If President Obama is to deliver on his ambitious goal of doubling U.S. exports in five years, it will be essential for the United States to pursue an aggressive strategy to help American businesses access international markets. One promising place to begin is at the intersection of trade and the environment.
On the heels of the announcement by Wal-Mart Stores that it will push carbon out of its supply chain, the Obama administration sent new signals this month in its annual trade policy agenda that it will use some government muscle to advance a series of environmentally-friendly trade policies. The Office of the U.S. Trade Representative set out an ambitious plan to open foreign markets for U.S. exports, which includes significant mention of policies designed to open and regulate trade for environmental purposes.
One of those efforts is to lower or eliminate barriers to environmentally friendly goods and services. The Obama administration indicated that it would seek "to fast-track the elimination of tariffs on goods directly relevant to addressing climate change, such as solar panels and stoves, and wind and hydraulic turbines," breathing life into an effort that has been languishing in Geneva as part of the long-stalled Doha Round of global trade negotiations. USTR's indication that it would work with "like-minded and ambitious WTO members" suggests they may move forward on a green trade agreement even without the rest of the Doha Round, a move that the National Foreign Trade Council supports.
The administration has also focused on promoting American ideas and protecting the intellectual property behind U.S. clean technologies. Making sure U.S. trading partners enforce IP rules overseas helps spur investment and jobs in the United States and creates the conditions which can facilitate research and sharing of technologies with other countries.
One potential deliverable in this area this year is the establishment of a technology cooperation mechanism, which was written into the Copenhagen climate accord. As negotiators seek to flesh out the idea, U.S. trade policymakers will be called on to propose new forums and financing mechanisms to build trust and spur collaboration between U.S. companies and researchers and counterparts in developing countries. Devising a mechanism which relies on the current system of intellectual property rules, and which uses financing to make up funding gaps and strengthen legal protections abroad, would benefit U.S. exporters and our partners in the developing world.
The trade policy agenda also highlights a host of other environmentally-oriented trade priorities, from promoting sustainable tropical timber trade to reducing subsidies that contribute to overfishing. On paper, the environment is clearly an important part of the administration's trade agenda.
Environmentally-friendly trade policies should be a high priority for the administration this year. Securing access to international markets would help create clean energy jobs in the United States. Lowering trade barriers would reduce the cost of environmental technologies globally and increase access to those technologies, particularly in developing countries where trade barriers are often the highest. Promoting global enforcement of intellectual property rules - and developing new structures that support research collaboration based on compliance with those rules - could benefit U.S. innovators and facilitate better commercial relations between the United States and partners around the world.
Green trade is also bipartisan. Lowering barriers to clean technologies and protecting and promoting U.S. innovation are as American as apple pie. These initiatives enjoy support from a diverse group that includes Senators John Kerry and Richard Lugar and Congressmen Kevin Brady and Rick Larsen. Delivering on a green trade agenda would provide an opportunity to lead on trade without the partisan baggage that is attached to much of the trade agenda.
In a year where progress on domestic carbon-pricing legislation or in global climate negotiations may be slow, green trade also offers chances to demonstrate global leadership on the environment.
This is not to say that fulfilling such an agenda will be easy. Negotiations for a green trade agreement will present a host of complicated questions for the Obama administration, including whether to negotiate lower barriers to sensitive imports like ethanol and automobiles. Collaborating on clean technology development and deployment may require new sources of financing and delicate negotiations with partners in the developing world.
Defending U.S. interests internationally will also be a challenge, given the importance countries like China have placed on developing local industries through a mixture of tariffs, subsidies and standards. (The National Foreign Trade Council today released a lengthy review of China's renewable energy sector, which details promotional measures its government has taken "by directly or indirectly stimulating demand for Chinese-made renewable energy equipment.")
But as the United States seeks to rely less on the U.S. consumer to drive economic growth, the administration will need new mechanisms to help U.S. businesses export more of what they produce. Environmentally-friendly trade policies offer fresh opportunities to deliver benefits for American businesses and workers, provided that the administration is willing to spend some serious time and energy to see them through.
An edited version of this article appeared in The Hill on Friday, March 12, 2010.
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