Trade Group Warns Against New Global Warming Rules

Washington, DC, March 25, 2009--Energy-intensive manufacturing of steel, cement, chemicals and other products could move overseas without tax breaks or other subsidies, an industry coalition told lawmakers on Tuesday.

"If the U.S. enacts tough global warming regulation but other key manufacturing nations do not, production of energy-intensive goods may well shift to the unregulated countries," said John McMackin on behalf of the Energy-Intensive Manufacturers' Working Group.

The coalition includes steel companies US Steel and Nucor, paper producer NewPage Corp, aluminum manufacturer Alcoa and chemicals giant Dow.

McMackin testified at a hearing in the U.S. House of Representatives to examine the trade implications of proposed legislation to fight global warming by restricting carbon and other greenhouse gas emissions.

He told the House Ways and Means trade subcommittee his group believed the best way to prevent production shifts would be for Congress to give energy-intensive manufacturers free carbon trading credits or to reduce their compliance costs through a refundable tax credit or some other mechanism.

Representative Kevin Brady, the top Republican on the trade subcommittee, said the United States could lose "a stunning $162 billion in export sales" as result of higher costs if Congress does not move carefully on the climate bill.

Leo Gerard, president of the United Steelworkers union, said a combination of free allowances and border taxes could be needed to stop jobs from moving to countries like China which are likely to have less stringent controls.

"In commodity-based industries like steel, glass, chemicals, rubber and paper, even small differences in production costs can devastate an industry if they are not managed effectively," Gerard said.