Can the United States Have a Trade Policy Without Market Access?

This commentary is part of a report from the CSIS Economic Security and Technology Department, titled Staying Ahead in the Global Technology Race. The report features a set of essays outlining key issues on economic security for the next administration, including global technology competition, industrialization policies, economic partnerships, and global governance.

A hallmark of the Biden administration’s trade policy has been its refusal to negotiate trade agreements that include market access—the reduction of tariffs or non-tariff barriers to facilitate trade. The administration has occasionally said it supports more market access for U.S. products, but it has failed to accept the reality that trade negotiations are inevitably reciprocal. More market access for U.S. products can only be obtained by providing more access for imports into the United States. There is no free lunch in trade negotiations.

When asked what they wanted out of the Indo-Pacific Economic Framework for Prosperity (IPEF) agreement, Asian participants in CSIS’s research responded politely that they were looking for “tangible benefits.” This is code for “what’s in it for us?,” which is exactly what every experienced trade negotiator asks. The answer from the Biden administration has been “very little.” The same thing has happened with other ongoing regional negotiations—the Americas Partnership for Economic Prosperity (APEP) and the U.S.-EU Trade and Technology Council (TTC).

There are two reasons for this reluctance to take up market access. One is political—a desire to avoid intraparty warfare between the Democratic left and center. (The former sees trade as imports that harm U.S. workers. The latter views it as exports that promote growth and jobs.) The second reason is philosophical—past trade agreements are perceived as having primarily benefited large corporations and their executives at the expense of workers.

Both arguments lead to the same safe choice: pursuing trade agreements that do not contain “tangible benefits.” The dilemma for the current administration has been that trade agreements are not just about trade—they are symbols of the relationship between the participants, and symbols have power. An ambitious, binding agreement is proof that the United States is committed to ongoing engagement with the other party (or parties) on equitable terms, proof that would be welcomed in Asia, Latin America, and Europe. That was the rationale for the Trans-Pacific Partnership agreement, and the Trump administration’s rejection of it was widely seen in Asia as indicating a lack of interest in and commitment to the region on the part of the United States. That action left the United States without a policy and led to pressure on the Biden administration to develop a new economic approach to Asia, and subsequently to the Americas. Caught between demands for a policy that demonstrated U.S. commitment and reluctance to pursue an agreement that involved any meaningful market concessions, the administration came up with IPEF and APEP, both of which have been derided as unambitious agreements. The situation was made worse in November 2023 when the administration pulled back its support for the trade pillar of the IPEF agreement in the face of opposition from progressive Democratic members of Congress. While the trade pillar is technically not dead; it is on life support, and it appears that only the other three pillars—supply chains, decarbonization and sustainability, and anti-corruption and taxation—will survive. Those are not unimportant, but they are also not trade agreements. The origin story of the TTC is different, but the result is the same—much talk about cooperation with few tangible results beyond an impressive display of unity in sanctioning Russia.

Meanwhile, China is not standing still in the competition for regional influence. It has applied to join the Comprehensive and Progressive Trans-Pacific Partnership and is using its membership in the Regional Comprehensive Economic Partnership to expand its market access while the United States is, essentially, “just watching.”

What does this mean for the future? Neither presidential candidate is likely to return to conventional trade agreements, although, ironically, Trump may be more willing to start new negotiations than Harris. Instead, there is discussion about alternatives to what is currently on the table. One possibility is to focus negotiations on regulatory harmonization or mutual recognition on the theory that aligning regulations on commerce will increase trade. There is something to that. Standards conformance would make it easier for products to cross borders. Moreover, such mutual recognition could allow professionals like lawyers and accountants to work in partner countries and thus increase services trade. The problem is that those negotiations are not easy. Regulators in every country like the way they do things and resist being told that they must do them differently, or that they have to recognize that someone else’s rules are as good as theirs.

A second alternative is to focus on individual sectors—such as critical minerals—when making trade agreements. This is also a good idea, but like the first, it will be more difficult in practice than in theory. Countries that have minerals are, of course, interested in selling them, but they also want to capture more of the value added by processing the resources and manufacturing the products that contain them. If the United States is only interested in extraction, the negotiations may not get far.

Ultimately, success on any of these fronts will require an attitude change. If the United States only wants to receive and not give, any negotiation is doomed. The important word here is an old one—reciprocity. It was popular in trade debates in the 1980s when it meant that the United States should insist that other countries match concessions with its own. Today, the situation is reversed: other countries are demanding that the United States match their concessions with some of its own. Until the United States is willing to do that, progress on trade agreements will remain elusive.

William A. Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.