Biden’s trade policy needs effective commercial diplomacy
The incoming Biden administration has a great opportunity to rebuild America’s international competitiveness and policy effectiveness in ways to assure that the domestic and international policy agendas reinforce each other. This approach can build prosperity at home and simultaneously establish markets, opportunities and partnerships internationally.
The appointments of Jake Sullivan as national security adviser and Susan Rice to lead the Domestic Policy Council portend well for a more coordinated approach to the many “intermestic” issues that the United States faces. These are issues that have great international and domestic import simultaneously, requiring an integrated approach for effective economic statecraft.
Trade policy must be at the top of that list because it has generated such divisive debate, but the list of cross-cutting issues includes investing in infrastructure, workforce development training, research and development, and smart migration policies. It also means forging effective commercial diplomacy and building international coalitions to establish beneficial international norms and regulations on technology, cybersecurity, investment, taxes, internet management and a host of regulatory issues, just to cite some examples. Trade agreements are important, but they are only one set of tools to build prosperity.
President-elect Biden and his team are giving correct priority to his plan to “build back better” at home. The programs he advocates have the promise to make the United States more competitive internationally. They can increase international sales by U.S. companies, helping to boost the almost 39 million U.S. jobs supported by international commerce. Additionally, they can help attract increased foreign investment, providing jobs and growth. A 2016 report by the Commerce Department estimated that up to 12 million U.S. jobs were supported by foreign investment.
To achieve this potential, the Biden team needs to break from past practices and create new models of policy formulation and implementation that generate much closer interagency coordination and collaboration. Trade policy cannot be walled off from effects on domestic jobs or on international partnerships. International financial policies cannot be walled off from national security or domestic impacts. Sanctions, investment rules, technology regulations, internet policies and much more of the government’s technical work have domestic and international impact that must be well considered across a broad array of U.S. interests.
The pandemic reminded us that this interconnectivity between the international and domestic is also true of health policy. COVID-19 and its poor management have touched many at home, as well as abroad.
Biden’s selection of former Secretary of State John Kerry as his climate envoy also underscores that successfully addressing the environment and climate change can be accomplished only with integrated domestic and international policies. And these have vital security as well as economic impacts — for example, via increased international migration. Biden has highlighted that good policies have the potential to create millions of “green” jobs, as we proceed.
This kind of multi-dimensional policymaking and policy implementation requires a more integrated and interconnected process in the White House and between agencies than we have seen in the past. To work well, it will demand closer and more effective interagency partnerships. Success will come from breaking down agency silos and policy blinders.
The Biden team must forge a clear national strategy with a unified vision that can empower international economic policies to reinforce domestic prosperity and national security. As a corollary, it must get a strong international economic team in place.
One clear example is commercial diplomacy — diplomacy and aggressive advocacy in support of the U.S. private sector having fair access to overseas markets. This function long has been divided between the State and Commerce departments with mixed effectiveness in supporting U.S. companies’ success overseas. While America’s international competitors, including China, have reimagined and dramatically upgraded their commercial diplomacy work, the U.S. has lagged behind, as a landmark 2017 report by the American Academy of Diplomacy highlights.
Early on, the Trump administration focused largely on protecting the U.S. market, rather than on opening new overseas markets for U.S. companies. Even with the important new North America trade agreement — the United States Mexico Canada Agreement (USMCA) — a great value of the accord was to do away with the uncertainty of President Trump’s threats and preserve the vital continental market that the private sector built.
Only in the administration’s past year or so did State and Commerce come together with well-organized support for U.S. company commercial opportunities overseas. Only at the end of 2019 could the administration begin to use the powerful tools that Congress provided with the new Development Finance Corporation (DFC) to bolster U.S. economic impact overseas and with a reauthorized Export-Import Bank (EX-IM).
The Biden team should, early on, develop a unified national strategy for commercial diplomacy that integrates efforts by State, Commerce, DFC, EX-IM, USAID, the US Trade Representative, the departments of Treasury and Agriculture and others. The strategy should integrate the work of U.S. embassies to create and support opportunities for U.S. companies and work to dismantle policy and regulatory barriers that would tilt the playing field against them. To succeed, the effort needs funding, more overseas staff, better integrated training, strong ambassadorial leadership in the field, partnership with the private sector, and effective interagency coordination.
Biden and his team have a great opportunity to build a more effective international economic strategy and machinery to support America’s prosperity and security. A crucial first step is to get a strong slate of Cabinet and sub-Cabinet leaders in place across the administration to make this happen.
Earl Anthony Wayne is a retired career ambassador. He served as assistant secretary of State for business and economic affairs and as ambassador to Mexico and Argentina, and now teaches at American University. Follow him on Twitter @EAnthonyWayne.
Shaun Donnelly is a senior adviser at the U.S. Council for International Business. He held senior economic policy positions at the State Department and the Office of the U.S. Trade Representative, and was ambassador to Sri Lanka.
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