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Biden's nominee for trade representative embraces the 'sound formula' of the Trans-Pacific Partnership

President Joe Biden's nominee to lead US trade policy told senators on Thursday that the principles behind the Trans-Pacific Partnership (TPP) - the multilateral Pacific trade deal pursued by the Obama administration then rejected by former president Donald Trump - were a "solid equation" for countering China's growing clout, but stopped short of endorsing a re-entry into the deal.

"The basic formula of TPP, which was to work with our partners, with whom we have very important shared interests economically and strategically, and with the challenge of China in mind, is still a sound formula," said Katherine Tai, the nominee for United States Trade Representative (USTR), during her confirmation hearing before the Senate Finance Committee.

But she added: "A lot has changed in the world in the past five or six years. And a lot has changed in terms of our own wariness about some of the pitfalls of the trade policies we've pursued."

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Tai's comments on the TPP were the latest sign of the new administration's mindset as it begins to deal with the contentious issue of US-China trade, and another example of Biden's sense of urgency that the US must partner closely with its allies as it grapples with Beijing.

They also reflect the thorny domestic politics of trade deals in the US, as officials seek to balance national security concerns with President Biden's stance that any trade policy should be "worker-centred".

Tai speaking with the Senate Finance Committee chairman Ron Wyden and Senator Michael Crapo after the hearing on Thursday. Photo: Reuters alt=Tai speaking with the Senate Finance Committee chairman Ron Wyden and Senator Michael Crapo after the hearing on Thursday. Photo: Reuters

In her opening statement, Tai made a point of underscoring the US-China trade rivalry: "I know first-hand how critically important it is that we have a strategic and coherent plan for holding China accountable to its promises and effectively competing with its model of state-directed economics," she said.

As the US and China spar over human rights and the coronavirus pandemic, they have also been embroiled in a trade war that began during the Trump administration. The Biden administration has not yet said whether it will lift the tariffs that Trump had levied against Beijing.

China has also fallen far short of its commitments - agreed to in the phase-one trade deal the two nations signed 13 months ago - to purchase more US goods, according to an analysis by Chad Bown at the Peterson Institute for International Economics. Still, the trade in goods deficit with China fell to US$310.8 billion in 2020, down from US$419.5 billion in 2018, according to Commerce Department data released earlier this month.

US trade in goods deficit with China and total, according to the US Commerce Department. Chart: SCMP alt=US trade in goods deficit with China and total, according to the US Commerce Department. Chart: SCMP

Tai, who speaks fluent Mandarin, worked in China as a teaching fellow in the late 1990s.

Now the trade counsel for the US House Ways and Means Committee, Tai is expected to be confirmed in a bipartisan vote.

Tai was introduced at the hearing with effusive praise by both the top Republican and Democratic representatives on the House panel.

Senator Rob Portman of Ohio, a Republican on the Finance Committee and himself a former US trade representative, said in December that he would support her.

Senators on the committee questioning Tai on Thursday signalled a desire to maintain a hard-line stance against China, even as both parties rebuked the unilateral approach previously taken by Trump.

Senator Michael Crapo, Republican of Idaho, during the Senate Finance Committee hearings on Tai's nomination to be United States Trade Representative. Photo: EPA-EFE alt=Senator Michael Crapo, Republican of Idaho, during the Senate Finance Committee hearings on Tai's nomination to be United States Trade Representative. Photo: EPA-EFE

"Our USTR should ensure that the international trading regime strongly reflects American values rather than those of China," said Senator Mike Crapo of Idaho, the committee's ranking Republican. "The need for an energetic and effective trade policy is more compelling than ever."

Senator John Cornyn of Texas, another Republican, called for a return to the Trans-Pacific Partnership.

"I would certainly encourage you and the administration to look at re-entering what I thought was a good idea by the Obama administration and I regret that the Trump administration decided that only bilateral trade agreements made sense and not multilateral agreements," Cornyn said.

But Senator Elizabeth Warren, a Massachusetts Democrat and a TPP opponent, expressed some of the thinking that may be giving the Biden administration pause about rejoining the deal - even if it agrees with the geopolitical principles behind it.

Senator Elizabeth Warren, Democrat of Massachusetts, questioned whether the TPP would have been a good deal for American workers. Photo: EPA-EFE alt=Senator Elizabeth Warren, Democrat of Massachusetts, questioned whether the TPP would have been a good deal for American workers. Photo: EPA-EFE

"If the administration won't ensure that the interests of American workers and American families are prioritised over corporations when we're writing trade deals, then we're never going to get beyond a trade policy that leaves American families on the losing side," she said.

Senator Maria Cantwell of Washington, a Democrat, urged Tai to press for an end of the trade war; she cited data that linked American job losses to the punitive tariffs Trump's trade representative, Robert Lighthizer, promoted in 2018.

"I'm done with the Trump administration approach to trade ... so I'm hoping that you and the Biden administration are going to embrace a new trade regime," she said.

While Tai's comments aligned with many of the most strident denunciations of China's trade and other policies, she made a point of her Chinese ancestry in her opening remarks, noting that her parents are from the mainland and moved to Taiwan before immigrating to the US.

Tai said that her mother develops treatments for opioid addiction at the US National Institutes of Health, and that her father, as a researcher at the Walter Reed Army Institute of Research, worked on treatments for ailments suffered by US veterans of the Vietnam war.

Being American-born, however, Tai mentioned her love for a very American product when answering a question about how she would help facilitate the sale of the country's beef overseas by advocating for country of origin labelling within the World Trade Organization.

"I myself obviously was raised on American beef and I'm a very happy consumer of it," she said.

This article originally appeared on the South China Morning Post (SCMP).

Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.

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