How the Russia-Ukraine conflict bolsters Biden’s business ambitions
“Over the last 40 or so years, you’ve seen a kind of shrinking economic values that we should be shaping markets to really focus on efficiency, to the exclusion of things like resilience, which we had previously a much more robust accounting,” the NSC chief economics officer said.
Biden’s team sees his worker-centric trade policy offering a new path — one that not only spawns new manufacturing jobs, but supports working families by promoting unions and the right to organize, so that workers themselves can demand higher wages and better benefits.
This entails a “genuine re-evocation of organized labor and unions”, said the economics leader, and a realization that markets are “driven by the dynamics of power, whether its economic or political power, and these are the things that shape market outcomes. ”
Key to this program is rebuilding an industrial base in the US economy – lost by generations of US policies that encouraged companies to find cheaper labor overseas to deliver cheaper goods. to consumers. From the Commerce Department to the NSA, Treasury and USTR, this goal unites an administration often at odds over trade policy. Even Raimondo, arguably the most pro-corporate of economic decision makers, bases his speech on the history of the watchmaking work of his father who moved abroad when she was a child.
This unity of vision stems in large part from the shock of the 2016 election. And perhaps therefore, the goals of the two presidents who have entered the White House since then are surprisingly similar. Back in the Trump days, Commerce Chief Robert Lighthizer used to say that Americans were willing to pay an extra dollar for a t-shirt if they knew it supported jobs in the United States. Put simply, this is tantamount to saying that pure economic efficiency is no longer the priority, and veterans of both administrations say the continuity is remarkable.
“Five years ago the term industrial policy was a bad word in Washington, and now it makes some sense,” said Ivan Kanapathy, who served on the NSC staff as director for China, Taiwan. and Mongolia from 2018 to July 2021. “But honestly, if you go back to before post-war, we’ve done a lot of that. We just need to flex those muscles, and it’s not so much about China than to return to our own history.
Biden’s trade agenda is not only about domestic consumption, but also about exporting. In a reimagining of the goals of U.S. trade deals, the White House team hopes to use trade pacts to persuade other nations to raise wages and environmental regulations, reversing the script of decades of U.S. policy that sought a helping hand. -cheap labor and lax rules.
They see the United States-Mexico-Canada agreement — the renegotiated NAFTA that Tai herself led in the House as a staffer on the Ways and Means Committee — as a model. And in some of Tai’s first actions under the deal, she decided to support organizing drives at three auto parts factories, a new use of trade enforcement to protect the right to organize. in a foreign country. The action, USTR officials said at the start, signified how the administration is “putting workers first in the way we think about trade.”
If the White House ever ends its self-imposed moratorium on new trade talks, Biden’s team wants to use USMCA principles to build a network of like-minded nations who agree to support higher wages , stricter climate and environmental rules and digital technology. economic rules. Countries that don’t play by the rules – China and now Russia – would be subject to higher tariffs and other trade measures, in a bid to persuade US companies to choose more responsible business environments. In this way, the team hopes to end the “race to the bottom” in global trade where companies are constantly seeking lower wages and looser regulations abroad.
But that’s a big “if”. Chastened by the experience of Obama’s TPP and eager to demonstrate his focus on US wallets, Biden publicly suspended all new trade talks early in his presidency. That moratorium continues today, limiting Biden’s trade team to settling old Trump disputes, such as reaching steel and aluminum tariff deals with the European Union, Japan and the Kingdom. -United. Even Biden’s main policy initiative in Asia — the proposed Indo-Pacific Economic Framework — is patently unambitious from a business perspective. It is “not a trade deal,” the White House has said repeatedly, and will be narrow enough not to require congressional approval.
This skepticism about new trade deals has frustrated many business interests, who expected more of a change between Trump and Biden on trade, especially when it comes to China. Many of them do not buy into the idea that the era of unfettered globalization is coming to an end and want to see tariffs removed and new market access negotiated for American companies abroad. But Tai’s recent visit to the Senate Finance Committee gave free traders little hope for a change of direction, angering even some members of his own party.
“I’m for labor rights, I’m for enforcement, I’m for capacity building. But why can’t we be for opening market access now and removing tariffs? asked the senator. Maria Canwell (D-Wa.), of which the state is a major exporter. “The biggest economic opportunity for the United States is to sell things outside of the United States. This means you have to trade.