economics_trade
How far will Freeland go to get climate change in NAFTA?
Foreign Affairs Minister Chrystia Freeland says she wants to see environmental provisions strengthened in a re-done North American Free Trade Agreement, but it’s not clear exactly how far Canada’s top diplomat will go to get climate change into NAFTA.
How far will Freeland go to get climate change in NAFTA?
By Carl Meyer in News, Energy, Politics | August 14th 2017
#703 of 703 articles from the Special Report:
Race Against Climate Change
Canadian Foreign Affairs Minister Chrystia Freeland delivers a speech about NAFTA at the University of Ottawa on Aug. 14, 2017. Photo by The Canadian Press
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Foreign Affairs Minister Chrystia Freeland says she wants to see environmental provisions strengthened in a re-done North American Free Trade Agreement, but it’s not clear exactly how far Canada’s top diplomat will go to get climate change into NAFTA.
The Trudeau government minister said Monday that strengthening environmental provisions is “absolutely a Canadian goal going into these talks.” In three separate public appearances on the same day — one at the University of Ottawa and two on Parliament Hill — she sought to reinforce a message that environmental protections are a clear focus.
Canada wants to “ensure that the member countries can benefit from protecting the environment and investments,” said Freeland in front of the House of Commons environment committee. She said Canada would "fully support efforts to target climate change.”
But the minister has so far declined to answer definitively whether Ottawa would walk away from negotiations if the term “climate change” doesn’t wind up in the deal’s final text.
Freeland has been part of a massive, across-the-board push by the federal government, provincial and territorial governments, businesses, political parties and organizations to engage with Americans on the upcoming NAFTA talks. The talks were triggered earlier this year when U.S. President Donald Trump said he wanted to renegotiate the deal because he believed it wasn't fair to American workers and countries.
Trump nearly sent formal notice in April that the U.S. would withdraw from the trade deal. But he changed his mind after phone calls from Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto.
Freeland said the Canadian government has made 185 visits to the U.S. and met 200 members of Congress, as well as 50 governors and deputy governors.
Part of this push involves reminding the United States of the two countries' interconnectedness, she said. In a discussion about the importance of Quebec's relations with the United States, Freeland paused to mention an "example" that grabbed everyone's attention.
"The electricity in Trump Tower comes from Quebec," she said, before quickly moving on.
The province’s utility sends over 40 per cent of its exports per year to New England and has been looking to expand power sales to the U.S. Northeast.
U.S. President Donald Trump announces his desire to withdraw from the Paris climate accord during a speech at the White House on June 1. Canada has a "different view," said Foreign Affairs Minister Chrystia Freeland on Aug. 14. Screenshot from White House video
'No secret' Canada, U.S. diverge on climate views: Minister
The question of how forcefully Canada will push to see the language of climate change reflected in a new NAFTA deal matters in light of the Trump administration’s continued rejection of the global scientific consensus on climate.
U.S. President Donald Trump, who has called climate change a “Chinese hoax,” is pulling the U.S. out of the Paris climate pact, alarming environmentalists, businesses and national governments pushing for a low-carbon future. Environmental Protection Agency administrator Scott Pruitt, who also doubts climate science, has shut down greenhouse gas emissions data collection and has yanked webpages on climate change off the internet.
“It’s no secret to anyone that Canada has a different view of probably the most important step the world has taken when it comes to the fight against climate change, which is the Paris Accords,” said Freeland. Prime Minister Trudeau has expressed his disappointment at Trump’s decision to withdrawal from Paris, she noted.
“Having said that, we continue to work at all levels of government with the U.S. on the environment, not least because we have many shared environments that we have shared stewardship of,” said Freeland.
“And this U.S. administration has said both in public and in private that it continues to have a very strong interest in working with us on protecting those shared spaces.”
When National Observer asked Freeland whether climate change was a dealbreaker, the minister discussed boosting environmental provisions and how environmental standards are “much higher than they were when the agreement was first negotiated, and this is an opportunity to bring them up.”
Canada has a “shared interest with all of our North American partners” to ensure a fair deal, Freeland continued. Strong environmental standards “are one way that we can ensure that Canadian workers don’t suffer unfairly, because of the high standards that Canadian society quite rightly wishes us to have.”
The NDP’s international trade critic Tracey Ramsey on the roof of the Canadian Embassy in Washington, D.C. on June 7. Ramsey said Monday that the NDP would consider not including climate change in the deal to be a "red flag to all Canadians." Photo from Ramsey's Twitter account
Not including climate change would be 'red flag' says NDP
Inserting the language of climate change in the deal is a matter that the opposition NDP believes should be a red line for Canada.
“I believe that including that language addresses the very real reality that we face [on] the globe right now,” said the NDP’s international trade critic Tracey Ramsey, appearing in front of reporters after Freeland’s comments.
“Trying to remove or erase climate change from this agreement will be a red flag to all Canadians,” she said. The Trump administration is “starting to turn their eye away from addressing climate change,” and “it’s very important to Canadians that the environment and protections are included in trade agreements.”
Asked what she thought Canada should give up, if climate change were to be one of the country’s dealbreakers, Ramsey said it was hard to tell since negotiators haven’t revealed what’s at stake.
“This is an interesting question, because that’s what we didn’t hear today” during the committee meeting, said Ramsey.
“This is a question for the negotiators, this is a question for Minister Freeland. How important is the environment to them in NAFTA? How important is climate change?”
During the committee meeting, Ramsey had also asked the minister about including the language in the deal. But her question included another element on labour provisions which the minister tackled first, and her allotted time ran out before she could get to the second part of the question.
Tories wary carbon tax will add 'hurdles' to trade
Meanwhile, the Conservatives see it another way: that the government’s decision to march into crucial trade talks while sticking with a plan to implement a carbon tax is unnecessarily hindering the country’s negotiating position.
Conservative trade critic Gerry Ritz compared it to Ottawa’s strong pushback against a proposed import tax that was canned at the end of last month.
“We made a lot of noise about the border tax that the U.S. was going to bring in, and how unfair that would be,” said Ritz.
“The same thing is going to happen with any product trying to be exported into the U.S.; it’s going to have a carbon tax price added onto it,” he said.
“Then coming in from the U.S., is it going to have to measure up to that level as well in order to come through? It adds hurdles at the border. Everybody talks about red tape...having a carbon tax in Canada that nobody else has is certainly one of those [barriers].”
Prime Minister Justin Trudeau, seen here in Ottawa in June, helped Trump change his mind on withdrawing from the NAFTA trade deal after a phone call. Canada now says it wants a "good deal, not just any deal." Photo by Alex Tétreault
'Committed to a good deal, not just any deal'
Freeland elaborated on Canada's core objectives Aug. 14, focusing on a half-dozen goals that included opening up access to government procurement rights, more professional movement, defending Canadian rights to supply management and reforming the investor-state dispute settlement process.
"In all these discussions, we will come to the table with goodwill, and Canada’s characteristic ability and willingness to seek compromise and find win-win solutions," she said at an earlier speech at the University of Ottawa.
"But we are committed to a good deal, not just any deal."
In addition to environmental protection provisions, Freeland is also calling for new "progressive" elements in NAFTA 2.0 such as stronger labour standards and chapters on gender and Indigenous rights.
On that front, Canadian negotiators plan to use Canada's recently negotiated trade agreement with the European Union as a reference, Freeland said.
"Progressive elements are also important if you want a free-trade deal that's also a fair-trade deal," Freeland said in a question-and-answer session following the speech at the University of Ottawa.
Ottawa also aims to cut down on bureaucracy, harmonize regulations to ease the flow of cross-border business, push for more mobility for professionals and free up the market for government procurement, she told her audience.
Canada's positions will also include work to maintain key elements of the 23-year-old deal, including the process to ensure anti-dumping and countervailing duties are only applied when truly warranted.
Freeland injected some personable comments throughout her committee appearance, trying to strike a light-hearted tone at some points, and pointing out different attendees in the packed committee room.
Canada received over 21k submissions on NAFTA consultations
Ottawa's negotiating team will sit down with their American and Mexican counterparts Wednesday in Washington, D.C. for the first round of talks.
Last month, U.S. Trade Representative Robert Lighthizer released the Trump administration's set of priorities for the NAFTA talks.
At committee, Freeland laid out the economic advantages of NAFTA as it stands today. Canada, the United States and Mexico account for a quarter of global GDP, she said, despite holding only seven per cent of the world’s population. Canada’s economy is 2.5 times larger than it otherwise would be
"We are seizing this opportunity to improve upon an agreement that is already good,” she said.
Canada is "America's biggest overall customer, by far,” said Freeland. "Quite a few of us have uttered that sentence in recent months.”
Canada received over 21,000 submissions in its NAFTA consultations, said Freeland, including from 16 “academics and think tanks,” 158 associations and 55 businesses.
Freeland said at the University of Ottawa that she believes Canada and its NAFTA partners can find common ground on new chapters for labour, the environment, gender and Indigenous rights.
But she also warned that Canadians should brace for some tense exchanges during the NAFTA talks, in general.
"I think we all do need to be prepared for some moments of drama," she said. "We should just see that as an expected part of any trade negotiations."
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House Science Committee chair says climate change is a good thing.
Rep. Lamar Smith is arguing that pumping the atmosphere full of carbon dioxide is “beneficial” to global trade, crop production and the lushness of the planet.
WASHINGTON — Rep. Lamar Smith (R-Texas) — who has spent his career cozying up to fossil fuel interests, dismissing the threat of climate change and harassing federal climate scientists — is now arguing that pumping the atmosphere full of carbon dioxide is “beneficial” to global trade, crop production and the lushness of the planet.
Rather than buying into “hysteria,” Americans should be celebrating the plus sides of a changing climate, Smith argues in an op-ed published Tuesday in The Daily Signal, a news website published by the conservative Heritage Foundation.
Smith — who has used his power as chairman of the House Committee on Science, Space and Technology to push his anti-science views — kicks off his op-ed by claiming Americans’ perception of the phenomenon is “too often determined by their hearing just one side of the story.”
“The benefits of a changing climate are often ignored and under-researched,” Smith said. “Our climate is too complex and the consequences of misguided policies too harsh to discount the positive effects of carbon enrichment.”
Increased carbon dioxide, Smith writes, promotes photosynthesis, resulting in a “greater volume of food production and better quality food” and “lush vegetation” that “assists in controlling water runoff, provides more habitats for many animal species, and even aids in climate stabilization, as more vegetation absorbs more carbon dioxide.” Warmer temperatures, he notes, results in longer growing seasons
Smith goes as far as to make a case for why a rapidly melting Arctic, which scientists warn could cost tens of trillions of dollars by the end of this century, is a positive thing.
“Also, as the Earth warms, we are seeing beneficial changes to the earth’s geography,” he writes. “For instance, Arctic sea ice is decreasing. This development will create new commercial shipping lanes that provide faster, more convenient, and less costly routes between ports in Asia, Europe, and eastern North America. This will increase international trade and strengthen the world economy.”
BILL CLARK/CQ ROLL CALL VIA GETTY IMAGES
Rep. Lamar Smith (R-Texas), despite being chairman of the House Committee on Science, Space, and Technology, has a long history of dismissing mainstream climate science.
The op-ed comes roughly two months after Smith led a group of lawmakers on what BuzzFeed described as a “secret tour of the melting Arctic.” The unpublicized, weeklong, multi-stop outing included meeting with climate scientists and learning about how they track the levels of carbon dioxide and other greenhouse gases, according to BuzzFeed.
While Smith reportedly canceled an interview with BuzzFeed to discuss the trip, Rep. Jerry McNerney (D-Calif.) told the publication that he and Smith had productive discussions about the climate.
Monday’s op-ed would suggest that, while Smith may have accepted the reality of the threat, he’s opted for the when-life-gives-you-lemons-make-lemonade approach.
Michael Mann, a climate scientist at Pennsylvania State University who sparred with Smith during a March hearing on climate science, told HuffPost via email that “it is clear” Smith is “slowly advancing through the stages of denial ... having apparently now moved from ‘it’s not happening,’ to ’ok—it’s happening, but IT WILL BE GOOD FOR US!”
“One step at a time I suppose,” Mann wrote, “but at least there is some apparent progress toward the truth (that climate change is real, human-caused, and already a problem).”
Joseph Kopser, an aerospace engineer and Army veteran from Austin, Texas, is one of several Democratic candidates vying for a chance to unseat the 16-term Republican in the 2018 midterm election. Reach Monday by phone, Kopser described Smith’s op-ed as “stunning.” And he said it is “exactly” what the late English author George Orwell warned about in his dystopian novel Nineteen Eighty-Four.
“He is acknowledging the warming planet,” Kopser said. “And he’s trying to use Orwellian speak to say that, ’No, no, no — These terrible things that scientists have talked about and proven and explained why they are terrible for our planet, are actually good things.”
What Smith is doing, Kopser said, is “equivalent to telling somebody who’s in a flood, ‘Oh no no, all this water is going to be great. Just think how much more drinking water you’re going to have available.’ Or somebody in a burning house, “No no, think, you now no longer need a furnace because you have this wonderful heat source all around your house.’”
First elected in 1986, Smith is the 14th longest-serving member of the current U.S. House. The San Antonio native has received more than $700,000 from the oil and gas industry over those years. In his five years as chairman of the science committee, he has worked to defund climate research and harassed federal climate scientists, whom he has accused of playing “fast and loose” with data. He has also sprinted to defend the fossil fuel industry ― namely Exxon Mobil Corp. ― from investigations into their own records on climate change and used his power to stack hearings with coal and chemical lobbyists and climate skeptics.
Burning fossil fuels, Smith writes in his op-ed, has “helped raise the standard of living for billions of people.”
“The use of fossil fuels and the byproducts of carbon enrichment play a large role in advancing the quality of human life by increasing food production to feed our growing population, stimulating the economy, and alleviating poverty.
Bad deals like the Paris Agreement would cost the U.S. billions of dollars, a loss of hundreds of thousands of jobs, and have no discernible impact on global temperatures. Instead of succumbing to fear tactics and exaggerated predictions, we should instead invest in research and technology that can help us better understand the effects of climate change.”
Smith is among a trio of Republicans that nonprofit political action committee 314 Action is targeting for their anti-science views. Smith’s office did not immediately respond to HuffPost’s request for comment Monday.
In a statement Monday, 314 Action founder Shaughnessy Naughton blasted Smith’s op-ed as the latest of his “industry-funded attacks on scientific consensus around the issue” of climate change.
“Rather than playing the hits to the Heritage Foundation’s mouthpiece, I challenge Mr. Smith to explain the benefits of climate change to the displaced people of Isle de Jean Charles or Tangier Island,” said Naughton, referring to two U.S. islands vanishing as ocean levels rise. “If climate scientists can’t convince him, maybe our country’s first climate refugees can.”
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Meet Trump's G-20 'Sherpa.'
As President Trump faced other leaders at the Group of 20 summit in Germany, his new "Sherpa" did the heavy dealmaking behind the scenes on everything from trade to climate and energy.
As President Trump faces other leaders at the Group of 20 summit in Germany this week, his new "Sherpa" will do the heavy dealmaking behind the scenes on everything from trade to climate and energy.
The goal for Everett Eissenstat, a trade expert with deep Republican connections on Capitol Hill: Please the president without alienating the rest of the world.
Eissenstat, Trump's negotiator at the summit, has spent the past several days negotiating the text for a communiqué Trump and other world leaders are expected to sign in Hamburg tomorrow.
And there's still a long way to go.
Late-night discussions the last two nights on issues ranging from trade to climate change have broken down without Eissenstat and his foreign counterparts agreeing on language.
And today, Trump skipped key negotiations on the climate and energy part of the text for an already-scheduled bilateral meeting with Russian President Vladimir Putin. That means Eissenstat is due for a late night again tonight, hammering out that and other points of disagreement.
Eissenstat's starring role in behind-the-scenes dealmaking emerged last month after the White House ousted his predecessor as Sherpa, Kenneth Juster, who was pushed aside before the Group of Seven summit in Sicily. Juster reportedly clashed with the more nationalist wing of Trump's White House led by chief strategist Steve Bannon but is expected to be nominated for an ambassadorship.
National Economic Council Director Gary Cohn, who is Eissenstat's boss, led negotiations in Sicily, which occurred before Trump announced on June 1 that the United States would not remain part of the Paris climate deal.
Now, with the United States withdrawing from the Paris accord, the German presidency of the G-20 is working toward a communiqué that acknowledges that decision while showing that the rest of the world is resolved to stay the course on Paris implementation.
It has been a difficult job for Eissenstat, and it isn't over yet.
Trump's team, which includes Eissenstat, originally proposed language in a draft dated July 3 that would have said the United States was committed to a "global approach" to address climate change, but the Germans and others rejected that language because they thought it left the door open for a Paris renegotiation, which they say is a non-starter.
Sherpas are now discussing language proposed by the United States that says "given the importance of energy access and security in the nationally determined contributions of other countries, the United States of America will endeavor to work closely with other partners to improve their access to and use of fossil fuels more cleanly and efficiently, and help deploy renewable and other clean energy sources."
U.S. experts say there are a variety of problems with this proposed language, which will continue to be negotiated into the wee hours of the morning by Eissenstat and his counterparts.
Andrew Light, a distinguished fellow at the World Resources Institute, said the negotiators from other countries were wrong to swap the reference to a "global approach" for a reaffirmation of the need for fossil fuels going forward.
Alden Meyer, the strategic and policy director of the Union of Concerned Scientists, said the new language seems to hint that energy access and security is more important to the other 19 members of the G-20 than climate action is — not at all the message German Chancellor Angela Merkel hoped to send at this week's summit.
"This is causing a lot of heartburn and pushback from a number of countries, and I'm sure this will be one of the topics of negotiation," he said, though he noted that Trump's tête-àà-tête with Putin might make it difficult for the leaders to iron out differences today.
The Germans hope the communiqué and a separate climate and energy action plan will reflect that, while Trump has pulled the United States out of the Paris deal, other countries are continuing to take action to combat climate change. That means holding together a coalition of other countries that include Saudi Arabia, Russia and others that have sometimes parted ways with Europe on climate and energy. So far in the negotiations, it appears that the "G-19" is holding firm.
Before joining the administration, Eissenstat had a lengthy career on and off Capitol Hill in trade policy. In 2011, he began serving as the Senate Finance Committee's chief international trade counsel under Republican Sen. Orrin Hatch of Utah, earning the reputation as a "pro-trade kind of guy," according to sources.
He also served as assistant U.S. trade representative for the Western Hemisphere and worked as a legislative director for former Rep. Jim Kolbe (R-Ariz.).
While it's unclear what Eissenstat would bring to energy and climate discussions, Hatch has pushed back against efforts to tax carbon and backed Trump's decision to withdraw from the Paris pact.
Twitter: @HMNorthey Email: hnorthey@eenews.net
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The Texas solar industry is growing. Some fear an international trade case could end that.
Cheap, imported solar panels have fueled growth in the solar industry in Texas, and reinvigorated the careers of laid-off oilfield workers. Some industry leaders fear a trade case will increase prices and end that growth.
After oil prices cratered two years ago, leading to lost jobs across the energy industry, many West Texas workers found relief in what seemed an unlikely place: solar power.
Instead of the boom-and-bust cycle of the oil and gas market, these workers sought stability in longer-term construction projects building facilities that harness solar power. Those opportunities, fueled by lower prices for solar panels, helped prevent widespread unemployment, said Doug May, the executive director of the Fort Stockton Economic Development Council.
“We were able to put people to work in the construction industry on these solar facilities who were working in the oilfield,” May said. “It’s enabled us to keep our economy stable.”
The respite may be short-lived. Solar industry advocates are warning that a case facing the U.S. International Trade Commission could significantly raise the price of solar panels in the United States, stunting growth across the country, but especially in Texas.
In April, Suniva Inc., a Georgia-based solar panel manufacturing company, filed a petition with the Trade Commission requesting protection from foreign competition. Solar manufacturing abroad has recently flooded the American solar market, lowering prices for panels here. Suniva, which recently filed for Chapter 11 bankruptcy, wants the commission to effectively set a tariff and bar imported solar panels below a certain price level.
The effects to the American solar industry could be “devastating,” said Abigail Ross Hopper, the CEO of the Solar Energy Industries Association, a national organization. The group, which is fighting the case in Washington, D.C., estimates Texas could lose more than 6,000 jobs in the construction, wiring and development segments of the solar industry if the price of solar panels rises.
The cheaper imports have fueled growth in Texas. In 2016, the industry added 2,366 workers in the state, a 34 percent bump from the previous year, according to data from the Solar Foundation, a solar advocacy nonprofit. That growth could be just the beginning: The Electric Reliability Council of Texas, which runs the state’s electricity grid, projects that solar power could contribute up to 28,100 megawatts to the grid within the next 10 to 15 years, an enormous increase from the roughly 1,000 megawatts currently on the grid.
“Solar in Texas is really coming on strong. We have seen tremendous cost reductions over the past several years,” said Charlie Hemmeline, the executive director of the Texas Solar Power Association, a state-based industry group.
And while the Trade Commission will not rule on the Suniva case until September — President Donald Trump will make the final decision on any potential remedies — some solar companies in Texas are already feeling effects.
Clay Butler is the CEO of 7X Energy, an Austin company that operates large solar farms and sells them to utility companies. His company is preparing to sell more than 400 megawatts of solar power in Texas — “hundreds of millions of dollars invested in the state," he said.
But concerns about the trade case have already stalled progress on the company’s plans here. With the potential for more expensive solar panels in the United States, Butler said locations abroad are looking more compelling for solar developers than sun-drenched Texas.
“If we cannot compete here, we need to go to other countries, whether it’s Australia or Mexico,” Butler said. “We are actively now focusing a lot of our development efforts in other countries.”
And as solar developers begin to consider their options, the contractors and firms that help build their large-scale solar farms in Texas and elsewhere are also beginning to feel industry tremors.
McCarthy Building Companies is one of the construction firms that helps build solar farms in Texas, employing hundreds of people at a time to complete its projects. Scott Canada, senior vice president of renewable energy at McCarthy, said some projects have recently started to fall through because of the Suniva case.
“We’ve had at least one in West Texas be put on hold and the other we haven’t heard back, but I’m assuming that’s the next shoe to drop,” Canada said. “It’s definitely slowing development. It causes definitely some inefficiency in the business and some direct heartburn" for workers.
To Matthew McConkey, the lawyer representing Suniva before the Trade Commission, concerns about job loss are inflated — “scare tactics” from an industry that favors installation over manufacturing jobs.
“They don’t want to talk about all those lost jobs in [solar panel] manufacturing,” McConkey said.
Some solar panel manufacturers in Texas have seen their business wane as imports have undercut their prices. In the past year, Mission Solar Energy, a solar panel manufacturer based in San Antonio, has laid off more than 200 employees. But even though it would benefit from higher solar panel prices, the company does not support the trade case, according to Mission Solar Energy spokeswoman Nicole Howard.
“While we acknowledge that foreign competition is a challenge for our company, we object to Suniva’s petition as it currently stands,” Howard wrote in a statement. “Despite Suniva’s claims, solar manufacturing in the U.S. has seen growth in past years.”
Hemmeline, with the Texas Solar Power Association, said that panel manufacturing represents only a small part of the solar industry, both nationally and in Texas.
“When you think about the solar industry and the different job pieces, I think it’s important to keep in mind it’s just one of those pieces," he said.
But Bret Biggart, the CEO of Austin-based Freedom Solar Power, which installs solar panels on commercial and residential properties, said that price increases tend to be more consequential in Texas, a conservative state where people are less mobilized by the urgency of climate change.
“It’s less compelling than it is in California and a lot of East Coast states," he said, "and so the impact is potentially a lot greater in a state like Texas."
The Trade Commission will have its first hearing on the case in August.
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Could trade dispute with China bring an end to US solar boom?
Low-cost solar cells produced in China have helped power the recent surge in the U.S. solar industry. But a case now before the federal International Trade Commission could lead to tariffs that would jeopardize U.S. solar’s rapid growth.
Cheap Chinese solar cells have powered a boom in the U.S. solar industry. They have helped drive down the cost of making electricity from sunlight by about 70 percent since 2010, leading to double-digit growth rates in rooftop and utility-scale installations, according to the industry. Last year, for the first time, solar added more generating capacity to the electricity grid than any other fuel, including natural gas. That’s welcome news to those who worry about climate change.
Now, though, the solar boom may be in jeopardy. The U.S. International Trade Commission, an independent federal agency, has begun an investigation that could lead to sweeping trade protections against the imports that would raise the costs of solar power and could bring a halt to solar’s rapid U.S. growth.
If the trade commission finds that imports caused serious harm to U.S. solar manufacturers, it will recommend trade remedies, which could potentially include tariffs on all imported solar products. President Donald Trump, a champion of U.S. manufacturing, would get the final word on any action — a prospect that has the solar industry in a tizzy.
The prospect of global tariffs “poses an existential threat to the broad solar industry and its 260,000 American jobs,” says Abigail Ross Hopper, the chief executive of the Solar Electric Industries Association, the industry’s largest trade organization. Most solar jobs in the United States are in sales and installation, not manufacturing, but tariffs could drive up the cost of solar and make it less competitive.
The trade investigation began in response to a petition filed by Suniva, a bankrupt manufacturer of solar cells and panels based in suburban Atlanta, with factories in Georgia and Michigan. Suniva, the second largest U.S. solar panel maker by volume, has been joined in the case by SolarWorld Americas, the largest U.S. solar panel manufacturer, which has a factory in Oregon.
U.S. solar manufacturers “simply cannot survive” in a market where foreign imports “have unexpectedly exploded and prices have collapsed,” Suniva said in its petition. SolarWorld Americas said it decided to join with Suniva because “massive overproduction” of Chinese solar cells and panels has “led to the near-destruction of remaining solar producers in America.”
The domestic solar firms have asked the Trump administration to impose steep tariffs on all imported solar cells, which are the devices inside solar panels that convert sunlight into electricity, and to set a floor price on solar panels containing imports. Those measures would roughly double the cost of imported panels, analysts say.
Some industry analysts say higher costs for solar will slow the industry’s growth. According to a report from analyst IHS Markit, demand for U.S. solar photovoltaics could be reduced by 60 percent over the next three years if the trade commission grants Suniva’s petition.
Hugh Bromley, an industry analyst with Bloomberg New Energy Finance, said in a note to clients that Suniva’s accusations are “riddled with holes and hypocrisies.” Still, he adds, “Those may not matter if the case makes its way to President Trump’s desk.”
As a candidate and as president, Trump has vowed to enforce U.S. trade laws as a way to strengthen the nation’s manufacturing base. Slapping tariffs on imported solar panels would benefit not only domestic solar manufacturers but traditional energy producers, including the coal industry, that compete with solar.
The International Trade Commission (ITC) has already made one statement about the Suniva petition — that, within the meaning of trade law, it is “extraordinarily complicated.” About that, no one disagrees. For starters, Suniva is majority-owned by Shunfeng International Clean Energy, a Chinese company that opposes Suniva’s petition, and SolarWorld Americas is a subsidiary of an insolvent German firm. Yet both are taking a stance against imports into the U.S.
How can that be? In Suniva’s case, the petition is being driven by SQN Capital Management, a New York-based asset manager that made $51 million in loans to Suniva and spent another $4 million on legal fees. In a letter to the China Chamber of Commerce for Import & Export of Machinery & Electronic Products, SQN offered to drop the petition if a buyer could be found for Suniva’s manufacturing equipment, which SQN says is worth $55 million. The Chinese declined to make a deal, and the issue became moot when SolarWorld Americas entered the case and the ITC decided to investigate.
This isn’t the first time that U.S. solar manufacturers have sought trade sanctions. In 2012, the Obama administration imposed modest tariffs on Chinese imports after finding that the Chinese government provided illegal export subsidies to its manufacturers. Two years later, it extended the tariffs to Taiwan. Those moves were prompted by cases brought by SolarWorld Americas.
Nevertheless, solar imports to the U.S. continued to surge — from $5.1 billion in 2012 t0 $8.3 billion in 2016, according to Suniva — as Chinese companies built factories in Thailand, Vietnam, and Malaysia, which were unaffected by the tariffs. Last year, the U.S. imported $520 million in panels from Thailand, up from almost nothing in 2012, and another $514 million from Vietnam, up from less than $1 million in 2012, according to Suniva.
That’s why Suniva now wants tariffs imposed globally. “Without global relief, the domestic industry will be playing ‘whack-a-mole’ against [solar cells] and modules from particular countries,” says Matthew McConkey, a lawyer for Suniva, in the petition to the ITC.
Trade experts agree that China has subsidized its giant solar manufacturers. Beijing and provincial governments provided free or low-cost loans; artificially cheap raw materials, components, and land; support for research and development; and a demand that was artificially driven by domestic regulation, according to Usha C.V. Haley and George Haley, wife-and-husband authors of a 2013 book, “Subsidies to Chinese Industry: State Capitalism, Business Strategy and Trade Policy.”
“Production in China is still heavily subsidized,” says Usha Haley, a professor of management at West Virginia University. “There is little doubt in my mind that it is going to become a monopoly producer — and then, of course, they will raise prices.”
What’s more, a solar industry dominated by a handful of Chinese companies will have little incentive to innovate, argues Stephen Ezell, a vice president at the Information Technology & Innovation Foundation, a Washington think tank. The U.S. industry, which invented solar photovoltaics and still leads the world in solar patents, simply will not have the resources it needs to invest in research.
“These industries are fundamentally about generating the next-generation product,” Ezell says. “We’re getting locked into a lower level of technological development.” In the long run, that would make it more difficult for the global solar industry to dislodge its fossil-fuel competitors.
Still, U.S. firms that complain about subsidies run the risk of being called hypocrites. Suniva, for instance, enjoyed state tax incentives for its Michigan plant, and “many other U.S. solar manufacturers have received tax, grant, and loan guarantee incentives,” says analyst Hugh Bromley. SolarCity, a unit of Tesla, is building a $900 million factory in Buffalo, New York, to make solar panels, with major subsidies.
Other solar manufacturers headquartered in the U.S., including SunPower and First Solar, have located a majority of their manufacturing offshore. SunPower has joined with the Solar Electric Industries Association to oppose the tariffs, for obvious reasons. SunPower, First Solar, and SolarCity all declined to comment on the trade issue.
Some analysts believe that the industry will be able to adjust to the tariffs. Setting a floor price for panels will lead developers to choose higher-efficiency, higher-cost panels that will enable other price reductions along the supply chain, says Roberto Rodriguez Labastida, an analyst with Navigant Research. “There will be some shake-ups and adjustments,” he says, but nothing like the meltdown being forecast by some.
The ITC will decide in September whether U.S. manufacturers have been injured. Shara Aranoff, a former chair of the commission who is now a corporate lawyer, says the nonpartisan ITC commissioners will be guided by the law and the facts. “It is one of the most independent agencies in the federal government,” she said.
If the commission finds harm, the issue moves into the political arena. Already, Daniel Kildee, a Democratic congressman from Michigan, and Rob Woodall, a Republican congressman from Georgia, have called for trade remedies. The solar industry is arguing that tariffs will kill many more jobs than they will save, and that there are better ways to protect U.S. manufacturing.
In making any decision, the Trump administration would be free to take anything into account — jobs, the impact of higher solar prices on consumers, and, at least in theory, the environment. Few would expect the environment to be high on the administration’s priority list here. But what will the president do? As with so many issues in Washington these days, that’s anybody’s guess.
Marc Gunther has reported on business and sustainability for Fortune, The Guardian, and GreenBiz. He now writes about foundations, nonprofits, and global development on his blog, Nonprofit Chronicles.
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World food trade runs chokepoint gauntlet.
A group of physical chokepoints – roads, ports and waterways – could disrupt the flow of world food trade, with drastic consequences.
The crowded Suez Cana is a likely checkpoint for the world food trade.
Image: By https://www.panoramio.com/user/2433337?with_photo_id=64163879, via Wikimedia Commons
A group of physical chokepoints – roads, ports and waterways – could disrupt the flow of world food trade, with drastic consequences.
LONDON, 27 June, 2017 – The sheer size of the world food trade is hard to digest. The amount of food transported around the world to fill empty stomachs is prodigious.
Every year a global fleet of ships, trains and trucks moves enough of four staple crops – maize, wheat, rice and soya – internationally to feed about 2.8 billion people (more than one in three of us alive today).
But this world food trade, which also includes agricultural fertilisers, is highly vulnerable, a new report says. The report, from the UK-based independent policy institute Chatham House, says there are a small number of key physical chokepoints where things could go wrong, with the risk of price rises, food shortages, and, as it puts it, “consequences that could reach beyond food markets”.
Security-critical
The report, Chokepoints and Vulnerabilities in Global Food Trade, identifies fourteen chokepoints as critical to global food security. Eight are maritime waterways, including the Panama and Suez canals and the Turkish Straits, which link the Black Sea to the Aegean and Mediterranean.
There are three inland chokepoints, including the US inland waterways and Brazil’s road network, and three coastal ones, including the Black Sea ports and those on the US Gulf Coast.
The report draws on data included in a new interactive online database, available to those researching the global resource trade.
Laura Wellesley, co-author of the report, says: “The risks are growing as we all trade more with each other and as climate change takes hold. The oil industry has been mapping this sort of risk for years but it has been woefully overlooked in discussions of food security.
“Past events, including floods in Brazil and the southern US, and the export bans on wheat from the Black Sea countries that contributed in part to the Arab Spring, give us a flavour of the sort of disruptions that can occur when chokepoints are closed.”
Chinese mitigation
The authors say the increasingly interrelated nature of the world food trade means that disruption to one trade route could have knock-on effects for others. The potential risk is both poorly understood and poorly managed, except by China, which “has done the most to mitigate its exposure to chokepoint risk.”
Beijing, they say, “is acutely aware of its exposures and actively invests in overseas infrastructure to relieve pressure on existing chokepoints, diversify supply routes, and increase its operational footprint along its supply chains.”
They also say the ongoing territorial dispute over the South China Sea may add to insecurity over food in the region.
The report says more than half the global trade in soya, cereals and fertilisers passes through at least one maritime chokepoint, while 10% passes through a maritime chokepoint for which there is no viable alternative.
“Climate change is going to make things worse by increasing the frequency of extreme weather events, fuelling conflict, and damaging already-weakened infrastructure”
A fifth of global wheat exports transit the Turkish Straits each year, and four ports on Brazil’s southern coastline handle nearly a quarter of global soya exports.
The report identifies three main types of risk: political and institutional; conflict and security; and weather and climate. Laura Wellesley says: “Climate change is going to make things worse by increasing the frequency of extreme weather events, fuelling conflict, and damaging already-weakened infrastructure.”
Nearly 25% of all food for direct human consumption is traded on international markets, and the quantity is increasing. The Middle East and North Africa (MENA) is the world region most dependent on food imports, especially on wheat from the Black Sea region coming through the Turkish Straits.
Just over a third of all grain imports to MENA passes through at least one maritime chokepoint for which there is no viable alternative. The report says the risk of disruption, given the political situation in the region, is high.
Low-income net food importers in sub-Saharan Africa, including Uganda, Ethiopia, Kenya, Tanzania and Sudan, are also very exposed, as are Japan and South Korea.
Risks growing
Chatham House says the report is a “first-of-its-kind analysis”, but the wider problems of food security have attracted attention for years, and especially the probable impact of weather and climate.
Other studies have examined the viability of different approaches to feeding the world. A report late last year warned of one consequence of the growth in human pressure.
The report says the risks to the chokepoints are increasing as our dependency on them grows. Chronic under-investment in infrastructure is a significant problem, and climate change, as so often, will multiply existing threats.
The authors write: “If a hurricane comparable in ferocity to Hurricane Katrina in 2005 were to shut down US exports from the Gulf of Mexico at the same time as extreme rainfall rendered Brazil’s roads impassable (the latter happened in 2013), up to 50% of global soya exports could be affected.
“If this in turn occurred in conjunction with a Black Sea heatwave similar to the one recorded in 2010, around 64% of global soya shipments could be halted or delayed.” – Climate News Network
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Solar panel makers look to White House for help.
Solar panel manufacturers are pushing to impose trade penalties on imports to the United States, dividing their industry while potentially creating a new trade case for President Trump.
BY TIMOTHY CAMA - 06/20/17 06:00 AM EDT
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© Getty Images
Solar panel manufacturers are pushing to impose trade penalties on imports to the United States, dividing their industry while potentially creating a new trade case for President Trump.
Two companies that manufacture solar panels and related technology in the United States are asking the Trump administration to impose pricing policies, such as tariffs or price floors, on imported panel technologies.
Suniva Inc. and SolarWorld USA say a surge of cheap imports from China and elsewhere are destroying domestic manufacturing of the panels.
Suniva filed a petition with the International Trade Commission (ITC) for the trade remedies in May, shortly after filing for bankruptcy. SolarWorld, a unit of a German company, joined the case later that month after making big job cuts.
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But the Solar Energy Industries Association (SEIA), which represents much of the rest of the solar industry, including some U.S. manufacturers, is fighting the effort, which it says would decimate solar power and threaten the growth the sector has seen over the last decade by significantly raising prices.
The SEIA commissioned a study last week that said 88,000 jobs would be lost if Suniva won.
The industry’s dispute is likely to be settled by the White House.
Under Section 201 of the Trade Act, Trump has wide-ranging authority to implement protections if he believes that the domestic industry has been injured seriously.
The ITC is due to make a recommendation to Trump after its investigation ends later this year.
It’s not yet known which side Trump might favor, but he campaigned on protecting American manufacturing and has long been skeptical of imports to the United States.
“There’s a very good chance that if the ITC says that there is injury, chances are that Donald Trump would give them protection,” Michael Moore, a trade economist at George Washington University, told The Hill.
The controversy specifically centers on photovoltaic cells and modules, the pieces in solar panels that take the sun’s radiation and turn it into electricity.
Only about 13 percent of the solar panels installed last year in the United States were produced domestically.
“It’s really a fight between a few of the remaining domestic manufacturers against almost everyone else in the solar industry. Those who sell and install it, but also asset management companies, the software companies, the engineering and procurement companies,” said Shayle Kann, head of GTM Research, the clean-energy research unit of Greentech Media.
To Suniva and SolarWorld, the huge growth in the solar sector has left behind U.S. producers.
“While this action is not undertaken lightly, the fact is the American [crystalline silicon photovoltaic] cells and modules industry is disintegrating,” Suniva wrote to the ITC.
“This industry simply cannot survive in a market where foreign CSPV cell and module imports into the United States have unexpectedly exploded and prices have collapsed.”
Christian Hudson, an attorney at Mayer Brown who represents Suniva, said that a Section 201 petition is the best option so that Suniva and its peers can get back on their feet.
“Once U.S. solar manufacturing jobs and the industry as a whole are gone, they are not likely to come back because the investment in the industry will dry up, leaving behind only fluctuating project-to-project and part-time construction jobs for solar panel installation,” he said.
“The solution is to create breathing space for the U.S. industry to rebuild.”
SolarWorld struck a similar tone.
“Unfortunately, the U.S. solar manufacturing industry has no other choice, because it’s almost been driven into extinction by these trade practices,” said Timothy Brightbill, a Wiley Rein attorney representing the firm.
On the campaign trail and since taking office, Trump has frequently criticized countries that import to the U.S. and cited the trade deficit as an indicator that other countries, like China, are taking advantage of the U.S.
The president has also expressed a willingness to use the power of his office to boost domestic manufacturing.
“We have a strong case that U.S. solar manufacturing has been injured, and we think that strongly aligns with the administration’s interest in promoting U.S. jobs and U.S. manufacturing,” Brightbill said.
Abigail Ross Hopper, president of the SEIA, said her group supports domestic panel manufacturers. But trade penalties are not the best way to boost manufacturing, she said.
“The impact of it would be devastating to demand, it would be devastating to jobs and it would be devastating to customers who want this competitively priced energy,” Hopper said.
“If you want to have an honest conversation about how to bolster cell and module manufacturing in the United States, then we should have that conversation,” she said. “We shouldn’t employ these blunt instruments and bash our industry over the head with those legal proceedings.”
TAGS DONALD TRUMP
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