November 10, 2009 / 3:06 PM / 10 years ago

US climate bill needs strong border measure-Baucus

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By Doug Palmer

WASHINGTON, Nov 10 (Reuters) - The United States must include a tariff or some other "border measure" to protect U.S. manufacturers from unfair foreign competition as part of legislation to address climate change, Senate Finance Committee Chairman Max Baucus said on Tuesday.

"We can not allow our manufacturing industries to fade as result of trade with countries that refuse to negotiate global solutions to global concerns," Baucus said in a speech.

"We must push our trading partners to do their part to curb harmful emissions and we must devise a border measure, consistent with our international obligations, to prevent the carbon leakage that would occur if US manufacturing shifts to countries without effective climate change programs," he said.

Border measures generally refer to a tax or tariff on imports, although they could take other forms.

Baucus, who is expected to play a key role in shaping final U.S. climate legislation, was not specific about what type of border measure he meant.

The House of Representatives passed a bill that would allow the president beginning in 2020 to tax imports from countries judged not be doing their part to fight climate change.

Many trade experts worry about a "green" trade war if countries impose barriers to protect domestic producers in the name of addressing climate change.

Baucus told reporters after his speech that he did not expect the Senate to finish work on climate change legislation this year and it was difficult to estimate when it would be completed in 2010.

Countries have been striving to reach an international climate change deal next month at a meeting in Copenhagen, but hopes for that are fading as the date approaches and the U.S. Congress still does not have a final bill laying out domestic goals for reducing carbon emissions.

U.S. steel, cement and other carbon-intensive industries say some sort of border tax would be needed to level the playing field if they are forced to reduce greenhouse gases blamed for global warming, but foreign competitors in countries such as China and India are not.

Baucus said the United States must take care that its border measures do not violate World Trade Organization rules or other international commitments.

But he said lawmakers should figure out by themselves the best way to do that, rather than expect trade negotiators to work out an agreement with other countries.

"I think often the United States has to lead," Baucus said, noting that what lawmakers come up could be used as a model for other countries to copy.

(Additional reporting by Richard Cowan; Editing by Will Dunham and Cynthia Osterman)

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