Officials Say They Have 'Strong Legal Objections'

A State Department official says that the U.S. Government is strongly opposed to the imposition of a European emissions cap-and-trade scheme on U.S. flagged airliners. The EU's highest court affirmed the Union's right to impose the fees in a decision handed down Wednesday.

"We continue to have strong legal and policy objections to the inclusion of flights by non-EU air carriers in the EU ETS," said Krishna R. Urs, deputy assistant secretary for transportation affairs at the U.S. State Department. Secretary of State Hillary Clinton had warned of possible reprisals before the ruling was made public.

Reuters reports that China's state-run news agency Xinhua warned of a possible trade war if the tax is imposed, though that country's foreign ministry did not take that hard-line stance. Various non-European airline associations have also vehemently opposed the measure, and have released statements reiterating the opposition in the days following the ruling.

European officials say that the threats of trade wars or sanctions are "rhetoric," but some non-European analysts say that some kind of retaliation, even if it is minor, is to be expected to show that the U.S. disapproves of the tax. U.S.-flagged carriers have said they will grudgingly pay the tax if it comes to that, though they are considering their legal options. Legislation is still pending in Congress that would make it illegal for U.S. airlines to comply with the law, which could place the companies in a no-win situation.

The EU has vowed to "hold firm" on the fee, and points out that if U.S. and other airlines are taking "equivalent measures" then no tax will be imposed.

FMI: http://ec.europa.eu/clima/policies/ets/index_en.htm