BIDEN STRUGGLES TO REVAMP GLOBAL TRADE: The free trade era is over, Biden’s team keeps telling us. We just aren’t sure what will replace it yet. Last year we outlined how Biden’s team had soured on the decades-long neoliberal economic consensus — adherence to free trade abroad and austerity at home. Biden’s team has been hammering that message home for months, with trade chief Katherine Tai telling Davos that she is trying to shape a “new economic order” and national security adviser Jake Sullivan calling for a “new Washington consensus” in his landmark speech at Brookings last month. “I remain convinced that through all of this disruption we're moving towards a new economic order,” Tai reiterated to POLITICO in an interview this spring. “I'd really like to fill that gap with a positive vision that we will be prepared for it.” But so far shaping that new world has proved difficult. From the WTO reform process to Biden’s newfangled economic partnerships, critics across the political spectrum are worried that the administration’s solutions don’t live up to its stated desire to fundamentally reshape the paradigms of the global economy. More fundamentally, it’s unclear if they even know what that new world will look like. And Sullivan’s take at Brookings didn’t inspire much confidence: “In the end, the way that we are going to build an international economic architecture is not going to be with kind of Parthenon-style, clear pillars as we did after the Second World War,” Sullivan said, “but something that feels a little bit more like a Frank Gehry — a mix of structures and substances.” Not that their critics have better ideas. After a speech decrying neoliberal economics in February, Sen. Marco Rubio (R-Fla.) admitted that he doesn’t know what’s coming next, either. "I don’t know if the administration has clearly outlined what that new world looks like,” he said. “But I don't know if anybody else has either.” That campaign to shape a new economic order is the subject of our latest Special Report. And if Biden’s team fails in that quest, Trumpian populism is waiting in the wings, ready to assert its own, more nationalistic alternative to neoliberal economics. “We should take care of America’s workers first and then worry about building the world order,” said Trump’s trade chief, Robert Lighthizer, “not the other way around.” Pros can read the entire article now, while those without a subscription will have to wait for it to jump the paywall later this week. EX-IM OIL PROJECT IN INDONESIA DRAWS FIRE: An advocacy group opposed to the use of fossil fuel has accused the United States of violating a pledge that President Joe Biden made twice at the international level not to provide new public financing for fossil fuel projects. Collin Rees, a senior campaigner for Oil Change International, said the nearly $100 million project approved last week by the U.S. Export-Import Bank for Indonesia’s national oil company, Pertamina, to upgrade its refinery at Balikpapan clearly crosses the line. Biden made the pledge along with leaders from other countries at the UN climate change conference in Glasgow, Scotland, in 2021 and repeated it in a statement at the G-7 leaders summit in Germany last year. Ex-Im Bank officials said they strive to support Biden’s climate goals but are barred by their charter against discriminating against any industry. White House officials did not defend Ex-Im’s action, but said they have no control over the bank. “Ex-Im is an independent agency that operates under its own statutory charter,” White House spokesperson Adam Hodge said. “Ex-Im made an independent decision to approve the loan under its authorities and its decision does not reflect administration policy.” Hodge added the administration “stands by its commitment to end new direct public support for the international unabated fossil fuel energy sector,” using a term that refers to the use of fossil fuels without the application of carbon capture and storage technology. Rees called the White House explanation “frankly ridiculous” and its acceptance of Ex-Im’s action “particularly weak-willed.” Indonesia imports 70 percent of its gasoline and has been exposed to dramatic price fluctuations since the beginning of the war in Ukraine, Ex-Im said in its news release last week. The new project will enable Indonesia “to substantially reduce its reliance on imported, refined transportation fuels while producing cleaner gasoline products,” the bank said. COMMERCE TAKES AIM AT CHINA WITH AD/CVD REFORMS: Commerce last week issued new proposed regulations to strengthen antidumping and countervailing duty laws — with an implicit aim of countering China’s economic practices. Belt and Road targeted: Commerce proposed to eliminate its so-called transnational subsidy regulation, which prevented the U.S. from imposing tariffs on imports from a nation if those products benefited from subsidies provided by a third country. This, as the lawyers at Wiley pointed out, could allow Commerce to issue tariffs against programs like the Belt and Road Initiative, China’s massive foreign infrastructure program. Labor, IP enforcement in focus: Commerce also proposed expanding its authority to address “inaction” from foreign governments that allow their domestic producers to skirt labor, environmental and intellectual property rules — another veiled jab at Beijing. “[F]ailure by foreign governments to implement or enforce labor and human rights protection laws would allow for unsafe and unhealthy working conditions, slave or forced labor, child labor, and even human trafficking,” Commerce wrote in the Federal Register notice. “This would allow companies to avoid paying costs associated with preventing or mitigating such adverse labor and human rights impacts and thereby reduce their costs of production.” Those are just a few of the more than 20 proposed changes to AD/CVD laws which can be found in the Federal Register here. Companies and outside groups have until July 10 to comment. SCOTT, McHENRY PUSH BIDEN ON TIKTOK: Two top Republican economic lawmakers pushed the Biden administration last week to force the Chinese owner of TikTok to sell the app – but offered no new ideas for how to make it happen. Senate Banking Committee ranking member Tim Scott (R-S.C.) — a likely presidential candidate — and House Financial Services Chair Patrick McHenry (R-N.C.) wrote to Biden on Friday, urging him to enforce a Trump-era executive order directing Chinese tech firm ByteDance to divest from the U.S. version of TikTok. That order, issued in 2020, lost a court challenge late in Trump’s term, and the Biden administration decided to withdraw the executive order and enter talks with TikTok rather than pursue an appeal. That kicked off months of negotiations between the company and the Committee on Foreign Investment in the U.S., which stalled late last year after internal debate in the administration over whether Biden should force a sale. Since then, the administration has turned to Congress for help, endorsing the bipartisan RESTRICT Act from Senate Intelligence Committee Chair Mark Warner (D-Va.), which would give the federal government more power to ban apps it deems a security threat. The endorsement was widely interpreted as an indication that Biden’s team feels it does not have adequate legal authority to ban or force a sale of TikTok, and that it would need new powers to avoid the kind of legal challenges that derailed Trump’s effort. But McHenry and Scott’s letter doesn’t get at any of that. The lawmakers don’t mention the court challenges, the RESTRICT Act, S. 686 (118), (which neither lawmaker sponsors) or any other legislative initiatives, instead opting to simply urge Biden to enforce the Trump-era order. But they do pledge that “Congress will take the steps necessary” to curtail TikTok if Biden doesn’t enforce the Trump-era order.
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