Caribbean Trade Law and Development

Tag: USTR

  • President Biden’s Trade Policy Agenda 2021 Released

    President Biden’s Trade Policy Agenda 2021 Released

    Alicia Nicholls

    The Office of the United States Trade Representative (USTR) today released the eagerly anticipated 2021 Trade Agenda and 2020 Annual Report to Congress. This annual report outlines the President’s trade policy priorities each year and is the first to be released under the Biden presidency. Readers would recall that last week, USTR nominee Katherine Tai had her Senate confirmation hearing, giving us some greater glimpses into what possible directions the Biden-Harris administration might take on some of the major trade issues of the day. Her opening statement to the Senate Finance Committee may be read here.

    The Biden administration’s trade priorities reflect a generally more inward-looking trade policy disposition than the more open approaches that defined most contemporary pre-Trump US administrations. The priorities include shoring up the COVID-19-hit US economy, promoting US job creation/preservation and a pledge to ‘stand up” for American industry and workers. The report notes that the President’s trade agenda will be ‘a critical component’ of the Biden Administration’s plan to Build Back Better. As expected, there is also a commitment for a comprehensive strategy on curbing China’s “unfair trade practices”.

    A marked departure, however, from his predecessor is the inclusion of a stated focus on climate action and on racial equality and a more concerted effort to work with ‘friends and allies’.

    Biden-Harris’ trade priorities according to USTR report

    The trade policy priorities identified are

    1. Tackling the COVID-19 Pandemic and Restoring the Economy

    2. Putting Workers at the Center of Trade Policy

    3. Putting the World on a Sustainable Environment and Climate Path

    4. Addressing China’s Coercive and Unfair Economic Trade Practices Through a
    Comprehensive Strategy

    5. Partnering with friends and allies

    6. Standing Up for American Farmers, Ranchers, Food Manufacturers, and
    Fishers

    7. Promoting Equitable Economic Growth Around the World

    8. Making the rules count

    The report can be accessed here.

  • President Trump’s Trade Policy Agenda for 2017 Released

    President Trump’s Trade Policy Agenda for 2017 Released

    Alicia Nicholls

    The Office of the United States’ Trade Representative (USTR) today released a preliminary report outlining President Trump’s Trade Policy Agenda for 2017.  It should be noted that this is a preliminary report prepared in order to comply with the statutory deadline for the report’s annual release March 1, but bearing in mind that President Trump’s nominee for USTR, experienced trade lawyer and former deputy USTR under former President Ronald Reagan, Robert Lighthizer, has not yet been confirmed by the Senate. As such, it has been noted in the report that  a more detailed version will be published once the USTR has been confirmed and has had the opportunity to provide input in that report’s development.

    As stated in the report, President Trump sees bipartisan support by the American people for a complete overhaul of US trade policy. In order to effect this, the report states that the overarching purpose of the Trumpian trade policy “will be to expand trade in a way that is freer and fairer for all Americans”.

    To this effect, the report outlines four priorities identified by the Administration:

    (1) defend U.S. national sovereignty over trade policy;

    (2) strictly enforce U.S. trade laws;

    (3) use all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services, and provide adequate and effective protection and enforcement of U.S. intellectual property rights; and

    (4) negotiate new and better trade deals with countries in key markets around the world.”

    Several preliminary things stand out from the report:

    (1) The report highlighted that the US is not bound by WTO decisions and evinces a policy stance going forward not to accept any adverse rulings from the WTO. The paragraph below taken directly from the report is instructive:

    “And, when the WTO adopts interpretations of WTO agreements that undermine the ability of the United States and other WTO Members to respond effectively to these real world unfair trade practices with remedies expressly allowed under WTO rules, those interpretations undermine confidence in the trading system. None of these outcomes is in the interest of the United States or a healthy global economy.”

    This is coupled with what appears to be the Trump administration’s plans to make greater use of unilateral remedies.

    US disregard for adverse WTO rulings is a troubling prospect for many reasons, but particularly for small island states’ enforcement of their trade interests. It should be noted that the Caribbean island state of Antigua & Barbuda is still awaiting compensation from the US, after many years, since winning the US-Gambling dispute. It remains to be seen whether this will ever be resolved.

    (2) Based on the arguments made in this report, I think it likely that Trump’s team will advocate for changes to be made to the WTO’s dispute settlement mechanism for their own interest.

    (3) The Administration has stated its intention to not only more aggressively go after countries the US deems to be “engaging in unfair trade practices”, but will also with equal zeal go after countries which do not sufficiently open their markets to US exports. As mentioned previously, the pursuit of countries’ trading practices which are perceived to be inimical to US interests is not new and has been US policy for years. The singling out of China in this regard came as no surprise.

    (4) The Trump administration’s criterion for whether a trade agreement is bad or good appears to be based solely on whether the US has a trade (merchandise) deficit with the country in question. This is not just a facile way of assessing the merits of a trade agreement, but also ignores services trade and investment which in many cases the US has a surplus with its trading partners.

    (5) While there are references to “free and fairer trade” throughout the report, I believe the term “zero sum” trade may be the more appropriate term to describe these proposals.

    The full report may be viewed here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

     

  • TPP: Acting USTR Submits Withdrawal Letter

    TPP: Acting USTR Submits Withdrawal Letter

    Alicia Nicholls

    On January 30, 2017, upon the instructions given by President Donald Trump in his January 23rd executive order, the Office of the US Trade Representative (USTR) submitted a letter to the 11 other Trans-Pacific Partnership (TPP) signatories officially withdrawing the US from the Agreement. This is according to a press release on the USTR’s website.

    The letter was also submitted to the TPP Depositary and signed by Acting USTR, Maria Pagan. In addition to indicating the US’ withdrawal, the letter further stated, that “the United States remains committed to taking measures designed to promote more efficient markets and higher levels of economic growth, both in our country and around the world.We look forward to further discussions as to how to achieve these goals.”

    Withdrawal from the TPP, which he had denounced as detrimental to American jobs, had been one of President Trump’s least controversial campaign promises during the election campaign. The US had signed the agreement via executive action on February 4, 2016 by then President Barack Obama but the Agreement had never been ratified.

    The Agreement’s 11 remaining signatories are Australia, New Zealand, Canada, Singapore, Vietnam, Malaysia, Japan, Mexico, Peru, Brunei, and Chile.

    The future of the Agreement sans the US remains uncertain. In the wake of the US’ withdrawal, Malaysia has signaled that it will refocus on trade with fellow ASEAN and Asian countries. According to Reuters’ reporting, Chile has indicated its interest in pursuing an FTA with China which is not a TPP party, and has reportedly invited remaining TPP members, China and South Korea to a summit in March on how to proceed. Australia’s Prime Malcolm Turnbull had initially indicated his interest in salvaging the agreement.

    There has also been some speculation that China, which potentially stands to benefit geopolitically from the collapse of the TPP, may accede to the Agreement but Beijing has not confirmed whether it will pursue this option. Alternatively, there are some who argue that the Regional Comprehensive Economic Partnership (RCEP) which involves China provides a realistic alternative to the TPP.

    Further information is available on the USTR’s website here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • Trump Trade Team poised to reset US Trade Policy

    Trump Trade Team poised to reset US Trade Policy

    Photo source: Pixabay

    Alicia Nicholls

    Just three weeks shy of his inauguration date, United States President-elect Donald Trump has completed his trade team by nominating veteran trade lawyer and negotiator, Robert Lighthizer, as the next United States Trade Representative (USTR). Last month the President-elect had announced Wilbur Ross Jr as his Commerce Secretary nominee and Peter Navarro as head of the new White House Trade Council.

    A cabinet-level office, the Office of the USTR is responsible for developing and coordinating US trade and investment policy and overseeing negotiations with third countries. Mr. Lighthizer’s pick comes as no surprise as he was an early Trump supporter. Moreover, a former deputy USTR in the Reagan Administration, Mr. Lighthizer is the most qualified of Mr. Trump’s nominees to date, bringing considerable technical expertise and professional experience to the post of USTR. Currently a partner with law firm Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates, he also served as the Chief of Staff of the United States Senate Committee on Finance. Mr. Lighthizer will be taking over from current USTR under President Obama, Michael Froman. One of his first tasks from day one will likely be working on the renegotiation of the North-American Free Trade Agreement (NAFTA) as promised by President-elect Trump in his 100 days proposal.

    Mr. Lighthizer’s conservative views on trade, including his criticism of free trade, are in consonance with the President-elect’s binary trade views, as well his hard-line position on China’s so-called currency manipulation. Mr. Lighthizer also had some harsh words for the WTO’s dispute settlement system in regards to dealing with what he had termed China’s “mercantilism”.

    His choice of the word “mercantilism” is curious as it can actually be used to describe Mr. Trump’s “America first” stance on trade. Mercantilist theory, prevalent during 16th century Europe and also refined by Alexander Hamilton during the US’ post-independence period, views trade in a zero sum way, that is, only one country can win in trade. It favours the use of protectionist policies, such as tariffs, subsidies and quotas, to protect domestic industries from foreign competition.

    Granted lingering traces of protectionist practices are not alien in current US trade policy and all modern “great powers” have used mercantilist policies to develop in their early stages (see the works of Professors Erik Reinert and Ha-Joon Chang for greater information on this). Just consider the protection given to sensitive sectors like agriculture. This is true not just for the US but for most other trading nations as well. However, in the last three decades US trade policy has been guided (if not always in practice, at least in theory) by neoliberal tenets, based on the works of Adam Smith and later David Ricardo, which extolled the benefits of free markets and became the dominant economic theory. However, while trade is a good thing, there are winners and losers, and the “losers” made their voices known this election, and increasingly in other western states.

    Capitalising on the populist backlash to free trade, Mr. Trump’s trade team seems poised to break with this three-decade old policy stance towards a more neo-mercantilist disposition, with an emphasis on positive trade balances, and a proclivity for the use of protective and retaliatory tariffs to discourage imports in order to protect American jobs and industries and punish “cheaters”. On this front at least, Mr. Trump has tremendous popular support, especially in the rust belt, at home.

    So what can we in the rest of the world expect? We can probably expect greater confrontation by the US with China on trade matters. We can expect even more aggressive US pursuit of countries in general believed to be engaging in “unfair trade practices” (and the USTR has already been doing this through the WTO’s dispute settlement system), However, there might be less emphasis under the Trump administration on utilising the WTO’s rules-based system and a resort to unilateral action, with the possibility of trade wars.

    Perhaps, one saving grace is that the US Congress alone has the power to impose tariffs, although this CNN Money article notes there are several pieces of legislation which give the President some flexibility, for example, during “times of war” or during “a national emergency”.

    As I have said in previous posts on Trump’s trade policy, President-elect Trump has changed his positions on many things so there is still great uncertainty about which of his policy proposals he will seek to implement. However, if the Carrier deal were not enough to show that Mr. Trump’s “America first” trade policy is more than mere bloviating on his part, his protectionist-leaning trade team confirms his intention  to shake up American trade policy, and not just in optics.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.