International trade is central to the United States’ economy and has created economic opportunities for millions of people in the U.S. and around the world. In 2018, nearly one in every five American jobs depended on trade. Trade is critical to the success of many sectors of the U.S. economy. Today, the U.S. is both the world’s largest national economy and the leading global trader.
In order to fully harness the benefits of trade, however, the United States must work to ensure that global trade rules promote high labor standards and economic security for working people and protect the environment and consumer safety. Unfortunately, domestic backlash against globalization has led to severe backsliding into protectionism. Congress can be a positive force in determining U.S. trade policy and, by extension, global trade through its constitutional authority over tariffs and foreign commerce.
of Americans think that the Trump Administration’s trade dispute with China has been bad for jobs.
Historically, the United States has led efforts to open up global markets, expanding trade in the years preceding and following World War II. In 1995, the World Trade Organization (WTO) was established, the result of the 1986 Uruguay Round of negotiations initiated by President Reagan. The creation of the WTO was revolutionary because it governed not just trade in goods but also services and intellectual property, as well as established new procedures for the settlement of disputes. The WTO has been a controversial organization since its inception: efforts to expand the WTO in 1999 it resulted in what is known as “the battle in Seattle,” where 50,000 protestors went to Seattle and succeeded in shutting down trade talks in demand of a more democratic, socially just, and environmentally sustainable global economy.
Skepticism of U.S. trading patterns and a reliance upon antiquated trade deficit figures were cornerstones of the Trump administration, which entered a trade war with China that neither helped nor protected U.S. innovation and competitiveness. Ironically, this bilateral and isolationist strategy helped China. In 2017, President Trump withdrew from the Trans Pacific Partnership (TPP) agreement. The TPP was negotiated by the Obama administration to solidify U.S. trade relationships with strategic partners in Asia and beyond while adding $130 billion per year to the U.S. economy. Shortly after the collapse of the TPP, China signed the Regional Comprehensive Economic Partnership—the largest regional free trade agreement to date—with many former TPP participants.
After two years of negotiating and threats to withdraw from the North American Free Trade Agreement (NAFTA) altogether, President Trump announced in October of 2018 that the United States, Canada, and Mexico had agreed in principle to an updated agreement, the United States-Mexico-Canada Agreement (USMCA). The deal was revised by the White House and House Democrats in December 2019 and ultimately includes increased protections for environmental, labor, intellectual property (IP), pharmaceutical, and currency manipulation issue areas. A bipartisan achievement, the USMCA marks true progress for the labor and healthcare sectors. Specifically, the agreement now includes mechanisms to allow Mexican workers to unionize more easily and no longer includes a 10-year market exclusivity provision for biologic drugs.
“If transparency would lead to widespread public opposition to a trade agreement, then that trade agreement should not be the policy of the United States.”— Sen. Elizabeth Warren (D-MA) On Negotiating Trade Deals
By the end of January 2020, the USMCA passed the House, Senate, and was signed into law by President Trump. It entered into force at the start of July 2020 following its ratification by all parties. The U.S. International Trade Commission estimates that the USMCA will raise U.S. real GDP by $68.2 billion and U.S. employment by 176,000 jobs, as well as increase exports to Canada and Mexico by six to seven percent. During her confirmation hearing, Katherine Tai—the Biden-Harris administration’s U.S. Trade Representative—vowed to enforce the USMCA.
In a speech to the National Foreign Trade Council, Trade Representative Tai stated that President Biden’s vision “is to implement a worker-centered trade policy,” a vision consistent with Biden’s opposition to trade deals weak on workers’ rights and environmental protections during his Senate tenure. Though trade policy was not meaningfully featured in the Biden-Harris administration’s initial flurry of executive orders, it will undoubtedly be a priority throughout the remainder of his presidency. The international impact of the COVID-19 pandemic has only increased the urgency for global coordination across all issues.
We strongly support trade agreements that promote prosperity and inclusive growth for all and effectively protect workers, consumers, and the environment. We encourage Congress to support the Biden-Harris administration’s commitment to long-term trade policies that focus on workers across the globe while supporting the U.S. economy. Members of Congress should investigate the following questions when considering any trade deal:
Call your representative and senators today at (202) 244-3121 and urge them to support trade policies that meet the above standards and oppose those that do not. Make sure to mention that over 40 million American jobs rely on trade. Finally, ask that they assert Congressional authority and involvement in trade policy by reauthorizing the Trade promotion authority, which is set to expire June 2021.
TIME Magazine, November 2020U.S. Trade Policy: Background and Current Issues
Congressional Research Service, September 2020Impacts on Global Trade and Income of Current Trade Disputes
The World Bank, July 2018Growing World Trade: Causes and Consequences
Brookings InstitutionThe Renegotiation of NAFTA Is a Relief. But It Is Not a Success
The Economist, October 2018The State of U.S. Trade Policy
Council on Foreign Relations, January 2017Shattering the Myths About U.S. Trade Policy
Harvard Business Review, March 2012Trade Promotion Authority (TPA) Facts
U.S. Chamber of Commerce