BANGKOK – With world economies all suffering from more than two years of the coronavirus pandemic and global supply problems exacerbated by Russia’s invasion of Ukraine, the United States has an “incredible opportunity” to engage with other nations on a common playing field and forge new partnerships and agreements, the top U.S. trade negotiator told The Associated Press on Friday.
U.S. Trade Representative Katherine Tai arrived in Thailand for meetings with Asia-Pacific Economic Cooperation group trade ministers, the same day President Joe Biden started an Asia visit in South Korea.
The two are to link up in Japan, where they are to announce plans for a new Indo-Pacific Economic Framework, which Tai said above all else would demonstrate “the U.S. abiding commitment as a partner to the countries in this region” as Washington seeks to keep growing Chinese influence in check.
“It is a robust and holistic approach to economics and investing in each other that we’re bringing,” she said.
It will include engagement on supply chain stability, clean energy, decarbonization, taxes and anti-corruption measures, she said.
Even before the announcement, expected Monday, Japan welcomed the initiative, expressing its support Friday and saying it was considering joining.
Tokyo is still smarting at the U.S. decision in 2017 under then-President Donald Trump to pull out of the Trans-Pacific Partnership trade agreement, and played a key role in bringing together the other 11 members of that pact, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Noriyuki Shikata, Japan’s Cabinet secretary for public affairs, said because the IPEF is expected to be less focused on market access and tariffs, Tokyo still hopes the U.S. will rejoin the TPP even though Washington has said it will not.
But even though there isn’t the promise of greater access to U.S. markets like in traditional trade agreements, the IPEF will still have the effect of increasing opportunities, Tai said.
“We are not bringing discussions and negotiations around tariff liberalization,” she said. “But in layman’s terms, when we’re talking about access to markets and market opportunities, that absolutely is something that is part of our conversation.”
Tai, who is considered a problem-solving pragmatist on trade policy, has said the focus of U.S. policy has shifted away from globalization for its own sake to one that prioritizes security and the interests of workers as well as consumers.
Before she was appointed USTR, Tai was chief trade counsel for the House Ways and Means Committee, where she handled negotiations over a revamped North American trade deal.
One key objective was to refashion the pact to make it easier for Mexican workers to form independent unions and demand better pay and benefits. That might reduce incentives for U.S. companies to move their manufacturing south of the border to take advantage of cheaper labor.
With all of the current disruptions in the global economy, including the coronavirus pandemic and the war in Ukraine, which has caused a rise in food and fuel prices, she said counterparts she has spoken with in the Asia-Pacific Economic Cooperation group currently meeting in Thailand have been enthusiastic about the idea of the new economic framework that might help workers and businesses.
“I don’t think anybody’s economy is stronger because of COVID and there is a pretty pervasive sense of anxiety about how we recover,” she said. “I actually think that this presents with an incredible opportunity.”
She said her counterparts talked about needing “resilience, sustainability and inclusion.”
“To the extent that we’re all looking for those themes in our economic policies right now, I think that there’s tremendous opportunity for us to come together to forge a set of parameters in our global economy to enable us to build a new economic world order that will be more adaptive, more inclusive and more sustainable for our planet and for our people.”
She said the U.S. in Asia was “very, very focused on our competition with China,” and that the framework was also seen as an effective counter to the growing influence of Beijing.
“The United States will always bring an economic engagement that is grounded in our values, which is in terms of openness, with respect to our market and our economy, and also in terms of our society,” she said. “So the engagement that we will bring by nature, inherently will be different from China’s engagement in the region. I think that is an important part of the U.S. presence in this region, that we bring a market-based and open approach.”
Tai is in favor of a comprehensive approach toward ongoing trade issues with China, and has been pushing back at U.S. Treasury Secretary Janet Yellen’s calls for eliminating some Trump-era tariffs on Chinese goods to fight domestic inflation in the United States.
She said she saw the tariffs as “a tool in the economic policy toolbox” which could be considered, but alongside “a lot of other tools at our disposal.”
“What is of the utmost importance for us is to ensure that this medium-term strategic realignment that we know we need to accomplish is something that we are able to accomplish, and that nothing that we do in the short term undermines that larger goal,” she said.
“We cannot afford to come out of this very difficult time putting ourselves in the United States in a more vulnerable position than we were in before we entered this period.”
Associated Press writer Elaine Kurtenbach in Tokyo contributed to this story.