Textiles and other manufacturing industries have major concerns with the House-passed climate and energy bill, fearing it will increase their energy costs and hurt their ability to compete with foreign manufacturers. The bill, which squeaked through the House by a seven-vote margin, makes major changes in the way energy is created, sold and consumed. It sets up a complex system for controlling carbon dioxide emissions by utilities and industries. It also calls for greater use of renewable energy resources and  measures to increase energy efficiency.

Cass Johnson, president of the National Council of Textile Organizations (NCTO), issued a statement expressing his organization's "strong disappointment" with the bill and vowed to make changes in the Senate, stating, "NCTO, along with virtually every other manufacturing sector, opposed this bill because it will significantly increase energy costs for domestic manufacturers and not those of its overseas competitors." He said that while language has been added to the bill providing for a border adjustment tax to offset any advantages given to countries that do not impose carbon emission taxes on their manufacturers, the language is "too discretionary and would not allow the textile industry, even if the measure is implemented, to benefit because the trade-impacted industries are not given a high enough priority."

At a briefing for energy reporters in Washington over the weekend, President Barack Obama said he is opposed to the border tax. "At a time when the economy worldwide is in recession and we have seen a significant drop in world trade, I think we have to be careful about sending out any protectionist signals," he said, adding that he believes there may be ways to deal with the problem other than with tariffs.

June 30, 2009