Trump’s Trade Agenda: Background

President Trump’s 2017 Trade Policy Agenda, issued on March 1, sets expanding trade that is “freer and fairer for all Americans” as its guiding principle. The Administration identifies four major priorities: (i) defending U.S. sovereignty over trade policy; (ii) strictly enforcing U.S. trade laws; (iii) using all sources of leverage to open foreign markets; and (iv) negotiating new and better trade deals. This post highlights key elements of these priorities and the pending confirmation of the nominee for U.S. Trade Representative (USTR).

Defending National Sovereignty Over Trade Policy: The Agenda sets out the Administration’s intention to “aggressively defend American sovereignty over matters of trade policy”. Citing U.S. law as well as the WTO Dispute Settlement Understanding, it stresses that a ruling against the United States by a WTO dispute settlement panel or the WTO Appellate Body does not automatically lead to a change in U.S. law or practice.

Strictly Enforcing U.S. Trade Laws: Declaring that the Administration “will not tolerate” unfair trade practices that harm U.S. interests, in particular the dumping or subsidizing of imports, the Agenda cites strict enforcement of U.S. trade laws as a major priority. In addition to relying on the U.S. anti-dumping and countervailing duty laws, including the Department of Commerce’s authority to self-initiate trade remedy cases, the Agenda singled out two provisions of the 1974 Trade Act that could be used. Section 201 allows the President to impose tariffs as a safeguard to protect U.S. industry from a surge of imports. Section 301, as detailed in a recent post, authorizes retaliation against foreign countries that impose unjustifiable, unreasonable or discriminatory restrictions that burden or restrict U.S. commerce.

Using Leverage to Open Foreign Markets: The Agenda pointed to the need to address high tariffs and non-tariff barriers in foreign markets that impede access for U.S. exports. In doing so, it emphasized the need to address “two fundamental challenges” that undermine WTO rules and bilateral and plurilateral trade agreements. One is the failure of important trading partners to pursue free-market principles, and the other is the lack of transparency in legal and regulatory systems, which makes it is difficult to hold trading partners accountable. Turning to a “more aggressive approach”, the Trump Administration promises to “use all possible leverage” to seek fair and reciprocal access to foreign markets.

Negotiating New and Better Trade Deals: The Agenda criticizes existing trade agreements as not living up to expectations, pointing in particular to the North American Free Trade Agreement (NAFTA), the U.S.-Korea Free Trade Agreement and the Uruguay Round Agreement that established the WTO, as well as China’s accession to the WTO. The Trump Administration will undertake a major review of the U.S. approach to trade deals and focus on negotiating bilateral agreements. As the first step, the Administration is preparing an executive order to initiate a review of all trade agreements.

Perhaps to response to questions that have been swirling around as to who will be in charge of the President’s trade policy, the Report cited provisions of trade law that give the USTR the “primary responsibility for developing” U.S. international trade policy and stipulate that the USTR will “act as the principal spokesman of the President on international trade”. The Administration intends to submit a more detailed report on the trade agenda after the Senate confirms a USTR. That would provide an opportunity for USTR to fulfill in greater detail the mandate of the Trade Act of 1974 that the national trade policy agenda include the actions proposed, or anticipated, to be undertaken during the year to achieve its objectives and priorities, including actions authorized under the trade laws and negotiations with foreign countries, and any proposed legislation necessary or appropriate to achieve any of the objectives or priorities.

On March 14, the Senate Finance Committee held a hearing on the President’s nominee for USTR, Robert Lighthizer. In his statement to the Committee, Lighthizer aligned himself squarely with the President’s “America first trade policy” and emphasized his extensive work over the past 30 years “representing U.S. manufacturing companies opposing unfair trade”. While there is widespread support for Lighthizer’s nomination, the issue of whether he needs a congressional waiver as a consequence of his earlier work for a foreign government remains unresolved. Until he is confirmed, the Administration is likely to be hampered in moving forward aggressively on its evolving trade agenda.

Jean Heilman Grier

March 22, 2017

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