Trade

Biden nominee previews post-Trump trade agenda

Katherine Tai, President Biden's pick for U.S. Trade Representative (USTR), previewed the administration's post-Trump trade agenda at a confirmation hearing Thursday where senators signaled bipartisan support for her nomination.

Tai, a former general counsel to the USTR and top lawyer for the House Ways and Means Committee, jumped right in with her opening statement by addressing a frequent criticism of U.S. trade in recent administrations: that it has left too many people behind.

"We must pursue trade policies that advance the interests of all Americans - policies that recognize that people are workers and wage earners, not just consumers; policies that promote broad, equitable growth here at home; policies that support American innovation and enhance our competitive edge," she said.

Tai took it a step further when asked by Sen. Pat Toomey (R-Pa.) if the fundamental goals of trade policy should be to eliminate quotas, tariffs, and barriers to trade, particularly when dealing with modern, industrialized economies.

"I have to confess to you, my dilemma is that maybe if you'd asked me this question five or 10 years ago, I would have been inclined to say yes," she said, reflecting an evolving worldview on trade that puts a greater focus on shared economic prosperity, geopolitical goals and climate change.

"But sitting here before you today in 2021, having gone through four years of Trump administration trade policies, the previous years of efforts to negotiate the [Trans-Pacific Partnership] and the last year of living in a pandemic world ... I think that our trade policies need to be nuanced, and need to take into account all of the lessons that we have learned, many of them very painful, from our most recent history," she added.

Tai signaled that such an approach could be used to revive the Trans-Pacific Partnership (TPP), the 12-country trade deal that became a lightning rod for both parties in the 2016 presidential election. Trump scrapped the trade deal upon taking office.

But the strategy of banding together with multiple countries to set the rules of global trade "is a solid equation," Tai said, adding that the TPP would need to be renegotiated given how much the world has changed since 2015.

She also addressed how the administration would likely engage with China, the world's second-largest economy.

"China is simultaneously a rival, a trade partner, and an outsized player whose cooperation we'll also need to address certain global challenges. We must remember how to walk, chew gum and play chess at the same time," she said.

She also promised to press China on the phase one trade deal Trump signed last year, and utilize tough new enforcement mechanisms in the United States-Mexico-Canada Agreement, many of which she helped write or negotiate in the Ways and Means Committee.

"I hope that's true," said Sen. Sheldon Whitehouse (D-R.I.). "I've been in Congress 14 years and enforcement has never been an adequate priority in my view ever. So I hope when you're done improving enforcement you'll then improve enforcement and then improve enforcement again."

The Biden administration has already taken several steps on the trade front, even without a permanent trade representative.

On Wednesday, Biden signed an executive order mandating a supply chain review of certain critical materials for the economy, noting that a chip shortage has affected the auto industry, and that technology had become key in both private industry and national security infrastructure.

Rather than seeking cheap supplies abroad, the review could produce recommendations to shore up domestic production.

Lawmakers have pushed for similar measures regarding pharmaceuticals and medical supplies after the U.S. was left flat-footed early on in the coronavirus pandemic.

Biden has also pushed to strengthen "Made in America" provisions in hopes that federal spending, even if less efficient, would go further in boosting the economy, an approach critics say amounts to old-fashioned protectionism.

During the lengthy hearing, Tai left some key questions unanswered. 

She did not provide much details about when or how the administration might lift tariffs on billions of dollars of goods from China, Europe and a variety of key allies that Trump imposed, an irritant to major trade groups.

She also sidestepped questions on whether she supported stronger oversight on the use of section 232 tariffs, which Trump used liberally to impose tariffs under the guise of national security.

But Tai received a largely glowing response from members of both parties, suggesting she will breeze through the confirmation process.

"I trust Ms. Tai's judgement and I know the depth of her experience," Committee Chairman Ron Wyden (D-Ore.) said, adding that she was "uniquely qualified" and noting that she would be the first Asian and first woman of color in the role.

The committee's top Republican, Sen. Mike Crapo (R-Idaho), said that not only did she have the capability for the job, but that she had struck bipartisan common ground.

"We've not only shown that trade is a bipartisan issue in Congress, but it's one where we can build a very strong, unified approach with the administration and move forward to significantly expand the opportunities for the American worker and American businesses in this country," he said.

Tai also received strong endorsements from her former boss, House Ways and Means Committee Chairman Richard Neal (D-Mass.). And in an unusual sign of bipartisanship, the House committee's ranking member, Rep. Kevin Brady (R-Texas), also joined Thursday's hearing to provide his endorsement.

"Ambassador-designate Tai is such a qualified nominee, with the well-earned reputation of a knowledgeable and skillful trade lawyer, negotiator, and consensus-builder," he said.

"Her credentials are impeccable."

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