Trade Wars: Can They Disrupt World Renewable Energy Cooperation?

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The World Trade Organization will meet in Brussels Monday (Feb. 9, 2009) to head-off the rising wave of protectionism. A trade war could put the world into a deep depression and threaten cooperation on renewable energy. Ten EU commissioners are on their way to Moscow to meet with Putin and other Russian officials over trade bearers.

 Russia has raised tariffs and subsidies. The European Union claims that the “Buy American” proposal in the US stimulus plan violates WTO rules.

Under the Bush administration, the US imposed traffics on French cheese in retaliation for French health rules that restricted the sale of US chicken and beef. As Bush left office he was celebrated by the poultry industry for this retaliation. Such irrational lose-lose behavior is absurd, which is why it’s called “war.”

Until the recent slowdown, world trade was expanding and increasing world prosperity. According to Fareed Zakaria in his recent book, The Post-American World, “China’s growth alone has lifted more than 400 million people out of poverty. Poverty is falling in countries housing 80% of the worlds population.”

Recent squabbles are the result of growing unemployment that fuel fears that trade will “outsource” jobs. World unemployment can snowball as trade disputes grow into international distrust. The Great Depression was deepened by a breakdown in world trade.

International trust is essential to reverse the decline in trade, reestablish growing world prosperity, and convert the world to renewable energy. Oil has peaked—further exploration and drilling can only yield diminishing returns. Without renewable energy, a world economic recovery will be choked off as rising demand for oil pushes oil prices beyond recent highs.

The Kyoto Protocol is an international environmental treaty to cut greenhouse gases. Bush rejected it, but Obama has pledged to sign it. Only world cooperation can reverse global warming.

It’s imperative that emerging economies realize that renewable energy is in their own self-interest and greater world good. Expanding economies, education, and rising prosperities insures that citizens of all nations have the means and leisure to envision future possibilities.

During the Great Depression there were not any organizations like the WTO to decide trade disputes. The WTO represents a consensus of 151 members representing the poorest and richest economies. According to WTO Director-General Pascal Lamy, “Trade expansion is insurance against financial turbulence.” Developing world renewable energy offers one way to expand trade.

Obama has taken the lead by rejecting this proposal in opposition to his own party. “I think that would be a mistake right now, he told ABC News, “That is a potential source of trade wars that we can’t afford at a time when trade is sinking all across the globe.”

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