worker centered trade policy

IPEF: The Party Few Wanted to Attend

IPEF: The Party Few Wanted to Attend

The final document, released by US President Joseph Biden, ran to just over a page. It described the elements of the proposed framework, which include four pillars of activities. Only 12 governments have agreed to think about starting to discuss something in the future. Why was this party such a disaster? In a nutshell, because the US was promising to hold a very dull event. It was not just that the food and beverages were going to be either bland and uninteresting for some party goers or inedible for others. The proposed music was not danceable. But much worse, the hosts had a series of activities planned for the party. These activities were, in fact, mostly quite unpopular for the proposed guests. The individual games or plans were largely built to suit the hosts without much consideration of the needs or interests of potential guests. These activities are also set to continue long after the original launch party ends. Some could, in fact, take years to wrap up. Guests could be committed to regular gatherings for an indefinite amount of time. While some of the activities have titles that are unobjectionable, others may be quite problematic. The description of these events is so brief and so bland that almost any sort of outcome could be imagined. There is no way to tell how involved any guest will have to be at any given time. This sounds less like a fun party and a lot more like work.

The “North Star” of US Trade Policy Leads Where?

The “North Star” of US Trade Policy Leads Where?

Tai has made very few public appearances. Her confirmation hearings provided limited details into her thinking about how US trade policies might adjust to fit in this Administration. Vague answers make sense when trying for a smooth passage with Congress which makes it imperative to say nothing that might offend anyone. While resetting policy directions does take time, after several months on the job, at least broad outlines ought to be clearer, along with a sense of what is currently considered acceptable or intolerable about past practices. However, Tai is a master of speaking without revealing any worthwhile information at all. She deftly dodged every question posed to her during her conversations last week in the Financial Times’ Global Boardroom. Instead, she deflected pointed questions and responded mostly with “motherhood and apple pie” sorts of statements. The net result is it still remains unclear what a worker centered trade policy actually looks like. Beyond repeatedly stating that the Administration’s “North Star” remains creating a trade policy that delivers value to workers, there were no details on what that means in practice. She said that the whole of government would be laser focused on following this objective. It’s awfully difficult to have the government machinery start focusing on a particular “Star” without any guidance on what might be meant by the term, what might be problematic from past efforts, and what outcomes should be encouraged going forward. Unless Tai is much more voluble in conversations with the whole of government engaged—to one extent or another—in designing and executing US trade policy, it is highly likely that most officials are uncertain or confused about the path forward.

US Worker Centered Trade Policy Meets Global Competition

US Worker Centered Trade Policy Meets Global Competition

The United States has a new chief trade official. Katherine Tai was unanimously confirmed as the next US Trade Representative (basically trade minister). As USTR, Tai is expected to develop and execute US trade policies. The extent to which American policies on trade are adjusting remain to be seen. Thus far, Tai has been relatively quiet on her objectives, speaking only during her confirmation hearing. She has to hire her three deputies and a chief agriculture negotiator who will help flesh out and deliver policies. The early signs, however, suggest that potentially important changes are on the horizon. The key buzz word is that from now on, the US will pursue “worker centered” policies. It remains unclear what “worker centered” actually means. In practice, the phrase is likely to mean different things to different people. It will take cues from long-standing Democratic party objectives to support organized labor and environmental protection. These concerns have been embedded into a series of trade agreements for the United States, including the renegotiated NAFTA or USMCA. Tai took the lead role of shepherding the final USMCA document through Congress and building support from within Capitol Hill for the agreement. Her personal ability to forge bipartisan consensus on renewal helped with her smooth passage into her new role at USTR. US President Biden has suggested that trade agreements are not going to be part of American trade objectives in the near term. This suggests that worker centered policies will need to be anchored in something other than trade deals. Where might they be found? In large measure, it appears through enforcement. The US is likely to be giving extra scrutiny to US trade partners under various free trade agreements (FTAs) and other preference programs. It will also be looking hard at obligations and commitments made at the World Trade Organization (WTO) which have not been pursued with sufficient vigor by members. The US is also likely to change its position on a number of domestic policies. This includes an increasing use of “Buy American” policies and a probable review of US commitments under the WTO’s government procurement agreement and other similar chapters in existing FTAs.

Setting Trade Policies in the Biden Administration

Setting Trade Policies in the Biden Administration

Of course, confirmation is only needed at the top. Restaffing the rest of the vacant posts, however, will also take some time. This includes restarting the pipeline for junior talent in various agencies. At the same time that staff are being rapidly hired or rehired, it will be important to figure out what these people are meant to be doing. Getting alignment on policy is always challenging. The Biden team inherits a disrupted trade and economic policy landscape as well. As Biden’s team members have been saying recently, it will take time to sort out policy priorities and determine next steps. This is particularly true for China policy, where some of the existing policies, like tariffs, are likely to remain in place while others might be adjusted, removed, or even toughened. Incoming staff members will need to spend time taking stock of what policies are in place, which have been partially implemented, which are clearly not working well, what impact any or all of these policies have had, and what opportunities and challenges remain. Biden has already called for a “worker centered” trade and economic policy objective. It remains unclear exactly how this outcome might be best met. Existing policies will need to be recalibrated to better fit revised goals.