Focus on Forced Labor Not Expected to Subside as Trade Facilitation Suffers

The recent focus on forced labor has also created some trade facilitation problems, both of which appear unlikely to go away under the Biden administration, said Paul Rosenthal, a lawyer with Kelley Drye, during the virtual International Trade Update hosted by Georgetown Law on March 9. Rosenthal was asked about the corporate compliance difficulties following CBP forced labor enforcement actions, particularly in countries that the company isn't directly connected to. “The shift has been away from concern about U.S. manufacturing interests to social interests” involving child and forced labor, he said. “And I don't see that shifting. In fact, I see that continuing and accelerating and I think one the big issues” for the administration “will be how to balance those interests,” he said

President Joe Biden's administration also faces a dilemma with the Section 301 tariffs on China, Rosenthal said. Removing the tariffs without gaining something further from China likely would lead to criticism of the administration, but at the same time “you've got a lot of companies that are being burdened by tariffs” and are “innocent bystanders” in the dispute, he said. “I don't know how they dismantle these tariffs without making some more progress than, frankly, the Trump administration did.” A short-term adjustment may involve more exclusions from the tariffs, he said.

Another quandary now faced by the Biden administration involves imports of polysilicon, which is used to make solar panels, Rosenthal said. The product was recently linked to the use of forced labor in China (see 2101080044). Such products may bring the administration's forced labor goals into conflict with its climate change platform, he said. “It's going to be a very interesting and difficult set of decisions that this administration is going to face,” he said.

Countries in the Asia-Pacific region that are facing competition with China would probably like to see the U.S. return to engaging in the region, said Barbara Weisel, managing director at Rock Creek Global Advisors. Those countries are hoping to eventually see “concrete commitments” from the U.S., but for now the U.S. says it plans to focus more on domestic issues in the near future. The Biden administration seems likely to return to the Trans-Pacific Partnership, “but I do think that the countries in the region expect the United States to come back to the table to help look at the way the regional trade architecture is being established,” she said.

The intent to focus on domestic issues “may play well” in the U.S., but it also signals to other countries “that the U.S. is kind of out of the game and go ahead and fill the vacuum because we are not ready to engage at all,” she said. Instead, the U.S. should be silent on negotiating plans and begin those “quiet conversations,” Weisel said.