The Biden Administration Needs to Stick the Landing on Trade

December 14, 2023 Topic: Trade Region: Global Tags: European UnionSteelIPEFBiden AdministrationFree Trade

The Biden Administration Needs to Stick the Landing on Trade

But the European Union and other partners aren’t playing ball.


Three years in, the Biden administration’s trade policy agenda stands in stark contrast to the Obama administration’s approach. Rather than continuing to seek broad-spectrum free trade agreements, U.S. officials have sought to reframe the terms of globalization itself. But for this pivot to succeed, our international partners need to cooperate—and so far, it’s been a tough sell. A potentially transformative deal with Europe could change all that, but with the negotiation deadline looming at the end of the year, Brussels is still skeptical. If the Europeans don’t play ball, the White House should look elsewhere.

In their speeches and statements, Biden Administration officials have pushed for a sharp break with the appetite for more and bigger trade deals that prevailed in Washington for decades. U.S. Trade Representative Katherine Tai described a “less efficient world” where economic connectivity is reorganized to hedge against disruptions while also actively fighting climate change and improving the livelihoods of American workers. Similarly, National Security Advisor Jake Sullivan spoke of a “new Washington consensus” that moves beyond traditional trade deals to craft new international partnerships that focus on addressing the core challenges of our time.


This is ambitious talk—nothing less than a total rethinking of the fundamental premises behind the global economy. And there’s a strong case to be made that the vision these officials have laid out is a good one. Lest we forget, the COVID-19 pandemic dispelled any presumption that global markets can be trusted to allocate scarce and essential goods without oversight. Meanwhile, the presumption that economic integration would lead non-democratic states to behave like market economies has instead created opportunities for economic coercion and facilitated authoritarian encroachment. Given the well-documented impacts of globalization on inequality, there’s also ample reason to doubt the pursuit of conventional trade deals could be incorporated into foreign policy for the middle class.

But if the Biden administration’s critique of trade-as-usual is merited, its plans for what comes next are shaky. Consider the rocky progress of the Indo-Pacific Economic Framework or IPEF, President Biden’s signature economic initiative in Asia. Unlike earlier trade deals, the IPEF stems from a new premise—that the United States can meaningfully shape the regulatory and commercial activities of a diverse set of countries and counter China’s rising influence. The IPEF attempts to accomplish all of this without jeopardizing the concession regional actors want most: enhanced access to the U.S. market.

Considering the political sensitivities surrounding economic integration with Asia, it’s understandable why the Biden administration would discourage market access in a multilateral arrangement covering much of the region. On the other hand, without market access, the United States has little leverage to demand its trading partners comply with labor and environmental standards. It’s telling that the only agreement under the IPEF where public details are available doesn’t include any climate-related standards or even soft commitments.

Given the fraught politics of trade and the risks of unfettered globalization, there’s clearly merit to a “do no harm” approach. But such a policy would be a far cry from the new Washington consensus proposed by Sullivan. It wouldn’t break new ground in the fight against climate change, and it certainly wouldn’t move the needle toward a more inclusive American economy. What’s more, a trade policy with little to show in the way of concrete outcomes leaves future administrations with more latitude to define the future—which could look a lot like regressing to the old approaches the Biden administration sought to break with in the first place. Grimmer still, it could mean a return to the Trump administration’s bellicose, climate-denialist trade skepticism. 

This context makes clear how urgent it is that the Biden administration stick the landing on trade, and soon. With the November 2024 elections looming right around the corner, there’s still one major opportunity for the White House to set a progressive precedent in trade before its time runs out—and that’s by striking a deal on green steel and aluminum.

Alongside the IPEF, the Global Arrangement on Sustainable Steel and Aluminum, or GASSA, is the highest-profile trade initiative the Biden administration has pursued since coming to power. While the exact contours of the deal remain to be worked out, in broad strokes, it aims to create a protected market for low-carbon steel and aluminum produced between the United States and Europe. On its face, the deal seems an easy win. American and European steel and aluminum are less carbon-intensive on average than those from many other major producers. A combined U.S.-EU green steel market would create powerful incentives for decarbonizing two industries that collectively account for over 10 percent of anthropogenic emissions.

And yet, recent reporting suggests GASSA negotiations are floundering, and if the two sides can’t reach a deal by the end of 2023, it’s likely the arrangement will never see the light of day. The reasons for the impasse are unclear, but it probably has something to do with Brussels’ concerns over the compatibility of GASSA with rules under the World Trade Organization. Whatever the case, there’s a great deal at stake in the outcome of these negotiations. It represents the last, best opportunity for the Biden administration to provide proof-of-concept for its vision of global economic order. Such considerations should push negotiators on both sides to identify creative ways forward. This could mean conditioning the deal on joint investments in steel decarbonization or focusing only on the most carbon-intensive steel circulating in global markets.

If our transatlantic differences are truly irreconcilable, the United States should consider a GASSA-like arrangement with another high-ambition partner—for example, Norway or Canada. Both nations have relatively green steel industries and would likely be more amenable to compromise than a regulatory superpower like Brussels. While such an agreement might not shift markets on the scale that a deal with Europe would, it would still be an important step toward a global economy that is both sustainable and just.

Trevor Sutton is a senior fellow with the Energy and Environment Department at the Center for American Progress. Previously, Sutton worked at the U.N. Development Programme and International Organization for Migration, where he advised on anti-corruption issues.