Trade Discord Fuels U.S.-China Tension in Copenhagen

  • Date: 15/12/09

Bloomberg: China is demanding that a global agreement to reduce greenhouse gases prohibit nations from imposing trade sanctions, further pitting the world’s No. 1 emitter against U.S. lawmakers. The draft accord from a meeting in Copenhagen to forge a climate treaty bars rich nations from adopting trade actions tied to global warming. China said such language will avert “trade wars.” The U.S. Chamber of Commerce sides with China.

“We will always oppose any practice of establishing trade barriers under the guise of protecting the global environment,” Yu Qingtai, China’s climate change ambassador, said in an interview.

A proposed U.S. law would impose tariffs by 2020 on imports of certain goods from nations such as China seen as not doing enough to cut emissions. American politicians and labor groups say pending legislation to cut heat-trapping gases must include tariffs on such nations because they gain competitive advantage.

The dispute between China and the U.S., which had record $268 billion surplus last year in China’s favor, illustrates how trade is emerging as a central issue dividing developed and developing countries at the United Nations gathering in the Danish capital.

Senators’ Opposition

With just a couple days before the close of the UN negotiations, the U.S. and China have failed to bridge differences over key issues such as how much wealthy economies should pay poorer countries to deal with global warming, emissions-reduction goals and how to ensure that countries live up to their pledges to curb climate change.

U.S. senators such as Benjamin Cardin, a Maryland Democrat, say it’s “critical” that the U.S. retain its option to impose tariffs, or border-tax adjustments, on China and other countries. The Senate is the only U.S. body authorized to approve treaties.

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