New Shores Full Interview with Jayme White

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This transcript is from an interview included in edited form in a CSIS podcast published on October 26, 2023. Listen to the podcast here.

Emily Benson: It is a pleasure to have with us here today, Deputy United States Trade Representative Jayme White. In the interest of time, I will not read Ambassador White's full biography, but he has an illustrious career in trade spanning over two decades, including most recently serving in the Senate, but also with prolific experience in the House of Representatives as well. So today, Ambassador White joins us to discuss the role of USTR in accelerating decarbonization efforts, how trade policy stands out as a particularly potent tool for combating climate change, and also to talk about what the friend shoring agenda portends for deeper climate cooperation. So, with that, let me begin. Ambassador White with our guiding question. There's been a lot of talk in the last couple of years about the unique ability of trade to accelerate decarbonization. What makes trade so unique in its abilities to combat climate change?

Jayme White: That's a good question. And having been around international trade for a long time, the newest issue among many is climate and trade, how they're connected, and it relates also to supply chains and durable supply chains. And so when you think about trade, you think about what happens to the border. When you think about the 232 tariffs, for example, it's about excess capacity, but also we're talking about products that are very carbon intensive. And so this question around carbon intensity and trade and border measures is one that has been percolating for quite a while. And it's not just the U.S. that's grappling with climate change and their own economies, but also the economies. What happens to the border is a key aspect of managing a policy to try and get to net zero.

Emily Benson: Great. Thank you. I think there are a couple of things to pick up there. One, of course is 232, and the ongoing global arrangement on sustainable steel and aluminum negotiations, but also the carbon border adjustment and the European Union. I'm wondering if you could say a couple of words about how the United States and its allies maintain or differ when it comes to goals about combating climate change. How aligned really, are they exploring the same toolkit or are they going about things a little bit differently?

Jayme White: That's a good question. I think top line is that countries are trying to address the climate crisis and the way we go about it might be different, but we're all rowing in the same direction. And so whether it's the CBAM, or it's other measures that we can take, the point is that we're trying to address the climate crisis and we're working with our colleagues in Brussels on CBAM. They have a very different mechanism. They've got a cap and trade sort of system, and we have a different system here, but we're all trying to find ways in which we incentivize renewable energy and to decarbonize. And so the question is how we coordinate and cooperate to achieve what are the same goals? We just are going to end up doing it differently.

Emily Benson: So an integral part of the U.S. climate and trade agenda has focused on front shoring. That's kind of dominated the trade headlines a lot in the last couple of years. I'm wondering if you could share your thoughts on what front shoring is and how it fits into the climate picture.

Jayme White: Another good question. So what we've learned of the last few years between COVID and the war in Europe is that, and it's hard for policymakers actually, but what we've learned is that we need more durable and diversified supply chains so that we can withstand shocks where one country controls everything that we need or two countries control what we need. And how do we as policymakers figure out a way so that our businesses have diverse supply chains from which to draw. And luckily for the US and Western Hemisphere, we have really important trading partners that are capable. And so how do we strengthen those relationships so that the supply chain is more diverse and we're more durable as a result? And that fits into climate because we have allies that are also equally determined to promote and use renewable energy, whether it's solar, whether it's wind or whatnot. And so the question is how do we work with our allies, whether it's in Western Hemisphere or whether it's Europe, to promote renewable energy and its deployment and production from that type of energy.

Emily Benson: If few of our allies seemed a little perplexed when front shoring came on the scene, I was in Europe over the summer and the IRA is still very top of mind, I think in a way that it maybe has subsided a little bit on the side of the Atlantic. Korea also had some reservations in the beginning, but it seems like the tone is shifting over overall to see front shoring as a real opportunity for deeper engagement with close allied economies. I'm wondering if you agree with that assessment, and I know you were also recently in Mexico City, so I'm wondering if you've heard from any partners in particular that are particularly enthusiastic about the friendshoring agenda, and you really do want to play a more integral role when it comes to the green energy side of the supply chain.

Jayme White: So I agree with you when it comes to the IRA, at first there was concerns and questions that seems to have subsided. And now it seems like other countries are looking at the IRA as a model for what they might be able to do. That's my feeling. But my experience so far is there are a lot of countries that are democracies that have shared values as the U.S. and they look at friendshoring as a way to peel back investment in non-market economies and instead attract investment in their countries and countries that are like-minded in terms of market economics and democratic values.

Emily Benson: Well, that's a good lead into another question, which is about economic security. Economic security obviously is featuring increasingly prominently in trade discourse. The European Commission unveiled its own economic security strategy in June. Japan, I believe is currently updating theirs. Germany in July released this big strategy essentially calling to reassess trade ties with China. I'm wondering if economic security and broader de-risking and diversification can coexist with decarbonization, are there any drawbacks or can we achieve this wholesale diversification while not slowing down our efforts to combat climate change?

Jayme White: I think it's all about diversification. And as policy makers, how do we help businesses and others diversify their supply chains so they're not overly reliant on one or two or three sources for inputs. So diversity, I'm not an economics major, but in my econ classes as somebody who was younger, diversification is really important for investments, et cetera. And so that's where we're trying to focus our time because if you have a diverse supply chain, you have a more durable supply chain and you have more economic security for workers and for businesses and others.

Emily Benson: A term that Ambassador Tai uses frequently is resiliency. The idea of building supply chains that are less susceptible to geopolitical risk or other external events, whether climate or policy change in a foreign jurisdiction. And I think that's a very helpful way of thinking about the end goal. I'm wondering if you could share a couple of words about where USTR comes into the resiliency side of the agenda, what programs USTR is currently pursuing to really make sure that we get that last 20% of the friendshoring agenda down so that at the end of the day we can look back and see that we actually have succeeded in building more resiliency into supply chains.

Jayme White: That's a good question. A complex one, and I agree with what Ambassador Tai has said about supply chains. There's a lot of work that USTR does that doesn't show up in headlines. We have a lot of FTAs, especially in the western hemisphere and those FTAs retread agreements, they are not static. Within those FTAs. There are work streams and committees that do work on the various chapters, and there are ways in which we're kind of updating those FTAs over time. So that's important. And we have lessons learned, whether it's with Chile or Peru or Columbia or Dr. Kafta, USMCA. Another example, the newest FTA. So we do work through the FTAs. I was just in Mexico as you mentioned. So I had buy laps with Mexico and Canada, and we work on issues and those issues relate to supply chains. But in addition to the FTA work, we have other work in the region we call them. We have different names for them. We have ticks, atex, et cetera. They're basically agreements around rules which are really important. So we do continuous work and at every single meeting we talk about supply chains, not just the U.S. bringing it up, but everyone's talking about supply chains. And so that's an important conversation. And we're using every tool in the trade toolbox we can use to deal with supply chains. And the same is true with Europe. We've got the TTC where we have ministerial engagement, we have engagement at my level, and we talk about technology, we talk about chips and we talk about supply chains. And when it comes to Europe, there's nothing more acute than the pressure they have felt with being reliant too reliant upon perhaps one country for inputs. And so, the two things that I want to just convey is over the last few years, the topics that have risen in the trade world is supply chains and climate. 20 years ago, the new issue was labor and environment. We've worked through that, and right now it's supply chains and climate.

Emily Benson: Well, I'll come back to Europe in a minute, but first, let me go back to your mention of the rules, which I think is a very important aspect of trade. Something that makes it so unique is that the rules can be enforced. These in some ways go beyond just standard setting, and I think that really does hold a lot of promise for the future of our ability to combat climate change. So I'm wondering if in your estimation, FTAs and the other, of course, trade acronyms do that we all love, if those are maybe our best chance at combating climate change or if they should be pursued concurrently with some of these other alternative economic arrangements.

Jayme White: Yes, the answer is yes. Trade can be used as a tool to enforce climate objectives for sure. And other objectives too that relate to the environment. This is not related really, but for example, the fish subsidies negotiations, the WTO, we're using trade to deal with overfishing, right? There was a hearing in the finance committee about 10 years ago where Oceania and WWF said the best way to save the fish is through trade. So trade measures can be really, really important, especially in a world that's really globalized. So if you can take a measure at the border, whether it's on climate or whether it's on forced labor, for example, the border measures can be really, really important, an important tool. Sometimes you can't reach agreement about some country's domestic procedures, but when it comes to what we import and what we don't import based upon our values, that is significant, especially when we are the world's largest economy.

Emily Benson: Well, thank you for bringing up the fisheries negotiations. That's a great segue into the WTO. Ambassador. Tai was recently at CSIS, along with director General Ngozi of the WTO. WTO reform came up quite a bit, but so did climate and trade. I'm wondering if you could share a little bit about how the WTO could do more, and something that comes up in a lot of discussions I have, particularly with Europeans or folks who are curious to see how carbon border adjustments play out, is really the lack of clarity of where the WTO stands on some of these far-reaching issues. What types of subsidies are okay when it comes to combating climate change? Are border tariffs? Okay, if so, with what stipulations and under what conditions? So do you think that there's more the WTO can do to provide guidelines for countries when they're exploring the use of trade as this climate tool?

Jayme White: That's complicated. First, let's go back and rewind the tape and just remember that the WTO is a member driven organization. There are lots of members, but there are lots of members that have signed on to Paris, right? So there is commonality in terms of addressing climate. What the WTO will bear when it comes to rules or border measures on high carbon products remains to be seen. But if you've got a plurality of members that want to do something on climate that have already signed up to do something on climate, if you've got countries or you've got the EU and the U.S. and big economies that want to do something, I have a hard time believing that the WTO is not going to find a way to say, that's okay. I'm not a WTO expert. I'm not a lawyer. But there are exceptions when it comes to rules, the WTO, regarding public health, national security. So if big economies want to do something and it's not discriminatory, then I think the WTO will find a way to go along. But it's something that has to be pushed for sure. And you see countries pushing, whether it's CBAM or something else, the WTO is going to have to accommodate the measures by which we are trying to deal with climate.

Emily Benson: Well, a couple of themes have come up today, which include national security, climate change, of course, tariffs, the European Union, one of the Hallmark agenda items of this administration, it seems like from the outside at least, is encapsulated in this one negotiation, which is GASSA the global arrangement on sustainable steel and aluminum. It holds a lot of promise because it would achieve multiple objectives at once, which is combating over capacity from non-market economies, incentivizing decarbonized steel and aluminum, and helping reduce some of the tariffs on imported goods from the European Union. So a lot is writing on this new agenda to really prove that trade can deliver on a diverse set of agendas in one go around. The deadline is on Halloween, which may or may not be scary for the trade community. And so I'm wondering if you could say just a couple of words about how that's going, why you think it's worth pursuing, what's unique about it, and then maybe if you are comfortable sharing your optimistic or pessimistic outlook for the deadline.

Jayme White: So we want to make the deadline. That is our goal. What's unique about this negotiation is, and you alluded to this, we have this confluence of where you have over capacity on steel and aluminum being produced by non-market economies, but also these are products where they're extremely carbon intensive. And where a lot of these products are coming from are from places where they're producing these products in a way that's more carbon intensive than we would produce it domestically. And so there is a strong link between carbon intensity and over capacity. And so that's what I think is unique about this discussion. What's important about this discussion, and it could be a harbinger for future discussions on trade, where you've got high intensity carbon products, and these products meet a lot to the climate, and they meet a lot to workers. And so there's a strong link. I'm always optimistic. We are trying to make the deadline, and our friends in Brussels know that. And so there's a deadline and there's consequences for not meeting the deadline that matter. So we're full on, our sleeves are rolled out.

Emily Benson: So something that comes up frequently in the think tank blob is that the GASSA could serve as the very foundational architecture for something bigger like a climate club, which would mean additional countries joining over time, creating this kind of smaller PLU lateral framework where countries can buy and sell greener goods and services. Is that something that you at USTR think about? Or is step one getting gas done with Brussels and then reevaluating?

Jayme White: Yeah. So yes. So first stop is Brussels, but we call it global arrangement. We don't call it USTR arrangement. So the idea is if we can get a template with our friends in Brussels, that might be, we can replicate that with others. So this is the first test, if you will.

Emily Benson: Okay. Let me finish with one bigger question. Taking us full circle about friendshoring, some skeptics of friendshoring worry that this could potentially signal an end to globalization as we know it, there's this big reshuffle happening. The global economy will become fractured. Everything will look kind of like scrambled eggs. At the end of the day, do you share these concerns or are you optimistic that this new approach can really lead to better outcomes, particularly when it comes to combating climate change?

Jayme White: When somebody says globalization, I know what they mean. I think back when Tom Friedman was writing his first books and talking about globalization, but I think that today globalizations not just economics only, not just trade only. It's about globalizing our values, globalizing the idea that our economies are linked, of course, but globalizing the goal to combat climate change globalizing the goal to combat forced labor. So globalization, I think is a broader issue from my point of view, than just the economics of tariffs and tariff rate quotas, et cetera. So I think globalization is changing because we're trying to share our values generally and share those values in ways that make a difference for our supply chains and for our workers and for our farmers, ranchers.

Emily Benson: It seems like there's also a reality in which friendshoring hits the ground running. It succeeds, but it doesn't necessarily mean less trade, it just means different trade under different circumstances, and that's more deeply decarbonized. Do you think that that's a viable outcome?

Jayme White: Exactly right. It's exactly right. It's about being mindful of the supply chains and being more resilient so that when things happen, we're not overly reliant on one country or two countries or three countries, but we have friends that are producing inputs that we need and buying our products too. So define friend nearshoring, friendshoring, but our logical trading partners are in the western hemisphere, Canada, Mexico, south America, our FTA partners, and of course to Europe. So let's concentrate our efforts on shoring up, if you will, those relationships. And it's the private sector ultimately, but we as policymakers can find ways in which we can work with countries through our FTAs or the other acronyms that we've talked about to make it easier for our producers to have diverse choices when it comes to inputs.

Emily Benson: Well, I think diversity and resiliency is a great note to end on. We really appreciate you sharing your insights with us and taking the time in a very busy fall schedule. So thank you again for joining us, and we'll let you go.

Jayme White: Okay, sounds great. It's been fun. All right.