Biden Trade Initiatives
The Biden administration has introduced innovative trade initiatives over the past two years that aim to redefine U.S. trade relations. These initiatives differ from traditional free trade agreements (FTAs) in both structure and substance. They emphasize climate goals and worker empowerment over tariff reductions. Four key initiatives are:
- Indo-Pacific Economic Framework for Prosperity (IPEF): Launched in May 2022, IPEF involves negotiations among 13 nations, focusing on economic engagement without market access. It includes pillars such as a connected economy (trade), resilient economy (supply chains), clean economy, and fair economy.
- Americas Partnership for Economic Prosperity (APEP): Since June 2022, the U.S. has engaged with countries across the Americas on similar negotiations, with a focus on economic commitments related to regional institutions, supply chain resilience, trade updates, clean energy, and inclusivity.
- U.S.-Taiwan Initiative on 21st-Century Trade: Started in June 2022, this initiative involves negotiations to deepen the trade and economic relationship between the United States and Taiwan, with a focus on trade facilitation.
- U.S.-EU Trade and Technology Council (TTC): Established early in the Biden administration, TTC aims to foster trans-Atlantic cooperation in trade and investment, particularly in emerging technologies and infrastructure. It also includes the Clean Energy Incentives Dialogue to coordinate incentive programs.
These initiatives reflect a shift away from traditional trade agreements, prioritizing climate, worker rights, and economic resilience in U.S. trade policy.
The Biden administration has initiated sector-specific trade efforts alongside its multilateral negotiations to reshape manufacturing practices and safeguard against unfair trade practices in key industries. One prominent example is the Global Arrangement on Sustainable Steel and Aluminum (GASSA), a partnership between the U.S. and the EU that aims to promote decarbonization and competitiveness in the steel and aluminum sectors while setting carbon-based standards and trade barriers for non-participating nations.
Another potential initiative is the critical minerals buyers club, which involves discussions among the U.S., EU, and other G-7 nations to create a trade pact ensuring a sustainable and resilient supply of critical minerals for clean energy technologies.
Additionally, the Industrial Deep Decarbonization Initiative (IDDI), led by the UK and India and joined by Germany, Canada, and the U.S., focuses on policies and investments to decarbonize industrial materials, including standardized carbon assessments, procurement targets, and collaborative efforts. These sector-specific initiatives align with broader economic and environmental goals.
There are policies being implemented and debated domestically that can help forge pathways for bi- and multilateral trade discussions:
- Carbon Border Adjustment Mechanism (CBAM): This mechanism involves imposing duties and tariffs on imports from nations that don’t adhere to established environmental rules or domestic standards. It has gained traction in the European Union and is also being considered in the United States as a stand-alone policy. CBAM aims to address carbon intensity and encourage climate-friendly trade practices.
- Green Public Procurement: Countries are using government procurement as a tool to reduce emissions in manufactured goods. In the U.S., this approach is known as “Buy Clean.” It involves leveraging public spending to support environmentally friendly products and can be coordinated across borders, with discussions occurring in international forums like the Industrial Deep Decarbonization Initiative (IDDI).
This article summarizes these initiatives and more: Biden Trade Initiatives
Biden Recent Discussions
President Biden last talked about his initiatives towards international trade on March 8, 2023, at the IISS Shangri-La Dialogue in Singapore. In his speech, he reiterated his commitment to rejoining the TPP and to working with allies to counter China’s economic coercion. He also called for a new trade agreement that would focus on reducing greenhouse gas emissions.
Here are some excerpts from his speech:
- “We must work together to ensure that the rules of the road are fair and that they reflect our shared values. That’s why I’m committed to rejoining the Trans-Pacific Partnership, and why I’m working with our allies to build a new trade agreement that will lower costs, raise wages, and protect our environment.”
- “We must also stand up to China’s economic coercion. China has used its economic power to bully its neighbors and to undermine the rules-based international order. We will not allow that to continue.”
- “We must also work together to build a clean energy economy. The climate crisis is a global challenge, and it requires a global solution. That’s why I’m calling for a new trade agreement that will focus on reducing greenhouse gas emissions.”
President Biden also mentioned other topics related to international trade in his speech at the IISS Shangri-La Dialogue. These include:
- The importance of free and fair trade: Biden reiterated his commitment to free and fair trade, saying that it is essential for economic growth and prosperity. He also said that the United States will not tolerate unfair trade practices, such as subsidies and tariffs.
- The need for cooperation on trade issues: Biden called for cooperation with allies on trade issues, saying that the United States cannot address these issues alone. He also said that the United States will work with allies to build a rules-based international order that benefits all countries.
- The importance of labor standards: Biden said that the United States will work to ensure that trade agreements include strong labor standards. He said that this is important to protect workers’ rights and to ensure that trade benefits all people.
- The need to address climate change: Biden said that the United States will work with allies to address climate change through trade. He said that trade can be used to promote clean energy and to reduce greenhouse gas emissions.
In general, these are Biden trade initiatives:
- Reviving the TPP. The TPP was a trade agreement between the United States and 11 other countries in the Asia-Pacific region. It was designed to boost trade and investment between the participating countries. President Trump withdrew the United States from the TPP in 2017, arguing that it was unfair to American workers. President Biden has said that he wants to rejoin the TPP in order to counter China’s dominance and reassert American influence in the region, but it is unclear if this will be possible. Some of the other countries involved in the TPP have already ratified the agreement, and it is not clear if they would be willing to renegotiate it.
- More information here: Biden TPP Article.
- Renegotiating the USMCA. The USMCA is a trade agreement between the United States, Canada, and Mexico. It was designed to replace NAFTA, which was negotiated in 1994. President Trump renegotiated the USMCA in 2018, and it was ratified by the U.S. Congress in 2020. President Biden has said that he wants to make some changes to the USMCA, but it is unclear what these changes will be. Some of the changes that have been proposed include strengthening labor and environmental protections and addressing the issue of prescription drug prices.
- Investing in infrastructure. President Biden has proposed investing billions of dollars in infrastructure, such as roads, bridges, and broadband internet. This investment would create jobs and make the United States more competitive in the global economy. President Biden has also said that he wants to make sure that this investment is done in a way that is fair and equitable, and that it benefits all Americans.
- More information here: Biden Infrastructure Article.
- Promoting clean energy. President Biden has said that he wants to make the United States a leader in clean energy. He has proposed investing in clean energy technologies and rejoining the Paris Agreement on climate change. President Biden has also said that he wants to make sure that the United States is not left behind in the global transition to clean energy.
- More information here: Clean Energy Initiatives.
- Enforcing trade rules. President Biden has said that he wants to enforce trade rules and crack down on unfair trade practices. He has appointed a new trade representative, Katherine Tai, who is a strong advocate for fair trade. President Biden has also said that he wants to work with other countries to reform the World Trade Organization (WTO), which is the international organization that oversees trade rules.
- More information here: Unfair Trade Practices.
- Strengthening alliances. President Biden has said that he wants to strengthen alliances with other countries. He has met with leaders from the European Union, Japan, and China to discuss trade and other issues. President Biden has also said that he wants to work with other countries to address global challenges, such as climate change and terrorism.
- Indo-Pacific Economic Framework for Prosperity (IPEF)
- Americas Partnership for Economic Prosperity (APEP)
- U.S.-Taiwan Initiative on 21st-Century Trade
- U.S.-EU Trade and Technology Council (TTC)
- Global Arrangement on Sustainable Steel and Aluminum (GASSA)
- Critical minerals buyers club
- Industrial Deep Decarbonization Initiative (IDDI)
- Carbon Border Adjustment Mechanism (CBAM):
- Green Public Procurement
- Biden Trade Initiatives
- IISS Shangri-La Dialogue in Singapore
- Biden TPP Article
- Biden Infrastructure Article.