Wow, the latest out of Bali is really, um, something to behold:
The US and the European Union found a rare common cause when they combined to ask developing nations to cut or remove tariffs on imports of environmental goods and services.
Golly, why would developing nations not go for that?
Other developing countries were also understood to be concerned that the proposal would only benefit rich nations, by opening up export markets in green goods and services before poor countries had a chance to develop them.
Well, there is one "environmental good and service" for which developing countries have robust markets, but, um ...
Poor countries pointed out, however, that the US and EU retained import tariffs on biofuels.
Hm, good point. How we going to talk our way out of that one? Wait for it ... waaaait for it ...
Susan Schwab, US trade representative, said that biofuels were classed as an agricultural issue at world trade talks and thus were separate from discussions of environmental goods and services.
Bam! Rock solid logic, baby! Now STFU, poor countries, and let our container ships in.
Copenhagen climate summit (part 1): the expectations
City preps and countries posture ahead of Copenhagen talks
Comments
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Jon Rynn Posted 7:41 am
10 Dec 2007
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Tasermons Partner Posted 10:03 am
10 Dec 2007
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dewolfe Posted 10:07 pm
10 Dec 2007
The worst thing to do is make these same countries hungry by making our own ethanol at great expense and removing food from the marketplace.
Dewolfe
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Ron Steenblik Posted 5:08 am
11 Dec 2007
Countries like the USA and EU truly wanted a "win-win" outcome on the environment -- so that they could say that trade liberalization was good for the environment also -- and so they slipped in this negotiating mandate into the November 2001 Doha Declaration at the last minute. Countries like NZ, who produce things like monitoring instruments, were also genuinely concerned about high tariffs and non-tariff barriers that were making it difficult for them to export their goods. Most of the goods that the OECD countries had proposed for liberalization were rather generic, by the way: pumps, pipes, filters, meters and other material for controlling or measuring pollution.
The problem was that many developing countries -- led by India -- took a mercantilistic view towards the proposal and only looked at it from the perspective of an exporter. Yet one can make a strong case that it is in any country's interest to look at environmental equipment more as a potential user. But the real politics of this is that developing countries (not all of them, but some of the more influential ones) have refused to sign onto an EG&S deal until and unless they get what they want on agriculture.
Regarding biofuels, the USA and the EU are only half right. Although the negotiating mandate says nothing about the negotiations being restricted to industrial goods, because the "modalities" (how quickly and how deep tariff reductions will be made) are being discussed in the group that deals with industrial products, OECD countries have maintained that no agricultural products should qualify as "environmental goods".
That interpretation would exclude ethanol (classified in chapter 22 of the Harmonized System) but not biodiesel (classified in chapter 38 of the Harmonized System), which is considered an industrial chemical. In fact, in 2005 biodiesel made it onto the composite list of possible environmental goods being considered by negotiators, but was taken off when the list was slimmed down from over 400 to around 150 tariff lines.
The U.S. stance on fuel ethanol being an agricultural good stands in contrast with its own tariff treatment of the good. Whereas ethyl alcohol destined for beverage or industrial (i.e., medical or chemical) use is subject to a mere 2.5% tariff, fuel ethanol is classified in Chapter 99 of the USA's tariff code and subject to an additional specific-rate tariff of 54 cents per gallon.
By the way, I agree with Dewolfe and disagree with Tasermons Partner. Tariffs on imported ethanol do nothing to address the displacement effects of producing ethanol in the United States. As many have pointed out, more corn means less soybeans. And where is that soybean deficit being made up? In part in the Amazon. More to the point, it is awfully rich for people in the United States to lecture other countries about the environmental performance of their agriculture, given the amounts of pesticides, fertilizer and (in the High Plains) irrigation water used to grow corn.
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