Former USTR Says Biden May Not Be Able to Put Trade on Back Burner
Former U.S. Trade Representative Susan Schwab said that although President-elect Joe Biden has signaled that trade is not a priority for him, he is unlikely to be able to put it on the back burner completely until the COVID-19 crisis and economic recession are resolved. “Trade is going to come to them even if they don’t necessarily want to go to trade,” she said during a Peterson Institute for International Economics Trade Talks interview Nov. 24. When Biden is at a G-7 or G-20 meeting, and other heads of state bring up trade, “What are you going to do? Say, 'I'm not going to do trade for the next two or three years'? So, you can’t underestimate what happens when [India's] Prime Minister [Narendra] Modi wants to talk to you about trade. Or [China's President] Xi Jinping wants to talk to you about trade. Or [German Chancellor] Angela Merkel wants to talk to you about trade.”
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Schwab said that the Biden administration could inherit either an initialed U.K.-U.S. free trade deal or a not-quite-ready deal. “What are they going to do with it? Are they going to get it done? Maybe not. But that is a very big decision. A go/no-go decision is a very, very fundamental foreign policy decision, in that case. Because you’re not going to be able to turn that one around after July 1, 2021.”
The USTR position is often the last Cabinet-level appointment to be announced, Schwab said, noting that current USTR Robert Lighthizer wasn't confirmed until May 2017. But on Jan. 20, the new general counsel and the USTR-designee's chief of staff can start work with the career staff, as neither position requires Senate confirmation. Schwab, the USTR under President George W. Bush, also discussed her own setup work for President Barack Obama's USTR, on the European Union's refusal to import U.S. beef, a situation that may hold some lessons for the Airbus-Boeing dispute.
In the beef dispute, she said, the U.S. had been imposing retaliatory tariffs allowed by the World Trade Organization for a while, and importers had become used to paying them. For that reason, she said, threatened tariffs are much more powerful than existing tariffs. So Schwab held hearings on a carousel of targeted products, and that got both a new group of European exporters and U.S. importers activated. “We set a date [for changing the tariff list] that was after we left,” she said, and one of the first deals her successor, USTR Ron Kirk, was able to achieve was resolution of that dispute.
Schwab said that while she doesn't agree with all the past positions of everyone on the Biden USTR transition team, “it is a serious group of people, it is a knowledgeable group of people for the most part.”