USTR nominee Tai promises allied approach on trade

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Biden looks to rebrand trade policy as it solidifies itself in post-Trump trade era.

Katherine Tai, President Joe Biden’s choice for U.S. Trade Representative ambassador, appeared before the Senate Finance Committee Feb. 25. Her promises for an allied approach to trade and enforcing trade partners to abide by their commitments drew bipartisan praise from senators, with signs pointing to strong, if not unanimous, support for her nomination which the committee plans to take up Wednesday.

She was introduced to the committee by the top Democrat and Republican on the House Ways and Means Committee, Chairman Richard Neal, D-Mass., and Ranking Member Kevin Brady, R-Texas, as she previously served as a trade lawyer on the committee staff.

Neal says Tai has many accomplishments, but “none greater than the pivotal role she played behind the scenes in our successful work to improve the U.S.-Mexico-Canada Agreement and secure widespread support for its passage.” He adds, “Katherine was integral in crafting an agreement that drew support from the far sides of the political spectrum, and even more impressively, our caucus. A skilled negotiator, Katherine was able to include tough labor and environmental standards in USMCA, that will now allow us to uphold strong moral leadership in future deals.”

She says USMCA offers an important step in reforming the U.S. approach to trade. “We must all continue to prioritize its implementation and success.”

Tai previously served as America’s chief enforcer against China’s unfair trade practices. Her parents grew up in China and she was raised in Thailand. She also speaks fluent Mandarin.

“I know firsthand how critically important it is that we have a strategic and coherent plan for holding China accountable to its promises and effectively competing with its model of state directed economics. I know the opportunities and limitations in our existing toolbox,” she says.

However, she also cautioned against alienating the Chinese. “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 says she would enforce President Trump’s Phase One agreement with China because it’s the agreement we have, and China needs to deliver on promises it makes. She did not promise to remove the 232 or 301 tariffs but did say she supports using all the tools in the toolbox to enforce commitments made by trading partners and to lower trade barriers.

Engaging allies

Tai says she know how important it is to build what the President has termed “a united front of U.S. allies.”

Tai says she will also prioritize rebuilding international alliances and partnerships, and re-engaging with international institutions. “We must do the hard work and secure the necessary reforms that allow the world to come together and address common threats like climate change, the COVID pandemic and a global economic downturn,” she says.

In her comments, she notes she wants to revitalize the World Trade Organization and the appellate body. However, she didn’t sound open to rejoining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or at least not without some changes to the Trans-Pacific Partnership negotiated under the Obama administration but withdrawn from the Trump administration.

She promised to negotiate an end to the long-running Boeing-Airbus WTO dispute in a bid to revitalize US-EU relations and the WTO, but she also declined to commit to lifting any of the retaliatory tariffs imposed by President Trump in connection with the dispute.

Rebrand rather than reset

During a recent Farm Foundation forum on trade just days before Tai’s hearing, Cassandra Kuball, vice president of Michael Torrey Associates, shares that she sees Biden doing a rebrand on Trump’s trade approach.

“With the Trump administration, they took the play book and ripped it up,” Kuball says of the overall approach and how to use trade remedy tools. Many expect Biden to do a reset, but she sees a reset as a way for Biden to feel out how he can proceed forward.

China offers a perfect example where those in agriculture probably do not want to see a reset and going back to square 1 with China because some effective advancements were made with China.

Kuball says to a degree the Biden trade team is undergoing a public affairs campaign as it re-engages on the Paris Climate Accord, reaffirming commitments at the WTO and World Health Organization. “From what I assume it is all part of a trust building exercise,” Kuball says.

 

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