Bloomberg Law Publishes Akin Gump Article on Green Tax Credits and International Trade Pacts

“Keep Green Initiatives Focused on the Environment,” an article by Akin Gump international trade partner Stephen Kho, environment and natural resources partner Kenneth Markowitz, trade counsel Sarah Sprinkle and senior public policy specialist Gabriel Harrison, has been published by Bloomberg Law.

The article discusses the version of the Build Back Better Act passed by the U.S. House of Representatives, which proposed raising tax credits for electric vehicles in a way that favored U.S.- and union-made electric vehicles over others. The authors note, however, that the tax credit modifications would “violate U.S. obligations of ‘national treatment,’ i.e., not to discriminate against goods from other countries, a commitment the U.S. has made in World Trade Organization and other bilateral trade treaties.”

The authors propose, instead, and describe alternative policies to the federal tax credit: provision of a tax credit to EV consumers that is singularly focused on encouraging EV purchases, and additional support for, and promotion of, the development of EV infrastructure.

They write, “These proposals, in our view, would directly achieve the objectives related to emissions reductions, and protect the environment more generally, through the promotion of EVs while not running afoul of international trade laws. Otherwise, our trading partners may view the policies merely as a means of discrimination against their products or a disguised restriction on global trade.”

To read the full article, click here.