A new president will shape a different, less combative foreign trade policy during his term, according to a former top agricultural diplomat.
As part of the virtual National Turkey Federation 2021 Annual Convention, Darci Vetter, the vice chair of agriculture, food and trade at Chicago-based Edelman, gave her rundown of how the administration of President Joe Biden will differ from his predecessor and what it may mean for animal agriculture. From 2014 through 2017, she was the U.S. Chief Agricultural Negotiator, an ambassador of the Office of the U.S. Trade Representative. She spoke on February 9, 2021.
Domestic focus
Vetter said the Biden Administration will view trade as an extension of both domestic and foreign policy rather than focusing on the issue of trade itself. It sees trade as a means to another end such as international influence and resolving domestic issues. The previous administration focused on bilateral trade and trade deficits. The Biden Administration will also examine trade through a prism of how it will affect the middle class in America, how it will affect the environment and how it will affect organized labor and international human rights.
The new administration will not debut with new trade policies and proposals because it is preoccupied with the COVID-19 pandemic. For now, the economic focus should be on addressing the on-going economic crisis related to COVID-19 and stabilizing the domestic economy. However, there will be certain decisions related to that objective affecting international trade.
From now on, the U.S. will likely approach trade policy as an extension of foreign policy that can be used to achieve domestic goals. There were early signals of this when the Biden Administration quickly issued executive orders reinforcing and strengthening buy American rules in U.S. government procurement policy – a move to help domestic manufacturing. The administration will also likely introduce legislation into Congress concerning national infrastructure, the climate and creating what some refer to as green jobs in the U.S. economy.
China
The trading relationship with China was a key plank for the Trump Administration’s trade agenda. Vetter said Biden will continue to focus on China, a new trading partner for the U.S. poultry industry, with continued scrutiny of its political and martial ambitions in Asia and beyond.
There is some hope, she said, that a new administration will cancel tariffs against China and move away from that approach. Instead, she expects, the U.S. will look overall at what’s been done in the past and assess which approaches toward China worked and which didn’t. Tariffs are still on the table along with any other measure that could influence or limit China’s aggressive behavior and unfair international trade practices. For now, the Phase One agreement between China and the U.S. will remain in place.
International order
On a broader scale, the Biden Administration aims to return the U.S. to its leading international role diplomatically.
Already, the U.S. is resuming cooperation with the World Trade Organization. But it will maintain some of the Trump Administration’s positions calling for reform in that institution. The U.S. rejoined the World Health Organization and the Paris Agreement on climate change.
Possible immediate actions
Although the administration wants to focus on the pandemic for now, it will need to address some maters related to international trade in short order.
One of the first actions will be dealing with tariffs on products from China. For agriculture, that is related to the retaliatory tariffs China placed on U.S. agricultural products. Vetter said the administration will have to do something about the tariff situation due to their effects on the domestic economy and pressure from key stakeholder groups.
The U.S. will also need to take action on the tariffs assessed on other countries by the Trump Administration. The Section 232 tariffs are designed to be used against threats to national security, she said. These 232 measures were used on steel and aluminum coming from trading partners like Canada, Mexico and countries in Europe. Some tariffs were resolved when the so-called U.S. Mexico Canada Agreement was established. Others assessed against European countries are still in place and removing them, Vetter said, would help ease tension with transatlantic allies and could have an economic impact in the U.S.
Outlook for the future
Overall, the Biden Administration wants to create a sort of worker centered trade policy. This will focus on building the American middle class. Vetter said in U.S. agriculture the established thought is trade lifts all boats and that trade gives consumers better choices and lower prices. About 30% of farmer income is due to international trade.
The U.S. agricultural industry needs to send the message that international trade of its products helps workers earn more for their families now, she said. It would be wise to show specifically how exportation of agricultural products benefits workers.
The Biden Administration will also see trade as an extension of environmental policy. It will seek out new trading partners – and new markets for agricultural products – that have high environmental standards and are willing to uphold their commitments to international environmental agreements.
Finally, the administration will focus on how trade relates to labor and U.S. values on labor conditions and human rights. The U.S. will try and establish a level playing field in terms of labor conditions in countries it trades with. A country that doesn’t have equality in wages and working conditions will not become a new trading partner of the U.S. Already, the U.S. is focusing on imports of products suspected to be produced with forced labor from China.
