Biden’s muddled trade policy
Recently, Rep. Jim Costa (D-Calif.) said he’d like U.S. trade representative Katherine Tai to testify before the House Agriculture Committee early in 2022. He says he wants “clarity” on U.S. trade policy, and “where agriculture fits in…” Clarity would be good right now, because having no trade policy appears to be the trade policy of the Biden administration.
Costa’s invitation to Tai comes on the heels of a report by the Corn Refiners Association titled “Trade Agreements and U.S. Competitiveness.” The vanilla title belies the report’s despair. It’s a survey of Washington’s “recent bipartisan neglect of a proactive trade agenda” and “self-removal from the game ….” It’s not a flattering read.
The report’s main take-away is that our trade partners are busy negotiating trade deals, and the U.S. isn’t. Since 2010, Canada, China, the European Union (EU) and Japan have each had at least seven new agreements come into force, whereas the U.S. has mostly edited four existing ones, notably the U.S.-Mexico-Canada Agreement (USMCA). Going forward, moreover, the Biden administration has been silent on proposed trade deals with the UK and Kenya, or rejoining the Trans-Pacific Partnership (TPP). Instead, Tai and others are promoting an Indo-Pacific Economic Framework, which the report rightly calls “undefined.”
The Corn Refiners Association report urges Biden to do more than enforce existing trade deals. Here’s why. First, the Biden administration continues to block the Appellate Body (AB) of the World Trade Organization (WTO), making it far more difficult to sue any of the fast-growing markets in the Asia-Pacific in Geneva.
Second, even if the AB were back to work, the WTO can’t enforce non-WTO law, and this includes the new science-based health and safety provisions built into modern trade deals, such as USMCA. Indeed, USMCA has a strong chapter on sanitary and phytosanitary standards, making it especially capable of dealing with emerging food fights. American farmers and ranchers need access to similar “WTO plus” provisions in the Asia-Pacific and elsewhere. This can happen only if the U.S. gets more trade deals.
Agricultural trade is seriously complicated. It’s not just about tariffs and subsidies. Food fights are increasingly over science, labels and the names and descriptors used to explain these products to consumers. The EU, for example, claims 3,300 geographical indicators, such as cheddar, and recently concluded a deal with China to give 550 of these enhanced protections, something the WTO does only for wine and spirits. The U.S. needs to get in on this action.
Modern trade deals also include special provisions for litigating agricultural disputes. For example, USMCA puts more emphasis on technical consultations in the lead up to dispute settlement. It also provides for technical working groups to trouble-shoot any emerging health and safety tensions before they arise. U.S. agriculture needs this bigger tool kit in the Asia-Pacific, among other places, and should insist that the Biden administration explain how it will deliver.
America’s farmers and ranchers lost big when President Trump pulled the U.S. out of the Trans-Pacific Partnership (TPP). Barter deals, like Phase 1 U.S.-China, aren’t a substitute for the market access had by a trade deal. When Tai goes before the House Agriculture Committee, she should either give a timeline for rejoining the TPP or offer a draft of a template for an Indo-Pacific Economic Framework.
The report by the Corn Refiners Association speaks for all U.S. exporters. It’s not possible to pause U.S. trade policy in a global economy. The Biden administration’s “review” has dragged on long enough. Having no trade policy is a trade policy. It’s just a bad one.
Marc L. Busch is the Karl F. Landegger Professor of International Business Diplomacy at the Walsh School of Foreign Service, Georgetown University. Follow him on Twitter @marclbusch.