Trade Agenda Includes Considering Carbon Border Adjustments
The Biden administration is emphasizing the need to fight forced labor and exploitative labor conditions, as well as using trade to fight climate change, in the first Trade Agenda published since President Joe Biden took office.
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“The President’s trade agenda will restore U.S. global leadership on critical matters like combating forced labor and exploitative labor conditions, corruption, and discrimination against women and minorities around the world,” the agenda says, suggesting the executive branch will support Democratic priorities in changes to the Generalized System of Preferences benefits program. Later, the document explicitly says existing trade programs will be evaluated for “their contribution to equitable economic development, including whether they reduce wage gaps, increase worker unionization, promote safe workplaces, tackle forced labor and exploitative labor conditions, and lead to the economic empowerment of women and underrepresented communities.”
The value of imports covered by GSP fell 20% from 2019 to 2020, to $16.8 billion, and were down 30% from 2018, the report noted, saying the removal of India and Turkey from the program, and the actions against some Thai products were probably to blame. Overall, goods imports fell 6.6% from 2019 to 2020.
In a section addressing imports from China's Xinjiang region made with forced labor, the agenda said, “The trade agenda will consider all options to combat forced labor and enhance corporate accountability in the global market.”
On the environment, as many observers expected, Biden expressed openness to carbon adjustment taxes. “The Biden Administration will work with allies and partners that are committed to fighting climate change. This will include exploring and developing market and regulatory approaches to address greenhouse gas emissions in the global trading system. As appropriate, and consistent with domestic approaches to reduce U.S. greenhouse gas emissions, this includes consideration of carbon border adjustments,” the agenda said. “Additionally, the Biden Administration will work with allies as they develop their own approaches and act against trading partners that fail to meet their environmental obligations under existing trade agreements.”
In 2020, goods exports fell by 13.2% compared with 2019. “Opening markets and reducing trade barriers are fundamental to any trade agenda. This will be a priority for the Biden Administration, particularly since export-oriented producers, manufacturers, and businesses enjoy greater than average productivity and wages,” the document said.
The agenda also touched on some recent developments in trade negotiations. It said that over five negotiating sessions with the United Kingdom, the two countries “made considerable progress towards a comprehensive, ambitious trade agreement.”
The document noted that in December, Canada requested USMCA consultations over solar panel safeguards, and Mexico asked to join the consultations at the end of that same month. The USMCA says that Canada and Mexico cannot be subject to safeguards if their exports are not the most significant contributor to the domestic industry's injury, but the safeguard has applied to their exports for years.
The administration also noted that after “significant engagement,” Guatemala began allowing for corrections to the CAFTA-DR certificates of origin. “This change helped expedite Guatemalan Customs clearance of U.S. exported products claiming CAFTA–DR benefits, saving time and money and making the import process more transparent,” the document said.