Fighting Climate Change a New Priority in U.S. Trade Policy, Says USTR Tai

Trade Update • APRIL 18, 2021

In her first major speech since taking office, U.S. Trade Representative Katherine Tai last week outlined her vision for using trade policy to protect the planet and fight climate change, saying the United States must be a leader in preventing a catastrophic environmental chain reaction.

“The view that environmental issues are not an inherent part of trade ignores the reality that the existing rules of globalization incentivize downward pressure on environmental protection,” Tai said in her keynote address to an online event hosted by the Center for American Progress.

Globalization has created incentives for countries to erode environmental protections to attract investment, Tai said, pointing to the need for revamped international trade rules to counter a “race to the bottom” that puts higher environmental standards at a competitive disadvantage.

“The goal is to ensure that we and our trading partners are engaged in fair competition that does not suppress environmental protection,” according to the USTR, who vowed that Washington was committed to “rewriting trade rules so that they move us toward this model of fair competition.”

Tai’s speech comes a week before President Joe Biden is set to hold a virtual summit with world leaders to discuss climate change, and signals a shift to more aggressive efforts by Washington to promote energy-efficient and low-emissions technologies.

The USTR highlighted the need to develop environmental technologies, goods, and services, as well as strategic supply chains to ensure the transition away from fossil fuels. That would require pushing for “comprehensive action” to encourage clean energy use throughout the supply chain, she said.

New global agreements to end illegal logging and address overfishing were also needed, according to Tai. In this regard, she acknowledged that the World Trade Organization was “considered by many as an institution that not only has no solutions to offer on environmental concerns but is part of the problem.”

Despite this perception, Tai cautioned her audience “to be mindful that we will only truly address the global scale of this problem through global rules.”