US TRADE POLICY OBJECTIVES AND ANALYSIS

The overarching purpose of US trade policy, the guiding principle behind all of US actions in this key area  is to expand trade in a way that is freer and fairer for all Americans. Every action the US takes with respect to trade will be designed to increase economic growth, promote job creation in the United States, promote reciprocity with US trading partners, strengthen US manufacturing base and its ability to defend itself , and expand agricultural and services industry exports.

The US believes that these goals can be best accomplished by focusing on bilateral negotiations rather than multilateral negotiations  and by renegotiating and revising trade agreements when goals are not being met. Finally the United States should not, for putative geopolitical advantage, turn a blind eye to unfair trade practices that disadvantage American workers, farmers, ranchers, and businesses in global markets.

Key objectives

• Ensuring that U.S. workers and businesses have a fair opportunity to compete for business  both in the domestic U.S. market and in other key markets around the world.
• Breaking down unfair trade barriers in other markets that block U.S. exports, including exports of agricultural goods.
• Maintaining a balanced policy that looks out for the interests of all segments of the U.S. economy, including manufacturing, agriculture, and services, as well as small businesses and entrepreneurs
• Ensuring that U.S. owners of intellectual property (IP) have a full and fair opportunity to use and profit from their IP.
• Strictly enforcing U.S. trade laws to prevent the U.S. market from being distorted by dumped and/or subsidized imports that harm domestic industries and workers.
• Enforcing labor provisions in existing agreements and enforcing the prohibition against the importation and sale of goods made with forced labor.
• Resisting efforts by other countries – or Members of international bodies like the World Trade Organization (WTO) – to advance interpretations that would weaken the rights and benefits of, or increase the obligations under, the various trade agreements to which the United States is a party.
• Updating current trade agreements as necessary to reflect changing times and market conditions.
• Ensuring that United States trade policy contributes to the economic strength and manufacturing base necessary to maintain – and improve – US national security.
• Strongly advocating for all U.S. workers, farmers, ranchers, services providers, and businesses, large and small – to assure the fairest possible treatment of American interests in the U.S. market and in other markets around the world.

Analysis

Source: David P. Fidler, Indiana University School of Law

The assault on conventional US trade policy is apparent in proposals and actions President Trump has made or taken.

• The President has decided his administration will not pursue multilateral or regional agreements and his actions to end US involvement with the TPP and TTIP agreements underscore this choice. The president has indicated he will negotiate only bilateral agreements.
• President Trump has also threatened or expressed an interest in withdrawing the United States from international trade treaties.
• President Trump has demanded a renegotiation of NAFTA
• President Trump has indicated he might be willing to pull the United States out of the WTO if his administration does not believe it can produce more effective remedies against WTO members such as China that engage in unfair trade practices harmful to the United States.
• The President Trump has threatened to unilaterally increase tariffs on imports targeting e.g. China, Germany, Mexico he believes harm US interests through unfair trade practices. In the case of China, Japan and Germany threats of tariff increases have come with complaints of currency manipulation by the Chinese, German and Japanese governments.
• The President believes that trade and investment agreements have provided US corporations with incentives to outsource manufacturing to foreign nations. His desire to punish imports made by US companies in other countries, challenges global flows of foreign direct investment. The attack on outsourcing challenges the manner in which US policy has encouraged US companies to invest capital in other countries and integrate those foreign subsidiaries into global markets through liberalized trade.

A hallmark of the Trump’s administration’s statements on trade policy has been its willingness to impose trade sanctions and restrictions based on unilateral determinations of harm to the United States. This unilateralist approach threatens the US government’s support for resolving trade and investment disputes through rule-bound dispute settlement established within treaties. Under the America First agenda, the Trump administration is questioning the value of the policy commitment for the United States. Similarly, the unilateralism of America First reveals less interest in international law found in trade and investment treaties accepted by the United States. All the proposals from the president and his advisors concerning the unilateral imposition of increased tariffs on imports would, if implemented, violate binding obligations the United States has made under international trade law. In addition, none of the treaties violated contain an exception that allows the United States to breach its obligations in order to ‘Make America Great Again’. The United States has long had a difficult relationship with international law, but it has been more steadfast on the value of international law in the context of trade and investment. What the Trump administration is contemplating raises questions whether it will abandon this tradition in US foreign policy.