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katherine tai
US-China Electric Vehicle Dispute Shows Old Trade Rules Imperil Climate Action
"The climate crisis is too urgent for the U.S. or any country to allow outdated trade rules... to distract us from enacting bold climate policies," argued one campaigner.
Mar 26, 2024
As the Chinese government on Tuesday formally challenged what it termed "discriminatory" U.S. electric vehicle subsidies, climate action advocates warned that antiquated trade policies and international bickering must not be allowed to hamper the urgently needed green energy transition.
"Immediate climate action must take priority over compliance with outdated trade rules that were inked long before governments worldwide began taking the climate crisis seriously," said Trade Justice Education Fund executive director Arthur Stamoulis in response to the move by Beijing.
Melinda St. Louis, director of Public Citizen's Global Trade Watch, agreed that "the climate crisis is too urgent for the U.S. or any country to allow outdated trade rules—written long before governments were taking climate change seriously—to distract us from enacting bold climate policies."
"Existing trade rules need to be rewritten so that trade pacts can become tools for helping the world advance towards a clean, just, and sustainable economy—but we don't have time to wait."
China—which has heavily subsidized its own electric vehicle industry—on Tuesday filed a complaint against the United States at the World Trade Organization (WTO), taking aim at rules for EV tax credits included in the Inflation Reduction Act (IRA), a sweeping package signed by President Joe Biden in 2022.
"Under the pretext of 'responding to climate change' and 'environmental protection,' the U.S. has formulated discriminatory policies through its Inflation Reduction Act regarding new energy vehicles, excluding products from China and other WTO members from subsidies," said a Chinese Ministry of Commerce spokesperson, according to a translation by the South China Morning Post.
"Such exclusions distort fair competition, disrupt global industrial and supply chains, and violate WTO principles such as national treatment and most-favored-nation treatment," added the spokesperson. "We urge the U.S. to abide by WTO rules, respect the development trend of the global new energy vehicle industry, and rectify its discriminatory policies."
U.S. Trade Representative Katherine Tai said that "we are carefully reviewing the consultation request" and called out the People's Republic of China for using "unfair, nonmarket policies and practices to undermine fair competition and pursue the dominance of the PRC's manufacturers both in the PRC and in global markets."
Tai also praised "President Biden's leadership," represented by the passage of the IRA, which she described as "a groundbreaking tool for the United States to seriously address the global climate crisis and invest in U.S. economic competitiveness." She said the U.S. would "continue to pursue major new investments in clean energy technology, from solar and wind to batteries and electric vehicles and beyond."
The Associated Pressreported Tuesday that "the real-world impact of the case is uncertain. If the United States loses and appeals the ruling, China's case likely would go nowhere. That is because the WTO's Appellate Body, its supreme court, hasn't functioned since late 2019, when the U.S. blocked the appointment of new judges to the panel."
St. Louis said that "China's threatened trade attack against climate provisions in the U.S. Inflation Reduction Act is another example of why the U.S. and other nations should begin working with one another towards an immediate moratorium on the use of trade challenges against clean energy transition and other climate measures."
"We've been warning since before the passage of the Inflation Reduction Act that antiquated WTO rules would threaten our ability to realize the green transition," she noted. "Prominent labor, environmental, and consumer groups have urged the U.S. government to boldly implement the IRA as intended despite trade pact attacks—and to make a commitment not to use such trade rules to challenge other countries' climate policies."
Stamoulis pointed out that "governments worldwide are wasting considerable amounts of time and political capital attempting to squeeze potential climate measures into compliance with outdated trade and investment rules."
"Ultimately, existing trade rules need to be rewritten so that trade pacts can become tools for helping the world advance towards a clean, just, and sustainable economy—but we don't have time to wait," he continued. "A 'climate peace clause' that brings an immediate end to the ongoing trade attacks against climate measures is a necessary interim step towards helping governments transition to clean energy on the rapid timeline that is required to head off the worse possible impacts of climate change."
"A moratorium on the use of international trade agreements to challenge climate policies would: (1) help governments safeguard existing climate mitigation and transition measures by protecting them from trade challenge; (2) create the space for governments to adopt the bolder climate policies that justice and science demand without fear or threat of new trade challenges; and (3) incentivize and offer countries time to work together and resolve the underlying tensions between current trade law and the imperative for climate action," he explained.
St. Louis also called for implementing a climate peace clause to "temporarily halt cases like this one so countries can prioritize the green transition and revise the WTO rules currently creating unnecessary hurdles."
"We must move forward with IRA implementation and work to enact even bolder policies to transform our economy for a clean energy future, and support other countries that do the same," she asserted.
China's WTO complaint comes on the heels of the hottest year in human history—which concluded with a United Nations climate summit that scientists called a "tragedy for the planet" because the conference's final agreement didn't demand a phaseout of fossil fuels that are driving global heating.
Soaring temperatures have continued this year, with European Union scientists recently announcing that last month was the warmest February on record. Carlo Buentempo, director of the E.U.'s Copernicus Climate Change Service, stressed that "the climate responds to the actual concentrations of greenhouse gases in the atmosphere so, unless we manage to stabilize those, we will inevitably face new global temperature records and their consequences."
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In 'Assault' on Mexican Food Sovereignty, US Ramps Up Fight Over GM Corn
"U.S. agribusiness exporters, the biotech industry, and their allies in Congress are pushing this case, intent on compelling Mexico to accept U.S. exports without debate," said one expert.
Aug 17, 2023
After two-and-a-half months of failed negotiations, the U.S. government on Thursday intensified its effort to quash Mexico's limits on genetically modified corn imports by calling for the formation of a dispute settlement panel under a North American trade deal.
In a 2020 decree backed by agricultural, consumer, environmental, public health, and worker groups, Mexican President Andrés Manuel López Obrador (AMLO) announced plans to phase out genetically modified (GM) corn and the herbicide glyphosate by January 2024.
Under pressure from the U.S. government and impacted industries, he issued a new decree in February reiterating plans to block GM corn imports for human consumption by then but lifting the deadline for imports intended for livestock feed and industrial use.
"The Mexican government will show what has occurred: Its cherished tortillas are being contaminated with glyphosate and GM corn. And they intend to put a stop to that."
While AMLO's move was seen as a concession to the U.S. and lobbyists challenging his policies, the Biden administration in June still requested 75 days of formal negotiations. After talks ended Wednesday, U.S. Trade Representative (USTR) Katherine Tai confirmed the decision to form a panel under the United States-Mexico-Canada Agreement (USMCA).
"Through the USMCA dispute panel, we seek to resolve our concerns and help ensure consumers can continue to access safe and affordable food and agricultural products," Tai said Thursday. "It is critical that Mexico eliminate its USMCA-inconsistent biotechnology measures so that American farmers can continue to access the Mexican market and use innovative tools to respond to climate and food security challenges. Our bilateral relationship with Mexico, one of our oldest and strongest trading partners, is rooted in trust and honesty, and there are many areas where we will continue to cooperate and work together."
U.S. Agriculture Secretary Tom Vilsack similarly said that "Mexico's approach to biotechnology is not based on science" and "the United States is continuing to exercise its rights under the USMCA to ensure that U.S. producers and exporters have full and fair access to the Mexican market."
The Mexican Ministry of Economy responded in a statement that "Mexico does not agree with the position of the United States" and "is prepared to defend the Mexican position before this international panel and demonstrate: 1) that the national regulation is consistent with the commitments signed in the treaty; and 2) that the challenged measures do not have commercial effects."
The Institute for Agriculture and Trade Policy (IATP) has previously supported Mexico's efforts to phase out GM corn and glyphosate and on Thursday challenged claims by U.S. officials and agribusiness about Mexican obligations under the treaty and the potential economic impact of the policies.
"U.S. agribusiness exporters, the biotech industry, and their allies in Congress are pushing this case, intent on compelling Mexico to accept U.S. exports without debate. It is an assault on Mexico's food sovereignty," said Karen Hansen-Kuhn, IATP director of trade and international strategies. "Trade rules should provide a forum to protect and advance rights, rather than block them."
Hansen-Kuhn on Thursday authored an op-ed about Mexico's rights under the USMCA while ITAP senior adviser Timothy A. Wise wrote about "exaggerated claims of economic damage" that "sprang from a convenient set of assumptions, all of which are flawed and now outdated in light of the more recent presidential decree."
"As Mexican Economy Minister Raquel Buenrostro stated in response to the USTR request for technical consultations, Mexico's decree is based on science, and she will challenge the U.S. government in the consultations to show 'quantitatively, with numbers, something that has not occurred: that the corn decree has commercially affected U.S. exporters,'" Wise also said.
"The Mexican government will show what has occurred: Its cherished tortillas are being contaminated with glyphosate and GM corn," he continued. "And they intend to put a stop to that."
As Reutersdetailed Thursday:
Under USMCA's dispute settlement rules, a five-person panel, chosen from a roster of pre-approved experts, must be convened within 30 days, with a chair jointly chosen and the U.S. side choosing two Mexican panelists and Mexico choosing two American panelists. The panel will review testimony and written submissions and its initial report is due 150 days after the panel is convened.
Previous USMCA dispute panels last year ruled in the U.S.'s favor in a dispute over Canadian dairy quotas, and against the U.S. on automotive rules of origin, siding with Mexico and Canada.
There have been other disagreements between the U.S. and Mexico, most notably over energy in which the U.S. has argued that Mexico's nationalist policy prejudices foreign companies.
Arturo Sarukhán, a former Mexican ambassador to the United States, said on social media Thursday that "of the two consultation processes—energy and yellow corn—this is the one that is politically most relevant for the White House in 2024," given the significance of agricultural states such as Michigan, Minnesota, and Wisconsin to Democratic U.S. President Joe Biden, who is seeking reelection, and the GOP nominee, which could be former President Donald Trump, who signed the USMCA.
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US Groups to Biden Trade Chief: Ensure Deals Don't Block Bold Climate Action
"Outdated trade rules continue being used to attack climate programs at the federal and sub-federal levels," said an organizer with the Trade Justice Education Fund, which is pushing for a "Climate Peace Clause."
Aug 08, 2023
Amid key talks in Seattle, Washington, 234 U.S. environmental organizations on Tuesday pressured the Biden administration to work on ensuring that international trade deals don't thwart efforts to combat the global climate emergency.
Echoing previous letters from state legislators and national groups—including 350.org, Food & Water Watch, Greenpeace USA, Sierra Club, and Trade Justice Education Fund—the coalition wrote to U.S. Trade Representative Katherine Tai demanding a "Climate Peace Clause" in trade deals.
"As state and local organizations working to protect our climate and environment, we call on you and the Biden administration to please take decisive action to prevent climate policies in our states from being attacked and undermined via outdated trade agreements," the letter to Tai states, noting the U.S. commitment to the Paris agreement's 1.5°C temperature goal.
"Please work with other countries to secure a 'Climate Peace Clause': a commitment to refrain from using dispute settlement mechanisms in international trade agreements to challenge climate mitigation and/or clean energy transition measures."
The new letter highlights how countries and the European Union have threatened provisions of the Inflation Reduction Act—a law signed by President Joe Biden last year that is intended to support the renewable energy transition and includes electric vehicle credits. It also points out that the U.S. and India have gone after each other's solar efforts.
"Cases like these not only directly threaten climate policies, but could dissuade state legislatures from passing and governors from signing future climate policies," the letter stresses. "While we greatly appreciate your recent announcement that India and the U.S. will be dropping trade attacks on each other's renewable energy programs within the World Trade Organization (WTO), we still need a broader and longer-term solution to the ongoing conflict between outdated trade rules and the imperative for ambitious climate action."
"Therefore, we urge you to take additional action to help bring trade attacks on climate action and a liveable future to an immediate end," the document adds. "Specifically, we join with state legislators from all 50 states in asking that you and the administration please work with other countries to secure a 'Climate Peace Clause': a commitment to refrain from using dispute settlement mechanisms in international trade agreements to challenge climate mitigation and/or clean energy transition measures."
The coalition is calling on Tai's office "to pursue a Climate Peace Clause within the texts of pending bilateral and regional trade agreements such as the Indo-Pacific Economic Framework, the U.S.-E.U. Trade & Technology Council and the Americas Partnership for Economic Prosperity, as well as within other venues," like the Group of Seven.
Signatories to the letter include Conservation Alabama, Dallas Peace and Justice Center, Greater Boston Trade Justice, Hawaii Wildlife Fund, Kentucky Environmental Foundation, Mazaska Talks, New Mexico Climate Justice, Save Our Illinois Land, Washington Fair Trade Coalition, and WE ACT for Environmental Justice as well as several chapters of 350.org, Climate Reality Project, Extinction Rebellion, Indivisible, Our Revolution, Physicians for Social Responsibility, and Sierra Club.
"Outdated trade rules continue being used to attack climate programs at the federal and sub-federal levels," Trade Justice Education Fund climate organizer Clayton Tucker said Tuesday. "A moratorium on the use of trade agreements to challenge climate mitigation and clean energy transition policies would enable local, state, and national governments to safeguard existing climate measures and adopt the additional policies urgently needed to prevent the worst outcomes from climate change."
"We were glad when the administration recently announced a reciprocal agreement ending India's trade attacks again U.S. states' solar programs and vice versa," Tucker added. "Unfortunately, other clean energy initiatives in the U.S. and elsewhere are still being threatened and future climate policies remain at serious risk. A Climate Peace Clause would provide assurances that other climate programs won't be delayed or weakened by trade attacks moving forward."
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