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Setting trade policies in Asia in the Biden Administration

After four years of a tumultuous trade policy set from the White House in Washington, the start of US President Joseph Biden’s administration promises less chaos and more measured policymaking.

The previous occupant practiced a highly unusual approach to policy: set by the President, often quite rapidly, in conjunction with a literal handful of officials.  Many of the key decisionmakers were located in advisory roles and may not have been part of agencies typically associated with trade and economics.

This decisionmaking style left departments and institutions normally in charge of formulating policy sidelined and left officials in charge of implementation guessing at next steps.  Foreign governments were also left adrift, unclear about policy intentions and future steps.

An additional defining feature of the past four years has been policies targeted at a wide range of countries, including both presumed adversaries and traditional allies.

Such high levels of inconsistency, sidelining of key government offices and stakeholders, and failures to communicate effectively, left individuals working for the US government at most levels in challenging positions.  Many were supposed to respond to rapidly unfolding, contradictory and unclear policies.

As a result, many key government agencies in the US in charge of trade and economics lost significant numbers of staff members from the top levels to the bottom.  Whole office floors and offices were empty even before the Covid-19 pandemic created new levels of disruption.

President Biden has inherited a very challenging policy landscape.  In addition to a large set of domestic concerns, including managing a badly botched pandemic response and restarting large parts of the US economy that have been disrupted by the spread of Covid and associated lockdowns, he has to tackle foreign and economic policy concerns with skeletal teams.  Staff are working from home and many or most are likely to do so for an extended time period as well.

Getting his agencies staffed requires consent from Congress—roughly 800 positions require Senate confirmation.  This process can be slow at the best of times, but with the Senate managing impeachment proceedings in February, getting people into posts will be lengthy.

While Talking Trade, of course, views trade and economic positions as key, approval of such positions are unlikely to go ahead of critical roles in security and domestic policy.  This pushes out the process of getting staff sorted further into 2021.

Of course, confirmation is only needed at the top.  Restaffing the rest of the vacant posts, however, will also take some time.  This includes restarting the pipeline for junior talent in various agencies.

At the same time that staff are being rapidly hired or rehired, it will be important to figure out what these people are meant to be doing.  Getting alignment on policy is always challenging.  The Biden team inherits a disrupted trade and economic policy landscape as well.

As Biden’s team members have been saying recently, it will take time to sort out policy priorities and determine next steps.  This is particularly true for China policy, where some of the existing policies, like tariffs, are likely to remain in place while others might be adjusted, removed, or even toughened.

Incoming staff members will need to spend time taking stock of what policies are in place, which have been partially implemented, which are clearly not working well, what impact any or all of these policies have had, and what opportunities and challenges remain.

Biden has already called for a “worker centered” trade and economic policy objective.  It remains unclear exactly how this outcome might be best met.  Existing policies will need to be recalibrated to better fit revised goals.

The interagency process, where policy is typically run through groups at different, relevant agencies and departments, before a course of action is selected and policies are confirmed, will need to be restarted to become more effective and functional.  New individuals and departments could be added from areas like climate and sustainability.

An assessment of past efforts, of course, is always required as administrations are shifting, particularly as the baton is handed off between parties.  This time, the transition also needs to consider the changing priorities of both major political parties.  Particularly for any policy outcomes that needs Congressional approval, it will be critical to design policies that can clear the likely contentious settings on Capitol Hill.

The divisive situation in Congress is likely to be reflected across the country as well, with the general public often skeptical about the benefits of trade.  Ironically, polling information suggests that trade became more popular under the past administration than before.  However, a general position of support for trade does not automatically translate into enthusiasm for certain policy positions.

While policy is still being worked out for the White House, it is important to ensure that trade options are kept open.  This includes managing a tricky, but key, issue: having authority in place to start negotiations as opportunities become available.

In short, trade negotiations have been managed in Washington by having the White House work closely with Congress during the course of talks.  At the end, Congress agrees to either vote trade deals up or down without amendment.  This process, however, requires that Trade Promotion Authority (TPA) be in place for both sides.  Current TPA legislation expires on July 1, 2021.

For the White House to even start preliminary talks with a range of foreign partners, having TPA is a critical step.  Thus, although Congress may not be ready to authorize a renewed TPA with clearly defined priorities by summer, it could, as a first step, vote to extend authority for an additional 6 months.  This would give both sides time to sort out trade objectives while allowing early talks to begin, if a situation arises where the US would like to engage.

Trade is unlikely to be at the top of the agenda for Biden or for members of Congress in the immediate months ahead.  But its importance could rise rapidly as the pandemic recedes and restarting and bolstering the economy takes center stage.  Having the right staff members in place with authority to seize opportunities remains an urgent concern.

 ***Talking Trade was written by Dr. Deborah Elms, Executive Director, Asian Trade Centre, Singapore. While Talking Trade is unlikely to miss “Donald Days,” trade is likely to remain an important topic of conversation for everyone in 2021. Glad to have you along for the journey! If you think you have what it takes to join our team as a research assistant or trade analyst, please contact us today at info@asiantradecentre.org. ***

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