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This Week In Trade

‘Hello USTR!’ Tai takes office with a ‘clear mandate’ -- use trade to build back better

Posted: March 22, 2021

U.S. Trade Representative Katherine Tai has embarked on her first full week in office -- and it promises to be a busy one. The newly minted USTR is set to virtually meet with British Trade Secretary Liz Truss and other foreign counterparts, as well as put in motion an agenda focused on enforcing the U.S.-Mexico-Canada Agreement, supporting the president’s domestic agenda and dealing with China.

“As I stated in my confirmation hearing, from implementing and enforcing USMCA, to rebuilding our alliances, tackling climate change, ending the COVID-19 pandemic, advancing racial and gender equity, addressing the challenges posed by China -- and more -- we will have to walk, chew gum and play chess at the same time,” Tai said in a message to staff on Friday.

“We have a clear mandate from President Biden to leverage trade to help our economy recover and build back better,” Tai added. “Working together with our colleagues across the Administration, we will challenge the preconceived notions about what trade policy should look like. Through unprecedented engagement, we will pursue policies that advance the interests of all Americans, support American innovation and promote broad, equitable growth by giving workers a seat at the table.”

Noting she was not new to Winder -- Tai is a former USTR official -- the new trade representative challenged her colleagues to think outside the box and look “at old problems in new ways” while “looking at new problems in even newer ways.” She pledged to build “a more diverse and inclusive team while engaging stakeholders and communities that trade policy often overlooks.”

However, she noted, “it may be some time before we can all get together in person.”

“Beyond our work together to advocate for the interests of American workers, the American economy, and American leadership -- I commit to you that I will carry the voice of this small and mighty agency into every room I enter,” she concluded, signing her message with the admonition “Let’s get to work!”

USTR on Sunday also issued daily guidance for Tai -- something the previous administration did not do -- saying the new trade representative would “begin virtual conversations with her international counterparts” and “conduct meetings and briefings with staff.”

The British embassy last week confirmed that one of Tai’s first phone calls will be with Truss. The embassy did not detail what issues the two trade chiefs would discuss, but the priorities are fairly obvious: The U.S. and UK earlier this month announced a four-month suspension of tariffs over the longstanding Boeing-Airbus dispute, for one. Although the Trump administration has questioned the UK’s authority to adjust the tariffs stemming from the long-running World Trade Organization dispute -- the case was brought by the European Union while the UK was still a member of the bloc -- a resolution to the case could make the question moot.

Tai and Truss are also likely to discuss the trade negotiations launched by Tai’s predecessor. So far, the Biden administration has not prioritized launching or continuing trade negotiations, or said what it might do with the nascent UK deal. The soon-expiring Trade Promotion Authority law also complicates a possible U.S.-UK agreement. UK officials, however, have made clear they still hope for an agreement and are signaling that new issues, including climate change, could be included in the talks.

On the USMCA front, Tai will soon have to decide whether to pursue a USMCA dispute the U.S. launched last December over dairy market access. She also must monitor the implementation of the deal’s novel rules of origin, which are causing headaches for some auto manufacturers. The fate of the dairy case could be politically perilous for Tai, as the largest national dairy organizations --- including the National Milk Producers Federation, International Dairy Foods Association, and U.S. Dairy Export Council -- support the case while the International Brotherhood of Teamsters and Wisconsin chapter of the National Farmers Union have urged the U.S. to drop its petition.

On auto rules of origin, Tai faces an April 11 deadline, when she must recommend to the president whether to uphold a decision by the International Trade Commission that would ban, for 10 years, imports of some electric battery components the ITC said were made using stolen trade secrets. The ITC said Ford and Volkswagen would still be permitted to import the battery components for four and two years, respectively. But SKI Innovation, the company that produces the banned battery components, is threatening to withdraw billions of dollars in planned investments if the president does not overturn the ITC decision, including scrapping plans to build a second electric vehicle battery production plant in Georgia while shuttering the first, the company told Inside U.S. Trade last week. Checking in on the China chess board, Tai will have to sort through the fallout from last week’s meeting of U.S. and Chinese officials in Anchorage, AK. Secretary of State Antony Blinken and National Security Adviser Jake Sullivan led the U.S. delegation to the summit, which got off to a rough start Thursday evening. The two sides were, however, able to hold “candid” private discussions that touched on trade and technology, Blinken said on Friday.

Tai has promised to hold China to its commitments under the U.S.-China phase-one deal. The two sides are a month overdue for a ministerial-level check-in under the terms of the agreement.

In Geneva, the WTO’s Dispute Settlement Body will gather for its monthly meeting on Friday. As has been the norm in DSB meetings for nearly four years, the agenda features a proposal by the majority of WTO members to resume appointments to the DSB’s Appellate Body. The U.S. each time has blocked consensus on relaunching the appointment process citing systemic concerns, leaving the Appellate Body without any members. The Biden administration has upheld the block in the last two DSB meetings.

The U.S. also will face a panel request by Venezuela over a series of sanctions the Trump administration put in place beginning in 2018. According to the panel request, the U.S. refused Venezuela’s request for consultations in February 2019. The U.S. does not recognize Venezuela’s Maduro regime.

Events

  • The Center for Strategic and International Studies on Monday hosts a discussion on China’s new legislative agenda, which was unrolled earlier this month. CSIS analysts Scott Kennedy, Bonnie Glaser, and Jude Blanchette will participate.
  • The Hudson Institute on Monday will hold a discussion on China and supply chain vulnerabilities as part of its U.S.-Australia series. Panelists include Jeffrey Wilson, research director at the Perth USAsia Center; Jill Slay, chair in cybersecurity at the University of South Australia; John Costello, adjunct senior fellow at the Center for a New American Security; Helen You, policy analyst at Foreign Policy Analytics; and Hudson senior fellow Patrick Cronin.
  • Sen. Dan Sullivan (R-AK) will discuss a future U.S. strategy toward China with former Under Secretary of State for Global Affairs Paula Dobriansky during an Atlantic Council event on Monday.
  • The Peterson Institute of International Economics and the British Embassy on Tuesday will host an event on the economic impact of climate change, which will focus on the policy implications for trade, financial institutions, infrastructures and markets. PIIE senior fellow Jeffrey Schott will take part in the discussion along with Kevin Stiroh, senior adviser to the Federal Reserve Board's Division of Supervision and Regulation, and Robert Tichio, partner at Riverstone Holdings LLC.
  • The U.S. Chamber of Commerce and AmCham EU will on Wednesday release its annual report on the trans-Atlantic economy during an event hosted by the Woodrow Wilson Center’s Global Europe program. The report will be presented by Daniel Hamilton, director of the WWC Global Europe Program; Joseph Quinlan, senior fellow at the Transatlantic Leadership Network; and Marjorie Chorlins, senior vice president for European affairs at the Chamber.
  • The Chamber will also launch its annual International Intellectual Property Index on Wednesday during an event that will feature World Intellectual Property Organization Director General Daren Tang; National Industrial Property Institute Claudio Vilar Furtado; Laurie Hill, vice president of intellectual property at Genentech; Lauri Self, senior vice president and counsel for government affairs at Qualcomm; Meir Pugatch, managing director of Pugatch Consilium; David Hirschmann, president and CEO of the Chamber’s Global Innovation Policy Center; and Patrick Kilbride, senior vice president of GIPC.
  • The Americas Society/Council of the Americas on Thursday will host Brazilian Secretary of Foreign Trade Lucas Ferraz for a discussion on Brazil’s foreign trade agenda.
  • The Washington International Trade Association on Friday will host a webinar on meaningful action that can be taken to address barriers to trade for women. Sen. Bob Casey (D-PA) will participate with Elvis Francis, director of the Gap Foundation and Mei Xu, CEO of Yes She May.
  • Agriculture Secretary Tom Vilsack will discuss USDA’s priorities during a National Press Club Newsmaker event on Friday. -- Brett Fortnam (bfortnam@iwpnews.com)

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