Issue 1 2021 - FBJNA From the Editor

Optimism with some hurdles


MATT WEIDNER Tel: + 1 610 486 6525

JOHN SAUNDERS - PUBLISHER Tel: +44 (0)151 427 6800 Mobile: +44 (0)7932 102026





LORRAINE CHRISTIAN Tel: +44 (0)151 427 6800

ANDREA CAZZOLATO Tel: +44 (0)151 427 6800




Tel: +44 (0)151 427 6800 Fax: +44(0)151 427 1796

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By Karen E. Thuermer

Despite the nail biter election, Joseph Biden is on his way to becoming the next

president of the United States. The coming weeks will uncover the future direction of his administration and efforts to restore US relations around the globe. Bloomberg News wrote: “It will be a relief to HYPERLINK “

com/news/articles/2020-11-09/leaders-slowest-to-congratulate-biden-may-be-his- biggest-worries” \t “_blank” US allies who are still reeling from Donald Trump’s American First trade agenda, which has debilitated the World Trade Organization, increased trade barriers and reduced global trade flows.” In meeting and speaking with world leaders and executives around the world during

the last four years, I can attest that fostering better international relations is much needed and has been sorely missed. While traveling overseas these last four years I have seen and heard how Trump’s “America-go-it-alone” policies have caused government and business leaders to turn away from the United States and literally opened paths for increased relations elsewhere. I was reminded of this last year while in Belgium where I noticed interviewees rarely mentioning the United States and expounding on growing relations with China. Meanwhile, two major events occurred: the launching of China’s Road and Belt Initiative (BRI) in October with Belgium that resulted in direct block train service from Zhengzhou, China to Liège, and a trade agreement between the Belgium government and China’s Alibaba Group Holding Limited. Earlier this year while attending International Trade, Retail Industry Leaders

Association’s (RILA) logistics conference, I heard executives with Walmart and American Eagle Outfitters speak with frustration about the little assistance they were receiving from the United States Trade Representative (USTR) and how unpredictable changes to tariffs made by on “Twitter feed” were impacting their business. “It takes time for your merchants and pricing teams to do the math and know how you

are going to meet margins to which you are committed,” the Walmart executive said. “There has been a lot of chaos.” Legal counsel for American Eagle Outfitters stressed how the political landscape

both within the United States and internationally have made world trade volatile. “The [Trump] Administration is unpredictable,” remarked Chris Lucas, Director and Associate General Counsel, American Eagle Outfitters. “[Trump is] big on trade deficits and does not know what’s on his full plate.” For the first time in my 40+ years of reporting, I heard similar conversations overseas,

but now optimism for a new direction. I, myself, have felt weary but am now optimistic. I like the fact President-Elect Biden says that he will make certain that climate

provisions will be part of any trade negotiations and that he promises to immediately rejoin the Paris climate accord -- the landmark international deal to combat climate change that Trump exited in 2017. He also says he will ensure the US rejoins the World Health Organization (WHO), which Trump moved to withdraw from this year. Biden promises to put Transportation Investment Generating Economic Recovery

(TIGER) grants (renamed BUILD grants by Trump) on “steroids.” Awarded on a competitive basis, these grants are for projects that will have a significant local or regional impact such as roads, bridges, transit, rail, ports, or intermodal transportation. The President-Elect also says that he will “stand up to China by working with our allies

to negotiate from the strongest possible position.” The optimum words here are “allies” and “negotiate.” He says he will make US trade policy work for American farmers. Of course, the proof will be in the pudding. Biden will need trade promotion authority

(TPA) from the US Congress to accomplish these goals. Without fast track, presidents have a difficult time pushing through new trade deals. But as of this writing, we still do not know which party will control the Senate. We

do know the election was contentious with an unprecedented ending. The view from Washington is that if the Republicans maintain control of the Senate, the US Congress will not give TPA to the new president. Pundits also expect Trump to leave the newly inaugurated president with unfinished

tariff business. And when Biden takes the oath of office, he will face Trump’s unfinished trade disputes such as the fight between Europe and US over HYPERLINK “https://www. strike-on-the-u-s” \t “_blank” aircraſt subsidies, i.e. think Boeing. The UK’s desire for a fast trade deal with the US also be forced to take a back seat. In addition, a Republican-controlled Senate could also delay confirmation of a new

USTR trade representative. This leads us back to China, which, in mid-November signed the Regional

Comprehensive Economic Partnership (RCEP). RCEP involves 15 nations across the Asia Pacific region -- nearly one-third of the

world’s economic activity. This makes RCEP the world’s largest trading bloc. RCEP is expected to take already low tariffs on trade between member countries still lower. For many, the deal has powerful symbolic ramifications against Trump, who threw out the 11-nation Trans-Pacific Partnership (TPP) shortly aſter taking office and his “America First” policy to forge trade deals with individual countries. It’s also a coup for China. RCEP places China in a better position to exert influence in the booming region. But there are work arounds. Some of Biden’s most far-reaching HYPERLINK” \t “_blank” proposals regard infrastructure, energy, and technology, which – given an overhaul -- have the potential to ensure the United States remains competitive. Biden has stated his goal to have government invest $2 trillion in advanced manufacturing, high-speed rail, electric cars, universal high-speed broadband, and a lot more. This emphasis on American technology and production would re-shore jobs and supply chains, while also creating a carbon-free energy economy. “All these measures would have explicit Buy American provisions,” writes Robert

Kuttner, professor at Brandeis University’s Heller School. “It is the kind of thing America did in World War II and through the public investments and military spinoffs of the postwar boom.” Kuttner stresses, however, that this strategy is prohibited by the current rules of

the global trading system -- most of which, he explains, were deliberately put in place aſter 1995 to expand the WTO “to enforce an ideology of free-market globalism that expressly bars constructive economic nationalism.” “Biden would need to reverse not only the rules, but the ideological assumptions

and Wall Street interest-group politics behind them,” he says. Consequently, while Biden will be deliberate about trade, he will not be able to

move fast. The best indicator we will have regarding Biden’s direction on international trade is whom he selects as USTR. And this might face some hurdles, depending on the Senate. One thing we can count on, however, is the Biden Administration will offer clarity

– not shoot-at-the-hip reactions based on mood or standing with global leaders. That alone offers a breath of fresh air.


Freight Business Journal North America - FBJNA reaches out to the decision makers and influencers involved in international freight transport and logistics. FBJNA boasts the most informative and authoritative source of information with unrivalled in depth knowledge of the rapidly changing freight business environment. Our complimentary website www.fbjna. com provides the most up to date news and analysis from within the international shipping industry.

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