Biden’s Pacific Trade Pact faces setback after criticism from Congress

The Biden administration has withdrawn plans to announce the conclusion of substantial parts of a new Asia-Pacific trade deal at an international meeting in San Francisco this week, after several leading Democratic lawmakers threatened to oppose the deal, said people familiar with the matter. .

The White House had planned to announce that the United States and its trading partners had largely agreed on the terms of the Indo-Pacific Economic Framework for Prosperity, an agreement aimed at strengthening alliances and economic ties between the United States and its allies in the to strengthen the East. and South Asia.

But Senator Sherrod Brown, Democrat of Ohio, and other prominent lawmakers have criticized the pact, saying that, among other shortcomings, it provides adequate protections for workers in the states it covers.

The Biden administration, facing the possibility of additional critical public statements, has decided not to push for the trade portion of the deal to be concluded this week, and has asked members of Congress and foreign trading partners in recent days about its decision informed, the people said. .

The agreement has been a key element of the Biden administration’s strategy to counter China’s growing influence in Asia by strengthening ties with allies. The framework’s partners include Australia, Indonesia, Japan, South Korea and Singapore, which together account for 40 percent of the global economy.

The Indo-Pacific Economic Framework for Prosperity consists of four main components, or ‘pillars’. The first part, which the government completed in May, aims to bring together the countries’ supply chains.

It still seems likely that the Biden administration will announce the substantive conclusion of two other major parts of the deal this week, one on clean energy and decarbonization and another on taxes and anti-corruption. The Department of Commerce negotiated these two pillars, as well as the supply chain agreement.

But the trickiest part of the framework was the trade pillar, which Katherine Tai, the U.S. Trade Representative, and her office oversee. The trade negotiations will cover issues such as regulatory practices, procedures for importing and exporting goods, agriculture and standards for the protection of workers and the environment.

Democrats in Congress, including Sen. Ron Wyden of Oregon, who heads the Senate Finance Committee, have raised concerns about labor and environmental standards. Lawmakers from both parties have criticized the administration for not closely consulting Congress during negotiations, while others are upset about the administration’s recent clash with big tech companies over U.S. negotiating positions on digital trade.

In a statement last week, Mr Brown, who faces a tough re-election battle next year, called for the entire trade pillar to be removed from the agreement, saying it does not provide sufficient protection to ensure workers are not exploited.

“While the government works to finalize the Indo-Pacific Economic Framework, the trade pillar should not be included,” Mr Brown said. “Any trade agreement that does not include enforceable labor standards is unacceptable.”

Members of Congress and their staffs had been raising concerns about a lack of enforceable provisions in meetings for several months, a Senate aide said.

At a meeting with White House officials this fall, officials from the Office of the U.S. Trade Representative suggested waiting until next year to announce the completed trade pillar, after which the full contents of the agreement, including the labor provisions, would be settled . said a person familiar with the deliberations who was not authorized to speak publicly.

But White House officials were eager for President Biden to announce the developments at the San Francisco meetings. U.S. trade officials have pressed their partners abroad in recent weeks to finalize a package of agreements that do not include labor provisions, with the aim of finalizing them in 2024.

After Mr. Brown’s public objections, the White House and National Security Council asked that the announcement be withdrawn, the person familiar with the deliberations said.

A spokesperson for the National Security Council said in a statement that the Biden administration had focused on advancing workers’ rights and raising standards during negotiations, and that the parties were on track to make meaningful progress.

A spokesperson for Ms. Tai’s office said it had held 70 consultations with Congress during the development and negotiations of the Indo-Pacific framework and would continue to work with Congress to negotiate a high-level agreement.

The decision to delay final trade measures until next year at the earliest is a setback for the Biden administration’s strategic plans for Asia. It’s also a demonstration of the tricky politics of trade, especially for Democrats, who have regularly criticized trade deals for failing to protect workers and the environment.

Ms. Tai worked with Mr. Wyden, Mr. Brown and others during the Trump administration, when she was chief trade adviser for the House Committee on Ways and Means, to implement stronger protections for workers and the environment in the renegotiated North American free sector. Trade agreement.

Ms Tai has pledged to include strong labor standards in the Indo-Pacific agreement, which covers a number of countries – such as Malaysia and Vietnam – that labor groups say have low standards for worker and union protection. But critics say the United States’ power to demand concessions from other countries is limited because the deal does not include a reduction in tariffs to give trading partners greater access.

While this would boost trade, the Biden administration and other trade skeptics argue that lower barriers could hurt American workers by encouraging companies to move jobs abroad. A previous Pacific trade deal that proposed cutting tariffs, the Trans-Pacific Partnership negotiated by the Obama administration, collapsed after losing support from both Republicans and Democrats.

In a statement, Mr. Wyden said senators had warned Ms. Tai’s office for months “that the United States cannot reach a trade deal without leveling the playing field for American workers, addressing pressing environmental challenges and removing trade barriers for small businesses and makers to take away. .”

“It should not have taken this long for the government to listen to our warnings,” Mr Wyden said. “Ambassador Tai must come home and work with Congress to find an agreement that will support American jobs and get congressional support.”