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Three Arguments against Border Tax Adjustments

August 26, 2010

From ICTSD:

1) that the use of BCAs is a prima facie violation of the spirit and letter of multilateral trade principles and norms that require equal treatment among equal goods;

2) that BCAs are a disguised form of protectionism; and

3) that BCAs undermine in practice the principle of common but differentiated responsibilities.

Responding in order: 1) I don’t buy it. 2) Not necessarily. International cooperation is preferable to address this issue. 3) Depends on how you define it. In particular, you can argue that border tax adjustments are simply designed to avoid developed countries reducing their production of carbon intensive goods “too much” only for them to be replaced by other countries with weaker carbon policies. It is a bit rich to insist that this is a developing country right under the principles of common but differentiated responsibility!

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