The International Trade Council (ITC) takes note of the recent statements by Business Secretary Grant Shapps expressing concern that President Joe Biden's green subsidies could potentially lead to a rise in protectionism, which could prove "dangerous" for world trade.
The President's $430bn (£350bn) scheme, inclusive of tax credits for green technologies, is aimed at attracting investment into the US. Last month, however, International Trade Secretary Kemi Badenoch expressed her apprehension to her US counterpart, citing potential harm to multiple global economies.
Several nations, including the European Union, Canada, and South Korea, have argued that this package breaches international trade rules. Moreover, it has been labeled as anti-competitive and a possible threat to jobs outside the US, particularly in the energy and automotive sectors.
Speaking at a panel discussion during the World Economic Forum in Davos, Switzerland, Secretary Shapps stated that while the Act was not designed to be protectionist, it could inadvertently lead to protectionism if not appropriately revised. Protectionism, often through measures such as tariffs, quotas, or other regulations, can restrict imports from other nations, aiming to shield domestic businesses and workers from overseas competition. Critics argue that such policies tend to reduce global trade and lead to higher prices for consumers.
The ITC, recognizing the importance of green technologies for sustainable global development, encourages dialogue and collaboration among nations. Secretary Shapps' concern reflects the Council's commitment to promoting open and fair international trade.
Meanwhile, Labour leader Sir Keir Starmer offered an alternative perspective during a separate Davos session. He posited that the US green subsidies represent an enormous opportunity for a new economic strategy in the UK rather than a challenge.
The ITC endorses the diverse perspectives on this critical issue. We look forward to facilitating a constructive dialogue and helping to shape policies that balance environmental sustainability, economic development, and fair trade practices.
