By Yuka Hayashi
WASHINGTON -- During his campaign, President-elect Joe Biden
highlighted his intention to work closely with America's allies to
ease trade tensions and pressure China to abide by international
rules.
He will have several early chances to do that after being sworn
in Jan. 20.
The new president will have an opportunity to try to resolve a
leadership dispute at the World Trade Organization pitting the U.S.
against most other members.
He could remove Trump administration tariffs on imported steel
and aluminum that have riled trading partners.
Moreover, he could command the world economic stage by calling
an emergency meeting of the Group of 20 nations early next year, as
some former economic officials have suggested, a potential setting
for an unofficial summit with Chinese President Xi Jinping.
Mr. Biden this week showed his intent to reverse President
Trump's pivot away from some international agreements by appointing
former Secretary of State John Kerry as a special envoy for climate
change, a new position that will be focused on global policy.
Here's a look at these and other areas where the president-elect
could make an early mark on global trade and economic issues.
WTO Leadership
One of the first steps Mr. Biden can take is to end the deadlock
over the selection of the WTO's new leader. The Trump
administration has opposed the candidate backed by most member
countries, Ngozi Okonjo-Iweala, a former Nigerian finance minister
and former World Bank executive.
The Trump administration maintains that Ms. Okonjo-Iweala
doesn't have enough experience in world trade, and is instead
backing South Korean Trade Minister Yoo Myung-hee.
Either candidate would be the first woman to lead the
organization, and Ms. Okonjo-Iweala would be the first WTO leader
from an African nation.
Traditionally, the choice of WTO leader has been by unanimous
vote, so a Biden administration could end the deadlock by agreeing
to the Nigerian candidate.
China's influence on the WTO is another possible wrinkle. If Ms.
Yoo were to be selected, China could lose its deputy director
general seat at the WTO, analysts say, since those seats are
rotated among global regions for balance, and Asia would have its
representation through Ms. Yoo.
The White House didn't respond to a request for comment about
whether that was a factor in its support for Ms. Yoo.
The Trump administration isn't the first to have a beef with the
WTO. The Obama administration blocked appointments of WTO appellate
judges, complaining that they overstepped their legal mandates or
delivered rulings that Washington felt unfairly favored rivals,
including China.
Mr. Biden has promised to work more with the global community,
but he also promised to be tough on China. The Biden campaign
didn't respond to questions on the WTO leadership and other
trade-related issues.
Brian Pomper, executive director of Alliance for Trade
Enforcement, a group of trade associations that advocates for
foreign governments to end unfair trade practices, believes that
Mr. Biden is likely to go with the consensus choice.
"It would make sense as a way to show that he is more
multilateral, and willing to take account of these multilateral
institutions," Mr. Pomper said.
He and others say Mr. Biden should also start taking steps to
allow the WTO to resume its role as the arbitrator of trade
disputes. Mr. Trump has said the WTO is unfair, and his
administration has blocked the appointment of new judges to the
group's appellate body, effectively disabling its
dispute-settlement function.
"On WTO reform, we have to start with confidence-building
measures," said John Neuffer, president of the Semiconductor
Industry Association. "It's important to get the dispute-settlement
system of the WTO fully operational again. Our industry and many
others have benefited from that system."
Steel Tariffs
Among the most significant of the tariffs imposed by Mr. Trump
are those on imported steel and aluminum. The levies of 25% on
steel and 10% on aluminum were imposed on national security
grounds, with Mr. Trump saying they were needed to protect an
industry vital to national defense.
The tariffs have provided mixed benefits for U.S. steel
companies, however, and hurt U.S. manufacturers that either faced
retaliatory tariffs or higher costs for imported steel.
Washington has exempted several friendly countries such as
Australia, Mexico and South Korea from the tariffs, but kept others
on the list, including the European Union and Japan.
Experts say lifting those tariffs on allies during the early
months will go a long way toward smoothing ties with partners,
particularly Europe, before the new administration starts to tackle
rising bilateral trade challenges.
A long-running dispute over Boeing Co. and Airbus SE jets
escalated this month with a European threat to impose $4 billion in
retaliatory tariffs on U.S. goods. Meantime, tensions are growing
over European digital-services taxes that affect U.S. technology
companies.
"The strongest signal President-elect Biden can send is to
simply repeal [the tariffs]. That's absolutely within his
authority," said Michael Smart, managing director at Rock Creek
Global Advisors and a former Democratic congressional and White
House aide.
To fend off opposition from domestic companies, unions and
lawmakers, Mr. Smart said the new administration could introduce
generous import-monitoring steps on allies similar to those offered
to Mexico and Canada through the United States-Mexico-Canada
Agreement.
Trade Promotion Authority
The new administration must decide what to do with trade
promotion authority: special legislation that allows trade
officials to submit any trade agreements to Congress for expedited
approval.
The current authority is set to expire July 1, and the renewal
process will be contentious because of partisan differences over
worker and environmental protection in future trade agreements,
particularly if the Republicans maintain Senate control.
TPA's expiration will also influence the Biden administration's
stance on the continuing negotiations for a bilateral trade
agreement with the U.K. started by the Trump administration based
on the authority. The negotiations are believed to be in their late
stages.
Emergency G-20 Summit?
Several former officials from Democratic administrations,
including former Treasury Secretary Larry Summers, have called on
Mr. Biden to push for an emergency summit meeting of G-20 nations
early next year to set a global agenda for recovery from the
coronavirus pandemic.
The leaders could rally behind sustained fiscal stimulus to
ensure growth and pledge assistance to developing nations.
Reinvigorating the WTO could be a topic as well, the former
officials say.
Such a meeting could also provide Mr. Biden an opportunity to
meet top officials from China, a G-20 member. "It somewhat deflects
the problem of how to engage with China bilaterally," said Matthew
Goodman, senior vice president at Center for Strategic &
International Studies and one of the meeting's proponents.
Write to Yuka Hayashi at yuka.hayashi@wsj.com
(END) Dow Jones Newswires
November 26, 2020 08:14 ET (13:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.