The Trade Policy Agenda of the Biden Administration, released in March (2021), very clearly reflects U.S. domestic concerns. Unlike the Trump Administration, however, which kept narrowly defined U.S. interests at the heart of its policy, the Biden Administration trade policy uses U.S. interests as a point of departure to work with allies on shared global threats. The trade agenda also goes beyond the traditional focus of U.S. administrations on expanding market access for U.S. goods and services and enforcement actions for violations of trade commitments. While these components are certainly present, the nine pillars incorporate elements that underscore the Administration’s ambition to use trade to provide tangible benefits for all Americans.
We highlight the following key elements of the nine pillars:
Tackling COVID and Restoring the Economy – President Biden’s trade policy will
promote long-term supply chain resiliency for equipment and supplies critical to protecting public health in the United States. It will also support the broader economic recovery by helping companies, including small businesses and entrepreneurs, put Americans to work by building world-class products for export to foreign markets.
Putting Workers at the Center of Trade Policy – Committing to protect and empower workers, the Administration’s trade agenda will focus on inclusion in trade agreements of enforceable labor standards and on use of the Rapid Response Mechanism of the United States-Mexico-Canada Agreement (USMCA). The first of its kind, the USMCA mechanism will review alleged violations by individual factories in Mexico of workers’ rights to free association and collective bargaining and impose duties or other penalties on products made at factories found to be in violation. The Administration also plans to conduct reviews of past trade policies to understand their impact on workers.
Without naming China, (seen as the main culprit), the Administration also pledges to use the full range of trade tools at its disposal to ensure that products that use forced, trafficked, or child labor and/or exploitative labor conditions are not imported into the United States. Working multilaterally on this issue, the Administration will also oppose attempts by foreign countries to artificially manipulate currency values (allowing them to gain unfair advantage over American workers). Towards this end, the Administration commits to work to increase transparency and accountability in global supply chains, an issue with which has already occupied the attention of the U.S. Congress.
Putting the World on a Sustainable Environment and Climate Path – Towards the goal of reducing greenhouse gas emissions and achieving net-zero global emissions by 2050, if not before, the trade policy agenda includes the negotiation and implementation of strong environmental standards. The Administration further commits to work with engaged partners to explore and develop market and regulatory approaches to address greenhouse gas emissions in the global trading system and to act against trading partners that fail to meet their environmental obligations under existing trade agreements. Fostering U.S. innovation and production of climate-related technology will promote resilient renewable energy supply chains.
Advancing Racial Equity and Supporting Underserved Communities – A first, that I have seen in a U.S. trade policy document, this pillar commits the Biden Administration to a trade agenda that acknowledges the grave reality of the persistent economic disparities on communities of color exposed during the pandemic. The Administration plans to engage in ongoing discussions and innovative data collection to better understand the projected impact of proposed trade policies on communities of color and to ensure those impacts are considered before pursuing such policies.
Addressing China’s Coercive and Unfair Economic Trade Practices Through a Comprehensive Strategy – While reiterating the areas of tension in U.S.-China trade relations – barriers that restrict access to the Chinese market, use of forced labor, subsidies, overcapacity in some sectors, coercive technology transfers, censorship in the digital economy, and failure to provide like treatment to U.S. firms operating in China – the Biden Administration plans to replace the focus on tariffs with a comprehensive and systematic strategy. To this end, the Administration is conducting a comprehensive review of U.S. trade policy toward China. Addressing human rights abuses, strengthened enforcement, as well as transformative investments at home to enhance U.S. competitiveness will be key components of this strategy.
Partnering with Friends and Allies – Inclusion of this recommitment to multilateralism reflects the need to repair relationships damaged during the past four years. The Biden Administration will seek to regain its leadership in international organizations. This will include working with the World Trade Organization (WTO)’s new Director-General, Ngozi OkonjoIweala, and like-minded trading partners to implement necessary reforms to the WTO’s substantive rules and procedures. Reforms are needed so that the organization can deal with the challenges facing the global trading system, including growing inequality, digital transformation, and impediments to small business trade. The WTO is also the venue to work with allies to address market distortions caused by industrial overcapacity to which, the document notes, the Chinese Government has been a key contributor.
Standing Up for American Farmers, Ranchers, Food Manufacturers, and Fishers – This pillar aims at correcting the negative impact on America’s agricultural communities of erratic trade actions taken “in recent years”. The Biden trade agenda will seek to expand global market opportunities for American farmers, ranchers, food manufacturers, and fishers and defend U.S. producers by enforcing global agricultural trade rules.
Promoting Equitable Economic Growth Around the World – Not a new component to U.S. trade policy, what stands out in this pillar is the acknowledgement of the need to learn more about the issue. The Administration plans to conduct a review of existing trade programs to evaluate their contribution to equitable economic development, including whether they reduce wage gaps and lead to the economic empowerment of women and underrepresented communities. As part of this review, the Biden Administration will seek to incorporate corporate accountability and sustainability into trade policies. In addition, the Biden Administration is committed to engaging in robust technical assistance and trade capacity building with trading partners to ensure workers and small and medium-sized enterprises around the world benefit from U.S. trade policy.
Making the Rules Count – Included in this pillar on enforcement is the focus on ensuring that labor and environmental standards and workers’ rights in existing trade agreements are implemented. Acknowledging that unilateral action may be necessary in some instances, President Biden will make it a priority to work multilaterally on trade enforcement.
Billed as an agenda for 2021, these are large priorities that will occupy the Administration for its entire term. We will nevertheless look forward to learning how future iterations of the Trade Policy Agenda of the Biden Administration incorporate the lessons learned from the several reviews to be conducted.
I am a seasoned international trade and customs attorney, and policy adviser for various companies and governments with a demonstrated history of successfully developing and implementing sustainable and dynamic trade programs. I am experienced in creating partnerships with various business-support organizations to drive compliance and growth in the international market.