USTR Says Getting Market Access for Exports Still Possible Outside FTAs
During a hearing with the House Ways and Means Committee March 30, U.S. Trade Representative Katherine Tai was asked by many Republicans and a few Democrats why the administration has ruled out cutting tariffs to convince negotiating partners in Asia to open their markets, and why it has shied away from continuing free trade agreement negotiations started during the previous administration.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The Indo-Pacific Economic Framework, the administration has said, will be a binding agreement that will cover some elements traditionally covered by trade agreements, such as science-based agricultural regulations, but will not lower American tariffs.
Rep. Suzan DelBene, D-Wash., a free-trade advocate, said that the IPEF could open markets in Asia for Washington state exporters. "That said, we need to make sure we’re putting enough on the table to accomplish these goals," she said, and asked why the U.S. ruled out offering market access incentives during negotiations.
Rep. Adrian Smith, R-Neb., too, asked if the administration could promote deep economic engagement with countries without lowering tariffs or creating preferential rules of origin for their exports. Smith is the top Republican on the trade subcommittee.
Tai said it's true tariff reductions are not on the table, but she said the U.S. will be offering "economically significant outcomes" to the negotiating partners. To Smith, she argued that getting retaliatory tariffs dropped in Europe lowered tariffs on $7 billion worth of agricultural exports and that "is quite a bit of market access right there for you," she said.
To DelBene, she alluded to the political problems the Trans-Pacific Partnership faced. The TPP was a traditional free trade agreement with the same countries the IPEF is targeting, and President Donald Trump exited the TPP immediately after taking office. The other countries, led by Japan, brought the agreement into force. She said critics of globalization have argued it's leading to "offshoring and the erosion of our jobs and our industries."
Still, Tai was not as negative about free trade agreements as she had sounded the week before, when she dismissed them as a 20th-century tool. Even after she said there are ways to secure market access without comprehensive trade agreements, and pointed to agricultural access agreements secured with India, Vietnam and the Philippines through dialogues, she added: "That's not to say those types of exercises don’t have their place," referring to FTAs.