As an important department for formulating and implementing U.S. trade policy, the handover of the Office of the United States Trade Representative (USTR) has been delayed.
With only one week left before the ceremony of the new president of the United States, what is the USTR representative Lighthizer thinking?
According to foreign media reports, sources close to Biden’s transition team said that USTR is still preventing its internal staff from meeting with Biden’s transition team.
Relations between the two sides have been in a “frozen state” since the November 2020 election, but the Biden transition team is currently planning to maintain this impasse. Silence, hoping that the situation will improve in the near future.
At present, the outstanding cases in the hands of USTR include the “301 investigation” of Vietnam’s exchange rate and its timber issue, and there is still the possibility of introducing punitive tariffs.
U.S. President-elect Biden has previously nominated KatherineTai, the chief trade counsel of the U.S. House Ways and Means Committee, as the next USTR representative.
Several people familiar with the matter interviewed by the First Financial Reporter said that Dai Qi acted low-key and was a pragmatic. If she can take office, trade policy volatility may decrease and predictability may increase.
Robert Ashworth, co-head of global mergers and acquisitions at Fuld Law Firm, said in an interview with First Financial Reporter: “About this trend of protectionism, it will definitely continue in the future, whether it is buying American, Chinese or European. This policy will continue around the world and even after the Biden administration comes to power, the overall trend will not change much.
But the predictability of the whole policy will indeed increase than before. At least like the various executive orders issued by the Trump administration in the past that are very unpredictable, such sanctions against Chinese technology companies, including payment companies, may gradually decrease or even disappear in the future, and the certainty of the whole market will increase. “
USTR is still playing its role.
The USTR was created by the United States Congress under the Trade Expansion Act of 1962. This body is a cabinet-level body in the Office of the President. The representative of USTR is an ambassadorial cabinet official and is directly accountable to the President and Congress.
Since the 1980s, USTR has been authorized by presidential executive orders to formulate and manage all trade policies in the United States.
At the same time, USTR is also designated as the country’s chief negotiator and serves as the representative of the United States in major international trade organizations.
For example, the ambassador of the United States to the World Trade Organization (WTO) is also the deputy representative of USTR.
While the U.S. State Department has communicated with the Biden transition team, the USTR controlled by Lighthizer still refuses to meet with the Biden transition team.
After Biden’s victory, USTR is still investigating cases and issuing investigative decisions according to its own timeline.
The latest information released by the First Financial Reporter was on January 7, 2021. USTR announced that it would suspend the previous plan to impose tariffs on French goods exported to the United States in order to coordinate with the “301 survey” conducted by the United States on the digital service tax of other trading partners.
Last year, USTR announced that it planned to impose a 25% tariff on about $1.3 billion worth of French goods exported to the United States on January 6, 2021.
The day before, USTR released the results of the “301 survey” of digital service taxes in India, Italy and Turkey, saying that the digital service taxes of the three countries “discriminate” against American enterprises and do not conform to the general principles of international taxation, but did not announce tariff penalties.
As mentioned earlier, USTR is currently conducting two investigations against Vietnam. One is a survey on the exchange rate of Vietnam. Previously, on December 16, 2020, the U.S. Treasury Department announced that Vietnam was listed as a currency manipulator.
The other is the “301 survey” on Vietnam’s timber exports.
Domestic companies in the United States are now more worried about the latter.
If the United States imposes retaliatory tariffs on Vietnam, the products that may be included in Vietnam’s technology, furniture and clothing exported to the United States are likely to be included in the tariff list. The American Federation of Companies said recently that these industries are already facing “the highest tariffs imposed by the U.S. government”, and the new tariffs may mean that “more than half of all clothing and footwear sold in the United States and more than three-quarters of all accessories will be hit. The cumulative tariffs are as high as 25% to 50%.”
Expert: Biden may continue the foreign trade route under the Obama administration
The First Financial Reporter asked a number of people in the industry who had contact with USTR, and said that at this time in previous years, USTR had begun the team handover work, which was a normal procedural problem. But unless the U.S. Congress takes a tough stand, there are few factors that can force it to hand over.
One of the industry insiders told the First Financial Reporter that although they do not think that Biden’s team can turn over U.S. trade policy immediately after taking office, every government has a lot of discretion.
Tu Xinquan, dean of the China WTO Research Institute of the University of International Economics and Trade, also said in an interview with the First Financial Reporter that, for example, Biden will not cancel the tariffs immediately, but the conditions for exemption (tariffs) can be expanded or relaxed.
At the same time, Biden can relax administrative procedures, compared with For example, reduce the conditions for requesting immunity. For example, it can be said that because of the addition of tariffs, the domestic price of (a product) can be exempted by increasing by 10%.
“In addition, you can review it one by one, but also review it together in one industry. These are operational in administrative procedures and do not require congressional approval.
You just need to adjust the procedures reviewed by the U.S. Department of Commerce. This is an area of discretion in itself, and these things will not cause too much. Political influence. Tu Xinquan said.
As mentioned earlier, Deqi has been nominated as the next USTR representative. In her recent speech, she said that her team would make trade a “good force”.
“Trade, like any other domestic or foreign policy, is not an end in itself.” “Trade is a means to create more hope and opportunity for people,” she said.
“The Democratic Party has Democratic philosophy, and it can be seen from Obama and even earlier Clinton administration that their policies (in the context is about trade policy) are a line,” Professor Liu Yongtao, a researcher at the Center for American Studies at Fudan University, told First Financial Reporter.
Dyce participated in the negotiations of the US-Mexico-Canada Agreement as the chief trade counsel of the Ways and Means Committee of the United States House of Representatives and successfully won respect from the American business community, labor and even the environmental community. However, at present, Republican members of the U.S. Senate remain silent about her nomination.
Wang Yong, a professor at the School of International Relations of Peking University and director of the International Center for International Political Economy, said in an interview with First Financial Reporter: “The Biden administration will continue the foreign trade route of the Obama administration that year.”
“On the one hand, I think he will emphasize adherence to free trade in a multilateral framework and abide by the rules of international trade.
At the same time, he will promote the reform of the economic and trade system, especially international rules, especially to strengthen the discipline of the World Trade Organization (WTO), for example, to take actions to restrain industrial policies and industrial subsidies.”
Wang Yong pointed out, “On the other hand, in terms of trade frictions, more cautious measures should be taken in the imposition of tariffs. But at the same time, it will focus on helping American enterprises and industries open up the markets of major trading partners.