The proposal from the electrical workers’ union is explained in this NY Times article.
What EC Trade Commissioner Peter Mandelson means by the proposal being a “probable breach” of WTO trade rules is that unilateral measures must be both necessary and non-discriminatory under the GATT’s rules on “environmental” non-tariff import barriers. In the 1990’s, the USA twice failed these tests of its laws on turtle-exluding purse-seiner nets for shrimp boats and (probably—the case was never decided) of its laws concerning the protection of dolphins by tuna boats. As I argue here, the most plausible necessity-test is one that shows a barrier has been imposed to comply with an internationally-agreed obligation in an environmental treaty, such as the Kyoto Protocol.
Of course, the reason that the Obama camp is proposing this unilateral action is precisely because such international agreement on trade sanctions is entirely unlikely. Here, Peter Mandelson’s second point is relevant. The Obama proposal is ‘bad politics’ because unilateral action by the USA or Europe to impose sanctions would make the prospect of international agreement on any collaborative action on climate change—let alone on sanctions for non-compliance with emissions controls—more remote, defeating his whole purpose.
Obama’s advisors, at least, could take a few lessons in leadership from Mandelson.