Outside View: The choice: Kyoto or WTO?

Outside View: The choice: Kyoto or WTO?

Horner Op-Ed Distributed by United Press International
December 23, 2001

Mid-November brought us reports from two international negotiations, whose sole common thread appeared to be each took place amid tight security in Muslim countries. These were the Doha, Qatar World Trade Organization negotiation and the Marrakech session addressing the Kyoto Protocol on "global warming".

Yet it is increasingly obvious that these two instruments are quite related, in that they will soon prove mutually exclusive of each other.

This incompatibility is particularly acute now the United States has rhetorically abandoned the Kyoto agreement. The Bush administration, however, has refused to rescind the U.S. signature to the protocol so far. That suggests it is signaling either a plea for a better offer or positioning itself to participate in the agreement at a later date.

Though both agreements are voluntary coalitions, even there lies a marked difference. Nations lie, cheat and steal to enter the WTO, but the United States is merely the most vocal to claim no love for the reality of Kyoto.

The WTO claims its "overriding purpose is to help trade flow as freely as possible", while Kyoto is wrapped in save-the-planet "green" rhetoric. Yet, Kyoto is in reality an economic instrument. It restricts energy-use emissions, a solid measure of economic activity, and threatens economic sanctions against countries failing to meet a particular energy emission profile.

Hence the conflict. The WTO "obliges members to bring their disputes to the WTO and not to act unilaterally." If the United States does not participate in Kyoto, it is free from Kyoto's sanctions. But the WTO will be called upon to adjudicate the possible looming Transatlantic dispute over the alleged unfair trade barriers of the 15-nation European Union if it carries through its threat to "adjust" trade barriers for U.S. goods in penalty for the U.S "withdrawal" from Kyoto, or America's refusal to match the EU's "Kyoto" energy tax increases.

This specter led to agreement at the November WTO talks in Doha to try and harmonize the WTO with numerous multilateral environmental agreements or

MEAs. But this revealed the irony that it appeared to be the WTO's responsibility to adjudicate between it s member nations in order to accommodate these outside efforts, not the other way around.

If the WTO is indeed called upon to play such a role that could well prove the first thread to unravel the global free trade body's principles and undermine its foundation.

The EU's threatened sanctions against the Untied States over the U.S. pullout from Kyoto are unique. Such economic sanctions are usually reserved to discourage human rights violations by offending nations. That is how environmental activists view affordable energy and any world population above two billion -- and it is currently above six million.

Still, to more sober minds it appears odd to target something that clearly and universally betters the human condition -- increased energy use -- and that brings about wealth creation and increased health.

Earlier this year, EU Environment Commissioner Margot Wallstrom revealed the mindset of the European policymakers in Brussels on the issue. "This is not a simple environmental issue where you can say it is an issue where the scientists are not unanimous," she said. "This is about international relations, this is about economy about trying to create a level playing field for big businesses throughout the world."

Kyoto is about "unfair tax competition" in which the United States already engages. The U.S. government has consistently refused to match the Europeans' zeal for taxing energy use to modify behavior, particularly repressing automobile use and population.

As a result, according to Yale economist William D. Nordhaus, the Bush administration's decision to pull out of Kyoto "is likely to engender trade disputes because it widens the already large disparities in energy prices between Europe and the United States."

The EU vision ratifies how these two pacts are mutually exclusive economic regimes. The WTO was founded, as its pact states, to strengthen the world economy and lead to more trade, investment, employment and income growth throughout the world. Kyoto is driven by a the Intergovernmental Panel on Climate Change, which complains of the West's "unsustainable lifestyles" and calls for imposition of regionalized, less consumptive economies.

Kyoto's advocates say they seek to "decouple well being from production."

They maintain that they want to debunk what they regard as the falsely conditioned belief that there is a connection between quality of life, or satisfaction, and increasing Gross National Product. This kind of talk represents the antithesis of globalization.

The WTO calls for eliminating economic barriers to increased productivity, trade and global economy. Kyoto, with or without the United States, is driven by and breeds further calls for trade barriers to punish those who refuse to abide by energy use edicts.

No one should be surprised at this conflict. The roving mobs that protest WTO talks are of the same ideology and indeed are often the very same individuals who so enthusiastically support the Kyoto Protocol and who passionately advocate its immediate adoption.

These two agreements cannot both survive. The Bush administration should advocate expedited inquiry into reconciling how the stated goals of the WTO and those of Kyoto can be reconciled, if they can be reconciled at all.

This endeavor would require the involvement of economic and trade ministers from the WTO member nations, including those from the Developing World.

Developing World governments have overwhelmingly made no secret of their preference for achieving the goals of the WTO to those of Kyoto. They know that only a prosperous West can ensure their own escape from poverty and dependence. Now, their conviction is penetrating into the chambers of even some European governments long supportive of Kyoto. Germany's economic minister has spoken out against mindless carbon dioxide suppression.

Any treaty threatening the economic health of nations, such as Kyoto, will ultimately collapse of its own potential harm. As the Bush administration seeks to reshape U.S. foreign policy, one important step would be to abandon Kyoto once and for all, with its built-in appeasement of ideological extremists seeking to impede global prosperity.