China Trade DA DDI 2008

China Trade DA
China Trade DA.....................................................................................................................................................1 1nc............................................................................................................................................................................4 1nc............................................................................................................................................................................5 Unique.....................................................................................................................................................................6 Unique - US/China Trade High.............................................................................................................................7 Unique - US/China Trade High.............................................................................................................................8 Unique - US/China Trade High.............................................................................................................................9 US-China Trade High - AT: Textiles...................................................................................................................10 Unique - US/China Relations High.....................................................................................................................11 Unique - US/China Relations High.....................................................................................................................12 Unique - US/China Relations High.....................................................................................................................13 LInks.....................................................................................................................................................................14 Generic Link.........................................................................................................................................................15 Generic Link.........................................................................................................................................................16 Generic Link.........................................................................................................................................................17 Generic Link.........................................................................................................................................................18 Generic Link.........................................................................................................................................................19 Generic Link.........................................................................................................................................................20 Generic Link.........................................................................................................................................................21 Generic Link.........................................................................................................................................................22 Generic Link.........................................................................................................................................................23 Link Empirical ....................................................................................................................................................24 Link Empirical.....................................................................................................................................................25 Regulations Reductions Link..............................................................................................................................26 Regulations Reductions Link..............................................................................................................................27 C/T Link ...............................................................................................................................................................28 C/T Link................................................................................................................................................................29 C/T Link – Empirical ..........................................................................................................................................30 C/T – China Bashing Link..................................................................................................................................31 RPS Link...............................................................................................................................................................32 RPS Link ..............................................................................................................................................................33 RPS Links – Electricity Prices ...........................................................................................................................34
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China Trade DA DDI 2008 Lobbies Push Tariffs ...........................................................................................................................................35 Kills Steel Industry..............................................................................................................................................36 AT: WTO blocks tariffs ......................................................................................................................................37 AT: Cooperation/China Complies......................................................................................................................38 AT: Cooperation/China Complies......................................................................................................................39 AT: Cooperation/China Complies......................................................................................................................40 Impacts .................................................................................................................................................................41 Trade War Bad - Economy..................................................................................................................................42 Trade War Bad - Economy..................................................................................................................................43 Trade War Bad – Economy.................................................................................................................................44 Trade War Bad – Economy.................................................................................................................................45 Trade War Bad – Economy.................................................................................................................................46 Trade War Bad – Eonomy...................................................................................................................................47 Trade War Bad – Economy.................................................................................................................................48 Trade War Bad – Economy.................................................................................................................................49 Trade War Bad – Hegemony...............................................................................................................................50 Trade War Bad – Nuclear War General............................................................................................................51 Trade War Bad - Global Warming ....................................................................................................................52 Trade War Bad - North Korea ...........................................................................................................................53 Trade War Bad - Proliferation............................................................................................................................54 Trade War Bad - Taiwan.....................................................................................................................................55 Trade War Bad – Taiwan.....................................................................................................................................56 Trade War Bad – Taiwan.....................................................................................................................................57 Spratlys (Chinese Competition) .........................................................................................................................58 Spratlys (Chinese Competition)..........................................................................................................................59 Spratlys (Chinese Competition)..........................................................................................................................60 Spratlys (Chinese Competition)..........................................................................................................................61 Trade War Bad - Alt Tech....................................................................................................................................62 AFF........................................................................................................................................................................63 No Link.................................................................................................................................................................64 TF 2020..................................................................................................................................................................65 Regulations Good.................................................................................................................................................66 Sanctions Good.....................................................................................................................................................67
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China Trade DA DDI 2008 Manufacturing Jobs Turn ..................................................................................................................................68 TRADE LOW.......................................................................................................................................................69 TRADE LOW.......................................................................................................................................................70 TRADE LOW.......................................................................................................................................................71 TRADE LOW.......................................................................................................................................................72 **Trade good**....................................................................................................................................................73 Democracy............................................................................................................................................................74 Terrorism..............................................................................................................................................................75 Economy................................................................................................................................................................76 Innovation / competitiveness...............................................................................................................................77 War........................................................................................................................................................................78 Environment.........................................................................................................................................................79 **Trade bad**......................................................................................................................................................80 Economy................................................................................................................................................................81 Plant Disease.........................................................................................................................................................82 Industrilization.....................................................................................................................................................83 Trade -> Monoculture..........................................................................................................................................84 Mad Cow! (1/2).....................................................................................................................................................85 Mad Cow! (2/2).....................................................................................................................................................86

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China Trade DA DDI 2008

1nc
A. China US Trade Relations High
Li Ruogu, Chairman and President of China’s Exim Bank, 2008-05-09 07:24, Real Issues in U.S China Trade Imbalance, (http://www.chinadaily.com.cn/opinion/2008-05/09/content_6672305.htm)

While pursuing sound economic development, China is opening up its economy and actively seeking to expand its economic and trade ties with the developed world, including the US. At present, China and the US have become economically interdependent and their interests intertwined. The US has made significant gains from its economic and trade relations with China. First, low-priced and good-quality goods and services imported from China have raised the consumer surplus and eased the inflation pressure in the US. According to a Morgan Stanley report, trade with China in 2004 alone saved American consumers $100 billion and created 4 million new jobs. Second, China's imports from the US have added new momentum to the US economy. For five consecutive years, China has been the fastest growing market of American exports. And over the past decade, US exports to China increased more than 350 percent, which is about six times the growth of US exports to other regions. Whereas China was the 13th largest export market for US products in 1995, it is now the US' fourth largest market. Third, US investments in China have yielded high returns. As of November 2007, US investors had poured in a total of $56 billion into 51,555 enterprises in China. These investments have obtained high returns and shared China's economic success.

B. Climate regulations spark trade war with China – uncompetitive industries will force protectionist tariffs
Robert Collier, a visiting scholar at the Center for Environmental Public Policy at the University of California at Berkeley, is writing a book about China and global warming. He has been with the San Francisco Chronicle from 1991 to the present as a senior foreign affairs correspondent (since 2002), a member of the editorial board (2001-2002), and a foreign affairs reporter (1994–2001). May 6, 2008 China Business | China faces trade war climate challenge, http://www.atimes.com/atimes/China_Business/JE06Cb01.html China in recent months has taken center stage in the international debate over global warming. It has surpassed the United States as the world's largest source of greenhouse gases, and it became developing nations' diplomatic champion at the recent United Nations climate negotiations in Bali. Now China may become the target of a full-fledged trade war that could destroy, or perhaps rescue, the chances of bringing rich and poor nations together to fight global warming. The focus on China intensified late last year, when data from the International Energy Agency and other research organizations revealed that China had overtaken the United States as the largest source of greenhouse gases, and, more ominously, that its emissions are growing at a rate that exceeds all wealthy nations' capacity to decrease theirs. Even if China met its own targets for energy conservation, its emissions would increase by about 2.3 billion tonnes over the next five years, far larger than the 1.7 billion tonnes in cutbacks imposed by the Kyoto Protocol on the 37 developed "Annex 1" countries, including the United States. After the inconclusive end of the UN-led Bali talks on the global environment, worry has grown among US and European industries especially iron, steel, cement, glass, chemicals, and pulp and paper - that any new climate treaty would put them at a big disadvantage against their fast-growing competitors in China.

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C. A TRADE WAR WITH CHINA CAUSES A HOT WAR (Ben Landy, Ben Landy, Director of Research and Strategy at the Atlantic Media Company, publisher of the Atlantic Monthly, National Journal, and Government Executive magazines. Landy served in various research and project management positions at the Brookings Institution and Center for Strategic and International Studies, two leading public policy think tanks in Washington, D.C. Ben holds a bachelor of arts degree from Yale University. April 3, 2007, http://chinaredux.com/2007/04/03/protectionism-andwar/#comments,) The greatest threat for the 21st century is that these economic flare-ups between the US and China will not be contained, but might spill over into the realm of military aggression between these two world powers. Economic conflict breeds military conflict. The stakes of trade override the ideological power of the Taiwan issue. China’s ability to continue growing at a rapid rate takes precedence, since there can be no sovereignty for China without economic growth. The United States’ role as the world’s superpower is dependent on its ability to lead economically. As many of you will know from reading this blog, I do not believe that war between the US and China is imminent, or a foregone conclusion in the future. I certainly do not hope for war. But I have little doubt that protectionist policies on both sides greatly increase the likelihood of conflict–far more than increases in military budgets and anti-satellite tests. D. HOT WAR WITH CHINA ENSURES EXTINCTION (STRAIT TIMES, June 25, 2K, Pg. l/n) THE high-intensity scenario postulates a cross-strait war escalating into a full-scale war between the US and China. If Washington were to conclude that splitting China would better serve its national interests, then a full-scale war becomes unavoidable. Conflict on such a scale would embroil other countries far and near and -horror of horrors -raise the possibility of a nuclear war. Beijing has already told the US and Japan privately that it considers any country providing bases and logistics support to any US forces attacking China as belligerent parties open to its retaliation. In the region, this means South Korea, Japan, the Philippines and, to a lesser extent, Singapore. If China were to retaliate, east Asia will be set on fire. And the conflagration may not end there as opportunistic powers elsewhere may try to overturn the existing world order. With the US distracted, Russia may seek to redefine Europe's political landscape. The balance of power in the Middle East may be similarly upset by the likes of Iraq. In south Asia, hostilities between India and Pakistan, each armed with its own nuclear arsenal, could enter a new and dangerous phase. Will a full-scale Sino-US war lead to a nuclear war? According to General Matthew Ridgeway, commander of the US Eighth Army which fought against the Chinese in the Korean War, the US had at the time thought of using nuclear weapons against China to save the US from military defeat. In his book The Korean War, a personal account of the military and political aspects of the conflict and its implications on future US foreign policy, Gen Ridgeway said that US was confronted with two choices in Korea -truce or a broadened war, which could have led to the use of nuclear weapons. If the US had to resort to nuclear weaponry to defeat China long before the latter acquired a similar capability, there is little hope of winning a war against China, 50 years later, short of using nuclear weapons. The US estimates that China possesses about 20 nuclear warheads that can destroy major American cities. Beijing also seems prepared to go for the nuclear option. A Chinese military officer disclosed recently that Beijing was considering a review of its "non first use" principle regarding nuclear weapons. Major-General Pan Zhangqiang, president of the military-funded Institute for Strategic Studies, told a gathering at the Woodrow Wilson International Centre for Scholars in Washington that although the government still abided by that principle, there were strong pressures from the military to drop it. He said military leaders considered the use of nuclear weapons mandatory if the country risked dismemberment as a result of foreign intervention. Gen Ridgeway said that should that come to pass, we would see the destruction of civilization.

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China Trade DA DDI 2008

Unique

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China Trade DA DDI 2008

Unique - US/China Trade High

China continues to invest in US
Lawrence S. York, founder and editor of SeriousBull (Market watching company), 7/6/08, Has China Become the US Treasury’s Best Friend?, http://seekingalpha.com/article/85212-has-china-become-the-u-s-treasury-s-best-friend The US economic picture by all accounts (except George Bush's) is deteriorating with forecasts that as many as 300 US banks may fail and that Stagflation is becoming an ever greater reality (stagnant growth accompanied by rising inflation). US investors concerned that Fannie Mae (FNM) and Freddie Mac (FRE) would not be able to manage their debt service when combined with their payoff guarantees on $12 trillion of US mortgages, sold both companies' stock, calculating that a Fed bailout was certain and that stockholders would lose out. Russia, and perhaps other sovereign investors, likewise have reason to sell their US government sponsored holdings. Russia is paying back the Bush Administration for its aggressive and unfriendly behavior, missile defense systems in the Czech Republic and the US intervention to derail World Bank loans for Russian oil pipelines. But not China. China reportedly increased its holdings in US Government mortgage-back securities a thousand-fold from 2000-2006 according to the US State department. And recently, according to a Bloomberg news report by Andy Mukherjee, China Investment Bank (for the 12 months ended April) again sharply increased its holdings in Fannie and Freddie debt some 26% compared to a year earlier by purchasing an additional $67 billion more debt. Now we can assume that China is a contrarian investor seeking to catch a falling knife using its foreign reserves to speculate for gain, or we can speculate that China may have an inside track to the US Treasury (i.e. that China has been reassured by Treasury Secretary Paulson that they have no need to fear and sell). Indeed the Treasury would be much obliged if China were to purchase Russia's redemptions as well, because the US Treasury will stand behind the debt.

China US Trade Relations High
Li Ruogu, Chairman and President of China’s Exim Bank, 2008-05-09 07:24, Real Issues in U.S China Trade Imbalance, (http://www.chinadaily.com.cn/opinion/2008-05/09/content_6672305.htm)

While pursuing sound economic development, China is opening up its economy and actively seeking to expand its economic and trade ties with the developed world, including the US. At present, China and the US have become economically interdependent and their interests intertwined. The US has made significant gains from its economic and trade relations with China. First, low-priced and good-quality goods and services imported from China have raised the consumer surplus and eased the inflation pressure in the US. According to a Morgan Stanley report, trade with China in 2004 alone saved American consumers $100 billion and created 4 million new jobs. Second, China's imports from the US have added new momentum to the US economy. For five consecutive years, China has been the fastest growing market of American exports. And over the past decade, US exports to China increased more than 350 percent, which is about six times the growth of US exports to other regions. Whereas China was the 13th largest export market for US products in 1995, it is now the US' fourth largest market. Third, US investments in China have yielded high returns. As of November 2007, US investors had poured in a total of $56 billion into 51,555 enterprises in China. These investments have obtained high returns and shared China's economic success.

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China Trade DA DDI 2008

Unique - US/China Trade High

US to boost high tech trade with China
China Daily, Periodical in China, US to Boost high Tech trade with China, 2006-06-10, http://www.chinadaily.com.cn/china/200606/10/content_613560.htm The Bush administration is to revise laws to facilitate export of hi-tech equipment to China under a new policy designed to narrow its ring trade gap with the world's fastest growing economy. The new policy will spare the need for US exporters in such sectors as semiconductor equipment and electronics to apply for licenses for sales to Chinese companies, according to an AFP report on Saturday. And, the administration will also ensure closer scrutiny of key technology purchasers in China, a senior US Department of Commerce official said. The changes to Washington's so-called China Export Control Policy will achieve "growth in civilian high-tech trade and enhanced security," undersecretary of commerce for industry and security David McCormick said. "These changes to technology export controls for China are a 'win-win'", he told a forum of the Washington-based Center for Strategic and International Studies. He said Washington would encourage other nations to take similar steps. The new policy, McCormick emphasized, would prevent exports of US technologies for incorporation into the weapons systems in China. For example, he said that the cutting edge composite technology that helps China build commercial aircraft will not find its way into the Super-7 next generation fighter aircraft. US high-tech exports to China last year reached US$12 billion dollars and the new licensing flexibility would further open up "potentially hundreds of millions of dollars" worth of American sales to Chinese companies, McCormick said.

US Sino Relations are getting even better!
Barry Wood, Reporter for Newsvoa.com, June 18th, 2008, “US, China Agree on Energy Cooperation, Start of Work on Investment Treaty”, (http://www.voanews.com/english/2008-06-18-voa74.cfm) Treasury Secretary Henry Paulson hailed the achievements of the talks, the fourth round in a strategic economic dialogue launched two years ago. He said the 10-year energy and environmental agreement is particularly significant as the US and China are the world's biggest oil consumers and biggest emitters of green house gases. The investment treaty-which will take some time to negotiate-would enhance each nation's access to the other's market. The two countries already have a huge and growing trade relationship. The Chinese delegation was headed by Vice Premier Wang Qishan.

US China trade relationship growing in a positive direction
Xinhua News Agency, 6/11/2008, Primary periodical for Chinese economics, “Paulson: Economic Relations with China Growing in a positive direction”, http://news.xinhuanet.com/english/2008-06/11/content_8342751.htm WASHINGTON, June 10 (Xinhua) -- The U.S.-China economic relationship is growing in a positive direction through the on-going, dynamic and respectful discussions of the Strategic Economic Dialogue (SED), U.S. Treasury Secretary Henry Paulson said Tuesday. Delivering a speech outlining the goals of the high-level economic talks the two countries will hold next week, Paulson described the bilateral economic relationship as "complex, broad and important to both our countries and to the world economy." The SED has brought progress faster and more broadly on issues important to the U.S. and global economy than would have been possible otherwise, Paulson said, noting it is important to resist calls for erecting protectionist barriers. "It is clear that our strategy for robust engagement with China- intensive dialogue but with resort to WTO dispute settlement and WTO-sanctioned trade remedies if needed - is more productive than protectionist policies or legislation," he said here in his prepared remarks. On June 17-18, high-level delegations from China and the United States will meet in Annapolis, Maryland, north of Washington, for the fourth round of SED launched in December 2006. The upcoming discussions will focus on five areas, Paulson said. These are: managing financial and macroeconomic cycles; developing human capital; the benefits of trade and open markets; enhancing investment; and advancing joint opportunities for cooperation in energy and the environment. Paulson expressed his confidence that next week's meeting "will move the United States and China even further forward to a stronger economic future."

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Unique - US/China Trade High
ENERGY COOPERATION IS CURRENTLY BOOSTING TRADE (Barry Wood, Voice of America News, 6/18/08, http://www.voanews.com/english/2008-06-18-voa74.cfm) Treasury Secretary Henry Paulson hailed the achievements of the talks, the fourth round in a strategic economic dialogue launched two years ago. He said the 10-year energy and environmental agreement is particularly significant as the US and China are the world's biggest oil consumers and biggest emitters of green house gases. The investment treaty-which will take some time to negotiate-would enhance each nation's access to the other's market. The two countries already have a huge and growing trade relationship. The Chinese delegation was headed by Vice Premier Wang Qishan.

Money ties China, U.S. together
Vancouver Sun, 7/14/08, http://www.canada.com/vancouversun/news/editorial/story.html?id=d7ab411a-e5af-42e7-98e11b675dd44eaf Money makes for strange bedfellows. As many countries consider boycotts, U.S. President George Bush recently confirmed that he will attend the opening ceremonies for the 2008 Beijing Olympics. Less than 20 years since tanks rolled through Tiananmen Square, China remains a hotbed of human rights abuse and environmental degradation. But the United States has been cautious with its criticism of the emerging superpower. The reason is largely financial. The economic ties between China and the U.S. run deep. China relies on the U.S. as their largest export market, just as the Americans rely on China to fuel its outrageous consumption with cheap imports. "It's kind of like the relationship between a junky and a dealer," explains economics expert Nicholas R. Lardy of the Peterson Institute. "The junky needs the dealer so he can get his fix, but the dealer also needs the junky to buy his drugs." Trade between the two nations is rising at a dizzying pace. In 1980 their trade totalled $5 billion; last year it was $387 billion. It is also heavily lopsided. The U.S. imports far more from China than it exports, resulting in a trade deficit of over $250 billion. This enormous consumption is rapidly pushing America's debt towards $10 trillion. The numbers can get overwhelming and the question becomes: How does America stay afloat? The U.S. economy is buoyed by foreign investment into its treasury securities. Japan still possesses the largest holdings, but China is catching up. Since 2000, China's ownership of U.S. securities has grown from about $50 billion to over $500 billion. Some political pundits are concerned that by becoming America's banker, China could exercise significant influence over the U.S. But that's not really the case. There's an old adage that says, if you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem. China is now so deeply invested in U.S. securities, any disruption to the value of the dollar would be a serious blow to its own reserves. And since the Chinese rely on the U.S. market for their exports, they're forced to buy up new securities as soon as they're issued to prevent the yuan from appreciating against the dollar. Neither country holds a significant advantage over the other. Despite the enormity of the U.S. economy, the two nations have built a system of co-dependency. Or as Catherine Mann, professor of economics at Brandeis University and former adviser to the chief economist at the World Bank, puts it -a system of Mutually Assured Destruction. I think you can characterize it a lot like nuclear weapons," she says. "Whoever uses the weapon, invariably gets hurt too." Each country has the means to significantly disrupt the other's economy, but the collateral damage within their own country could be just as severe. In short, the U.S. needs China for cheap imports and foreign investment. China needs the American dollar to remain strong to preserve the value of their foreign reserves and to keep the price of their exports appealing. This co-dependency is perhaps the reason why the U.S. has remained relatively quiet while China continues its oppressive policy towards Tibet, suppresses freedom of speech and erodes the environment. It should be noted that China has made progress over the last 20 years, but there is still much work to be done. As the Olympics approaches, the protests and boycotts will escalate. But as the voice of the international community rises, don't expect more than a whisper out of the U.S. They say “money talks,” but sometimes it knows when to keep its mouth shut. Marc and Craig Kielburger co-founded Free the Children. The primary goal of the organization is to free children from poverty and exploitation through education

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US-China Trade High - AT: Textiles

US China textile deal said to be reached, increased trade expected.
China Daily, US, China said to reach textile deal, 11/7/07, http://news.xinhuanet.com/english/2005-11/07/content_3743482.htm These officials, who spoke on condition of anonymity because the deal has not yet been announced, said it could be signed as early as Tuesday when U.S. Trade Representative Rob Portman and Chinese officials will be in Geneva. They said that the tentative deal was reached during the fifth round of discussions, which took place over the past week in Washington. Both sides agreed on the major issues, they said, and discussions were continuing on details. The deal would be similar to an agreement China reached with the 25-nation European Union earlier this year. However, in a victory for U.S. manufacturers, the deal would last through 2008, one year longer than the EU agreement. U.S. textile and apparel companies and their labor unions have been pushing for a comprehensive deal to stem a flood of Chinese imports that began last January when global quotas, in place for more than three decades, were lifted. The Bush administration has been reimposing quotas, known as "safeguards," for individual categories of clothing and textiles. The industry wanted a comprehensive deal covering all threatened categories of U.S. production and lasting for three years. The safeguard quotas were only good for a year at a time. The tentative agreement would allow for imports of most clothing and textile categories covered by the deal to increase by 8 to 10 percent in 2006, by around 13 percent in 2007 and by around 17 percent for 2008. All of these percentages would be above the 7.5 percent growth allowed under the safeguard procedures. U.S. retailers had said they would reluctantly go along with a comprehensive deal as long as the growth in imports was sufficient to allow them to obtain reliable supplies.

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Unique - US/China Relations High

US China relations look good, SED coming together.
Chinaview, 06/21/2008, U.S. Business leader urges continued strategic economic dialogue with China, http://news.xinhuanet.com/english/2008-06/21/content_8410358.htm NEW YORK, June 20 (Xinhua) -- A leading U.S. business leader said here Friday that the U.S.-China Strategic Economic Dialogue (SED) has played an important role in bilateral economic and trade cooperation and that the SED should continue in a sustained and effective manner. At a meeting with visiting Chinese Vice Premier Wang Qishan, Harold McGraw III, chairman of Business Roundtable, an association of chief executive officers of leading U.S. companies, suggested that business leaders of the two countries should also establish and hold such dialogues as an effective complement to government-to-government dialogue. McGraw, who is the president and CEO of the McGraw-Hill Companies, urged both governments to support such dialogues. Wang was meeting with McGraw and leaders of other member companies of Business Roundtable to hear their opinions and suggestions about China-U.S. economic and trade relations. Wang told the U.S. business leaders that the Chinese economy will maintain a rapid growth in a relatively long period of time and that the Chinese government will create a good environment for enterprises of both countries to conduct dialogue and mutually beneficial cooperation. The Chinese vice premier arrived in New York on Thursday after co-chairing the 4th session of the China-U.S. Strategic Economic Dialogue in Annapolis, Maryland, and meeting U.S. President George W. Bush and U.S. lawmakers in Washington. Qishan said the purpose of the Strategic Economic Dialogue is to raise questions, seek consensus, and implement results, and to prevent trade protectionism and conservatism from hampering the development of bilateral economic and trade cooperation, so as to ensure that such cooperation benefits the people of both countries. STRONG US- CHINA TRADE AND ENERGY RELATIONS NOW (Thomson Financial News, 6/18/08, US, China announce launch of new investment talks, energy cooperation, http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/18/afx5130797.html) The US and China today formally announced the launch of talks that the US hopes will result in more transparency and certainty for US investors in China, as well as options for settling investment disputes with China. As part of today's US-China Strategic Economic Dialogue, the two countries also signed a ten-year environment and energy cooperation agreement, a deal that moves forward an agreement from last year to cooperate in these areas in the wake of rising oil prices and concern over the environment. 'Our interests in this area are very aligned,' US Treasury Secretary Henry Paulson said today in his closing statement to the SED. Paulson added that the two countries will work on energy conservation and efficiency as part of this effort. 'This is a highlight of this round of the SED,' said Chinese Vice Premier Wang Qishan in his accompanying closing statements. The two countries also established a Transportation Forum intended to identify the infrastructure needed to support various modes of transportation and to enable the free flow of trade between the US and China.

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China seeks cooperation with the US in Energy
Du Guodong, Editor for Xinhua, June 17, 2008, Vice premier: China-U.S. energy cooperation would produce win-win results, http://english.gov.cn/2008-06/17/content_1018512.htm Chinese Vice Premier Wang Qishan has called for stronger cooperation between China and the United States in energy, the environment and other related areas, saying that bilateral cooperation in these areas would lead to win-win results. "The Chinese government gives high priority to energy and resources conservation and the protection of the environment. It is committed to building a resource-conserving and environment-friendly society," Vice Premier Wang wrote in an article published by The Financial Times on Monday in its North American edition. "However, China is a big and populous developing country at a stage of accelerated industrialization and urbanization. This has led to heavy consumption of energy and resources and made the task of protecting the environment a daunting one," he said. "So it is highly significant that the fourth China-U.S. Economic Dialogue, which will be held in the U.S. this week, will promote long-term cooperation in energy, the environment and other related areas," said Wang, who heads a Chinese delegation to take part in the fourth China-U.S. Strategic Economic Dialogue (SED), scheduled to be held in Annapolis, Maryland, on Tuesday and Wednesday. To meet the challenges brought about by the pressures of growing demand, Wang said China has endeavored to achieve the following goals: intensifying energy and resource conservation, developing renewable energy, and actively adapting to global climate change. "There is a broad scope for cooperation between China and the U.S. in energy and environment," he wrote. "Stronger cooperation between the two countries in energy and the environment will enable China to respond better to energy and environmental issues and also bring about tremendous business opportunities and handsome returns for American business." According to the intent of the 10-year cooperation between China and the U.S. in energy and environmental protection, Wang said the two countries should, on the basis of the principles of mutual complementarity and win-win progress, focus their cooperation in energy, pollution reduction and protection of natural resources. The Chinese vicepremier proposed three approaches to strengthen bilateral cooperation in these areas. First, China and the United States should build joint laboratories or research and development centers for energy and environmental protection technologies, and provide platforms to promote industrial applications of such technologies. Second, the two countries should jointly formulate and implement fiscal, taxation, financial and trade policies to encourage innovation and cooperation in and transfer of energy-conserving and environment-friendly technologies. Third, the two sides should use existing multilateral and bilateral dialogue mechanism and exchange platforms to enhance consultation and coordination, strengthen cooperation in training, exchanges of technical personnel, and data-sharing. Vice-Premier Wang hoped that through dialogue and cooperation in these areas, China and the United States will promote all-round development of the constructive and cooperative relationship between the two countries, to better serve the interests of their peoples. The SED was launched jointly by Chinese President Hu Jintao and U.S. President George W. Bush in September of 2006. The dialogue is held twice a year, alternating between the two countries. The previous meeting was held in December in Beijing.

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Unique - US/China Relations High

THE US AND CHINA ARE CURRENTLY GOING TO COOPERATE ON ENERGY AND THE ENVIRONMENT (Du Guodong , Tuesday, June 17, 2008 , “Vice premier: China-U.S. energy cooperation would produce win-win results”, http://english.gov.cn/2008-06/17/content_1018512.htm) Chinese Vice Premier Wang Qishan has called for stronger cooperation between China and the United States in energy, the environment and other related areas, saying that bilateral cooperation in these areas would lead to win-win results. "The Chinese government gives high priority to energy and resources conservation and the protection of the environment. It is committed to building a resource-conserving and environment-friendly society," Vice Premier Wang wrote in an article published by The Financial Times on Monday in its North American edition. "However, China is a big and populous developing country at a stage of accelerated industrialization and urbanization. This has led to heavy consumption of energy and resources and made the task of protecting the environment a daunting one," he said. "So it is highly significant that the fourth China-U.S. Economic Dialogue, which will be held in the U.S. this week, will promote long-term cooperation in energy, the environment and other related areas," said Wang, who heads a Chinese delegation to take part in the fourth China-U.S. Strategic Economic Dialogue (SED), scheduled to be held in Annapolis, Maryland, on Tuesday and Wednesday. To meet the challenges brought about by the pressures of growing demand, Wang said China has endeavored to achieve the following goals: intensifying energy and resource conservation, developing renewable energy, and actively adapting to global climate change. "There is a broad scope for cooperation between China and the U.S. in energy and environment," he wrote. "Stronger cooperation between the two countries in energy and the environment will enable China to respond better to energy and environmental issues and also bring about tremendous business opportunities and handsome returns for American business." According to the intent of the 10-year cooperation between China and the U.S. in energy and environmental protection, Wang said the two countries should, on the basis of the principles of mutual complementarity and win-win progress, focus their cooperation in energy, pollution reduction and protection of natural resources. The Chinese vice-premier proposed three approaches to strengthen bilateral cooperation in these areas. First, China and the United States should build joint laboratories or research and development centers for energy and environmental protection technologies, and provide platforms to promote industrial applications of such technologies. Second, the two countries should jointly formulate and implement fiscal, taxation, financial and trade policies to encourage innovation and cooperation in and transfer of energy-conserving and environment-friendly technologies. Third, the two sides should use existing multilateral and bilateral dialogue mechanism and exchange platforms to enhance consultation and coordination, strengthen cooperation in training, exchanges of technical personnel, and data-sharing. Vice-Premier Wang hoped that through dialogue and cooperation in these areas, China and the United States will promote all-round development of the constructive and cooperative relationship between the two countries, to better serve the interests of their peoples. The SED was launched jointly by Chinese President Hu Jintao and U.S. President George W. Bush in September of 2006. The dialogue is held twice a year, alternating between the two countries. The previous meeting was held in December in Beijing.

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LInks

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China Trade DA DDI 2008

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Uncompetitive industries call for protectionist measures
Marc Faber PhD is economics , CEO of many corporations 2003 “Why US protectionism can not be the answer”, http://www.ameinfo.com/26611.html) But what about protective duties, quotas, and regulatory measures that would prevent service jobs from migrating overseas? It is on this point that I disagree with Klaus Bockstaller. Import duties and quotas will make matters worse and not just in the long term but also immediately. Let me explain. First of all, import tariffs and quotas on a large scale would increase prices for manufactured goods in the US and, combined with the ongoing inflation for services, would lead to higher inflation rates across the board and, therefore, depress bond prices further. In turn, rising interest rates would bring the refinancing boom, which has kept consumption up, to an abrupt end. In addition, selective tariffs, such as were imposed on steel imports, will not create jobs. Because of the steel tariffs, US steel prices are now far above steel prices in Asia, Russia, and Brazil. So, what is the result? Manufacturers of goods with a heavy steel content (such as car-part manufacturers) are shifting production overseas, where not only labor but also now steel prices are lower. And if across-the-board import duties were levied, such duties would not only hurt foreign manufacturers, but also US companies, which in the last few years have set up production capacities overseas and import their products back to the US (I understand that about 50% of US imports originate from US companies overseas). In fact, under careful analysis, it should be obvious that the lack of competitiveness of US companies has led to the shift overseas of goods production and the provision of services. Import duties or restrictions will 'protect' unproductive and uncompetitive industries and make them even less competitive, since duties will now diminish the competitive pressures. For the US economy, rising protectionism would also mean far higher inflation rates, as well as a huge competitive disadvantage on the global markets for US corporations. Sure, the lowest-cost providers of services and producers of goods would temporarily be hurt, but the world's economic geography is now mutating rapidly. Already, the Asian markets combined are far larger than the US economy in a number of sectors.

Industries perceive that emissions controls will decrease competitiveness by undermining domestic markets
The World Bank, 2008 (International Trade and Climate Change, Economic, Legal, and Institutional Perspectives, Vol 2 http://www-wds.worldbank.org/external/default/WDSContent Server/WDSP/IB/ 2007 /11 /15/000310607_20071115153905/Rendered/PDF/41453optmzd0PA101OFFICIAL0USE0ONLY1.pdf) There is a widespread concern regarding international competitiveness of major industries,especially in the energy-intensive sector ,among countries that have undertaken several measures to reduce GHG emissions. These countries especially worry that higher energy costs not only burden them domestically but also give competitors in countries that do not have these measures (especially the United States and China) a competitive edge and an unfair advantage. Generally,climate change measures can be grouped as regulatory measures, fiscal measures,market-based instruments,or voluntary agreements (see appendix2 for a detailed description of each specific measure).As illustrated in table 2.1, the choice of policy instruments differs significantly across nations, reflecting institutional, economic, and policy structures. The higher costs usually accrue from fiscal and regulatory measures, or a combination of these measures, that are levied by these countries.

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Industrial lobbies will push for an all-out trade war with China
Robert Collier, a visiting scholar at the Center for Environmental Public Policy at the University of California at Berkeley, is writing a book about China and global warming. He has been with the San Francisco Chronicle from 1991 to the present as a senior foreign affairs correspondent (since 2002), a member of the editorial board (2001-2002), and a foreign affairs reporter (1994–2001). May 6, 2008 China Business | China faces trade war climate challenge, http://www.atimes.com/atimes/China_Business/JE06Cb01.html In response, the US Congress is moving to create a system of trade sanctions that would levy heavy taxes on imports from other major greenhouse gas emitters. Ironically, the American plan is taking shape even before the US takes any action to reduce its own emissions, inviting charges of hypocrisy, violation of international law, and threatening a major trade war. The tariff proposal, contained in the central piece of global warming legislation now before Congress, would impose emission controls on domestic industries starting in 2012. It would also levy punitive tariffs on greenhouse-gas-intensive products imported from countries that lack "comparable action" to that of the US, starting in 2020. Industrial lobbies and labor unions are pushing hard for these sanctions to take effect more quickly. European Commission president Jose Manuel Barroso, French President Nicolas Sarkozy and industrial chambers of commerce strongly advocate a similar tariff system, leading many analysts to predict that the EU will also adopt some sort of green tariff system in the next few years. Warning of an "all-out trade war" if the sanctions go forward, US Trade Representative Susan Schwab argues that green trade sanctions would violate World Trade Organization rules. In a recent letter to the House Energy and Commerce Committee, she wrote, "We believe this approach could be a blunt and imprecise instrument of fear, rather than one of persuasion, that will take us down a dangerous path and adversely impact US manufacturers, farmers, and consumers."

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Efforts to reduce emissions result in carbon tariffs against China
The Canadian Press, 3/27/08, Carbon Tariff on China possible to curb pollution, http://www.thestar.com/Business/article/380403# Countries such as Canada and the United States may start imposing a "carbon tariff" on goods from China and other developing countries which have become the biggest contributors to global greenhouse-gas emissions, CIBC World Markets said Thursday. The investment bank's report says China, India and other developing economies have expanded so massively they have surpassed the established industrialized world in belching out carbon dioxide pollution blamed for climate change. "And once surpassed, the gap is growing rapidly," wrote economists Jeff Rubin and Benjamin Tal. "Already, non-OECD emissions are a massive 2,500 million metric tonnes more than the OECD – a gap that is now equal to almost 20 per cent of the latter's total emissions." With advanced countries enacting carbon taxes, carbon trading systems and other measures to lower emissions, Rubin and Tal believe the growing pollution from poor countries will provoke penalties against their exports. Many in the West assumed that since industrialized nations were primarily responsible for the historical build-up of greenhouse gases in the world, they should bear the brunt of efforts to cut back, a view that underpinned the Kyoto Protocol in 1997, which exempted developing countries. But the CIBCWM economists see a shift in sentiment. "As the OECD countries begin to impose greater economic sacrifices on their own economies as part of decarbonization efforts, tolerance for the carbon practices of its trading partners, or more precisely the lack thereof, will diminish dramatically," they write. "Already Europe, which is well ahead of North America in terms of domestic carbon pricing, is talking about a carbon tariff that it can apply to imports from countries that don't play by the same carbon rules." They add that the concept is likely to gain currency in the U.S. and Canada. The report fingers China as the world's top greenhouse-gas polluter, surpassing the U.S. and pulling away. Since the beginning of the decade, it says, China's emissions have increased about 120 per cent and are greater than Canada, India, Spain and Japan combined. A key reason is China's reliance on heavily polluting coal. As a result, Chinese emissions per unit of energy are double those of Canada, the report says.

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Climate policy puts US manufacturing in competition with China
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf As political momentum surrounding climate change builds in the United States, policymakers are taking a fresh look at national climate policy and America’s involvement in multilateral climate negotiations. And as in years past, the potential economic impact of any US effort to reduce greenhouse gas emissions stands as a central question in the Washington policy debate. Of particular concern is the effect climate policy would have on carbon-intensive US manufacturing. Many of these industries are already under pressure from international competition, particularly large emerging economies such as China, India, and Brazil that are not bound to reduce emissions under the current international climate framework. As the US Congress takes up domestic climate legislation, policymakers are looking for ways to avoid putting US carbon-intensive manufacturing at a competitive disadvantage vis-à-vis countries without similar climate policy, lest a decline in industrial emissions at home is simply replaced by increases in emissions abroad. While this objective would be best achieved through a harmonized international climate policy, the differences between countries in level of economic development, political conditions, obligations stemming from historic emissions, and responsibilities arising from future emissions mean harmonization is still a long way off. The question then, in the design of domestic US climate policy today, is how to level the playing field for carbon-intensive industries during a period of transition—where trading partners are moving at different speeds and adopting a variety of policies to reduce emissions—and how to do so in a way that does not threaten the prospects for a broader international agreement down the road.

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US will engage in brinksmanship approach to regain competitive edge
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf Implications for International Engagement An important assumption of proponents of trade measures is that they will help drive other countries to the negotiating table and thus strengthen global climate action. Current legislative proposals would only impose penalties on carbon-intensive imports from countries that had not implemented climate policy “comparable” with that taken in the United States. The rationale is that giving countries an economic incentive to participate in international climate change mitigation efforts will make them more inclined to submit to greenhouse gas reduction targets. After all, access to international markets is likely to be a higher priority for many governments than international climate negotiations. Perhaps trade measures could raise the political focus on mitigation options for America’s major trading partners. And as mentioned earlier, the United States is not alone in considering the use of trade measures for such ends. On a recent trip to Beijing, French President Nicolas Sarkozy warned that if the Chinese government did not take action on climate change, Chinese goods could face restrictions in entering the European market.10 Multilateral action would not only expand the coverage in terms of industrial emissions (the United States accounts for 14 percent of the global total) but also expand the degree of protection for US industry and increase the leverage on the behavior of nonparticipating countries (see box 3.4 on the disadvantages of unilateral action). Yet there is reason to be skeptical of the likelihood that the threats of trade measures alone, whether unilaterally by the United States or in concert with Europe and Japan, will force developing countries to take a different position in international negotiations. Developing-country leaders, like politicians in many other countries, need to act tough for the domestic audience. This is particularly true in the case of China, which is also the primary focus of most trade measures currently proposed. In judging extraterritorial “conditions” in other countries, it is helpful to consider a “reciprocity test”: What would be the US reaction, for instance, to a provision adopted by the Indian Parliament or the Chinese Communist Party that conditioned Indian or Chinese actions on those of the United States? Threats of punitive trade sanctions against Beijing have failed to make headway on issues far less contentious then climate change and in which the United States had considerably more leverage (box 3.5). And as climate change is an issue that can be solved only with the involvement of the developing world, China in particular, there is considerable risk in a brinksmanship approach on the part of the United States. That said, Beijing has demonstrated the willingness and ability to make painful adjustments to the structure of the Chinese economy in order to be part of a multilateral framework, when it perceives such membership to be in its national interest. With China surpassing the United States as the world’s largest CO2 emitter (on an annual basis), the country’s leadership is under growing domestic and international pressure to take accountability

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Congress would place tariffs to gain back market shares in China
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf The Fourth Assessment Report from the Intergovernmental Panel on Climate Change (IPCC), released in 2007, brought a new sense of certainty that the Earth’s temperature is warming as a result of human activity. Discussion in the press, through documentary film and by advocacy groups, has expanded public awareness of the policy challenge global climate change presents. In state houses around the country, legislators have begun tackling those policy issues at a local level, and strong popular support for nationwide action has prompted dozens of hearings in both the House of Representatives and Senate. Yet as the US Congress starts drafting federal climate legislation, many of the same concerns raised about the Kyoto Protocol are still front and center in the policy debate. Specifically, _ concern that a climate regime that omits greenhouse gas emissions caps on some large emitters will be environmentally ineffective, as rapid growth in major emerging economies will render emissions reductions in the United States irrelevant; and _ concern that the US economy will suffer from the loss of investment, market share, and jobs in industrial sectors sensitive to the additional cost of reducing carbon emissions. Progress made in international climate negotiations suggests that post- Kyoto agreements (to take effect in 2013) will ask more of developing countries than the Kyoto Protocol did. Yet commitments will likely vary considerably by country, given differences in levels of economic development, political conditions, obligations stemming from historic emissions, and responsibilities arising from future emissions. The question for US policymakers drafting legislation today is how to address domestic concerns during a period of uncertainty about the shape of the multilateral framework to come. Of particular concern is the effect climate policy would have on carbon-intensive US manufacturing. Many of these industries are already under pressure from international competition, particularly large emerging economies such as China, India, and Brazil that are not bound to reduce emissions under the current international climate framework. As the US Congress takes up domestic climate legislation, policymakers are looking for ways to avoid putting US carbon-intensive manufacturing at a competitive disadvantage vis-à-vis countries without similar climate policy, lest a decline in industrial emissions at home is simply replaced by increases in emissions abroad. In considering measures to level the playing field for carbon-intensive US manufacturing industries under a domestic climate regime, policymakers seek to (1) prevent a decline in output by US producers in the face of higher costs, (2) guard against “emissions leakage” (migration of US industrial emissions to other parts of the world) from a loss of market share to more carbon-intensive foreign producers, and (3) create incentives for other countries to reduce emissions. This book evaluates the effectiveness of a wide range of policy options in achieving these goals as well as their impact on other industries, the overall environmental effectiveness and economic efficiency of domestic climate policy, and the prospects for reducing emissions internationally.

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US industries will force tariffs on china to even market playing field
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf Trade Measures The second approach to leveling the playing field for US industry is to impose similar costs on foreign producers at the border. Trade measures can be used under either a cap-and-trade or carbon tax system, though their design and implementation differ within each system. European policymakers first put forward the notion of imposing border tariffs on imports from countries that are slow to reduce emissions and targeted them at the United States. But as the United States starts drafting its own climate policy, the discussion of trade measures is focused clearly on China. Advocates of such measures claim they will both protect domestic industry and provide US negotiators with the leverage of market access to force developing countries to the bargaining table. As designed, and if taken unilaterally, such measures will likely fail on both counts. While policymakers have China in mind when considering the use of trade measures, only 14 percent of cement, 7 percent of steel, 3 percent of aluminum, 4 percent of paper, and less than 1 percent of basic chemicals imported into the United States come from China. Canada is the largest source of imports in all carbonintensive industries considered in this book except one (Trinidad and Tobago is the largest for chemicals), with Europe and Russia not far behind. In most proposals, the imposition of border tax adjustments or allowance requirements is conditioned on whether the trade partner has enacted domestic climate policy “comparable” to that in the United States. Europe and Canada, the two largest sources of carbon-intensive imports, would likely pass this test with flying colors. And among developing countries that are less likely to have adopted “comparable” policy at home, many have industries that are cleaner, on average, than those in the United States. As opposed to relatively carbon-intensive Chinese producers, many firms in Latin America and oil-exporting countries have newer and more efficient equipment and use low-carbon energy sources like hydropower and natural gas.

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Climate change allows protectionists to kill free trade
GABRIEL STEIN, Chief International Economist, Lombard Street Research, 22-JUN-07, The International Economy, http://goliath.ecnext.com/coms2/gi_0199-6910875/Will-environmentalism-become-the-new.html The case for free trade was conclusively proven more than two hundred years ago. Yet simple though it is, it seems to constantly need to be restated. The temptation for politicians, trade unionists, and business leaders to blame "the other" for their own shortcomings, and their inability to grasp that trade and growth are not zero-sum games, means that they are always ready to resort to at least threatening protectionism. True, the experience of the 1930s and the undoubted benefits of the post-1945 freer trade environment mean that very few advocate trade bartiers as such. Instead, we get pious appeals to "level playing fields" or "decent standards for workers." But we know that this often is rubbish. The alternative to low-paid work in an emerging economy is not full trade union rights and an American standard of living; rather, it can all too often be unemployment, crime, or prostitution. Add to this the new mantra of climate change. For protectionists, it is a God-send. "I am not in favor of protectionism--I only want to save the planet."

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China’s growing economic growth will fall once the U.S. feels the need to make an agreement to reduce these emissions.
Matthew Chen & Joe Barnes, Baker Institute, China opposes emissions limits , May 2008, The Global Energy Market: Comprehensive Strategies to Meet Geopolitical Risks, http://www.bakerinstitute.org/publications/IEEJexecsummaryFINAL.pdf

Achieving such an agreement—even with a change in Washington’s attitude—will be difficult. China, in particular, has sharply divergent interests from the United States and the E.U. Despite China’s spectacular economic growth in recent years, it remains poor in comparison with the advanced economies of North America and Western Europe.
Beijing sees robust economic growth not just as a means to raise living standards but also to bolster regime legitimacy. Agreements on emissions that might constrain China’s economic growth are therefore viewed with great suspicion. This is particularly true because of the composition of China’s energy mix: coal dominates its electricity sector and the country is rapidly becoming a major consumer of oil. Despite planned increases in hydroelectric power, China’s growth will be fueled largely by hydrocarbons for the foreseeable future. Like many countries in relatively early stages of economic development, China has, until very recently, placed a very modest emphasis on environmental protection.

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Link Empirical
US trade policies will force comparable tariffs on China – empirically proven
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf “Comparable” but Not Sufficient Advocates of incorporating trade measures into climate policy hope providing a future US administration with the ability to threaten punitive tariffs at the border will both win industry support for overall legislation and provide incentives to other countries to take similar action. In the best case scenario, trade measures are a stick that stays firmly planted in the administration’s back pocket, never actually needing to be invoked. Unfortunately, the history of US trade policy suggests that what is initially intended as a negotiating tool often becomes an embedded part of public policy (box 3.3). In recent hearings on the Lieberman-Warner bill, both organized labor and the American Iron and Steel Industry expressed serious reservations with the 2020 start date for the trade measures included in the legislation.5 Regardless of when the review is conducted, it is highly likely that carbonintensive industries in the United States seeking protection from imports will take issue with the administration’s determination of what constitutes “comparable action” by other countries on climate change. The European Union by any definition would pass a nationwide “comparable action” test, as it has a considerably more ambitious climate policy than the United States. However, aluminum producers in the European Union are not directly covered by climate targets (although they do face higher power prices from generators that are covered). Going forward, China could choose to implement policies that reduce greenhouse gas emissions while imposing no additional costs on carbonintensive manufacturing whatsoever. Under such a scenario, it is quite plausible that industry and labor groups would seek additional legislation from Congress, making the review process a “private right of action,” as happened with the antidumping regime.

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Cap and trade would include carbon tariffs on foreign nations – proven through Warner Lieberman bill
Mark Langner 6/5, 2008 “Warner Lieberman Cap and Trade Bill Levels Competitive Playing Field for Manufacturers” http://www.greenstreetinvestor.com/warner-lieberman-cap-and-trade-bill-levels-competitive-playing-field-for-manufacturers/ Buried within the 1000+ page Warner-Lieberman climate change act is a provision for something called “international reserve allowances” and what is quickly being dubbed a “Carbon Tariff.” Essentially the provision applies a cross-border, per ton, carbon tax on imported goods that are manufactured in countries that do not have limits on carbon emissions. If an item creates 2 tons of carbon dioxide in its manufacture and a 1 ton carbon credit trades for $30 - then the tariff would be $60 on that item. I don’t know if the bill requires the government to use the revenues to purchase carbon offsets - though that or putting it into an environmental clean up fund would be sensible.

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Regulations Reductions Link
Any regulations cause industries to force through tariffs and create cartels
Jonathan H. Adler, Director of environmental studies at the Competitive Enterprise Institute., 1999 "Rent Seeking Behind the Green Curtain", http://www.cato.org/pubs/regulation/reg19n4b.html, In the regulatory context, rent seeking typically consists of pursuing government intervention that will provide a comparative advantage to a particular industry. By restricting entry or reducing output, regulations often reduce competition, create cartels, and increase returns. Thus, tariffs and licensing restrictions are regulatory measures commonly sought by rentseekers. Less-direct measures can heighten preexisting comparative advantages or manufacture a comparative advantage out of incidental differences in an industrial sector. While often disparaged, rent seeking can be viewed as the natural outgrowth of firms seeking their best interests in a regulated environment. If regulations are here to stay, the argument goes, a firm might as well make the best of the situation. In fact, given the courts’ current interpretations of antitrust laws, one could consider rent seeking as the only legal form of predation. Whether defensible or not, rent seeking has become rather pervasive in regulatory policy. As economist Robert McCormick notes, "There is abundant evidence in the economic literature that when the flag of public interest is raised to support regulation, there is always a private interest lurking in the background." There is no reason to expect environmental regulations to be immune from the economic pressures that create rent seeking in other contexts. In fact, by their very nature, environmental regulations are conducive to rent seeking, for in the environmental context, both regulated firms and "public interest" representatives stand to gain from reductions in output and the creation of barriers to entry. Regulated firms and public interest groups may not always agree on the nature and design of specific regulatory programs, but they often share a common interest.

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Emissions regulations cause protectionist barriers against China Stratfor, 11/29, 2007, "Global Market Brief: Carbon Tariffs as New Protectionism",
http://www.stratfor.com/analysis/global_market_brief_carbon_tariffs_new_protectionism The European Union, and likely the United States, soon will agree to significant and long-term reductions in greenhouse gas emissions. These agreements will dramatically increase the price of energy for consumers and industries in participating countries. Thus, energy-intensive industries in countries that are not part of these agreements will have significant — and growing — cost advantages in the coming decades. Faced with losing manufacturing industries, countries reducing greenhouse gas emissions will have little choice but to take protective measures that some will see as fair compensation for tackling climate, but others (especially China) will see as protectionist nontariff barriers to trade. Carbon tariffs would disproportionately affect China’s economy, since the country’s industries are far more dependent on carbon-emitting fossil fuels than are others. Recent reports say that as much as one-fourth of China’s carbon emissions are directly caused by the production of exports for the European Union and the United States — the same goods that fuel China’s economy. After 2007’s numerous toy recalls and “Made in China” scares in the United States and the European Union, along with World Trade Organization (WTO) intellectual property rights-related challenges from the European Union and United States, China likely would view the carbon tariff issue as yet another Western act of political aggression against it. France can propose all the green taxes it wants, but Germany is the key to such proposals’ success. EU industry and jobs
are at stake, and economic tension is mounting between Germany and China. The strong euro and the weak yuan — which is tied to the declining dollar — are diverging to such extremes that the imbalance is beginning to threaten Germany, which is more insulated than other EU states from the increasing influx of cheap Chinese goods into the EU market. While France is the most active carbon tariff advocate internationally, the idea is far from foreign to efficiency- and environmentally-conscious Germany, where the idea of a domestic carbon tax is closer to reality than anywhere else in Europe. Emboldened by Germany’s consternation with China, Sarkozy brought up the carbon tariff idea in part to threaten China ahead of U.N. climate negotiations slated for Dec. 3-14 in Bali, Indonesia. China has adamantly opposed any post-Kyoto climate agreement setting mandatory emissions targets similar to the European Union’s and has shown some support for U.S. President George W. Bush’s voluntary emissions program, a Kyoto competitor. France and other EU nations hope that threats like Sarkozy’s will force China to give a little ground on carbon emissions; if not, the threat will remain. Though the EU will take the lead on pushing for any energy-related retaliatory tariffs, the United States has an increasing interest in implementing such tariffs.

Emissions regulations ensure tariffs on China
Timothy Gardner, Reuters News Service, 6/9/08, http://www.planetark.com/dailynewsstory.cfm/newsid/48684/story.htm NEW YORK - The US climate bill may be dead but one thorny element of it -- possible tariffs on energy-intensive imports from rapidly developing countries like China -- will fester as lawmakers form new greenhouse legislation. Introduced to the US Congress by industrial players such as power utility American Electric Power and industrial worker unions, the issue, also known as competitiveness in climate legislation, boils down to two ideas. First, if the United States embarks on a carbon emissions reduction program, the placement of a tariff on imports of emissionsintensive goods like cement, steel and chemicals would ensure that China and other rapidly industrializing countries do their part on global warming. The tariff would aim to equal the price that US carbon regulation had added to the same products made domestically. Second, such a tariff would prevent heavy US industries from relocating to other countries that don't regulate greenhouse gases to lower their operating costs. The US climate bill, sponsored by Sens. Joe Lieberman, a Connecticut independent, and John Warner, a Virginia Republican, which aimed to cut greenhouse emissions by 66 percent by 2050, died on Friday with a procedural vote in the Senate. It would have added such a carbon tariff, also known as a border tax, or an international reserve allowance, on imports starting in 2020. An amendment to the bill had pushed the imports tax forward to 2014. Pressure from industry will keep the competitiveness issue alive going forward. "The concern about tight caps from leading industry is very real," Billy Pizer, director of the energy program at the think tank Resources for the Future, said by telephone. "Something like this tariff is probably going to have to be part of the solution."

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Cap and Trade will force protectionist barriers that results in all out trade war with China
The Economist 6/ 5 2008 “A convenient truth, sadly ignored” A deal to be done between rich and poor countries on global warming is going begging http://www.economist.com/opinion/displaystory.cfm?story_id=11496890 Western countries would benefit too, thanks to the lower cost of cutting emissions abroad. That is why the European Union allows international offsets to be used in its “cap-and-trade” scheme. In this, governments issue a set number of permits to produce greenhouse gases, obliging firms to cut their own emissions or buy spare permits from others. The cap-and-trade scheme that America's Senate began debating this week would also allow firms to fulfil some of their obligations through green investments in other countries. But the bill in Congress would allow only a small number of offsets, and only from factories that do not compete with American firms —a big hurdle in a globalised world. Worse, to make the bill more palatable to China-bashing politicians, its authors have strengthened provisions that would impose tariffs on energy-intensive imports from countries that are not taking “comparable action” against climate change, meaning all developing countries. That is a recipe for a trade war, which would only compound the economic pain of global warming. Just when a deal is possible, the stage is being set for a tragedy of Wagnerian dimensions.

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Cap and Trade forces industries to lobby for tariffs to regain market shares
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf Gauging the Impact on International Competitiveness Climate policy, by imposing a cost on greenhouse gas emissions, has the potential to negatively affect carbon-intensive manufacturing industries that compete with foreign producers, either at home or abroad, and for which energy (particularly carbon-intensive) is a significant share of total production costs. In the United States, five industries fit this bill: ferrous metals (iron and steel), nonferrous metals (aluminum and copper), nonmetal mineral products (cement and glass), paper and pulp, and basic chemicals. Together these five account for more than half of all carbon dioxide (CO2) emissions from the manufacturing sector, though their direct emissions account for less than 6 percent of the US total. Under a domestic cap-and-trade or carbon tax regulatory regime, these industries could see a decline in output and lose market share to foreign competitors if they are unable to reduce emissions and must pass carbon costs on to downstream consumers. While the degree of impact is a topic of considerable research and debate, the fate of these industries has become a key consideration in domestic policy design. Yet it is important to keep in mind that these five industries combined account for only 3 percent of the country’s economic output and less than 2 percent of nationwide employment. Many options for protecting carbon-intensive manufacturing do so at the expense of other industries or by increasing the cost to consumers of reducing US emissions overall. Climate policy creates economic winners as well as losers in the international marketplace. Incentives to develop low-carbon technology and services at home help make US firms more competitive in carbon-constrained markets abroad. Options for safeguarding the competitiveness of US carbon-intensive manufacturing should be addressed in the context of their broader economic effects.

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C/T Link – Empirical
Cap and Trade will hurt businesses and industries – empirical reason for why recent legislation failed
Eliza Strickland, 6/6, 2008, "Republicans Put the Kibosh on Climate Change Bill", http://blogs.discovermagazine.com/80beats/2008/06/06/republicans-put-the-kibosh-on-climate-change-bill-2/ Well, it wasn’t unexpected, but it’s worth noting anyway. After one brief week of Senate debate over the Lieberman-Warner climate change bill, it’s officially dead. Senators can now put their good intentions back on the shelf until next year, when the issue of regulating greenhouse gas emissions is expected to be raised again under a friendlier administration (both presumptive presidential nominees say they support such regulations). In this go round, Democrats couldn’t gather the 60 votes needed to end a Republican filibuster and bring the bill up for a vote. In fact, the final vote was 48-36, short of a majority, but Democrats had letters from six absent senators (including Barack Obama, John McCain, and Ted Kennedy) saying that they would have voted for the policy had they been present. “It’s just the beginning for us,” proclaimed Sen. Barbara Boxer, D-California, a chief sponsor of the bill in the Senate, noting that 54 senators had expressed support of the legislation, although that’s still short of what would be needed to overcome concerted GOP opposition. “It’s clear a majority of Congress wants to act,” Boxer said at a news conference [AP]. The debate was notable not for the seriousness with which the legislators confronted the issue of global warming, but rather for the amount of squabbling and petty partisan tricks it occasioned. In one exchange on the Senate floor, Senator John Kerry tried to break into Senator James Inhofe’s long speech decrying the bill. After being rebuffed a fourth time, Mr. Kerry was exasperated. “With all due respect,” he said, “we are here to have a debate. It is hard to have a debate when you are talking all by yourself.” Even for the Senate, where members are well-known to prefer talking to listening, the amount of unilateral jabbering on the climate bill has been remarkable, with lawmakers both for and against it arguing repeatedly over how much time was allotted for them to speak [The New York Times]. The Republican leader, Mitch McConnell, also demanded that the entire 492-page document be read aloud into the record on Wednesday, a maneuver that sent senators scurrying from the floor for nine hours, only to be forced to return after 10 p.m. for a latenight quorum call. The debate that did occur showed a stark disagreement on the economic costs of cutting back greenhouse gas emissions. The bill would have required major emitters such as power plants, refineries, and factories to buy emissions permits in a cap-and-trade system. Republicans complained that the measure would saddle the U.S. economy with higher energy costs, which could hurt businesses and ultimately would be passed on to consumers. “Before we sacrifice the U.S. economy and American jobs, we need to quantify the benefits of having a relatively slight reduction in greenhouse gases and compare it to the huge costs imposed on the U.S. economy and American families,” said Jon Kyl, R-Ariz [San Francisco Chronicle].

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C/T – China Bashing Link
Cap and Trade results in China Bashing – dem control congress makes this uniquely problematic
Adam Smith, 06/08/2008, "Climate Change, Kyoto and impacts on China and India", http://adamsmith.wordpress.com/2008/06/08/1018/ The cap-and-trade scheme that America’s Senate began debating this week would also allow firms to fulfil some of their obligations through green investments in other countries. The problem as so often is the American Congress, which is likely to restrict the amount of offsets, to factories that do not compete with American ones - nonsensical to say the least- and thus panders to the anti-trade, antiChina brigade. This is made worse by the fact that the Congress is contrlled in both houses by the Democrats and even worse by the fact that Barack Obama has shown himself to be weak on trade issues.

China will respond to carbon tariffs – they perceive taxes as protection for US companies, rather than the environment
The Financial Times January 24, 2008 Green Barricade Trade faces a new test as Carbon Taxes go Global, Lexis China, for example, might bring a case to the WTO on carbon border taxes, only for the EU or the US to hit back with fresh litigation or emergency tariffs aimed at Chinese energy subsidies. Climate change has already started to provoke WTO legal cases and other disputes. Brazil, for example, has filed a complaint about the US tariffs and subsidies that keep out Brazilian sugarcane ethanol. Brasilia wants ethanol to be classified as an "environmental good" in the Doha round and hence subject to big cuts in tariff protection, a move blocked by the US and EU. An EU plan to ban imports of biofuels produced in environmentally destructive ways, though in theory also protected by the principle established in the shrimp-turtle case, may also be vulnerable to legal challenge. A Chinese trade official says that, while China had not taken a formal view, his initial personal impression was that carbon border taxes would be legally complex and many WTO members would be concerned. "I doubt whether the measures taken in the name of the environment will always be applied to protect the environment and not to protect domestic industries," he says. He adds that they could prove a double-edged sword. "If one takes per capita emissions of greenhouse gases rather than overall emissions, it will be the developed countries paying taxes on their exports."

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RPS Link

An RPS would cause industry to perceive a loss of competitiveness due to energy costs Competitive Enterprise Institute, June 27, 2007, Competitive Enterprise Institute http://www.cei.org /gencon/014,06020.cfm
Although 21 states have already passed an RPS, this is not an argument in favor of a federal RPS. These RPS states tend to have a much higher potential for renewable energy and/or less energy-intensive manufacturing. In the RPS states that do have considerable manufacturing, the effect of adopting an RPS has been to raise electricity prices and push manufacturing into states or other countries with lower electricity prices. Therefore, the effect of a federal RPS would be to require states with low electricity prices and proportionately lower renewable energy potential, such as is found in our industrial heartland, to raise electricity prices to a level that would force their industries to migrate overseas to countries with cheaper energy rates and no renewable portfolio standards.

Loss of competitiveness leads to protectionism
Jeffery Frankel, Brookings Institute June 9, 2008 “climate change, trade and competitiveness is a collision inevitable? http://www.brookings.edu/events/2008/~/media/Files/events/2008/0609_climate_trade/2008_frankel.pdf] Even more salient politically than leakage is the related issue of competitiveness: American industries that are particularly intensive in energy or otherwise GHG-generating activities will be at a competitive disadvantage to firms in the same industries operating in nonregulated countries.4 Such sectors as aluminum, cement, glass, paper and steel will point to real costs in terms of lost output, profits, and employment. They understandably will seek protection and are likely to get it. Of twelve market-based climate change bills introduced in the 110th Congress, almost half called for some border adjustment: either a tax to be applied to fossil fuel imports (unobjectionable, provided the same tax is applied to domestic production of the same fossil fuels; distortionary and WTO-illegal otherwise) or a requirement that energy intensive imports surrender permits corresponding to the carbon emissions embodied in them.5

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RPS Link

Electric companies and labor unions will lobby against a federal RPS for protectionism measures
The Atlanta

Journal-Constitution 2007 “Alternative energy rule would be costly” Lexis

Southern Company is not alone in its opposition to this federal mandate. Dozens of other organizations including consumer groups, utilities and trade unions also believe that good energy policy encourages development of a variety of clean resources, including nuclear power, clean coal technologies, increased conservation and energy efficiency and, when it's cost-effective for consumers, practical and economic renewable energy options.

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RPS Links – Electricity Prices
A federal RPS would raise electricity prices – destroying manageable state based RPS. Edison Electric Institute A forum to promote energy-efficiency practices among electric utilities; promote the sharing of information,
ideas, and experiences in energy efficiency in the power sector; and develop a resource base of effective business models and options. December 1, 2007 http://www.eei.org/industry_issues/electricity_policy/federal_legislation/EEI_RPS.pdf Oppose the 15% Federal RPS Mandate in the Energy Bill A new energy bill expected to reach the House floor soon contains a one-size-fits-all federal renewable portfolio standard (RPS) mandate that would require shareholder-owned electric utilities to obtain up to 15% of their electricity from renewables by 2020, or make equivalent payments to the federal government. Such a federal RPS mandate would raise electricity prices for consumers; upset ongoing renewable energy programs in the states; create winners and losers among states, electricity generators and electricity suppliers; and impose new burdens on electric reliability. Moreover, an RPS is not a solution to achieving energy independence. The federal RPS mandate should be opposed for the following reasons: The RPS mandate could cost electricity consumers billions of dollars in higher electricity prices, with no guarantee that additional renewable generation will actually be developed. A nationwide RPS mandate will lead to a massive wealth transfer from electricity consumers in states with little or no renewable resources to the federal government or to states where renewables are more abundant. The RPS mandate is essentially an electricity tax, with the heaviest burden falling on states without renewable resources. The RPS mandate undercuts or preempts the state renewable plans that already exist in 26 states and the District of Columbia. If states choose a lower percentage requirement, a more measured timetable, or qualifying renewable resources that do not comply with the federal mandate, they will be preempted. Every state with an RPS program has chosen renewable resources that qualify for credits under their state program that would fail to receive credits under the federal program. States also can modify their state programs to adjust to changing circumstances, unlike the rigid, one-size-fits-all federal program in the House RPS provision.

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Lobbies Push Tariffs
Labor and industrial lobbies will force implementation of carbon tariffs Stratfor, 11/29, 2007, "Global Market Brief: Carbon Tariffs as New Protectionism",
http://www.stratfor.com/analysis/global_market_brief_carbon_tariffs_new_protectionism The U.S. ambassador to the European Union recently endorsed trade sanctions as a way of pressuring China and India into reducing their emissions, and claimed that a WTO-compliant way to account for emissions — such as requiring a fee on goods based on the carbon emitted during manufacturing — could be possible. If China does not price carbon into its economy, several sectors of the U.S. economy will be hit particularly hard. For instance, China exports a significant amount of cheap steel compared to the United States, in part because China produces steel less efficiently, producing much more carbon dioxide per ton. If the United States imposes a carbon price for steel on domestic production as part of its carbon reduction plans — making its industry even less competitive — and China continues to pollute at similar levels, pollution may actually increase as more steel production moves to China. U.S. jobs will suffer as well. Thus, U.S. environmentalists, labor and industry will be on board for implementing carbon tariffs. As the European Union embarks on even stricter emissions targets in its post-Kyoto discussion, and China likely makes only slight alterations to its carbon-intensive economy, discussion of carbon tariffs will not abate and could eventually be brought to the WTO. Trade measures that aid domestic industries while addressing environmental concerns often make contentious WTO cases, but there are precedents for ruling in favor of environmental matters over business interests. In 2001, the United States won a WTO case in which several Southeast Asian nations challenged its prohibition of importing shrimp captured in ways that harm endangered turtle species. If China remains noncommittal about cutting its emissions, and if carbon tariff proposals fail, other forms of disguised protectionism — such as carbon labeling — will be proposed. This already is occurring in some parts of Europe and is similar to genetically modified food labeling and country-of-origin labeling, which businesses and governments often promote to benefit domestic and local industry.

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Kills Steel Industry

Energy independence has the potential of destroying the entire steel industry along with other industries. Alhajji and Longmuir (A F and Gavin, A F Alhajji is an energy economist and professor at Ohio Northern University; Gavin Longmuir is a petroleum engineer independence, The Edge Malaysia, March 5, 2007 Lexis Nexis) //am
In spite of these possibilities, let's assume that plans for energy independence succeed, and that several European
countries, the US, Japan, China and India become self-sufficient. Major oil exporters could then seek to use their now less-valuable oil at home as cheap fuel for an expanded heavy industrial sector. Instead of exporting oil directly, they could export their energy embedded in metals, chemicals and manufactured products at prices that undercut anything producers in the oil-consuming countries, especially Europe and the US, could match, given their dependence on higher-cost alternative energy sources. Energy independence thus could destroy entire industries, especially petrochemicals, aluminium and steel. In fact, cheap energy in oil-producing countries might make their new industries competitive with those in China, India and Southeast Asia. The net result would be a loss of jobs and weakened economies. Countries might end up energy-independent, only to become steel-dependent affiliated with the International Petroleum Consultants Association, My Say: The paradox of energy or petrochemical-dependent.

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AT: WTO blocks tariffs
WTO can’t limit tariffs on imported goods
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf Assigning a Price Once the carbon intensity of a product is established, the way compliance costs are assigned depends on the domestic regulatory framework in place. The Lieberman-Warner bill, a cap-and-trade approach, requires importers of covered goods to purchase emissions allowances from a special pool to cover the embedded carbon in the shipments entering the United States. These “international reserve allowances” are separate from the domestic allowance pool. A number of factors determine whether this system would impose the same costs on foreign producers as faced by those within the United States. First, in order to pass the WTO’s nondiscrimination test, the price of international reserve allowances cannot be allowed to exceed the price of domestic allowances. There is not, however, a corresponding limit on how expensive domestic allowances are relative to allowances for imported goods. Under the LiebermanWarner bill, this is left to administration discretion.

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AT: Cooperation/China Complies
China won’t cooperate or comply with climate legislation
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf Options for International Cooperation It is unlikely that multilateral negotiations will produce a perfectly harmonized international climate policy within the same timeframe as the implementation of climate legislation in the United States. Yet while developing countries are reluctant to agree to the same type of absolute caps on emissions expected of the developed world under a post-Kyoto framework, there is considerable scope for other forms of commitments that could, in fact, be even more successful in leveling the carbon playing field internationally. China, the source of much of the concern in the US climate policy debate, is working aggressively to curb the growth and improve the efficiency of its carbon-intensive industries, out of local environmental and energy security concerns.

If China were to stop releasing co2 emissions, these emissions will still rise up.
H. Sterling Burnett, an environmental policy analyst with the National Center for Policy Analysis, a non-partisan, non-profit research and education institute, No Date National Center for Policy Analysis,

http://www.ncpa.org/oped/sterling/aprnatgas.html According to the International Energy Agency, as much as 85 percent of the projected increase in CO2 emissions will come from developing countries - the same countries and regions exempted from the proposed treaty (China, India, South Korea, Mexico, Brazil, etc.). The U.N. estimates exempted countries will contribute 76 percent of total greenhouse gas emissions within the next 50 years. By 2025, China alone will emit more carbon dioxide than the current combined total of the United States, Japan and Canada. Thus, even if developed countries unilaterally stopped all their greenhouse gas emissions immediately (something no one seriously proposes), total greenhouse gas emissions would continue to rise.

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AT: Cooperation/China Complies
For the electricity market, China agreed with a tariff arrangement than an RPS program. Chris Greacen, Ph.D., Joint Graduate School for Energy & Environment, Feed-in Tariffs: International experiences and recommendations for implementation in Thailand, March 2006, www.palangthai.org/docs/FeedinTariffs
China originally considered developing an RPS program, but because of lack of independent regulatory oversight (a condition shared with Thailand) and remaining challenges in developing competitive electricity markets (a condition also shared with Thailand), China decided that a feed-in tariff arrangement would be more effective. A Chinese delegation of lawmakers on a study tour to UK, Spain and Germany observed: “We do not have the perfect electricity market like European countries, and Chinese enterprises do not have strict self-discipline, like Germany enterprise. Therefore, simple, effective, easy for check and supervise measures are the main method in renewable energy legislation. Fixed or incremental renewable power price [feed-in tariff] might be the first choice.”

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AT: Cooperation/China Complies
China isn’t interested in modeling US environmental policies Rep. Joe Barton, (R-Texas), ranking member of the Energy and Commerce Committee., April 21, 2008, Cap-and-Trade Doesn't
Work, Hurts Economy, <http://republicans.energycommerce.house.gov/News/PRArticle.aspx?NewsID=6718> Global warming is a trillion-dollar problem, and we’ve always taken it seriously on the House Energy and Commerce Committee. Under Republican and then Democratic leadership, we have been assembling a remarkably thorough record of facts and views from experts. The more we learn, the more I believe we need to apply a common-sense test to any lawmaking that might follow: We want to keep the lights on; we don’t want the cost of using energy to bankrupt working people; we want them to drive what they want to drive and go where they need to go; and above all, we want them to keep their jobs. America has big energy challenges in the next 20 years. Electricity production must grow by at least 40 percent. The demand for motor and aviation fuels is expected to increase 1 percent to 3 percent a year, and the requirement for natural gas to heat our homes, cook our food and fuel our industry is headed up. That’s why I welcomed the agreement between BP and ConocoPhillips to build a new natural gas pipeline from Alaska. We’ve gotten by with the same gas supply levels for a decade, and you can see it in the cost of heating a house even after a 19 percent demand reduction by industrial gas users. In short, life and prosperity in America require energy, and we’ve got large domestic reserves of it right here in the neighborhood. Maybe that’s the most important aspect of the pipeline agreement — it’s a move to be self-reliant instead of betting more of our future on energy from across the oceans. Another problem with adopting a cap-and-trade program for the United States is that even if we want one, it is very unlikely that developing nations would do the same. Some argue that America needs to cap emissions unilaterally because doing so will inspire the world’s big polluters like China and India to follow us. China, the planet’s largest emitter of greenhouse gases, isn’t interested. Each year, China adds more coal-fired electricity generation than all the power in Texas, and Texas is the U.S. leader in electricity generation. China is committed to raising its enormous population from poverty, and it has given every indication that it intends to stick with the current policy of breakneck economic development and job creation. China argues that it has the right to grow and raise its standard of living closer to ours, and if we want to reduce worldwide emissions, we should do it by ourselves. In summary, cap-and-trade works badly in Europe, is DOA in Asia and makes no economic sense in America. So what’s the answer? We could begin by not abandoning hope and trying to tell people all the things they can’t do — can’t drive to work, can’t turn on the lights, can’t ... well, you name it. Contrary to the frenzied reporting on the subject, the science of global warming is not settled, carbon dioxide is not a pollutant and prosperity is not evil. But if we ultimately decide that some kind of action makes sense, let’s start by helping our people find ways to succeed instead explaining all the things they’ll no longer be permitted to do. I, for one, haven’t given up on the quaint idea that innovation and ingenuity will respond to consumer demand in a free market. Washington is full of talk about the rise of “green-collar” jobs, but nearly everybody here thinks a green-collar worker is a government employee. The trick for policymakers, scientists and industry will be to get new, low-carbon technologies out of the laboratory and into homes, cars and businesses by inventing products and services to sell instead of rules to impose. We all want a clean environment, and I believe we can have one. I also believe we can have economic prosperity and job growth if we use market forces, not government mandates, to join the two together.

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Impacts

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Trade War Bad - Economy
A trade war will destroy businesses on both sides Dan Steinbock, staffwriter for China Business, 10/18/2007, Multinationals fear US China Trade War, <
http://www.atimes.com/atimes/China_Business/IJ18Cb01.html> After several Chinese product recalls in the US, China retaliated by rejecting US goods for quality deficiencies. Now, Washington and Beijing have filed complaints against each other at the World Trade Orgaization (WTO). The US Congress is about to enact legislation that would levy punitive duties on Chinese goods. This could lead to unintended consequences for both American consumers and the wider US economy. Some 119 leading multinational companies agree - including Boeing, Citigroup, General Motors, and Microsoft. They have called on Congress to reject protectionist legislation against China, arguing that "imposing unfair barriers to trade in the name of currency valuation or product safety is not a solution to the underlying concerns". It was "a vote for free trade", reported the state-owned China Daily, which, as so many other Chinese observers do, argues that rising protectionism among some US lawmakers "seriously threatens the interests of China, the United States itself and the world at large". The flat world in Guangzhou As the high-speed ferry took off from Hong Kong, the young municipality worker continued to read his copy of Thomas Friedman's bestseller, The World is Flat. He had about an hour to go before the ferry would dock in Guangzhou. "This book has a great following in China," he said. "The world is flat." In Guangzhou, the capital of southern China's Guangdong province, such views are common. With 92 million people and a GDP of US$284 billion in 2005, Guangdong is the most prosperous province in China, accounting for more than 12% of the national total. It also has the highest volume of imports and exports. But Friedman's world may be fading. "Exaggerating individual cases and doubting the quality of all made-in-China products has hurt our reputation and caused economic losses to our exporters," said Qi Xiuqin, a high-level official at China's quality supervision administration (GAQSIQ) in mid-September. According to a recent GAQSIQ report, some 30% of a sample of 2,500 Chinese exporters suffered economic losses from the imposition of technical trade barriers last year. The companies lost $35.9 billion, up from $28.8 billion in 2005. Increasing friction Last April, the United States took China to the WTO over piracy and copyright protection. Beijing said that the decision would "seriously damage" bilateral cooperation and harm business ties. Washington has brought four complaints against China to the WTO since 2006. International trade, however, is a two-way street. In mid-September China filed a complaint against the US over its combined countervailing anti-dumping rulings on Chinese coated paper. The WTO case is the first initiated by Beijing against Washington in five years. After high-profile Chinese product recalls in the US, Chinese inspectors have seized, returned or rejected a slate of US-made product shipments - from orange pulp and dried apricots with high levels of bacteria and preservatives, to powdered milk imports too toxic for children. In the most recent case, a shipment of 47 tons of frozen sardines originating from the US was rejected. Chinese regulators said it was infected with disease-inducing bacteria. 'Playing with fire' Last summer, Senators Hillary Clinton and Barack Obama agreed to co-sponsor legislation that would levy punitive duties on Chinese goods. The bipartisan bill introduced by senators Max Baucus, Chuck Grassley, Charles Schumer and Lindsey Graham, would permit US companies to seek anti-dumping duties on Chinese imports based on the undervaluation of the currency. During the past few weeks, US Treasury Secretary Henry Paulson has repeatedly warned Congress against making legislation aimed at punishing China over its economic policies. "When we look at taking unilateral actions aimed at another nation, this can have enormous repercussions to our economic well-being," Paulson said. "You know, we're playing with fire." Typhoon arising As we approached Guangdong, the municipality worker set aside his book. "For Chinese people, it is sometimes hard to understand America," he said. "We have opened our doors to Coca-Cola, Ford, Motorola, and GE. We want to do business. We believe that it's a win-win to China and America. We thought that America believed in a flat world."

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Trade War Bad - Economy
The US will lose a trade war to a country it owes $230–billion in trade deficits L.A. Times, 4/5/2007, No Papering it Over, < http://articles.latimes.com/2007/apr/05/opinion/ed-china05>
NOT TOO MANY Americans will be much affected by a U.S. tariff on Chinese coated paper, and even fewer noticed when the Commerce Department announced the move last week. Yet the decision to impose a 10% to 20% import penalty could be the opening shot in a trade war between the world’s largest economy and its fastest growing. It’s a war that neither side can win, and one that the U.S. should take pains to avoid. Unfortunately, Congress may make that impossible. For 20 years, it has been U.S. policy not to impose “countervailing” duties – basically tariffs on goods from state-subsidized industries – on China. The theory was that, in a state-controlled economy, pretty much everything is subsidized, so it’s pointless to pick out a single industry for punishment. With its announcement last week, however, the Commerce Department signaled that it now considers China a market economy, not a state-controlled economy. And as its welcoming gift to the world of market economies, the U.S. is presenting China with The move is troubling practically as well. It could open the door to tariffs on other Chinese imports, such as steel and textiles. The Commerce Department is not scheduled to finalize its decision until October, although the tariffs take effect immediately. China has already called the tariff unacceptable and says it reserves the right to challenge it, probably before the World Trade Organization. Congress, meanwhile, alarmed at China’s $230-billion trade surplus, is considering a variety of protectionist measures to bring the account into balance. Some could severely damage the economies of both countries, like a bill from Sen. Byron L. Dorgan (D-N.D.) to revoke China’s normal trade-relations status. A proposal from Sens. Charles E. Schumer (D-N.Y.) and Lindsey Graham (R-S.C.) that threatened a 27% tariff on all Chinese imports was withdrawn last year, but the senators are working on a new bill that could hurt U.S. consumers nearly as much. The U.S.-China trade deficit exists mostly because American consumers buy a lot of low-priced goods from China – and China maintains those low prices by keeping its currency undervalued compared to the dollar. This is a legitimate source of frustration for many in Congress, but it’s not worth a trade war. By slapping a tariff on Chinese paper, the Bush administration may think it is appeasing congressional protectionists. But there’s no guarantee they’ll be satisfied.

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Trade War Bad – Economy
Tariff war with China will cause massive inflation
World Money Watch, April 4, 2007, US Tariff damages China Relations – Expect Higher Prices, <http://www.worldmoneywatch.com/US-China-relations.htm> Last week, the U.S. Department of Commerce announced its preliminary decision to apply penalty tariffs to paper imports from China. It claims that the Chinese government unfairly provided subsidies of 10-20% to its manufacturers of the glossy type of paper used in books and magazines. Although the trade volume is only $224 million, (less than .1% of the $288 billion in goods imported from China in 2006) it has grown 177% in one year. New Page Corp brought the anti-dumping case to the Commerce Department, saying it cannot compete against these subsidized prices. The Chinese are concerned that other industries in the U.S. will follow, such as textiles, garments, as well as iron, steel and plastics. Other countries, notably Japan, Mexico and Canada, are likely to file anti-dumping resolutions as well, further hurting China’s export trade. What the U.S. tariff means to relations with China: First, since it is a preliminary decision, the Chinese may remove the subsidies to avoid an actual tariff. However, if the tariff is instituted, then it could trigger a trade war. This would result in higher prices for imports, which could then lead to inflation. The Chinese believe that the Commerce Dept. is reacting to pressure from the U.S. Congress to reduce the $233 billion trade deficit with China. In response, China could allow the yuan to rise in value, allowing U.S. exports to be priced in cheaper dollars. The mechanism is in place, since China has already signaled that it will reduce its holdings of U.S. Treasury notes (See “Paulson to visit China”). The declining dollar would reduce the trade deficit, but also increase the cost of imports, also triggering inflation.

Increased inflation forces the Fed to raise interest rates which pop the real estate bubble, crush bonds and stocks and create another Great Depression Doug Casey, economist and head of Casey research, 6/2006, What we know now, “The Greater Depression-an Update”<
http://www.howestreet.com/articles/index.php?article_id=2588> Well, one obvious indicator is how the price of gold is running. Gold is the only financial asset left in the world that’s either safe or cheap. It’s also under owned and largely unrecognized, which is why the smart money has been moving into it. Then there’s the CPI itself—although I don’t think it’s very accurate, in that all the adjustments, exclusions, weightings and whatnots the government has insinuated into it over the years makes the CPI as much of a floating abstraction as the dollar itself. It’s funny how the government plays with figures for fear of hurting confidence. They believe the economy rests mainly on confidence, which, ironically, in today’s world, is true. Unfortunately, confidence can blow away like a pile of feathers in a windstorm—and we have a class-5 hurricane coming. If the economy were sound and people for some reason lost confidence, the currency and the banks would be unhurt, and the next day things would go back to normal. But that’s not the world we live in. So, higher CPI numbers are another thing that could destroy confidence and supercharge the gold price. They’re coming. Higher interest rates, which we’re already seeing, will inevitably burst the real estate bubble, which is floating on a sea of mostly adjustable-rate debt, a lot of it interest-only or even with negative amortization. Higher rates will also crush bonds and probably stocks. And they’ll devastate the economy since everybody is deeply in debt. However, I feel the Fed will keep shortterm rates—which are really the only ones they control—as low as possible for as long as possible. For one thing, they don’t want a recession, which this time could snowball into the Greater Depression. For another, my guess is that they want to gradually depreciate the dollar against other currencies, in part to decrease the chronic, massive trade deficit. And because increasing the number of dollars makes people think they’re richer than they really are, it can stimulate some additional spending… but these days that spending is mostly done on credit, so it is only illusionary.

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China Trade DA DDI 2008

Trade War Bad – Economy
Provoking China over trade collapses the economy faster than a nuclear strike (Bill Ridley, 2005, "U.S. BULLIES CHINA - DOLLAR CRISIS LOOMING" <http://www.goldeagle.com/editorials_05/ridley061605.html> A few months ago in my report "China and the Final War for Resources" I pointed out that the Government of China realizes that in order for their country to grow and survive in the years ahead, they must secure resources, primarily oil supplies. They also view the United States as a major hindrance to this objective, not only because the U.S. is the world's biggest consumer of oil but the U.S. government itself is viewed as being unpredictable, aggressive, and warlike as far as the Chinese leaders are concerned. To win this war, the hard line doctrine taken from the treatise "Unrestricted War: China's Master Plan to Destroy America" instructs that currency revaluation or devaluation is a primary weapon which when initiated, will create financial turbulence and economic crisis within the U.S. and thus give the Chinese the opportunity to advance their own version of national security. In analyzing the precarious predicament that has $1.94 trillion U.S. Treasury debt owned by foreign banks, most notably China, the overloaded U. S. debt burden is already teetering on a fine line. Any hint of a problem in maintaining support of U.S. bonds would create an instantaneous meltdown of the greenback with a simultaneous surge in the price of gold. However despite this, the Treasury Department warned China last month they have until November to make their exchange rate more flexible or they will be labeled as currency manipulators. This charge would start bilateral talks on the exchange rate and possibly retaliatory action. Currently the yuan is pegged with the U.S. dollar at 8.3:1 giving China, with its low labor costs, an excellent trade advantage which both Republican and Democratic politicians have been strongly complaining about for the last few years. I would have to conclude that these bureaucrats are only looking at the trade imbalance with China and ignoring the tenuous nature of the important reliance on foreign debt purchases. As Business Week warned, a revaluation of the yuan could have other serious repercussions for the dollar. "With a stronger currency peg versus the dollar, China would purchase fewer bonds, as would Asian central banks if they were to cut back on currency market intervention. And further weakness in the Treasury market with a resulting bump higher in interest rates, could weigh on the long-gestating US recovery. In that regard, US lawmakers should be very careful what they wish for." Provoking China is a dangerous game and could have extremely serious consequences not only for the U.S. economy but the world economy. If China ever pulls the trigger on their "primary weapon" the dollar will crash and gold will break $600 in a heart beat and just keep going. Zhu Min, general manager and advisor to the President for the Bank of China was quoted in the China Daily last year saying that: "The United States is benefiting from China using its trade surplus to buy U.S. Treasury paper as a reserve currency, along with other Asian nations. But in the long run, this is not sustainable.... China will focus more and more on domestic demand, which is growing fast. Then we won't be able to finance the U.S. deficit." real assets in the form of precious metals and energy equities. No matter what happens in the future at least you will sleep and night and profits in the process.

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Trade War Bad – Economy
China will emerge victorious over an economically shattered US (Bill Ridley, 2005, "U.S. BULLIES CHINA - DOLLAR CRISIS LOOMING" <http://www.goldeagle.com/editorials_05/ridley061605.html> Last year, the Wall Street Journal observed that a sell off of U.S. treasuries from a large debt holder like China would put the U.S. economy into a tail spin. Long term interest rates would climb and bond yields would sky rocket. This could start a stampede of selling which would devastate the stock market. This is the treasury trap America is in. In May The People's Bank of China said it would not respond to a US Treasury report calling for the central bank to move to a more flexible exchange rate within six months. A bank spokesman stated that "We have no comment whatsoever on this. We have made very clear our policies on China's foreign exchange reform." China's Premier Wen Jiabao also weighed in saying China will not bow to outside pressure on the exchange rate for its currency. All this rhetoric has gotten the attention of United Nations economists who have stated that China has an important role in the world wide economy and recovery. However in the same breath they also warned that the U.S. had better reduce it's deficit or there could be serious repercussions not only in the U.S. but globally. These thoughts have also echoed an International Monetary Fund (IMF) report that described the deficit as "perilous" in the long term and poses "significant risks" to the rest of the world. "The United States is on course to increase its net external liabilities to around 40 percent of its GDP within the next few years - an unprecedented level of external debt for a large industrial country." The bottom line of the report quite correctly forecasts this current dilemma will create a further meltdown of the dollar. In light of the U.S. government's huge and increasing debt load, the politician's aggressive stance on the free trading issue of the yuan, the need of China and other foreigners to bank roll the $ 1.9 trillion of U.S. debt [and], warnings from the U.N. and IMF about America's out of control spending - you must wonder what the hell these U.S. bureaucrats are thinking? These are serious issues which I hope you, dear reader, will take to heart. A strategic analysis of your current equity portfolio would be advisable with emphasis on real assets in the form of precious metals and energy equities. No matter what happens in the future at least you will sleep and night and profits in the process.

The perception that China will retaliate is enough to devastate the economy Asia Times 1/23/2004 < http://www.atimes.com/atimes/Global_Economy/FA23Dj01.html>
One has to question the long-term economic rationale for China of putting its long-term assets into very low-interest bonds in a currency that has already dropped recently by a third - and is going to drop even more. It certainly makes strategic sense: if push came to shove over, for example, the Taiwan Strait, all Beijing has to do is to mention the possibility of a sell order going down the wires. It would devastate the US economy more than any nuclear strike the Chinese could manage at the moment.

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China Trade DA DDI 2008

Trade War Bad – Eonomy
Imposing carbon taxes on China kills the economy Mary-Anne Toy, April 24, 2007, "China flags hard line on climate", <http://www.theage.com.au/news/world/china-flags-hard-lineon-climate/2007/04/23/1177180567874.html?page=fullpage> THE push for a global consensus on reducing greenhouse gases has been dealt a potentially serious blow, with a major report by the Chinese Government declaring that economic growth must take priority over cuts in emissions. Despite dire warnings about the effects on China of a warming planet, Beijing's first official report on climate change flatly rejects international pressure to impose emission limits on its factories and coal-generated power plants as unfair and economically perilous. "If we prematurely assum[ing] responsibilities for mandatory greenhouse-gas emissions reductions, the direct consequence will be to constrain China's current energy and manufacturing industries," the report says. "Developing the economy and improving people's lives remains the country's primary task." The report, released yesterday, provides another sobering message to rich nations about the difficulty they face in persuading major developing nations, in particular China and India, to sign up for tough, mandatory limits on greenhouse emissions. It will also give further ammunition to the Howard Government, which has justified its own refusal to introduce drastic greenhousereducing measures by arguing such schemes are futile unless big polluters such as China and the United States are also on board. Prime Minister John Howard yesterday echoed some of the sentiment of the Chinese Government report, arguing in a major speech that maintaining economic prosperity — rather than climate change — was Australia's great moral challenge. Rejecting the stance of Opposition Leader Kevin Rudd, Mr Howard declared: "Australia emits less greenhouse gas in a year than the United States or China emit in a month. "Do we need to lower carbon emissions over time? Of course we do. But to say that climate change is the overwhelming moral challenge for this generation of Australians is misguided at best; misleading at worst." Although China's per capita emissions are very low compared with developed nations such as Australia, its enormous population means it is set to overtake the US as the world's top emitter of human-generated greenhouse gases within a year. The National Climate Change Assessment, a 400-page report written by experts and officials from more than a dozen ministries and agencies and several years in negotiation, is China's first official assessment of global warming's impact. The report warns that by the end of the century, the glaciers on the Qinghai-Tibet highlands that feed the Yangtze River could shrink by twothirds. It also says heavy rainfall could "spark mud and landslides, and other geological disasters" around the massive Three Gorges Dam, the world's biggest hydro-electricity project that is a key part of China's efforts to move away from coal-powered energy. Despite the damning findings, the report emphasises that China cannot afford to restrain economic development. China has also been working on a national strategy to fight climate change but is not expected to announce emissions caps. The action plan was due to be released this month but may be delayed. China has previously resisted accepting mandatory international emissions limits, saying that rich countries are responsible for the accumulation of greenhouse gases and should not penalise poorer countries such as China, which are trying to fight poverty and need to continue industrialisation to do so. China is a signatory to the Kyoto Protocol, but as a developing country is exempt from mandatory gas emission targets. China's own national climate change assessment says coastal cities will need to build or strengthen barriers to ward off rising sea levels and unless steps are taken, water scarcity and increasingly extreme weather could reduce nationwide crop production by up to 10 per cent by 2030. Wheat, rice and corn growing capacity could fall by up to 37 per cent in the second half of the century.

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China Trade DA DDI 2008

Trade War Bad – Economy
US China trade wars will destroy the global economic fabric Robert Collier, scholar at the Center for Environmental Public Policy, author of China and Global Warming, 5/6/2008, China
Faces Trade War Climate Challenge, < http://www.atimes.com/atimes/China_Business/JE06Cb01.html> China in recent months has taken center stage in the international debate over global warming. It has surpassed the United States as the world's largest source of greenhouse gases, and it became developing nations' diplomatic champion at the recent United Nations climate negotiations in Bali. Now China may become the target of a full-fledged trade war that could destroy, or perhaps rescue, the chances of bringing rich and poor nations together to fight global warming. The focus on China intensified late last year, when data from the International Energy Agency and other research organizations revealed that China had overtaken the United States as the largest source of greenhouse gases, and, more ominously, that its emissions are growing at a rate that exceeds all wealthy nations' capacity to decrease theirs. Even if China met its own targets for energy conservation, its emissions would increase by about 2.3 billion tonnes over the next five years, far larger than the 1.7 billion tonnes in cutbacks imposed by the Kyoto Protocol on the 37 developed "Annex 1" countries, including the United States. After the inconclusive end of the UN-led Bali talks on the global environment, worry has grown among US and European industries especially iron, steel, cement, glass, chemicals, and pulp and paper - that any new climate treaty would put them at a big disadvantage against their fast-growing competitors in China. In response, the US Congress is moving to create a system of trade sanctions that would levy heavy taxes on imports from other major greenhouse gas emitters. Ironically, the American plan is taking shape even before the US takes any action to reduce its own emissions, inviting charges of hypocrisy, violation of international law, and threatening a major trade war. The tariff proposal, contained in the central piece of global warming legislation now before Congress, would impose emission controls on domestic industries starting in 2012. It would also levy punitive tariffs on greenhouse-gas-intensive products imported from countries that lack "comparable action" to that of the US, starting in 2020. Industrial lobbies and labor unions are pushing hard for these sanctions to take effect more quickly. European Commission president Jose Manuel Barroso, French President Nicolas Sarkozy and industrial chambers of commerce strongly advocate a similar tariff system, leading many analysts to predict that the EU will also adopt some sort of green tariff system in the next few years. Warning of an "all-out trade war" if the sanctions go forward, US Trade Representative Susan Schwab argues that green trade sanctions would violate World Trade Organization rules. In a recent letter to the House Energy and Commerce Committee, she wrote, "We believe this approach could be a blunt and imprecise instrument of fear, rather than one of persuasion, that will take us down a dangerous path and adversely impact US manufacturers, farmers, and consumers." Developing nations' allies, meanwhile, are warning that the sanctions plan could destroy the chances of a post-Kyoto treaty. Chinese diplomats have not responded directly, but they have noticeably hardened their stand on climate talks. In February, China's top climate negotiator, Yu Qingtai, said at the UN that rich nations, which "caused the problem of climate change in the first place," must be treated as "culprits" and developing countries as "victims". Despite China's official hard line, some Chinese environmental officials privately express alarm at runaway carbon emissions and suggest that foreign green tariffs would actually strengthen their hand in domestic policy struggles over controlling greenhouse gases by helping to win political support for emissions cuts. Pan Yue, vice director of the State Environmental Protection Administration, recently argued in a China Daily article in favor of stronger emissions regulations and a more "green-oriented China", warning that "China's image among the international community" was in jeopardy. The growing dispute over trade sanctions brings to the fore not only the fundamental ethical question of whether wealthy nations should bear the burden of emissions reduction alone but also the strategic question of whether sticks as well as carrots should be used to induce green behavior in developing countries. Although China may not like it, the international trading system may provide more leverage than any other post-Kyoto mechanism over developing countries' environmental policies. Despite the threat of trade wars, trade sanctions could emerge as the most effective means of forcing international action on global warming.

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Trade War Bad – Economy
US–China diplomatic dispute will spill over to dollar dumping Brad Setser, Oxford, and Nouriel Roubini, Professor Economics – NYU, 2005 (Foreign Affairs 84.4)
The United States has a particularly delicate relationship with China. To date, disagreements on other issues have not prompted China to slow its accumulation of dollar reserves, but that is not to say that it could not happen in the future. The ability to send a "sell" order that roils markets may not give China a veto over U.S. foreign policy, but it surely does increase the cost of any U.S. policy that China opposes. Even if China never plays its financial card, the unbalanced economic relationship between the United States and China could add to the political tensions likely to accompany China's rise.

China will crash the dollar in response to tariff wars Telegraph 10/8/2007
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml) Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies. Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels. It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds. Xia Bin, finance chief at the Development Research Centre (which has cabinet rank), kicked off what now appears to be government policy with a comment last week that Beijing's foreign reserves should be used as a "bargaining chip" in talks with the US. "Of course, China doesn't want any undesirable phenomenon in the global financial order," he added. He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.

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China Trade DA DDI 2008

Trade War Bad – Hegemony
Trade wars with China undermines US hegemony (Henry C K Liu, Asia Times Online, 8/20/05, Trade wars can lead to shooting wars,
http://www.atimes.com/atimes/Global_Economy/GH20Dj01.html) Developing countries should not misconstrue isolationism as an effective strategy of anti-imperialism. Quarantine is a strategy that deprives the subject of any chance of developing effective immunity against invading viruses that eventually exposes it to more serious vulnerability. Yet US policy on China will impact the outcome of China's policy debates with serious consequences. Hostility breeds counter-hostility, and protectionism breeds counter-protectionism. Isolation between hostile nations leads inevitably to war. Kissinger went on in the same article: "With respect to the overall balance, China's large and educated population, its vast markets, its growing role in the world economy and global financial system foreshadow an increasing capacity to pose an array of incentives and risks, the currency of international influence. Short of seeking to destroy China as a functioning entity, however, this capacity is inherent in the global economic and financial processes that the United States has been pre-eminent in fostering." A China forced defensively by hostile US policy into isolationism, a recurring tendency throughout its long history, ironically would lead to regional decline and instability that would quickly turn global in this interconnected world. The decline of China that began in early 19th century was traceable in part to Chinese self-imposed isolationism, in contrast to Japan's forced opening to the then more technologically advanced West that led to the Meiji Reformation. The modern history of China might have been totally different if isolationism had not prevailed in Chinese politics in the early 1800s, and modernization had been allowed to proceed with needed stimulation from mutually beneficial contacts with the West before Western imperialism had a chance to take shape. An internationally engaged China will be a positive force for world peace and prosperity. As the enormous China market becomes reality from rising income, it will impact traditional international economic relations to restructure residual prejudicial racial enmity and Cold War geopolitical alliances and give rise to a new mode of world order free of residual racial phobia and obsolete ideological conflicts. US hostility and preemptive strategy toward a peacefully rising China may be forced to fall back on ineffective US unilateralism, devoid of willing partners even from among its residual Cold War allies. Trade protectionism will lead to isolationism, a movement with a significant past in US history. Yet as a superpower, the US cannot isolate itself from the rest of the world without severe penalties. Or to put it another way, the cost of US isolationism is the forfeiture of its superpower status. Kissinger observed correctly in the Washington Post article that "in a US confrontation with China, the vast majority of nations will seek to avoid choosing sides". Already, normally dependable US allies such as the United Kingdom, the EU (particularly France and Germany), Japan, Australia and even Israel are experiencing rising conflicts with US policy on China. These nations are beginning to see US demands for unquestioning support of its hostile policy on China as not being congruent with their separate national interests. Everywhere else in the world, from Asia to Latin America, from the Middle East to Africa, sympathy for China's effort to regain its natural prominence in the world and positive response to its effective development strategy are mounting while appreciation for unilateral US security and economic policies is falling. While the US is still a juggernaut in its coercive ability to commandeer much of the world's wealth, its ability to produce wealth appears to have declined. It is becoming increasingly obvious to some in Washington that a military option is the answer to arresting US economic decline that threatens the country's superpower status. Eleven of the 16 countries surveyed in June by the US-based Pew Research Center - Britain, France, Germany, Spain, the Netherlands, Russia, Turkey, Pakistan, Lebanon, Jordan and Indonesia - had a more favorable view of China than of the US. The survey on global attitudes finds that while China is well regarded in both Europe and Asia, its burgeoning economic power elicits mixed reactions. Majorities or pluralities in France and Spain believe that China's growing economy has a negative impact on their own economies. Respondents in the Netherlands and Britain, traditionally free-trade nations, have much more positive reactions to China's economic growth. Public opinion in the United States on this issue is divided; 49% view China's economic emergence as a good thing, while 40% say it has a negative impact on the US. Whatever their views on China's increasing economic power, European publics are opposed to the idea of China becoming a military rival to the US, despite their deep reservations over US policies and hegemony. Solid majorities in every European nation except Turkey regard China's emergence as a military superpower as undesirable. In Turkey and most other predominantly Muslim countries, where antagonism toward the US runs much deeper at this time in history, most people think a Chinese challenge to US military power would be a good thing.

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Trade War Bad – Nuclear War General
US will use tariff water guns – China will use nuclear bombs BusinessReport, 5/28/2007, Trade War Looms over US China,
<http://www.busrep.co.za/index.php?fArticleId=3853174&fSectionId=552&fSetId=662> Washington - Ties between the US and China could become turbulent as combative US law makers threaten Beijing with punitive trade sanctions that could draw the ire of Chinese leadership. A week of high-level talks in Washington failed to end their biggest dispute, over China's undervalued currency, opening the prospect of a trade war between the world's richest and the world's most rapidly growing nations. The Pentagon warned on Friday that cash-flush China was militarising under an opaque budget and that Beijing's ballistic nuclear missiles could now strike the US. The administration of US President George W Bush seems to have taken a more aggressive trade stance, while many in congress discuss passing, not just proposing, anti-China bills. "Previous instances of [US] protectionist rhetoric have ended in little action, but the risks of actual action are a bit higher this time," warned Alec Phillips, a Goldman Sachs analyst. Protectionist sentiment in Washington was high despite low US unemployment and inflation and record equity prices, which would normally stymie such sentiment. "This raises two risks," Phillips warned. "First, the Congress, which has become increasingly hostile towards trade, could impose policies that could sour the US-China economic relationship. Second, a softer labour market, in particular, might raise tensions beyond their already elevated levels [yesterday]." Talks led by Chinese vice-premier Wu Li and US treasury secretary Henry Paulson, as well as subsequent discussions between the Chinese leader and US members of congress, failed to end concerns over the yuan. Law makers said China undervalued the yuan, making US-bound exports cheaper and fuelling the US-China trade deficit, at $232.5 billion (R1.658 trillion) last year. Despite heavy dependence by the US on China, some law makers want trade sanctions, including a possible 20 percent across-the-board tariff on Chinese goods. Anti-China trade bills that were being drafted in congress "could ultimately disrupt bilateral trade flows and, more importantly, capital inflows from China", warned Joseph Quinlan, a Bank of America strategist. Reportedly, two-thirds of China's $1.2 trillion in reserves are in assets denominated in US dollars, including $420 billion in US Treasury bills. – AFP Beijing bourse nears boiling point Shanghai - Experts in China and abroad warned last week of an imminent contraction in the Asian giant's roaring stock markets but defiant investors remain confident that the market knows best. "The market will seek its own balance and correct itself," said Yan Li, an analyst with Chinalion Securities in Beijing. "The government should do nothing to interfere," she said, adding that it was increasingly difficult for China's regulators to influence a market that has tripled in value to about $1.6 trillion (R11.4 trillion) since 2005. The once-marginalised bourse, with a market capitalisation that is merely 2 percent of the $2.3 trillion A-share market, is seeing sharper rises now but it may spearhead any future correction. The week's broader market advance came despite warnings from former US central banker Alan Greenspan and the Organisation of Economic Co-operation and Development, a global group helping states tackle economic challenges, that current prices were unsustainable. - Sapa-AFP

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Trade War Bad - Global Warming
US China cooperation is key to solve global warming (William Chandler , Senior Associate, Carnegie Endowment for International Peace, March 2008, Breaking the Suicide Pact:
U.S.-China Cooperation on Climate Change) The United States and China must make accommodations to curb greenhouse gas emissions if both countries are to break their “suicide pact” of self-destructive, energy-using behavior. Together they produce 40 percent of global greenhouse gas emissions, yet both countries demand that the other take responsibility for climate change, meanwhile the threat of environmental disaster grows. For the first time, China is considering an emissions target while half of U.S. states have set their own targets—the time for a deal is now. In Breaking the Suicide Pact: U.S.-China Cooperation on Climate Change, William Chandler, director of the Carnegie Energy and Climate Program, identifies practical, non treaty-based approaches both countries could take to cut their carbon dioxide emissions across economic sectors—with little financial impact. He argues that China and the United States should work together to set individual, national goals and achieve them through domestically enforceable measures and international agreements that prevent either nation from taking advantage of steps taken by the other. Key Recommendations for U.S.-China Cooperation: Eliminate subsidies that discourage energy efficiency. Provide tax breaks for investment in efficiency and low-carbon energy and impose tax penalties on high-carbon energy. Make climate cooperation integral to trade policy, such as jointly setting production standards to limit the energy used to manufacture exports. Create partnerships between Chinese provincial officials and leaders in U.S. states on the forefront of climate change prevention to improve implementation of innovative energy policies. Promote market penetration of existing carbon emission reduction technologies and encourage development of new technologies by linking American laboratories more closely to Chinese markets to share research and development costs. Encourage banks in China to remove the regulatory cap on interest rates for energy-efficiency investments. “U.S.–China collaboration poses no threat to the climate leadership of any region or nation or to global cooperation. It is a complement, not a challenge, to existing and planned emissions cap and trade systems. This act of mutual self-preservation would help the United States and China to avert climate disaster and the eventual sanctions of other nations if they do not act, and lay the groundwork for successful global action,” concludes Chandler.

US–China cooperation spurs global cooperation against global warming; a purely multilateral approach is key Zach Arnold, June 12, 2008, "Cap-and-Trade's Achilles Heel", <http://breakthroughgen.org/2008/06/12/cap-and-trades-achillesheel/> As long as some countries restrict emissions and some don’t, firms will simply move their emissions rather than eliminate them, resulting in little to no reduction in overall CO2 emissions. There’s only one solution. A truly global carbon regime, one in which firms can’t escape a single carbon price, will leave no opportunity for countries to avoid the cost of carbon, and spur CO2 reductions rather than evasion. It’s perhaps with this in mind that many environmentalists have boosted cap-and-trade not so much for its actual effect on climate change as much as for its potential to enable America to broker a global carbon regime. Joe Romm exemplifies the trend: “If China won’t alter its coal policy to make its environment livable today even with the Olympics coming, it will require very strong international leadership (led by an America with a moral climate policy of our own) to have any chance at making them alter it to preserve a livable climate in the future.” But the developing world has already signaled its unwillingness to restrict emissions, no matter how hypocritically the U.S. may or may not be behaving. Besides, if we move first, then quite a few developing countries may find themselves with new industries, creating new interests against restrictions. Put more simply, we may not have time to get cap-and-trade right first. What we need, fast, is a clean energy technology portfolio that’s cheap worldwide – a set of technologies that make financial sense both to American utilities and Indian entrepreneurs, regardless of the policies in place in one country or another. The marginal renewable energy sources of today – wind, solar, geothermal and the like – could well come to fulfill this role, but only if policymakers focus their attention on tech deployment and development, rather than obsessively pursuing America’s emissions alone. Will capand-trade’s proponents wake up in time?

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Trade War Bad - North Korea
Effective US–China cooperation is key to prevent North Korean nuclearization Yoon Won-sup, Staff Reporter, 2008, "Both Soft, Hard Powers Needed for NK Denuclearization:"
<http://www.koreatimes.co.kr/www/news/nation/2008/02/116_18777.html> Harvard Professor Joseph Nye, who pioneered the theory of ``soft power,'' said that the resolution of the North Korea's nuclear weapons issue would require both soft and hard power. At a lecture for university students in Seoul Tuesday, Nye said that it was important to use hard power such as economic pressure as well as soft power of naturally letting North Koreans seek a better life to escape their oppressive regime. He added China's role is important in terms of hard power while South Korea will play an important role in soft power over the nuclear threat. Nye suggested soft power alone would not solve the nuclear issue by saying that North Korean leader Kim Jong-il's love of Hollywood movies would not affect Pyongyang's nuclear policy. He stressed the importance of cooperation among Korea, the United States, Japan and China in order to induce changes in North Korea. In the book, ``Soft Power: The Means to Success in World Politics,'' Nye defined soft power ― a contrasting concept to hard power ― as representing cultural influences that can be a successful tool for national interest. He also said Washington needs to seek what he calls ``smart power,'' a combination of hard and soft powers in a balanced manner. ``The United States managed such a combination during the Cold War, but more recently U.S. foreign policy has tended to over-rely on hard power because it is the most direct and visible source of American strength,'' he said. A major threshold was the 9/11 terrorist attacks, which have thrown the United States off course, he said. ``Since the shock of 9/11, the United States has been exporting fear and anger rather than our more traditional values of hope and optimism,'' he said. ``The United States should become a smart power by once again investing in the global goods.'' His advice for Washington to be a smart power is the restoration of alliances and focusing on global development, public diplomacy, economic integration and global goods such as energy security and climate change. The Korea Foundation and the East Asia Institute invited Nye with other foreign scholars and experts to a lecture at a seminar aimed at discussing ways of promoting Korea's public diplomacy through soft power. Yim Sung-joon, president of the foundation, said, ``The 21st century is an era of soft power, which emphasizes culture, knowledge, technology, value sharing and international exchanges.'' Participants in the roundtable include Jan Melissen, director of the Institute of International Relations Clingendael in the Netherlands; Barnett Baron, executive vice president of the Asia Foundation; Chu Yun-han, president of the Chiang Ching-kuo Foundation; Vishakha Desai, president of the Asia Society; Evans Revere, president of the Korea Society; former Foreign Minister Han Seung-joo; and Professor Lee Shin-wha of Korea University. Nye has served as assistant secretary of defense for international security affairs, chair of the National Intelligence Council, and deputy undersecretary of state for security assistance, science and technology.

North Korean nuclearization causes extinction Kim Myong Chol, 2002, The Agreed Framework is Brain Dead, <http://www.nautilus.org/fora/security/0212A_Chol.html>
Without precise knowledge of the location of those target facilities, the American policy planners face the real risk of North Korea launching a full-scale war against South Korea, Japan and the U.S. The North Korean retaliation will most likely leave South Korea and Japan totally devastated with the Metropolitan U.S. being consumed in nuclear conflagration. Looking down on the demolished American homeland, American policy planners aboard a special Boeing jets will have good cause to claim, "We are winners, although our homeland is in ashes. We are safely alive on this jet." The third and last option is to agree to a shotgun wedding with the North Koreans. It means entering into package solution negotiations with the North Koreans, offering to sign a peace treaty to terminate the relations of hostility, establish full diplomatic relations between the two enemy states, withdraw the American forces from South Korea, remove North Korea from the list of axis of evil states and terroristsponsoring states, and give North Korea most favored nation treatment. The first two options should be sobering nightmare scenarios for a wise Bush and his policy planners. If they should opt for either of the scenarios, that would be their decision, which the North Koreans are in no position to take issue with. The Americans would realize too late that the North Korean mean what they say. The North Koreans will use all their resources in their arsenal to fight a full-scale nuclear exchange with the Americans in the last war of mankind. A nuclear-armed North Korea would be most destabilizing in the region and the rest of the world in the eyes of the Americans. They would end up finding themselves reduced to a second-class nuclear power. The third option of negotiating a shotgun marriage will most probably have the most sex appeal to Bush.

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Trade War Bad - Proliferation
Relations are key to prevent proliferation (Phillip C. Saunders, Director of East Asian Nonproliferation Program, October 23, 2001, "Can 9-11 Provide a Fresh Start for U.S.SINO Relations?", http://cns.miis.edu/pubs/reports/sino911.htm) China and the United States still share numerous common interests in fighting proliferation. In terms of specific nonproliferation issues, the United States and China both oppose the introduction of nuclear weapons onto the Korean peninsula and seek to restrain India's efforts to build an operational nuclear arsenal. Both also want to avoid arms races in Northeast Asia that might lead Japan, South Korea, and even Taiwan to develop nuclear weapons and ballistic missiles. Finally,
both the United States and China seek ways to improve the effectiveness of the treaties banning chemical and biological weapons. Obstacles to cooperation: Despite a significant record of successful bilateral cooperation, proliferation remains a contentious issue. China has received little political credit in the United States for its significant accomplishments, which have been overshadowed by a small number of continuing weapons transfers. U.S. concerns now center mainly on Chinese exports of ballistic missile technology to Pakistan and exports of dual-use technology to Iran that can be used for chemical and biological weapons. The current military conflict in Afghanistan and the threat of WMD terrorism have turned these issues from abstract proliferation concerns to concrete threats to American lives. If Pakistani nuclear weapons fall into the hands of Islamic terrorists, China's assistance to Pakistan's nuclear weapons program in the 1980s will be blamed. China argues that U.S. arms sales to Taiwan and proposals to provide theater missile defense systems to Japan and Taiwan should be considered a form of proliferation. Chinese efforts to link its bilateral proliferation commitments with American conventional arms sales to Taiwan have led many to question China's commitment to nonproliferation principles and to conclude that Chinese missile technology exports are used as leverage to force the United States to address Chinese security concerns. While China is a member of the major international arms control treaties, it has significant reservations about export control regimes such as the Missile Technology Control Regime (MTCR). Chinese commitments to abide by MTCR restrictions on exports of ballistic missile technology have been made bilaterally, interpreted as narrowly as possible, and have not been implemented effectively. The United States is still waiting for China to issue export control laws governing missile

technology that were promised in November 2000. Ironically, after American efforts to persuade China to join the arms control and nonproliferation regime bore fruit, the United States now appears to be losing interest in arms control. The Senate's rejection of the CTBT is one example; the Bush administration's rejection of international efforts to develop a BWC verification protocol is another. Several Bush administration officials have argued that the United States cannot afford to be constrained by treaties in an uncertain future world. Instead, the administration's emphasis has been on building ballistic missile defenses that can protect the U.S. homeland, which would require withdrawing from the Anti-Ballistic Missile (ABM) Treaty. Even a limited national missile defense (NMD) system would cause concerns for China, which currently possesses only 18-24 intercontinental ballistic missiles capable of reaching the United States. The Bush administration is not prepared to accept any binding limits on U.S. missile defenses, which makes it difficult to engage in a serious strategic dialogue with China. A serious strategic dialogue would also require China to discuss the ultimate size of its future strategic forces. U.S. NMD deployment would accelerate the pace and expand the scope of China's ongoing strategic modernization program. The issues of ballistic missile defense and China's strategic modernization are likely to continue to impede efforts to cooperate on other nonproliferation issues. Chinese concerns about NMD have already produced a deadlock in international arms control efforts, where work on a fissile material cutoff treaty has been linked to a Chinese demand for negotiations on a ban on outer space weapons. The U.S. emphasis on ballistic missile defense and counterproliferation at the expense of arms control could prompt China to withdraw from some of its bilateral nonproliferation commitments and even to resume nuclear weapons testing. Another important obstacle to cooperation is the Chinese buildup of short and medium range missiles opposite Taiwan. This buildup does not violate any international regimes, but China's use of M-9 missile tests to intimidate Taiwan in 1995-96 raised concerns throughout Asia about Chinese behavior and intentions. China regards its missiles as a means of deterring moves toward Taiwan independence. China strongly opposes the U.S. sale of advanced theater missile defense (TMD) systems to Taiwan, but its ongoing missile buildup (currently between 300-350 missiles) is increasing support for providing Taiwan with TMD. The missile buildup is also stimulating Taiwan's interest in developing offensive missile and aircraft strike capabilities that would allow it to hold China at risk. An arms race is already underway across the Taiwan Strait; the question is whether it will accelerate or whether it can be slowed or stopped.

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Trade War Bad - Taiwan
Maintaining close relations with China is key avoid war over Taiwan Joseph S. Nye, 01-20-2008, "Fear Factor in US-China Relations"
<http://www.koreatimes.co.kr/www/news/opinon/2008/01/137_17603.html> Opinion polls indicate that one-third of Americans believe that China will ``soon dominate the world," while nearly half view China's emergence as a ``threat to world peace." In turn, many Chinese fear that the United States will not accept their ``peaceful rise." Americans and Chinese must avoid such exaggerated fears. Maintaining good U.S.-China relations will be a key determinant of global stability in this century. Perhaps the greatest threat to the bilateral relationship is the belief that conflict is inevitable. Throughout history, whenever a rising power creates fear among its neighbors and other great powers, that fear becomes a cause of conflict. In such circumstances, seemingly small events can trigger an unforeseen and disastrous chain reaction. Today, the greatest prospect of a destabilizing incident lies in the complex relationships across the Taiwan Strait. China, which regards Taiwan as an integral part of its territory that has sheltered behind the U.S. navy since the days of the Chinese civil war, vows that any Taiwanese declaration of independence will be met by force. The U.S. does not challenge China's sovereignty, but it wants a peaceful settlement that will maintain Taiwan's democratic institutions. In Taiwan itself, there is a growing sense of national identity, but a sharp division between pragmatists of the ``pan-blue alliance," who realize that geography will require them to find a compromise with the mainland, and the ruling ``pan-green alliance," which aspires in varying degrees to achieve independence. The two sides in Taiwan will face off in a presidential election on March 22. Current polls suggest that former Taipei Mayor Ma Ying-jeou of the Kuomintang (KMT) leads Frank Hsieh of the ruling Democratic Progressive Party (DPP). But some observers fear that the incumbent DPP President Chen Shui-bian will seek a pretext to prevent a defeat for the pro-sovereignty camp. He is currently advocating a referendum on whether Taiwan should join the United Nations, which China views as provocative. Chen replies that it is China ``that is acting provocatively today."America is clearly concerned. Recently, U.S. Secretary of State Condoleezza Rice told a news conference that ``we think that Taiwan's referendum to apply to the U.N. under the name 'Taiwan' is a provocative policy. It unnecessarily raises tensions in the Taiwan Strait and it promises no real benefits for the people of Taiwan on the international stage." She also reiterated the administration policy opposing ``unilateral threat by either side to change the status quo." The same day, Secretary of Defense Robert Gates criticized China for unexpectedly curtailing American ship visits to Chinese ports because of American arms sales to Taiwan. According to Gates, he had told Chinese officials that American arms sales were consistent with past policy and that ``as long as they continued to build up their forces on their side of the Taiwan Strait, we would continue to give Taiwan the resources necessary to defend itself." Gates added, however, that despite China's rising defense budget, "I don't consider China an enemy, and I think there are opportunities for continued cooperation in a number of areas." In principle, the Taiwan issue need not lead to conflict. With increasing change in China and growing economic and social contacts across the strait, it should be possible to find a formula that allows the Taiwanese to maintain their market economy and democratic system without a placard at the U.N. Thus far, the U.S. has tried to allow for this evolution by stressing two bright lines: no independence for Taiwan and no use of force by China. But, given the danger of incidents that could grow out of political competition in Taiwan or growing impatience in the Peoples' Liberation Army on the mainland, the U.S. would be wise to encourage more active contacts and negotiations by the two sides. The U.S. has a broad national interest in maintaining good relations with China, as well as a specific human rights interest in protecting Taiwan's democracy. The U.S. does not have a national interest in helping Taiwan become a sovereign country with a seat at the U.N., and efforts by some Taiwanese to do so present the greatest danger of a miscalculation that could create enmity between the U.S. and China. Already, some Chinese suspect the U.S. of seeking an independent Taiwan as an "unsinkable aircraft carrier" for use against a future Chinese enemy. They are wrong, but such suspicions can feed a climate of enmity. If America treats China as an enemy today, it will ensure future enmity. While we cannot be sure how China will evolve, it makes no sense to foreclose the prospect of a better future. America's current policy combines economic integration with a hedge against future uncertainty. The U.S.-Japan security alliance means China cannot play a "Japan card." But, while such hedging is natural in world politics, modesty is important for both sides. If the overall climate is one of distrust, what looks like a hedge to one side can look like a threat to the other. There is no need for the U.S. and China to go to war in this century. Both sides must take care that an incident concerning Taiwan does not lead in that direction. Americans and Chinese must avoid letting exaggerated fears create a self-fulfilling prophecy.

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Trade War Bad – Taiwan
The US and China are both willing to go to war over Taiwan Michael E. O’Hanlon, senior fellow of foreign policy at the Brookings Institute, 5/1/2005, The Risk of War Over Taiwan is Real, <
http://www.brookings.edu/opinions/2005/0501asia_ohanlon.aspx> And Britain, which takes over the six-month EU presidency in June, will only be able to hold off such pressures for so long. The recent friendly visit by Lien Chan, the Taiwanese opposition leader, to mainland China may also suggest that the risk of war, and therefore the stakes in the EU arms embargo issue, are both rather low. Nonetheless, Mr Zoellick is more right than wrong. In the absence of strong constraints on future high-technology sales, lifting the European arms embargo on China would be a big mistake. There really is a chance of a Sino-US war over Taiwan, which may ebb and flow month to month but nonetheless remains quite real. And any European decision to lift the embargo could make any war more likely and more costly in lives and assets. The reasons are simple. First, China is serious about being willing to risk war to prevent Taiwan's secession. Second, although many in China as well as Europe cannot quite believe it, the US is just as serious about defending Taiwan. And third, even though American military power remains far superior to that of China, the Chinese do not need to equal US power to make any war over nearby Taiwan very challenging for American forces. Given the right catalyst from Taipei, therefore, US deterrence of China could fail and the world's first true war between nuclear weapons states could ensue. It is not just China's ruling communist party that considers Taiwan a part of China; an increasingly nationalistic population does as well. In fact, the Chinese see themselves as patient and restrained because they are simply demanding that Taiwan not secede, rather than insisting on immediate reunification. They worry that if Taiwan broke away, it would encourage other separatist movements in places such as Tibet and Xinjiang province, and weaken China strategically at the very moment it is poised to regain its status as a global power. China's leaders operate on the assumption that Taiwanese secession would doom their own prospects for holding on to power. At a minimum, they would have to show they had gone the extra mile to try to prevent secession, meaning that even an unsuccessful military operation might be preferable to inaction. And as bizarre as it may seem, the US really would fight to prevent faraway Taiwan from being conquered. This is true not only because President George W. Bush publicly said so in 2001, but also for deeper reasons. First, US credibility as a dependable security partner would be on the line in any conflict over Taiwan. After a half-century of coming to Taiwan's aid in crises, to back down when the going got tough would cause every other US ally around the world to doubt the strength of America's commitment. Among other implications, more countries might then pursue their own nuclear deterrents. Second, and more positively, Taiwan's vibrant democracy elicits strong support in the US. This goes for Democrats as well as Republicans; it was the Clinton administration, after all, that sent two aircraft carriers toward the Taiwan Strait in 1996 in reaction to China's firing of missiles near the island. Unfortunately, many Chinese doubt America's real commitment to Taiwan. Some argue that the US is casualty averse (despite the evidence from Iraq) and would back down from a fight over a distant island—especially a fight against another nucleararmed state. They realise there is no binding treaty obliging the US to defend the island, and that the language of America's 1979 Taiwan Relations Act as well as other policy statements would give Washington numerous excuses not to fight (especially if, in Chinese eyes at least, Taiwan had clearly provoked the war). Other Chinese believe their recent successes in diplomatically and economically wooing much of the Asia-Pacific region—and Europe—mean that the US, rather than China, would be isolated in any future conflict. Even the military balance gives China hope that it would emerge successful in a crisis over Taiwan. A Chinese invasion of Taiwan remains highly unlikely, given the inherent difficulties of amphibious assault in an era of 24-hour reconnaissance and precision strike capabilities. But China has other military tools and options. In addition to threatening missile attacks, for example, it may be able to conduct a naval blockade of Taiwan. Estimates differ over the strength of the American force needed to defeat such a Chinese attempt, and the losses that would be incurred. But this very uncertainty may give Beijing hope, and a lifting of Europe's arms embargo could give it even more hope. The chances of a Sino-US war over Taiwan are not enormous, but are sufficiently real to be taken seriously. It is for Europeans to determine their future policy on selling arms to China, of course. But the US is on solid ground in asking that any new policy be made with eyes wide open about the huge strategic and military stakes at play.

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Trade War Bad – Taiwan
China has 1,200 missiles pointing at Taiwan – annihilation is ensured The National Interest, 6/10/2003, Future War: Taiwan, < http://findarticles.com/p/articles/mi_m2751/is_84/ai_n16689822>
IN LAST week's U.S.-Chinese war over Taiwan, the president was propelled towards conflict by strategic miscalculation, rather than a bold defense of a popular but geopolitically dispensable ally, according to a senior administration official. The president had hoped to repel China's rising bellicosity with a show of force, rather than the actual use of force. After Beijing responded by ratcheting up tensions in the Taiwan Strait, both sides feared that a subsequent climb-down would damage their global credibility and leadership, the official said. In addition, Washington misread Taiwan's own perceptions of its national interests, according to a Western diplomat stationed in Asia. Taiwan's ruling party saw its opportunity to assert itself vis-a-vis Beijing rapidly waning, and believed it had to be claimed. Washington's intelligence deficit regarding Taipei's leadership further undermined its ability to anticipate and therefore control events, and contributed to the spiraling of tensions. "The national security advisor from the start recommended military force, arguing that China had dangerous expansionist ambitions. He argued that China's rapacious consumption of the world's raw materials was a liability. He said China had become a strategic, economic and cultural rival", said the senior administration official, who declined to be identified. "The secretary of state argued against that. He pointed to the technical advantages Beijing had gained since the European Union relaxed its moratorium on arms sales. The president opted for a third-way approach between a military response and diplomatic maneuvering, hoping to intimidate Beijing by flexing some military muscle in the Taiwan Strait. It ended up being a third way to war." According to the Western diplomat, Beijing had accurately read the president's reluctance to resort to military action but, like the president, underestimated the potential for war as a result of escalation. And both Washington and Beijing failed to accurately assess tempers in Taipei. After Taiwan's president last Monday sought an amendment to his country's constitution to change the country's name from the Republic of China to the Republic of Taiwan, the White House did not see war anywhere in the offing, said the senior official. Beijing's shrill statement in response was expected to dampen Taiwan's enthusiasm for independence, particularly Beijing's characterization of Taiwanese government officials as "separatist traitors." The statement also said, "We urge our Taiwan compatriots to repudiate this irresponsible leadership before it is too late. The People's Republic of China has said repeatedly that it wants to settle the issue of Taiwan's reunification by peaceful means. Some provocations are simply intolerable, however." After Taiwan appeared undeterred, the United States shared with Taiwan satellite data, showing extensive activity at Chinese military airfields directly across the strait from Taiwan, the official said. In addition, U.S. officials pointed out that China had more than 1,200 missiles targeting the island. The secretary of state urged the president to issue a statement reiterating Washington's long-standing position against any unilateral changes in the status quo by either Taipei or Beijing and explicitly condemning the proposal to change Taiwan's constitution, according to the official. At that point, the president was under significant congressional pressure to stand up to Beijing's confrontation, particularly from the House majority leader. The president instead issued a statement mildly critical of the Taiwanese proposal. The official said Washington was blindsided by Taiwan's blunt rejection of the U.S. criticism. "It is up to the people of Taiwan to decide whether to change the name of our country to the Republic of Taiwan. The communist authorities on the mainland have nothing to say about it, and even a friend like the United States has no right to interfere in the affairs of a sister democracy", said Taiwan's foreign ministry in a statement. IN HINDSIGHT, Taiwan's position should have been anticipated by Washington, said the Western diplomat in Asia, in a telephone interview. Taipei had been increasingly convinced that going on the offensive was its best defense, given Taiwan's deteriorating geopolitical circumstances. Beijing's strategy of isolating Taipei had been successful. By the time Taiwan's government proposed the constitutional change, it was recognized by just 16 countries. Taiwan's leaders may have thought that they had nothing to lose by being bold, since the alternative was inexorable diplomatic extinction, the diplomat said. Also, the changing military balance may have also encouraged the belief that it was "now or never", the diplomat added. China had been purchasing cutting-edge weapons from Russia for years, and from the European Union since it dropped its moratorium on arms sales to Beijing. Meanwhile, Taiwan had starved its defense budget, choosing instead to spend money on domestic priorities. The balance in 2013 was still uncertain, but time clearly was not on Taiwan's side.

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Spratlys (Chinese Competition)
[ Link ]To out–resource the US, China is targeting the Spratlys for energy sources Time Asia, 9/29/1999, China Flexes its Muscle, < http://www.time.com/time/asia/magazine/99/0927/spratly.html>
In 1994, China accelerated its claim to the islands, building two concrete structures at Mischief Reef (known as Panganiban to the Filipinos). More recently, China has been building what appears to be a chain of naval facilities and observation posts stretching from the Spratlys to the Paracel Islands. The structures, built along a nearly straight line, appear almost to be a recreation of the Great Wall--this time across China's watery southern frontier. Although Beijing describes the structures as shelters for its fishermen, their strange architecture suggests fortress-like structures. The anxieties generated by China's presence are magnified by Beijing's claim to historical rights over all of the South China Sea. Although historical-rights claims hold little water in international law, physical occupation does. China seems bent on establishing a military presence in the disputed shoals. The most concerned rival is the Philippines. The structure at Mischief Reef sits within the economic zone claimed by the Philippines. In escalating but still harmless rhetoric, Defense Secretary Orlando Mercado has described the construction as part of a "creeping invasion." It's a risky drama. Although the Philippine military is inferior to China's, Manila has put up a show of resistance. Markers set up by the Chinese navy to guide its ships through the shoals have been used for target practice by the Philippine air force. Twice this year, Philippine naval craft have rammed and sunk Chinese boats encountered in waters claimed by Manila. Indeed, there is much more at stake in the Spratlys than just a few reefs and shoals that disappear at high tide. They straddle some of the world's busiest shipping lanes. And the determination of South China Sea boundaries will have great consequences in terms of who controls oil, gas and other natural resources in the area. During the cold war, ironically, China cast a smaller shadow over Southeast Asia. Enmeshed in internal turmoil and constrained by the Western powers behind a "bamboo curtain," China was less menacing. Its army is clumsy but massive--and Beijing makes an occupation of periodically rattling its rusty saber. China's record on matters of territory and national pride does not induce calm on the part of the smaller countries sitting under the belly of an increasingly prosperous dragon.

China will seize the Spratlys in case of economic crisis bombing relations– empirically proven Global Security, 12/17/2006, Spratly Islands, < http://www.globalsecurity.org/military/world/war/spratly.htm>
The South China Sea is defined by the International Hydrographic Bureau as the body of water stretching in a Southwest to Northeast direction, whose southern border is 3 degrees South latitude between South Sumatra and Kalimantan (Karimata Straits), and whose northern border is the Strait of Taiwan from the northern tip of Taiwan to the Fukien coast of China. The South China Sea region is the world's second busiest international sea lane. More than half of the world's supertanker traffic passes through the region's waters. In addition, the South China Sea region contains oil and gas resources strategically located near large energy-consuming countries. The South China Sea encompasses a portion of the Pacific Ocean stretching roughly from Singapore and the Strait of Malacca in the southwest, to the Strait of Taiwan (between Taiwan and China) in the northeast. The Paracels also has a total land area of 10 square kilometers spread over a sea zone of 15,000 to 16,000 square kilometers. Many of these islands are partially submerged islets, rocks, and reefs that are little more than shipping hazards not suitable for habitation. The islands are important, however, for strategic and political reasons, because ownership claims to them are used to bolster claims to the surrounding sea and its resources. The South China Sea is rich in natural resources such as oil and natural gas. These resources have garnered attention throughout the Asia-Pacific region. Until recently, East Asia's economic growth rates had been among the highest in the world, and despite the current economic crisis, economic growth prospects in the long-term remain among the best in the world. This economic growth will be accompanied by an increasing demand for energy. Over the next 20 years, oil consumption among developing Asian countries is expected to rise by 4% annually on average, with about half of this increase coming from China. If this growth rate is maintained, oil demand for these nations will reach 25 million barrels per day - more than double current consumption levels -- by 2020. Almost of all of this additional Asian oil demand, as well as Japan's oil needs, will need to be imported from the Middle East and Africa, and to pass through the strategic Strait of Malacca into the South China Sea. Countries in the Asia-Pacific region depend on seaborne trade to fuel their economic growth, and this has led to the sea's transformation into one of the world's busiest shipping lanes. Over half of the world's merchant fleet (by tonnage) sails through the South China Sea every year.

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Spratlys (Chinese Competition)
Relations key – China will restrict US navigation in the Spratlys Dana Robert Dillon, senior policy analyst for Southeast Asia in Asian Studies Center at the Heritage Foundation, 9/5/2001,
How the Bush Administration Should Handle China and South China Sea Maritime Territorial Dispute, <http://paracelspratlyislands.blogspot.com/2008/01/american-role-in-south-china-sea.html> In August 2001 the United States Navy held a two-carrier passing exercise in the South China Sea. Navy spokesmen denied that the exercise was intended to send a message to China, but it was in the right location to do just that. In fact, Washington needs to do a lot more of the same as a first step toward protecting American interests in the South China Sea. The United States is the world's largest trading nation; 90 percent of the world's trade moves via ship, and 45 percent of all shipping moves through Asia's lawless waters. America's continued prosperity requires free access to the markets and producers of Asia, and the United States Navy is the only reliable guarantor of freedom of navigation in Asia's seas. But China's sweeping territorial claims in the South China Sea and skewed interpretation of the law of the sea are an explicit threat to the freedom of navigation. Six countries claim maritime borders in the South China Sea, but Beijing claims virtually the entire waterway as Chinese territory and declares that foreign warships traversing its maritime territory must first gain China's permission. Beijing's penchant for unilateral military action against the territorial claims of other countries in the region, such as establishing a naval outpost on Mischief Reef less than 200 miles from the Philippines, further militarizes the dispute and forces the countries of Southeast Asia to choose between confronting or submitting to Beijing's threats. Thus far, the U.S. response to the Chinese challenge has been to remain neutral on the competing maritime border claims and to avoid criticism of China. Other countries in the region have made attempts to defuse the problem, such as Indonesia's informal conferences in the 1990s, but Beijing has refused multilateral solutions that do not recognize Chinese sovereignty. If Washington continues to allow Beijing's willful misinterpretation of the United Nations Convention on the Law of the Sea (UNCLOS) to remain unchallenged, the South China Sea will become a de facto Chinese lake, the countries of Southeast Asia will be subject to Beijing's interpretations of international law and sovereignty, and the American Navy will have to ask permission from China to transit this vital international waterway. To avoid this outcome, the Bush Administration must make it clear to China and other claimants that the United States opposes extreme claims that interfere with or threaten freedom of navigation. Washington also must unequivocally oppose the use of force to resolve territorial disputes in, and recommend a demilitarization of the islands and reefs in, the South China Sea. Finally, the Bush Administration should insist that the competing claimants formulate a process to resolve the dispute.

The US navigates in the Spratlys to prevent Chinese domination The Inquirer, 5/27/2008, No Spratlys Scenario in US, RP Navy Games in Palawan, <
http://newsinfo.inquirer.net/inquirerheadlines/regions/view/20080527-138999/No-Spratlys-scenario-in-US-RP-Navy-games-inPalawan> PUERTO PRINCESA CITY—American and Filipino naval troops began their joint military exercises here on Monday, but officials did not include a scenario of potential military conflict between the Philippines and other claimant countries in the nearby Spratly Islands. The seven-day Cooperation Afloat Readiness and Training (Carat) exercises will focus on tactics in “interdiction and interoperability” between the two navies, including a sea-based attack that will be simulated in a coastal village, among other areas of cooperation. Some 1,200 US Navy men of the USS Tortuga based in Okinawa, Japan, are joining some 200 Philippine Navy troops in the exercises. The Spratly group of islands is a territory in the South China Sea that is being claimed by several nations, including China. US officials who attended the Carat launch at the Naval Forces West (Navforwest) headquarters stressed their country’s position of neutrality with respect to the Spratlys. “Interoperability and being able to work together in a joint mission is what this exercise is all about,” US Press Attaché Rebecca Brown Thompson said. Asked if the training exercise will have significance on the Philippine Navy’s capability to project its military capability in the Spratlys, Thompson said Carat did not plan such a scenario. “The United States has no claims to the Spratlys. But we support the countries who do have claims working together to come to an agreement,” she said. Lt. Cmdr. Joselito de Guzman, Navforwest spokesperson, said the games aimed at improving the Filipino soldiers’ ability to deal with acts of terrorism and strengthen the cooperation between the two navies. Carat will also involve medical and dental missions in the municipalities of Narra and Aborlan in southern Palawan, he said.

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Spratlys (Chinese Competition)
The US will go to war with China on terms of UNCLOS violation Yann–Huei Song, Scholar at Institute of European and American Studies Academia Sinica, Taipei, Taiwan, R.O.C., 2005, Declarations and Statements with Respect to the 1982 UNCLOS: Potential Legal Disputes between the United
States and China after U.S. Accession to the Convention, <http://www.southchinasea.org/docs/Song,%20UNCLOS,%20US,%20&%20China.pdf> Among the two declarations and the twenty-four statements of understanding to be made by the United States in accordance with Articles 298(1) and 310 of the UNCLOS upon its accession to the Convention, the following are believed to have the greatest potential to give rise to legal disputes between the United States and China in the areas of ocean law and politics: the second declaration concerning the exclusion of certain categories of disputes from dispute settlement procedure; the first five understandings that relate principally to the U.S. right of innocent passage, transit passage, freedom of navigation and overflight in the maritime zones of foreign countries, and the right to conduct survey activities in the exclusive economic zone that are not considered marine scientific research and, therefore, do not require authorization from the coastal state; and the sixth understanding concerning the U.S. position on those declarations or statements made by other state parties to the UNCLOS that are in violation of the Convention provisions, in particular, Article 310. The Second Declaration Article 298 (1)(b) provides that when signing, ratifying, or acceding to the UNCLOS or at any time thereafter, a state may, without prejudice to the obligations arising under section 1 of Part XV of the Convention, declare in writing that it does not accept any one or more of the procedures provided for in section 2, Part XV of the Convention with respect to “disputes concerning military activities, including military activities by government vessels and aircraft engaged in non-commercial service, and disputes concerning law enforcement activities in regard to the exercise of sovereign rights or jurisdiction excluded from the jurisdiction of a court or tribunal under article 297, paragraph 2 or 3.”55 The U.S. declaration made pursuant to Article 298(1)(b) indicates that the U.S. consent to accession to the UNCLOS is conditioned upon the understanding that, “under article 298(1)(b), each State Party has the exclusive right to determine whether its activities are or were ‘military activities’ and that such determinations are not subject to review.” However, it must be noted that Article 309 of the UNCLOS disallows states from making reservations or exceptions to the Convention unless expressly permitted by other articles of the UNCLOS. While Article 298(1)(b) allows states to exclude disputes concerning military activities from the compulsory dispute settlement procedures provided in section 2, Part XV of the Convention, it is not clear if State Parties have the exclusive right to determine whether their activities are or were “military activities” and that such determinations are not subject to review. It is also problematic for the United States to declare that its consent to accession to the UNCLOS is conditioned upon the aforementioned understanding. If the second declaration to be made by the United States when acceding to the UNCLOS is considered consistent with Article 298 and Article 310, other state parties to the Convention are also entitled, after their signing, ratifying, or acceding to the UNCLOS, or “at any time thereafter” to making the same declaration. Accordingly, it is believed that this declaration could give rise to legal dispute between the United States and foreign countries, including China. The declaration would also have the potential to destabilize the legal order at sea if followed by other state parties to the UNCLOS. The First Understanding The first understanding to be made by the United States underscores the importance of U.S. concern over its rights under international law to take appropriate actions in selfdefense or in times of armed conflict, including, where necessary, the use of force. This understanding states that nothing in the UNCLOS impairs the inherent right of selfdefense or rights arising during armed conflict, including any Convention provisions referring to “peaceful uses” or “peaceful purposes.” For instance, Article 88 of the UNLCOS reads that “[t]he high seas shall be reserved for peaceful purposes”; Article 141 provides that “[t]he Area shall be open to use exclusively for peaceful purposes by all States whether coastal or land-locked, without discrimination and without prejudice to the other provisions of the Part;” and Article 301 states that “[i]n exercising their rights and performing their duties under this Convention, State Parties shall refrain from any threat or use of force against the territorial integrity or political independence of any State, or in any other manner inconsistent with the principles of international law embodied in the Charter of the United Nations.”

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Spratlys (Chinese Competition)
US–China war will ensure global annihilation Straits Times, June 25 2000 “U.S.-China Relations”, Straits Times, Lexis-Nexis
The high-intensity scenario postulates a cross-strait war escalating into a full-scale war between the US and China. If Washington were to conclude that splitting China would better serve its national interests, then a full-scale war becomes unavoidable. Conflict on such a scale would embroil other countries far and near and -horror of horrors -raise the possibility of a nuclear war. Beijing has already told the US and Japan privately that it considers any country providing bases and logistics support to any US forces attacking China as belligerent parties open to its retaliation. In the region, this means South Korea, Japan, the Philippines and, to a lesser extent, Singapore. If China were to retaliate, East Asia will be set on fire. And the conflagration may not end there as opportunistic powers elsewhere may try to overturn the existing world order. With the US distracted, Russia may seek to redefine Europe's political landscape. The balance of power in the Middle East may be similarly upset by the likes of Iraq. In south Asia, hostilities between India and Pakistan, each armed with its own nuclear arsenal, could enter a new and dangerous phase. Will a full-scale Sino-US war lead to a nuclear war? According to General Matthew Ridgeway, commander of the US Eighth Army, which fought against the Chinese in the Korean War, the US had at the time thought of using nuclear weapons against China to save the US from military defeat. In his book The Korean War, a personal account of the military and political aspects of the conflict and its implications on future US foreign policy, Gen Ridgeway said that US was confronted with two choices in Korea -truce or a broadened war, which could have led to the use of nuclear weapons. If the US had to resort to nuclear weaponry to defeat China long before the latter acquired a similar capability, there is little hope of winning a war against China 50 years later, short of using nuclear weapons. The US estimates that China possesses about 20 nuclear warheads that can destroy major American cities. Beijing also seems prepared to go for the nuclear option. A Chinese military officer disclosed recently that Beijing was considering a review of its "non first use" principle regarding nuclear weapons. Major-General Pan Zhangqiang, president of the military-funded Institute for Strategic Studies, told a gathering at the Woodrow Wilson International Centre for Scholars in Washington that although the government still abided by that principle, there were strong pressures from the military to drop it. He said military leaders considered the use of nuclear weapons mandatory if the country risked dismemberment as a result of foreign intervention. Gen Ridgeway said that should that come to pass, we would see the destruction of civilization. There would be no victors in such a war. While the prospect of a nuclear Armaggedon over Taiwan might seem inconceivable, it cannot be ruled out entirely, for China puts sovereignty above everything else.

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Trade War Bad - Alt Tech
Trade barriers hinder alternative energy research and undermind efficiency – turning case (Otto Graf Lambsdorff, Former German Federal Minister of Economics, 6/22/2007, The International Economy,
http://goliath.ecnext.com/coms2/gi_0199-6910875/Will-environmentalism-become-the-new.html) Beyond doubt, environmentalism is gaining momentum-not only in politics, but also in business. Customers are increasingly willing to pay extra for environment-friendly goods in the light of noticeable climate change. Of course, companies want to take advantage of the market's readiness to pay higher prices. In this context, protectionism is a promising tool for domestic producers to safeguard high margins by excluding international rivals. For instance, instead of competing for cheaper and better products, European manufacturers of electronics achieved in 2002 surcharges on imports of energy-efficient bulbs from China. The 66 percent duty is more than dubious as Europe's leaders are at the same time urging households to make use of exactly these energy-efficient light bulbs. If the duty ended, market prices of energy-efficient bulbs would equal those of conventional ones. The consequences of this kind of protectionism are two-fold: first, domestic manufacturers are not forced to produce more cost-efficiently; and second, many customers who cannot afford the artificial high prices continue to purchase conventional bulbs. The European Commission acts Janus-faced: While defending unnecessary high prices for energy-efficient bulbs due to successful lobbying, it is striving for a significant reduction of carbon dioxide emissions. Obviously, the attractive international market for environment-friendly goods must stay free of protectionism for our planet's sake. Only if premium energy-efficient products become affordable for the majority can a pivotal contribution to environmental protection be made. By the way, Australia has just decided to ban incandescent bulbs. Instead of intervening, governments should more often trust and release market forces to boost environmentalism. If the Chinese can offer eco-friendly products under more favorable conditions, let them do the business. JAGDISH BHAGWATI University Professor, Columbia University, and Senior Fellow for International Economics, Council on Foreign Relations. One needs to distinguish between domestic environmental phenomena (for example, polluting a lake entirely within your own jurisdiction or disturbing the peace through noise-making in a library) and international ones where environmental spillovers occur, the latter being multilateral (such as global warming) or plurilateral or bilateral (such as acid rain). On global warming, there is a good logic to saying that the carbon tax everywhere should be identical. Yet if India and China are to be taxed equally with the United States and the European Union on the carbon dioxide they emit currently (the "flow" aspect), there must also be a Superfund where the rich countries who polluted in the past pay for the damage imposed (the "stock" aspect). The 1997 Kyoto Protocol to the Framework Convention on Climate Change has to be revised; it is a conceptually muddled set of political compromises mixing up the stock and the flow aspects-see my August 2006 Financial Times article on the subject. The question of protectionism would not arise in such a revised Kyoto. ROGER M. KUBARYCH Chief U.S. Economist, Unicredit Markets and Investment Banking, and Kaufman Adjunct Senior Fellow for International Economics and Finance, Council on Foreign Relations Some of the most avid, and effective, ecologists are also committed free traders. That's why efforts to raise environmental standards globally need not lead to greater protectionism in trade--so long as drafters of trade agreements are vigilant against those who try to sneak in provisions with protectionist intent. One example is provided by the fierce debate that preceded Congressional approval of NAFTA. Back in 1991-93, some environmentalists opposed it, claiming that Mexico would become a worse polluter. But prominent advocates, including NAFTA's spiritual father, Rodman Rockefeller (then U.S. co-chairman of the Mexico-U.S. Business Committee), thought differently. Rockefeller was a dedicated environmentalist like his father, Nelson Rockefeller. In a 1991 speech entitled "North American Free Trade: Economic Growth and Ecological Enhancement," the younger Rockefeller gave a stirring reminder of how a growing economy provides the resources to achieve ambitious ecological goals: "Our nation has won the capability to be environmentally responsible. We have been through the development process of industrialization, environmental degradation, wealth creation, and ecological enhancement. Today the Hudson River is swimable and the striped bass and shad are breeding again--why? Because in 1965 the citizens of New York State decided to dedicate the resources needed to clean up the Hudson." He went on to predict that "Mexicans will demand that a portion of the newly created resources be utilized to meet the same standards to which the American people have now become accustomed." That will take time, but there is progress. Sound environmental standards are useful complements to trade agreements, not least because they empower concerned citizens in emerging market countries frustrated by the unwillingness of their governments to enforce their own laws. To the extent trade agreements can provide another tool to prod governments to implement environmental safeguards, they are a big plus.

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AFF

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No Link

industries wouldn’t impose trade measures – they know its detrimental to the environment
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf Policy actions taken already include changes in tax policy equal to the imposition of a $50 per ton carbon tariff applied to exports of Chinese steel. Building on these steps, international agreements to reduce industrial emissions from key sectors, whether through product standards, emissions targets, or a direct tax, would be more successful in addressing competitiveness concerns and reducing emissions than trade measures imposed unilaterally. Indeed, during the last round of climate negotiations in Bali, Indonesia, in December 2007, industry-level agreements garnered support from developed and developing countries alike. The rules and institutions of the international trading system may well have a role to play in leveling the carbon playing field in the years ahead. If approached multilaterally and in conjunction with a broader international climate framework, trade policy could create additional incentives to reduce greenhouse gas emissions. To be successful, a trade regime that included climate considerations would require the willing participation of both developed and developing countries. Such multilateral involvement would promote an accurate assessment of embedded carbon both by product and by producer, so that low-carbon goods and production processes were adequately rewarded. Absent broad multilateral action, the use of trade measures to address competitiveness concerns and emissions leakage will have only limited success and could put considerable strain on the international trading system we rely on to boost economic growth in developing countries and deliver the technology required to make that growth green.

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TF 2020
Trade measures would not be immediate – compliance costs won’t force action until 2020
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf Scenarios for Implementation In the leading legislative proposals under consideration, trade measures would not be an immediate feature of US policy. Rather, the law would provide for a review process, which could in time lead to the imposition of trade measures if the administration judges these necessary. This is, perhaps, out of recognition that the optimal outcome, both from climate and competitiveness standpoints, is to have major trading partners impose similar costs on their industry at home rather than the United States doing so at the border. It is also likely seen as a strategy for compelling similar action in other countries lest their exports be put at a disadvantage in the US market. In both the Lieberman-Warner bill and its predecessor from Senators Bingaman and Specter, the administration is instructed to immediately engage in international negotiations to seek binding greenhouse gas reduction commitments from all major emitting nations. No later than the beginning of 2019, the administration shall evaluate whether major US trading partners have indeed taken “comparable action.” If not, imports from those countries will be subject to compliance costs starting in 2020. Under such a framework, the question of what constitutes “comparable action” will likely be the key to not only when trade measures are invoked but also how effective the system as a whole is in addressing the competitiveness concerns of domestic carbon-intensive industry.

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Regulations Good
Climate regulations are key for renewable competitiveness abroad
Trevor Houser et. al , visiting fellow at the Peterson Institute for International Economics, is also a partner at the Rhodium Group, a practice helping decision makers in the public and private sectors analyze and understand global economic and policy trends, May 2008 Rob Bradley, Britt Childs, Jacob Werksman, Robert Heilmayr “Leveling the Carbon Playing Field International Competition and US Climate Policy Design” PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS WORLD RESOURCES INSTITUTE http://pdf.wri.org/leveling_the_carbon_playing_field.pdf A Broader View of Competitiveness? It is important to note that while our discussion, as well as that of the policy community, focuses on the impact of US climate legislation on carbon intensive industries, it is a fairly narrow interpretation of US competitiveness. If the world is indeed heading toward a carbon-constrained future, fun and more efficient practices will be needed. Past experience in renewable energy and efficient vehicle technologies has seen companies profit from strong regulatory environments at home to build competitive advantage abroad. Loose or uncertain policy structures will not serve US companies well in the medium to long term, as other countries will build markets for the products and services that will be required in a low-carbon world. Such concerns have led many major US companies to call for strong mandatory climate policy.4 In addition, policymakers should carefully weigh the cost of measures to protect carbon-intensive industry for the economy as a whole. Certain policy options may shield domestic producers of goods like steel, aluminum, and chemicals but do so at the expense of taxpayers, consumers, or downstream industries that rely on those goods and that compete internationally as well. And building US competitiveness in the low-carbon energy technologies needed to stabilize the climate will require not only a clear domestic regulatory environment but also a significant amount of investment in infrastructure, education, and research and development. The economic and fiscal costs of protecting carbon-intensive manufacturing must be measured against these longer-term strategic goals. Finally, while there are costs associated with US action to reduce carbon emissions, there are also costs associated with inaction or delay. Estimating the financial costs associated with the impacts of climate change is notoriously difficult, but the United Nations Framework Convention on Climate Change (UNFCCC 2007a) calculates that the cost of adaptation globally will run to tens of billions of US dollars per year by 2030. While the poorest countries will disproportionately feel these impacts, the United States will by no means be immune from significant damage (Ruth, Coelho, and Karetnikov 2007). Though we focus on leveling the playing field for carbon-intensive industries under various US climate policy scenarios, when possible, we assess legislative options in light of their broader costs and impact on overall US economic dynamism.

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Sanctions Good
Trade sanctions are key for action to combat global warming
Robert Collier, a visiting scholar at the Center for Environmental Public Policy at the University of California at Berkeley, is writing a book about China and global warming. He has been with the San Francisco Chronicle from 1991 to the present as a senior foreign affairs correspondent (since 2002), a member of the editorial board (2001-2002), and a foreign affairs reporter (1994–2001). May 6, 2008 China Business | China faces trade war climate challenge, http://www.atimes.com/atimes/China_Business/JE06Cb01.html Developing nations' allies, meanwhile, are warning that the sanctions plan could destroy the chances of a post-Kyoto treaty. Chinese diplomats have not responded directly, but they have noticeably hardened their stand on climate talks. In February, China's top climate negotiator, Yu Qingtai, said at the UN that rich nations, which "caused the problem of climate change in the first place," must be treated as "culprits" and developing countries as "victims". Despite China's official hard line, some Chinese environmental officials privately express alarm at runaway carbon emissions and suggest that foreign green tariffs would actually strengthen their hand in domestic policy struggles over controlling greenhouse gases by helping to win political support for emissions cuts. Pan Yue, vice director of the State Environmental Protection Administration, recently argued in a China Daily article in favor of stronger emissions regulations and a more "green-oriented China", warning that "China's image among the international community" was in jeopardy. The growing dispute over trade sanctions brings to the fore not only the fundamental ethical question of whether wealthy nations should bear the burden of emissions reduction alone but also the strategic question of whether sticks as well as carrots should be used to induce green behavior in developing countries. Although China may not like it, the international trading system may provide more leverage than any other post-Kyoto mechanism over developing countries' environmental policies. Despite the threat of trade wars, trade sanctions could emerge as the most effective means of forcing international action on global warming.

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Manufacturing Jobs Turn
Carbon tariffs would result in a reversal of manufacturing outsourcing
David Roberts is Grist's staff writer. at 8:28 AM on 3/29 2008 “Report: carbon tariffs could bring manufacturing jobs back from China” http://gristmill.grist.org/story/2008/3/29/82021/1196 Via Greenwire (sub rqd), a new report from Canada-based investment bank CIBC shows that if the U.S. passes domestic carbon caps, and China doesn't, and the U.S. responds with "carbon tariffs," it could spark a return of manufacturing jobs: The report finds that a carbon tariff, combined with triple-digit oil prices, "could reverse the migration of certain manufacturing industries that have left North America for much cheaper labour markets in China." "Wage advantages may no longer be as decisive in determining overall competitiveness for energy-intensive industries in today's energy-starved world economy," the report finds. "All the more so if exports from those industries will be assessed relatively punitive tariffs for their carbon content upon entering North American or Western European markets." [CIBC chief economist Jeff] Rubin, in an interview, was more succinct. "All of sudden," he said, "maybe you don't want your steel plant in China." His report notes that other developing countries could also face disadvantages, but singles out China because of its growing energy use and reliance on coal in particular. Coal, the most carbon-heavy major energy source, provides about two-thirds of China's total energy needs and roughly 80 percent of its electric power, the report states. And export-related emissions account for 27 percent of China's total emissions, CIBC finds. Rubin says industries that would take part in his predicted reverse migration would be energy-hungry sectors like chemicals, metal manufacturing, cement, glass and others. The report finds that if carbon were priced at $45 per ton in the United States, applying this cost to Chinese goods would raise about $55 billion per year from Chinese exports to the United States, the equivalent of a 17 percent tariff.

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TRADE LOW
Trade Dispute Aggravates EU and US. China won’t budge.
China Daily, 2008-03-04, China Daily, “Eu and US file WTO case against China, http://www.chinadaily.com.cn/china/200803/04/content_6506700.htm The United States and the European Union filed a case against China at the World Trade Organization (WTO) on Monday, demanding that China loosen restraints on foreign companies in terms of providing financial information services. The US and the 27-nation EU said they were challenging Chinese rules announced 18 months ago that foreign suppliers including Reuters Group, Dow Jones and Bloomberg distribute their data and news reports to customers in China through Xinhua News Agency. "Competitive and open financial services information markets are the lifeblood of a strong financial sector, but China's rules have tipped the balance against foreign companies," said EU Trade Commissioner Peter Mandelson in a statement. "I trust the EU and China will be able to resolve this issue amicably and to mutual benefit." Susan C. Schwab, the United States trade envoy addressed that the current restriction placed "US and other foreign suppliers at a serious competitive disadvantage" and the US has repeatedly raised the issue to China but it has not been resolved yet. In response, China said it "respects the choices" of other WTO members and will follow WTO rules in settle disputes with other members, the Commerce Ministry said in a brief statement on its website. According to WTO rule, the requests of EU and US trigger a 60-day consultation period. If the dispute is failed to be resolved before the deadline, Washington and Brussels could ask the WTO to launch a formal investigation. The financial information provided by those companies like Reuters Group, Dow Jones and Bloomberg includes stock prices, currency rates etc. The lucrative financial information market in China exceeded US$100 million in 2006. To compete with foreign financial information providers, Xinhua News Agency launched its own service dubbed "Xinhua 08" last year. The provided information includes data on currency, gold and future markets and 55 industries like metal, energy and real estate. China enjoys a remarkable trade surplus with both EU and the United States and this has aroused great concerns from Brussels and Washington. Last year, Bush administration decided to take a more confrontational approach towards China on trade issues to meet the demands of the US Congress. The United States has more frequently gone to the WTO to solve its trade disputes with China. For instance, last April, the United States filed two WTO cases against China over copyright piracy and restrictions on the sale of US books, music, videos and movies.

US China relations tense in recent months.
Xinhua News Agency, Primary periodical of Chinese economics, 7/2/2008, “Paulson: Economic Relations with China Growing in a positive direction”, http://news.xinhuanet.com/english/2005-07/02/content_3034767.htm US Commerce Secretary Carlos Gutierrez arrived in Beijing Thursday morning, starting his first visit to China after taking office earlier this year. Chinese senior officials, including Vice Premier Wu Yi and Commerce Minister Bo Xilai were set to meet or hold talks or with him during his three-day stay in Beijing. US Trade Representative Rob Portman is also scheduled to meet Wu on Saturday. Economic and trade ties between China and the United States are becoming tense in recent months due to US restrictions on Chinese textile exports and pressure on the exchange rate of Chinese currency. Local analysts expect this visit could help to cool down the Sino-US textile trade friction, which provoked anger of Chinese textile and garment producers but experts ruled out a trade war. "Though the parties appear to be tough, the trade dispute is far from a trade war," said Zhang Hanlin, director of the Research Institute on the World Trade Organization with China's University of International Business and Economics. Enditem

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TRADE LOW

China losing interest in American products.
Shu-Ching Jean Chen, 06.17.08, staff writer for Forbes, China's U.S. Shopping List Shorter This Year , http://www.forbes.com/markets/2008/06/17/china-us-tradetalks-markets-econ-cx_jc_0617markets02.html HONG KONG - In its latest annual shopping trip to the United States, China signed agreements worth nearly $14 billion late Monday for goods and equipment from U.S. companies. The buying spree, part of Beijing's effort to reduce its record hightrade surplus with the United States, contributed to an atmosphere of good will during the weeklong conference between top officials from both countries known as the Strategic Economic Dialogue, an initiative launched by U.S. Treasury Secretary Henry Paulson in 2006. The latest round of talks is the last under the current American administration. But the sum total of the purchase contracts amounts to less than half of what the annual Chinese trade delegation bought a year ago, when it closed a total of 138 deals from its visits to 25 cities in 24 states, spending $32.6 billion. The sharp decline possibly signals cooling Chinese interest in bulk purchases of U.S. goods via official missions, at a time when the focus of attention of both governments is shifting from the issue of revaluating China's currency, the yuan, to liberalizing the investment environment. There may be an announcement later in the week of talks aiming to conclude a bilateral investment treaty. The latest shopping delegation consists of 120 top Chinese executives, who have signed 71 contracts and agreements with their U.S. counterparts totaling $13.6 billion.

China decreasing national exposure to the Dollar
Financial Times, Henny Sender in New York, July 17th,2008, Sovereign Funds cut exposure to weak us dollar, http://www.ft.com/cms/s/0/1f51a6de-539b-11dd-8dd2-000077b07658.html Some of the world's largest sovereign wealth funds are seeking to reduce their exposure to the US dollar in a sign of global concern about the currency. One big sovereign fund in the Gulf has cut its dollar-denominated holdings from more than 80 per cent a year ago to less than 60 per cent, while China's State Administration of Foreign Exchange (SAFE) has been looking to strike deals with private equity firms in Europe as a part of a strategy to reduce its dollar holdings. Sovereign wealth funds have played a leading role in helping to recapitalise faltering US banks, but have lost money so far on such investments. Continuing market turbulence has further shaken their faith in US policy and policymakers.

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TRADE LOW
China and US experience a lot of friction.
Donald H. Straszheim, 06.19.08, President of the Milken Institute.Chief Economist of Merrill Lynch & Co. Dissecting A 'Dialogue', http://www.forbes.com/opinions/2008/06/19/economic-dialogue-energy-oped-cx_dhs_0619china.html Just talking about economic and financial concerns at the cabinet level of government is extremely useful, even if it doesn't result in so-called breakthroughs. Any breach of the economic relationship between the U.S. and China--the most important in the world--would be costly. Over the four meetings of this kind held since 2006, the agendas have gravitated toward long-term concerns like energy and environmental clean-up, where the two countries share common ground. On other topics, however, the two sides have basically agreed to disagree, listening politely but ultimately going their own ways. Take, for example, China's currency and exchange rate policy. America would like China to allow market forces to determine the exchange rate. China's currency was pegged to the U.S. dollar from 1994 to 2005 in an effort to lend some stability to China's still immature but reforming economy. In July 2005, China unpegged the currency, gradually letting it appreciate by about 20% against the dollar since then. Ideally, this week China received a civics lesson on how the U.S. runs its government--elections, transitions, selection of a new Cabinet members, Congressional turnover and so forth. Under our system, the potential for economic policy change is considerable, and this must mystify the Chinese. I have had countless meetings in China over the years with senior people who don't have a clue about the way things work over here. Conversely, I'm sure, Chinese hosts are shocked by Americans' lack of knowledge about China's political practices. In most aspects of life, better understanding is the first step toward agreement. The 10-year energy and environment framework signed this week is an important step. Oil prices at $130 a barrel tend to focus the mind. On energy, America and China are generally headed in the same direction. Both are thinking of environmental risks, global warming, energy security and alternative energies. The truth is that the U.S. is far behind China in creating anything that resembles a coherent energy policy. Despite the 35 years that have passed since the first oil shock in 1973, our government still doesn't have its act together. Investment interests were discussed as well--from the U.S. to China; from China to the U.S.--and a new treaty process was agreed upon. But here are the sticking points. Just after the Strategic Economic Dialogue in December 2006, which seemed constructive, China listed 13 industries that were identified as "strategically vital." The basic message to foreign investors with respect to these industries was: "Don't call us. We'll call you if we want your involvement." China has every right to limit investment in these industries, which range from autos to telecommunications and cover a wide swath of China's economy, as it sees fit, and, similarly, the U.S. has rules to limit foreign investment within its own borders. So both sides want the other side more open, but neither wants to relax the limits. Neither China nor the U.S. is happy about these restrictions, but they are a fact of a complicated global economy. As I see it, friction will likely remain on the issue of cross-border investment for a long time.

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TRADE LOW
THE US HAS TRADE DISPUTES WITH CHINA NOW (CHINA DAILY, 2008-03-04, “US, EU file WTO case against China”, http://www.chinadaily.com.cn/china/200803/04/content_6506700.htm) The United States and the European Union filed a case against China at the World Trade Organization (WTO) on Monday, demanding that China loosen restraints on foreign companies in terms of providing financial information services. The US and the 27-nation EU said they were challenging Chinese rules announced 18 months ago that foreign suppliers including Reuters Group, Dow Jones and Bloomberg distribute their data and news reports to customers in China through Xinhua News Agency. "Competitive and open financial services information markets are the lifeblood of a strong financial sector, but China's rules have tipped the balance against foreign companies," said EU Trade Commissioner Peter Mandelson in a statement. "I trust the EU and China will be able to resolve this issue amicably and to mutual benefit." Susan C. Schwab, the United States trade envoy addressed that the current restriction placed "US and other foreign suppliers at a serious competitive disadvantage" and the US has repeatedly raised the issue to China but it has not been resolved yet. In response, China said it "respects the choices" of other WTO members and will follow WTO rules in settle disputes with other members, the Commerce Ministry said in a brief statement on its website. According to WTO rule, the requests of EU and US trigger a 60-day consultation period. If the dispute is failed to be resolved before the deadline, Washington and Brussels could ask the WTO to launch a formal investigation. The financial information provided by those companies like Reuters Group, Dow Jones and Bloomberg includes stock prices, currency rates etc. The lucrative financial information market in China exceeded US$100 million in 2006. To compete with foreign financial information providers, Xinhua News Agency launched its own service dubbed "Xinhua 08" last year. The provided information includes data on currency, gold and future markets and 55 industries like metal, energy and real estate. China enjoys a remarkable trade surplus with both EU and the United States and this has aroused great concerns from Brussels and Washington. Last year, Bush administration decided to take a more confrontational approach towards China on trade issues to meet the demands of the US Congress. The United States has more frequently gone to the WTO to solve its trade disputes with China. For instance, last April, the United States filed two WTO cases against China over copyright piracy and restrictions on the sale of US books, music, videos and movies. According to the breakdown released by the customs agency, China imported $78.8 billion worth of services and goods, 35% more than in the previous year. Exporters, however, only saw 6.5% growth in shipments, to $87.4 billion. In February, China registered a 23% year-on-year decline, to $9.4 billion, in its trade surplus with the United States, its No. 2 trading partner. The surplus with the European Union, China's biggest trading partner, also narrowed, by 15%, to $10 billion. Sliding demand from the United States spurred worries over the potential impact on the Chinese economy of a U.S.-led global recession. THE US IS WITHIN A DISPUTE WITH CHINA OVER TRADE RIGHT NOW (International News, 8/14/07, US squeezes China at WTO in copyright dispute, http://www.france24.com/france24Public/en/archives/news/business/20070814-WTO-china-US-copyright-dispute.php) The United States on Monday asked the World Trade Organization to mediate a copyright trade dispute with China, saying bilateral talks have failed to close loopholes that allow counterfeiters to flourish. It marked the third time in less than a year that the United States has sought a WTO dispute settlement panel to help resolve trade frictions with the leading emerging superpower, whose ballooning trade surplus has become a political flashpoint. Washington filed a complaint with the WTO against China in April, alleging China's legal regime for protecting and enforcing copyright and trademark protections was unfairly deficient. Chinese-made counterfeit goods -- from software and DVDs to luxury leather goods and watches -- are widely available in the US market. "In pursuing this action, the United States is seeking to eliminate significant structural deficiencies that give pirates and counterfeiters in China a safe harbor to avoid criminal liability," the trade office said.

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**Trade good**

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Democracy
Trade fosters democracy Helen Milner political scientist and graduate at Stanford, and Keiko Kubota affiliate at world bank, 2005, Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries, http://ideas.repec.org/a/cup/intorg/v59y2005i01p107-143_05.html
Rising international trade flows are a primary component of globalization. The liberalization of trade policy in many developing countries has helped foster the growth of these flows. Preceding and concurrent with this move to free trade, there has been a global movement toward democracy. We argue that these two trends are related: democratization of the political system reduces the ability of governments to use trade barriers as a strategy for building political support. Political leaders in labor-rich countries may prefer lower trade barriers as democracy increases. Empirical evidence supports our claim about the developing countries from 1970 99. Regime change toward democracy is associated with trade liberalization, controlling for many factors. Conventional explanations of economic reform, such as economic crises and external pressures, seem less salient. Democratization may have fostered globalization in this period.

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Terrorism
Trade combats terrorism Brink Lindsey, director of the Cato Institute's Center for Trade Policy Studies. August 5 2003, The Trade Front: Combating Terrorism with Open Markets, http://www.freetrade.org/node/39
In May 2003 President Bush announced plans to create a U.S.-Middle East free-trade area within a decade. The new trade initiative aims to combat terrorism, and the Islamist extremism that underlies it, by promoting economic and political development in the Muslim world. The administration moved quickly to begin putting its plans into action by announcing that the United States and Bahrain would soon commence negotiations for a free-trade agreement (FTA). Meanwhile, negotiations for an FTA with Morocco are already under way, and a U.S.-Jordan FTA, now in its second year, has produced a boom in Jordanian exports. The Bush administration should be congratulated for opening a trade front in the war on terrorism. With the proper commitment and followthrough, a major U.S. trade initiative in the Muslim world can give real encouragement to desperately needed growth and reform in that troubled region.

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Economy
Trade solves for US economy George W. Bush, 3/18/2008, President Bush: Free Trade Agreements Are "Good For Our Economy" President Bush Promises Additional Action On The Economy If Needed, And Calls For “A Vote On Colombia This Year”, http://www.commerce.gov/s/groups/public/@doc/@os/@opa/documents/content/prod01_005407.pdf
And during this time of economic uncertainty, when consumer spending and investment is slowing down, it's important to understand the role trade has made for our economy. Last year exports accounted for more than 40 percent of our total growth. That's good news. Export is continuing. This January, exports were up more than 16 percent over last January. If you're worried about the economy, it seems like you ought to be sending a clear signal that the United States of America will continue to trade, not shut down trade. And that's what this Colombia vote says."

Key time for trade to save the economy Ana Isabel Eiras, specializes in international economics and development as a senior policy analyst in the Center for International Trade and Economics, May 24, 2004, Why America Needs to Support Free Trade, http://www.heritage.org/research/tradeandforeignaid/bg1761.cfm
The Bush Administration should support free trade by all means at its disposal. Keeping America free of protectionism and special favors helps to generate opportunities and fosters economic growth. Economic growth is of particular importance today because eliminating the large federal budget deficit requires either growth to generate tax revenues or something even harder to come by--the political will to cut spending.

Free trade fosters economic growth by spurring investment and opening job opportunities Ana Isabel Eiras, specializes in international economics and development as a senior policy analyst in the Center for International Trade and Economics, May 24, 2004, Why America Needs to Support Free Trade, http://www.heritage.org/research/tradeandforeignaid/bg1761.cfm
Economic freedom is essential to economic growth, and the true measure of economic freedom involves more than just the question of whether tariff and non-tariff trade barriers are present. It involves other barriers to commerce such as inflationary pressures, regulations that make it more difficult to do business, restrictive banking systems, whether or not property rights are protected, and the fiscal burden of government. The data presented over the past seven years in the annual Heritage Foundation/Wall Street Journal Index of Economic Freedom show clearly that the economies of countries that open their markets grow at a faster pace than the economies of countries that open their markets less or not at all. (See Chart 2.) Of the 142 nations whose economies have been observed during this seven-year period, those that opened their markets the most grew twice as fast as those that opened them the least. A growing economy increases the demand for goods and services, and as demand increases, more businesses start and expand their operations. Such expansion leads to the creation of more, better-paid jobs. The same is true when the market expands beyond borders. Gaining free access to other markets opens up new business opportunities, encouraging investment and fostering job creation.

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Innovation / competitiveness
Free trade spurs innovation Ana Isabel Eiras, specializes in international economics and development as a senior policy analyst in the Center for International Trade and Economics, May 24, 2004, Why America Needs to Support Free Trade, http://www.heritage.org/research/tradeandforeignaid/bg1761.cfm
America's ability to compete and innovate derives from its open markets and from the continual search for new markets through the expansion of free trade. Goods and services flowing across borders foster new ideas and allow U.S. producers to learn about the market through the failure and success of traded products. As they learn more, they are able to innovate to remain competitive.

Trade fosters innovation, competitiveness, and the economy Ana Isabel Eiras, specializes in international economics and development as a senior policy analyst in the Center for International Trade and Economics, May 24, 2004, Why America Needs to Support Free Trade, http://www.heritage.org/research/tradeandforeignaid/bg1761.cfm
Innovation is the basis of progress, and competition is the best incentive to innovate. The challenge of having others producing similar products or offering similar services motivates businesses to find new technologies and better ways to provide what they produce. The need to remain competitive forces businesses to strive constantly to innovate. As a result, new technologies are born. America is perhaps the world's best example of how competition fosters innovation. Although at times the United States has become somewhat protectionist, its economy has been built primarily on the principles of a free market, private enterprise, and competition. In such a competitive environment, new technologies, from computers to medicines to machinery, have helped the economy to become increasingly more productive per unit of labor and machinery employed in the production process. Since 1948, according to the Bureau of Labor Statistics, multifactor productivity--a ratio of output to combined inputs--in the U.S. private business sector has more than doubled.2 (See Chart 1.) Productivity has fostered economic growth and, by lowering production costs, has given ordinary Americans the opportunity to raise their standard of living.

Free trade promotes innovation to solve for disease, pollution, education, tech, and the economy Ana Isabel Eiras, specializes in international economics and development as a senior policy analyst in the Center for International Trade and Economics, May 24, 2004, Why America Needs to Support Free Trade, http://www.heritage.org/research/tradeandforeignaid/bg1761.cfm
Free trade, however, is good for America, and for a very simple reason: It allows American workers to specialize in goods and services that they produce more efficiently than the rest of the world and then to exchange them for goods and services that other countries produce at higher quality and lower cost. Specialization and free trade allow the U.S. to become more competitive and innovative. Innovation constantly provides new technologies that allow Americans to produce more, cure more diseases, pollute less, improve education, and choose from a greater range of investment opportunities. The resulting economic growth generates better-paying jobs, higher standards of living, and a greater appreciation of the benefits of living in a peaceful society. New technologies bring about change, which, as U.S. economic history shows, benefits society as a whole. In the process, however, some sectors suffer until they can adapt to the new changes and begin to benefit from them. Today, Americans are experiencing some of that "suffering" because new technologies are challenging old methods of production.

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War
Free trade solves for war Ana Isabel Eiras, specializes in international economics and development as a senior policy analyst in the Center for International Trade and Economics, May 24, 2004, Why America Needs to Support Free Trade, http://www.heritage.org/research/tradeandforeignaid/bg1761.cfm
Free trade fosters an enormous chain of economic activity, the benefits of which culminate in a social desire to be at peace with neighboring and even faraway nations with which trade is conducted or might be conducted in the future. When individuals see how beneficial it is to live in an economically free society; when they see how freedom allows them to improve their lives and those of their families; when they can create new businesses, engage in commerce, or work for a decent salary or wage, adding dignity to their lives, they want peace to preserve all these good things. By contrast, when people live under economic oppression and are at the mercy of a small ruling authority that dictates every aspect of their lives and limits their ability to realize their potential, they resent the life they have and learn to hate better lives elsewhere. If they cannot enjoy the fruits of their efforts and cannot realize their potential; if they cannot feel free to do business, work freely, and trade freely; if they do not have anything to gain or to lose, they begin to feel that any change--even war--might be better. They have no incentive to desire peace with their neighbors.

Free trade fosters peace Ana Isabel Eiras, specializes in international economics and development as a senior policy analyst in the Center for International Trade and Economics, May 24, 2004, Why America Needs to Support Free Trade, http://www.heritage.org/research/tradeandforeignaid/bg1761.cfm
Free trade and economic freedom set the process of growth, innovation, and prosperity in motion. In that process, individuals support the creation of institutions that are conducive to growth and that preserve peace and prosperity. The greater the level of prosperity, the greater the likelihood of peace.

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Environment
Free trade is the best way to help the environment Heritage Foundation, Oct 1, 2001, Free Trade Can Help Protect Environment, Analysts Say, http://www.heritage.org/Press/NewsReleases/NR100101.cfm
Free trade is a catalyst for improving a country's environment as well as its economy, which is another reason Congress should give the president Trade Promotion Authority, a new Heritage Foundation paper says. Contrary to what some environmental activists say, countries with open economies have better environmental records—and the best way for countries to improve their economies is through the free trade that Trade Promotion Authority (TPA) allows, Heritage trade experts Ana Eiras and Brett Schaefer write. "Economic growth is achieved through greater economic liberalization, including free trade," they write. "Countries with higher incomes are better able to afford economic protection. So those who are concerned with protecting the environment should support a trade promotion authority that effectively advances free trade."

Trade helps the environment Reuters, Feb 5, 2007, Free trade can help guard the environment: WTO, http://www.reuters.com/article/newsOne/idUSWAL54336920070205
Proposals in the revived Doha Round of free trade talks could help protect the environment if governments agree to a deal at forthcoming negotiations, the head of the World Trade Organization (WTO) said on Monday. Measures to cut farming and fisheries subsidies will stop overproduction while others will lower tariffs on environmentally sound goods and services, Pascal Lamy said on the fringes of a major U.N. environment meeting in Kenya.

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**Trade bad**

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Economy

Free trade hurts farmers and the economy The Prometheus Institute, January 07, 2008
American farmers and manufacturers hate free trade. Who could blame them? Cutthroat competition from foreigners getting paid cents per hour renders the relative cost of American labor so expensive that greedy businesses and cost-cotting consumers alike rush to buy foreign products and outsource their employment. Such pecuniary obsession costs American farmers, factory workers, and other communities their jobs, livelihoods, and ways of life that have flourished for decades. Breadwinners are unemployed, towns are depressed, and industries crushed. How could anyone support the gross inhumanity that this free trade monster unleashes on the American working man and American tradition?

Trade leads to underpaid workers, child labor, bad health regulations and weak environmental policies Washington Post, December 23, 2006, How Free Trade Hurts, http://www.washingtonpost.com/wpdyn/content/article/2006/12/22/AR2006122201020.html
That is what's at stake when we talk about trade policy: America's middle class and the American Dream. The new mobility of capital and technology, coupled with the revolution in information technology, makes production of goods possible throughout much of the world. But much of the world at the beginning of the 21st century looks a lot like the United States did 100 years ago: Workers are grossly underpaid, exploited and abused, and they have virtually no rights. Many, including children, work 10, 12, 14 hours a day, six or seven days a week, for only a few dollars a day. The result has been a global race to the bottom as corporations troll the world for the cheapest labor, the fewest health, safety and environmental regulations, and the governments most unfriendly to labor rights. U.S. trade agreements paved the way for this race: While rejecting protections for workers or the environment, they protected investors and corporate interests.

Trade skyrockets trade deficits by shipping workers to other countries Washington Post, December 23, 2006, How Free Trade Hurts, http://www.washingtonpost.com/wpdyn/content/article/2006/12/22/AR2006122201020.html
The results of such trade agreements are skyrocketing trade deficits -- more than $800 billion this year alone -- and downward pressure on income and benefits for American workers. Why? Because these agreements enable countries to ship what their low-wage workers produce to the United States while blocking many U.S. products from entering their countries.

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Plant Disease
Monoculture spreads airborne spores that increases diseases Martine Wolf, Wakelyns Agroforestry and Elm Farm Research Centre, June 2008, Perspective http://www.newagri.co.uk/01-1/perspect.html#top
Monoculture of crop plants is often regarded as the norm - it's a simple and convenient way of planting, cultivating and harvesting a crop. But this also provides the perfect opportunity for those many crop pathogens that spread by airborne spores. However, if we look at the history of agriculture, deliberate and unconscious forms of mixed cropping have been common throughout most of that history. It is only recently that development of pure line varieties has allowed the growth of the monoculture concept and the industrialisation of field crops. But this has come at a considerable cost, which we are still discovering. Faced with the cost of controlling disease in monoculture, two solutions emerged - to keep producing new varieties and new fungicides. But both of these solutions led to the Red Queen problem in Lewis Carroll's 'Through the Looking Glass': 'Now, here, you see, it takes all the running you can do, to keep in the same place'. Mixtures of appropriate varieties, however, can restrict disease and increase yield reliably, without need for fungicides.

Monocultures allows spores to be dispersed easily, causing plant disease Martine Wolf, Wakelyns Agroforestry and Elm Farm Research Centre, June 2008, Perspective http://www.newagri.co.uk/01-1/perspect.html#top
In a monoculture, if a single spore infects one leaf and produces more spores, many will have a high chance of success because they will land on identical susceptible leaves wherever they are dispersed. In a mixture, however, even with only three different varieties, there is a greater spatial separation among identical plants than in a monoculture. So, spores of a pathogen produced on one plant are less likely to be blown on to an identical plant that they can infect - and so disease spreads more slowly. The spaces between identical plants can be occupied by more resistant plants, thus providing a physical barrier to spores being blown from one susceptible plant to another.

Monocultures are prone to wipeouts from plant disease
Caroline Brown, referring to Burce R. Fraedrich, who is a Ph.D and vice president for Bartlett Tree Research Laboratories, May 24, 2006, Dutch elm disease, http://earthfriendlygardening.wordpress.com/2006/05/24/dutch-elm-disease/ According to Bruce R. Fraedrich Ph.D., vice president of research for Bartlett Tree Research Laboratories, Dutch elm disease was able to spread virtually unchecked because American elms were a monoculture, especially in urban areas. Monocultures—the growth of a single species in a given area—are especially prone to eradication by disease. “Monoculture is the primary factor that favors the spread of the disease,” explains Dr. Fraedrich. “Elms were overplanted in many American communities. Once a tree becomes infected, the fungus can move rapidly between closely spaced elm trees."

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Industrilization

Trade prevents industrialization and economic growth George Monbiot, Oxford graduate and author for New Scientist, June 2003, Enslaved by Free Trade, http://www.monbiot.com/archives/2003/05/31/enslaved-by-free-trade/
The founding myth of the dominant nations is that they achieved their industrial and technological superiority through free trade. Nations which are poor today are told that if they want to follow our path to riches, they must open their economies to foreign competition. They are being conned. Almost every rich nation has industrialised with the help of one of two mechanisms now prohibited by the global trade rules. The first is “infant industry protection”: defending new industries from foreign competition until they are big enough to compete on equal terms. The second is the theft of intellectual property. History suggests that technological development may be impossible without one or both.

Trade prevents poor nations from advancing George Monbiot, Oxford graduate and author for New Scientist, June 2003, Enslaved by Free Trade, http://www.monbiot.com/archives/2003/05/31/enslaved-by-free-trade/
The nations which are poor today are forbidden by the trade rules from following either route to development. New industries are immediately exposed to full competition with established companies overseas, which have capital, experience, intellectual property rights, established marketing networks and economies of scale on their side. “Technology transfer” is encouraged in theory, but forbidden in practice by an ever fiercer patents regime. Unable to develop competitive enterprises of their own, the poor nations are locked into their position as the suppliers of cheap labour and raw materials to the rich world’s companies. They are, as a result, forbidden from advancing beyond a certain level of development. While there is no sound argument for permitting rich nations to protect their economies, there is a powerful case for permitting the poor ones to follow the only routes to development which appear to work.

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Trade -> Monoculture
Globalization forces farmers into monoculture Franz Nuscheler, Professor and senior fellow, January 2008 Globalization: Is the South Losing Touch?, http://www.iiz-dvv.de/index.php?article_id=420&clang=1
The liberalization of international trade in agricultural products promises exporting countries higher profits but causes them to develop ecologically disastrous monocultures, to overexploit their natural means of survival, and to neglect the domestic provision of food from their own resources. For example, the terrible forest fires in Borneo, which were responsible for a third of the world release of CO2 in 1998, were attributable to plans by the Nestlé corporation to grow palm oil on the burnt-out areas. The agriculture agreement sponsored by the WTO which opens up developing countries’ agricultural markets threatens the livelihoods of many millions of small farmers, who have until now been supplying basic foodstuffs to local markets.

Free trade leads to monoculture Tao Kongsbak, ethnographer, February 2006, Can anyone hear us?- The critical voice of the free, farmers http://www.lucsus.lu.se/Tao_Kongsbaek_Paper.pdf
Global free trade does not necessarily prescribe that individual countries specialize in the type of agriculture that they are good at. Rather free trade creates dependence and monoculture. Nor does free trade distinguish between public and private ‘actors’. In fact where the public sector secures specialisation (through 4 tariffs, subsidies etc.) it gives the most comparative advantages. Private importers/exporters do not.

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Mad Cow! (1/2)

Monoculture increases disease spread including bird flu and BSE Crawford Kilian, September 28, 2006, Pandemonium' Details Our Plagues, http://thetyee.ca/Books/2006/09/28/Pandemonium/
Monoculture enables us to feed billions relatively cheaply, but it also exposes us to attacks of ever-evolving pests. Nikiforuk emphasizes the tempting economic attractions of monoculture and the catastrophic economic consequences: the migration of H5N1 into poultry factories and then into humans; the casual transfer of dangerous pests in freighters' ballast water and in the wood of packing crates; the costs saved by turning cattle into cannibals, and the high price of BSE. Nikiforuk even speculates that senile dementias like Alzheimer's disease might be unrecognized forms of mad cow disease.

CJD alters the mind causing victims to forget who they are UCSF, 2008, Signs and Symptoms of CJD, Personality changes, http://memory.ucsf.edu/cjd/overview/intro/symptoms/multiple/personality CJD often begins with personality changes such as anxiety, depression, memory loss and confusion. As the disease progresses, mental symptoms become more severe. Ultimately, people with CJD develop dementia - a disorder that robs them of the ability to speak, think, reason, remember, and move. Although the symptoms of CJD sometimes resemble those of other neurological disorders such as Alzheimer's and Huntington's disease, CJD tends to cause a much faster decline than other types of dementia.

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Mad Cow! (2/2)
Ontological Damnation Zimmerman, Prof of Philosophy @ Tulane, 1994 (Michael, Contestinq Earth's Future p. 119-120)
Heidegger asserted that human self-assertion, combined with the eclipse of being, threatens the

relation between being and human Dasein. Loss of this relation would be even more dangerous than a nuclear war that might "bring about the complete annihilation of humanity and the destruction of the earth. 1114 This controversial claim is comparable to the Christian teaching that it is better to forfeit the world than to lose one's soul by losing one's relation to God. Heidegger apparently thought along these lines: it is possible that after a nuclear war, life might once again emerge, but it is far less likely that there will ever again occur an ontological clearing through which such life could manifest itself. Further, since
modernity's one dimensional disclosure of entities virtually denies them any "being" at all, the loss of humanity's openness for being is already occurring.,, Modernity's background mood is horror in the face of nihilism, which is consistent with the aim of providing material "happiness" for everyone by reducing nature to pure energy.s6 The unleashing of vast quantities of energy in nuclear war would be equivalent to modernity's slowmotion destruction of nature: unbounded destruction would equal limitless consumption. If humanity avoided nuclear war only to survive as contented clever animals, Heidegger believed we would exist in a state of ontological damnation: hell on earth, masquerading as material paradise. Deep ecologists might agree that a world of material human comfort purchased at the price of everything wild would not be a world worth living in, for in killing wild nature, people would be as good as dead. But most of them could not agree that the loss of humanity's relation to being would be worse than nuclear omnicide, for it is wrong to suppose that the lives of millions of extinct and unknown species are somehow lessened because they were never "disclosed" by humanity

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