Push within ALP for green trade barriers

Dennis Shanahan, Political editor | July 29, 2009Article from: The Australian

THE ALP is looking at extending protectionism through new "green" barriers against trading partners who refuse to sign international agreements to cut greenhouse gas emissions.

The draft trade policy for the Labor Party conference, which begins in Sydney tomorrow, includes a proposal to "prevent environmental dumping" of trade goods by nations "which fail to implement international agreements to reduce greenhouse gas emissions".

The push runs directly against Kevin Rudd's public appeal for nations not to retreat into protectionism during the financial crisis and endanger Australia's position in global trade negotiations.

The proposal is designed to counterbalance the lower costs for developing nations that do not adopt binding greenhouse gas reduction targets but still produce goods for sale in Australia.

Such a move would hit China and India, two of Australia's biggest trading partners, who are expected to refuse to sign binding targets at a global climate change conference in Copenhagen.

The union movement is concerned that countries that do not face the extra costs of an emissions trading scheme will be able to import goods at lower prices than what they cost to produce in Australia because of higher costs for energy and transport imposed by an ETS.

The US congress has already flagged that it is prepared to introduce protectionist laws after 2018 directed against countries that do not sign binding agreements to cut carbon emissions.

Reserve Bank governor Glenn Stevens yesterday warned about the dangers to world trade of protectionism and called on governments to resist economically damaging policies.

Mr Stevens said it was a "key element" in economic productivity and recovery "to maintain open and competitive markets for goods and services, since they are most likely to spur the innovation that raises productivity".

"It is a bit disturbing, in this context, that the World Trade Organisation reports a pick-up in trade-restricting decisions by governments in recent times," he said. "The challenge for governments is to resist these tendencies. That, of course, is not a new challenge, but it is as important as ever."

A spokesman for Trade Minister Simon Crean said last night that the Labor Party's platform was a matter for the ALP. But he said the Rudd government remained committed to free trade and to meaningfully reducing global greenhouse gas emissions.

When the global financial crisis began, the Prime Minister warned, in his first long essay on the economy, that nations could not retreat into protectionism to defend themselves.

http://www.theaustralian.news.com.au/story/0,25197,25850827-11949,00.html