions from Jonathan Weisman.
WASHINGTON -- House Democratic leaders Thursday weighed tough trade penalties on countries that don't cap so-called greenhouse-gas emissions, while President Barack Obama sought support from wavering lawmakers ahead of a vote on a climate bill.
The trade proposal is designed to protect a half dozen trade-sensitive U.S. industries, including steel, cement and chemical manufacturers, from competitors in countries that don't cap their output of greenhouse gases.
Top House Democrats and many members of the Ways and Means Committee, which has jurisdiction over trade policy, led the negotiations and effectively signed off on details of the plan late Thursday.
The measure -- expected to be folded into the 1,200-page proposal to curb U.S. greenhouse-gas emissions -- is tougher than a provision approved last month by the House Energy and Commerce Committee. It would impose the sanctions in 2020, five years before the earlier-approved version would, and give Congress authority to levy a border fee, if the president chooses not to act, that would raise the cost of imported goods.
The inclusion of the trade-related provisions is meant to appease lawmakers from heavy industry states like Pennsylvania, Ohio and Michigan who worry that limits on U.S. emissions would put domestic industries at a disadvantage to competitors in countries like China that don't limit emissions.
Rep. Sander Levin (D., Mich.) said the changes are "designed to do no more than is necessary to ensure that this important legislation is trade neutral for our energy intensive industries."
White House aides said Thursday they were still reviewing the language on imports and were not sure it would remain in the bill that comes to a vote Friday. They declined to state the president's position on the issue.
Still short of votes, the president made personal and public appeals to wavering Democrats, making a brief statement in the Rose Garden and calling lawmakers.
The proposed border-adjustment program also includes commitments to help downstream industries that make use of products that face global competition.
As proposed, the sanctions would not take effect if the U.S. enters into a global agreement to limit emissions. The legislation establishes a series of U.S. objectives for any global agreement, including a demand that any international pact include enforcement mechanisms to shield companies from unfair competition.
China's government and some major U.S. business groups, such as the Chamber of Commerce, have warned of a trade war if the U.S. imposes tariffs on carbon-intensive imports such as steel. In a letter to Congress dated Wednesday, the Chamber warned that the provisions being considered by Ways and Means "could spark a trade war" and make U.S. companies that rely on imports less competitive.
Democratic aides and lawmakers suggested the legislation was still short of the 218 votes needed to ensure passage. It was unclear by how much, but individuals familiar with the vote-counting suggested Democrats were lacking 15 to 20 votes and perhaps more.
The nonpartisan Congressional Budget Office has estimated that the legislation would have a fairly modest impact on the economy, with net annual economy-wide cost in 2020 of $22 billion -- or about $175 per household.
Republicans, and some major business groups have slammed the bill as an energy tax that would drive up the costs of goods and services and put the U.S. at a competitive disadvantage with countries that don't operate under such caps.
On Thursday, Republicans cited Bureau of Economic Analysis data showing the U.S. economy contracted at an annual rate of 5.5% in the first quarter of 2009 as further evidence for scrapping the legislation.
Speaker Nancy Pelosi met with a handful of lawmakers from timber-producing states pushing for wood byproducts to be treated as a renewable-energy source under the bill.
Democratic leaders were also looking for ways to address the concerns of a handful of lawmakers worried that a provision of the bill goes too far in toughening oversight of derivatives, congressional aides said.
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In the news
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March 2-4, The Coalition for a Prosperous America
Legislative Fly-In
CPA will hold its Second Annual Legislative Fly-In on
March 2-4, 2010. This is a powerful opportunity for us to work
together to advance trade reform in the halls of Congress. We need to
bring the concerns of the grass roots to our legislators.
This is efficient advocacy, well worth your time. We make all the
meeting arrangements with legislators or their staff, we put together
materials, we plan a message, and we pack meetings together in a
concentrated period of time. You make a bigger impact with your time
using only three of the 365 days in the year.
Click here to sign up for the CPA Fly In.
CPA has a special offer--limited time only: the first 50 registrants
get a free copy of Ian Fletcher's new book: Free Trade Doesn't Work.
This is a highly acclaimed book about trade policy and the needed
changes therein.
Agenda:
March 2, 2010: 2p to 6p - Group meeting for training, talking points and team assignments
March 3-4, 2010: Hill visits
Place: Capitol Skyline Hotel, 10 I ("Eye") Street SW, Washington, DC 20024
Once registered, please call 202.488.7500 for hotel room reservations
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March 2 and March 3. CPA has negotiated discounted rates for a limited
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If you have questions about the events, please call Sara Haimowitz,
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