The Great Awokening
My column several weeks ago, “Where’s the Beef,” lamented, among other things, the absence of market access goals in the proposed Indo-Pacific Economic Framework (IPEF). That will turn out to be a mistake because it signals to potential framework partners that the United States does not intend to offer them anything. The idea that there can be a successful negotiation where we give nothing and all the others agree to do what we want is delusional.
It is also a signal to our own business community that there may not be much for them in this framework. New rules are nice—and in areas like digital trade they are badly needed and will be welcomed—but for many sectors of the U.S. economy, including agriculture, more market access would be nicer. If, at the end of the day, the framework is submitted to Congress, it will live or die based on private sector support for it. In short, if you don’t have a lot of farmers telling their representatives they need the agreement, you should not expect it to be approved. The administration currently says it does not intend to submit the agreement to Congress, so what the U.S. private sector thinks may be irrelevant, but that very decision tells the other potential partners that the United States does not see this as an agreement of great consequence.
So, for the Biden administration, what is of great consequence? The answer is found not only in the IPEF but in other administration actions as well. Opposing forced labor is important. The administration’s main, if not only, contribution to the World Trade Organization fisheries negotiation is a proposal on forced labor. Gender is important. The administration just announced it is creating the Global Partnership for Action on Gender-Based Online Harassment and Abuse, which will be “dedicated to improving the response to technology-facilitated gender-based violence and promoting effective prevention strategies.” (The Scholl Chair addressed this issue in a report last spring that focused on how promoting the role of women in trade will lead to more trade and more economic growth.)
Climate is important, although the administration appears to believe that trade rules are obstacles to decarbonization rather than possible facilitators. Worker rights and labor standards are important, although I don’t think we’ll ever know whether that is due to a moral imperative or the belief that improving labor wages and conditions elsewhere makes foreign products more expensive and thus less competitive with ours. Probably both. Attempting to address social issues through trade agreements is also not confined to the United States. Protection for Indigenous communities, for example, has been a priority of the Canadian and New Zealand governments.
This is not all new. Older trade agreements addressed worker standards, deforestation, and illegal logging, and countries have spent decades arguing about sanitary and phytosanitary standards in agriculture, like how you process a chicken to make sure it is safe to eat. Canada and Chile have negotiated agreements addressing women’s rights.
It has probably not escaped your notice that the countries mentioned are Western developed economies. These issues don’t get very far with authoritarian states like China and Russia or with countries in the Middle East whose views on the role of women in society are very different from ours. That explains why progress on these issues is going to be plurilateral rather than multilateral and likely limited to countries that are already sensitive to them.
The increasing appearance of these issues in trade negotiations signals the arrival of “woke” trade policy, which is virtue signaling at its finest. This is both sincere and politically expedient. Activists have prioritized these causes and opposed trade agreements that do not adequately address them. Politicians have gone along, either out of conviction or expediency. Doing so, however, leaves a number of important questions unanswered:
- Is trade policy the best venue for dealing with social problems?
- Do negotiators focus on these issues at the expense of the economic issues that have historically been the core of trade negotiations?
- If the agreements reached are limited to countries that are already sensitive to these priorities, how much do they actually accomplish?
- Conversely, if they are not limited to the already woke, do they create such an additional burden on negotiators that agreements become impossible to reach?
And perhaps most important, are woke provisions trade enhancing or trade limiting?
I don’t have answers to all these questions, but I hope they will be debated as part of the administration’s reorientation of our trade policy, particularly the last one. I sometimes get the sense that the administration’s attitude is that trade agreements are only worth pursuing if they address these issues. In fact, there are many other legitimate reasons to pursue trade agreements, the main one being that trade overall produces more jobs and growth. The administration has been clear that it is concerned about the unequal distribution of the benefits of trade, but it needs to be equally concerned about the creation of those benefits, because without that there is nothing new to distribute. A woke trade policy, in contrast, risks making the perfect the enemy of the good by insisting on social policy outcomes at the expense of expanding trade. We need to make sure the Great Awokening does not mean the end of trade expansion.
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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