Squandering an opportunity on trade
The Biden administration’s economic missteps continue. Too much Washington spending caused historic inflation; regulatory overreach has led to record-high energy prices; and Democrats’ crippling tax agenda threatens investment and opportunity. One thing is certain: Americans everywhere are struggling under President Biden’s cruel economy.
In addition to the president’s domestic policy failures, the administration’s refusal to develop a robust and proactive trade strategy has further exacerbated our economic challenges.
There are many examples that underscore the consequences of the Biden administration’s failure to take trade seriously, a recent being the breakdown of U.S.-UK trade negotiations following President Biden and Prime Minister Liz Truss’s meeting at the United Nations. As the Wall Street Journal accurately wrote after the trip, “The Biden Administration’s trade policy has largely been a failure.”
This is disappointing and damaging to the United States not just reputationally, but economically.
Strong trade agreements support American industries by opening the door to more customers and markets for small businesses. They also lower costs for American consumers, something desperately needed during record-high inflation.
While other countries around the world — including and especially China — continue to pursue new trade opportunities, President Biden is pursuing “frameworks” in the Indo-Pacific and Americas. Whatever their potential merit, these frameworks are no substitute for trade agreements. By design, they will not open new markets for American products and services — and contain no enforcement mechanisms. Our competitors — including China — will continue to take more of the global market share from American businesses, even if the frameworks are concluded.
This administration began with major trade opportunities and momentum. President Trump, with bipartisan support in Congress, enacted the historic United States-Mexico-Canada Free Trade Agreement (USMCA) in 2020. The world saw this important and historic agreement as a roadmap for other high-ambition pro-American trade deals.
USMCA is already producing more American jobs and opportunities for U.S. companies while addressing NAFTA’s broken dispute settlement system. Thanks to USMCA, we now have an effective way to enforce the agreement when Canada or Mexico don’t live up to their commitments, and we need to do the same with other trading partners around the world.
Regrettably, nearly two years later, the Biden administration has done little to build on the momentum left by the Trump administration’s efforts, missing opportunities to foster new trade relationships around the world.
The United Kingdom, Japan and Kenya have all expressed strong interest in building on the USMCA model. In fact, the Trump administration completed several rounds of negotiations with the United Kingdom and Kenya. The Biden administration could have resumed these negotiations at any point over the last two years, but this White House approaches trade like a hot kettle that shouldn’t be touched.
Strong trade agendas need not be partisan. Even former Democrat presidents — like Barack Obama and Bill Clinton — had more aggressive trade agendas. Unfortunately, today’s Democrat Party has been captured by extreme progressives, big labor, and radical environmental groups. The greatest irony is that selling American products abroad supports American workers through competitive wages and leads to manufacturing of high-standard products.
Biden, who campaigned as a bipartisan consensus builder, is now more of a passenger on a bus driven by ideological extremists with no interest in finding new opportunities for American entrepreneurs around the world.
This must change.
Strong trade agreements should be built on a bipartisan foundation. The Trump administration’s bipartisan work on trade could have served as both a template and motivator for this administration to pursue pro-America trade deals.
Republicans will continue to press this administration to pursue a more active trade agenda. A successful trade agenda will require close cooperation with Congress every step of the way; this coordination is not optional.
Adrian Smith represents Nebraska’s 3rd District and is ranking member of the Ways and Means Trade Subcommittee.