Pro-Trade Democrats Say Politics of Trade Tricky in Congress

House Ways and Means Committee member Stephanie Murphy, D-Fla., said that although “the politics of trade are fairly tricky,” she feels confident in saying “things can't get any worse” for free trade during the Biden administration. Murphy, one of two members of the House speaking on a Cato Institute webinar about what to expect in trade with a new president, said she's encouraged by President-elect Joe Biden's choices for the secretaries of the treasury and state, and the head of the National Security Council, because all of the individuals recognize that trade is an important tool in foreign policy.

She said she's hopeful Biden will decide the Section 232 tariffs on aluminum and steel should be “eliminated, adjusted or reduced.” If they are eliminated, that would help exports of wine and spirits and other goods targeted by the European Union because of these tariffs.

She said she's a hawk on China, but said the tariffs haven't done much to change China's behavior in using technology for authoritarian purposes or their trade abuses, which she said “violate the spirit and the letter of their [World Trade Organization] commitments.”

So, she said, she hopes there'll be a review of the Section 301 tariffs.

Rep. Henry Cuellar, D-Texas, a former customs broker, said he's been told by various Asian diplomats, “When you all got out of the TPP, that sent a very direct message to us that you didn’t care about this part of the world, and we had to turn around and do more business with China.”

Both he and Murphy said during the Dec. 2 session that the Biden administration should revive the Trans-Pacific Partnership. However, Ways and Means Chairman Richard Neal, D-Mass., recently said that wage rates in Vietnam made the TPP deeply controversial (see 2011230034), and he says it cannot be passed.

Murphy said that while she doesn't see how you can take on China's trade abuses without a free trade agreement in the region, she also doesn't believe Trade Promotion Authority can be renewed in 2021. She said Congress is in “a really protectionist moment,” and the fact that Rust Belt states were responsible for Biden's win also makes the politics difficult.

She said it's time to educate other members of Congress and their staffs about the benefits of trade -- especially in services. Murphy said she's been critical of pro-free-trade Republicans' silence in the face of President Donald Trump's economic nationalism. She added, “We need to stand up to forces in our own party whose opposition to trade is reflexive rather than reflective.”

Cuellar, one of only 15 Democrats who voted for the Central America Free Trade Agreement, said “there are people within our party that just see the negative things but don’t see the positives of what trade brings in.”

But Murphy said that just because TPA will have expired doesn't mean there's no prospect of a United Kingdom-U.S. trade agreement. She said the administration will have “to engage a little bit more” with Congress as it negotiates, which isn't a bad thing. She said aside from the close collaboration for the NAFTA rewrite, the administration “pretty much ran roughshod over us” as it negotiated trade with Korea, Japan and others. On the U.K., she said, “that relationship is too important to us not to have a trade deal.”