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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