[CTC] FTC chair ties Tai’s trade policy to administration's ‘new paradigms’

[Arthur Stamoulis]

FTC chair ties Tai’s trade policy to administration's ‘new paradigms’
Inside US Trade, March 14, 2024
 
The worker-centered trade policy championed by U.S. Trade Representative Katherine Tai is part of the Biden administration’s broader shift away from “outdated theories” to “new paradigms” that are based on the reality of the global economy and lessons learned in recent years, Federal Trade Commission Chair Lina Khan said on Wednesday.
Khan, speaking at the Carnegie Endowment for International Peace <https://carnegieendowment.org/2024/03/13/future-of-american-innovation-conversation-with-lina-khan-event-8255>, argued that the administration is aiming to address challenges facing the economy in a way that prioritizes people over corporations. She noted that this “pivot” is happening across the government but cited Tai in particular.

“In my conversations across the country, I've also sensed that when people feel like they're not able to get a fair shake in markets, in our economy, that really does implicate their sense of our democracy and whether government is working for them in some fundamental way.... I think, again, this is where across this government we've seen pivots in policy,” she said.

“Take Ambassador Tai,” she added, “who's been extremely eloquent about the ways that we've been shifting to a worker-centered approach to trade policy, recognizing that if you're just focused on short-term efficiency metrics that can really come at the expense of long-term stability and health domestically. And so, I think that's one area where we see a reorientation based on our experience over the last couple of decades, but I think is something we're seeing more broadly too.”

Tai and other USTR officials have touted the administration’s worker-centered approach to trade as a move away from policies that have benefited large companies and facilitated an efficiency-first approach in favor of ones that focus on labor rights and building resilience into supply chains. The agency eschews market-access talks and has shifted instead to broader arrangements that touch on global challenges. Additionally, USTR has begun rethinking its approach to digital trade and last October withdrew its support for proposals on data flows, data localization and source code at the World Trade Organization, citing a need for “policy space” to allow domestic debates on such issues to play out.

According to Khan, the shift on trade policy is part of the administration’s efforts to revamp government policy to be more in line with “reality and evidence.”

“From trade and industrial policy to national security and competition, the administration has learned from past experiences and adopted new paradigms. A common through-line across these approaches is a commitment to discarding outdated theories in favor of reality and evidence,” she said. “Fighting back against the challenges that we face is about more than just enforcing the antitrust laws. But by seeking fair competition and by demonstrating to the American people that the era of monopoly dominance over their lives can end and is not inevitable, we can help rebuild not just the confidence of the consumer or the worker or the entrepreneur but also a belief in American government and its leadership both at home and abroad.”

The digital trade move, in particular, has caused a stir among lawmakers, business groups and civil society organizations. Civil society groups, along with some lawmakers, have celebrated the decision as part of a broader effort to rein in “Big Tech” companies and to prevent trade rules from standing in the way of domestic regulation. Other lawmakers, along with much of the business community, have decried the move, arguing it is upending a longstanding U.S. position and ceding digital leadership to China.
Khan, who is known for her advocacy for rigorous antitrust enforcement, has become a figure in the digital trade debate, with some business groups accusing USTR of allowing Khan and Jonathan Kanter, head of the Justice Department’s antitrust division, to improperly lead this effort. However, both the agency and Khan have argued she was involved only as part of normal interagency discussions.

On Wednesday, Khan said the administration has consciously sought to become a more hands-on regulator and noted U.S. partners are watching the pivot with interest.

“I think one thing that was interesting for me when I joined the FTC and started talking to enforcers in other countries was a sense that for the past couple of decades the message that some of these other enforcers had been hearing from the U.S. was, ‘You all are doing it all wrong and the best thing to do is be more hands off.’ And so, we had been in a mode of exporting a more hands-off approach to antitrust and competition policy,” she said. “As they've seen a pivot here domestically, I think it's been really interesting for them to figure out what that means more globally.”

In particular, she noted other countries are dealing with the same challenges, “similar questions about how does competition work in digital markets [and] how do we make sure we're updating our tools and frameworks for thinking about competition in very high-tech, more fast-moving sectors?”

While Khan was not referring to trade policy, Tai has posed similar questions more than once about how the U.S. and its partners must consider whether its tools and avenues for cooperation are up to the task of addressing global economic challenges as they are in the 21st century. -- Hannah Monicken (hmonicken at iwpnews.com <mailto:hmonicken at iwpnews.com>)


Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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