WASHINGTON – The chairman of the powerful House Ways and Means Committee called on the new administration to renew trade negotiations with the European Union and contradicted President-elect Joseph R. Biden Jr.’s pledge to postpone new trade talks until the U.S. has made major domestic deals Investments made.
The statement by Massachusetts Democrat Richard E. Neal on Friday raises the question of whether congressional pressure could induce the Biden administration to become more aggressive in trade negotiations with close allies.
Mr Biden downplayed expectations of new trade negotiations early in his tenure, saying he would first take control of the pandemic and make significant investments in American industries such as energy, biotechnology and artificial intelligence.
“I’m not going to sign a new trade deal with anyone until we’ve made big investments here in our homes and in our workers,” Biden said in an interview with the New York Times last week.
However, since the opposition in Congress would be one of the main obstacles to a new trade deal, the support of key Democrats could be a strong motivation for starting talks.
In an interview, Mr Neal suggested that reaching a trade deal with the European Union would help tackle the increasing economic threat posed by China, which has used hefty subsidies, state-owned companies and other practices to dominate the industry and trade rules long to question embraced in the west.
Mr. Neal called Mr. Biden’s approach “good and fair” but argued that continuing the EU trade negotiations “is part of a foreign policy challenge related to China’s expansionist activities”.
“I think we should prepare now to do justice to China’s aggressive nature in the world,” he added.
Mr Biden would need the help of Mr Neal and others to cement such a deal. The so-called Trade Promotion Agency, a law that lays down guidelines for the executive branch to negotiate trade deals and streamline the approval process, expires in July. Business then submitted to Congress could find a more difficult path to ratification. It is not yet clear whether the Biden administration will petition Congress to renew authority.
Despite deep historical ties, the United States and Europe have not always had an easy trading relationship. Governments have fought over tariffs, farm subsidies, and food safety standards for decades, and efforts to achieve a comprehensive trade pact under both the Obama and Trump administrations have ultimately ceased.
But Mr Biden has spoken many times about the importance of strengthening American alliances, and he and his advisors have been eager to eradicate ties with Europe that have been weighed down by President Trump’s confrontational approach to trade. They also see many similarities with the European Union on issues such as climate change, labor standards and consumer protection, as well as against China’s growing geopolitical power and trade practices.
Economy & Economy
Updated
Dec. 11, 2020, 10:11 am ET
Both governments seem eager to make progress on trade issues that have stalled under the Trump administration, including Spats over subsidies to the aircraft industry and plans by European countries to tax American tech giants.
These discussions would be led by Mr Biden’s sales representative, Katherine Tai, whom the president-elect plans to present as his candidate for office on Friday. Ms. Tai is an associate of Mr. Neal as Chief Commercial Attorney on the Ways and Means Committee.
Mr. Neal declined to enter into discussions with Ms. Tai about trade deals with the European Union, but said, “I think we largely agree on the nature of the challenge.”
Mr Neal referred to the US-Mexico-Canada agreement as a “blueprint” for new trade pacts. The deal, the successor to the North American Free Trade Agreement, was negotiated by Mr. Trump and revised by Congressional Democrats, including Mr. Neal and Ms. Tai, before it went into effect this year.
“What we’ve been able to do with USMCA on the environment, labor standards and enforcement – I think we have some momentum,” said Neal. He said he was continuing to work to raise support for using a European trade agreement to counter China’s influence around the world.
In his statement on Friday, Mr Neal said a trade deal with the European Union was a “strategically sound choice” as the United States sought to compete economically with China and rebuild its economy after the pandemic recession.
He called on the Biden government to work with allies in Europe and elsewhere to “formulate a strategic, far-reaching, forward-looking and robust package of programs and investments to defend against anti-competitive, anti-democratic influences in Chinese politics.”