China and other developing countries are resisting a U.S. proposal to cut tariffs on environmental goods, casting doubt on one of President Barack Obama's goals for a Pacific Rim summit he hosts next week.
China
and
other developing countries are resisting a
U.S.
proposal to cut tariffs on environmental goods, casting doubt on one of
President Barack Obama's goals for a
Pacific Rim
summit he hosts next week.
The U.S. has been pressing for years, with little success, to liberalize trade
on "green" goods, like wind turbines and solar panels, and services
in World Trade Organization talks. Obama's efforts on the issue at the
Asia-Pacific Economic Cooperation summit Nov. 11-13 in Honolulu face the same
divisions that have stymied the WTO campaign.
The atmospherics aren't good: the president this week said Chinese energy
companies have engaged in "questionable" trade practices. His
administration is reviewing claims by U.S. companies that their Chinese rivals
are "dumping" solar panels on the U.S. market below the cost of
production to gain market share and that Beijing is illegally subsidizing
Chinese firms.
At the same time, Obama is under political pressure over a government loan
guarantee to solar-power company Solyndra LLC, which later went bust.
China
said
Friday its solar-energy policies are WTO-compliant, pressing
Washington
to
avoid protectionism and use more "rational" policies to address
bilateral trade disputes. Developing the solar industry is a focus for
Beijing
to
address climate change and energy security, and
China
hopes
the
U.S.
will
boost bilateral cooperation on solar energy, Foreign Ministry spokesman Hong
Lei told a news conference.
All this complicates the
U.S.
push
for APEC countries to pledge to cut tariffs to a maximum 5% on a broad range of
environmental goods and services by the end of 2012. Proponents argue that
lower tariffs would help countries like
China
that
are major exporters of green products.
"Developing countries stand to be some of the biggest beneficiaries of
this proposal," said Karan Bhatia, vice president and senior counsel at
General Electric Co., a major producer of wind turbines and other technologies.
"
China
and
other manufacturers of clean technologies can have the assurance that
governments won't raise tariffs above the nominal 5% level, and that's very
valuable."
But developing countries argue that the
U.S.
is
seeking too much too fast. Although
China
is a
major exporter of green products, it insists that APEC agreements allow
developing countries until 2020 to fully open their markets.
A
U.S.
trade
official counters that APEC goals allow countries to liberalize on their own
initiative before 2020.
"We have heard concerns about the timeframe and we are discussing our
proposal with other APEC economies in an effort to forge consensus," the
official in the U.S. Trade Representative's office told Dow Jones Newswires by
e-mail. "However, timely implementation for developing economies will
bring sooner the environmental and economic benefits that come from lowering
tariffs."
APEC's 21 economies account for 44% of world trade and 54% of global economic
activity, but the group's agreements, unlike those of the WTO, are nonbinding.
Opponents of the
U.S.
green-trade push are rallying around a counterproposal from
Hong
Kong
that doesn't set a deadline, according to an Asian diplomat.
APEC countries are also divided over what products should be covered. Some
developing countries want a greater commitment from the
U.S.
and
developed economies to technology transfers, which would give their nascent
industries a boost.
Beyond renewable-power generation like solar and wind, an agreement could also
cover water-filtration technologies and energy-efficient products like fluorescent
light bulbs. Tariffs on advanced, high-value products like these are often
higher than a country's average industrial tariffs.
Malaysia
, for
instance, imposes 30% tariffs on fluorescent bulbs, compared to an average
tariff of 9%, according to World Bank data.
Indonesia
and
the
Philippines
, also
APEC members, maintain 15% tariffs on solar photovoltaic panels, of which
China
is
the world's top exporter.
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