The Statement declares that the 2016 election represented a general antipathy for current U.S. trade policy among the U.S. populace. The Administration notes that U.S. trade agreements have not created clear benefits for Americans and that, going forward, they will seek to negotiate outcomes more beneficial to the U.S. economy and a wider constituency of American workers.
The Statement is generally critical of the globalized trade environment fostered by trade deals such as NAFTA or the creation of the World Trade Organization (WTO); asserting that such deals have not produced a fair and competitive playing field for U.S. trade interests. The Statement also purports that China’s accession to the WTO has generally had a negative effect on the U.S. economy.
The Administration aims to rectify these problems by achieving the following key objectives:
- Increase fair opportunities for U.S. workers and businesses to compete in both domestic and international markets.
- Remove unfair trade barriers to U.S. exports, including U.S. agricultural goods.
- Balance the interests of all segments of the U.S. economy; including manufacturing, agriculture, services, small businesses, and entrepreneurs.
- Ensure U.S. owners of intellectual property have full and fair opportunities to profit from it.
- Strictly enforce U.S. trade laws to prevent market distortions and harm to U.S. domestic industries and workers caused by foreign dumped or subsidized imports.
- Strictly enforce labor provisions in existing agreements and “enforcing the prohibition against the importation and sale of goods made with forced labor”.
- Resisting efforts by other countries – or Members of international bodies like the World Trade Organization (WTO) – to advance interpretations that would weaken the rights and benefits of, or increase the obligations under, the various trade agreements to which the United States is a party.
- Updating current trade agreements as necessary to reflect changing times and market conditions.
- Ensuring that United States trade policy contributes to the economic strength and manufacturing base necessary to maintain – and improve – our national security. Strongly advocate for U.S. workers, farmers, ranchers, services providers, and businesses
Top Priority Areas
To achieve these objectives, the Trump Administration has identified four major priorities:
- Defend U.S. national sovereignty over trade policy;
- Strictly enforce U.S. trade laws;
- Use all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services, and provide adequate and effective protection and enforcement of U.S. intellectual property rights;
- Negotiate new and better trade deals with countries in key markets around the world.
Priority 1 - Defend U.S. national sovereignty over trade policy;
The statement firmly asserts, while citing supporting statutes, that the Trump Administration will not allow the U.S. to be automatically bound to WTO findings or decisions that may be adverse to U.S. interests. The Administration emphasizes that any WTO decision or ruling against the U.S. does not necessarily lead to a change in U.S. law or practice and that it will “aggressively defend American sovereignty over matters of trade policy”.
Priority 2 – Strictly Enforcing U.S. Trade Laws
The Trump Administration believes in the need to strictly enforce U.S. trade laws, such as the authority to impose antidumping (AD) and countervailing duties (CVD) on imports that are either “dumped” (sold at less than their fair value) or subsidized – if such imports cause harm to a domestic industry. ADCVD laws are fully consistent with the WTO and the 1947 General Agreement on Tariffs and Trade (GATT).
Priority 2 cites two other provisions of the Trade Act of 1974 that the President believes should be invoked in order to protect U.S. trade interests and prevent unfair trade actions by foreign countries engaged with the U.S. Section 201 allows the President to impose relief if increasing imports are a substantial cause of serious injury to a domestic industry. Most recently, President George W. Bush used this “safeguard” provision in response to a harmful surge of steel imports. Section 301 authorizes the USTR to take appropriate action in response to foreign actions that violate an international trade agreement or are unjustifiable or discriminatory, and burden or restrict U.S. commerce.
Priority 3 – Using Leverage to Open Foreign Markets
The Trump Administration is seeking to break down unfair trade barriers that U.S. exports face in gaining access to new markets. These include foreign producers receiving subsidies that provide them with an unfair advantage over U.S. competitors, restricting the flow of digital data and services, theft of U.S. trade secrets, unnecessary regulation on particular U.S. items, or currency practices that impact U.S. competitiveness. The Trump Administration believes that the status quo in this area is “unsustainable” and that “for too long American have lost business to other countries, in part because our businesses and workers are not being given a fair opportunity to compete abroad”.
This section goes on to declare how critical it is that U.S. trading partners, and fellow WTO members, are operating transparently and fulfilling international obligations. However, the Administration believes this is too often not the case and that it will need to take a “more aggressive approach” and “use all possible leverage” to ensure unfair barriers are broken down and the trade landscape is competitive.
Priority 4 – Negotiating New and Better Trade Deals
The Administration acknowledges that trade deals such as NAFTA, the creation of the WTO, and China’s Accession into the WTO, have generated benefits for some sectors of the American economy, particularly in the form of increased export opportunities. However, since 2000, just before China joined the WTO in 2001, the U.S. has faced slowed GDP growth, weak employment growth, and a sharp net loss of manufacturing in the U.S. It acknowledges the role of the 2008 financial crisis and impact of automation, but goes on to present a series of statistics that the Administration purports correlate a weakened U.S. economy to China’s joining the WTO.
This section goes on to make similar assertions about NAFTA and the U.S. Free Trade Agreement with South Korea in 2011- that these agreements have produced trade deficits detrimental to the U.S. The Administration believes that the U.S. must take a “major review of how we approach trade agreements”. “Going forward we should focus on bilateral negotiations, and hold our partners to higher standards of fairness, and use all possible legal measures in response to unfair trade practices.”
Next StepsThe Trump Administration believes that it has begun making progress on these priority objectives by; withdrawing from the Trans-Pacific Partnership (TPP), consulting with Congress on ways in which future trade agreements can “work for all Americans more effectively than they have in the past”, and by putting together a strong team of officials who are committed to pursuing these objectives.
The statement signals a divergence from previous administrations’ U.S. Trade Policy. According to a report in the Washington Post, the new trade approach could adversely impact U.S. businesses by creating adversarial relationships between the U.S. and some of its major trading partners. While the new approach demonstrates President Trump’s commitment to his campaign promises, trade experts cited in the article worry that countries will respond to U.S. actions by imposing their own sanctions and tariffs, ultimately harming U.S. manufacturers. One expert, Eswar Prasad, a senior professor of trade policy at Cornell University, contends U.S. divergence and noncommitment to the WTO could undermine the WTO’s credibility and its trade resolutions.
Ultimately, the Trump Administration is making moves to increase the credibility of its commitment to strictly enforce U.S. trade laws and maintain a zero-tolerance policy towards unfair trade practices. To this end, the U.S. emphasized preventing or halting WTO provisions, trade interpretation or agreements that undermine U.S. ability to effectively respond to unfair trade practices.