Following-up on my last post, the Executive Order Addressing Trade Agreement Violations and Abuses is here. Let's go through it quickly.
Here's how it starts:
Section 1. Policy. Every trade agreement and investment agreement entered into by the United States, and all trade relations and trade preference programs of the United States, should enhance our economic growth, contribute favorably to our balance of trade, and strengthen the American manufacturing base. Many United States free trade agreements, investment agreements, and trade relations have failed, in whole or in part, to meet these criteria. The result has been large and persistent trade deficits, a lack of reciprocal treatment of American goods and investment, the offshoring of factories and jobs, the loss of American intellectual property and reduced technological innovation, downward pressure on wage and income growth, and an impaired tax base. It is the policy of the United States to negotiate new trade agreements, investment agreements, and trade relations that benefit American workers and domestic manufacturers, farmers, and ranchers; protect our intellectual property; and encourage domestic research and development. It is also the policy of the United States to renegotiate or terminate any existing trade agreement, investment agreement, or trade relation that, on net, harms the United States economy, United States businesses, United States intellectual property rights and innovation rate, or the American people.
If they have already decided that a favorable balance of trade and strengthening the American manufacturing base are crucial policy objectives, I worry that whatever measures they come up with as part of their new trade policy are going to be problematic. I would rather take a step back and ask, what should the objectives of U.S. trade and investment agreements be? But regardless, this language gives them the flexibility to do just about anything with trade policy. They could try to open up foreign markets, or they could try to close U.S. markets. We'll have to wait and see which one they give priority to.
Next up is this:
Sec. 2. Conduct Performance Reviews. The Secretary of Commerce and the United States Trade Representative (USTR), in consultation with the Secretary of State, the Secretary of the Treasury, the Attorney General, and the Director of the Office of Trade and Manufacturing Policy, shall conduct comprehensive performance reviews of:
(a) all bilateral, plurilateral, and multilateral trade agreements and investment agreements to which the United States is a party; and
(b) all trade relations with countries governed by the rules of the World Trade Organization (WTO) with which the United States does not have free trade agreements but with which the United States runs significant trade deficits in goods.
And here is what is supposed to happen in each of these performance reviews:
Sec. 3. Report of Violations and Abuses. (a) Each performance review shall be submitted to the President by the Secretary of Commerce and the USTR within 180 days of the date of this order and shall identify:
(i) those violations or abuses of any United States trade agreement, investment agreement, WTO rule governing any trade relation under the WTO, or trade preference program that are harming American workers or domestic manufacturers, farmers, or ranchers; harming our intellectual property rights; reducing our rate of innovation; or impairing domestic research and development;
(ii) unfair treatment by trade and investment partners that is harming American workers or domestic manufacturers, farmers, or ranchers; harming our intellectual property rights; reducing our rate of innovation; or impairing domestic research and development;
(iii) instances where a trade agreement, investment agreement, trade relation, or trade preference program has failed with regard to such factors as predicted new jobs created, favorable effects on the trade balance, expanded market access, lowered trade barriers, or increased United States exports; and
(iv) lawful and appropriate actions to remedy or correct deficiencies identified pursuant to subsections (a)(i) through (a)(iii) of this section.
(b) The findings of the performance reviews required by this order shall help guide United States trade policy and trade negotiations.
Presumably they are going to make use of the work USTR has been doing on these same issues for years, and repackage it in some way.
And then there is this:
Sec. 4. Remedy of Trade Violations and Abuses. The Secretary of Commerce, the USTR, and other heads of executive departments and agencies, as appropriate, shall take every appropriate and lawful action to address violations of trade law, abuses of trade law, or instances of unfair treatment.
Again, this seems like something that U.S. government agencies have already been doing. So does this mean big changes in U.S. trade policy, or just more of the same? Within the next 180 days, we'll start to find out.
