A shift back toward coalition building in trade discussions will be the major outcome under a new administration, a longtime trade specialist told the California Chamber of Commerce Board of Directors last week.
The brief look at fundamental differences between the current and incoming administrations was presented by William Reinsch, senior adviser at the Center for Strategic and International Studies, based in Washington D.C., at the CalChamber Board online meeting on December 4.
President-Elect Joe Biden, Reinsch commented, is a multilateralist who believes in coalitions and will be inclined to use diplomatic tools through existing institutions to achieve U.S. objectives.
For example, Reinsch predicted a Biden administration would likely work to get all parties challenged by China’s unfair trade practices to stand together. The specifics of joint action may be more difficult to get agreement on, Reinsch said, but there is a U.S. consensus (more than 70% in a recent poll) that China is a threat.
Overall, U.S. trade policy will continue to evolve toward a stronger U.S. presence in the Asia Pacific Region, and that will eventually include returning to the Trans-Pacific Partnership, Reinsch said.
He pointed out that the President-Elect has made it clear not to expect new bilateral trade deals. Discussions that already have begun with the United Kingdom, Kenya and Japan (phase 2) will continue, Reinsch said. Progress, he added, will depend on how quickly a new U.S. Trade Representative is appointed to serve as key negotiator.
Reinsch forecast two new areas to watch in a Biden administration:
• Climate change: The European Union has been a leader in the area of carbon border adjustments—a tax on imported goods based on their carbon content, and a Biden administration is likely to join them. There are ways to implement such a program consistent with international rules.
• Buy American. This was a campaign theme for both the current and incoming administrations and the impact depends on whether what’s meant goes beyond government procurement to the more complicated issue of “reshoring”—bringing manufacturing jobs back to the United States. Companies with complicated supply chains and significant locations overseas will be caught in the middle of the debate, Reinsch commented. Because hostility toward China is bipartisan, he added, some members of Congress will propose strong measures, but whether those proposals become law is a more open question.
Staff Contact: Susanne T. Stirling