Although confirmation of Robert Lighthizer, President Trump’s pick for U.S. Trade Representative, could still be weeks away, the office of the USTR on Wednesday released its first congressionally mandated annual “Trade Policy Agenda” outlining the new administration’s goals and priorities for the coming year.
The overarching purpose of the Trump administration’s trade policy will be to “expand trade in a way that is freer and fairer for all Americans,” according to the 336-page report.
“Every action we take with respect to trade will be designed to increase our economic growth, promote job creation in the United States, promote reciprocity with our trading partners, strengthen our manufacturing base and our ability to defend ourselves, and expand our agricultural and services industry exports,” the document says.
The new approach is claimed to reflect the view of disgruntled voters in both major parties who “called for a fundamental change in direction of U.S. trade policy” having grown increasingly frustrated with the status quo “not because they have ceased to believe in free trade and open markets, but because they did not all see clear benefits from international trade agreements.”
The report indicates that as a general matter, the administration believes its economic objectives are “best accomplished by focusing on bilateral negotiations rather than multilateral negotiations – and by renegotiating and revising trade agreements when our goals are not being met.”
To this end, President Trump has already withdrawn the U.S. from the 12-nation Trans-Pacific Partnership that was the centerpiece of the preceding administration’s trade policy and has initiated the process to renegotiate the North American Free Trade Agreement with Canada and Mexico. As for the Transatlantic Trade and Investment Partnership between the U.S. and 28 countries of the European Union, the deal is now widely considered to be effectively “dead and buried” thanks to the new president’s reported disdain for the EU “consortium” and stated preference for reaching a deal with a departing member, the UK.
Finally, the administration says that it rejects “the notion that the United States should, for putative geopolitical advantage, turn a blind eye to unfair trade practices that disadvantage American workers, farmers, ranchers, and businesses in global markets.” In this regard, it plans to defend “national sovereignty over trade policy” and vows to “use all possible leverage” to open global markets to American goods and services, while cracking down on unfair trading practices by other countries such as China.
The report states the administration will rely on strict enforcement of American trade laws to prevent the U.S. market from being “distorted by dumped and/or subsidized imports that harm domestic industries and workers,” and won’t necessarily be bound by international dispute settlement mechanisms like the World Trade Organization. “In too many instances, Americans have been put at an unfair disadvantage in global markets,” the agenda says. “It’s time for a more aggressive approach.”
The administration promises the robust use of U.S. trade remedy laws, including the use of Sections 201 and 301 of the Trade Act of 1974, which gives the president almost unilateral authority to put in place safeguard tariffs or other actions to selectively restrict imports. In a draft version of the document, the administration said it will “act aggressively” to counter WTO rulings that undermine the use of any domestic remedy.
“When the WTO adopts interpretations of WTO agreements that effectively hamstring the ability of the United States and other WTO members to respond effectively to these real-world unfair trade practices using remedies expressly allowed under WTO rules, those activist interpretations, untethered from economic realities, undermine confidence in the trading system,” the draft of the report’s preamble states.
Although this wording was softened in the final version, the overall message still appears to be that Trump’s nationalistic “America First” policy signals a new willingness by the world’s largest economy to pursue its own interests and do as it pleases; even if it means potentially undermining the global order that it helped build and has actively championed for almost three-quarters of a century.
Quoted in a Washington Post article, Wendy Cutler, the former acting deputy for the U.S. trade representative, said the strategy is a substantial departure from past policy — especially with regard to resolving disputes at the WTO. “It seems to be suggesting, with respect to cases taken against the U.S., if we don’t like the result, we will go it alone and respond accordingly.”
The danger, she said, is that other countries might choose to follow the U.S. approach. “I’m not sure how we can expect other countries to live up to WTO findings if our policy is to just live up to findings that we find acceptable.”