http://www.gfmag.com/index.php?idPage=777
NEIGHBORHOOD UNREST - MEXICO
Mexico’s recent economic progress could be derailed by turmoil in the US economy and the outcome of the US presidential election.
Global Finance Magazine
By Antonio Guerrero
March 2008
The last time the US economy posted a slowdown, after the 2001 terrorist attacks, the Mexican economy contracted by 0.2%, nearly crushing its industrial sector. With the threat of a US recession looming large and uncertainties over what US-Mexican relations will look like once a new occupant moves into the White House next year, the outlook is beginning to look gloomy south of the border. However, Mexican government officials say the country is better prepared this time around to meet the challenge.
Mexico’s finance ministry estimates assume the US economy will grow by a meager 1.8% this year, prompting officials to reduce their own 2008 GDP forecast in February to 2.8% from the 3.7% forecast the ministry included in the federal budget last September. This would be Mexico’s slowest expansion in three years, after posting 3.2% GDP growth last year. Local banks had already adjusted their forecasts ahead of the government. Banamex, Citi’s Mexican subsidiary, cut its 2008 growth outlook to 2.9% from a previous 3.6%, while BBVA Bancomer slashed its prediction to 2.7% from 3.4%.
With 80% of Mexican exports going to the United States and domestic capital markets moving nearly in tandem with their counterparts in New York, a US recession would have a swift impact on Mexico—and perhaps test many of the structural reforms implemented by the Felipe Calderón administration that have helped to at least partly decouple the two economies. Calderón has tried to ease Mexicans’ fears about a potential US slowdown, saying, “We will seek growth opportunities from within ourselves, in our internal market, in the strong productive apparatus and in the country’s competitiveness.”
Calderón’s reform package includes a fiscal overhaul launched last September that should boost federal revenues by 1.5% of GDP this year, as well as labor reform to introduce greater flexibility. The next hurdle is energy reform, which legislators say should be ready by April. The controversial plan would open the Pemex state-owned oil monopoly to partnerships with private investors to inject capital into a company struggling with rising debt and dwindling oil reserves. Oil accounts for 40% of federal revenues, and, with its output of 1.3 million barrels a day, Pemex is the United States’ third-largest oil supplier.
The Mexican government’s 2008 budget will boost investment by 45%, the biggest increase in 45 years, with most additional spending earmarked for infrastructure projects that will boost competitiveness and create jobs. The aim is to spark 5% annual GDP growth by 2012, falling short of the 6% growth that analysts say is needed to generate the 1.3 million new jobs Mexico requires each year to absorb workers entering the job market. But the Calderón administration counters that its $295 billion public-private infrastructure investment program approved last year should alone create 800,000 jobs.
According to a Merrill Lynch report, “A positive political agenda should create three positive effects in the medium-term: (1) reduce the country’s growth dependence on US activity and oil prices; (2) reinforce domestic engines for growth: credit, domestic consumption and productivity gains; and (3) promote GDP per capita growth, also addressing Mexico’s social agenda: improve social services and decrease poverty.” Merrill Lynch expects economic growth will be supported by 22% credit growth this year, along with a 4.1% expansion in domestic consumption.
US Election Raises Tension
While Mexico is hoping to shield itself from a US recession, it may be harder for it to stay out of the US presidential election as Republican and Democratic candidates alike tackle the issues of immigration, drug trafficking and free trade. Calderón recently asked US presidential candidates to tone down the anti-immigrant and anti-Mexican rhetoric in their campaigns. But candidates may be responding to genuine concerns, as a recent Zogby poll in the US shows more than 76% of respondents said a candidate’s position on immigration will be a “very important” or “somewhat important” factor in deciding whom to vote for this year. Another 36% said “job creation to stem migration” is the most important foreign policy measure the US should take toward Latin America.
The fight against drug trafficking, likely to be a key concern for the next US president, is already being tackled by the Mexican government, with the Calderón administration deploying more than 24,000 troops to regions with high drug production and trafficking activity, as well as extraditing drug lords to the US and seizing large amounts of illicit drugs. The moves have been well received in Washington, where the White House last October announced a $1.4 billion military and security package designed to help Mexico and Central America tackle drug cartels.“
Given the dimensions of the problem, cooperation with the government of the United States is indispensable,” Mexico’s foreign minister Patricia Espinosa told the press. The US aid package is made more politically palatable to Mexican authorities by, unlike the controversial Plan Colombia, not involving any deployment of US military personnel to Mexico.
Both governments may find themselves embroiled in a less congenial dialogue this year over the future of trade between the two nations. In January the last remaining exceptions to the North American Free Trade Agreement (Nafta) were lifted, allowing US corn, sugar, beans and milk to enter Mexico under the pact. While the measure could help lower food prices, Mexican farmers are less than thrilled and not only have unleashed street protests but have called on their government to renegotiate the treaty, which went into effect in 1994.
According to Lawrence Kogan, president and CEO of the Institute for Trade, Standards and Sustainable Development (ITSSD) in Princeton, New Jersey, the controversy may lead to “managed” trade, which he feels is a euphemism for quota-like restrictions on trade in selected agricultural products. “Mexican farmers may end up receiving the short end of the stick here,” says Kogan. “We must wait and see what is ultimately agreed to and then wait to see how it is actually applied in practice.”
Kogan, also a professor of International Trade Law and Policy at Seton Hall University, says the impact on Mexican exports to the US could be determined by who wins the presidency. “A Democratic Congress would likely become emboldened if a Democrat were in the White House. Assuming the Republicans fail to retake Congress, Congress would be more inclined to impose new environmental, health and safety, and labor standards through Nafta and the WTO to raise the cost of Mexican goods and services so that they no longer could compete effectively with US products,” he says.
Meanwhile, capital market investors remain cautiously bullish on Mexico. Merrill Lynch predicts a 23% total return on Mexican equities this year, below the 26% Latin American average and 28% for Brazil, but higher than Chile’s 22% and Argentina’s 19%—adding that the appreciation will be driven by 16% earnings growth (in US dollars) in 2008 and 11% in 2009. Citi upgraded Mexican shares to overweight, arguing that a US recession has been nearly fully priced into Mexican stocks. The sovereign also set a new fixed-income benchmark in January that extended its yield curve to 2040 and saw the order book soar to $3 billion for a $1.5 billion issue that had been upped from an initial $1 billion.
Mexico’s central bank governor Guillermo Ortiz remains more cautious, saying at the World Economic Forum in Davos that Mexico has not yet felt the full impact of the global economic crisis, and there could be more pain ahead. “We’re in round one or two,” he said, “but this is a 15-round fight.”
Showing posts with label economic harm. Show all posts
Showing posts with label economic harm. Show all posts
Tuesday, April 1, 2008
Wednesday, March 5, 2008
Overly Strict EU Environmental and Health Regulations Have Long Served as Protectionist Trade Barriers That Harm Developing Country Advancement
http://www.itssd.org/Res%20Ipsa%20Loquitor/Res%20Ipsa%20Loquitor%20-%20Developing%20Countries%20Trade%20Barriers%20Sust%20Dev.pdf
ITSSD Main Website Issues - Developing Countries, EU Regulatory Trade Barriers and 'Negative' Sustainable Development
I. Generally
II. DDT , Malarian and UN POPs Treaty
III. UN Basel Convention and the Waste and Recyling Trade in Asia
IV. The Developing World Response to the EU's Proposed (now Final) REACH Chemicals Regulation
V. Africa's Response to Europe's GM Moratorium
ITSSD Main Website Issues - Developing Countries, EU Regulatory Trade Barriers and 'Negative' Sustainable Development
I. Generally
II. DDT , Malarian and UN POPs Treaty
III. UN Basel Convention and the Waste and Recyling Trade in Asia
IV. The Developing World Response to the EU's Proposed (now Final) REACH Chemicals Regulation
V. Africa's Response to Europe's GM Moratorium
Thursday, February 28, 2008
WTO Finds That China Employed Illegal Protectionist Border Tariffs & Indirect 'Local-Working' Subsidies
WTO rules against China on car parts; Finds in favour of Canada, U.S. and EU
http://www.theglobeandmail.com/servlet/story/LAC.20080214.RCHINA14/TPStory/Business
theglobeandmail.com
STEVEN CHASE
With files from AP
February 14, 2008
OTTAWA -- The World Trade Organization has for the first time ruled against China for breaking global trade law in a precedent-setting case over car part imports that is expected to spur further challenges aimed at forcing Beijing to open its markets.
Yesterday's interim decision by the WTO found in favour of Canada, the United States and the European Union, all of which complained that China is raising unfair barriers to imports of foreign car parts.
China only joined the 151-member WTO in 2001 and while the state-heavy economy faces several challenges to its trade behaviour at the global body, yesterday's ruling is the first decision handed down.
International Trade Minister David Emerson cheered the ruling - which is officially secret until March despite being leaked yesterday - saying the decision may help open up a new market for
Canadian auto parts makers.
Print Edition - Section Front
"Hopefully it will bring about change in the practices that China's been applying," he said. "With our companies in such tough shape right now, a growing market is critically important to restoring health to our Canadian auto parts industry."
The WTO ruling is only an interim decision but the global referee's adjudicators have never changed their minds in the final version of their rulings. It could take more than a year for the case to conclude, but when it does, China may be forced to alter its behaviour or face trade sanctions from Ottawa, Washington and Brussels.
The WTO reportedly found that China was breaking agreed-upon global trade rules by taxing imports of car parts at the same higher rate levied on foreign-assembled autos.
"It's rendering it uneconomic for Canadian parts suppliers in this market," Mr. Emerson said of China's tax rate.
Toronto trade lawyer Lawrence Herman with Cassels Brock & Blackwell LLP predicts more WTO challenges of Chinese trade barriers.
Mr. Herman noted China's growing importance as an export destination, particularly for U.S. goods. "I think it's the beginning of many more such cases where the U.S. is taking on China, rightly or wrongly, for not complying with WTO rules," he said. "The huge U.S. trade deficit with China can't be ignored."
U.S. exports to China have more than quadrupled between 1996 and 2006, when they hit $55.2-billion (U.S.). That same year, the U.S. trade deficit with China hit $233-billion.
The three trade powers argued at the WTO that China's tariff was discouraging auto makers from using imported car parts for the vehicles they assemble in China. As a result, car parts firms had an incentive to shift production to China, costing Americans, Canadians and Europeans their jobs, they said.
The ruling will be closely watched by makers of batteries and brakes, seats and spark plugs on both sides of the Atlantic, including U.S.-based Delphi Corp. (General Motors' former parts supplier) and Robert Bosch GmbH in Germany.
China, which can appeal the ruling, claims the tariffs are intended to stop whole cars being imported in large chunks, allowing companies to avoid the higher tariff rates for finished cars. It argues all measures are consistent with WTO rules and do not discriminate against foreign auto parts.
But the U.S. and EU say China promised not to treat parts as whole cars when it joined the WTO in 2001.
[This point is significant in light of the prior 1998 WTO case Indonesia – Certain Measures Affecting the Automobile Industry (WT/DS54,55,59 & 64/R). US and EU allege that two sets of Indonesia measures constitute subsidies that cause ‘serious prejudice’ to their interests within the meaning of SCM Art. 5 (c). They alleged that the effect of the ‘subsidies’ was to displace or impede imports of ‘like’ products from the EC and US into the subsidizing Indonesian market. In other words, the prices of 'like' EC and US autos were significantly undercut by the subsidized national car company, and thus discriminated against in the marketplace.
The first set of measures entailed a ‘grant’ of National Car company status to Indonesian car companies that met specified criteria as to ownership of facilities, use of trademarks and technology. The ‘benefits’ provided were exemption from luxury tax on car National Car sales and exemption from import duties. They were maintainable by meeting increasing local content requirements.
The second set of measures provided that National Cars manufactured in a foreign country by Indonesian nationals and that fulfill (20%) local content requirements shall be treated the same as ‘National Cars’ (exemption from luxury tax and import duties). The 20% local content requirement was deemed satisfied if the overseas car manufacturer ‘counter-purchases’ Indonesian parts and components that account for 25% or more of the cost & freight (C&F) value of the imported cars. Indonesia maintained a duty of 200 percent on imports of finished passenger cars. As a result, almost ALL passenger cars imported into Indonesia including the EC and US models in question were imported as ‘completely knocked down’ (CKD) kits and assembled in Indonesia.
The WTO Appellate Body (AB) did not consider that an unassembled product ipso facto was NOT a ‘like’ product to that product assembled. The AB considered that a tariff classification was a useful tool in ‘like’ product analysis. It noted how the Gen’l Rules for Interpreting Harmonized System stated that any reference in a heading to an article shall include a reference to that article incomplete or unfinished, provided, the incomplete or unfinished article has the essential character of the complete or finished article.
The AB believed that a comparable approach to the relation between assembled and unassembled products made good sense in the context of that dispute. Due to the high Indonesian duties, ‘completely built-up, EC and US producers shipped ‘cars in a box’ to Indonesia. Consequently, they could properly be considered to have characteristics closely resembling those of a completed car. In WTO jurisprudence, the AB employed a ‘Big Accordion’ of ‘likeness’.]
http://www.theglobeandmail.com/servlet/story/LAC.20080214.RCHINA14/TPStory/Business
theglobeandmail.com
STEVEN CHASE
With files from AP
February 14, 2008
OTTAWA -- The World Trade Organization has for the first time ruled against China for breaking global trade law in a precedent-setting case over car part imports that is expected to spur further challenges aimed at forcing Beijing to open its markets.
Yesterday's interim decision by the WTO found in favour of Canada, the United States and the European Union, all of which complained that China is raising unfair barriers to imports of foreign car parts.
China only joined the 151-member WTO in 2001 and while the state-heavy economy faces several challenges to its trade behaviour at the global body, yesterday's ruling is the first decision handed down.
International Trade Minister David Emerson cheered the ruling - which is officially secret until March despite being leaked yesterday - saying the decision may help open up a new market for
Canadian auto parts makers.
Print Edition - Section Front
"Hopefully it will bring about change in the practices that China's been applying," he said. "With our companies in such tough shape right now, a growing market is critically important to restoring health to our Canadian auto parts industry."
The WTO ruling is only an interim decision but the global referee's adjudicators have never changed their minds in the final version of their rulings. It could take more than a year for the case to conclude, but when it does, China may be forced to alter its behaviour or face trade sanctions from Ottawa, Washington and Brussels.
The WTO reportedly found that China was breaking agreed-upon global trade rules by taxing imports of car parts at the same higher rate levied on foreign-assembled autos.
"It's rendering it uneconomic for Canadian parts suppliers in this market," Mr. Emerson said of China's tax rate.
Toronto trade lawyer Lawrence Herman with Cassels Brock & Blackwell LLP predicts more WTO challenges of Chinese trade barriers.
Mr. Herman noted China's growing importance as an export destination, particularly for U.S. goods. "I think it's the beginning of many more such cases where the U.S. is taking on China, rightly or wrongly, for not complying with WTO rules," he said. "The huge U.S. trade deficit with China can't be ignored."
U.S. exports to China have more than quadrupled between 1996 and 2006, when they hit $55.2-billion (U.S.). That same year, the U.S. trade deficit with China hit $233-billion.
The three trade powers argued at the WTO that China's tariff was discouraging auto makers from using imported car parts for the vehicles they assemble in China. As a result, car parts firms had an incentive to shift production to China, costing Americans, Canadians and Europeans their jobs, they said.
The ruling will be closely watched by makers of batteries and brakes, seats and spark plugs on both sides of the Atlantic, including U.S.-based Delphi Corp. (General Motors' former parts supplier) and Robert Bosch GmbH in Germany.
China, which can appeal the ruling, claims the tariffs are intended to stop whole cars being imported in large chunks, allowing companies to avoid the higher tariff rates for finished cars. It argues all measures are consistent with WTO rules and do not discriminate against foreign auto parts.
But the U.S. and EU say China promised not to treat parts as whole cars when it joined the WTO in 2001.
[This point is significant in light of the prior 1998 WTO case Indonesia – Certain Measures Affecting the Automobile Industry (WT/DS54,55,59 & 64/R). US and EU allege that two sets of Indonesia measures constitute subsidies that cause ‘serious prejudice’ to their interests within the meaning of SCM Art. 5 (c). They alleged that the effect of the ‘subsidies’ was to displace or impede imports of ‘like’ products from the EC and US into the subsidizing Indonesian market. In other words, the prices of 'like' EC and US autos were significantly undercut by the subsidized national car company, and thus discriminated against in the marketplace.
The first set of measures entailed a ‘grant’ of National Car company status to Indonesian car companies that met specified criteria as to ownership of facilities, use of trademarks and technology. The ‘benefits’ provided were exemption from luxury tax on car National Car sales and exemption from import duties. They were maintainable by meeting increasing local content requirements.
The second set of measures provided that National Cars manufactured in a foreign country by Indonesian nationals and that fulfill (20%) local content requirements shall be treated the same as ‘National Cars’ (exemption from luxury tax and import duties). The 20% local content requirement was deemed satisfied if the overseas car manufacturer ‘counter-purchases’ Indonesian parts and components that account for 25% or more of the cost & freight (C&F) value of the imported cars. Indonesia maintained a duty of 200 percent on imports of finished passenger cars. As a result, almost ALL passenger cars imported into Indonesia including the EC and US models in question were imported as ‘completely knocked down’ (CKD) kits and assembled in Indonesia.
The WTO Appellate Body (AB) did not consider that an unassembled product ipso facto was NOT a ‘like’ product to that product assembled. The AB considered that a tariff classification was a useful tool in ‘like’ product analysis. It noted how the Gen’l Rules for Interpreting Harmonized System stated that any reference in a heading to an article shall include a reference to that article incomplete or unfinished, provided, the incomplete or unfinished article has the essential character of the complete or finished article.
The AB believed that a comparable approach to the relation between assembled and unassembled products made good sense in the context of that dispute. Due to the high Indonesian duties, ‘completely built-up, EC and US producers shipped ‘cars in a box’ to Indonesia. Consequently, they could properly be considered to have characteristics closely resembling those of a completed car. In WTO jurisprudence, the AB employed a ‘Big Accordion’ of ‘likeness’.]
"It will be instructive to see how China responds," U.S. Trade Representative Susan Schwab said in a recent interview with Associated Press. "If, as we hope and expect, China will be found in contravention of its WTO obligations, hopefully that will help those forces within China that have been advocating reform."
Wednesday, February 6, 2008
Europe Wields Antitrust Law as an Imperialist Sword & Protectionist Shield
http://online.wsj.com/article/SB120053154686996085.html?mod=googlenews_wsj
REVIEW & OUTLOOK
Europe v. U.S. Business
January 17, 2008; Page A16
EU competition chief Neelie Kroes's determination to cow large, successful American firms with antitrust laws is nothing new. But the latest Brussels sally against Microsoft is a good time for Washington to wake up to Europe's regulatory imperialism.
In September, EU courts upheld Brussels's landmark 2004 ruling and €497 million fine against Microsoft. That case hinged on Microsoft's "bundling" of its Media Player with its dominant Windows operating system and alleged refusal to provide rivals with technology to write software that worked with Microsoft programs. Ms. Kroes is now going for the jugular. The formal inquiry she announced Monday focuses on Microsoft's packaging of its Internet Explorer Web browser with Windows, and the compatibility of its popular Office software suite with rival programs.
Brussels has also set its sights on other large U.S. firms. Just since September, EU antitrust regulators have dialed up a case against Qualcomm, continued processing claims against Intel, charged MasterCard with setting illegal fees, searched for reasons to block Google's purchase of DoubleClick, and forced Apple to cut prices for digital songs (though the iPod maker was cleared of any wrongdoing).
All of these cases target American companies that have already come under antitrust scrutiny in the U.S. But Brussels is an attractive venue for competitors to use European antitrust litigation to hobble a rival. We've seen a stampede of lawyers descend on the European capital since September's Microsoft ruling. The U.S. Justice Department has reacted, at most, with a stern press release. There was no American response as far as we could see to Monday's Microsoft news. Words do matter, as Barack Obama says. So does their absence.
Euro-American regulatory cooperation is currently in vogue, with the first meeting last fall of the Trans-Atlantic Economic Council and Washington's recent acceptance of international accounting standards. If there's one legal area that could benefit from such camaraderie, it's antitrust. We're not talking about an International Competition Court but, rather, mutual recognition of American rulings on U.S. companies and EU oversight of European firms. Other countries that want to sign up to the standards could also be included.
We're under no illusions that an arrangement on antitrust would come easily. Brussels seems to enjoy its newfound power. And while U.S. and EU laws on issues such as mergers have been converging, there's still a great deal of water between the two on the treatment of monopolies. For example, American authorities aren't as quick as their Continental counterparts to dismiss the benefits that dominant firms like Microsoft can offer consumers.
In the long run, Europe would also benefit from mutual recognition. In fast-growing economies like China, antitrust law is developing apace. What will be the reaction in Paris and Berlin when French and German companies start encountering "antitrust" cases in Beijing or Seoul?
Today's antitrust multiple-jeopardy -- Intel currently faces litigation in Europe, Japan, South Korea and New York -- is a potential disaster for business. If antitrust cooperation seems a long way off, that's all the more reason for Washington to start fighting back against European overreach.
REVIEW & OUTLOOK
Europe v. U.S. Business
January 17, 2008; Page A16
EU competition chief Neelie Kroes's determination to cow large, successful American firms with antitrust laws is nothing new. But the latest Brussels sally against Microsoft is a good time for Washington to wake up to Europe's regulatory imperialism.
In September, EU courts upheld Brussels's landmark 2004 ruling and €497 million fine against Microsoft. That case hinged on Microsoft's "bundling" of its Media Player with its dominant Windows operating system and alleged refusal to provide rivals with technology to write software that worked with Microsoft programs. Ms. Kroes is now going for the jugular. The formal inquiry she announced Monday focuses on Microsoft's packaging of its Internet Explorer Web browser with Windows, and the compatibility of its popular Office software suite with rival programs.
Brussels has also set its sights on other large U.S. firms. Just since September, EU antitrust regulators have dialed up a case against Qualcomm, continued processing claims against Intel, charged MasterCard with setting illegal fees, searched for reasons to block Google's purchase of DoubleClick, and forced Apple to cut prices for digital songs (though the iPod maker was cleared of any wrongdoing).
All of these cases target American companies that have already come under antitrust scrutiny in the U.S. But Brussels is an attractive venue for competitors to use European antitrust litigation to hobble a rival. We've seen a stampede of lawyers descend on the European capital since September's Microsoft ruling. The U.S. Justice Department has reacted, at most, with a stern press release. There was no American response as far as we could see to Monday's Microsoft news. Words do matter, as Barack Obama says. So does their absence.
Euro-American regulatory cooperation is currently in vogue, with the first meeting last fall of the Trans-Atlantic Economic Council and Washington's recent acceptance of international accounting standards. If there's one legal area that could benefit from such camaraderie, it's antitrust. We're not talking about an International Competition Court but, rather, mutual recognition of American rulings on U.S. companies and EU oversight of European firms. Other countries that want to sign up to the standards could also be included.
We're under no illusions that an arrangement on antitrust would come easily. Brussels seems to enjoy its newfound power. And while U.S. and EU laws on issues such as mergers have been converging, there's still a great deal of water between the two on the treatment of monopolies. For example, American authorities aren't as quick as their Continental counterparts to dismiss the benefits that dominant firms like Microsoft can offer consumers.
In the long run, Europe would also benefit from mutual recognition. In fast-growing economies like China, antitrust law is developing apace. What will be the reaction in Paris and Berlin when French and German companies start encountering "antitrust" cases in Beijing or Seoul?
Today's antitrust multiple-jeopardy -- Intel currently faces litigation in Europe, Japan, South Korea and New York -- is a potential disaster for business. If antitrust cooperation seems a long way off, that's all the more reason for Washington to start fighting back against European overreach.
Monday, February 4, 2008
Sudden EU Commission Change of Heart on CO2 Rules Against Industry???? It's the Economy Stupid!!
http://www.planetark.org/dailynewsstory.cfm/newsid/46516/story.htm
EU to Set Easier CO2 Regime for Heavy Industries
Paul Taylor
Planet Ark
January 21, 2008
BRUSSELS - Europe's steel, aluminium and cement industries will have a special, less strict regime for greenhouse gas emissions under European Commission proposals to fight climate change to be announced this week.
After weeks of intense lobbying by business and governments, EU sources said on Sunday those three energy-intensive industries would be introduced more slowly into a new system for auctioning permits to emit carbon dioxide (CO2) from 2013.
The sources insisted on anonymity because wrangling is continuing in the Commission on final details of the proposals on CO2 emissions, renewable energy sources, biofuels and carbon sequestration to be unveiled on Wednesday.
A key flaw of the EU's Emissions Trading Scheme -- the main instrument for curbing pollution blamed for global warming -- has been that governments issued emission permits for free, handing industry windfall profits.
Under a planned reform, the sources said most sectors covered by the ETS will have to buy about one-fifth of emission permits from 2013 -- fewer than in early drafts of the proposal -- rising annually to reach 100 percent in 2020.
Those sectors include energy and power generation, including refineries, despite fierce lobbying by European oil majors BP and Shell to go easy on refineries.
The overall aim is to reduce European emissions of CO2 by at least 20 percent by 2020 compared to 1990 levels.
[MY, MY: HOW EU ASPIRATIONS FOR ENLIGHTENED ENVIRONMENTALISM HAVE FALLEN!!]
However, the sources said the EU executive was sensitive to concerns that the three big energy-intensive industries could be driven out of Europe if subjected to the same regime.
[EU COMMISSION SMELLS THE COFFEE!!]
"Those concerns are being sufficiently taken into account through the benchmarking regime and a different allocation regime," one official said.
WHITTLED DOWN
He declined to give figures but said energy-intensive industries would have a bigger initial allocation than originally planned, a lower starting point for the percentage of emissions permits to be auctioned and a slower phase-in.
The Carbon Trust, a British government-funded body charged with helping companies cut emissions, warned earlier this month that cement, steel, aluminium, chemicals, fertiliser and pulp and paper businesses might be hurt by the stricter EU regime.
But the sources said officials had whittled down the number of energy-intensive sectors likely to enjoy special treatment to just the three.
Europe's top business lobby last week attacked Commission plans to implement the deep emissions cuts agreed by EU leaders last year, saying that auctioning pollution permits could hurt industry in global competition.
"In the absence of a comprehensive international agreement, auctioning of allowances will harm the competitiveness of European companies, especially in energy-intensive industries," BusinessEurope Secretary-General Philippe de Buck wrote in a letter to Commission President Jose Manuel Barroso.
The draft proposal provides for a review in 2011 of the impact on energy-intensive industries, depending on whether there has been an international pact on curbing emissions by then.
The EU package will also propose mandatory national targets for cutting CO2 emissions from buildings, heating and cooling and transport, as well as binding national targets for using renewable energy sources in power generation. (Editing by Caroline Drees)
EU to Set Easier CO2 Regime for Heavy Industries
Paul Taylor
Planet Ark
January 21, 2008
BRUSSELS - Europe's steel, aluminium and cement industries will have a special, less strict regime for greenhouse gas emissions under European Commission proposals to fight climate change to be announced this week.
After weeks of intense lobbying by business and governments, EU sources said on Sunday those three energy-intensive industries would be introduced more slowly into a new system for auctioning permits to emit carbon dioxide (CO2) from 2013.
The sources insisted on anonymity because wrangling is continuing in the Commission on final details of the proposals on CO2 emissions, renewable energy sources, biofuels and carbon sequestration to be unveiled on Wednesday.
A key flaw of the EU's Emissions Trading Scheme -- the main instrument for curbing pollution blamed for global warming -- has been that governments issued emission permits for free, handing industry windfall profits.
Under a planned reform, the sources said most sectors covered by the ETS will have to buy about one-fifth of emission permits from 2013 -- fewer than in early drafts of the proposal -- rising annually to reach 100 percent in 2020.
Those sectors include energy and power generation, including refineries, despite fierce lobbying by European oil majors BP and Shell to go easy on refineries.
The overall aim is to reduce European emissions of CO2 by at least 20 percent by 2020 compared to 1990 levels.
[MY, MY: HOW EU ASPIRATIONS FOR ENLIGHTENED ENVIRONMENTALISM HAVE FALLEN!!]
However, the sources said the EU executive was sensitive to concerns that the three big energy-intensive industries could be driven out of Europe if subjected to the same regime.
[EU COMMISSION SMELLS THE COFFEE!!]
"Those concerns are being sufficiently taken into account through the benchmarking regime and a different allocation regime," one official said.
WHITTLED DOWN
He declined to give figures but said energy-intensive industries would have a bigger initial allocation than originally planned, a lower starting point for the percentage of emissions permits to be auctioned and a slower phase-in.
The Carbon Trust, a British government-funded body charged with helping companies cut emissions, warned earlier this month that cement, steel, aluminium, chemicals, fertiliser and pulp and paper businesses might be hurt by the stricter EU regime.
But the sources said officials had whittled down the number of energy-intensive sectors likely to enjoy special treatment to just the three.
Europe's top business lobby last week attacked Commission plans to implement the deep emissions cuts agreed by EU leaders last year, saying that auctioning pollution permits could hurt industry in global competition.
"In the absence of a comprehensive international agreement, auctioning of allowances will harm the competitiveness of European companies, especially in energy-intensive industries," BusinessEurope Secretary-General Philippe de Buck wrote in a letter to Commission President Jose Manuel Barroso.
The draft proposal provides for a review in 2011 of the impact on energy-intensive industries, depending on whether there has been an international pact on curbing emissions by then.
The EU package will also propose mandatory national targets for cutting CO2 emissions from buildings, heating and cooling and transport, as well as binding national targets for using renewable energy sources in power generation. (Editing by Caroline Drees)
EU Comes Clean on Climate Change Costs: GHG Reduction Rules Will Significantly Harm European Industry Competitiveness
http://www.environmentalleader.com/2008/01/10/new-eu-co2-plans-will-affect-heavy-industry
New EU CO2 Plans Will Affect Heavy Industry
January 10, 2008
EU officials have acknowledged that a new plan to tighten greenhouse gas admissions will take a toll on the competiveness of some heavy industries, reports this article. The new rules will be unveiled by the European Commission on January 23.
According to official documents, the aluminum producers would be most affected, while chemical, steel and cement makers, to comply with the new standards, would have to raise prices between 5 and 48 percent. Reportedly, the EU executive is still divided on whether to introduce measures that would protect some sectors, such as energy intensive industries.
[REPORTS LIKE THESE ONCE AGAIN VALIDATE PREVIOUS ITSSD RESEARCH]
Overall, it’s estimated that should the changes occur, Europe’s GDP would drop by 0.1 percent but that jobs lost in the affected industries would be offset by new opportunities in the low-carbon economy.
The commission is also considering a carbon tariff on goods from countries whose emission policies aren’t as strong as Europe’s.
New EU CO2 Plans Will Affect Heavy Industry
January 10, 2008
EU officials have acknowledged that a new plan to tighten greenhouse gas admissions will take a toll on the competiveness of some heavy industries, reports this article. The new rules will be unveiled by the European Commission on January 23.
According to official documents, the aluminum producers would be most affected, while chemical, steel and cement makers, to comply with the new standards, would have to raise prices between 5 and 48 percent. Reportedly, the EU executive is still divided on whether to introduce measures that would protect some sectors, such as energy intensive industries.
[REPORTS LIKE THESE ONCE AGAIN VALIDATE PREVIOUS ITSSD RESEARCH]
Overall, it’s estimated that should the changes occur, Europe’s GDP would drop by 0.1 percent but that jobs lost in the affected industries would be offset by new opportunities in the low-carbon economy.
The commission is also considering a carbon tariff on goods from countries whose emission policies aren’t as strong as Europe’s.
Sunday, January 27, 2008
Biofuels Protectionism Trumps Climate Concerns: Just How Green is Biofuel?
http://www.reuters.com/article/GlobalAgricultureandBiofuels08/idUSN1661111120080116?sp=true
Biofuels protectionism trumps climate concerns
By Inae Riveras
Reuters
January 16, 2008
SAO PAULO (Reuters) - Despite world concerns about global warming and the impact of biofuel production on food prices, policy makers have done little to boost international trade of cheaper and more environmentally friendly fuels for consumers, experts said.
Import tariffs and trade barriers have prevented, for example, an increase in cane-based ethanol exports from Brazil, the world's most competitive producer of the biofuel. Shipments are actually expected to be lower in 2008 than last year.
In Europe, biodiesel producers have been hit by an increase in U.S. imports, which benefit from subsidies if they are blended with mineral diesel. To counterattack, the EU bloc may impose countervailing duties, industry leaders said.
The EU has also been affected by large volumes of Argentine biodiesel at cheap prices, which are encouraged by preferential taxes. The product is charged a 5 percent tariff by Argentina's government, while edible oil exports have a 30 percent duty.
"Some countries are trying to solve a world problem, which is global warming and climate change, just with national solutions," said the head of Brazil's Sugar Cane Industry Union (Unica), Marcos Jank, at the Reuters Global Agriculture and Biofuel Summit.
According to Unica, cane-based fuel has higher productivity than other feedstocks. Sugar cane yields seven liters of ethanol per hectare compared with three liters with corn.
Production costs are lower, and energy efficiency -- amount of energy used in the process versus energy resulting -- is five times higher with cane than with corn, Unica said.
Moreover, its impact on food prices is much more limited than the one caused by corn or wheat. Almost a third of the next U.S. crop may be turned into fuel, increasing upward pressure on food inflation.
But tariffs in some of the world's largest fuels markets like the U.S. and Europe will limit ethanol exports. Shipments from Brazil are to drop this year to 3.4 billion liters, down from 3.8 billion liters in 2007, Datagro consultants said.
GLOOM PERSPECTIVES
Unica argues its position is not self-promotional as cane-based ethanol could come also from Asia, Africa or South America. More than 100 countries -- most of them poor nations -- have natural conditions to grow cane.
"Europe is trying to subsidize their farmers to produce ethanol from beet and wheat instead of buying ethanol from abroad. The same happens in the U.S. Most of the ethanol there will come from corn, probably from biomass in the future, but not imported (ethanol)," Jank said.
"We believe that if these countries consider to import more from developing countries, the energy and environmental balance would be much better, and costs would be much lower."
But signals from these countries point to the opposite direction.
The chairman of the U.S. House Agriculture Committee, Rep. Collin Peterson, said on Tuesday tax credits and tariffs on ethanol would have to be maintained to create the necessary conditions for the development of cellulosic ethanol.
"We are hoping that we won't have any changes in the tax or tariffs any time soon," he said.
Brazilian ethanol is charged with a 54-cent-a-gallon tariff to enter the U.S. market. This makes direct sales possible only on specific and uncommon occasions, depending on low prices in Brazil and high prices in the United States.
And perspectives remain negative as the U.S. passed in December its Energy Bill, which sets a target for biofuel use of 36 billion gallons -- none of them imported, in principle.
"They (U.S.) won't open their market. They will stick to its import tariff and create a quota, and then administrate this quota under geopolitical criteria," said the president of Brazil's Datagro consultants, Plinio Nastari.
Wallace Tyner, professor at Purdue University in West Lafayette, Indiana, said it would be necessary either alter the mandate or change the tariff for U.S. to meet its goal.
"Brazil and a lot of Central American countries have a capacity to expand pretty quickly their ethanol production if they get signals that there's a market for it," Tyner said.
Biofuels protectionism trumps climate concerns
By Inae Riveras
Reuters
January 16, 2008
SAO PAULO (Reuters) - Despite world concerns about global warming and the impact of biofuel production on food prices, policy makers have done little to boost international trade of cheaper and more environmentally friendly fuels for consumers, experts said.
Import tariffs and trade barriers have prevented, for example, an increase in cane-based ethanol exports from Brazil, the world's most competitive producer of the biofuel. Shipments are actually expected to be lower in 2008 than last year.
In Europe, biodiesel producers have been hit by an increase in U.S. imports, which benefit from subsidies if they are blended with mineral diesel. To counterattack, the EU bloc may impose countervailing duties, industry leaders said.
The EU has also been affected by large volumes of Argentine biodiesel at cheap prices, which are encouraged by preferential taxes. The product is charged a 5 percent tariff by Argentina's government, while edible oil exports have a 30 percent duty.
"Some countries are trying to solve a world problem, which is global warming and climate change, just with national solutions," said the head of Brazil's Sugar Cane Industry Union (Unica), Marcos Jank, at the Reuters Global Agriculture and Biofuel Summit.
According to Unica, cane-based fuel has higher productivity than other feedstocks. Sugar cane yields seven liters of ethanol per hectare compared with three liters with corn.
Production costs are lower, and energy efficiency -- amount of energy used in the process versus energy resulting -- is five times higher with cane than with corn, Unica said.
Moreover, its impact on food prices is much more limited than the one caused by corn or wheat. Almost a third of the next U.S. crop may be turned into fuel, increasing upward pressure on food inflation.
But tariffs in some of the world's largest fuels markets like the U.S. and Europe will limit ethanol exports. Shipments from Brazil are to drop this year to 3.4 billion liters, down from 3.8 billion liters in 2007, Datagro consultants said.
GLOOM PERSPECTIVES
Unica argues its position is not self-promotional as cane-based ethanol could come also from Asia, Africa or South America. More than 100 countries -- most of them poor nations -- have natural conditions to grow cane.
"Europe is trying to subsidize their farmers to produce ethanol from beet and wheat instead of buying ethanol from abroad. The same happens in the U.S. Most of the ethanol there will come from corn, probably from biomass in the future, but not imported (ethanol)," Jank said.
"We believe that if these countries consider to import more from developing countries, the energy and environmental balance would be much better, and costs would be much lower."
But signals from these countries point to the opposite direction.
The chairman of the U.S. House Agriculture Committee, Rep. Collin Peterson, said on Tuesday tax credits and tariffs on ethanol would have to be maintained to create the necessary conditions for the development of cellulosic ethanol.
"We are hoping that we won't have any changes in the tax or tariffs any time soon," he said.
Brazilian ethanol is charged with a 54-cent-a-gallon tariff to enter the U.S. market. This makes direct sales possible only on specific and uncommon occasions, depending on low prices in Brazil and high prices in the United States.
And perspectives remain negative as the U.S. passed in December its Energy Bill, which sets a target for biofuel use of 36 billion gallons -- none of them imported, in principle.
"They (U.S.) won't open their market. They will stick to its import tariff and create a quota, and then administrate this quota under geopolitical criteria," said the president of Brazil's Datagro consultants, Plinio Nastari.
Wallace Tyner, professor at Purdue University in West Lafayette, Indiana, said it would be necessary either alter the mandate or change the tariff for U.S. to meet its goal.
"Brazil and a lot of Central American countries have a capacity to expand pretty quickly their ethanol production if they get signals that there's a market for it," Tyner said.
Saturday, January 26, 2008
Protectionists Within 110th Congress Toyed With Bringing Global Trade War; Considered Carbon Emissions Limits & Carbon Border Taxes!
http://www.economist.com/opinion/displaystory.cfm?story_id=10134052
Climate change - Green protectionism
Nov 15th 2007
From The Economist print edition [ECONOMIST APPROVES OF ALL U.S. LEGISLATION THAT HELPS OUT EUROPEAN INDUSTRIES]
A dangerous flaw in a bill to control carbon emissions
FOR those (such as this newspaper) who argue that the only way to avert dangerous climate change is to set a price on CO2 emissions, what's going on in America's Congress is excellent news. A bill to set such a price has achieved a remarkable degree of cross-party support (see article). Federal emissions controls in America are essential to tackling climate change globally. So it is especially unfortunate that the bill includes a provision that would turn the fight against climate change into a tool for protectionists.
While Al Gore has been strutting his stuff on stage, behind the scenes America's quieter greens have been successfully lobbying powerful interests. Many companies have come round to the view that they would do better with a single federal system than a patchwork of state-level rules. Farmers have bought the idea that they can make money out of biofuels. Christians have been persuaded that they need to be better stewards of the earth. Defence hawks have been arguing that America needs to reduce its dependency on the Middle East.
But two powerful groups have remained determinedly sceptical: energy-intensive manufacturers and organised labour, who fear the effects of higher energy costs in America and their impact on jobs.
The main purpose of the bill is to establish a carbon price through a cap-and-trade system. The proposal is a reasonable one, informed by the experience of Europe's similar scheme.
[IT MUST BE RECALLED IN A PRIOR FINANCIAL TIMES ARTICLE POSTED IN THIS BLOG THAT THE EU COMMISSION HAS ADMITTED ITS FLAWED ENERGY POLICY FOCUSING ON EMISSIONS CAP LIMITS!!!]
But to placate the manufacturers and the unions, the bill also includes a measure which Europe has rightly abjured (although some member states have recently been demanding one) for a border tax on carbon-intensive goods. Imports would have to be certified as to their carbon content, and would be taxed accordingly.
Proponents of the idea argue, first, that American producers would otherwise be disadvantaged by the higher costs that their country's stricter standards impose on them. Second, they maintain, a tax would encourage developing-country governments to cut the carbon-intensity of their economies for fear of losing lucrative export markets.
Be green and grow
[IT MUST BE RECALLED THAT THE FRENCH ATTALI COMMISSION RECENTLY RECOMMENDED THAT THE PRECAUTIONARY PRINCIPLE, WHICH SERVES AS THE LEGAL BASIS FOR ENACTING SUCH DRACONIAN RULES REFLECTS THAT 'ENLIGHTENED' PRECAUTIONARY PRINCIPLE-BASED ENVIRONMENTALISM IMPOSES LIMITS TO GROWTH]**
On the first argument, if America establishes a carbon price, an energy-intensive industry such as aluminium would very likely choose to expand capacity elsewhere. Yet it is not clear that, in the long run, environmental regulation does much to suppress economic growth. After all, California imposes tighter rules on companies than do most other American states, but its long boom suggests that greenery and growth can coexist comfortably. [CALIFORNIA, TO BE SURE, IS A VERY EXPENSIVE STATE TO DO BUSINESS IN, LET ALONE TO LIVE IN!!!]
[IF IT IS NOT CLEAR THAT GROWTH IS IMPAIRED BY ENVIRONMENTAL REGULATION, WHY REGULATE IN THIS MANNER???]
China and India might well come more swiftly to the negotiating table if they faced the possibility of losing their export markets. [CHINA AND INDIA WOULD BE IMPAIRING THEIR ABILITY TO DEVELOP WERE THEY TO ADOPT UNREALISTIC CARBON EMISSIONS LIMITS AND CARBON BORDER TAXES!!]
But the experience of America and Europe suggests that threatening trade sanctions is not the only way to bring a country round. After all, Europe set a carbon price without imposing tariffs on American goods, and America looks like following its lead anyway. What's more, the costs of a border tax could be huge, not just because of the massive bureaucracy needed to certify the carbon content of different goods imported from different factories in different countries, but also because such a tax would be a dangerous weapon in the hands of America's growing gang of protectionists.
The people who worry most about the costs of trying to constrain carbon emissions are the very ones demanding protectionist measures. But if those measures are passed, America risks something far costlier than a switch to cleaner energy: a global trade war.
Climate change - Green protectionism
Nov 15th 2007
From The Economist print edition [ECONOMIST APPROVES OF ALL U.S. LEGISLATION THAT HELPS OUT EUROPEAN INDUSTRIES]
A dangerous flaw in a bill to control carbon emissions
FOR those (such as this newspaper) who argue that the only way to avert dangerous climate change is to set a price on CO2 emissions, what's going on in America's Congress is excellent news. A bill to set such a price has achieved a remarkable degree of cross-party support (see article). Federal emissions controls in America are essential to tackling climate change globally. So it is especially unfortunate that the bill includes a provision that would turn the fight against climate change into a tool for protectionists.
While Al Gore has been strutting his stuff on stage, behind the scenes America's quieter greens have been successfully lobbying powerful interests. Many companies have come round to the view that they would do better with a single federal system than a patchwork of state-level rules. Farmers have bought the idea that they can make money out of biofuels. Christians have been persuaded that they need to be better stewards of the earth. Defence hawks have been arguing that America needs to reduce its dependency on the Middle East.
But two powerful groups have remained determinedly sceptical: energy-intensive manufacturers and organised labour, who fear the effects of higher energy costs in America and their impact on jobs.
The main purpose of the bill is to establish a carbon price through a cap-and-trade system. The proposal is a reasonable one, informed by the experience of Europe's similar scheme.
[IT MUST BE RECALLED IN A PRIOR FINANCIAL TIMES ARTICLE POSTED IN THIS BLOG THAT THE EU COMMISSION HAS ADMITTED ITS FLAWED ENERGY POLICY FOCUSING ON EMISSIONS CAP LIMITS!!!]
But to placate the manufacturers and the unions, the bill also includes a measure which Europe has rightly abjured (although some member states have recently been demanding one) for a border tax on carbon-intensive goods. Imports would have to be certified as to their carbon content, and would be taxed accordingly.
Proponents of the idea argue, first, that American producers would otherwise be disadvantaged by the higher costs that their country's stricter standards impose on them. Second, they maintain, a tax would encourage developing-country governments to cut the carbon-intensity of their economies for fear of losing lucrative export markets.
Be green and grow
[IT MUST BE RECALLED THAT THE FRENCH ATTALI COMMISSION RECENTLY RECOMMENDED THAT THE PRECAUTIONARY PRINCIPLE, WHICH SERVES AS THE LEGAL BASIS FOR ENACTING SUCH DRACONIAN RULES REFLECTS THAT 'ENLIGHTENED' PRECAUTIONARY PRINCIPLE-BASED ENVIRONMENTALISM IMPOSES LIMITS TO GROWTH]**
On the first argument, if America establishes a carbon price, an energy-intensive industry such as aluminium would very likely choose to expand capacity elsewhere. Yet it is not clear that, in the long run, environmental regulation does much to suppress economic growth. After all, California imposes tighter rules on companies than do most other American states, but its long boom suggests that greenery and growth can coexist comfortably. [CALIFORNIA, TO BE SURE, IS A VERY EXPENSIVE STATE TO DO BUSINESS IN, LET ALONE TO LIVE IN!!!]
[IF IT IS NOT CLEAR THAT GROWTH IS IMPAIRED BY ENVIRONMENTAL REGULATION, WHY REGULATE IN THIS MANNER???]
China and India might well come more swiftly to the negotiating table if they faced the possibility of losing their export markets. [CHINA AND INDIA WOULD BE IMPAIRING THEIR ABILITY TO DEVELOP WERE THEY TO ADOPT UNREALISTIC CARBON EMISSIONS LIMITS AND CARBON BORDER TAXES!!]
But the experience of America and Europe suggests that threatening trade sanctions is not the only way to bring a country round. After all, Europe set a carbon price without imposing tariffs on American goods, and America looks like following its lead anyway. What's more, the costs of a border tax could be huge, not just because of the massive bureaucracy needed to certify the carbon content of different goods imported from different factories in different countries, but also because such a tax would be a dangerous weapon in the hands of America's growing gang of protectionists.
The people who worry most about the costs of trying to constrain carbon emissions are the very ones demanding protectionist measures. But if those measures are passed, America risks something far costlier than a switch to cleaner energy: a global trade war.
[CONSIDERATION BY US LEGISLATORS AND INDUSTRIES OF SUCH RIDICULOUS LEGISLATION HAS BEEN NO DOUBT TRIGGERED BY A MISTAKEN BELIEF THAT EUROPE'S GLOBAL PRECAUTIONARY PRINCIPLE ENVIRONMENTAL JUGGERNAUT WILL SUCCEED!!]
Friday, January 25, 2008
French Rethinking the Precautionary Principle?? Jamais!!!
Communique From ITSSD Journal Advisory Board Member, Dr. Sorin Straja About France and the Precautionary Principle:
January 23, 2008
Dear Dr. Kogan,
I just came from a trip in France. While there I heard the news about the recommendation of the Jacques Attali commission regarding the Precautionary Principle. Apparently, this commission felt that this principle should be discarded as it is a hurdle for development. However, the reaction was quite strong (the commission was labeled as the ATTILA commission) and the draft document released this week does NOT mention the precautionary principle. Please let me know if you want me to follow up with the recommendations of this commission (may be released in the near future).
... Apparently, the French President Sarkozy has already rejected two proposals of the Attali Commission: the administrative reorganization of France abolishing the counties ("départements") and ... the precautionary principle.
Please See: "Sarkozy rejette deux propositions du rapport Attali", reported on the website of "Le Figaro" one of the most popular French daily papers:
http://www.lefigaro.fr/economie/2008/01/23/04001-20080123ARTFIG00421-sarkozy-rejette-deux-propositions-du-rapport-attali.php .
The subheadline prominently reads:
Nicolas Sarkozy a relevé quelques désaccords avec les propositions formulées par Jacques Attali. Le chef de l'État est contre la suppression des départements et celle du principe de précaution
Thank you very much for your help.
Sorin Straja
Here is the news report in French:
Commission Attali: les premières propositions suscitent la polémique
PARIS (AFP) — Les premières propositions de la Commission pour la libération de la croissance française (CLCF) présidée par Jacques Attali, qui devait remettre lundi après-midi au président Nicolas Sarkozy un rapport d'étape sur le pouvoir d'achat, ont déjà déclenché la polémique.
Selon des informations de presse publiées vendredi, les membres de la commission suggéraient notamment de retirer de la Constitution le "principe de précaution", considéré comme un frein à la croissance, ce qui a suscité une levée de boucliers.
Le ministre de l'Ecologie, Jean-Louis Borloo, s'est fermement opposé lundi à cette suppression, rappelant que "le principe de précaution fait partie de traités internationaux que la France a signés".
La secrétaire d'Etat à l'Ecologie, Nathalie Kosciusko-Morizet, avait auparavant qualifié cette position de "réactionnaire". "Il faut cesser de considérer que l'environnement est une limite à la croissance", a affirmé celle qui fut rapporteur de la Charte de l'environnement, qui avait inscrit ce principe dans la Constitution en 2005.
Dès vendredi, la CLCF avait souligné que ses propositions étaient "en cours de finalisation" et que "les documents qui ont pu être diffusés jusqu'ici ne correspondent pas à l'état actuel des propositions".
La commission Attali contre le principe de precaution
La Commission pour la libération de la croissance propose, dans son rapport d'étape, de le retirer de la Constitution ou encore d'abroger les lois Royer, Galland et Raffarin sur la distribution.
Présidée par Jacques Attali, la Commission pour la libération de la croissance (CLCF) va suggérer au président de la République de retirer le principe de précaution de la Constitution, d'abroger les lois sur la distribution, de lancer des mesures pour le logement et la stimulation du pouvoir d'achat, écrit Le Figaro dans son édition de vendredi 12 octobre.
Selon la une du quotidien, transmise jeudi soir à Reuters, qui cite le rapport d'étape de la commission remis lundi prochain au président de la République, "les membres de la commission demandent à Nicolas Sarkozy de retirer le principe de précaution qui figure actuellement dans la Constitution. Ils y voient un frein majeur à la croissance".
Grande consommation et logement
La commission propose également une libéralisation radicale de la distribution, poursuit Le Figaro. "En abrogeant les lois Royer, Galland et Raffarin, sur le commerce, il serait possible de faire baisser de 2 à 4% les prix des produits de grande consommation", écrit le quotidien.
"Pour relancer le logement, la commission propose neuf séries de mesures: alléger le contrat de bail, instaurer la TVA à 5,5% pour les jeunes, créer des villes nouvelles ultraécolos…", poursuit-il. La Commission suggère également une vaste restructuration des 850 organismes de HLM dont le nombre serait réduit afin d'augmenter leur efficacité.
La commission livrera également "une trentaine de recommandations pour libérer les contraintes qui pèsent sur les revenus des ménages", lit-on également sur la une du Figaro, sans plus de précision. (Reuters)
...The PRECAUTIONARY PRINCIPLE is questioned by the Attali Commission Report providing 316 proposals “to liberate the French growth.”
Jacques Attali gave on January 23, 2008 to the French President Nicolas Sarkozy and the Prime Minister Francois Fillon the “Report Of The Commission For The Liberation Of The French Growth”. Please find attached the original document (in full in French). The major goals are to obtain an additional 1% of growth, to bring back the rate of unemployment to 5 %, and to reduce the national debt.
One of the most unexpected proposals is to repeal, or if this is not possible then to very strictly specify, the precautionary principle.
Also attached is...my translation of the section where the precautionary principle is mentioned.
Jacques Attali, between 1981 and 1991, was a French presidential adviser as part of the country's socialist government. In April 1991 he became the first President of the London-based European Bank for Reconstruction and Development established to assist the former communist countries in their transition to democratic market economies.
Sorin Straja
OBJECTIVE: To rethink the precautionary principle
The constitutional law n° 2005-205 of March 1st, 2005 inscribed in the constitutional text the “Charter of the environment of 2004”. It thus meets an increasing concern of the citizens with regard to their environment and testifies to the interest that the Parliament carries to these questions. However, article 5 of the Charter introduces a new provision in constitutional law, by referring to a “precautionary principle”, already present in the legislative corpus, and whose normative range remains uncertain.
This reference generates judicial uncertainties and installs a context prejudicial to the innovation and the growth, because of the risks of dispute of responsibility against the most innovating companies in front of the courts of law. It also burdens with a heavy presumption the decisions of administrative police force.
The need for protection is undeniable. It is established and recognized by the European texts.
If the constitutional text intends to prevent the realization of damages harmful to the collectivity, its very open drafting leaves place to potentially divergent interpretations, likely to paralyze the economic activity and that of the administration.
In effect, the concept of damage affecting the “environment in a gravely and irreversible way” is not defined by the constitutional text. Moreover, the reality of the “damage” is only very vaguely specified there: it is enough that its realization be “uncertain in the state of scientific knowledge” to oblige the administration to act. This fuzzy formulation opens to the judge the possibility of interpreting the founding text of the Republic. This situation is not ideal from the point of view of democracy.
Moreover, article 5 of the Charter of the environment risks to inhibit the fundamental and applied research, insofar as an innovation which potentially would generate a damage whose realization would be “uncertain in the state of scientific knowledge” could open recourse of responsibility, against the companies or institutes of research as well as against public collectivities charged with administrative police force. Moreover, sometimes this sanction would intervene only at the end of a long legal procedure, thus paralyzing the activity of the public and private laboratories.
In addition, the administrative action itself would be very slow due to this vague formulation. In virtue of this constitutional text modified in 2005, the administration is supposed to be able to follow the whole scientific research, which appears not very realistic. Not being able to do it, the administration will thus resort very often to prohibition, the solution that is judicially the most sure, administratively the most comfortable, and the more penalizing for our growth.
Finally, article 5 of the Charter of the environment is not dissociable from article 7 that imposes that the decisions of precaution be taken with the participation of the citizens. Under French reality, the precautionary principle leads to situations of indecision that are penalizing for the industrialists and, in a general way, for the long-term investment.
The constitutionalisation of the principle solidifies reality and constitutes an obstacle to the growth: the legislator should be able to preserve a room for maneuver to define precise conditions of application of the principle.
Consequently, it seems convenient to repeal, or if this is not possible then to very strictly specify the range of article 5 of the Charter of the environment of 2004, with respect to both the private operators and the public authorities, by a revision of the constitutional text, which will make it possible to specify the nature of the “damage” and the conditions of its compensation.
January 23, 2008
Dear Dr. Kogan,
I just came from a trip in France. While there I heard the news about the recommendation of the Jacques Attali commission regarding the Precautionary Principle. Apparently, this commission felt that this principle should be discarded as it is a hurdle for development. However, the reaction was quite strong (the commission was labeled as the ATTILA commission) and the draft document released this week does NOT mention the precautionary principle. Please let me know if you want me to follow up with the recommendations of this commission (may be released in the near future).
... Apparently, the French President Sarkozy has already rejected two proposals of the Attali Commission: the administrative reorganization of France abolishing the counties ("départements") and ... the precautionary principle.
Please See: "Sarkozy rejette deux propositions du rapport Attali", reported on the website of "Le Figaro" one of the most popular French daily papers:
http://www.lefigaro.fr/economie/2008/01/23/04001-20080123ARTFIG00421-sarkozy-rejette-deux-propositions-du-rapport-attali.php .
The subheadline prominently reads:
Nicolas Sarkozy a relevé quelques désaccords avec les propositions formulées par Jacques Attali. Le chef de l'État est contre la suppression des départements et celle du principe de précaution
Thank you very much for your help.
Sorin Straja
Here is the news report in French:
Commission Attali: les premières propositions suscitent la polémique
PARIS (AFP) — Les premières propositions de la Commission pour la libération de la croissance française (CLCF) présidée par Jacques Attali, qui devait remettre lundi après-midi au président Nicolas Sarkozy un rapport d'étape sur le pouvoir d'achat, ont déjà déclenché la polémique.
Selon des informations de presse publiées vendredi, les membres de la commission suggéraient notamment de retirer de la Constitution le "principe de précaution", considéré comme un frein à la croissance, ce qui a suscité une levée de boucliers.
Le ministre de l'Ecologie, Jean-Louis Borloo, s'est fermement opposé lundi à cette suppression, rappelant que "le principe de précaution fait partie de traités internationaux que la France a signés".
La secrétaire d'Etat à l'Ecologie, Nathalie Kosciusko-Morizet, avait auparavant qualifié cette position de "réactionnaire". "Il faut cesser de considérer que l'environnement est une limite à la croissance", a affirmé celle qui fut rapporteur de la Charte de l'environnement, qui avait inscrit ce principe dans la Constitution en 2005.
Dès vendredi, la CLCF avait souligné que ses propositions étaient "en cours de finalisation" et que "les documents qui ont pu être diffusés jusqu'ici ne correspondent pas à l'état actuel des propositions".
La commission Attali contre le principe de precaution
La Commission pour la libération de la croissance propose, dans son rapport d'étape, de le retirer de la Constitution ou encore d'abroger les lois Royer, Galland et Raffarin sur la distribution.
Présidée par Jacques Attali, la Commission pour la libération de la croissance (CLCF) va suggérer au président de la République de retirer le principe de précaution de la Constitution, d'abroger les lois sur la distribution, de lancer des mesures pour le logement et la stimulation du pouvoir d'achat, écrit Le Figaro dans son édition de vendredi 12 octobre.
Selon la une du quotidien, transmise jeudi soir à Reuters, qui cite le rapport d'étape de la commission remis lundi prochain au président de la République, "les membres de la commission demandent à Nicolas Sarkozy de retirer le principe de précaution qui figure actuellement dans la Constitution. Ils y voient un frein majeur à la croissance".
Grande consommation et logement
La commission propose également une libéralisation radicale de la distribution, poursuit Le Figaro. "En abrogeant les lois Royer, Galland et Raffarin, sur le commerce, il serait possible de faire baisser de 2 à 4% les prix des produits de grande consommation", écrit le quotidien.
"Pour relancer le logement, la commission propose neuf séries de mesures: alléger le contrat de bail, instaurer la TVA à 5,5% pour les jeunes, créer des villes nouvelles ultraécolos…", poursuit-il. La Commission suggère également une vaste restructuration des 850 organismes de HLM dont le nombre serait réduit afin d'augmenter leur efficacité.
La commission livrera également "une trentaine de recommandations pour libérer les contraintes qui pèsent sur les revenus des ménages", lit-on également sur la une du Figaro, sans plus de précision. (Reuters)
...The PRECAUTIONARY PRINCIPLE is questioned by the Attali Commission Report providing 316 proposals “to liberate the French growth.”
Jacques Attali gave on January 23, 2008 to the French President Nicolas Sarkozy and the Prime Minister Francois Fillon the “Report Of The Commission For The Liberation Of The French Growth”. Please find attached the original document (in full in French). The major goals are to obtain an additional 1% of growth, to bring back the rate of unemployment to 5 %, and to reduce the national debt.
One of the most unexpected proposals is to repeal, or if this is not possible then to very strictly specify, the precautionary principle.
Also attached is...my translation of the section where the precautionary principle is mentioned.
Jacques Attali, between 1981 and 1991, was a French presidential adviser as part of the country's socialist government. In April 1991 he became the first President of the London-based European Bank for Reconstruction and Development established to assist the former communist countries in their transition to democratic market economies.
Sorin Straja
OBJECTIVE: To rethink the precautionary principle
The constitutional law n° 2005-205 of March 1st, 2005 inscribed in the constitutional text the “Charter of the environment of 2004”. It thus meets an increasing concern of the citizens with regard to their environment and testifies to the interest that the Parliament carries to these questions. However, article 5 of the Charter introduces a new provision in constitutional law, by referring to a “precautionary principle”, already present in the legislative corpus, and whose normative range remains uncertain.
This reference generates judicial uncertainties and installs a context prejudicial to the innovation and the growth, because of the risks of dispute of responsibility against the most innovating companies in front of the courts of law. It also burdens with a heavy presumption the decisions of administrative police force.
The need for protection is undeniable. It is established and recognized by the European texts.
If the constitutional text intends to prevent the realization of damages harmful to the collectivity, its very open drafting leaves place to potentially divergent interpretations, likely to paralyze the economic activity and that of the administration.
In effect, the concept of damage affecting the “environment in a gravely and irreversible way” is not defined by the constitutional text. Moreover, the reality of the “damage” is only very vaguely specified there: it is enough that its realization be “uncertain in the state of scientific knowledge” to oblige the administration to act. This fuzzy formulation opens to the judge the possibility of interpreting the founding text of the Republic. This situation is not ideal from the point of view of democracy.
Moreover, article 5 of the Charter of the environment risks to inhibit the fundamental and applied research, insofar as an innovation which potentially would generate a damage whose realization would be “uncertain in the state of scientific knowledge” could open recourse of responsibility, against the companies or institutes of research as well as against public collectivities charged with administrative police force. Moreover, sometimes this sanction would intervene only at the end of a long legal procedure, thus paralyzing the activity of the public and private laboratories.
In addition, the administrative action itself would be very slow due to this vague formulation. In virtue of this constitutional text modified in 2005, the administration is supposed to be able to follow the whole scientific research, which appears not very realistic. Not being able to do it, the administration will thus resort very often to prohibition, the solution that is judicially the most sure, administratively the most comfortable, and the more penalizing for our growth.
Finally, article 5 of the Charter of the environment is not dissociable from article 7 that imposes that the decisions of precaution be taken with the participation of the citizens. Under French reality, the precautionary principle leads to situations of indecision that are penalizing for the industrialists and, in a general way, for the long-term investment.
The constitutionalisation of the principle solidifies reality and constitutes an obstacle to the growth: the legislator should be able to preserve a room for maneuver to define precise conditions of application of the principle.
Consequently, it seems convenient to repeal, or if this is not possible then to very strictly specify the range of article 5 of the Charter of the environment of 2004, with respect to both the private operators and the public authorities, by a revision of the constitutional text, which will make it possible to specify the nature of the “damage” and the conditions of its compensation.
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