14 generic olsen china trade da

8/14/2019 14 Generic Olsen China Trade DA

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China Trade DADDI 2008

China Trade DA

China Trade DA .....................................................................................................................................................1

1nc ............................................................................................................................................................................4

1nc ............................................................................................................................................................................5

Unique .....................................................................................................................................................................6

Unique - US/China Trade High .............................................................................................................................7



US-China Trade High - AT: Textiles ...................................................................................................................10

Unique - US/China Relations High .....................................................................................................................11



LInks .....................................................................................................................................................................14

Generic Link .........................................................................................................................................................15

Generic Link .........................................................................................................................................................16

Generic Link .........................................................................................................................................................17

Generic Link .........................................................................................................................................................18

Generic Link .........................................................................................................................................................19

Generic Link .........................................................................................................................................................20

Generic Link .........................................................................................................................................................21

Generic Link .........................................................................................................................................................22

Generic Link .........................................................................................................................................................23

Link Empirical ....................................................................................................................................................24

Link Empirical .....................................................................................................................................................25

Regulations Reductions Link ..............................................................................................................................26

Regulations Reductions Link ..............................................................................................................................27

C/T Link ...............................................................................................................................................................28C/T Link ................................................................................................................................................................29

C/T Link Empirical ..........................................................................................................................................30

C/T China Bashing Link ..................................................................................................................................31

RPS Link ...............................................................................................................................................................32

RPS Link ..............................................................................................................................................................33

RPS Links Electricity Prices ...........................................................................................................................341


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Lobbies Push Tariffs ...........................................................................................................................................35

Kills Steel Industry ..............................................................................................................................................36

AT: WTO blocks tariffs ......................................................................................................................................37

AT: Cooperation/China Complies ......................................................................................................................38



Impacts .................................................................................................................................................................41

Trade War Bad - Economy ..................................................................................................................................42

Trade War Bad - Economy ..................................................................................................................................43

Trade War Bad Economy .................................................................................................................................44


Trade War Bad Economy .................................................................................................................................46Trade War Bad Eonomy ...................................................................................................................................47



Trade War Bad Hegemony ...............................................................................................................................50

Trade War Bad Nuclear War General ............................................................................................................51

Trade War Bad - Global Warming ....................................................................................................................52

Trade War Bad - North Korea ...........................................................................................................................53

Trade War Bad - Proliferation ............................................................................................................................54

Trade War Bad - Taiwan .....................................................................................................................................55

Trade War Bad Taiwan .....................................................................................................................................56

Trade War Bad Taiwan .....................................................................................................................................57

Spratlys (Chinese Competition) .........................................................................................................................58

Spratlys (Chinese Competition) ..........................................................................................................................59



Trade War Bad - Alt Tech ....................................................................................................................................62

AFF ........................................................................................................................................................................63

No Link .................................................................................................................................................................64

TF 2020 ..................................................................................................................................................................65

Regulations Good .................................................................................................................................................66

Sanctions Good .....................................................................................................................................................67

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Manufacturing Jobs Turn ..................................................................................................................................68

TRADE LOW .......................................................................................................................................................69

TRADE LOW .......................................................................................................................................................70

TRADE LOW .......................................................................................................................................................71

TRADE LOW .......................................................................................................................................................72

**Trade good** ....................................................................................................................................................73

Democracy ............................................................................................................................................................74

Terrorism ..............................................................................................................................................................75

Economy ................................................................................................................................................................76

Innovation / competitiveness ...............................................................................................................................77

War ........................................................................................................................................................................78

Environment .........................................................................................................................................................79**Trade bad** ......................................................................................................................................................80

Economy ................................................................................................................................................................81

Plant Disease .........................................................................................................................................................82

Industrilization .....................................................................................................................................................83

Trade -> Monoculture ..........................................................................................................................................84

Mad Cow! (1/2) .....................................................................................................................................................85

Mad Cow! (2/2) .....................................................................................................................................................86

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A. China US Trade Relations HighLi Ruogu, Chairman and President of Chinas Exim Bank, 2008-05-09 07:24, Real Issues in U.S China Trade Imbalance,(http://www.chinadaily.com.cn/opinion/2008-05/09/content_6672305.htm)

While pursuing sound economic development, China is opening up its economy and actively seeking to expand its economicand trade ties with the developed world, including the US. At present, China and the US have become economicallyinterdependent and their interests intertwined.

The US has made significant gains from its economic and trade relations with China.First, low-priced and good-quality goods and services imported from China have raised the consumer surplus and eased theinflation pressure in the US. According to a Morgan Stanley report, trade with China in 2004 alone saved American consumers$100 billion and created 4 million new jobs.

Second, China's imports from the US have added new momentum to the US economy. For five consecutive years, China hasbeen the fastest growing market of American exports. And over the past decade, US exports to China increased more than350 percent, which is about six times the growth of US exports to other regions. Whereas China was the 13th largest exportmarket for US products in 1995, it is now the US' fourth largest market.Third, US investments in China have yielded high returns. As of November 2007, US investors had poured in a total of $56billion into 51,555 enterprises in China. These investments have obtained high returns and shared China's economic success.

B. Climate regulations spark trade war with China uncompetitive industries will force protectionist

tariffs

Robert Collier, a visiting scholar at the Center for Environmental Public Policy at the University of California at Berkeley, is writinga book about China and global warming. He has been with the San Francisco Chronicle from 1991 to the present as a senior foreignaffairs correspondent (since 2002), a member of the editorial board (2001-2002), and a foreign affairs reporter (19942001).May 6,2008China Business | China faces trade war climate challenge, http://www.atimes.com/atimes/China_Business/JE06Cb01.html

China in recent months has taken center stage in the international debate over global warming. It has surpassed the United States asthe world's largest source of greenhouse gases, and it became developing nations' diplomatic champion at the recent United Nationsclimate negotiations in Bali. Now China may become the target of a full-fledged trade war that could destroy, or perhaps rescue, thechances of bringing rich and poor nations together to fight global warming.The focus on China intensified late last year, when data from the International Energy Agency and other research organizationsrevealed that China had overtaken the United States as the largest source of greenhouse gases, and, more ominously, that its emissionsare growing at a rate that exceeds all wealthy nations' capacity to decrease theirs. Even if China met its own targets for energyconservation, its emissions would increase by about 2.3 billion tonnes over the next five years, far larger than the 1.7 billion tonnes incutbacks imposed by the Kyoto Protocol on the 37 developed "Annex 1" countries, including the United States.After the inconclusive end of the UN-led Bali talks on the global environment, worry has grown among US and European industries -especially iron, steel, cement, glass, chemicals, and pulp and paper - that any new climate treaty would put them at a bigdisadvantage against their fast-growing competitors in China.

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C. A TRADE WAR WITH CHINA CAUSES A HOT WAR

(Ben Landy, Ben Landy, Director of Research and Strategy at the Atlantic Media Company, publisher of the Atlantic Monthly,National Journal, and Government Executive magazines. Landy served in various research and project management positions at theBrookings Institution and Center for Strategic and International Studies, two leading public policy think tanks in Washington, D.C.Ben holds a bachelor of arts degree from Yale University. April 3, 2007,http://chinaredux.com/2007/04/03/protectionism-and-war/#comments,)

The greatest threat for the 21st century is thatthese economic flare-ups between the US and China will not be contained, butmight spill over into the realm of military aggression between these two world powers. Economic conflict breeds military

conflict. The stakes of trade override the ideological power of the Taiwan issue. Chinas ability to continue growing at a rapidrate takes precedence, sincethere can be no sovereignty for China without economic growth. The United States role as theworlds superpower is dependent on its ability to lead economically. As many of you will know from reading this blog, I do notbelieve that war between the US and China is imminent, or a foregone conclusion in the future. I certainly do not hope for war. But Ihave little doubt that protectionist policies on both sides greatly increase the likelihood of conflictfar more than increases in

military budgets and anti-satellite tests.

D. HOT WAR WITH CHINA ENSURES EXTINCTION

(STRAIT TIMES, June 25, 2K, Pg. l/n)

THE high-intensity scenario postulates a cross-strait war escalating into a full-scale war between the US and China. IfWashington were to conclude that splitting China would better serve its national interests, then a full-scale war becomes unavoidable.Conflict on such a scale would embroil other countries far and near and -horror of horrors -raise the possibility of a nuclearwar. Beijing has already told the US and Japan privately that it considers any country providing bases and logistics support toany US forces attacking China as belligerent parties open to its retaliation. In the region, this means South Korea, Japan, the

Philippines and, to a lesser extent, Singapore. If China were to retaliate, east Asia will be set on fire. And the conflagration maynot end there as opportunistic powers elsewhere may try to overturn the existing world order. With the US distracted, Russia

may seek to redefine Europe's political landscape. The balance of power in the Middle East may be similarly upset by the likes

of Iraq. In south Asia, hostilities between India and Pakistan, each armed with its own nuclear arsenal, could enter a new anddangerous phase. Will a full-scale Sino-US war lead to a nuclear war? According to General Matthew Ridgeway, commander of theUS Eighth Army which fought against the Chinese in the Korean War, the US had at the time thought of using nuclear weaponsagainst China to save the US from military defeat. In his book The Korean War, a personal account of the military and political aspectsof the conflict and its implications on future US foreign policy, Gen Ridgeway said that US was confronted with two choices in Korea-truce or a broadened war, which could have led to the use of nuclear weapons. If the US had to resort to nuclear weaponry to defeatChina long before the latter acquired a similar capability, there is little hope of winning a war against China, 50 years later, shortof using nuclear weapons. The US estimates that China possesses about 20 nuclear warheads that can destroy major Americancities.Beijing also seems prepared to go for the nuclear option.A Chinese military officer disclosed recently that Beijing wasconsidering a review of its "non first use" principle regarding nuclear weapons. Major-General Pan Zhangqiang, president of themilitary-funded Institute for Strategic Studies, told a gathering at the Woodrow Wilson International Centre for Scholars inWashington that although the government still abided by that principle, there were strong pressures from the military to drop it. Hesaid military leaders considered the use of nuclear weapons mandatory if the country risked dismemberment as a result of

foreign intervention. Gen Ridgeway said that should that come to pass, we would see the destruction of civilization.

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Unique - US/China Trade High

China continues to invest in USLawrence S. York, founder and editor ofSeriousBull (Market watching company), 7/6/08, Has China Become the US Treasurys BestFriend?, http://seekingalpha.com/article/85212-has-china-become-the-u-s-treasury-s-best-friend

The US economic picture by all accounts (except George Bush's) is deteriorating with forecasts that as many as 300 USbanks may fail and that Stagflation is becoming an ever greater reality (stagnant growth accompanied by rising inflation).US investors concerned that Fannie Mae (FNM) and Freddie Mac (FRE) would not be able to manage their debt service whencombined with their payoff guarantees on $12 trillion of US mortgages, sold both companies' stock, calculating that a Fedbailout was certain and that stockholders would lose out. Russia, andperhaps other sovereign investors, likewise havereason to sell their US government sponsored holdings. Russia is paying back the Bush Administration for its aggressiveand unfriendly behavior, missile defense systems in the Czech Republic and the US intervention to derail World Bank loans forRussian oil pipelines. But not China. China reportedly increased its holdings in US Government mortgage-backsecurities a thousand-fold from 2000-2006 according to the US State department. And recently, according to a Bloombergnews report by Andy Mukherjee, China Investment Bank(for the 12 months ended April) again sharply increased its

holdings in Fannie and Freddie debt some 26% compared to a year earlier by purchasing an additional $67 billion more debt.Now we can assume that China is a contrarian investor seeking to catch a falling knife using its foreign reserves to speculatefor gain, or we can speculate that China may have an inside track to the US Treasury (i.e. that China has been reassured byTreasury Secretary Paulson that they have no need to fear and sell). Indeed the Treasury would be much obliged if China wereto purchase Russia's redemptions as well, because the US Treasury will stand behind the debt.

China US Trade Relations HighLi Ruogu, Chairman and President of Chinas Exim Bank, 2008-05-09 07:24, Real Issues in U.S China Trade Imbalance,(http://www.chinadaily.com.cn/opinion/2008-05/09/content_6672305.htm)

While pursuing sound economic development, China is opening up its economy and actively seeking to expand its economicand trade ties with the developed world, including the US. At present, China and the US have become economicallyinterdependent and their interests intertwined. The US has made significant gains from its economic and traderelations with China. First, low-priced and good-quality goods and services imported from China have raised the consumersurplus and eased the inflation pressure in the US. According to a Morgan Stanley report, trade with China in 2004 alone savedAmerican consumers $100 billion and created 4 million new jobs. Second, China's imports from the US have added newmomentum to the US economy. For five consecutive years, China has been the fastest growing market of Americanexports. And over the past decade, US exports to China increased more than 350 percent, which is about six times the growthof US exports to other regions. Whereas China was the 13th largest export market for US products in 1995, it is now the US'fourth largest market. Third, US investments in China have yielded high returns. As of November 2007, US investors hadpoured in a total of $56 billion into 51,555 enterprises in China. These investments have obtained high returns and sharedChina's economic success.

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http://www.seriousbull.com/http://seekingalpha.com/symbol/fnmhttp://seekingalpha.com/symbol/frehttp://seekingalpha.com/symbol/frehttp://www.seriousbull.com/http://seekingalpha.com/symbol/fnmhttp://seekingalpha.com/symbol/fre


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US to boost high tech trade with ChinaChina Daily, Periodical in China, US to Boost high Tech trade with China, 2006-06-10, http://www.chinadaily.com.cn/china/2006-06/10/content_613560.htm

The Bush administration is to revise laws to facilitate export of hi-tech equipment to China under a new policy designedto narrow its ring trade gap with the world's fastest growing economy. The new policy will spare the need for USexporters in such sectors as semiconductor equipment and electronics to apply for licenses for sales to Chinese companies,according to an AFP report on Saturday. And, the administration will also ensure closer scrutiny of key technology purchasersin China, a senior US Department of Commerce official said. The changes to Washington's so-called China Export ControlPolicy will achieve "growth in civilian high-tech trade and enhanced security," undersecretary of commerce for industryand security David McCormick said. "These changes to technology export controls for China are a 'win-win'", he told a forumof the Washington-based Center for Strategic and International Studies. He said Washington would encourage other nations totake similar steps. The new policy, McCormick emphasized, would prevent exports of US technologies for incorporation intothe weapons systems in China. For example, he said that the cutting edge composite technology that helps China buildcommercial aircraft will not find its way into the Super-7 next generation fighter aircraft. US high-tech exports to China lastyear reached US$12 billion dollars and the new licensing flexibility would further open up "potentially hundreds of millionsof dollars" worth of American sales to Chinese companies, McCormick said.

US Sino Relations are getting even better!Barry Wood, Reporter for Newsvoa.com, June 18th, 2008, US, China Agree on Energy Cooperation, Start of Work on InvestmentTreaty, (http://www.voanews.com/english/2008-06-18-voa74.cfm)

Treasury Secretary Henry Paulson hailed the achievements of the talks, the fourth round in a strategic economic dialoguelaunched two years ago. He said the 10-year energy and environmental agreement isparticularly significant as the USand China are the world's biggest oil consumers and biggest emitters of green house gases. The investment treaty-whichwill take some time to negotiate-would enhance each nation's access to the other's market. The two countries alreadyhave a huge and growing trade relationship. The Chinese delegation was headed by Vice Premier Wang Qishan.

US China trade relationship growing in a positive directionXinhua News Agency, 6/11/2008, Primary periodical for Chinese economics, Paulson: Economic Relations with China Growing in apositive direction, http://news.xinhuanet.com/english/2008-06/11/content_8342751.htm

WASHINGTON, June 10 (Xinhua) -- The U.S.-China economic relationship is growing in a positive direction through theon-going, dynamic and respectful discussions of the Strategic Economic Dialogue (SED), U.S. Treasury Secretary HenryPaulson said Tuesday. Delivering a speech outlining the goals of the high-level economic talks the two countries willhold next week, Paulson described the bilateral economic relationship as "complex, broad and important to both our

countries and to the world economy." The SED has brought progress faster and more broadly on issues important to theU.S. and global economy than would have been possible otherwise, Paulson said, noting it is important to resist calls forerecting protectionist barriers. "It is clear that our strategy for robust engagement with China- intensive dialogue but withresort to WTO dispute settlement and WTO-sanctioned trade remedies if needed - is more productive than protectionist policiesor legislation," he said here in his prepared remarks. On June 17-18, high-level delegations from China and the United Stateswill meet in Annapolis, Maryland, north of Washington, for the fourth round of SED launched in December 2006. Theupcoming discussions will focus on five areas, Paulson said. These are: managing financial and macroeconomic cycles;developing human capital; the benefits of trade and open markets; enhancing investment; and advancing joint opportunities forcooperation in energy and the environment. Paulson expressed his confidence that next week's meeting "will move theUnited States and China even further forward to a stronger economic future."

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ENERGY COOPERATION IS CURRENTLY BOOSTING TRADE

(Barry Wood, Voice of America News, 6/18/08, http://www.voanews.com/english/2008-06-18-voa74.cfm)

Treasury Secretary Henry Paulson hailed the achievements of the talks, the fourth round in a strategic economic dialoguelaunched two years ago. He said the 10-year energy and environmental agreement is particularly significant as the US and

China are the world's biggest oil consumers and biggest emitters of green house gases. The investment treaty-which will take

some time to negotiate-would enhance each nation's access to the other's market. The two countries already have a huge and

growing trade relationship. The Chinese delegation was headed by Vice Premier Wang Qishan.

Money ties China, U.S. togetherVancouverSun, 7/14/08,http://www.canada.com/vancouversun/news/editorial/story.html?id=d7ab411a-e5af-42e7-98e1-1b675dd44eaf

Money makes for strange bedfellows. As many countries consider boycotts, U.S. President George Bush recently confirmed that hewill attend the opening ceremonies for the 2008 Beijing Olympics. Less than 20 years since tanks rolled through Tiananmen Square,China remains a hotbed of human rights abuse and environmental degradation. But the United States has been cautious with itscriticism of the emerging superpower. The reason is largely financial. The economic ties between China and the U.S. run deep. Chinarelies on the U.S. as their largest export market, just as the Americans rely on China to fuel its outrageous consumption with cheapimports. "It's kind of like the relationship between a junky and a dealer," explains economics expert Nicholas R. Lardy of the PetersonInstitute. "The junky needs the dealer so he can get his fix, but the dealer also needs the junky to buy his drugs." Trade between thetwo nations is rising at a dizzying pace. In 1980 their trade totalled $5 billion; last year it was $387 billion. It is also heavily lopsided.The U.S. imports far more from China than it exports, resulting in a trade deficit of over $250 billion. This enormous consumption israpidly pushing America's debt towards $10 trillion. The numbers can get overwhelming and the question becomes: How doesAmerica stay afloat? The U.S. economy is buoyed by foreign investment into its treasury securities. Japan still possesses the largestholdings, but China is catching up. Since 2000, China's ownership of U.S. securities has grown from about $50 billion to over $500billion. Some political pundits are concerned that by becoming America's banker, China could exercise significant influence over theU.S. But that's not really the case. There's an old adage that says, if you owe the bank $100, that's your problem. If you owe the bank$100 million, that's the bank's problem. China is now so deeply invested in U.S. securities, any disruption to the value of the dollarwould be a serious blow to its own reserves. And since the Chinese rely on the U.S. market for their exports, they're forced to buy up

new securities as soon as they're issued to prevent the yuan from appreciating against the dollar. Neither country holds a significantadvantage over the other. Despite the enormity of the U.S. economy, the two nations have built a system of co-dependency. Or asCatherine Mann, professor of economics at Brandeis University and former adviser to the chief economist at the World Bank, puts it --a system of Mutually Assured Destruction. I think you can characterize it a lot like nuclear weapons," she says. "Whoever uses theweapon, invariably gets hurt too." Each country has the means to significantly disrupt the other's economy, but the collateral damagewithin their own country could be just as severe. In short, the U.S. needs China for cheap imports and foreign investment. China needsthe American dollar to remain strong to preserve the value of their foreign reserves and to keep the price of their exports appealing.This co-dependency is perhaps the reason why the U.S. has remained relatively quiet while China continues its oppressive policytowards Tibet, suppresses freedom of speech and erodes the environment. It should be noted that China has made progress over thelast 20 years, but there is still much work to be done. As the Olympics approaches, the protests and boycotts will escalate. But as thevoice of the international community rises, don't expect more than a whisper out of the U.S. They say money talks, but sometimes iknows when to keep its mouth shut. Marc and Craig Kielburger co-founded Free the Children. The primary goal of the organization isto free children from poverty and exploitation through education

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US-China Trade High - AT: Textiles

US China textile deal said to be reached, increased trade expected.China Daily, US, China said to reach textile deal, 11/7/07, http://news.xinhuanet.com/english/2005-11/07/content_3743482.htm

These officials, who spoke on condition of anonymity because the deal has not yet been announced, said it could be signed as earlyas Tuesday when U.S. Trade Representative Rob Portman and Chinese officials will be in Geneva. They said that the tentative dealwas reached during the fifth round of discussions, which took place over the past week in Washington. Both sides agreed on themajor issues, they said, and discussions were continuing on details. The deal would be similar to an agreement China reached withthe 25-nation European Union earlier this year. However, in a victory for U.S. manufacturers, the deal would last through 2008, oneyear longer than the EU agreement. U.S. textile and apparel companies and their labor unions have been pushing for acomprehensive deal to stem a flood of Chinese imports that began last January when global quotas, in place for more than threedecades, were lifted. The Bush administration has been reimposing quotas, known as "safeguards," for individual categories ofclothing and textiles. The industry wanted a comprehensive deal covering all threatened categories of U.S. production and lasting forthree years. The safeguard quotas were only good for a year at a time. The tentative agreement would allow for imports of mostclothing and textile categories covered by the deal to increase by 8 to 10 percent in 2006, by around 13 percent in 2007 and by

around 17 percent for 2008. All of these percentages would be above the 7.5 percent growth allowed under the safeguard

procedures. U.S. retailers had said they would reluctantly go along with a comprehensive deal as long as the growth in imports wassufficient to allow them to obtain reliable supplies.

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THE US AND CHINA ARE CURRENTLY GOING TO COOPERATE ON ENERGY AND THE ENVIRONMENT

(Du Guodong , Tuesday, June 17, 2008 , Vice premier: China-U.S. energy cooperation would produce win-win results,

http://english.gov.cn/2008-06/17/content_1018512.htm)

Chinese Vice Premier Wang Qishan has called for stronger cooperation between China and the United States in energy, the

environment and other related areas, saying that bilateral cooperation in these areas would lead to win-win results. "TheChinese government gives high priority to energy and resources conservation and the protection of the environment. It is committed tobuilding a resource-conserving and environment-friendly society," Vice Premier Wang wrote in an article published by The FinancialTimes on Monday in its North American edition. "However, China is a big and populous developing country at a stage ofaccelerated industrialization and urbanization. This has led to heavy consumption of energy and resources and made the task

of protecting the environment a daunting one," he said. "So it is highly significant that the fourth China-U.S. Economic

Dialogue, which will be held in the U.S. this week, will promote long-term cooperation in energy, the environment and otherrelated areas," said Wang, who heads a Chinese delegation to take part in the fourth China-U.S. Strategic Economic Dialogue (SED),scheduled to be held in Annapolis, Maryland, on Tuesday and Wednesday. To meet the challenges brought about by the pressures ofgrowing demand, Wang said China has endeavored to achieve the following goals: intensifying energy and resource conservation,

developing renewable energy, and actively adapting to global climate change. "There is a broad scope for cooperation betweenChina and the U.S. in energy and environment," he wrote. "Stronger cooperation between the two countries in energy and the

environment will enable China to respond better to energy and environmental issues and also bring about tremendous

business opportunities and handsome returns for American business." According to the intent of the 10-year cooperationbetween China and the U.S. in energy and environmental protection, Wang said the two countries should, on the basis of the principlesof mutual complementarity and win-win progress, focus their cooperation in energy, pollution reduction and protection of naturalresources. The Chinese vice-premier proposed three approaches to strengthen bilateral cooperation in these areas. First,China and the United States should build joint laboratories or research and development centers for energy and

environmental protection technologies, and provide platforms to promote industrial applications of such technologies. Second,

the two countries should jointly formulate and implement fiscal, taxation, financial and trade policies to encourage innovation

and cooperation in and transfer of energy-conserving and environment-friendly technologies. Third, the two sides should use

existing multilateral and bilateral dialogue mechanism and exchange platforms to enhance consultation and coordination,

strengthen cooperation in training, exchanges of technical personnel, and data-sharing. Vice-Premier Wang hoped that through

dialogue and cooperation in these areas, China and the United States will promote all-round development of the constructive andcooperative relationship between the two countries, to better serve the interests of their peoples. The SED was launched jointly byChinese President Hu Jintao and U.S. President George W. Bush in September of 2006. The dialogue is held twice a year, alternatingbetween the two countries. The previous meeting was held in December in Beijing.

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Generic Link

Industrial lobbies will push for an all-out trade war with China

Robert Collier, a visiting scholar at the Center for Environmental Public Policy at the University of California at Berkeley, is writinga book about China and global warming. He has been with the San Francisco Chronicle from 1991 to the present as a senior foreignaffairs correspondent (since 2002), a member of the editorial board (2001-2002), and a foreign affairs reporter (19942001).May 6,2008China Business | China faces trade war climate challenge, http://www.atimes.com/atimes/China_Business/JE06Cb01.html

In response, the US Congress is moving to create a system of trade sanctions that would levy heavy taxes on imports from other majorgreenhouse gas emitters. Ironically, the American plan is taking shape even before the US takes any action to reduce its ownemissions, inviting charges of hypocrisy, violation of international law, and threatening a major trade war.The tariff proposal, contained in the central piece of global warming legislation now before Congress, would impose emission controlson domestic industries starting in 2012. It would also levy punitive tariffs on greenhouse-gas-intensive products imported fromcountries that lack "comparable action" to that of the US, starting in 2020. Industrial lobbies and labor unions are pushing hard for

these sanctions to take effect more quickly.European Commission president Jose Manuel Barroso, French President Nicolas Sarkozy and industrial chambers of commercestrongly advocate a similar tariff system, leading many analysts to predict that the EU will also adopt some sort of green tariff systemin the next few years.Warning of an "all-out trade war" if the sanctions go forward, US Trade Representative Susan Schwab argues that green tradesanctions would violate World Trade Organization rules. In a recent letter to the House Energy and Commerce Committee, she wrote,"We believe this approach could be a blunt and imprecise instrument of fear, rather than one of persuasion, that will take us down adangerous path and adversely impact US manufacturers, farmers, and consumers."

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Efforts to reduce emissions result in carbon tariffs against China

The Canadian Press, 3/27/08, Carbon Tariff on China possible to curb pollution,http://www.thestar.com/Business/article/380403#

Countries such as Canada and the United States may start imposing a "carbon tariff" on goods from China and other developingcountries which have become the biggest contributors to global greenhouse-gas emissions, CIBC World Markets said Thursday.The investment bank's report says China, India and other developing economies have expanded so massively they have surpassed theestablished industrialized world in belching out carbon dioxide pollution blamed for climate change."And once surpassed, the gap is growing rapidly," wrote economists Jeff Rubin and Benjamin Tal."Already, non-OECD emissions are a massive 2,500 million metric tonnes more than the OECD a gap that is now equal to almost 20per cent of the latter's total emissions."With advanced countries enacting carbon taxes, carbon trading systems and other measures to lower emissions, Rubin and Tal believethe growing pollution from poor countries will provoke penalties against their exports.

Many in the West assumed that since industrialized nations were primarily responsible for the historical build-up of greenhouse gasesin the world, they should bear the brunt of efforts to cut back, a view that underpinned the Kyoto Protocol in 1997, which exempteddeveloping countries.But the CIBCWM economists see a shift in sentiment."As the OECD countries begin to impose greater economic sacrifices on their own economies as part of decarbonization efforts,tolerance for the carbon practices of its trading partners, or more precisely the lack thereof, will diminish dramatically," they write."Already Europe, which is well ahead of North America in terms of domestic carbon pricing, is talking about a carbon tariff that it canapply to imports from countries that don't play by the same carbon rules."They add that the concept is likely to gain currency in the U.S. and Canada.The report fingers China as the world's top greenhouse-gas polluter, surpassing the U.S. and pulling away.Since the beginning of the decade, it says, China's emissions have increased about 120 per cent and are greater than Canada, India,Spain and Japan combined.A key reason is China's reliance on heavily polluting coal. As a result, Chinese emissions per unit of energy are double those of

Canada, the report says.

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Climate policy puts US manufacturing in competition with China

TrevorHouser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group,a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May

2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr Leveling the Carbon Playing Field International Competitionand US Climate Policy Design PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCESINSTITUTEhttp://pdf.wri.org/leveling_the_carbon_playing_field.pdf

Aspolitical momentum surrounding climate change builds in theUnited States, policymakers are taking a fresh look at nationalclimate policy and Americas involvement in multilateral climate negotiations. And as in years past, thepotential economic impact of any US effort to reduce greenhouse gas emissions stands as a central question in the Washington policydebate. Of particular concern is the effect climate policy would have on carbon-intensive US manufacturing. Many of these industriesare already under pressure from international competition, particularly large emerging economies such as China, India,and Brazil that are not bound to reduceemissions under the current international climate framework. As the US Congress takes updomestic climate legislation, policymakers are looking for ways to avoid putting US carbon-intensive manufacturing at acompetitive disadvantage vis--vis countries without similar climate policy, lest a decline in industrial emissions at homeis simply replaced by increases in emissions abroad. While this objective would be best achieved through aharmonized international climate policy, the differences between countries in level of economicdevelopment, political conditions, obligations stemming from historic emissions, and responsibilities arisingfrom future emissions mean harmonization is still a long way off. The question then, in the design of domestic USclimate policy today, is how tolevel the playing field for carbon-intensive industries during a period of transitionwhere tradingpartners are moving at different speeds and adopting a variety of policies to reduce emissionsand how todo so in a way that does not threaten the prospects for a broader international agreement down the road.

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US will engage in brinksmanship approach to regain competitive edge



Implications for International Engagement An important assumption of proponents of trade measures is that theywill help drive other countries to the negotiating table and thus strengthen global climate action. Current legislative proposals wouldonly impose penalties on carbon-intensive imports from countries that had not implemented climate policy comparable with thattaken in the United States. The rationale is that giving countries an economic incentive to participate in international climate changemitigation efforts will make them more inclined to submit to greenhouse gas reduction targets. After all, access to internationalmarkets is likely to be a higher priority for many governments than international climate negotiations. Perhaps trade measures could

raise the political focus on mitigation options for Americas major trading partners. And as mentioned earlier, the United States is notalone in considering the use of trade measures for such ends. On a recent trip to Beijing, French President Nicolas Sarkozy warnedthat if the Chinese government did not take action on climate change, Chinese goods could face restrictions in entering the Europeanmarket.10 Multilateral action would not only expand the coverage in terms of industrial emissions (the United States accounts for 14percent of the global total) but also expand the degree of protection for US industry and increase the leverage on the behavior ofnonparticipating countries (see box 3.4 on the disadvantages of unilateral action). Yet there is reason to be skeptical of the likelihoodthat the threats of trade measures alone, whether unilaterally by the United States or in concert with Europe and Japan, will forcedeveloping countries to take a different position in international negotiations. Developing-country leaders, like politicians in manyother countries, need to act tough for the domestic audience. This is particularly true in the case of China, which is also the primaryfocus of most trade measures currently proposed. In judging extraterritorial conditions in other countries, it is helpful to consider areciprocity test: What would be the US reaction, for instance, to a provision adopted by the Indian Parliament or the ChineseCommunist Party that conditioned Indian or Chinese actions on those of the United States? Threats of punitive trade sanctions againstBeijing have failed to make headway on issues far less contentious then climate change and in which the United States had

considerably more leverage (box 3.5). And as climate change is an issue that can be solved only with the involvement of thedeveloping world, China in particular, there is considerable risk in a brinksmanship approach on the part of the United States. Thatsaid, Beijing has demonstrated the willingness and ability to make painful adjustments to the structure of the Chinese economy inorder to be part of a multilateral framework, when it perceives such membership to be in its national interest. With China surpassingthe United States as the worlds largest CO2 emitter (on an annual basis), the countrys leadership is under growing domestic andinternational pressure to take accountability

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US industries will force tariffs on china to even market playing field



Trade MeasuresThe second approach to leveling the playing field for US industry is to impose similar costs on foreign producers at the border.Trade measures can be used under either a cap-and-trade or carbon tax system, though their design and implementationdiffer within each system. European policymakers first put forward the notion of imposing border tariffs on imports fromcountries that are slow to reduce emissions and targeted them at the United States. But as theUnited States

starts drafting its own climate policy, the discussion oftrade measures is focused clearly on China. Advocates of such measuresclaim they will both protect domestic industry and provide US negotiators with the leverage of market access to force developingcountries to the bargaining table. As designed, and if taken unilaterally, such measures will likely fail on bothcounts. While policymakers have China in mind when considering the use of trade measures, only 14 percent of cement, 7percent of steel, 3 percent of aluminum, 4 percent of paper, and less than 1 percent of basic chemicalsimported into the United States come from China. Canada is the largest source of imports in all carbon-intensive industries considered in this book except one (Trinidad and Tobago is the largest for chemicals),with Europe and Russia not far behind. In most proposals, the imposition of border tax adjustments or allowancerequirements is conditioned on whether the trade partner has enacted domestic climate policy comparable to that in theUnitedStates. Europe and Canada, the two largest sources of carbon-intensive imports, would likely pass this testwith flying colors. And among developing countries that are less likely to have adopted comparablepolicy at home, many have industries that are cleaner, on average, than those in the United States. Asopposed to relatively carbon-intensive Chinese producers, many firms in Latin America and oil-exporting

countries have newer and more efficient equipment and use low-carbon energy sources like hydropowerand natural gas.

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Climate change allows protectionists to kill free trade

GABRIEL STEIN, Chief International Economist, Lombard Street Research, 22-JUN-07, The International Economy,http://goliath.ecnext.com/coms2/gi_0199-6910875/Will-environmentalism-become-the-new.html

The case for free trade was conclusively proven more than two hundred years ago. Yet simple though it is, it seems to constantly needto be restated. The temptation for politicians, trade unionists, and business leaders to blame "the other" for their own shortcomings,and their inability to grasp that trade and growth are not zero-sum games, means that they are always ready to resort to at leastthreatening protectionism. True, the experience of the 1930s and the undoubted benefits of the post-1945 freer trade environmentmean that very few advocate trade bartiers as such. Instead, we get pious appeals to "level playing fields" or "decent standards forworkers." But we know that this often is rubbish. The alternative to low-paid work in an emerging economy is not full trade unionrights and an American standard of living; rather, it can all too often be unemployment, crime, or prostitution. Add to this the newmantra ofclimate change. For protectionists, it is a God-send. "I am not in favor of protectionism--I only want to save the planet."

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Generic Link

Chinas growing economic growth will fall once the U.S. feels the need to make

an agreement to reduce these emissions.

Matthew Chen & Joe Barnes, Baker Institute, China opposes emissions limits , May 2008, The Global Energy Market:Comprehensive Strategies to Meet Geopolitical Risks, http://www.bakerinstitute.org/publications/IEEJexecsummaryFINAL.pdf

Achieving such an agreementeven with a change in Washingtons attitudewill be difficult. China, inparticular, has sharply divergent interests from the United States and the E.U. Despite Chinas spectacular economicgrowth in recent years, it remains poor in comparison with the advanced economies of North America and Western EuropeBeijing sees robust economic growth not just as a means to raise living standards but also to bolster regime legitimacy.

Agreements on emissions that might constrain Chinas economic growth are therefore viewed with great suspicion. This isparticularly true because of the composition of Chinas energy mix: coal dominates its electricity sector and the country is

rapidly becoming a major consumer of oil. Despite planned increases in hydroelectric power, Chinas growth will befueled largely by hydrocarbons for the foreseeable future. Like many countries in relatively early stages of economicdevelopment, China has, until very recently, placed a very modest emphasis on environmental protection.

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Link Empirical

US trade policies will force comparable tariffs on China empirically proven



Comparable but Not SufficientAdvocates of incorporating trade measures into climate policy hope providing a future US administration with the ability to threatenpunitive tariffs at the border will both win industry support for overall legislation and provide incentives to other countries to takesimilar action. In the best case scenario, trade measures are a stick that stays firmly planted in the administrations back pocket, neveractually needing to be invoked. Unfortunately, the history of US trade policy suggests that what is initially intended as a negotiatingtool often becomes an embedded part of public policy (box 3.3). In recent hearings on the Lieberman-Warner bill, both organizedlabor and the American Iron and Steel Industry expressed serious reservations with the 2020 start date for the trade measures included

in the legislation.5 Regardless of when the review is conducted, it is highly likely that carbonintensive industries in the United Statesseeking protection from imports will take issue with the administrations determination of what constitutes comparable action byother countries on climate change. The European Union by any definition would pass a nationwide comparable action test, as it hasa considerably more ambitious climate policy than the United States. However, aluminum producers in the European Union are notdirectly covered by climate targets (although they do face higher power prices from generators that are covered). Going forward,China could choose to implement policies that reduce greenhouse gas emissions while imposing no additional costs oncarbonintensive manufacturing whatsoever. Under such a scenario, it is quite plausible that industry and labor groups would seekadditional legislation from Congress, making the review process a private right of action, as happened with the antidumping regime.

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Link Empirical

Cap and trade would include carbon tariffs on foreign nations proven through Warner Lieberman bill

MarkLangner6/5, 2008 Warner Lieberman Cap and Trade Bill Levels Competitive Playing Field for Manufacturershttp://www.greenstreetinvestor.com/warner-lieberman-cap-and-trade-bill-levels-competitive-playing-field-for-manufacturers/

Buried within the 1000+ page Warner-Lieberman climate change act is a provision for something called international reserveallowances and what is quickly being dubbed a Carbon Tariff. Essentially the provision applies a cross-border, per ton, carbontax on imported goods that are manufactured in countries that do not have limits on carbon emissions. If an item creates 2 tons ofcarbon dioxide in its manufacture and a 1 ton carbon credit trades for $30 - then the tariff would be $60 on that item. I dont know ifthe bill requires the government to use the revenues to purchase carbon offsets - though that or putting it into an environmental cleanup fund would be sensible.

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Regulations Reductions Link

Any regulations cause industries to force through tariffs and create cartels

Jonathan H. Adler, Director of environmental studies at the Competitive Enterprise Institute., 1999"Rent Seeking Behind the Green Curtain", http://www.cato.org/pubs/regulation/reg19n4b.html,

In the regulatory context, rent seeking typically consists of pursuing government intervention that will provide a comparativeadvantage to a particular industry. By restricting entry or reducing output, regulations often reduce competition, create cartels, and

increase returns. Thus, tariffs and licensing restrictions are regulatory measures commonly sought by rentseekers. Less-directmeasures can heighten preexisting comparative advantages or manufacture a comparative advantage out of incidental differences in anindustrial sector.While often disparaged, rent seeking can be viewed as the natural outgrowth of firms seeking their best interests in a regulatedenvironment. If regulations are here to stay, the argument goes, a firm might as well make the best of the situation. In fact, given thecourts current interpretations of antitrust laws, one could consider rent seeking as the only legal form of predation. Whetherdefensible or not, rent seeking has become rather pervasive in regulatory policy. As economist Robert McCormick notes, "There isabundant evidence in the economic literature that when the flag of public interest is raised to support regulation, there is always a

private interest lurking in the background."There is no reason to expect environmental regulations to be immune from the economic pressures that create rent seeking in othercontexts. In fact, by their very nature, environmental regulations are conducive to rent seeking, for in the environmental context, bothregulated firms and "public interest" representatives stand to gain from reductions in output and the creation of barriers to entry.Regulated firms and public interest groups may not always agree on the nature and design of specific regulatory programs, but theyoften share a common interest.

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Emissions regulations cause protectionist barriers against China

Stratfor, 11/29, 2007, "Global Market Brief: Carbon Tariffs as New Protectionism",http://www.stratfor.com/analysis/global_market_brief_carbon_tariffs_new_protectionism

The European Union, and likely the United States, soon will agree to significant and long-term reductions in greenhouse gasemissions. These agreements will dramatically increase the price of energy for consumers and industries in participatingcountries.Thus, energy-intensive industries in countries that are not part of these agreements will have significant and growing cost advantages in the coming decades. Faced with losing manufacturing industries, countries reducing greenhouse gas emissionswill have little choice but to take protective measures that some will see as fair compensation for tackling climate, but others(especially China) will see as protectionist nontariff barriers to trade. Carbon tariffs would disproportionately affect Chinaseconomy, since the countrys industries are far more dependent on carbon-emitting fossil fuels than are others. Recent reports say thatas much as one-fourth of Chinas carbon emissions are directly caused by the production of exports for the European Union and theUnited States the same goods that fuel Chinas economy. After 2007s numerous toy recalls and Made in China scares in theUnited States and the European Union, along with World Trade Organization (WTO) intellectual property rights-related challengesfrom the European Union and United States, China likely would view the carbon tariff issue as yet another Western act ofpoliticalaggression against it. France can propose all the green taxes it wants, but Germany is the key to such proposals success. EU industry and jobsare at stake, and economic tension is mounting between Germany and China. The strong euro and the weak yuan which is tied to the decliningdollar are diverging to such extremes that the imbalance is beginning to threaten Germany, which is more insulated than other EU states from theincreasing influx of cheap Chinese goods into the EU market. While France is the most active carbon tariff advocate internationally, the idea is farfrom foreign to efficiency- and environmentally-conscious Germany, where the idea of a domestic carbon tax is closer to reality than anywhere elsein Europe. Emboldened by Germanys consternation with China, Sarkozy brought up the carbon tariff idea in part to threaten China ahead of U.N.climate negotiations slated for Dec. 3-14 in Bali, Indonesia. China has adamantly opposed any post-Kyoto climate agreement setting mandatoryemissions targets similar to the European Unions and has shown some support for U.S. President George W. Bushs voluntary emissions program, aKyoto competitor. France and other EU nations hope that threats like Sarkozys will force China to give a little ground on carbon emissions; if not,the threat will remain. Though the EU will take the lead on pushing for any energy-related retaliatory tariffs, the United States has an increasinginterest in implementing such tariffs.

Emissions regulations ensure tariffs on China

Timothy Gardner, Reuters News Service, 6/9/08, http://www.planetark.com/dailynewsstory.cfm/newsid/48684/story.htm

NEW YORK - The US climate bill may be dead but one thorny element of it -- possible tariffs on energy-intensive imports fromrapidly developing countries like China -- will fester as lawmakers form new greenhouse legislation.Introduced to the US Congress by industrial players such as power utility American Electric Power and industrial worker unions, theissue, also known as competitiveness in climate legislation, boils down to two ideas.First, if the United States embarks on a carbon emissions reduction program, the placement of a tariff on imports of emissions-intensive goods like cement, steel and chemicals would ensure that China and other rapidly industrializing countries do their part onglobal warming. The tariff would aim to equal the price that US carbon regulation had added to the same products made domestically.Second, such a tariff would prevent heavy US industries from relocating to other countries that don't regulate greenhouse gases tolower their operating costs.The US climate bill, sponsored by Sens. Joe Lieberman, a Connecticut independent, and John Warner, a Virginia Republican, whichaimed to cut greenhouse emissions by 66 percent by 2050, died on Friday with a procedural vote in the Senate.It would have added such a carbon tariff, also known as a border tax, or an international reserve allowance, on imports starting in2020. An amendment to the bill had pushed the imports tax forward to 2014.Pressure from industry will keep the competitiveness issue alive going forward."The concern about tight caps from leading industry is very real," Billy Pizer, director of the energy program at the think tankResources for the Future, said by telephone. "Something like this tariff is probably going to have to be part of the solution."

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C/T Link

Cap and Trade will force protectionist barriers that results in all out trade war with China

The Economist 6/ 5 2008 A convenient truth, sadly ignored A deal to be done between rich and poor countries on globalwarming is going begginghttp://www.economist.com/opinion/displaystory.cfm?story_id=11496890

Western countries would benefit too, thanks to the lower cost of cutting emissions abroad. That is why the European Union allowsinternational offsets to be used in its cap-and-trade scheme. In this, governments issue a set number of permits to producegreenhouse gases, obliging firms to cut their own emissions or buy spare permits from others. The cap-and-trade scheme thatAmerica's Senate began debating this week would also allow firms to fulfil some of their obligations through green investments inother countries.But the bill in Congress would allow only a small number of offsets, and only from factories that do not compete with American firmsa big hurdle in a globalised world. Worse, to make the bill more palatable to China-bashing politicians, its authors havestrengthened provisions that would impose tariffs on energy-intensive imports from countries that are not taking comparable actionagainst climate change, meaning all developing countries. That is a recipe for a trade war, which would only compound theeconomic pain of global warming. Just when a deal is possible, the stage is being set fora tragedy of Wagnerian dimensions.

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Cap and Trade forces industries to lobby for tariffs to regain market shares



Gauging the Impact on International CompetitivenessClimate policy, by imposing a cost on greenhouse gas emissions, has the potential to negatively affect carbon-intensivemanufacturingindustries that compete with foreign producers, either at home or abroad, and for which energy (particularlycarbon-intensive) is a significant share of total production costs. In theUnited States, five industries fit this bill: ferrousmetals (iron and steel), nonferrous metals (aluminum and copper), nonmetal mineral products (cementand glass), paper and pulp, and basic chemicals. Together these five account for more than half of all carbon dioxide

(CO2) emissions from the manufacturing sector, though their direct emissions account for less than 6 percent of theUS total. Under a domestic cap-and-trade or carbon tax regulatory regime, these industriescould see a decline in outputand lose market share to foreign competitors if they are unable to reduce emissions and must pass carbon costs on to downstreamconsumers. While the degree of impact is a topic of considerable research and debate, the fate of these industrieshas become a key consideration in domestic policy design. Yet it is important to keep in mind that these five industriescombined account for only 3 percent of the countrys economic output and less than 2 percent ofnationwide employment. Many options for protecting carbon-intensive manufacturing do so at the expense of other industries orby increasing the cost to consumers of reducing US emissions overall. Climate policy creates economic winners as well as losers inthe international marketplace. Incentives to develop low-carbon technology and services at home helpmake US firms more competitive in carbon-constrained markets abroad. Options for safeguarding thecompetitiveness of US carbon-intensive manufacturing should be addressed in the context of their broadereconomic effects.

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C/T Link Empirical

Cap and Trade will hurt businesses and industries empirical reason for why recent legislation failed

Eliza Strickland, 6/6, 2008, "Republicans Put the Kibosh on Climate Change Bill",http://blogs.discovermagazine.com/80beats/2008/06/06/republicans-put-the-kibosh-on-climate-change-bill-2/

Well, it wasnt unexpected, but its worth noting anyway. After one brief week of Senate debate over theLieberman-Warnerclimatechange bill, its officially dead.Senators can now put their good intentions back on the shelf until next year, when the issue of regulating greenhouse gas emissions isexpected to be raised again under a friendlier administration (both presumptive presidential nominees say they support suchregulations).In this go round, Democrats couldnt gather the 60 votes needed to end a Republican filibuster and bring the bill up for a vote. In fact,the final vote was 48-36, short of a majority, but Democrats had letters from six absent senators (including Barack Obama, JohnMcCain, and Ted Kennedy) saying that they would have voted for thepolicyhad they been present.Its just the beginning for us, proclaimed Sen. Barbara Boxer, D-California, a chief sponsor of the bill in the Senate, noting that 54senators had expressed support of the legislation, although thats still short of what would be needed to overcome concerted GOP

opposition. Its clear a majority of Congress wants to act, Boxer said at a news conference [AP].The debate was notable not for the seriousness with which the legislators confronted the issue ofglobal warming, but rather for theamount of squabbling and petty partisan tricks it occasioned. In one exchange on the Senate floor, Senator John Kerry tried to breakinto Senator James Inhofes long speech decrying the bill. After being rebuffed a fourth time, Mr. Kerry was exasperated. With alldue respect, he said, we are here to have a debate. It is hard to have a debate when you are talking all by yourself.Even for the Senate, where members are well-known to prefer talking to listening, the amount of unilateral jabbering on the climatebill has been remarkable, with lawmakers both for and against it arguing repeatedly over how much time was allotted for them tospeak[The New York Times].The Republican leader, Mitch McConnell, also demanded that the entire 492-page document be read aloud into the record onWednesday, a maneuver that sent senators scurrying from the floor for nine hours, only to be forced to return after 10 p.m. for a late-night quorum call.The debate that did occur showed a stark disagreement on the economic costs of cutting back greenhouse gas emissions. The billwould have required major emitters such as power plants, refineries, and factories to buy emissions permits in a cap-and-trade system.Republicans complained that the measure would saddle the U.S. economy with higher energy costs, which could hurt businessesand ultimately would be passed on to consumers.Before we sacrifice the U.S. economy and American jobs, we need to quantify the benefits of having a relatively slight reduction ingreenhouse gases and compare it to the huge costs imposed on the U.S. economy and American families, said Jon Kyl, R-Ariz [SanFrancisco Chronicle].

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C/T China Bashing Link

Cap and Trade results in China Bashing dem control congress makes this uniquely problematic

Adam Smith, 06/08/2008, "Climate Change, Kyoto and impacts on China and India",http://adamsmith.wordpress.com/2008/06/08/1018/

The cap-and-trade scheme that Americas Senate began debating this week would also allow firms to fulfil some of their obligationsthrough green investments in other countries. The problem as so often is the American Congress, which is likely to restrict the amountof offsets, to factories that do not compete with American ones - nonsensical to say the least- and thus panders to the anti-trade, anti-China brigade. This is made worse by the fact that the Congress is contrlled in both houses by the Democrats and even worse by thefact that Barack Obama has shown himself to be weak on trade issues.

China will respond to carbon tariffs they perceive taxes as protection for US companies, rather than the

environment

The Financial Times January 24, 2008 Green Barricade Trade faces a new test as Carbon Taxes go Global, Lexis

China, for example, might bring a case to the WTO on carbon border taxes, only for the EU or the US to hit back with fresh litigationor emergency tariffs aimed at Chinese energy subsidies. Climate change has already started to provoke WTO legal cases and otherdisputes. Brazil, for example, has filed a complaint about the US tariffs and subsidies that keep out Brazilian sugarcane ethanol.Brasilia wants ethanol to be classified as an "environmental good" in the Doha round and hence subject to big cuts in tariff protection,a move blocked by the US and EU. An EU plan to ban imports of biofuels produced in environmentally destructive ways, though intheory also protected by the principle established in the shrimp-turtle case, may also be vulnerable to legal challenge. A Chinese tradeofficial says that, while China had not taken a formal view, his initial personal impression was that carbon border taxes would belegally complex and many WTO members would be concerned. "I doubt whether the measures taken in the name of the environmentwill always be applied to protect the environment and not to protect domestic industries," he says. He adds that they could prove adouble-edged sword. "If one takes per capita emissions of greenhouse gases rather than overall emissions, it will be the developedcountries paying taxes on their exports."

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RPS Link

An RPS would cause industry to perceive a loss of competitiveness due to energy costs

Competitive Enterprise Institute, June 27, 2007, Competitive Enterprise Institute http://www.cei.org /gencon/014,06020.cfm

Although 21 states have already passed an RPS, this is not an argument in favor of a federal RPS. These RPS states tend to have amuch higher potential for renewable energy and/or less energy-intensive manufacturing. In the RPS states that do have considerablemanufacturing, the effect of adopting an RPS has been to raise electricity prices and push manufacturing into states or other countrieswith lower electricity prices. Therefore, the effect of a federal RPS would be to require states with low electricity prices andproportionately lower renewable energy potential, such as is found in our industrial heartland, to raise electricity prices to a level thatwould force their industries to migrate overseas to countries with cheaper energy rates and no renewable portfolio standards.

Loss of competitiveness leads to protectionism

Jeffery Frankel, Brookings Institute June 9, 2008 climate change, trade and competitiveness is a collision inevitable?http://www.brookings.edu/events/2008/~/media/Files/events/2008/0609_climate_trade/2008_frankel.pdf]

Even more salient politically than leakage is the related issue of competitiveness: American industries that are particularly intensive inenergy or otherwise GHG-generating activities will be at a competitive disadvantage to firms in the same industries operating in non-regulated countries.4 Such sectors as aluminum, cement, glass, paper and steel will point to real costs in terms of lost output, profits,and employment. They understandably will seek protection and are likely to get it. Of twelve market-based climate change billsintroduced in the 110th Congress, almost half called for some border adjustment: either a tax to be applied to fossil fuel imports(unobjectionable, provided the same tax is applied to domestic production of the same fossil fuels; distortionary and WTO-illegalotherwise) or a requirement that energy intensive imports surrender permits corresponding to the carbon emissions embodied inthem.5

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RPS Links Electricity Prices

A federal RPS would raise electricity prices destroying manageable state based RPS.

Edison Electric Institute A forum to promote energy-efficiency practices among electric utilities; promote the sharing of information,ideas, and experiences in energy efficiency in the power sector; and develop a resource base of effective business models and options.

December 1, 2007 http://www.eei.org/industry_issues/electricity_policy/federal_legislation/EEI_RPS.pdf

Oppose the 15% Federal RPS Mandate in the Energy BillA new energy bill expected to reach the House floor soon contains a one-size-fits-all federal renewable portfolio standard (RPS)mandate that would require shareholder-owned electric utilities to obtain up to 15% of their electricity from renewables by 2020, ormake equivalent payments to the federal government.Such a federal RPS mandate would raise electricity prices for consumers; upset ongoing renewable energy programs in the states;create winners and losers among states, electricity generators and electricity suppliers; and impose new burdens on electric reliability.Moreover, an RPS is not a solution to achieving energy independence.The federal RPS mandate should be opposed for the following reasons:

The RPS mandate could cost electricity consumers billions of dollars in higher electricity prices, with no guarantee that

additional renewable generation will actually be developed.A nationwide RPS mandate will lead to a massive wealth transfer from electricity consumers in states with little or no renewableresources to the federal government or to states where renewables are more abundant.The RPS mandate is essentially an electricity tax, with the heaviest burden falling on states without renewable resources.The RPS mandate undercuts or preempts the state renewable plans that already exist in 26 states and the District of Columbia. If stateschoose a lower percentage requirement, a more measured timetable, or qualifying renewable resources that do not comply with thefederal mandate, they will be preempted. Every state with an RPS program has chosen renewable resources that qualify for creditsunder their state program that would fail to receive credits under the federal program. States also can modify their state programs toadjust to changing circumstances, unlike the rigid, one-size-fits-a

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