Press Responses : Monday, December 3, 2001
EUROPE & INTERNATIONAL ECONOMY: Talks collapse on environment credit rules
Financial Times; Monday December 3, 2001
By EDWARD ALDEN
Negotiations on a new international agreement aimed at curbing official export credits for environmentally destructive projects have collapsed over sharp differences between the US and Europe.
Talks in the Organisation for Economic Co-operation and Development ended on Friday with countries failing to meet an end-of-the-year deadline for agreeing the rules. The deadline was set earlier this year by leaders from the Group of Eight industrialised nations.
The talks, which had failed to conclude for almost five years, were supposed to produce an agreed set of environmental guidelines for projects supported by official government export credits.
Export credits offered by the US Export-Import Bank, Germany's Hermes Guarantee and others are the largest source of government support for big infrastructure projects in the developing world, far outstripping the World Bank and other international financial institutions.
But environmentalists charge that many of these projects are environmentally damaging and should not be backed with government funds.
The World Bank has already adopted stringent environmental guidelines, but export credit agencies in both Europe and Japan have resisted, fearing these would hurt the ability of national companies to compete on large projects such as dams and power plants.
"It has a big competitive effect," said Ed Rice, president of Coalition for Employment through Exports, which represents large US companies. "That's why people have been fighting over it for years."
The US, which adopted environmental guidelines for export credits in 1995 following controversy in Congress over China's Three Gorges dam project, has pushed for tougher rules, in part to offset the competitive disadvantage now faced by US companies. US negotiators went to last week's OECD meeting in Paris prepared to block the most recent draft of the agreement, which US environmentalists and companies had denounced as too weak. The US was also prepared to consider a further extension in negotiations.
With the breakdown in talks, however, several European countries indicated they might move ahead on their own to implement the draft guidelines rejected by the US.
A senior US official said that while the Bush administration would welcome any moves by individual countries to improve their environmental guidelines, it would insist on new negotiations to set binding international standards.
US environmentalists said the breakdown in talks should lead countries to pull the negotiations out of the OECD, where representatives of the export credit agencies have controlled the talks. The US official said that the process must be more open to input from environmental and development experts.
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