Sen. Portman Praises Tai, Says Renewed TPA and UK Deal Possible

Sen. Rob Portman, a former U.S. trade representative, said he's glad House Ways and Means Committee chief trade counsel Katherine Tai is the nominee for his old job, because he thinks “that will help with moving an agenda forward vis a vis Congress.” Portman was one of eight former USTRs speaking on a webinar Dec. 17 hosted by the Center for Strategic and International Studies.

Portman, a Republican from Ohio, is the first Republican senator to praise Tai, who will need to be confirmed by a Senate that will most likely be either be 52-48 with Republicans in charge, or tied between the Democrats and Republicans, with Vice President Kamala Harris able to break ties.

Portman said that even though President-elect Joe Biden has said he's not interested in signing any free trade agreements before tending to the American economy, he hopes he changes his mind on the United Kingdom. “I spoke to Liz Truss yesterday,” Portman said, referring to the USTR counterpart in the U.K., and said they had a good talk on the agriculture issues. He said it's possible there could be an agreement by Jan. 20, Inauguration Day.

He said the U.K. trade agreement should be easier to get through Congress than many, since the labor and environmental issues are not difficult with a country with similar standards. But if a U.K. deal is reached, Congress' Trade Promotion Authority would have to be renewed in the summer. He said, “I think there is a hunger for finding that bipartisan policy we can move forward on. I do think this could be one.”

The former USTRs disagreed on how possible it would be for Biden to put trade negotiations on the back burner in 2021. Susan Schwab, who followed Portman in the job under George W. Bush, said no president “has that luxury of saying ‘Well, we’re going to address trade later.' Someone’s going to hand you the baton whether you want it or not.”

“There are a whole bunch of tariffs sitting out there,” she said. “And a lot of American constituencies expecting those tariffs are going to come down, or they’re going to be used as leverage, or they’re going to get exclusions.” Still, she's doubtful about the path for timely renewal of TPA. “You can have a trade policy that’s proactive without it, but it’s like one hand behind your back.”

Ron Kirk, who served as Barack Obama's first USTR, said that because all the former USTRs believe in the benefits of free trade, “We run a little bit of the risk we’ve got the choir together here, we’re all singing from the same hymnal, and the church is on fire,” he said with a chuckle. He said the Obama administration had to respond to the Great Recession in 2009, and “that sucked up so much energy. This is going to be COVID job 1, COVID job 2, COVID job 3.” And the other top priority will be to get the economy going, he said. He said he's somewhat skeptical that the expiration deadline of June 30 for TPA will result in congressional action.

The former USTRs talked about how to proceed with China. None believe Biden can roll back tariffs on Chinese goods without gaining concessions, but several are also doubtful any concessions are obtainable. Charlene Barshefsky, who served under Bill Clinton, said the fact that there was a 25% tariff on billions of dollars worth of Chinese goods, and some level of tariffs on $370 billion of imports, and that it was the U.S. that blinked first, shows that Trump's tack wasn't bearing fruit. She noted that China is doubling down on Made in China 2025, and as it produces more advanced technology domestically, it will be less dependent on U.S. imports.

She said, “You have to ask, ‘What does provide leverage?’” Barshefsky said Europe, Japan and the U.S. uniting against China could provide more leverage. But she later acknowledged that just because the U.S. and these countries are democracies doesn't mean they have the same interests in China. “Germany is highly trade dependent on China. Highly,” she said. “And Germany takes a different view on the China challenge.”

Kirk said that “because of Biden's history, we’ll get everyone back in the room, but none of this is going to be easy.” He said the U.S. will have to convince allies that China's on a path that is unsustainable for other countries' economies.

If China does not bend, several USTRs said, the integration between China and the U.S. should be rethought. One suggested China could be expelled from the WTO if members representing a majority of the world's gross domestic product agree. The most recent former USTR, Michael Froman, said that if China won't stop actions that are distorting the global economy, it should expect other countries to close their markets on scientific collaboration, investment and more.

The former USTRs also were asked by moderator Bill Reinsch of CSIS to give their advice to Tai. Schwab said that since many other Cabinet members don't know a lot about trade, she's in a position to explain how her portfolio fits into a larger agenda. Barshefsky said that Tai “needs to know what she thinks. She’ll do more negotiating in the administration than she ever will with a foreign party.” She said that if the USTR isn't clear on her own agenda, she'll “get buffeted and twisted and turned and end up with a bit of a muddle.” Froman said simply, “learn from and avoid all of our mistakes, and make your own mistakes instead.”