But speech by US Trade Representative Tai highlights shift by Biden administration to green energy focus over traditional US policy seeking expanded world trade role.
The April 12-18, 2021 roundup of major trade developments, with L.C.
Japan’s Prime Minister Yoshihide Suga was in Washington to meet with President Joe Biden on April 16th. This is the first face-to-face meeting the US president has had with a foreign leader. The US secretaries of State, Treasury, Defense, Commerce, and key national security advisers attended parts of the meeting. Shared concerns over China were clearly the focus the meeting and how best to cooperate, including joint development of key technologies.
Beijing objected to being the focus and reacted angrily, before and after the meeting. It was especially riled by the mention of Taiwan in the two leaders’ Joint Statement, even though it was anodyne — reportedly softened by the Japanese.
Trade downplayed
There doesn’t appear to have been any in-depth discussion of trade between the leaders – no word on whether the prime minister raised the issue of the Section 232 metals tariffs, one of the key current trade irritants, or of the US rejoining the Trans-Pacific Partnership (now the CPTPP), a decision which the US president insists he’s in no rush to make. Tokyo reportedly wants to bring the US gradually into narrower arrangements with Japan and regionally (e.g., such as on the digital economy). These might eventually lead to entry into the CPTPP. The Joint Statement’s paragraph on trade was specific only regarding cooperation to fight market distortions, that is, China’s practices. It said the two countries “will continue to work together bilaterally, as well as within the G7 and the WTO, to address the use of non-market and other unfair trade practices, including violations of intellectual property rights, forced technology transfer, excess capacity issues, and the use of trade distorting industrial subsidies.”
There was no indication that Biden pushed the prime minister on economic decoupling from China, which is a particularly dicey matter for the Japanese. But the bilateral cooperation promised at the meeting would clearly imply a decreasing reliance on China. The prime minister did commit to criticizing China’s abusive actions in the economic and human rights and territorial spheres and to cooperating with the US and others to counter them.
Taiwan and China
Highlighting the shift represented by the Taiwan mention, most press accounts noted that this was the first time Taiwan had been mentioned in a statement by US and Japanese leaders since the Peoples Republic of China was officially recognized in 1979.
That China-focused strategic matters are now the dominant factor in US-Japan relations was also shown by the fact that the first foreign travel of the US secretaries of State and Defense was to Tokyo. This means that economic friction will be downplayed while economic/technological cooperation will be played up, as it was this week.
In their Joint Statement titled, “US-Japan Global Partnership for a New Era,” the first section covered the US-Japan alliance, stating that Japan is under the US nuclear umbrella and that the Senkakus are also covered by the alliance treaty.
It also said the two leaders “exchanged views on the impact of China’s actions… and shared their concerns over Chinese activities that are inconsistent with the international rules-based order, including the use of economic and other forms of coercion…. We reiterated our objections to China’s unlawful maritime claims.” And, in a statement that caught Beijing’s attention: “We underscore the importance of peace and stability across the Taiwan Strait and encourage the peaceful resolution of cross-Strait issues.”
Other shared commitments affirmed
Also annoying to the Chinese: “We share serious concerns regarding the human rights situations in Hong Kong and… Xinjiang.” But “acknowledged the need to work with China on areas of common interest.” Also, as expected: “The US and Japan reaffirmed their commitment to the complete denuclearization of North Korea,” and “President Biden reaffirmed the US’ commitment to the immediate resolution of the abductions issue.” They also referenced continued work with the Quad, and, in a comment somewhat controversial in Japan, “We also concurred that trilateral cooperation with the Republic of Korea is essential to our shared security and prosperity.” Finally, this section included condemnation of “violence committed by the Myanmar military and police.”
They said they will collaborate by “deepening cooperation in research and technology development in life sciences and biotechnology, artificial intelligence, quantum information sciences, and civil space,” and “affirmed their commitment to the security and openness of 5th generation (5G) wireless networks” relying “on trustworthy vendors.”
On April 14th, the Wall Street Journal published an op-ed by Suga that put the climate issue up front but stressed free trade, the need for a free & open Indo-Pacific, and cooperation with the US on creating more advanced digitized economies as well as more green energy.
Tai announces greening of US trade policy in first speech as USTR
Katherine Tai gave her first speech as US Trade Representative on April 15. The speech focused on the link between trade and the environment. Titled “Greening US Trade Policy,” she presented it at the left-leaning think-tank Center for American Progress. The day before, Tai met with the leaders of 15 environmental organizations. The speech marked a significant shift for a USTR. Tai suggested that action on climate change is a priority for trade policy above trade expansion and above trade’s strategic importance. She further suggested that trade currently plays an unsupportive role that the US will work to change. In short, she presented a negative view of trade. She and other Biden administration officials have previously made clear that trade policy would be “worker-oriented,” but while they had spoken of the trade-environment link, this is the first time it was presented as the top priority for trade policy. The speech was remarkable for not addressing or even referencing trade policy apart from subordinating it to the push on climate action.
She spoke about the WTO and US trade agreements but only by suggesting they have fallen down on environmental issues, indeed can even be blamed for worsening them, which the US will now work to remedy.
The thrust of Tai’s remarks is not a surprise. They align with previous comments by her and others on the Biden team. But the downplaying of the traditional interest the US has in open and expanding trade is a change from the pre-2017 world and could create new sources of friction with its traditional trading partners.
On the other hand, the Biden administration’s obsession with green energy over post-WWII US trade policies prior to Trump aligns it more closely with a similarly obsessed European Union.
L.C. reports on trade matters for business as well as Founders Broadsheet.
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