TRADE: International Geneva Applauds US Rising Star

This is an onsite edited excerpt of the G|O Briefing newsletter

Joe Biden has just announced his nomination for US Trade Representative, Katherine Tai. Tai might well become a key member of the Biden’s administration. Reinventing trade, more than just fixing it, and making it more inclusive is part of the essential arsenal to fight populists everywhere who play on the worries of globalization’s discontents.

Rising from a staffer’s position (Tai is currently chief trade counsel on the House Ways and Means Committee) on Capitol Hill to the cabinet is unusual. “Do you know her? What is your reaction?” were the questions we asked around over the last two days. In typical International Geneva discreet and mostly anonymous fashion, the responses have unanimously been of praise. A former WTO official tells the G|O: "I don't know her personally, but all the right people are ecstatic about her choice.”

Indeed, Tai, a Harvard-trained lawyer with a solid record in WTO trade enforcement and international trade negotiations and fluent in Mandarin, served as General Counsel at USTR from 2007 to 2014 and then as Chief Counsel for China Trade Enforcement from 2011 to 2014 before joining the powerful Ways and Means Committee of the US House of Representatives as the Democratic Chief Trade Counsel.

"Katherine Tai is a wonderful choice for the Biden administration and for US trade policy more generally," Andrew Shoyer, leader of International Trade at Sidley Austin, LLP based in Washington DC, and a former legal advisor at the USTR mission in Geneva to the WTO, told the G|O.

From a Geneva-based trade lawyer: "She's good, and she understands the game. That is a good choice and shows Biden wants to see a professional in the job, and she won't have problems in confirmation." "She's a terrific lawyer, very sharp and analytically very good," said a former colleague who worked with Tai when she was in private practice.

A senior EU trade diplomat hopes that with her nomination, “we may be returning back to normalcy in trade relations," a sentiment shared with us by a former senior Chinese WTO diplomat: “Tai may understand China better," adding, "I hope more cool heads will prevail and there are more structured bilateral and multilateral contacts between the US and China."

In her post at Ways and Means, Tai—who comes from the center-left wing of the Democratic party—has also been credited with securing better labor and environment provisions in the recent US, Mexico, Canada Agreement (USMCA), the successor to NAFTA, and which helped secure Democratic support for the accord. Her "impressive" work on labor in the USMCA has also impressed the ILO, noted a senior official at the agency, who spoke on the condition of anonymity. "We're always pleased to have labor referred to in trade agreements like USMCA and referencing our work," the official said, and noted labor clauses have come back in fashion. “Clearly, things are changing.”

Rufus Yerxa, President of the influential National Foreign Trade Council, and a former Deputy USTR and former WTO deputy director-general, told the G|O: "A Great choice. It suggests three things about a future Biden trade policy. First, the importance of a better China strategy, because she has formidable expertise about China; second, the need to restore the rules in US trade policy, something she believes in strongly; and third, the need to ensure trust and collaboration between the Administration and Congress, given her ties to many members of both houses."

As we have often reported before, the Trump strictly transactional approach to trade is coming to an end with the new administration. But the emphasis on “fair trade” and on “leveling the playing field” will undoubtedly remain long-lasting preoccupations of US trade policy under the Biden-Harris administration. Another major difference will be a difference in methods: recent position papers from the EU and the US argue for the development of a common framework on issues of concern relating to China.

This has not gone unnoticed in Beijing. “Under Biden, Tai could be instrumental in implementing the strategy of recruiting allies and ganging up on China at the WTO,” Wu Xinbo, director of Fudan’s University’s American Studies Center, told the South China Morning Post, adding “Tai’s previous experience in setting US strategy in trade disputes with China at the WTO meant she was skilled in applying pressure to China on a multilateral platform.”