On March 1, the Biden Administration provided its outlook on U.S. trade policy for 2024. The annual report, produced by the Office of the United State Trade Representative (USTR), notes that trade can be a “force for good” to help meet broader policy goals such as increasing supply chain resilience and supporting inclusive growth. However, it also shows that USTR will continue to avoid new binding, rules-based agreements or take meaningful steps to advance the multilateral trading system.
The administration has taken a remarkable retreat from its global trade leadership, raising significant concerns from the U.S. Congress, civil society, U.S. industry, as well as international stakeholders. The 2024 trade strategy report does little to address the uncertainty stemming from these changes and limitations of recent U.S. trade policy. Open questions remain regarding the current U.S. policy position on digital trade, which generated $1.15 trillion in total trade in the U.S. in 2022. It is unclear why domestic policy considerations prevent the negotiation of any binding trade commitments in the United States when other countries are moving forward.
For U.S. trade leadership more broadly, the lack of forward momentum coupled with recent significant steps back – such as the decision to withdraw support of several long-standing digital trade provisions at the WTO last fall and the failure to conclude trade outcomes in the Indo-Pacific Economic Framework (IPEF) – could undermine long-term innovation and competitiveness.
While USTR needs to once again pursue binding, rules-based trade outcomes to achieve tangible progress this year and beyond, the U.S. Congress plays an important role in ensuring the United States has an effective trade policy. In the coming weeks, lawmakers will hold hearings on the administration’s annual report. There, they should continue to hold USTR accountable on pursing trade practices in the best interest of the country—not politics.
Specifically, we encourage the U.S. Congress to use more tools available to it in overseeing USTR’s work. The U.S. Congress should start by reauthorizing available trade levers such as the Miscellaneous Tariff Bill and Generalized System of Preferences, which reduce tariffs on imports into the United States to support domestic firms and contribute to economic growth in developing countries. It should also ensure digital trade provisions are prominent in any future relevant legislation on international trade programs such as reauthorization of the African Growth and Opportunity Act (AGOA).
Further, it can adequately fund executive branch trade agencies including USTR and those within the Department of Commerce. These steps would expand trade tools and ensure agencies have the staff and resources necessary to step up trade engagement and enforcement. This, coupled with effective oversight of USTR’s practices through targeted hearings, would help USTR steer a better course.
The U.S. Congress should also send the clear message to the administration that it does not support a U.S. retreat on digital trade by passing the bipartisan, bicameral digital trade resolutions (H.Res.270/ S.Res.155) expressing the strong sense of the U.S. House of Representatives and Senate that the U.S. should negotiate strong, inclusive, and forward-looking rules on digital trade and in support of the digital economy. In fact, Ambassador Tai recently praised the U.S.-Mexico-Canada Agreement as “the best example” of innovation in trade policy. The digital trade chapter in that agreement is considered a gold standard, and Congress should urge USTR to negotiate similar innovative agreements.
Moreover, while USTR’s trade progress on international frameworks like IPEF and the America’s Partnership for Economic Prosperity (APEP) has slowed, Congress should consider ways to spur specific action on priority trade negotiations. Lawmakers can potentially use the recently enacted H.R. 4004, the United States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act, as a model.
The administration and Congress can capitalize on the potential of trade as a “force for good” to address today’s top challenges. 2024 is the right time to make that happen.