Continued UK Talks, TPA Lapse Expected Regardless of Presidential Election Results

Talks toward a comprehensive trade agreement with the United Kingdom would likely continue under a Joe Biden administration, though when a deal could be reached is unclear, K&L Gates partner Stacy Ettinger said during a webinar on how trade policy would change if there is an administration change after the election, or progress if there is a second Trump administration. Ettinger, a staffer for Senate Minority Leader Sen. Chuck Schumer, D-N.Y., before joining the private sector, was joined by former White House trade staffer Clete Willems, now at Akin Gump, during a webinar Oct. 20 hosted by American University's law school.

If President Donald Trump wins re-election, Willems believes, the U.K. trade deal could wrap up by April, with enough time to pass under fast-track rules before the current Trade Promotion Authority expires next summer. Both he and Ettinger predicted, though, that TPA would not be renewed without a lapse. That means that during the time there is no TPA, no trade deal could be presented to Congress for a vote. “I think it’s going to be a knockdown, drag-out fight whenever it happens,” Willems said of a renewal debate. He said there's frustration in Congress over the use of sections 232 and 301 and in the administration on how the TPA limits its actions.

Willems said that if Trump is re-elected, there will be continued use of sections 301, 232 and safeguard tariffs, including levying Section 301 tariffs over digital services taxes. “Currency will be much more prominent in the second term,” he said, because the administration now believes that trade deficits can't be reduced without tackling currency manipulation.

Willems acknowledged that some viewers of the Oct. 20 webinar might wonder why the talk about a second Trump term, given the president's polling numbers. But he said he thinks it's going to be a close election, and we'll have to wait to see who wins.

If Democratic nominee Joe Biden wins, he'll have to deal with what Ettinger called “legacy tariff issues,” such as the Airbus retaliation, Section 232 tariffs on steel and aluminum, the Section 301 China tariffs, and the 301 investigations on Vietnamese currency and digital services taxes. “It is hard to get rid of things once they’re in place,” she said, because some are claiming the tariffs have been successful in their aims. At K&L, she said, she hears from many small and medium-sized businesses that “have been really slammed” with Section 301 tariffs.

“I don’t think they’re going to rush into rolling anything back” in terms of China executive orders or tariffs, she said.

Both Willems and Ettinger said further negotiations for trade liberalization with Japan are unlikely in the near future. Although some countries have complained in Geneva that the phase one deal does not cover “substantially all trade,” Ettinger questioned whether anyone would bring a case on it. “Who’s going to be the first member country to tee this up? Those who live in glass houses,” Ettinger said. Willems agreed, and said one could argue some European Union trade agreements aren't covering substantially all trade.