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INTRODUCTION       

         Wind vs. Coal The Office of the United States Trade Representative, in the Federal Register of March 28, 2014 on behalf of the Trade Policy Staff Committee, requested comments and issued notice of a public hearing on negotiations for a World Trade Organization Environmental Goods Agreement as proposed by fourteen WTO members in January 2014.  The negotiation is framed by a list of fifty-four “environmental goods” endorsed for tariff elimination by APEC leaders in 2012.

            The APEC leaders recognize that free trade in environmental goods would accomplish at least two objectives:  increase free trade generally, and enhance the global response to the dangers of climate change.  Easier global circulation of environmental goods, as reflected in the list of fifty-four specific items, should translate into greater deployment of goods that would reduce carbon footprints and thereby help arrest climate change.

TARIFF REDUCTIONS NOT ENOUGH

            Tariff reduction always increases world trade and inevitably is the first objective of all trade agreements.  Unfortunately, tariff reductions will not be nearly enough to make an important difference in the circulation of environmental goods sufficient to advance toward the objective of reducing the threat of climate change.

            Recent reports from the United Nations Intergovernmental Panel on Climate Change emphasize three points, that:  to a certainty of 95 percent or greater, humans are the main cause of global warming; it is not too late to arrest climate change, but time is running out; the goal of arresting climate change will not be accomplished without significant innovation, experimentation, and development of information. This last point requires money that is not likely to come in sufficient part from the private sector because it is difficult to carry investment in innovation and experimentation quickly to a corporation’s bottom line. 

            Most of the identified APEC environmental goods seek to clean up emissions and make energy production, still using hydrocarbons, more efficient. They would not reduce carbon emissions through alternative energy sources, which in the long term is the only way sufficiently significant reductions will be achieved.

ALTERNATIVES TO FOSSIL FUELS MUST BE HELPED TO BE COMPETITIVE

           Alternative energy sources must compete in the marketplace with hydrocarbons.  Once limited to conventional mining and drilling for coal, oil, and gas, hydrocarbon use has been expanding with the discovery and extraction of oil and gas from shale, which is extending and expanding the use of hydrocarbons at the very moment when renewable energy sources might have been competing with hydrocarbons more effectively.

            For more than a century, North American governments have been subsidizing the oil and gas industry for research and development, extraction and sales.  According to a 2011 Report of the International Energy Agency, more than 250 mechanisms are used to subsidize fossil fuels in OECD countries, and according to a July 2011 report of the United States Energy Information Administration, $557 billion was spent globally in 2008 to subsidize fossil fuels, compared to $43 billion for renewable energy. According to SourceWatch, most fossil fuel subsidies are written permanently into the U.S. Tax Code, whereas subsidies for renewable energy are time-limited and specific. 

            Because most of the subsidies to hydrocarbons have been embedded in the tax code for a long time, they continuously are more substantial than assistance for innovation, experimentation, research and development for alternative energy sources.  The gap between the cost of energy to consumers produced by hydrocarbons and the cost through alternative energy sources does not close easily, and as long as there is an important gap (and more than a century growing that gap), hydrocarbons will be preferred, notwithstanding consequences for the environment. Grid parity is a holy grail for public utilities, essential for uploading energy from wind or solar or biomass or geothermal, and alternative energy sources will not achieve it without a dramatic new commitment to the alternatives.  

            As long as the cost of hydrocarbons to produce electricity is less than the cost of alternative energy sources (wind, solar, biomass, geothermal), utilities will rely primarily on hydrocarbons.  As shale brings down the hydrocarbon cost, the alternative sources become even less competitive.  And as long as hydrocarbons are subsidized, with a century’s head start for research and development, they will be preferred. 

STRATEGIES FOR ARRESTING CLIMATE CHANGE

          There appear to be four principal strategies for arresting climate change:  controlling and reducing the polluting effects of hydrocarbons, whether through more efficient production or through “scrubbers,” converters and other additional equipment; taxing the use of hydrocarbons, as in “cap and trade” or other policy “innovations” that accept substantial continuing reliance on hydrocarbons but are designed to discourage use; mandating reliance on alternative sources for some percentage of overall energy production, thereby often accepting a higher cost for energy but with reduced use of hydrocarbons; development of new and better alternative energy sources, as in more efficient and cheaper solar panels and wind turbines. 

          The first two strategies generally confirm continued reliance on hydrocarbons, especially coal, whose use is expanding in the United States as well as in developing countries.  The third is inevitably and permanently limited in the absence of grid parity by the limitations on public utilities to raise rates that inescapably would be inflationary and the equivalent of a disproportionately distributed sales tax.  Only the fourth promises a long-term solution to climate change caused by hydrocarbons.  It requires government subsidies, potentially of the scale supplied to hydrocarbon development. The proposed negotiations appear, at present, to be dominated by the first strategy.

SEIZE THE OPPORTUNITY TO NEGOTIATE MEANINGFULLY

          Tariff relief for a host of environmental goods, most of which come within the first strategy, will not be adequate, if only because more efficient use of fossil fuels necessarily means continuing to burn fossil fuels. It is a strategy for slowing down climate change and buying more time for alternative energy sources to catch up, but by itself it will not solve the problem in the long term.  The negotiation of an international trade treaty focusing on environmental goods opens an opportunity to address the single most promising strategy that, at present, confronts the greatest challenge from the WTO régime of international trade.

            To compete with fossil fuels, alternative energy sources need government help.  Innovation, research and development to arrest global warming are public goods worthy of public support.  The Business and Industry Advisory Committee to the OECD has recognized this obvious proposition:  “[S]ubsidies can help support the shift from traditional to new energy sources which are in early stages of commercialisation and where affordability is a key barrier, or where existing infrastructures make it difficult to introduce new energy sources.” The central problem, however, is that countervailing duty laws discourage and even punish subsidies.

THE TRADE LAW AS A CENTRAL PROBLEM 

            New green technologies, especially solar and wind, are understood almost universally to be vital for the future of the planet, technologies that electrify the globe without burning fossil fuels.  Yet, European and American manufacturers of solar equipment have been waging a trade war against Chinese manufacturers, and the Chinese have retaliated against other solar products from Europe and the United States. The net result of the solar war has been to reduce trade in solar equipment, raise prices, reduce availability of affordable and competitive equipment.  Even as governments everywhere have been urged by climate scientists and economists to reduce the consumption of fossil fuels and expand reliance on solar power, governments implementing trade laws have punished other governments trying to expand the use of solar power.

            The European Union and China negotiated a settlement of the principal dispute over solar panels in July 2013, setting a floor price for Chinese solar panels sold in Europe that generally raised prices while enabling the Chinese to maintain their significant presence in the European market. Nevertheless, the European Union initiated tariffs on Chinese glass used to make solar panels in April 2014, albeit involving a much smaller market. 

            In the summer of 2013, the United States was looking for a comprehensive three-way settlement (EU-China-United States) of the solar panel disputes, but U.S. trade law, lacking a public interest clause and dependent on the consent of the petitioning industry, could not deliver and the EU and China proceeded alone.  The United States, thus, has been left behind, principally because of the rigidities and pro-petitioner biases of its trade law.   

            Steel manufacturers of wind towers, upon which sophisticated turbines are erected, have been raising the cost of wind power, offsetting if not exceeding the efficiency gains of wind turbine manufacturers through innovation, research and development.  As the turbine manufacturers approach grid parity, the tower manufacturers push them further away, one domestic industry involving little technology innovation and few prospects for export trumping another domestic industry devoted to innovation with substantial prospects for international trade.

            Since countervailing and antidumping duties were imposed on wind towers from China and Vietnam in 2012, wind power development effectively has ceased on the coasts and islands (Puerto Rico and Hawaii) of the United States (an offshore project is moving forward in Massachusetts, but is not under construction; small projects are continuing in New York, Connecticut, Maryland and Oregon).  The Chinese and Vietnamese towers had supplied these markets because domestic towers could not be transported, neither logistically nor cost-effectively, from their manufacturing sites in the American heartland.  See attached map from the American Wind Energy Association. 

            The ironies here should not be lost. The manufacture of solar panels is largely robotic and creates few jobs. Installation and maintenance are labor intensive, and the more solar panels mounted, the less fossil fuel is consumed. Yet, domestic panel manufacturers, in Europe and the United States, have complained successfully about subsidies for the development of more, and more efficient, solar panels in China, thereby reducing jobs in the United States and reducing the deployment of solar power.

            There are many, many more jobs in the research, development, production, and installation of wind turbines than in the manufacture of wind towers.  The largest tower manufacturer in the United States has around 600 employees and has only one major competitor.  The third largest turbine manufacturer employs over 1500 to design and build turbines and has many competitors including two that are much larger. Yet, the wind tower manufacturers have succeeded in reducing the deployment of wind power by complaining about Chinese and Vietnamese subsidies to towers, collaterally reducing employment in turbine manufacture.  Hence, as the Chinese and Vietnamese Governments may be supporting the development and sale of green technologies, responding to the fourth and most promising of the strategies to combat climate change (by putting money into alternative energy), U.S. domestic manufacturers of competing products have been able to use trade laws to constrain the reduction of fossil fuel dependence and to kill skilled jobs.

          Job losses result from the application of countervailing duties in at least two ways.  An industry with fewer highly skilled jobs – for example, wind tower manufacturers – may adversely impact wind power development and therefore cost more highly skilled jobs among wind turbine manufacturers.  There is, however, a second way that can be even more damaging.  China, for example, has been willing to slow its own production of solar panels in order to retaliate against European and American trade actions. 

          China does not produce enough solar grade polysilicon to supply fully its production of solar panels.  China, consequently, is the world’s leading importer of polysilicon.  When the European Union and the United States brought cases against China’s solar panels, China launched investigations into imports of the solar grade polysilicon it uses to make the panels.  In January 2014, when the United States expanded investigations into Chinese solar panels, China imposed a permanent tariff of 57 percent on polysilicon from the United States (and 48.7 percent on polysilicon from South Korea).  The net result has been to cost American jobs in manufacturing solar grade polysilicon, and in installing and maintaining Chinese solar panels.

          The American experience contrasts with Europe, and not only regarding solar panels.  China began investigating allegations of dumping against European polysilicon before investigating polysilicon from the United States, but then entered into negotiations, particularly with the largest European producer, Wacker Chemie of Germany.  While negotiations ensued, China resisted imposing tariffs.  Finally, less than two months after making the tariffs on the American product permanent, in March 2014, China and Wacker agreed to a minimum import price that enables the Europeans to continue, and likely expand, their sales to China, probably soaking up some of the American market share. The American trade remedy actions designed to save American jobs had exactly the opposite effect.

            A study for the United Nations by economists at the Peterson Institute, presented April 3-4, 2014 in Geneva, has quantified some of the costs of applying the trade laws to green technologies. On behalf of “Ad hoc Expert Group 2” studying “Trade Remedies in Green Sectors:  the Case of Renewables,” Cathleen Cimino and Gary Hufbauer estimated that trade remedy law applications are reducing global trade in renewable energy goods by $14 billion annually which, they calculated, “translates into a global trade loss of approximately $68 billion over 5 years,” with over 91 percent of the global reduction of imports involving cases initiated by the European Union and the United States.  Over 70 percent of the reduced trade has been in solar energy and, with many pending solar cases, is growing.  Cimino and Hufbauer conclude, “By stifling competition [with “traditional technologies (coal and natural gas)”], trade remedies probably slow the convergence between renewable and conventional electricity costs.”  They add, however, that “the main driver of convergence has to be new technology, beyond what is on offer in any country today.”   Unspoken is that such new technology requires  government help, at least as traditional technologies benefit still and benefited historically, and that trade remedy laws stand in the way.

A NEW TREATY SHOULD ENABLE PUBLIC INVESTMENT IN GREEN TECHNOLOGY

            Our comments are intended to join others identified by Cimino and Hufbauer who have called for adjustments in the application of trade remedy laws to green technologies.  Cimino and Hufbauer observe that, “Concerns that environmental disputes will undermine progress toward curbing greenhouse gas emissions underlie the calls to reform laws governing trade remedies and dispute procedures.”  They note, and we agree, that “These calls may find resonance in the plurilateral talks announced by a group of 14 countries,” the very talks that occasion these Comments.  Cimino and Hufbauer note a call for a “peace clause” from Lester and Watson (2013), subsequent to Feldman’s critique of trade law in this sector in January 2012, followed in December 2012 by his appeal for an international agreement to curtail trade remedies on subsidized green technology.  Cimino and Hufbauer review a number of proposals advanced in 2013 to reduce the impact of trade remedies on the development of green technologies.

            Not all trade remedy laws are alike, and not all are susceptible to or in need of international agreement.  International treaty negotiations will not lead to a public interest clause that would enable the United States to settle disputes the way the European Union has been settling solar disputes with China.  Nor should there be an effort to change restrictions on local content requirements. 

           The United States has accused India of applying local content requirements to solar development. Local content requirements retard research and development because they exclude lessons from other countries.  To the extent they exist, the United States is right to challenge them.  But investment in research and development of knowledge and products that will reduce the use of fossil fuels, regardless where those investments are made  and notwithstanding that they may help local enterprises before reaching  those further away, can, and should be, regarded as a service to a global public.  Climate change is everyone’s problem and everyone should be investing (a more useful and appropriate term than “subsidizing”) in solving the climate change problem.

            Countervailing duties and antidumping are both designed as remedies for unfair trade, but they address different challenges.  Antidumping concerns prices, which are set by companies; countervailing duties concern financial contributions from governments.  The United States has entered into numerous agreements encouraging foreign governments to invest in green technologies. It makes no sense to encourage or induce such investments and then turn against the results through trade remedy proceedings.

            The idea advanced here concerns only countervailing duties because the concern here is to stop asking governments to invest in the cause of alternative energy, on the one hand, while inhibiting, on the other hand, the export of goods resulting from those investments. There is no good reason for a company with a subsidized product then to dump it, selling it for less than it costs to make it, or selling it abroad for less than the price it would charge at home. The investments promote science and technology; dumping promotes unfair competition.

            There are complications arising with state-owned enterprises (“SOE”) and non-market economies (“NME”) because there can be difficulty in distinguishing between state investment through financial contributions and unfair competitive advantage through price management.  However, the United States Department of Commerce purports to measure separately subsidies and dumped prices. Consequently, the Department of Commerce already claims a methodology that would enable it to identify financial contributions and exempt them from trade remedy actions.

            As Cimino and Hufbauer point out, several scholars have offered a range of trade remedy law modifications, from a complete “peace clause” to limiting tests that might reduce the number of cases or shrink their impact.  Cimino and Hufbauer cautiously dismiss the complete peace clause as “ambitious” and “not politically feasible at this juncture,” but the present is not necessarily the juncture of an international agreement, and as President Obama has recognized, there is nothing more urgent, warranting “bold ambitious goals”, than arresting climate change. 

            The United States wants to assert global leadership to save the planet.  What may seem “politically feasible at this juncture” should not define such leadership.  There is no greater paradox in President Obama’s desire to “lead the world in a coordinated assault on a changing planet” than for the United States, repeatedly and systematically, to keep out of world trade green technologies developed and produced, in some part, by the actions of governments to help achieve the universal goal of saving the planet.

            A common objection to subsidies is that they distort markets, but fossil fuels have been advantaged by accumulating more than a century of government investments that now distort competition for access to the electricity grid.  One solution is to remove those advantages, but that approach would require turning back the clock and rewriting the tax code, which would be impractical and surely not enough.  The United States’ existing fossil fuel infrastructure is here to stay, but green technologies need to be given the opportunities to develop so that their environmental benefits and commercial viability can be evaluated prudently in relation to the existing system of energy supply.  Consequently, the second solution is inescapable, providing the financial support necessary to accelerate invention, innovation, and technological change.

            A further common objection is that investments in developing new products may give unfair advantage to the products of one country over another.  Yet, if Americans could buy more and cheaper solar panels, it would mean more and better jobs overall for Americans.  Innovative or creative Americans could still compete with the Chinese product, by improving upon it or even replacing it with something else.  Achievement of the collective goals – reducing hydrocarbon use and expanding recourse to alternative energy production – would be much closer than it could ever become under current laws, policies, and practices.

            Improvement in the technologies and in the accessibility and affordability of alternative energy sources is not a zero sum game.  It should matter little which country accelerates an improvement that, by getting everyone closer to the goals that will save the planet, serves everyone. 

            There is no better way to adjust laws and practices to encourage research, development, and dissemination of goods and knowledge and techniques combatting climate change, than through an international agreement.  The fourteen countries that launched negotiations at the World Trade Organization with a modest tariff-cutting proposal were not modest in their ambition.  They described their proposal as “one of the most concrete, immediate contributions that the WTO and its Members can make to protect our planet,” a program intended to “protect our environment and address climate change.”  They saw the tariff-cutting only as a beginning, and only as part of something grander, “committed to exploring a broad range of additional products in the context of a future oriented agreement able to address other issues in the sector and to respond to changes in technologies in the years to come, that can also directly and positively contribute to green growth and sustainable development.”

            The USTR Notice inviting Comments did not reflect fully the ambition of the APEC countries, nor faithfully the ambitions of President Obama in his climate change address at Georgetown University on June 25, 2013.  While the TPSC Chair invited comments on all relevant matters, it focused “in particular,” in three of its four parts, on specific products. Fortunately, in the fourth category of invited Comments, the TPSC Chair asked “how best to ensure that such an agreement remains relevant into the future.”  

            A new agreement will not be relevant into the future without ambition beyond tariff-cutting because innovation should mean an endless cycle of new products, and innovation will be encouraged only through government investments that current rules will punish.  Countries investing to protect the planet should not have their products kept out of world trade because they invested.  They should be rewarded, not punished, congratulated, not sued.  These talks are the opportunity to make the rules accommodate the reality of climate change.  Adherence only to the more modest ambition of tariff reduction would be less than the APEC countries seek, an opportunity missed which might never timely present itself again.

介绍

          美国贸易代表办公室于今年3月28日代表贸易政策委员会刊登通知,欢迎社会各界就十四个世贸组织成员提议展开的环保产品谈判各抒己见。这一即将展开的谈判建立在APEC领导人于2012年提出的、减免五十四项环保产品关税清单基础之上。

          APEC领导人认识到环保产品的自由贸易至少可以帮助实现两个目标:增进自由贸易,以及减缓全球气候变化。环保产品的全球流通将推动这些产品的广泛使用、减少碳足印,最终帮助控制气候变化。

减免关税还不够

          减免关税总是能够促进全球贸易,因此往往是所有贸易协定谈判争取实现的首要目标。然而,减免关税并不能显著促进环保产品流通、实现控制气候。

          联合国气候变化委员会最近发布的报告指出:全球变暖的主导因素是人为因素,占95%以上;现在控制气候变化仍为时不晚,但是时不待人;只有重大研发突破才可实现控制气候变化。后者需要投入大比资金,仅仅依靠企业的力量显然不够,因为企业关注短期效应。

          APEC环保产品清单中列出的众多产品大多旨在减少碳排放、提高以碳氢化合物为原料的能源生产的生产效率。这一方案并未提出通过替代能源减少碳排放,而这正是切实减少排放的唯一有效途径。

必须帮助发展其他能源

          替代能源必须和矿物燃料在市场中竞争。矿物燃料多年来一直局限于煤炭、石油和天然气开采,而这些传统行业在替代能源急需发展、以更有力地和矿物燃料竞争时也不断发展扩大。

          一个多世纪以来,北美政府为石油天然气产业提供研发、开采和销售补助。国际能源组织2011年报告指出,国际经合组织(OECD)成员国共为矿物燃料生产提供超过250项措施补助。美国能源信息管理中心2010年6月的报告则指出,2008年世界各国共支付55.7亿美元补助矿物燃料产业,却仅仅为替代能源产业提供4.3亿美元补助。此外,非政府组织—— SourceWatch 报告显示,大部分矿物燃料补助已经被永久写入美国税法,而为替代能源提供的补助却短暂且有限。

          正因为多年来为矿物燃料提供的补助已被永久写入美国税法,而这类补助远远超过为替代能源提供的研发支持,对于消费者而言两类能源的价格差别迥异。只要差异不缩减,消费者将忽略环境影响,依旧偏爱使用矿物燃料。在公众事业领域,电网平价决定一切,决定究竟是风能、太阳能、还是矿物燃料生产的电力进入消费领域。

          因此只要矿物燃料生产的电力交割价格低于替代能源(风、太阳能、地热等)电力,公众事业依然将依赖矿物燃料。目前页岩天然气开发使得传统能源生产成本进一步降低,替代能源进一步丧失竞争优势。只要传统能源生产依然享受补助,长达一个世纪的研发补助使之继续享有替代能源无法超越的优势。

控制气候变化的战略

          四大战略可以控制气候变化:(1)通过提高生产效率或者添置设备,以控制或减少传统能源生产产生的污染;(2)向传统能源生产增收税收,这是承认未来仍将依赖传统能源、但旨在鼓励减少依赖的方法;(3)指令替代能源的使用必须达到一定比例,因此接受更高的能源价格,但可减少碳氢化合物排放;(4)发展更先进更优秀的替代能源,如效率更高、价格更具竞争力的太阳能板和风力发电机组。

          前两大战略几乎肯定将继续依赖以煤炭为代表的传统能源,美国以及许多发展中国家仍然依赖传统能源。第三个方案必将而且将永远受无法实现电网平价的限制,因为公众电网提价将导致通货膨胀,这也等同于不平均地征收销售税。只有第四个方案是长久有效控制传统能源引发的气候变化。这一方案要求政府提供补助,甚至要求达到为传统能源提供的补助水准。但是目前提议的谈判似乎仅仅局限于第一种战略。

抓住机遇进行卓有成效的谈判

          如果认为更有效地使用传统能源意味着必须继续使用这一能源,因而依照第一种方案仅仅为环保产品提供优惠关税不足以根本解决问题。方案一是延缓气候变暖,拖延时间为替代能源发展争取时间。着眼于环保产品的国际谈判为实施这一方案创造了机会。

          绿色能源需要政府支持才能与传统能源竞争。创新、研发可以控制气候变暖,为公众造福的事业也需要公众支持。国际经合组织(OECD)商业工业顾问委员会赞同这一观点:“补助可促进从传统能源向正在商业化的新能源转型,新能源的价格是否能够让人承受是主要障碍,而现有的公众设施也使得引进新能源举步为艰”。但是,最关键的问题是反补贴法不鼓励乃至惩罚补助。

贸易法是最大障碍

          举世公认,发展以太阳能和风能为代表的的新绿色科技对地球未来至关重要。但是欧美太阳能产品生产商却针对中国产品展开贸易行动,而中国也以牙还牙针对欧美其他太阳能产品采取报复措施。太阳能产品贸易大战导致贸易递减、价格提升,减少市场上价格合适且具竞争力的产品。虽然气候专家和经济学家多次要求政府减少对碳氢化合物能源的依赖,增加使用太阳能,政府却使用贸易法惩罚鼓励使用太阳能的政府。

          2013年7月中欧达成太阳能板案协议,为中国出口至欧盟的太阳能板设立最低限价,虽然这一价格提高了中国产品价格但仍让中国产品在欧盟市场保持显著市场份额。但是,欧盟仍于2014年4月开始对中国产、用于制造太阳能版的晶体征收关税,虽然这一市场较小。

          2013年夏,美国试图通过美欧中三边协商解决太阳能板纠纷,但是美国贸易法没有公众利益这一条款、而且依赖起诉企业的同意,因此无法参与谈判。因此美国贸易法的不通融、倾向于申诉人的特性导致美国被排斥在谈判之外。

          生产用于制造支撑风力发电机铁塔的钢铁生产企业是导致风力发电成本上涨的主要原因。即使风塔支撑的发电机生产商不断研发,更先进的发电机组带来的效率增长也被钢铁价格上涨抵消了。当发电机生产商讨论平价时,风塔生产商却转身置之不理,于是这一停滞不前的产业阻碍了不断创新、具有出口潜力行业的发展。

          自2012年向中国以及越南生产的风塔征收反补贴、反倾销税以来,风力发电在美国两岸以及夏威夷、波多黎各岛停滞了。(麻省一海洋风力发电项目仍按计划进行,但尚未开始施工,同时小规模项目仍在纽约、康涅狄格、马里兰和俄勒冈州有条不紊地进行。)这些项目使用中越两国生产的风塔,因为无论是从成本还是物流角度看,美国生产商无法将本国生产的风塔从产地运送至这些地点。

          这些案件折射出的自相矛盾之处不容忽视。总体而言,生产太阳能板的企业状况良好但很少创造就业机会。安装、维护太阳能板却颇费工时,同时太阳能板安装将减少碳氢化合物能源的消耗。但是欧美太阳能板生产商却成功地将矛头指向中国,指责中国政府提供的补贴使得中国企业更有效率,这一状况导致美国损失就业机会并减少太阳能板安装。

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                                                                                                                               翻译:朱晶