[CTC] Warren calls for Tai to lead Indo-Pacific talks amid criticism for Biden trade agenda

[Arthur Stamoulis]

Warren calls for Tai to lead Indo-Pacific talks amid criticism for Biden trade agenda
The Massachusetts senator said she is concerned about divergent priorities between trade chief Katherine Tai and Commerce Secretary Gina Raimondo – just one of a torrent of criticisms for Biden’s trade policy in the Senate Finance Committee today.

Politico Pro
BY: GAVIN BADE, DOUG PALMER 
3/31/22 
 
President Joe Biden’s trade policy faced a torrent of criticism from the Senate Finance Committee on Thursday, as lawmakers from both parties questioned his trade chief on the White House’s strategy to confront China economically.
Too many cooks? U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo have worked for months on a proposed Indo-Pacific Economic Framework to unite Asian allies against China. But Sen. Elizabeth Warren <https://directory.politicopro.com/congress/member/W000817> (D-Mass.) told POLITICO that there should be only one lead on those talks — and it should be Tai.
“I would be very happy to see Ambassador Tai in charge of all of our trade negotiations,” Warren told POLITICO outside the Finance Committee hearing on Thursday. “That's why she's the trade rep.”
Warren’s remark came after she praised Tai for pledging to focus on labor, environmental and economic competition standards in the trade talks on IPEF, which Tai will lead. But she expressed dismay at Raimondo’s responsibility over other IPEF issues, such as supply chains, infrastructure and climate, and tax.
“I’m worried that these higher standards will only be included in the trade pillar that you are responsible for negotiating,” Warren told Tai during the hearing. “Secretary Raimondo will lead the negotiations on the three other pillars, and when she listed her priorities, labor standards and competition were absent. Based on this and her other comments, I am concerned her approach will boost profits for giant corporations, the ones that offshore jobs and squash small businesses.”
Tension rising: The Commerce Department did not immediately respond to a request for comment. But Warren’s remarks come on the heels of friction between Tai, <https://www.politico.com/newsletters/west-wing-playbook/2022/02/28/the-roots-of-a-tai-rahm-confrontation-00012558> who has been skeptical of new trade deals, and Raimondo, who is seen as friendlier to corporate interests. Tai, however, rejected the idea that there was any daylight between their approaches.
“I appreciate the confidence that I think Sen. Warren is expressing in me,” she said after the hearing. “But USTR is appropriately leading the trade pillar. We are purposefully making this economic engagement framework about more than just trade, as it's defined very narrowly, and I'm really grateful to have Secretary Raimondo as a partner.”
Everybody hates IPEF: Warren said she was concerned that Raimondo’s involvement would turn the IPEF into a second coming of the Trans-Pacific Partnership, the abandoned trade deal that she and other progressives viewed as a giveaway to corporate interests. “There was a reason the original TPP failed, and we cannot do a TPP 2.0,” she stressed outside the hearing room.
But that was a lonely position at the Finance hearing. Multiple other senators from both parties blasted Tai for not prioritizing tariff reduction and new market access for American companies as part of the IPEF deal, as TPP would have done. That included nearly every Republican on the panel and a handful of top Democrats.
“I’m for labor rights, I’m for enforcement, I’m for capacity building. But why can’t we be for opening market access right now and getting rid of tariffs?” asked Sen. Maria Cantwell <https://directory.politicopro.com/congress/member/bg/C000127> (D-Wa.), whose state is a major exporter. “The biggest economic opportunity for the U.S. is to sell things outside of the United States. That means you have to have trade.”
Tai holds firm: Tai defended the Biden administration throughout the hearing, saying she has averted $20 billion in tariffs affecting American businesses by cleaning up trade disputes with Europe, Japan and others started during the Trump administration. “So, we are opening markets,” Tai said.
But Tai also stuck to her guns, saying that she would not return to the old U.S. trade policy of prioritizing tariff reduction and liberalization, arguing that had led to a loss of manufacturing jobs and a backlash against trade deals in the U.S.
“We are not starting these conversations with tariff liberalization,” Tai said, “in large part because our traditional trade models and traditional [free trade agreements] have led us to a place where we are facing considerable backlash that we are listening to from our own people about concerns regarding the offshoring and outsourcing of American jobs.”
That line was a thinly veiled reference to the TPP, which Tai believes is a key reason that former President Donald Trump won the 2016 election <https://www.politico.com/newsletters/west-wing-playbook/2022/02/28/the-roots-of-a-tai-rahm-confrontation-00012558>.
“I take very seriously lessons that we have learned in the last five to seven years around trade agreements that we have pursued that have been so big, and have been so uneven in terms of the wins and losses they're going to deliver for our economy, that they have collapsed under their own weight,” Tai said in another reference to the abandoned pact.
Taiwan membership unclear: Tai also declined to say whether Taiwan would be invited to join the IPEF, a move that would likely provoke retaliation from Beijing. No decisions have been made yet on that front, she said to repeated questioning from Sen. Bob Menendez <https://cd.politicopro.com/member/51523> (D-N.J.), who heads the Senate Foreign Relations Committee.
USMCA enforcement: Tai was also on the defensive over the Biden administration’s enforcement of the U.S.-Mexico-Canada Agreement, with many senators on both sides of the aisle accusing Mexico of failing to honor its energy and agricultural commitments under the pact.
“Mexico continues to restrict potatoes and delay approval of biotech crops,” ranking member Mike Crapo <https://directory.politicopro.com/congress/member/bg/C000880> (R-Idaho) said. “Rather than launch cases, the administration appears to be in retreat.”
The U.S. trade chief said she was working closely with U.S. Agriculture Secretary Tom Vilsack on the potato issue but progress has been difficult.
“We have not given up hope even though we have been taking two steps forward and one step backward for many months now,” Tai said. “We are trying to secure a win here and … all options are on the table if we are not able to secure that win.”
Tai made similar hints about beginning dispute settlement proceedings against Mexico if negotiated agreements can not be reached on the biotech issue and on barriers that U.S. investors face in accessing the country’s electricity market.
Wyden complained the Mexican government is “slamming the brakes on renewable energy reform,” to the detriment of American renewable energy companies that want to do business in the country.
“I am also deeply concerned with the legislative and regulatory developments in the Mexican energy industry that we have seen in recent months,” Tai replied. “I have informed Mexico and I assure you that we at USTR are looking at all available options under the USMCA to address these issues.”
Several farm state senators on the panel also pressed Biden to quickly nominate a new chief U.S. agricultural negotiator after his previous nominee was forced to withdraw for undisclosed reasons.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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