Two key moments stand out for me last week. On Monday I saw former Senator Lugar (R-IN) receive Transparency International USA’s “Integrity Award” for his work to combat corruption, whether through his oversight hearings of World Bank projects or his leadership on the Dodd-Frank Act, specifically the Cardin-Lugar oil, gas and mining payment disclosure provision. . During a dinner co-sponsored by Exxon, Senator Lugar recounted his lobby visits from oil company representatives during the consideration of this legislation that now requires oil, gas and mining companies to disclose their payments to host governments. After hearing them out, Lugar and his staff simply weren’t persuaded by industry arguments about competitive harm or compliance costs. Looking forward, Lugar referenced the litigation that the American Petroleum Institute has launched against the provision bearing his name and said that no matter the outcome, “The trend is in our direction.”

The case will now go back down to the district court, where Oxfam believes the weaknesses of oil industry arguments will be demonstrated.

Indeed it is. On Friday morning I learned that the US Court of Appeals was not persuaded by the jurisdictional arguments of the oil industry’s lawyers, (Eugene Scalia and company from Gibson Dunn). The Appeals Court dismissed the case agreeing with Oxfam’s lawyers that the case should be heard in the district court first as Congress had instructed. Oxfam, as an intervener, was the only party to argue that this case does not belong in the Appeals Court and the court adopted Oxfam’s reasoning throughout the entire opinion.

This is a victory for transparency campaigners in the Publish What You Pay coalition. With the dismissal, the case will now go back down to the district court where there will be more opportunity for a comprehensive review of the administrative record. Such a review, we believe, will demonstrate the hollowness of industry arguments.

While the legal process continues, global momentum for increased transparency in the oil, gas and mining industry gains steam. In April, the European Union agreed on tough new rules that mirror Cardin-Lugar, with no exemptions for companies for alleged host government prohibitions. Once again, politicians and regulators were not persuaded by industry arguments and fear mongering. In Canada, Publish What You Pay is working with the Mining Association of Canada to develop mandatory disclosure proposals for the government. Later in May, Newmont Mining, the US and UK governments, and investors will highlight the importance of mandatory disclosure rules on the sidelines of the Extractive Industries Transparency Initiative global conference in Sydney, Australia. Finally, the UK government is championing transparency as part of its hosting of the G8 in June.

As the transparency tide reaches many corners of the globe, the war on transparency being waged by companies such as Shell, BP, Exxon and Chevron will seem increasingly doomed and misguided.

The President’s State of the Union address last night contained a lesser announcement of the launching of a US-EU free trade agreement:

“And tonight, I am announcing that we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union – because trade that is free and fair across the Atlantic supports millions of good-paying American jobs.”

This idea has been floating for some months, pushed more from the European side than the US. The US and EU are already massive trading partners with mostly low tariffs and few serious trade disputes.  Nonetheless, making a trade marriage of it has hurdles.  The crux of the US-EU deal will be regulatory and ‘behind the border’ issues.  For example, both the US and EU have extensive farm subsidies and have been critical of one another.  Europeans have some regulatory measures that US exporters see as problematic. (Think GMOs.)

The question is—do developing countries have a stake in this?

The answer is—they could.

What if both sides committed to embracing the pro-development trade policies of the other to harmonize and improve the trade opportunities for poor countries?  The US has a handful of “trade preference” programs that offer special access to developing countries, like the Generalized System of Preferences (GSP), the African Grown and Opportunity Act (AGOA), and regional programs for the Caribbean and Andean countries.  The Europeans have the “Everything But Arms” initiative that offers free export access to least developed countries.

Each side has some pros, and also some cons.  Very broadly, the European program is broader (more products included) and more generous (zero tariffs) than anything the US offers.  But the US programs,  especially AGOA, offer more favorable “rules of origin,” which help poor countries export more complex products like garments, rather than being stuck exporting low-value commodities and products.

Neither the US, nor the EU provide full “duty-free, quota-free” access for all least developed countries (LDCs), which has been a key goal for development advocates in the long-stalled Doha Round trade negotiations.  In fact, LDCs have not seen any of the promised outcomes from the so-called “development round” of the World Trade Organization.  Their request to extend the soon-to-expire exemption to implement intellectual property rules for LDCs has failed to gain support from the US in particular.

If the US and EU want to demonstrate global leadership and do something very positive for the world, they could start by using the trade agreement negotiations to start a “race to the top” in creating economic opportunities for poor countries.

We had mixed feelings coming out of the Durban climate talks about the state of global climate policy. Some important steps were taken but there remains a significant gap between what the science tells us is necessary to avoid catastrophic climate impacts and the emissions reduction commitments that have been made. Additionally, although we now have an operational Green Climate Fund, it remains to be seen where the money will come from to build climate resilience in the poorest, most vulnerable communities in the world. 

But news today coming out of Europe gives us hope that the world may be moving in the right direction. The Court of Justice of the European Union in Luxembourg ruled in a lawsuit brought by the Air Transport Association of America, American Airlines and United Continental that aviation can be included in the EU’s emissions trading system (ETS). The decision cannot be appealed. 

The US Airline industry has been for years fighting a provision in the EU ETS to cap carbon pollution generated from flights to and from the EU countries. They even succeeded at passing legislation in the US House of Representatives calling on the airline industry to break another country’s law by prohibiting US airlines from complying with the EU regulations. And late last week, in yet another demonstration of the airline industry’s influence over Washington, Secretary of State Hillary Clinton and Secretary of Transportation Ray LaHood sent a letter to EU Ministers objecting to the law. 

Ultimately, serious global solutions are necessary in the international aviation and shipping industries that both reduce emissions and generate climate finance for developing countries. This ruling, however, represents a critical first step in moving us towards that goal and beginning to reign in a powerful industry that has gone unregulated for far too long. 

Happy holidays!