“You could bring back the kind of trade frictions that have been characteristics of the U.S.-EU relationship with tit-for-tat solutions, and I think that’s a problem,” said John Podesta, who was President Barack Obama’s top climate adviser and is in frequent contact with Biden officials. “The bilateral relationship between the U.S. and EU democracy is perhaps the most important relationship now to create a structure for solving these global problems, and that’s why this is sort of a test case for that. Can we get our act together now?”
Biden has made addressing climate change one of his administration’s top priorities, but the U.S. is miles behind the European Union, which has created a bloc-wide carbon trading system to wean itself off the greenhouse gas that plays the biggest role in warming the planet. As the EU tightens its regulations on carbon emissions, it’s wary of allowing foreign companies that face no climate-related costs at home to flood its market with cheaper goods.
The tariffs the EU is expected to propose on Wednesday will leave Biden with a grim set of options. The White House could take a page from Trump’s trade playbook and impose its own retaliatory tariffs, or it could seek to challenge the EU’s move by resurrecting the World Trade Organization’s hobbled dispute resolution body, an option sharply opposed by U.S. climate policy advocates.
“Are we really going to let an unelected international body dictate whether we act on climate and jobs? That would be insane,” said National Wildlife Federation CEO Collin O’Mara, who is close to the White House climate team and said he has discussed the trade topic “more in the past two weeks than in the last two years” on the Hill and with the administration.
Much of the conversation in U.S. climate policy circles centers on how to act on the vague promises Biden made during last year’s campaign to slap fees on carbon-heavy imports. The imminent EU proposal has pushed environmental groups and the Biden administration to speed up their policy discussions after dialogue with EU officials failed to slow the tariff rollout, as U.S. officials had hoped.
Both the EU and the U.S. insist any climate trade policy must remain compliant with WTO rules. Podesta said the EU had pushed for the WTO to facilitate a conversation with the U.S. over the carbon tariffs.
But the WTO is essentially mothballed since the Trump administration blocked the appointment of new members to fill its appellate body. The Biden administration hasn’t been enthusiastic about its track record, and its trade policy agenda noted the U.S. Trade Representative would address “systemic concerns” with the WTO’s appellate board that has been defunct since 2019, chiefly over disagreements with how it handled tariffs.
Green groups worry that the WTO has also tended to ignore environmental issues when deciding disputes.
“The WTO track record on climate and environmental protections hardly inspires…
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