U.S. Trade Representative Katherine Tai continued her defense of a Biden trade agenda that does not so far include traditional free trade agreements with other nations, but several senators at a hearing Thursday strenuously pushed back, arguing the U.S. is being left behind as China pushes forward with new tariff-slashing pacts.
Senators Maria Cantwell, D-Wash., Chuck Grassley, R-Iowa, Mike Crapo, R-Idaho, John Thune, R-S.D., Robert Menendez, D-N.J., Pat Toomey, R-Penn., and John Barrasso, R-Wyo., all stressed the need for the U.S. to negotiate new FTAs, include tariff reduction deals in the Indo-Pacific Economic Framework (IPEF), or rejoin the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) at a Finance Committee hearing Thursday.
Tai stressed that the Biden administration is bringing down foreign tariffs by deals such as the one last summer that ended the U.S.-European Union dispute over aircraft subsidies and also is working to improve “economic engagement” through endeavors such as IPEF.
While the framework does not include market access provisions in the traditional sense, Tai argued it will “enhance our access to foreign markets.”
But several senators disagreed sharply.
“I define market access as free trade agreements and I just don’t see why we cannot engage,” Crapo said. “We’ve got nations in the Indo-Pacific that are crying out for free trade negotiations so that they can strengthen their relations with us economically rather than being tied to China … I believe we need to engage on free trade negotiations in terms of market access and not define market access as some kind of framework or something else.”
Tai, stressing U.S. labor concerns that previous free trade agreements led to job losses as manufacturing companies moved plants to other countries, insisted that new ways of improving trade are needed.
Sen. Cantwell, referencing remarks from Tai earlier this month in Baltimore where she suggested the free trade agreement is a “very 20th century tool,” stressed that her farming constituents want new FTAs.
“I’m just trying to understand this notion that somehow trade agreements are 20th century tools and they’re something we’re not going to do anymore,” Cantwell said. “My people … in the state of Washington want to know always, always what are we doing to increase market access. That’s what they want to know. Why can’t we be for opening market access now?”
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Tai responded by defending her “20th century comment,” calling it a “statement of fact” and stressing that “FTAs are something we did a lot of in the 1900s … There is a place for FTAs in our toolbox, but even there I feel our approach to FTAs needs to be updated … to reflect the realities of today.”
Senators Toomey and Thune did not agree, contending that the U.S. is being left behind as China spreads its influence globally by negotiating new free trade agreements.
“You may think this is a 20th century tool, but it looks like the rest of the world thinks this is a 21st century tool,” Toomey said. “What this means is that China and the European Union are expanding market access for their producers … and they’re getting market share that we’re going to miss out on.”
Senators echoed a theme from Wednesday's hearing of the House Ways and Means Committee, where lawmakers criticized Tai and the Biden administration for not treating the proposed Indo-Pacific Economic Framework more like a free trade agreement in order to demand lower tariffs from trading partners.
“It’s a lot of really flowery rhetoric, but I’m trying to see where this (framework) does anything to open markets for farmers and ranchers in areas of the world where America needs … to be competitive and needs to be leading the way,” Thune said.
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