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The Era of Irresistible Green Trade Barriers Arrives
The United States Trade Representative (USTR) has reportedly conveyed to South Korea the bipartisan public support for external environmental regulations. This is interpreted as both the Democratic Party, which prioritizes environmental issues, and the Republican Party beginning to utilize 'green trade barriers' to protect domestic companies. It is anticipated that regardless of who is elected as the next U.S. president, a transition to green industries is inevitable.
According to a comprehensive report by Asia Economy on the 17th, USTR officials met with South Korean participants at the Korea-U.S. Environmental Cooperation Committee (ECC) and Environmental Advisory Council (EAC) held in Seoul on the 11th, stating, “The Foreign Pollution Fee Act (FPF) is a policy both the Republican and Democratic parties want to adopt,” and “There is bipartisan support for laws impacting climate.”
The Foreign Pollution Fee Act was jointly introduced last November by Senators Bill Cassidy, Lindsey Graham, and Roger Wicker, all members of the Republican Party. The bill’s core is to assess the pollution level of imported products crossing U.S. borders and impose fees accordingly. It is a typical green trade barrier that imposes no fees on U.S. products but applies fees only to foreign products. The bill is currently referred to the Senate Finance Committee before passing the Senate.
The fee applies to energy products such as natural gas, oil, hydrogen, and solar panels, as well as industrial products including aluminum, cement, glass, iron, and paper. Pollution levels are measured based on carbon emissions, and if the pollution level is more than 10% higher than that of products produced in the U.S., a fee is imposed. Even countries with Free Trade Agreements (FTAs) are subject to fees if their pollution level exceeds U.S. products by more than 50%. The fee varies depending on the pollution level. Additionally, the product scope and fee rates are to be reassessed every three years, allowing U.S. companies to petition for sanctions on specific items.
Republican Proposal, Democratic Welcome... The Era of Green Barriers is Coming
USTR’s remarks suggest that external environmental regulations may strengthen regardless of the U.S. presidential election outcome. This contradicts predictions that Republican candidate Donald Trump would ease environmental regulations if elected. Although Trump denies global warming and the climate crisis, green trade barriers align with his America First policy. It means increasing burdens on foreign companies under the pretext of environmental protection while enhancing the competitiveness of domestic companies. In fact, the Republican senators who introduced the Foreign Pollution Fee Act deny the climate crisis or support fossil fuel power generation within the U.S.
There is also an interpretation that the Foreign Pollution Fee Act could be useful in pressuring China. William Allen Lacey, senior advisor at the Center for Strategic and International Studies, a conservative U.S. foreign policy think tank, explained, “The bill aims to completely block imports from countries, including China, that ignore environmental protection standards,” adding, “The bill’s sponsors argue that the current trade system has allowed the Chinese Communist Party to profit massively by permitting pollution emissions.”
The Democratic Party also supports the Republican Foreign Pollution Fee Act. According to major foreign media, Democratic Senator Sheldon Whitehouse said, “I am glad such a bill has been introduced,” and praised, “Senator Cassidy has done many good things leading up to this law.” Democratic Senator Chris Coons also stated, “Cassidy is a very capable legislator,” and expressed hope that the Foreign Pollution Fee Act would be reviewed.
As green trade barriers become visible not only in Europe but also in the U.S., a transition to an eco-friendly economy is unavoidable. A senior government official who attended the meeting explained, “Domestically, attention is focused on the U.S. presidential election results, but the U.S. is already demanding environmental data from major companies and industries on a bipartisan basis,” adding, “The transition to green industries is becoming an unstoppable trend.”
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