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This Week In Trade

Tai set to present, defend the Biden trade agenda before Congress

Posted: May 10, 2021

U.S. Trade Representative Katherine Tai will defend the Biden administration’s trade policy agenda before the Senate Finance and House Ways & Means committees this week, with U.S.-Mexico-Canada Agreement enforcement issues -- and potential disputes -- sure to be a major focus.

Tai is slated to testify before the Senate Finance Committee on Wednesday and to appear before the House Ways & Means Committee on Thursday -- and she will no doubt face questions about how the administration will handle the first-ever complaint filed using USMCA’s rapid response mechanism. The AFL-CIO, the Service Employees International Union, the Sindicato Nacional Independiente de Trabajadores de Industrias y de Servicios Movimiento 20/32 (SNITIS) and Public Citizen on Monday announced they had filed the complaint, calling it a test case for whether the rapid response mechanism “can deliver for Mexican workers denied their fundamental right to organize and bargain for better wages and working conditions,” according to an AFL-CIO statement.

The complaint involves the alleged harassment of Susana Prieto and the workers at an auto-parts manufacturing plant Prieto represents. They have been trying to organize with SNITIS. Prieto was arrested last June on charges of inciting violence during a protest and was released the day USMCA took effect. Congressional Democrats and labor activists have been closely following Prieto’s case.

House Ways & Means Committee Chairman Richard Neal (D-MA) and trade subcommittee Chairman Earl Blumenauer (D-OR) said they expect the case to be the first of many filed under the rapid response mechanism. “We expect and call on the Biden Administration to use all available resources to take aggressive enforcement action in this case,” the lawmakers said in a statement on Monday. “We also expect the Biden Administration to use the resources we provided under the USMCA Implementing Act to aggressively enforce the agreement and self-initiate other cases where workers’ rights have been violated. We expect that this complaint will be the first of many, and look forward to working with Ambassador Tai to deliver results for U.S. workers.”

Tai also is likely to be pressed on the future of a USMCA dispute the Trump administration initiated over Canadian dairy tariff-rate quotas. When USTR Robert Lighthizer launched consultations with Canada in December, it was the first-ever “enforcement action” under USMCA, according to USTR. The case, however, has been slowed by the transition, and the future of the complaint is unclear. Some major U.S. dairy groups, including the National Milk Producers Foundation and the U.S. Dairy Export Council, support the complaint. Other groups including the Teamsters, the National Farmers Union and others oppose it.

Under the timelines established by USMCA’s dispute settlement rules, the Biden administration can escalate the consultations by requesting the establishment of a panel.

A third high-profile issue likely to be discussed during the hearings is the administration’s Asia-Pacific strategy, and whether the U.S. should move toward re-entering the Trans-Pacific Partnership. The leaders of the Senate Finance trade subcommittee last week suggested that Tai reconsider the Trump administration’s “misguided” and “short-sighted” decision to withdraw from TPP shortly after taking office in 2017.

The Biden administration’s Asia-Pacific policy to date has emphasized dealing with China from a position of strength, part of which is a focus on domestic investment and innovation.

Domestic investment and innovation are at the heart of legislation the Senate Commerce, Science, and Transportation Committee will mark up on Wednesday. The “Endless Frontier Act,” introduced by Senate Majority Leader Chuck Schumer (D-NY) and Todd Young (R-IN) last month, is the centerpiece of a legislative package touted by Schumer to counter China. The bill would create a technology directorate within the National Science Foundation and authorize $100 billion in total funding for the agency’s new arm through fiscal year 2026.

The Endless Frontier Act faced skepticism from many Republicans on the Commerce committee when it was the topic of a hearing last month. Several Republicans at the time suggested the bill could harm U.S. competitiveness by imitating China’s spending habits.

In Geneva, the debate over whether to waive provisions of the World Trade Organization’s Agreements on Trade-Related Aspects of Intellectual Property continues. The Biden administration last week came out in support of waiving some TRIPS obligations but did not throw its support behind the proposed waiver “as-is.” Instead, the U.S. said it would “actively participate” in text-based negotiations.

Sponsors of the waiver are reviewing its language and hoping to reconcile competing positions. The TRIPS Council could meet later this month to discuss the progress of the review and a revised text could be issued next month.

Events

  • The Center for Strategic and International Studies’ Future Strategy Forum on national security and technology starts Monday and will continue through Wednesday. Deputy National Security Advisor for Cyber and Emerging Technology Anne Neuberger will give opening remarks.
  • The U.S. Chamber of Commerce on Tuesday host a business briefing with the co-chairs of the U.S. Congressional Argentina Caucus and Argentine-U.S. Parliamentary Friendship Group as well as companies and government officials.
  • The Peterson Institute for International Economics on Tuesday will host German Ministry of Finance Jakob von Weizsäcker for a discussion on whether the U.S. economy stimulate global growth. The panel will include outgoing Citi chief economist Catherine Mann and PIIE executive committee member and RockCreek senior adviser Caroline Atkinson.
  • The Washington International Trade Association on Wednesday discusses how carbon border adjustment measures fit in the trade toolbox with the Madelaine Tuininga, head of unit for sustainable development and the European Green Deal at the European Commission’s Directorate General for Trade. She will be joined by Brookings Institution’s Samantha Gross, Sidley’s Andrew Shoyer and the Atlantic Council’s Dave Banks.
  • The Atlantic Council on Wednesday will examine what the China-Latin America relationship could look like by 2035. Participants include Mexican Ambassador to China José Luis Bernal, University of International Business and Economics senior fellow Tatiana Prazeres, former Chilean Finance Minister Felipe Larraín, HSBC Banking Americans Vice Chair Katia Bouazza, and the Atlantic Council’s Pepe Zhang and Jason Marczak.
  • CSIS on Thursday will host Sen. Thom Tillis (R-NC) to discuss the National Security Commission on Artificial Intelligence and its latest report. Other participants include former Google CEO and NSCAI chair Eric Schmidt and commissioner Gilman Louie. -- Brett Fortnam (bfortnam@iwpnews.com)

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