Last week, U.S. Trade Representative Katherine Tai appeared before the House Ways & Means Committee to discuss the Biden administration’s 2022 trade agenda.
In her opening statement, Tai focused mainly on the trade relationship with China, highlighting the ongoing talks with Beijing over trade distortions and imbalances, including China’s failure to fulfill its purchase commitments detailed in the “Phase One Agreement” and its continuing state-centered and non-market practices.
In these “extremely difficult” discussions, it became clear according to Tai, that China will only comply with its trade obligations when it “fits its own interests” and that meaningful “follow-through or real change remains elusive.” She indicated that it was time to “turn the page on the old playbook with China, which focused on changing its behavior.
“Going forward, our strategy will expand beyond only pressing China for change and needs to include vigorously defending our values and economic interests from the negative impacts of China’s economic policies and practices,” she said. “This means we will also continue to explore the design and build of new tools and strategic investments that defend our interests and help us remain competitive.”
To do so, Tai said that the U.S. “must develop new domestic tools targeted at defending our economic interests, and make strategic investments in our economy,” while also working closely with allies that are similarly adversely affected by China’s practices.
Explaining that much of the past year was spent repairing “strained relationships” and “recommit[ing] the United States to the world’s institutions,” Tai noted work on new and existing bilateral, plurilateral and multilateral agreements. This includes economic engagement with partners in the Indo-Pacific and a clear commitment to the World Trade Organization.
While negotiation and cooperation are preferred, she noted that trade policy can fail to deliver on its promises, and when that happens, the U.S. will pursue formal dispute settlement and other enforcement options. In this regard, Tai added that “many of our existing trade tools were crafted decades ago” and no longer “adequately address the challenges posed by today’s economy.” Accordingly, the administration is currently reviewing “existing trade tools and will work with Congress to develop new tools as needed.”
Tai reminded the committee that President Biden’s agenda “begins with a commitment to putting workers at the center of our trade policy” and in this respect the administration last year obtained numerous “wins.” She pointed out that an important part of the trade agenda is “promoting trade policy that is equitable, inclusive, and durable for all Americans.”
A complete video of the 4 hour hearing can be viewed here.