[CTC] Tai gives USTR a new direction: Tackling climate change, inequality

[Arthur Stamoulis]

Tai gives USTR a new direction: Tackling climate change, inequality
By Hannah Monicken, Inside US Trade
4/15/2021
In her first speech since taking over as U.S. Trade Representative, Katherine Tai on Thursday charted a new course for the agency that envisions trade policy at the center of the Biden administration's push to tackle large, existential problems – climate change, racial justice and inequality.
At the heart of the new-look USTR: A focus on environmental protection, both through unilateral enforcement of trade agreements and new multilateral trade rules. In her remarks to the Center for American Progress <https://insidetrade.com/node/171087>, Tai outlined “immediate” difference-making issues – ending illegal logging and overfishing – and a broader goal of halting the “race to the bottom” in environmental protection incentivized by current trade rules.
“The science indicates that the window of opportunity to prevent a catastrophic environmental chain reaction on our planet is closing fast,” Tai warned. “Comprehensive action is the only way forward, and this challenge must be at the center of U.S. foreign policy, national security policy, and economic policy. USTR sits at the intersection of all three areas.”
Trade liberalization has not led to an improvement in environmental protections standards, as many expected, Tai argued. Instead, “the system itself creates an incentive to compete by maintaining lower standards,” she said.
“This is what people mean when they say the rules of trade promote a race to the bottom,” she added – and the international trading system has not kept up.
For this reason, Tai insisted, environmental protection is not only a social issue, but an economic one. And addressing it will pay dividends not only for the planet but for U.S. workers and the economy as well, while giving the country an opportunity to right past wrongs for underserved communities, she argued.
“Our bold, collective action can create enormous new economic opportunities and good paying jobs for all Americans while building the industries of the future. And we will not overlook our obligation to take on centuries of discrimination, oppression and bigotry,” she said. “Racial justice and equity must be central to the conversation.”
Tai offered several areas where trade plays an important role in environmental protection – enforcing existing trade agreements, including the U.S.-Mexico-Canada Agreement; concluding the World Trade Organization negotiations to curb harmful fisheries subsidies; establishing global trade rules on environmental issues; and developing “strategic international supply chains.”
Tai touted the USMCA’s environmental provisions but noted the “glaring omission” of climate change from the agreement. House Democrats have pushed to add the Paris Agreement to USMCA, and Canada has said it would be willing to do so as well.
But good provisions require good enforcement, she said. “Environmental groups have complained for years that chronic lack of enforcement of these rules fundamentally undermines the effort,” she added. “They are right.”
Tai pointed to the WTO as “part of the problem,” citing the organization’s failure to address the race to the bottom on environmental standards and the fact that such protections are subject to WTO challenge. She also pushed for WTO members to secure an agreement on fisheries subsidies. “[W]e will only truly address the global scale of the problem [of overfishing] through global rules,” she said.
WTO members failed to conclude an agreement by the end of 2020, as mandated by the United Nations Sustainable Development Goals. The new director-general, Ngozi Okonjo-Iweala, is pushing for a deal by midyear <https://insidetrade.com/node/171073>, although significant sticking points remain.
Tai also called for global rules on illegal logging and the trade in those products. Illegal logging and overfishing are “two practical issues that immediately come to mind” in “pushing forward with environment rules in trade,” Tai said.
Tai's argument that trade liberalization has created an economic incentive for lower environmental standards also suggests the Biden administration could support the previous administration’s main contribution to environmental discussions at the WTO: A proposal <https://insidetrade.com/node/170291> that would make lower environmental standards as a subsidy at the WTO, allowing other countries to impose remedies.
But alongside new disciplines, Tai also advocated for new “rules that promote positive [behaviors],” including fostering innovation in environmental technologies and goods as well as “cultivating strategic international supply chains for trade.”
She cited the recent settlement <https://insidetrade.com/node/171053> between South Korean battery companies SK Innovation and LG Energy Solutions, arguing it puts the U.S. in a “stronger position” for innovation.
“We need a strong, diversified, and resilient supply chain of electric vehicle batteries in America to meet the growing global demand and to expand U.S. manufacturing of clean energy vehicles,” she added.
Tai acknowledged this approach would upend some of the usual discourse around trade policy. “The traditional trade community has resisted the view that trade policy is a legitimate tool in helping to solve the climate crisis. As we have so often seen with labor issues, there is a certain refuge in arguing that this is all a question of domestic policy, and that we need not tackle the daunting task of building international consensus around new rules,” she said.
But, she added, “that dated line of thinking only perpetuates the chasm that exists between the lived experiences – and expectations – of real people on the one hand, and trade experts on the other. My job is to bridge that chasm and push for trade reforms that translate into meaningful change.”
She promised to include marginalized voices and stakeholders who are not typically “at the table” with USTR to foster “fresh, collaborative thinking” and “forge consensus and find solutions that we never knew existed.”
 
Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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