Where’s the Beef?
Those of you of a certain age will remember the Wendy’s commercial from 1984 featuring a little old lady with a giant bun and tiny burger. It subsequently became a meme in the 1984 Democratic presidential primary campaign when Walter Mondale used it to criticize what he considered the lack of substance in Gary Hart’s proposals. Since then it has come to represent proposals that sound good but lack substance.
You can see where I’m going with this. In an effort to convince everybody that the United States does indeed have an Asian economic policy, both Commerce Secretary Gina Raimondo and U.S. Trade Representative (USTR) Katherine Tai have been traveling in Asia announcing new partnerships and frameworks at each stop. There are two with Japan: the U.S.-Japan Partnership on Trade and the U.S.-Japan Commercial and Industrial Partnership. Those are in addition to the Indo-Pacific economic framework that Raimondo announced on her trip and various other cooperation efforts launched with Singapore, Australia, and New Zealand. Ambassador Tai is in India on November 22 and 23, and we should expect another partnership or framework agreement coming out of that.
What do they involve? Well, on the trade partnership with Japan, the USTR says, “Periodic meetings will be held . . . on a regular basis to advance a shared agenda of cooperation across a broad range of issue areas as well as to address bilateral trade issues of concern to either side.”
The other one, according to the Commerce Department is “part of the Administration’s broader efforts to strengthen economic ties with the region,” and “will enable deeper cooperation on efforts to strengthen supply chains, export controls, and innovations such as digital technologies.”
The Indo-Pacific framework is not intended to be a trade agreement but instead “will be centered around shared principles and partnerships, and it's designed to be a new sort of more flexible and inclusive framework that we will develop in partnership with our allies in the months to come,” according to Raimondo.
So, where’s the beef? There is going to be a lot of talk and a lot of meetings about issues that are unquestionably important like supply chains and digital trade, but one doesn’t come away with a sense that there are concrete deliverables coming along. Raimondo made clear that these are frameworks, not agreements, and claimed that the Indo-Pacific one will be better than the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Exactly how it would be better she didn’t say, and it is hard to imagine, since CPTPP is an actual agreement where the parties have assumed obligations and made commitments beyond simply agreeing to cooperate. The sad thing about all this activity is that there is a better solution staring the administration in the face—joining CPTPP. Its inability to see that is inexplicable.
Of course, saying that these things will not be agreements is an acknowledgement of the current legal situation. The administration unwisely let trade promotion authority (TPA) lapse at the end of June and has expressed no interest in renewing it. As a result, it does not currently have authority to conclude trade agreements, so calling them something else is necessary.
However, the distinction is not just semantics. Raimondo also made clear that the results of these discussions would not be submitted to Congress for approval. That’s no surprise since the administration lacks negotiating authority, but it also means that the agreements are not likely to amount to much, or at least will not change anything here that would require new laws. That gets to one of the reasons why this may not be a successful strategy. We seem to be envisioning frameworks that entail our trading partners taking on new obligations, as in digital trade, for example, that simply echo steps the United States has already taken. In other words, we want them to promise to be more like us, which saves us the trouble of going to Congress and asking them to change something. This is reminiscent of statements by Raimondo’s predecessor, Wilbur Ross, who argued that the United States had given away the store for 40 years and now it was time for the other countries to give back.
Unfortunately for the administration, the history of trade negotiations is that there is no free lunch. We have demands, but so will our trading partners, and if we are not in a legal position to meet them, the beef of the agreements is going to be really small.
That is particularly true with respect to market access, an issue the administration seems to have no interest in. The lack of interest is mystifying since there are thousands of Americans anxious to sell more stuff to foreigners, which would promote jobs and growth and reduce our trade deficit. But even if one goal of these agreements is market-access concessions by the other parties in the form of regulatory changes, without negotiating authority we have very little to offer in return.
Of course, all that assumes we primarily have economic goals in mind with these frameworks, but the administration’s constant rhetoric about focusing on labor and the environment suggests its goals may be less tangible than the meat and potatoes (or fries in the case of Wendy’s) of normal trade agreements. If true, that would be thin gruel indeed.
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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