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Inflation reduction act : EU and U.S. advocates call to stand down on WTO threats

Mathilde Dupré, 27 February 2023

[English] [français]

On the eve of a new meeting between the United States and the European Union to discuss ongoing disagreements over provisions in the U.S. climate package (Inflation reduction act), environmental organisations including the Sierra Club, the Natural Resources Defense Council, the European Trade Justice Coalition and Public Citizen have issued a call to their governments to put climate goals ahead of outdated trade rules.

European Commission Executive Vice President Valdis Dombrovskis, the trade commissioner, is due to travel to Washington D.C. for meetings on 1-3 March with US officials such as Treasury Secretary Janet Yellen and US Trade Representative Katherine Tai. His aim is to "negotiate better outcomes for the EU" on clean energy and other tax credits in the IRA, as the US Treasury Department prepares to issue guidance in March on the criteria for the definition of a "free trade agreement". The question is whether the benefits associated with domestic location of production available to countries linked to the US by trade agreements could also be extended to the EU.

The 40 civil society organisations on both sides of the Atlantic who signed the letter are asking in particular

"As part of any EU-U.S. transatlantic sustainable trade initiative, we urge the EU to refrain from challenging the IRA with trade instruments. And we call on the U.S. and EU to commit to a Climate Peace Clause to protect climate policies around the world from trade disputes, as well as to make good on climate financing and green technology transfer to countries in the Global South."

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