The US role in global trade alliances
Published 23 February 2021
During the Trump administration, the US launched a trade war against China, withdrew from the TPP, threatened to pull out of the WTO and stymied the institution's ability to fill spots on its Appellate Body. But the Biden administration is not moving quickly to simply undo what former President Trump has done. In this Hinrich Foundation sponsored National Press Foundation briefing, three trade experts discussed the new administration’s approach to global trade alliances.
In this Hinrich Foundation sponsored National Press Foundation briefing, three trade experts discussed the new administration’s approach to global trade alliances. Speakers include:
- Ronald Kirk, Senior Of Counsel, Gibson, Dunn & Crutcher; United States Trade Representative, 2009-2013
- Clete Willems, Partner, Akin Gump. He previously served in the Trump White House as the Deputy Assistant to the President for International Economics and Deputy Director of the National Economic Council
- Chad Bown, Reginald Jones Senior Fellow, Peterson Institute for International Economics
Here are the five key takeaways from the discussion:
- Democratic and Republican administrations differ in their trade policies but often keep a uniform voice. Ronald Kirk, who was President Barack Obama’s first US trade representative, said the United States’ unique role in world affairs means that political differences are more at the margins than the core of US policy. “We are a fairly constant voice for certain principles, particularly as it relates to the rule of law, fair play, abiding by norms,” Kirk said. “Now that will be nuanced from Democratic to Republican administration. And we often are confronted with complaints from different partners around the world, ‘Well, nothing really changes.’ You go from Bush to Clinton, to Bush to Obama. But it will change in the nuance.” Clete Willems, a trade official for President Donald Trump, agreed: “There’s generally a lot of continuity in US trade policy from one administration to the next. I think if you look at some of the hot-button issues out there, this is one of the least partisan.”
- Reforming the World Trade Organization will likely remain a priority for the US. Willems said the WTO has “three pillars” – negotiations, implementation and monitoring, and dispute settlement – and that all three require “drastic reform. It really has not been modernized in any significant way in 25 years,” Willems said. “We don’t have agreements that deal with some of the most pressing issues that the Biden administration is talking about. … We don’t have rules that deal with digital technologies. We don’t have rules that deal with some of the biggest problems from China. And we have rules in place that are very inequitable in terms of how much we have to lower our tariff rates.” Kirk agreed that the WTO needs reform, although, he said, “I don’t know if I’d use the word drastic.”
- The need for collective action will likely be a driver of US policy in the Biden years. While the Trump administration sought bilateral action with China on trade, Chad Bown of the Peterson Institute for International Economics said the strategy has not worked. “The issues of systemic reform with China can’t be handled bilaterally,” Bown said. On issues such as Chinese subsidies and state-owned enterprises, “None of us can work with China on our own. … If this is something that we’re actually concerned about, we need to do it collectively with the same sorts of allies that have the same interests that we do.”
- Trade means jobs, and the politics of trade will be driven by that. Kirk, a mayor of Dallas before he was US trade representative, said any Biden action on trade will be driven by the reality that trade patterns affect jobs – and the politicians who look after them. “As a mayor – and this is what frustrates me as a Democrat of my own party – if you’re not talking about jobs, you’re not talking to the American people,” Kirk said. “… The most pressing question facing families and advanced developed economies – like in Europe and the US – is where the hell are my kids going to go to work? Where are the next generation of jobs going to come from?”
- In the evenly divided Senate, significant change in trade policies will be difficult. In 2017, Trump pulled the US out of the Trans-Pacific Partnership, which – post-US – was then expanded into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. But if President Joe Biden wants to get the US into this expanded version – and he hasn’t said he does – he’ll face tough politics from both the left and the right. “I think the administration is going to be active on trade,” Bown said. “But I am not optimistic of seeing great new trade deals in the next couple of years.” Added Kirk: “Certainly it’s not going to happen within the first 24 months.”
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