Office of the U.S. Trade Representative Releases President Trump’s Trade Policy Agenda

International Trade & Customs Update

Date: March 10, 2017

On March 1, 2017, the Office of the U.S. Trade Representative released the president’s trade policy agenda, stating that “[t]he overarching purpose of our trade policy – the guiding principle behind all of our actions in this key area – will be to expand trade in a way that is freer and fairer for all Americans.” The Trump administration’s trade policy agenda sets forth four major priorities: (1) defend U.S. national sovereignty over trade policy; (2) strictly enforce U.S. trade laws; (3) use all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services, and provide adequate and effective protection and enforcement of U.S. intellectual property rights; and (4) negotiate new and better trade deals with countries in key markets around the world.

1. Defending National Sovereignty Over Trade Policy

The agenda notes that a core provision under the dispute settlement mechanism of the World Trade Organization (WTO) is the express legal requirement that the WTO cannot “add to or diminish the rights or obligations” of the United States or other countries under the WTO agreements. Because the U.S. law (the Uruguay Round Agreements Act) implementing U.S. commitments under the WTO also specifically provides that the application of any WTO provision that is inconsistent with any law of the United States shall have no effect, the trade agenda states that the Trump administration “will aggressively defend American sovereignty over matters of trade policy.”

2. Strictly Enforcing U.S. Trade Laws

The trade policy agenda references numerous U.S. laws designed to protect the U.S. market from unfair practices such as dumped or subsidized imports. It notes that under multilateral trade agreements such as the General Agreement on Tariffs and Trade (GATT) and the WTO agreement, dumping “is to be condemned.” In referencing various provisions of the Trade Act of 1974, the Trump administration indicated it has the right to self-initiate trade remedy cases, take action under Section 301 of the Trade Act, and otherwise “act aggressively as needed to discourage this type of behavior – and encourage true market competition.”

3. Using Leverage to Open Foreign Markets

The agenda states that U.S. exports face significant barriers in many markets (e.g., high tariffs, non-tariff barriers, foreign subsidies and theft of trade secrets), and that the United States has engaged in efforts to break down such barriers and open foreign markets to U.S. competition. While acknowledging the difficult task of opening foreign markets, the Trump administration references two “fundamental challenges”: (1) WTO rules and some bilateral/multilateral trade agreements that are written with the implicit understanding that participating countries are pursuing free-market principles when, in fact, they are not, and (2) these rules and agreements are written with the implicit understanding that countries implementing them have functional legal and regulatory systems that are transparent when, in practice, they are not. The Trump administration indicated that it will use all possible leverage to encourage other countries to give U.S. producers fair, reciprocal access to their markets.

4. Negotiating New and Better Trade Deals

The trade policy agenda provides data showing trade deficits, manufacturing and job losses, and decreased industrial production since the 1980s when the United States entered into such trade deals as the North American Free Trade Agreement (NAFTA) and the WTO and since China joined the WTO in 2001. The agenda asserts that the outcomes have not been what the American people expected from these agreements. The Trump administration states that it will seek to develop deeper trading relationships with international partners, but “going forward, we will tend to focus on bilateral negotiations, we will hold our trading partners to higher standards of fairness, and we will not hesitate to use all possible legal measures in response to trading partners that continue to engage in unfair activities.”

Reaction to Trump’s Trade Policy Agenda

The report does note that Trump’s pick for U.S. Trade Representative (USTR) has not been confirmed by the Senate and that the administration intends to submit a more detailed report on its trade policy once the new USTR has had the opportunity to participate in the development of such a report.

Nevertheless, there was quick reaction to the release of the 2017 trade agenda. Many lawmakers and trade officials worried that the United States would no longer be bound by WTO dispute settlement decisions, or might even withdraw from the agreement. While both Republicans and Democrats seem to agree that the WTO deserves some criticism and that the rules for the global trading system need revision and adjustment, they argued that the WTO gives the United States the ability to enforce the rules it helped create and has established a firm rule of law to check competitors. It is worth noting that in a closer reading of the trade agenda, the Trump administration—while criticizing the WTO dispute settlement process—does acknowledge that the process has been helpful in opening foreign markets and in resolving differences through consultation and ongoing contacts with other WTO members’ officials.

Shortly after his confirmation as secretary of Commerce, Wilbur Ross seemed to clarify the administration’s WTO position by stating that the “WTO is, in some ways, very necessary” as an arbiter for international trade and needs only “fine-tuning.”

FOR MORE INFORMATION

Thompson Hine’s International Trade & Customs group continues to monitor the trade-related activities and policies of President Trump’s administration. To track these developments as they occur, please visit our Trump and Trade website at www.TrumpandTrade.com.

If you have questions about how the Trump administration may affect your international trade concerns, please contact:

David M. Schwartz
202.263.4170
David.Schwartz@ThompsonHine.com

Samir D. Varma
202.263.4136
Samir.Varma@ThompsonHine.com

Scott E. Diamond
Senior Legislative & Regulatory Policy Advisor
Not licensed to practice law
202.263.4197
Scott.Diamond@ThompsonHine.com

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