* More US Senate, business, and allied pressure to join TPP, also just favorably reviewed at the WTO;
* Administration’s ban on Uyghur forced-labor polysilicon from China conflicts with its solar push; Senate Foreign Relations approves Uyghur protection bill;
* Trade talks with Taiwan start this Wednesday, and some US vaccines will go to Taiwan despite Chinese opposition.
The June 21st to 27th, 2021 roundup of major trade developments, with L.C.
Whether the US should seek to enter the Trans-Pacific Partnership (the former TPP, now CPTPP) was the real subject of the June 22nd Senate Finance Trade Subcommittee hearing titled “The Strategic Benefits of a Multilateral Approach to Trade Policy in the Asia-Pacific Region.” The hearing was called by Subcommittee Chairman Tom Carper (D-DE) and ranking Republican John Cornyn (R-TX). Earlier this month they jointly published an op-ed in the Washington Post arguing that the administration should rejoin the CPTPP especially in light of China’s interest in joining.
None of the eight senators at the hearing expressed opposition to a US effort to reengage with Asia on trade and the TPP. The four witnesses who testified favored TPP entry by the US.
White House pressured by Congress and allies
The hearing is another move by Congress, the private sector, and allied countries led by Japan to up the pressure on the White House to consider CPTPP accession.
Senator Carper pointed out that “since the US left the TPP… [n]ew agreements have been formed that have furthered Asia-Pacific economic integration,” such as the RCEP, which, he warned, has the “potential to restructure trade patterns and supply chains in Asia… without the US.” And “[r]egardless of the merits or demerits of the TPP, the fact was that the agreement allowed the US to have a seat at the table and actively help write the rules for trade in this dynamic region of the world.”
One possibility that emerged from the hearing is for the US to meanwhile enter more narrowly-focused trade agreements in the Pacific region — starting, say, with digital trade agreements. This would at least bring the US “back to the table” and move it toward re-engagement, perhaps lead to CPTPP entry in the future.
But the TPP question, like almost all trade policy, remains forever “under review” by the Biden administration.
US trade talks with Taiwan an exception?
But one promising break in the administration’s trade paralysis is its plan to revive trade and investment talks with Taiwan on Wednesday, June 30th, despite Chinese displeasure. This follows up on a commitment made earlier in the month by Secretary of State Anthony Blinken before a House committee, which also included promise of a US vaccine shipment to Taiwan. China has been doing everything in its power to block Taiwan from obtaining vaccines from the US and its allies.
Pressure to engage in free-trade agreement talks with Taiwan is growing in Congress, from members of both parties. Recently Reps. Ami Bera (D-CA) and Steve Chabot (R-OH) introduced the “Taiwan Peace & Stability Act” that would direct the US Trade Representative to work on the framework for an FTA or other bilateral arrangement.
Chinese polysilicon manufacturer blocked
While administration trade deals with allies have been in short supply, anti-Chinese moves not so much so. The Biden administration has moved to block imports of Chinese polysilicon for alleged violation of laws against the use of child labor and forced labor. Polysilicon is a material crucial to the manufacture of solar products. The restrictions are controversial among some activists because they will force up the price of solar panels. This runs counter to the president’s push for increased use of renewable energy.
But administration officials point out that the ban doesn’t cover all of Xinjiang’s polysilicon, just from specific companies. It’s not clear, however, that the Chinese polysilicon manufacturers that weren’t banned are any less exploitive of forced labor than those that were. This is just one more reason for criticizing the administration’s green energy policies that weaken the US and benefit China.
China produces about 80% of the world’s polysilicon, with about 45% of global supply coming from Xinjiang, where forced labor is used in the production of many products in the course of China’s persecution of its Uyghur minority. Being aware that a crackdown on Xinjiang polysilicon might be coming, some US solar panel makers have already begun seeking alternative sources.
Legislation
In a related action, on June 24th the Senate Foreign Relations Committee passed the bipartisan Uyghur Forced Labor Prevention Act co-sponsored by Sens. Marco Rubio (R-FL) and Jeff Merkley (D-OR). It has 52 co-sponsors and so could pass the full Senate. As Merkley explained, “We cannot turn a blind eye to the CCP’s ongoing crimes against humanity. We must enact legislation to prevent products, made with forced labor, from entering our nation’s supply chains. I hope the full Senate will quickly pass this bill.”
The bill would add further restrictions on imports from Xinjiang, requiring that they prove they aren’t made with forced labor. It would slap sanctions – asset freezes and visa bans – on individuals and entities linked to the violations.
WTO reviews CPTPP, reports on other regional trade agreements (RTAs)
Meanwhile at the WTO, the 100th session of its Committee on Regional Trade Agreements (RTA) met on June 22 — with a review of the CPTPP a main agenda item.
Japan and New Zealand introduced the discussion of the CPTPP, reportedly noting that it is “a trailblazer at the forefront of many issues on the wider multilateral trade agenda.” They told the meeting of the CPTPP parties’ decision on June 2th to begin the accession process for the UK.
Reports from the meeting suggest that there were no issues, criticisms, or objections raised to how the CPTPP countries are going about implementing the agreement.
More broadly, the WTO reported that “All 164 WTO members are party to at least one RTA and estimates suggest that close to 20% of global merchandise trade occurs between RTA partners on the basis of preferential tariff rates. Over 75% of global trade, on the other hand, occurs on most-favored nation terms, underscoring the continuing commercial importance of multilateral agreements at the WTO.” Addressing the session, WTO head Ngozi Okonjo-Iweala said, “RTAs today go beyond market access in goods and services and related WTO rules…. today you will be considering one of the largest and most complex RTAs, the CPTPP.”
L.C. reports on trade matters for business as well as Founders Broadsheet.
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