Background

In a recent speech U.S. Trade Representative Katherine Tai said the Biden administration will use trade policy as part of a “whole-of-government” approach to address climate change and other environmental issues. Tai said her job is to “push for trade reforms that translate into meaningful change in the lives of farmers, ranchers, factory workers, parents, children – not just in the United States, but around the world.”

“For too long, we believed that trade liberalization would lead to a gradual improvement in environmental protection as countries grew wealthier from increased trade flows,” Tai said. As a result, “for many decades, efforts to integrate environmental concerns through trade agreements were largely dismissed as wrongheaded, bleeding heart attempts to incorporate ‘social issues’ in the trading system.”

Further, countries have been left with a multilateral trading system with no rules to address the corporate incentive to compete by “maintaining lower standards or lowering those standards even further.” In contrast, Tai held up the U.S.-Mexico-Canada Agreement that updated NAFTA as an example of how trade policy can support environmental goals, with provisions on wildlife trafficking, illegal logging and fishing, fisheries subsidies, marine litter, and air and water pollution.

Going forward, Tai said, “trade has a role to play in discouraging the race to the bottom and incentivizing a race to the top.” For example, in the short term “we should use trade policies and trade enforcement actions to protect [forests],” and trade agreements are starting to address concerns about fisheries and oceans. However, she said, “we will only truly address the global scale of [these problems] through global rules.”

Global trade rules can not only discourage harmful behaviors but promote positive ones, Tai said. These include developing innovative environmental technologies, goods, and services (e.g., batteries for electric vehicles) and cultivating strategic international supply chains that enable reliable access to them. Using clean energy throughout those supply chains is also essential.

Tai also emphasized that whatever rules may be developed “they must actually be enforced.” She decried what she called a “chronic lack of enforcement” of environmental rules over the years and said she is “committed to enforcing the rules of USMCA and our other agreements to ensure not only that we follow through on our promises to protect the planet, but that we protect workers against … unfair competition.”

For more information on U.S. trade policy initiatives, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.

Copyright © 2021 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.

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