A veteran of D.C. policy circles, Tai is expected to be confirmed as the Biden administration’s trade representative.
Katherine Tai, President Biden’s pick for U.S. Trade Representative (USTR), told Senators on Thursday that if confirmed, she will work to enact a “worker-centric trade policy” that helps “American communities emerge out of crisis and into greater prosperity.”
During her lengthy confirmation hearing before the Senate Finance Committee, Tai touched on a number of trade issues, from the ongoing global shortage of semiconductor chips to intellectual property theft to beef exports to the World Trade Organization (WTO). But a common theme throughout was Tai’s stated desire to implement trade policy that “works for our workers” and helps get the economy back on track in the wake of the COVID-19 pandemic.
“We must pursue trade policies that advance the interests of all Americans — policies that recognize that people are workers and wage earners, not just consumers; policies that promote broad, equitable growth here at home; policies that support American innovation and enhance our competitive edge,” she said.
We’re supportive of Tai’s nomination here at the Alliance for American Manufacturing; our President Scott Paul even sent the Senate Finance Committee a letter of support earlier this week.
Not that she really needs our help. Tai is expected to be easily confirmed as USTR, in part because she already is much respected on Capitol Hill when it comes to trade matters.
Unlike some of Biden’s picks for cabinet positions, Tai wasn’t a public figure before being nominated for USTR. But she’s well-known in D.C. trade policy circles. Tai worked in the USTR office from 2007 to 2014, and spent several years as the chief counsel for China trade enforcement. She then moved to working on trade issues at the House Ways and Means Committee, where she was named chief counsel in 2017.
Tai played a key role in negotiations of the United States Mexico Canada Agreement (USMCA), the massive trade deal that replaced the North American Free Trade Agreement (NAFTA). Her work on the USMCA eventually led labor unions and Members of Congress who have been skeptical of previous trade agreements, like Sen. Sherrod Brown (D-Ohio), to support its passage.
The USMCA included a number of key provisions to strengthen labor and environmental standards, along with enforcement tools. Tai said she’s committed to using those new tools as USTR to ensure the deal is properly enforced.
Throughout the hearing, Tai noted that over the past several years, there has been a clear shift in the general consensus when it comes to trade policy. While that consensus once centered around the idea that we should pursue open trade as much as possible, now there is a more nuanced view, as it is clear free trade also has created some negative consequences.
“Over time, the trends we see are a race to the bottom. With increased economic and trade activity, we aren’t necessarily seeing bringing up standards with respect to workers and environmental standards,” Tai said. “I think this prompts us to have this inform our rethink of our strategic trade policies, and figure out how trade policy can be conducted in a way that it truly does lift all boats.”
One of the main problems on the trade front, of course, is China.
The general consensus view when China entered the WTO back in 2001 was that it would open up its economy and become more democratic. The opposite has happened, and China’s government has used state-owned enterprises, massive subsidies and other unfair trade practices to pursue its goals of dominating global markets.
“I think it’s clear that when we as Americans, with our economic traditions, look at the Chinese economy, what we see is an extremely formidable competitor, where the state is able to conduct the economy almost as a conductor with an orchestra,” Tai said.
Tai didn’t offer many specifics on how she plans to counter China (much to the annoyance of some observers). Instead, she said that the United States must figure out a way to take on China while also staying true to our own values of “freedom, democracy, truth, and opportunity.”
“China is simultaneously a rival, a trade partner, and an outsized player whose cooperation we’ll also need to address certain global challenges. We must remember how to walk, chew gum and play chess at the same time,” Tai said. “That means here at home, we must prioritize resilience and make the investments in our people and our infrastructure to harness our potential, boost our competitiveness, and build a more inclusive prosperity. We must also impart the values and rules that guide global commerce — and we must enforce those terms vigorously.”
One of the lingering questions about the China relationship is what happens to the “Phase 1” trade deal negotiated under the Trump administration. While the deal left a lot of key issues unaddressed, it is still on the books. As such, Tai said she’s committed in the near-term to enforcing it, including holding China accountable for agreements it made in the deal.
But Tai also made sure to subtly highlight a shift in strategy from the previous administration, pledging to work with allies to take on China and reform key international institutions, such as the WTO. Engagement is vital, Tai said – but noted that the WTO needs to figure out how to address many of the challenges facing the world today, and the challenges that exist between member nations.
“We need to be having hard conversations in Geneva, in a constructive way,” Tai said.
As we mentioned earlier, Tai touched on a whole lot of different trade issues throughout the three-and-a-half hour hearing. You can check out more of the highlights via this Twitter thread we put together while watching it, or you can check out the entire thing for yourself here.