By Ngosong Fonkem
The past four years of “America First” trade policy under the Trump Administration has been one of the most unpredictable periods in international trade history. After an exhausting post-election transition battle, President Biden was finally sworn into office on January 20, 2021, becoming the Forty-Sixth president of the United States. As things begin to settle down to normality under a new administration, an area of significant interest for the business community remains: What will US trade policy look like under a new Biden-Harris Administration in the coming four years or possibly eight years? Given that the Biden-Harris Administration is still in its infancy and is still formulating its trade policy, the most reasonable and appropriate method for forecasting what U.S. trade policy focus is likely to be in the new administration is to review and analyze the recently released “2021 Trade Agenda and 2020 Annual Report,” which was published on March 1, 2021, by the Office of the United States Trade Representative (“USTR”).
Typically, the U.S. government, through the USTR, on an annual basis publishes two seminal reports detailing its trade policy focus for the coming year: (1) The National Trade Estimate Report on Foreign Trade Barriers (“NTE”); and (2) Trade Policy Agenda (“TPA”) report. Whereas the NTE addresses the status of foreign trade and investment barriers to U.S. exports around the world, the TPA reports on progress and problems from the previous year and lays out U.S. policy focus and agenda for the coming year. These reports provide a window into the U.S. government’s views and priorities with respect to its trade policies moving forward, its trade relationship with its major trading partners, and further sheds light on the U.S. government’s potential trade actions against them. The information obtained from these reports provides a starting point for brainstorming strategic solutions for managing potential trade risks. With regard to the March 1, 2021, TPA report, two key areas standout: (1) Tackling the Covid-19 Pandemic; and (2) Countering China’s Influence through the use of the tools of trade and “values” based appeal.
Tackling the COVID-19 Pandemic
First, a major aspect of the report focuses on the administration’s effort to help the U.S. recover from the COVID-19 pandemic and “build back better.” Specifically, the report makes clear that the COVID-19 pandemic remains the greatest threat to the U.S. economy and the president’s domestic policies will first and foremost address stopping the spread of the virus and safely re-opening the economy. The agenda also encompasses a commitment to long-term investments to strengthen domestic production of essential medical equipment and an expansion of industrial capacity to meet future public health crises.
Countering China Through The Tools of Trade
As in the previous administration’s policy of confronting China using tariffs and other tools of trade, the report emphasizes continuity, except that the Biden Administration shall commit to work with its allies to strengthen the multilateral-rule base system with a view to counter China’s engagement with the world. It goes on to state “China’s challenge will require a comprehensive strategy and more systematic approach than the piecemeal approach of the recent past.” In that regard, the Administration will coordinate with U.S. allies to pressure the Chinese government to end its unfair trade practices and will work to hold China accountable to its trade obligations. Further, through bilateral and multilateral engagements, the U.S. will seek to build consensus around trade policies and will reengage and be a leader in international organizations, including the World Trade Organization (“WTO”) and will rely on strong trade enforcement to make certain U.S. trade partners live up to their commitments. These efforts will restore U.S. leadership around the world.
Countering China Through a “Value” Base Appeal
With regard to countering China through a values-based appeal, the report emphasizes US trade policies shall be advanced through a worker centric, human rights centric, and climate rights centric lens. The report states that workers “will have a seat at the table” in the development of trade policies and the Biden administration will review past trade policies for their impacts on, and unintended consequences for workers. In addition, the administration’s trade team will work with allies to achieve commitments to fight forced labor and to increase transparency and accountability in global supply chains. The report also includes plans to negotiate and implement strong environmental standards that are “critical to a sustainable climate pathway.” These efforts will include the negotiation and implementation of strong environmental standards and the development of market and regulatory approaches to address greenhouse gas emissions.
Observations Conclusory Remarks
An analysis of TPA 2021 makes two key issues certain: (1) We cannot have a functioning and vibrant economy if all our people are sick. Now more than ever we have to consider how global health is changing our lives. And (2) trade disruption caused by the geopolitical competition between the U.S. and China will continue for the foreseeable future, except that it will be multidimensional. As a result, any business that operates within this international trade environment must have a plan on how to manage global trade risk as compliance issues will remain a priority in the new Administration.
Ngosong Fonkem is an attorney at Page•Fura, P.C., a firm that provide companies of all sizes with business-practical representation on all aspects of Customs & International Trade Law. Ngosong received his B.A. from University of Wisconsin-Green Bay (2008), J.D./MBA from West Virginia University College of Law (2011), and LL.M. from Tulane Law School (2012).
In formation on his co-authored book, Trade Crash: A Primer on Surviving and Thriving in Pandemics & Global Trade Disruption, is available at: https://www.tradecrash.com/