Trade experts skeptical of Trump trade policies
February 27, 2019
AVENTURA, Fla. — A panel of trade experts expressed skepticism about President Donald Trump's trade policies Tuesday at the International Sweetener Colloquium here.
Rufus Yerxa, a former U.S. trade official who is president of the National Foreign Trade Council and moderator of the panel, said some experts believe that Trump's policies based on tariffs on other countries' products "may work," but others believe they lead only to retaliation and a loss of U.S. leadership in the multilateral trading system.
Darci Vetter, who was the chief agriculture negotiator in the Obama administration and is now vice chair for agriculture, food and trade at Edelman, a public affairs firm, said she believes "U.S. agriculture is rapidly falling behind our key competitors across the globe."
Vetter, who was one of the key negotiators on the Trans Pacific Partnership, noted that since Trump withdrew from the TPP, other countries have done deals with the Pacific countries while the remaining countries that were in TPP went ahead and implemented the agreement "to add salt to the wounds."
Japan was part of the TPP but China was not, and many analysts have said the U.S. decision to leave it strengthened China's hand in Asia.
Tomas Baert, the trade counselor at the European Delegation of the European Union to the U.S. in Washington, said "Abandoning TPP was not just a gift to China, it was a gift to many of us."
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The EU has completed a trade agreement with Japan, and Baert noted that it included protection of Champagne through geographical indicators, a system that the United States criticizes.
Vetter said she did not fault Trump for challenging China on its practices on intellectual property, forced technology transfer and limits on investment that "need to be curbed." But if Trump does not succeed in changing those practices, she said, the question will be "If we don't get the underlying reforms in China, why did we put farmers through this?"
Baert said that EU officials "share the diagnosis" on China, and "the question is, how we do something about it?"
In Washington, Baert said, he sees "tactics, not strategy."
Baert said he worries that a quick announcement of an agreement between the United States and China would mean that the U.S. has settled for an agreement by the Chinese to make purchases, rather than a "transformation" of the Chinese economy.
"China wants to pay the ticket and move on," Baert said.
The U.S. and the EU are engaged in their own difficult round of trade talks, but completion of those talks depends on establishing trust, Baert said.
Vetter also said that justifying tariffs on steel and aluminum on national security grounds could undermine U.S. arguments on agriculture in the long run.
India uses national security arguments to defend its agriculture policies while import-dependent countries argue they can't open up because it is a food security issue.
"We take away our ability to challenge damaging policies," Vetter said. "We have the potential to lose a lot of tools the United States has built up."
Don Phillips, the trade adviser to the American Sugar Alliance, which represents beet and cane growers, said, "We greatly appreciate of the Trump administration's role in revising the agreements with Mexico," and added that he personally gives Trump credit for getting China's attention.
But "from a broader perspective," Phillips said, it is harder to argue that other countries have not retaliated in reaction to Trump's tariffs on steel and aluminum.
Phillips noted that the United States has cases coming to the World Trade Organization including challenges to Chinese policies, but has not agreed to resolve conflicts about the the WTO Appellate Body that hears appeals from reports issued by panels in disputes.
"It will be a strange situation if we come to the end of the year and don't have a functioning appellate body," Phillips said.