U.S. Trade Chief Says Globalization Is Running Into Limitations, Wall Street Journal, Jan 18, 2023.
By Yuka Hayashi
U.S. Trade Representative Katherine Tai said Wednesday that the world needs to shift to a new trading system that aims to promote inclusiveness, resilience and sustainability--saying that the current version of globalization is “running into some limitations” by creating income inequality.
Speaking on a panel at the World Economic Forum in Davos, Switzerland, Ms. Tai warned that the shift to a new economic system will require governments and businesses to put in extra work and face changes including less efficiency and added costs.
“Your less efficient world economic system will necessarily mean that we can't just be pursuing the lowest cost and the maximum cost efficiency,” she said. Rather, she said, the new system requires participants to pay premiums in exchange for “an insurance policy to make sure that when we run into problems…we have systems that can help us bounce back.”
Natural disasters, pandemics and military incursions are examples of the disruptions that the new system must guard against, she said.
Ms. Tai, President Biden’s top trade official, said the U.S. administration is focused on creating a “worker-centered” trade policy to benefit people who are not just consumers, but who are also workers and community members.
She pointed to two existing U.S. policies as the bedrock of this policy: the labor provision of the 2020 U.S.-Mexico-Canada Agreement on trade and a ban on imports that are produced in whole or in part using forced labor.
The USMCA provision has allowed the U.S. government to intervene to address violation of labor rights at individual manufacturing facilities in Mexico, she said, noting such actions ensure the standards and rights of U.S. and Canadian workers won’t be eroded through exploitation in Mexico.
The Biden administration has been cracking down on imports of Chinese products including clothing and solar panels suspected of having been made with forced labor.
“The word is changing anyway. There is an opportunity for us to get ahead with a vision for positive change,” she said.