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

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

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

But Sen. Sherrod Brown, D-Ohio, and other prominent lawmakers have criticized the pact, saying it lacks adequate protections for workers in the countries it covers, among other shortcomings.

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

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

The Indo-Pacific Economic Framework for Prosperity has four main parts or “pillars.” The first part, which the administration completed in May, aims to link the countries’ supply chains.

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

But the thorniest part of the framework has been the trade pillar, which is being overseen by Katherine Tai, the U.S. trade representative, and her office. Trade negotiations cover topics such as regulatory practices, procedures for importing and exporting goods, agriculture, and standards to protect workers and the environment.

Congressional Democrats, including Sen. Ron Wyden of Oregon, who chairs the Senate Finance Committee, have expressed concerns about labor and environmental standards. Lawmakers from both parties have criticized the administration for not closely consulting Congress during negotiations, while others have expressed dismay at the administration’s recent clash with Big Tech companies over U.S. negotiating positions on digital trade. .

In a statement last week, Brown, who faces a tough re-election fight next year, called for scrapping the entire trade pillar of the deal, saying it did not contain protections strong enough to ensure workers are not exploited.

“As the administration works to finalize the Indo-Pacific Economic Framework, it should not include the trade pillar,” Brown said. “Any trade agreement that does not include enforceable labor standards is unacceptable.”

Members of Congress and their staff had raised concerns about the lack of enforceable provisions in meetings for several months, a Senate aide said.

In a meeting with White House officials this fall, officials from the Office of the U.S. Trade Representative proposed waiting until next year to announce the full trade pillar, at which time all contents of the deal would be worked out, including provisions labor. according to a person familiar with the deliberations, who was not authorized to speak publicly.

But White House officials were eager for President Biden to announce developments during meetings in San Francisco. U.S. trade officials pressured partners in foreign countries in recent weeks to complete a package of deals that did not include labor provisions, with the intention of finalizing them in 2024.

After Brown’s public objections, the White House and the National Security Council asked to withdraw the ad, the person familiar with the deliberations said.

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

A spokesman for Ms. Tai’s office said she had held 70 consultations with Congress while developing and negotiating the Indo-Pacific framework and would continue to work with Congress to negotiate a high-level agreement.

The decision to postpone final trade measures until next year at the earliest is a setback for the Biden administration’s strategic plans for Asia. It is also a demonstration of the complicated politics of trade, particularly for Democrats, who have frequently criticized trade agreements 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 the top trade adviser to the House Ways and Means Committee, to insert stronger protections for workers and the environment in the renegotiated North American Free Treaty. Commercial agreement.

Tai has pledged to include strict labor standards in the Indo-Pacific deal, which covers some countries – such as Malaysia and Vietnam – that labor groups say have low standards to protect workers and unions. But critics say the power of the United States to demand concessions from other countries is limited because the agreement does not involve reducing any tariff rates to give more access to trading partners.

While doing so would promote trade, the Biden administration and other trade skeptics argue that lower barriers could hurt American workers by encouraging companies to move jobs overseas. A previous Pacific trade pact that proposed reducing tariffs, the Trans-Pacific Partnership negotiated by the Obama administration, collapsed after losing support from both Republicans and Democrats.

In a statement, Wyden said senators had warned Tai’s office for months “that the United States cannot enter into a trade deal without leveling the playing field for American workers, addressing pressing environmental challenges and breaking down trade barriers for small businesses.” companies and creators. .”

“It shouldn’t have taken this long for the administration to listen to our warnings,” Wyden said. “Ambassador Tai must return home and work with Congress to find a deal that supports American jobs and wins Congressional support.”