2023 is the year to renew trade promotion authority
Political pundits are busy telling the world that activity in Washington, D.C. is quickly coming to a halt. Divided government will mean less legislating and more pageantry, or so the story goes. But that is not what Americans expect from our leaders. Voters gave us divided government and there are issues that can be resolved when compromise is the basis for action. International trade is one of these areas.
For context, in recent history, Trade Promotion Authority (TPA) has been the port of embarkation for new free trade agreements (FTAs). This policy tool gives the White House leeway to negotiate agreements, but still requires a vote from Congress to ratify a proposed FTA. TPA lapsed in July 2021, which is why we have not achieved any new FTAs since the U.S.-Mexico-Canada (USMCA) agreement. It is hurting hard-working American companies that rely on trade between America and other countries for its made-in-the-USA products.
This leads to two important questions. First, how did we end up in this scenario, if FTAs are so helpful for American companies? And second, is it politically possible to resurrect TPA in 2023? By exploring three important constituencies, we can determine the answers to both questions.
First, unions have been a key hold-out when it comes to FTAs. Their mandates to protect American workers have driven a hyper-focused policy agenda aimed at curtailing large corporations’ tendency to offshore jobs. Good jobs are supported by products made here in the United States.
However, the America First agenda has shifted the Republican Party’s relationship with the labor movement. Ambassador Robert Lighthizer, the U.S. Trade Representative for President Trump, described his trade agenda as “worker-first”. He galvanized relationships with organized labor as he crafted the U.S.-Mexico-Canada free trade agreement (USMCA), which received overwhelming bipartisan support in Congress.
We can take the lessons from USMCA and the platform Lighthizer has built as a foundation for future agreements that provide new market access and also support high-quality American jobs.
The second historical challenge for FTAs has been the flow of agricultural goods. Our farmers and ranchers don’t want other countries to flood our domestic market with their products and vice versa. We need to take these concerns seriously to protect American producers, like Georgia’s pecan growers, who have long-term concerns about increasing competition with Mexico.
However, the overarching data are clear on this front, America’s farm families have seen a nearly doubling of agricultural exports to countries directly after a new FTA is established on a five-year average annual basis. Many of these countries can’t feed themselves, or don’t have diversified crop production and thus, welcome America’s bounty. Russia’s war in Ukraine has only increased this uncertainty and the world is more dependent on the high-quality products we grow and raise right here in America.
The final political dynamic that lends itself to a bipartisan trade package is China. Whether or not we want to admit it, the policies of both countries are leading to a strategic decoupling of our economies. For example, the bipartisan U.S.-China Economic Security and Review Commission recently recommended that “Congress should consider legislation to immediately suspend China’s Permanent Normal Trade Relations treatment” and Lighthizer also penned similar sentiments in the a New York Times piece last month.
China isn’t waiting for an outcome of this duel to decide where it will procure goods and services. Chinese President Xi Jinping and his increasingly insular team are aggressively going after FTAs and other trade relationships across the globe. We should be too. Democrats and Republicans alike can agree on our need to forge economic relationships with countries around the world to strengthen our negotiating hand as geopolitical tensions arise. Sound bite duels on trade will not serve us well in our great power competition with China.
President Biden needs to take action by requesting TPA from Congress. Only then can we pursue fair and intentional FTAs that protect our economic and national security. The trade politics of the past have changed. Let’s hold the administration and Congress accountable and get it done in 2023.
Luke J. Lindberg is the president of South Dakota Trade and the former chief of staff at the Export-Import Bank of the United States.
Gary black is the managing partner of On Point Strategies and the former commissioner of agriculture for the state of Georgia.