The Trade Agenda for the 46th U.S. President –Advancing Global Economic Order? - Foundation Office Washington, D.C.
Since the end of the Cold War, U.S. trade policy has been characterized by periods of considerable activism whose record includes enacting NAFTA and establishing the World Trade Organization under Presidents George H.W. Bush and Bill Clinton, securing multiple bilateral trade agreements under George W. Bush, and the simultaneous pursuit of mega-regional agreements focused on Asia and Europe under Barack Obama. But during this period trade policy also became increasingly contentious in Congress, with concerns about its impact on workers and the environment at home and abroad. Yet over the last decade trade has also become more popular among Americans as a way to improve economic growth, especially among Democratic voters.
The Trump administration’s nationalist, go-it-alone trade policies – which departed radically from previous practice – did not only weaken the rules-based trading system. They were also ineffective in convincing China to change its economic behavior and at the same time alienated traditional allies. Yet the Trump administration’s approach to trade policy is more likely a symptom of increasingly anarchic conditions in the global economy than a harbinger of a new era of U.S. protectionism.
President Biden can be expected to face seven key trade policy questions upon taking office:
- What will the confrontation with China over its unfair trade policies and practices look like?
- Will the U.S.-Mexico-Canada Agreement be seen as a benchmark for future trade agreements?
- What are the implications of the U.S.-Japantrade agreements for U.S.-EU trade relations?
- What are U.S. ambitions to reform the WTO?
- What is the future of the digital services tax and what challenge could it present to the world trade order?
- Will the 117th U.S. Congress take action to curtail executive power over Section 232on national security of the 1962 trade act?
- How likely is the next U.S. administration to pursue new trade agreements and who are the most likely candidates – the EU, the UK, Kenya?
Several of these challenges can be the springboard for the new administration to reposition trade relations with like-minded countries after the Trump administration’s neglect or undermining of them. And many provide the Biden administration with avenues for economic diplomacy with allies to forge new trade rules and to reform the multilateral trading system.