Developing Worker-Centric Trade Policies Likely to be Long-Term Process

A new report from the International Trade Commission indicates that there are gaps in data and analytical literature that could slow the Biden administration’s efforts to “advance inclusive growth, economic resiliency, and competitiveness through sound and informed trade policy.”

At the request of U.S. Trade Representative Katherine Tai, the ITC conducted an investigation of the potential distributional effects of goods and services trade and trade policy on U.S. workers in underrepresented and underserved communities. The ITC’s concluding report catalogs information the agency gathered in roundtable discussions, an academic symposium, and a literature review.

At the roundtables, participants spoke about challenges workers may face depending on their age, disability status, race, ethnicity, gender, sexual orientation, education, or income level. These include discrimination, lack of childcare availability, barriers to relocation, challenges in gaining access to training or education, and disparate access to transportation, technology, internet connection, and health care. They suggested several ways to address these challenges, such as government funding for training and community programs, expansion of the Trade Adjustment Assistance program, on-the-job training and apprenticeship programs, and additional investment. In addition, many said that U.S. trade policy needs to move toward a framework that better protects U.S. workers and strengthens domestic supply chains and that governments should include workers and affected communities in policy- and decision-making processes.

With respect to existing academic and policy research, the ITC found that a “robust literature on the distributional effects of trade on U.S. worker outcomes has emerged, but several gaps remain.” For example, the current literature largely focuses on the trade effects of goods imports, covers only a limited number of demographics and communities, includes little research on distributional effects of services trade, and focuses on wages rather than also examining effects on wealth. Some of these gaps are fueled by gaps in data (e.g., with respect to the production and trade of services) or restrictions on researchers’ access to existing data.

It appears unlikely that the report will have any short-term impact on the administration’s work to develop a more worker-centric trade policy. The ITC noted that the report merely catalogs the information gathered and does do not attempt to assess, analyze, or draw conclusions. Tai said she planned to review the report and use it to inform trade policy development, but she also acknowledged a need for “new research, data, and analytical tools.”

USTR had also directed the ITC to expand its research and analysis capabilities so that its future advice on the probable economic effects of trade agreements and trade policies includes estimates of the potential distributional effects on U.S. workers. Among other things, USTR wanted the ITC to develop models capable of analyzing (1) the effect of expanded foreign market access on affected U.S. exporting industries and (2) the indirect effect on U.S. exports of intermediate inputs when final goods receive preferential access to the U.S. market. The ITC gave no update on these efforts in its report and said only that it would brief USTR on them.

For more information on trade policy development and implementation, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.