The Office of the U.S. Trade Representative is seeking comments by April 22 to inform the development of trade and investment policy initiatives that promote supply chain resilience.
USTR cites the supply chain disruptions of recent years as a proximate reason behind its inquiry but indicates that it is trying to address a more systemic problem. “Global supply chains have been designed to maximize short-term efficiency and minimize costs, leading to greater vulnerability and unsustainable dependencies,” USTR states, and have also “promoted trade that may not reflect our core values, like labor standards and environmental protection.” Similarly, U.S. trade and investment policies in recent decades “were designed to incentivize short-term cost efficiency and drive tariff liberalization, with the goal of creating an unfettered global marketplace.”
As a result, the Biden administration is “undertaking a whole-of-government effort to proactively strengthen domestic manufacturing and to secure trusted supply chains through strategic arrangements with trusted partners (friend-shoring) and with regional partners (near-shoring).” These supply chains can “provide a range of sources for critical inputs; adapt, rebound, and recover with agility when faced with economic shocks; uphold labor rights and environmental protections; and strengthen the domestic manufacturing base and workforce that drive economic growth and world-class American innovation.”
USTR’s part in this effort is to advance and implement principles of supply chain resilience through trade negotiations, efforts to enforce fair trade, and other engagement with trading partners. To inform that work the agency is seeking information on a number of topics identified in this notice.
Among other things USTR is interested in examples of trade and investment policy tools that could be deployed to enhance supply chain resilience in the following sectors: aerospace and aerospace components; agriculture, forestry, and fisheries; automobiles and automotive parts; call centers, business processing operations, and related services; critical minerals, including for electric vehicle and large-scale energy storage batteries, and related recycling; metals; pharmaceutical and medical goods; semiconductors, microelectronics, and related inputs; renewable energy generation, transmission, and storage; and textiles, such as yarns, fabrics, apparel, and other finished goods. USTR also asks which additional sectors may need dedicated trade and investment policy approaches to advance supply chain resilience.
USTR further points out that there is concern that preferential rules of origin in free trade agreements can benefit goods and/or firms from countries that are not party to those agreements and are not bound by the associated labor and environmental commitments. The agency is therefore interested in what actions could be taken to mitigate these risks and maximize production in partner countries as well as what policies could support strong rules of origin and adherence to them.
Written comments are due by April 22. USTR will also hold a hearing May 2 and is accepting requests to testify at the hearing by April 12.
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