A recent paper from the Congressional Research Service states that while many analysts expect a change of tone in the trade policy of the Biden administration, few expect a total reversal. Members of Congress now have an opportunity to shape the administration’s trade policy and define congressional priorities on trade through confirmation hearings, legislation, appropriations, and oversight, the paper states.
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While neither the Senate Finance nor the House Ways and Means committee has yet outlined its trade oversight plans, the paper outlines the following trade-related issues that may come before the 117th Congress.
Trade agreements. The most recent grant of trade promotion authority, through which Congress establishes trade negotiating objectives, notification and consultation requirements, and expedited procedures to consider implementing legislation for trade agreements that advance those objectives and requirements, expires July 1. A potential effort by the White House to renew TPA could prompt a substantive trade policy debate over U.S. trade negotiating objectives, the extent of congressional oversight, and the scope of and approach to potential new U.S. trade agreements.
The U.S.-Mexico-Canada Agreement includes a number of revisions and new provisions compared to past U.S. trade agreements, including on digital trade barriers, investment, intellectual property rights, government procurement, labor enforcement, rules of origin, and exchange rates. Another issue may be whether the USMCA serves as the new model for U.S. free trade agreement negotiations going forward or represents a distinct approach to address a specific trading relationship.
The status of trade negotiations with the United Kingdom and Kenya, pending second stage talks with Japan and China, and the U.S.-European Union economic relationship are of great interest to many members of Congress. Related issues may include resolution of specific trade disputes (e.g., Section 232 tariffs on steel and aluminum and the Boeing-Airbus subsidy dispute at the WTO), renewed momentum for broader U.S.-EU trade liberalization, and Brexit-related outcomes and implications for transatlantic trade and investment. The recent conclusion of the Regional Comprehensive Economic Partnership may influence congressional debate about existing and future U.S. trade agreements in the Asia-Pacific region, including whether and how the U.S. might join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
China. Congress will likely continue oversight of (1) China’s trade and investment practices, (2) the economic implications of China’s industrial policies in a range of sectors, including technology, clean energy, advanced manufacturing, and pharmaceuticals, and (3) the economic and geopolitical impact of China’s “One Belt, One Road” initiative, which finances and develops China’s global supply chains through trade, investment, and infrastructure projects across a number of countries and regions. A topic of growing congressional interest is whether the U.S. might pursue a trade agreement with Taiwan.
WTO. The growing debate over the role and future direction of the WTO raises issues such as (1) advancing reforms in an attempt to safeguard and improve its effectiveness, (2) updating WTO rules to reflect 21st century realities, such as advances in technology, new forms of trade barriers, and market-distorting government policies, and (3) resolving ongoing disputes and longstanding U.S. concerns over the functioning of the dispute settlement system’s Appellate Body.
Tariffs. President Trump’s use of certain delegated trade authorities to impose increased tariffs on U.S. imports has been subject to congressional debate, including proposed legislation to reform these authorities. The Biden administration will determine whether to maintain or modify current Section 232 tariffs on steel and aluminum products and Section 301 tariffs on imports from China and the EU, as well as whether or not to continue pending investigations under these statutes or support new ones.
Technology and Exports. Trade policy issues related to technology and industrial policy, digital trade, data flows and data privacy, the role of digital platforms, digital currencies, and commercial cyber theft may remain active in the new Congress. In addition, the Committee on Foreign Investment in the U.S. process likely will continue to be of interest to members, particularly on issues related to the ongoing implementation and effectiveness of recent legislative reforms. Oversight of export control reform implementation is also likely to be of interest.
COVID-19. In the first months of the pandemic, countries around the world placed export restrictions on certain finished goods and raw materials, leading to shortages of key goods. While many of those restrictions were eased by late 2020, the shock of the initial shortages led to congressional interest in encouraging the relocation of essential services and supply chains to the U.S. or to allies and trading partners like Canada and Mexico.
Other. Other issues of potential interest include global supply chains; trade promotion and finance agencies; the role of imports in government procurement; potential economic crises overseas; trade preference programs, including the recently expired Generalized System of Preferences; and possible renewal of the miscellaneous tariff bill.
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