This report is the first of a collection through which White & Case’s International Trade Group will study the Biden administration’s commerce agenda and the key establishments that form US commerce coverage.
On February 25, the Senate Finance Committee held a listening to on the nomination of Ms. Katherine Tai to function United States Trade Representative (USTR).1 The listening to adopted the latest appointments of 13 people to serve in senior workers positions at USTR, introduced on February 8.2
There is appreciable curiosity in how members of President Biden’s administration will form the US commerce agenda going ahead, notably given the unprecedented shifts in US commerce coverage and the multilateral buying and selling system lately. USTR, a creation of Congress that’s half of the Executive Office of the President, performs a central function in the growth, implementation and enforcement of US commerce coverage. Understanding the mission of the USTR, in addition to its statutory function in the broader authorized framework and interagency course of for formulating US commerce coverage is of essential significance when contemplating how personnel choices could affect the course of coverage.
The US Legal Framework for Trade Policy Formulation
In the United States, as in most nations, commerce coverage is a central part of financial coverage and international coverage. Trade coverage is continuously mentioned in phrases of its impression on employment, wages, and industrial competitiveness. However, US policymakers and the Congress have lengthy acknowledged that commerce coverage has broader implications, together with for nationwide safety, the atmosphere, innovation and know-how coverage, and public well being, amongst different concerns. Trade coverage choices essentially impression a broad and numerous vary of stakeholders inside and outdoors the US authorities. The US authorized framework for the formulation of commerce coverage makes an attempt to accommodate these diverse, overlapping, and generally competing pursuits.
The basis for US commerce coverage begins with the Constitution. Article I, Section 8 of the US Constitution offers Congress authority over the key levers of commerce coverage, together with the energy to impose duties and to in any other case “regulate Commerce with international Nations[.]” At the identical time, the President has broad authority beneath Article II of the US Constitution to conduct international affairs, together with the energy to barter worldwide treaties with the recommendation and consent of the US Senate.
Given this constitutional framework, the development of US commerce priorities requires cooperation and compromise between Congress and the Executive Branch. For instance, Congress, beneath a collection of legal guidelines, together with the Trade Act of 19743 and numerous subsequent iterations of commerce promotion authority (“TPA”), has delegated to the President the authority to barter commerce agreements involving the discount of tariff and non-tariff obstacles, topic to sure statutory negotiating aims and session necessities. Under TPA, Congress retains its authority to approve or reject the agreements negotiated by the President, although it commits to take action through an “up-or-down” vote inside specified timeframes. This permits the President to barter commerce agreements credibly and successfully via his international affairs powers beneath Article II with out having to attain the 2/3 majority in the Senate that’s wanted to approve a treaty.
Congress has additionally performed a key function in establishing the Executive Branch entities and processes which are concerned in the formulation of commerce coverage. In the Trade Expansion Act of 1962, Congress referred to as for the President to nominate a “Special Representative for Trade Negotiations,” which later turned the USTR.5 Through subsequent legislative actions, Congress considerably expanded USTR’s duties, elevated the USTR to a cabinet-level place inside the White House, and positioned USTR in cost of the interagency course of for the growth and coordination of US commerce coverage.6
The Role of the Office of the United States Trade Representative (USTR)
The US Trade Representative is a Cabinet-level official with the rank of Ambassador. The USTR serves as the President’s principal commerce adviser and negotiator, and is the chief US spokesperson on commerce. USTR’s mission is to acquire international market entry for US items and providers via the negotiation of commerce agreements and, the place mandatory, enforcement initiatives. More broadly, USTR is accountable for coordinating, growing, and implementing commerce coverage via an interagency course of in addition to stakeholder engagement and outreach. USTR’s function in the broader authorized framework for the formulation of US commerce coverage is depicted in the flowchart under.
Interagency Process for Trade Policy
Given the big selection of pursuits implicated by commerce coverage, a key function of the USTR is to coordinate an interagency course of to make sure that the Executive Branch can attain consensus and resolve coverage disagreements.7 Within the pointers set by the legal guidelines enacted by Congress, overarching commerce coverage choices of the Executive Branch are made by the President and his Cabinet, together with the USTR, whereas the job of animating broad rules is developed at the Deputy, Undersecretary and Assistant Secretary degree and fleshing out detailed coverage positions is carried out at the company workers degree. Even at the decrease ranges of the course of, the place choices are guided by overarching coverage mandates from increased ranges, there are sometimes vital disagreements and competing viewpoints amongst the companies.
The coordination of commerce coverage throughout US Government companies happens via the following three-tiered interagency construction:
Tier 1: Trade Policy Staff Committee (TPSC)
The TPSC is run and coordinated by USTR. Its members are drawn from subcabinet, senior civil servant degree workers from 20 member companies, together with the Departments of State, Treasury, Commerce, Justice, Interior, Labor, Health and Human Services, Agriculture, Energy, and Transportation, in addition to the Environmental Protection Agency, the National Economic Council, the National Security Council, and the Office of Management and Budget, amongst others. There are greater than 90 TPSC subcommittees accountable for specialised areas and a number of job forces that work on explicit points. Among different actions, the TPSC develops coverage papers, holds conferences, and solicits enter from the public via hearings and requests for written feedback.
Tier 2: Trade Policy Review Group (TPRG)
When companies can’t attain consensus on a difficulty at the TPSC workers degree, the subject is elevated to the TPRG, which is comprised of Deputy- and Undersecretary-level officers. This just isn’t unusual, although efforts are made to keep away from elevating points (e.g., via successive TPSC conferences).
Tier 3: Trade Policy Committee (National Economic Council (NEC) / National Security Council (NSC))
Unresolved points of the best significance are elevated to Cabinet-level officers for decision. Coordination at this degree is carried out by members of the National Economic Council and the National Security Council. These officers are accountable for resolving disagreements amongst companies and making suggestions to the President.
Private Sector Trade Advisory Committees and Stakeholder Engagement
The commerce advisory committee system, established by Congress in the Trade Act of 1974, was created to make sure that US commerce coverage and commerce negotiating aims adequately replicate US public and personal sector pursuits.8 Advisory committee members signify the full span of US financial pursuits, together with manufacturing; agriculture; digital commerce; mental property; providers; small companies; labor; environmental, shopper and public well being organizations; and state and native governments.
The commerce advisory committees present data and recommendation on US negotiating aims, the operation of commerce agreements, and different issues arising in reference to the growth, implementation, and administration of US commerce coverage. The advisory committee system is organized into three tiers:
- The President’s Advisory Committee on Trade Policy and Negotiations consists of members appointed by the President, and usually consists of CEOs representing a various vary of industries and stakeholders.
- There are 5 Policy Advisory Committees (coping with atmosphere, labor, agriculture, Africa, and state and native governments), the members of that are appointed by USTR alone or along with different Cabinet officers.
- There are 20 Technical and Sectoral Advisory Committees in the areas of trade (ITACs) and agriculture (ATACs). Each committee is comprised of people with subject-matter experience in a selected sector or coverage space (e.g., providers, mental property, power, chemical substances, and animal merchandise). Members of these committees are appointed collectively by USTR and the Secretaries of Agriculture and Commerce.
Historically, enter from Congress and the interagency and advisory committee processes have performed essential roles in the formulation of US commerce coverage. Not all administrations have approached commerce policymaking in identical approach, nevertheless. During the Trump administration, the White House performed a extra assertive function in the formulation of commerce coverage—a signature marketing campaign subject for President Trump—with enter from Congress, the interagency course of, and exterior stakeholders taking over much less significance than in the previous. It is anticipated that the Biden administration will return to a extra conventional method through which commerce coverage choices are extra usually deliberated via the interagency course of and consultations with Congress and different stakeholders play a extra outstanding function.
President Biden’s nominee for USTR, Ms. Katherine Tai, has vital expertise representing Members of Congress in discussions with the Executive Branch regarding commerce coverage. In her latest place as Chief Trade Counsel to the House Ways and Means Committee, Ms. Tai was actively concerned in consultations with USTR regarding the US-Mexico-Canada Agreement and different commerce points. She can be intimately aware of USTR’s mission, the dynamic of its inside operations and its central function in coordinating the interagency course of from her time as chief counsel for China commerce enforcement and as affiliate basic counsel at USTR beneath the Obama administration. In addition, Ms. Tai understands the collaboration that Congress will count on in reference to future commerce negotiations, the potential renewal of TPA, and different potential commerce actions.
This expertise was evident throughout Ms. Tai’s affirmation listening to earlier than the Senate Finance Committee. The listening to revealed little about the particular commerce insurance policies the Biden administration intends to pursue, together with with respect to the commerce battle with China, potential efforts to affix the CPTPP and WTO reform. Rather than supply a selected course of motion on these and a number of different points raised throughout the listening to, Ms. Tai as a substitute centered on the broad rules and approaches that will information her decision-making. Her responses positioned heavy emphasis on consultations with Congress, different Executive Branch companies and the public to tell commerce coverage choices and steadiness the pursuits of completely different stakeholders. Ms. Tai cited this as a key distinction between her method to commerce policymaking and the method taken by her predecessor, which she famous induced “lots of disruption and consternation.” She expressed her need “to perform related objectives in a simpler, process-driven method.” Her intensive prior expertise working with Congress could also be a key issue if the Biden administration decides to hunt an extension or renewal of the TPA which is about to run out this June.
The Finnce Committee voted to advance Ms. Tai’s nomination on March 3, and Ms. Tai is anticipated to be confirmed with broad bipartisan assist. Katherine Tai’s tenure as USTR portends shut collaboration between Congress and the Biden administration and a extra strong interagency course of with respect to the formulation of commerce coverage.
3 19 USC. § 2101 et seq.
4 The most up-to-date iteration of TPA, the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, is codified at 19 USC. § 4201 et seq. The TPA authority supplied to the President by the 2015 Act expires on June 30, 2021.
5 19 USC. § 1801 et seq.
6 Section 141 of the Trade Act of 1974 supplied a legislative constitution for the “Special Representative for Trade Negotiations” as half of the Executive Office of the President, making it accountable for the commerce agreements applications beneath the Tariff Act of 1930, the Trade Expansion Act of 1962, and the 1974 Act. Section 1601 of the Omnibus Trade and Competitiveness Act of 1988 gave the “primary responsibility” for growing and coordinating US worldwide commerce coverage.
7 The interagency course of was first established pursuant to Section 242 of the Trade Expansion Act of 1962 (19 USC. § 1872).
8 19 USC. § 2155