Republican and Democratic lawmakers responded to President Trump’s newly published trade agenda — which asserts that the U.S. will aggressively defend its sovereignty when it comes to trade policy — by urging the administration not to withdraw from the rules-based global trading system, despite its imperfections.But Republicans, in their reactions, largely sought to find common ground with Trump’s trade agenda while Democrats offered sharp criticism of the plan, citing a lack of concrete policies offered in the more than 300-page document the Office of the U.S. Trade Representative submitted to Congress on March 1.House Ways & Means ranking member Richard Neal (D-MA) said he agreed with the administration’s criticism of the World Trade Organization, but suggested it was considering an extreme approach.”The Administration is right to criticize the WTO international dispute settlement process, but when it says it will ‘aggressively defend American sovereignty over matters of trade policy,’ it sounds like the Administration is considering a far too drastic response,” he said in a March 1 statement. “We need to fix the problems with the current international trading system, not scrap the system altogether.”Rep. Sandy Levin (D-MI), Neal’s predecessor as ranking member, echoed that sentiment, saying the global trading system needs to be fixed rather than withdrawn from.Ways & Means Republicans were more more explicit in their support of the WTO and calls for the U.S. to remain a major player in it.”I strongly believe that our current trade agreements – including the WTO – have been successful for Americans because these agreements establish a firm rule of law to hold our competitors in check and open markets for us to sell our goods, services, and farm products,” committee chairman Kevin Brady (R-TX) said in a March 1 statement. “They have also made a broad array of products available to American families at affordable prices. And when other countries don’t follow the rules, our agreements give us powerful tools through a dispute settlement process to retaliate against them.”Subcommittee Chairman Dave Reichert (R-WA) said the WTO’s dispute settlement system gives the U.S. ability to enforce the rules it helped shape.”Our current trade agreements have benefited families and communities across my home state and the country,” he said in a statement. “We can – and do – hold our partners accountable to these agreements through rigorous dispute settlement proceedings with real teeth, including at the World Trade Organization. Dispute settlement allows us to win a level playing field for American businesses and workers when our trading partners have not followed the rules.”Thomas Sneeringer, the president of the Committee to Support U.S. Trade Laws, a coalition dedicated to combating unfair trade practices, cheered the president’s new trade agenda, including its rhetoric on the WTO.”Especially welcome is the recognition of – and the need to restore — U.S. sovereignty over our trade policy,” Sneeringer said in a press release. “A policy aimed at revising U.S. trade policy to obtain reciprocity in fact is important for our country, as is ensuring strong enforcement and a WTO Dispute Settlement system that doesn’t create obligations never agreed to by the U.S.”The report itself says the “core provision of the DSU was the express legal requirement that the WTO,through its dispute settlement findings and recommendations, could not ‘add to or diminish the rights or obligations’ of the United States, or other countries under the WTO agreements.”Consistent with these important protections and applicable U.S. law, the Trump Administration will aggressively defend American sovereignty over matters of trade policy,” the report adds, referring to the Uruguay Round Agreements Act and Articles 3 and 19 of the Dispute Settlement Understanding.Elsewhere, the report states that WTO disputes have been a useful tool to pry open foreign markets and ensure fair access for U.S. exports.Broadly, the report says that “through the vigorous application of U.S. trade laws and active use of WTO dispute settlement procedures, the United States opens foreign markets to U.S. goods and services and helps defend U.S workers, businesses, and farmers against unfair practices.”More specifically – for example, in regard to U.S. objectives at the WTO TRIPS Council — the report states that the U.S. will continue to “resolve differences through consultations and use of dispute settlement procedures, where appropriate.”On subsidies issues, the report says “it is frequently advantageous to pursue resolution of these problems through a combination of informal and formal contacts, including, where warranted, dispute settlement action in the WTO.”Democrats from the congressional trade committees slammed the document for lacking critical details. Senate Finance Committee Ranking Member Ron Wyden (D-OR) blasted it for leaving “the American people in the dark” on the trade actions Trump intends to take.Neal also skewered the report, describing it as “short on specifics” and saying it “raises more questions than it answers.””As we move forward, Congress needs answers to what this Administration’s trade agenda really is – and we need them sooner rather than later,” he added.”While I appreciate the Administration recognizing issues like foreign government subsidies, currency manipulation, and dispute settlement provisions, where are their solutions?” Ways & Means trade subcommittee ranking member Bill Pascrell (D-NJ) asked in a statement. “This ‘Trade Agenda’ lacks a coherent plan to tackle these issues that Democrats have been raising for decades,”The president of the National Foreign Trade Council, Rufus Yerxa, echoed both the Democrats’ assertion that the agenda lacks detail and Republican anxieties that Trump might head the U.S. away from the WTO.”This is not really a detailed agenda of specific trade policy objectives, but more of a general statement of intent seeking to orient U.S. trade policy in a more assertive, reciprocity-based direction,” Yerxa said in a statement sent to Inside U.S. Trade. “The implications for how this approach will fit with our historic commitment to the existing, rules-based trading system remain to be seen. For the business community it is vital that the US continue as a credible leader in that system, a leader able to ensure respect for the principles of open markets and fair trade”.But the agenda drew some praise from BSA | The Software Alliance, which welcomed its identification of constraints on cross-border data flows as a trade barrier, among other issues.”BSA is pleased the agenda recognizes problems caused by restrictions on the flow of data across borders, as well as unauthorized use of American intellectual property, and the need for increased IP protections,” the group said in a statement. “The Administration’s prioritization of efforts to ensure data can flow across borders and to oppose data localization are data flows is essential for American competitiveness and job growth.” — Jack Caporal (jcaporal@iwpnews.com) and Brett Fortnam (bfortnam@iwpnews.com)

The National Foreign Trade Council wants Robert Lighthizer confirmed as U.S. Trade Representative – ASAP.In a Feb. 23 letter to the Senate Finance Committee, the NFTC makes clear that its membership of more than 250 companies is getting impatient as the Trump administration embarks on a markedly new trade path without a USTR.”We urge the Committee on Finance to act quickly on this important nomination in order to ensure the smooth functioning of U.S. trade policy and the fulfillment of Congressionally mandated objectives in the trade arena,” state the letters, signed by NFTC president Rufus Yerxa.USTR, he writes, “plays a pivotal role within the U.S. Government to establish trade policy priorities and ensure their fulfillment through multilateral, regional and bilateral negotiations. It is also the vital link between Congress and the President in enabling both branches to work together in fulfilling their respective Constitutional roles to regulate international trade and negotiate trade agreements.”More:The centrality of USTR is deeply engrained in the whole legislative framework for U.S. trade policy. Without a strong leader at USTR, one who is able to attract a good team of Deputies and gain the respect of Cabinet peers, Congressional leaders and foreign governments, American leadership in world trade and the institutions related thereto will begin to erode.We recognize that your committee must have an opportunity to fully examine the qualifications and record of any nominee for this important position. However, we urge you to move as expeditiously as possible. He has a long record as an expert on trade matters, having served both as Deputy USTR and as trade law practitioner. His prior service as Staff Director of the Senate Finance Committee gave him an acute awareness of the absolutely essential role USTR plays in coordinating trade policy with the key Congressional committees. This will help to ensure respect for the mandates set forth under TPA and other legislative measures governing trade policy.”We are convinced that Ambassador Lighthizer has the qualifications and experience to be a highly successful USTR,” the NFTC letter concludes. “We sincerely hope the Committee can approve his nomination as soon as possible.”

Start with changes that really deliver for U.S. workers.Act I of the Trump Administration’s economic agenda cleared the deck of a number of existing economic ties and call into question others. In one week, the President opted out of the twelve-nation Trans Pacific Partnership pact leaving China to fill the void in Asia; called for renegotiation of NAFTA with a threat of possible high increased tariffs at the southern border spurring Mexico and Canada to consider other options for countries with which to form closer trade ties; caused the European Union’s president to call upon its member states to resist any U.S. overtures for negotiation of bilateral country-by-country agreements, and specified which persons could easily enter the United States from certain locations.Act II can be the beginning of a positive agenda. This needs to have four components:Education and workforce trainingA key priority of the new Administration is creating good jobs in quantity. It is not clear that on-shoring (bring manufacturing back to the U.S.) will create all that much employment. New plants are highly automated. A 2013 Oxford University study estimated that 47% of all U.S. jobs are at risk from use of computers. Worse, from the point of view of numbers, are the forthcoming transitions to an increased use of robotics in new applications such as autonomous vehicles.There are currently about 3 million truck drivers employed in the U.S.; over 600,000 bus drivers; and another half million ride-hailing drivers including taxi drivers. When automation hits fully, there is at least the possibility that some 4 million currently employed drivers will need alternative employment. This looks dire, but studies also show that advances in technology have historically created more jobs than they displace. As one surprising example, the introduction of ATMs actually increased the demand for human tellers as it became feasible to open more bank branches. That cannot be relied on to be replicated in all industries, so urgent attention needs to be paid to developing a population with enhanced skill sets to fill future workforce needs.This is not an insurmountable challenge. De-mobilization after WWII was perhaps the largest employment challenge the country has ever faced. For example, returning veterans were at least twice the number of those who may be displaced as vehicle drivers needing work. The GI bill provided education to 2.2 million returning vets. The challenge going forward requires both national and state planning. The Federal program of trade adjustment assistance, even when available, is not designed to meet this need and is wholly inadequate to the task at hand. The Trump Administration is focused on good jobs. Future demands for skilled workers can only be met through training and education and a positive immigration policy.TaxationThere is hardly any subject that is more complex. Every president coming into office wants to simplify and improve the tax code. There is now a chance to do so. The Congress and the White House are controlled by a single party. That party ran on a platform of removing the competitive disadvantage the American tax system creates for companies (and therefore workers) serving global markets from a U.S. base. Lowering the corporate tax rate, stimulating the repatriation of profits held abroad, and eliminating other ways in which the U.S. tax system makes America a less attractive place for economic activity requires Congress to enact fundamental beneficial changes to U.S. taxation.All of American businesses’ major competitors abroad have tax systems that benefit production relative to consumption. The House Ways and Means Committee is intent on providing a solution to the problem. The solution needs to be one that enhances the United States as a place from which to compete at home and abroad while avoiding substantial adverse effects felt differentially by consumers and segments of the business community. This is a daunting task but it is worth the effort to find appropriate solutions. The most important trade measure that the Trump Administration can put into place is a more competitive tax structure.InfrastructureMaking American an efficient place from which to compete globally requires state-of-the-art infrastructure. American airports on average compare poorly with those abroad, particularly in Asia. Members of Congress should visit Cambodia’s Phnom Penh airport before they take up the infrastructure spending bill. A large number of U.S. airports are a national disgrace. Cambodia has a per capita GDP of just under $3000/year compared with the U.S. average of $54,000. Visiting La Guardia or Newark, one would have thought Cambodia was far richer than the U.S.International competitiveness depends in part on having a modern infrastructure. The World Economic Forum places the United States 11th in overall infrastructure among country ratings. While China is much lower in the rankings, it has plans to build 66 new airports over the next five years. U.S. airports are in desperate need of modernization and some work has begun. There are a number of other areas of transportation in which the U.S. has fallen behind its commercial rivals. China has 12,500 miles of high speed rail lines, more than the rest of the world combined. The U.S. appears to have just the 226 mile stretch of high speed rail between Washington and New York City in current service. Beyond airports and rail, there are some 60,000 bridges in the U.S. and over 185,000 American roads that require repair. America’s competitive edge was due in no small part to the backing by Abraham Lincoln a century and a half ago of the transcontinental railroad and the building of the interstate highway system begun by Dwight Eisenhower. If Mr. Trump wants to be remembered for enhancing America’s edge in world trade, improving the national infrastructure is an essential component.Trade negotiationsThe Trump campaign slogan “Make America Great Again” needs to include restoring the United States to a position of international economic leadership in Asia. TPP should provide a floor in terms of the level of ambition both for new rules and trade liberalization in new agreements. Rebuilding American economic leadership in Asia has to begin with a close working relationship with Japan. The two countries can create a nucleus around which other Asian countries and Pacific nations can coalesce. Indonesia, Taiwan, Korea, Thailand and the Philippines had already expressed an interest in joining TPP. Based on a working relationship with Japan, a Trump Pacific Partnership (a new TPP) should be offered. It will be far more beneficial than the weaker Regional Comprehensive Economic Partnership (RCEP) that China is offering. The modernized NAFTA can be added to this arrangement along with agreements with other Latin American trading partners plus Australia and New Zealand. Europe should not be forgotten either. A start may be made in bilateral discussions with the United Kingdom, but the largest part of the developed world market is represented by the European Union. When the EU has gone through its key elections in 2017, a return to dealing with the EU as a whole is needed.Frenetic activity characterized the first weeks of the Trump Administration. Going forward what is needed is to begin the construction of an improved international trading system and making sure that the United States is in an excellent position to benefit fully from the new improved trading arrangements.One additional requirement is staffing up. The highly qualified and experienced U.S. chief trade negotiator that has been named by the President needs to be brought on board as soon as possible. There are a lot of matters competing for attention, but getting the full professional trade negotiating team in place needs to be a very high Administration and Congressional priority.Alan Wm. Wolff is a Senior Counsel with Dentons. He chairs the Board of the National Foreign Trade Council, and served in previous Republican and Democratic Administrations as a senior trade negotiator.