Belong To The Climate Club Or Get Penalized: The EU’s New Trade Protectionism – Watts Up With That?
Trade Protectionism Old And New
On March 10th, the European Parliament overwhelmingly endorsed the creation of a "carbon border adjustment mechanism" (CBAM) that would shield EU companies against cheaper imports from countries with "weaker" climate policies. The 'CBAM' will raise revenues to fund the "Green Transition" or, to use a term which has been elevated to a mantra by European policy-makers, "net zero by 2050". The carbon border tax is one of the highlights of the European Commission's $750 billion Green Deal...The Climate Club
The European Commission's Executive Vice President Frans Timmermans said earlier in the year that "It's a matter of survival of our industry. So if others will not move in the same direction, we will have to protect the European Union against distortion of competition and against the risk of carbon leakage." So, according to Mr. Timmermans, many countries outside of the EU are "distorting competition" since they have not implemented similarly punitive climate rules and regulations on their own industries
It is not clear how the EU's 'CBAM' proposal could be consistent with WTO rules and particularly the "Most Favoured Nation" obligations on WTO members which specifically outlaw discrimination among countries. Even John Kerry, the Biden's administration's international climate envoy leading the clarion call on the "global climate emergency", raised concerns about the EU's carbon tariff proposals as potentially causing disastrous fallout on international trade and relations. It would seem that the climate clubbers will have their work cut out for them at the UN climate conference in November.
