WASHINGTON (AP) — As U.S. trade representative, Katherine Tai is required by law to avoid discussions about the presidential election. But their ideas on fair trade are on the ballot in November.
Voters are essentially being asked to decide whether it is better to cooperate with the rest of the world or threaten it. Do they support enforcing worker protections in trade negotiations, as Tai did on behalf of the Biden-Harris administration? Or should the United States raise taxes on almost everything it imports, as Donald Trump has promised?
After nearly four years in her job, Tai feels she is making progress in getting the U.S. and its trading partners to focus more on workers’ rights. Decades of trade agreements often focused on keeping costs down by finding affordable labor, which in some cases could be exploited.
“You can’t do trade policy alone,” Tai said in an interview with The Associated Press. “I am confident that the path we are taking is the right one. I think the only question is how much progress we can make in the next few years.”
That approach has been criticized by business leaders, economists and Republicans who say the U.S. has not made enough progress in novel trade partnerships and in combating the rise of China.
“There have been no trade deals, no talks to expand free trade agreements,” Rep. Carol Miller, R-Wa., said in a congressional hearing with Tai in April. “Compared to China’s ambitious agenda, the United States is falling behind in every region of the world.”
Trump says sweeping tariffs of at least 20% on all imports – and possibly even higher on some products from China and Mexico – would bring back American factory jobs. Most economists say they would hurt economic growth and enhance inflation, although the former president has dismissed those concerns.
“If you’re a foreign country and you don’t make your product here, you have to pay a pretty high tariff that goes into our treasury and cuts taxes,” Trump, the Republican presidential nominee this year, said at a recent rally in Erie. Pennsylvania.
An Ivy League background and a blue-collar perspective
Tai has degrees from Yale University and Harvard Law School, but aims for a worker-oriented view of commerce. She said she brought previously excluded union voices into the trade process.
The Biden-Harris administration has not opposed the tariffs. The ones on China from Trump’s presidency were retained. It has imposed a 100 percent tariff on Chinese electric vehicles even though there is no vast market in the U.S. for these vehicles, which can cost as little as $12,000 without tariffs. Tai sees this as a way to protect an emerging industry from subsidized and unfair competition.
But the administration is also trying to empower U.S. workers in the face of competition from China through other industrial policies, such as funding for computer chip factories and tax breaks for renewable energy technologies.
The reality, according to some economists, is that domestic factories have not simply lost jobs to China. There were productivity increases that meant some manufacturers needed fewer employers, and there was a broader shift as more workers moved from manufacturing to the service sector. These factors are often deemphasized by Tai, said Mary Lovely, a senior fellow at the Peterson Institute for International Economics.
“It seems to me that she’s focused on the easy thing – the thing where you can blame the ‘bad guy’ China,” Lovely said.
There is unfinished work.
The trade pillar of the Indo-Pacific economic framework led by Tai remains incomplete. These efforts by Washington and its allies in Asia are intended to counterbalance China’s rise without the need for a trade deal, but they focus more on labor rights and environmental protection than previous proposals.
“I discovered that we actually all want the same thing,” Tai said. “Essentially we are renewing the way you do trade policy and renewing the way globalization will play out in the future.”
Tai said she is trying to promote trade policies with other countries that “allow us to build our middle class together and stop pitting them against each other, because that is the model we have followed for the past few decades.”
William Reinsch of the Center for Strategic and International Studies said it was not surprising that Asian countries involved in the initiative said they supported their middle-class workers. But he said Democrats have not given trading partners the access to U.S. markets they want in return for a focus on workers.
“The consistent message we have received from Asian partners is that they are looking for tangible benefits, but the U.S. is not providing any,” he said. “Trying to reorder the traditional social order can be an uphill battle, however meritorious it may be.”
The revised North American trade agreement is a model
Tai believes she has proof of concept that her trading approach can be successful. It happens to be from the U.S.-Mexico-Canada Agreement, the revised North American trade agreement signed during the Trump administration and cited by Trump as evidence that he knows how to negotiate with the rest of the world.
In her interview, Tai said the agreement included a “quick response mechanism” that would allow the government to punish factories that violate workers’ rights. Tai said that as of the end of September, the U.S. government had invoked the mechanism 28 times and completed 25 of those efforts.
Tai said this directly benefited 30,000 Mexican workers who could elect their own union representation, allowing them to receive higher wages, back pay and other benefits.
“We empower workers through trade,” she said. “And by empowering Mexico’s workers, we are ensuring that America’s workers do not have to compete with workers in our neighboring country who are being exploited and deprived of their rights.”
Praise for the deal appears to be a uncommon point of convergence on trade between Trump and the Biden-Harris administration. But their perspectives are different. Trump is telling voters that his threats of massive tariffs can lead foreign governments to accept American trade and immigration terms.
“I ended NAFTA, the worst trade deal ever, and replaced it with USMCA, the best trade deal ever,” he said Monday, referring to the North American Free Trade Agreement signed by Democratic President Bill Clinton.
Tai, who is barred from her position from influencing the presidential election campaign because of the federal Hatch Act, is cautious in her comments. But she disputes Trump’s claim.
She notes that there were actually two negotiations over trade with Canada and Mexico. The first negotiations took place between the Trump administration and the other two nations. But the second conflict was between Trump’s team and congressional Democrats, who had to ratify the agreement, and that led to worker protections, a component that Tai worked on while she was still a congressional staffer.
But on the other hand, she added, just getting a written agreement on trade protections and rights is never enough. The text must be supported by actions.
“They are just words on the page unless they are implemented,” she said.
