U.S. trade Representative Tai to argue for better free trade

U.S. Secretary of State Blinken attends the Ministerial Meeting at the University of Maryland in College Park.

WASHINGTON Reuters -- U.S Trade Representative Katherine Tai will defend Biden administration's decision not to pursue traditional free trade deals and argue that her approach of working to reduce non-tariff barriers is better for workers and supply chain resilience.

Ahead of a policy speech at American University, Tai said she is beginning to change minds in Washington and in other capitals that the traditional approach of cutting tariffs no longer works in the highly competitive global economy of the 21st century.

Tai said in excerpts of her remarks that we are writing a new story on trade, one that makes us more resilient, our economy more sustainable, and our results more inclusive.

Trade needs to work hand-in-hand with industrial policy, according to Tai, which the U.S. is employing to invest in infrastructure, semiconductors and clean energy technology. There are incentives that result in good paying jobs, including for those without a college degree, according to Tai.

That is the theme of the Biden Administration's new story on trade - Strengthening our cooperation with like-minded economies to forge a fairer and more sustainable future for our people, Tai said in her remarks.

She said that approach is the basis for trade engagements such as the Indo-Pacific Economic Framework IPEF and the U.S. Trade and Technology Council. They will not focus on tariffs, but on regulatory, environmental, food safety, labor and digital economy issues that have proven to be formidable trade barriers.

She said there were growing calls from U.S. business and agricultural trade groups for Congress to approve new fast track negotiating authority for USTR to pursue traditional free trade deals.

These groups argue that the U.S. is falling behind the growing network of free trade deals forged by China and the European Union in recent years, putting the U.S. farmers and food companies at a disadvantage against many foreign competitors in key markets.

During hearings last month, Republicans in the U.S. Senate and House of Representatives pelted Tai with complaints about the lack of new tariff-reducing trade deals.

In a Senate Finance Committee hearing, Republican Senator Mike Crapo of Idaho said that the administration should reconsider its decision not to pursue market access in IPEF or other trade arrangements because we lose ground every day.

Tai told reporters it was hard to explain the need to break away from the traditional vision of ever-liberalizing trade deals.

She said that the message was starting to sink in, due to widespread recognition that supply chains need to be more resilient after the COVID-19 epidemic, and the desire to reduce U.S. dependence on China for critical materials.

We are nearing a consensus on the need to do things differently. She highlighted the new U.S. trade agreement with Japan on electric vehicle battery minerals as one of the Biden administration's goals on trade. Those included strong provisions on labor and environmental standards, strengthening U.S. EV supply chains through friend-shoring or boosting sourcing from trusted allies.