17 March 2017
Trump Administration Announces Trade Policy Priorities
The Trump administration issued on 1 March its trade policy agenda for this year. While the agenda is a bit short on specifics, it does reiterate the administration’s commitment to pursue a brand new approach focused on expanding trade “in a way that is freer and fairer for all Americans.” The document states that every action taken by the administration 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 administration generally believes that these goals can be best achieved through bi-lateral, rather than multi-lateral, negotiations, as well as by renegotiating and revising existing trade agreements when U.S. goals “are not being met.”
Key objectives included in the trade agenda are:
- ensuring that U.S. workers and businesses have a fair opportunity to compete for business both in the domestic U.S. market and in other key markets around the world;
- breaking down unfair trade barriers in other markets that block U.S. exports, including exports of agricultural goods;
- maintaining a balanced policy that looks out for the interests of all segments of the U.S. economy, including manufacturing, agriculture and services, as well as small businesses and entrepreneurs;
- ensuring that U.S. owners of intellectual property have a full and fair opportunity to use and profit from their intellectual property;
- strictly enforcing U.S. trade laws to prevent the U.S. market from being distorted by dumped and/or subsidised imports that harm domestic industries and workers;
- enforcing labour provisions in existing agreements and enforcing the prohibition against the importation and sale of goods made with forced labour;
- resisting efforts by other countries – or members of international bodies like the World Trade Organisation – to advance interpretations that would weaken the rights and benefits of, or increase the obligations under, the various trade agreements to which the United States is a party;
- updating current trade agreements as necessary to reflect changing times and market conditions;
- ensuring that U.S. trade policy contributes to the economic strength and manufacturing base necessary to maintain – and improve – U.S. national security; and
- strongly advocating for all U.S. workers, farmers, ranchers, services providers and businesses, large and small, to assure the fairest possible treatment of American interests in the U.S. market and in other markets around the world.
The administration will pursue four core priorities in an effort to achieve these objectives: (i) defending U.S. national sovereignty over trade policy, (ii) strictly enforcing U.S. trade laws, (iii) using leverage to open foreign markets, and (iv) negotiating new and better trade deals. On this fourth priority, the report states that the administration is looking forward to developing deeper trading relationships with international partners but does not mention any specific candidates for new trade agreements. It also calls attention to the U.S. trade deficits with mainland China, the North American Free Trade Agreement countries and South Korea, highlighting, among other things, the fact that the U.S.-Korea trade deficit more than doubled from 2011 (the last full year before the U.S.-Korea FTA went into effect) to 2016.
At the same time, the trade agenda criticises the WTO dispute settlement system and ostensibly opens the door for the United States not to implement adverse rulings by a dispute settlement panel or the WTO Appellate Body, observing that such rulings do “not automatically lead to a change in U.S. law or practice” as “Congress had made clear that Americans are not directly subject to WTO decisions.” The report further states that “when the WTO adopts interpretations of WTO agreements that undermine the ability of the United States and other WTO Members to respond effectively to these real-world unfair trade practices with remedies expressly allowed under WTO rules, those interpretations undermine confidence in the trading system.”
With respect to the strict enforcement of U.S. trade laws, the trade agenda signals the administration’s willingness to take advantage of several mechanisms in the U.S. trade remedy arsenal to prevent the U.S. market from being distorted by unfair practices such as injuriously dumped or subsidised imports or harmful import surges. The document states, for example, how Title VII of the Tariff Act of 1930 provides the United States with the authority to impose antidumping and countervailing duties, highlighting that the U.S. Department of Commerce has the right to self-initiate AD/CV cases whenever appropriate.
Moreover, under Section 201 of the Trade Act of 1974 the president may impose relief if increasing imports are a substantial cause of serious injury to a domestic industry. This safeguard provision was most recently used by President George W. Bush in response to a harmful surge of steel products. Additionally, the administration may potentially resort to Section 301 of the Trade Act of 1974 to take appropriate action in response to foreign actions that violate an international trade agreement, or are unjustifiable, unreasonable or discriminatory, and burden or restrict U.S. commerce. Such investigations may be initiated pursuant to requests by private U.S. workers and businesses or a determination by the Office of the U.S. Trade Representative.
Lastly, the administration is committed to using a more aggressive approach as well as all possible leverage to encourage other countries to give U.S. producers fair and reciprocal access to their markets. The document claims that such an approach will help grow the global economy by breaking down long-standing barriers and promoting increased competition.