With enormous interest in the plentiful business opportunities related to tackling climate change, developing green technology, and instituting cap-and-trade, it is a surprising to learn of serious trade protectionism in these areas around the world. According to the U.S. Chamber of Commerce in its report outlining international engagement recommendations for the U.S., “countries around the world put tariffs as high as 70% on certain imported environmental goods.”

U.S. Trade Representative Ambassador Ron Kirk, who provided the keynote address at the Chamber’s May 18th event, “Next Steps for the American Trade Agenda”, reiterated the need for America to remember the world outside its borders by emphasizing the already essential and yet still growing importance of trade:

Trade can be a major boon to American companies and workers, and to the country as a whole. The numbers bear this out. Last year, exports reached a record 13 percent of U.S. Gross Domestic Product. More than a quarter of a million U.S. firms export goods. Ninety-seven percent of those firms are small- and medium-sized businesses who particularly need our help accessing global markets. Three-quarters of global purchasing power and nearly 95 percent of world’s consumers are outside our borders. Obviously, one of the best ways to grow America’s businesses – both large and small – is to open additional markets for their goods and services.

The benefits of trade are even more apparent when realizing that current trade barriers impede access to cutting-edge technologies and limit progress toward reducing emissions of carbon dioxide and other greenhouse gases. In fact, the Chamber points to a recent World Bank study (p. 27) on climate and clean energy technologies that suggests that by removing tariffs and non-tariff barriers to key technologies, trade could increase by an additional 7%-14% annually. This would spur adoption and proliferation of environmentally friendly technologies and products while fostering economic growth.

The Chamber report goes on to say that “in a proposal that could help more countries adopt ‘green’ technologies, the United States has championed [slashing] tariffs and other barriers to trade in environmental goods and services. This proposal would place priority action on eliminating barriers to trade in technologies that can help reduce output of carbon dioxide and a range of pollutants. The U.S. Chamber believes that this proposal could contribute in a meaningful way to climate change efforts by eliminating trade barriers and creating green jobs.”

Here is a breakdown of America’s top trading partners in 2007.

America’s Top 10 Trading Partners (Goods)

Think of the spread of green technology that could occur if these massive economies that produce most of the world’s goods (and pollution) would start trading their green products freely.

- Justin Manger