US Tariff Levels Will Make It Tough to Negotiate Bilateral Deals, Panelist Says
Low average tariff rates give the U.S. little leverage to negotiate bilateral free trade agreements, which could lead to the U.S. government reverting back to a multilateral agenda, Georgetown University Law professor Jennifer Hillman said during a trade panel session at the school. “How is that going to draw in a really powerful bilateral agreement from all of these countries that can’t negotiate with us anyway?” she said. “This bilateral strategy, I think, really is going to rub up against the economic reality.” Overall, bilateral negotiations would follow a very narrow agenda with a very small likelihood of passing a Congress where members sometimes embellish the negatives of FTA signatories when they consider implementation legislation, Hillman said. If this chronology takes place, the U.S. could pivot back to a multilateral negotiating posture, she said. “It’s only a question of how long is that going to take.”
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Hillman tied recent distaste in the U.S. for multilateral deals to weak Trade Adjustment Assistance and federal labor market assistance. She also noted that multilateral deals haven’t reined in the harms caused by global steel overcapacity, subsidies and state-owned enterprises, and that they have inadvertently become vehicles for corporations to focus more specifically on gaining value for shareholders, as firms started to offshore jobs and invest less in the domestic labor force. Center for Strategic & International Studies senior adviser Grant Aldonas called for free trade supporters to start countering protectionist narratives. He criticized top Trump administration trade officials for not promoting the ideal that Americans should decide for themselves what to buy and from whom. “We did not actually face any challenge America has ever faced by adopting a protective crutch,” Aldonas said. “That’s just not who we are.” The White House didn’t comment.