WTO Backs 'Global Warming' Import Duties

July 1, 2009
Metal Bulletin

With the nation's capital focused on the House of Representatives' narrow passage of a major cap-and-trade bill late Friday, scant attention was paid to a significant announcement in Geneva that could affect trade in steel and other manufactured products over the long term.
The World Trade Organization (WTO) said at the weekend that nations which put cap-and-trade mechanisms into place to deal with global warming may be eligible to apply import duties at the border to protect their domestic producers.
"Rules permit, under certain conditions, the use of border tax adjustments on imported and exported products," the WTO said in a littlenoted report published jointly with the United Nations Environment Program. "The objective of a border tax adjustment is to level the playing field between taxed domestic industries and untaxed foreign competition by ensuring that internal taxes on products are tradeneutral."
The WTO statement goes to the heart of what domestic manufacturers, including steelmakers, find most noxious in the American Clean Energy and Security Act, which squeaked through the House by a 219-212 vote that saw heavy last-minute lobbying and arm-twisting on both sides of the aisle.