August 23, 2021
Thirty years ago, when I was leaving one job on the Hill and moving to another, I was interviewed by the National Journal and given an opportunity to reflect on my career. It was not a memorable interview, but I did make a point I have often made subsequently: the interesting thing about international trade is that no problems are ever solved; they just keep coming back, which means permanent employment for trade wonks. A corollary to that, which has occurred to me 30 years later, is that even if problems are “solved” temporarily, they are replaced by new ones in an approximately one-to-one ratio, meaning even more employment for trade wonks.
The past week illustrated this with a lengthening list of problems which, like many trade issues, are small in a macroeconomic sense but very important to the people directly affected by them. I don’t intend to discuss them in detail, but I do want to list them and then return to my larger point.
First, the week featured the reappearance of some oldies but goodies, notably demands from some members of Congress for reforms in the U.S. sugar program and from others for the administration to do more to persuade the European Union to do away with non-tariff barriers on peanuts. (On sugar, I’ve worked on that issue for years and would just say that the merits are on the side of the reformers and the politics on the side of the status quo, which is why the issue never goes away.) Another familiar plea came from the ethanol industry, which urged the administration to do more to persuade Brazil to eliminate its tariff on ethanol.
Another reminder of the past came with a Mexican government announcement that it would be working with the United States to create an expedited process leading to the United States lifting its embargo on imports of Mexican wild-caught shrimp. The ban was imposed in April after the United States concluded that Mexico’s efforts to protect sea turtles were “no longer comparable” to what the United States was doing. Trade wonks will remember the epic “shrimp-turtle” litigation of years past which went through several rounds at the World Trade Organization. The reappearance of the turtles should be no surprise, given the Biden administration’s environmental priorities. Another test of the administration’s environmental commitment will be its response to environmental groups’ demands for more pressure on Mexico to enforce its rules against use of gillnets in the habitat of vaquita porpoises, which are now nearly extinct.
Closing out the agriculture section—as usual, the biggest—was the promise by U.S. Trade Representative Tai and Agriculture Secretary Vilsack to open new agriculture markets when they met with the Agricultural Policy Advisory Committee for Trade and the Agricultural Technical Advisory Committees for Trade. This is a perennial demand and perennial promise, the latter, also as usual, lacking specifics about precisely what the administration might do beyond working closely with the industry. In the absence of any hint of new trade negotiations, the promise rings a bit hollow.
The other always-popular category of problems is trade law litigation, and here, too, some familiar issues reappeared. The biggest concerns the solar industry, where domestic manufacturers filed petitions alleging that China was circumventing antidumping and countervailing duties (AD/CVD) imposed on its exports of crystalline silicon photovoltaic cells and modules by shipping them through Vietnam, Malaysia, and Thailand. Circumvention is a growing problem as the United States has become more aggressive in applying its AD/CVD laws. It’s like squeezing a balloon—it gets smaller where you push, but it expands elsewhere. CSIS looked at this issue in the report of its Commission on Affirming American Leadership and made some recommendations for dealing with it. Solar manufacturers also petitioned the International Trade Commission for an extension of the Section 201 safeguard tariffs imposed by President Trump in 2018 that are due to expire next February.
Both actions pose interesting policy dilemmas. U.S. solar manufacturers have prevailed in the past and obtained the relief entitled to them by law because they have shown they are victims of unfair trade practices and have been injured by large volumes of imports, but the results have made solar more expensive in the United States and slowed down the switch to it. The AD/CVD petitions will be resolved on the basis of the facts presented without political interference, and I expect the domestic industry to prevail. The Section 201 tariffs, however, will require a presidential decision, and it will be interesting to see how the president will reconcile the conflicting policies of promoting use of renewables, defending U.S. trade laws, and promoting domestic manufacturing.
Also in the squeaky wheel category is initiation of an investigation into fertilizer dumping by Russia and Trinidad and Tobago. On a positive note, there was a call from the U.S. Chamber of Commerce for Vice President Harris to use her Asia trip to start a regional discussion on digital standards. (I commented on the unlikelihood of that going anywhere in a previous column.)
All of these remind us that life—and trade—go on, whether the administration has a policy or not, but in the absence of a policy it is easy to be consumed by incoming demands like these. The danger is, like in Kenny Chesney’s song, you blink, and suddenly it’s four years later and you realize you have been so focused on incoming problems that you have not advanced your own agenda. The answer, as Kenny says, is “don’t blink.”
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
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