Good Trade Policy Requires Input from Business, Agriculture

Consulting with businesses that actually engage in international trade is indispensable to framing good trade policy.

Published

August 29, 2023

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In recent months, anti-trade activists and a handful of members of Congress have ratcheted up their use of a familiar tactic: When you can’t win an argument, a good old ad hominem attack will at least feel good.

Their charge is that the business community dominates the official trade advisory committee system. Some questions arise: What are these committees, what is their objective, and are these charges true?

The advisory committee system “was created to ensure that U.S. trade policy and trade negotiating objectives adequately reflect U.S. public and private sector interests,” according to USTR. Congress created them in the Trade Act of 1974, which mandates that the president “shall seek … and take into account” advice from the private sector on trade negotiating objectives, the operation of trade agreements, and other international economic policy issues.

The system consists of 26 advisory committees, including the President’s Advisory Committee on Trade Policy and Negotiations (ACTPN); committees focusing on agriculture, labor, the environment, and Africa; and 15 sectoral or functional Industry Trade Advisory Committees. The Commerce and Agriculture Departments co-manage some of these with USTR.

The committees play an important role in keeping U.S. trade policy tethered to the expertise of individuals and enterprises directly engaged in trade. As USTR negotiates complex rules with real-world impact, sector-specific knowledge from industry specialists is essential.

For example, consider the arcane trade rules used to determine origin for a brassiere. It turns out that all U.S. free-trade agreements negotiated over the past 30 years (except the U.S.-Korea FTA) “include a special [rule of origin] for brassieres, a garment of complicated construction where the application of a yarn- or fabric-forward tariff shift rule to an essential character component is difficult if not impossible,” according to the U.S. International Trade Commission.

This is a good example of the specialized knowledge useful to the work of the trade advisory committees. If trade rules for a piece of clothing can be this complex, imagine the case for high-tech products made using global supply chains, trade secrets and forced technology transfer, and “behind the border” barriers to trade that discriminate against U.S. companies and workers.

U.S. trade negotiators with USTR or the Commerce Department should be able to call on the expertise of people who actually know how to make stuff and have experience in international trade. It makes sense for these people to serve on these committees.

Do these business voices dominate the trade advisory committees, as charged? Hardly. Consider the ACTPN, the most senior committee. Its charter states that the committee “will be broadly representative of the key sectors and groups of the economy affected by trade.” This calls for strong business representation on the committee.

However, a glance at the ACTPN’s 14 members reveals that a small minority are drawn from business and agriculture, and most of its members are representatives of academia, organized labor, and NGOs. The charge that “big business” is calling the shots could hardly be more off base.

The Industry Trade Advisory Committees (ITACs) advise both USTR and the Commerce Department on sector-specific trade issues. They are required to incorporate “balanced industry representation” with respect to size and perspective. The ITACs open application process helps achieve this goal and draws in needed expertise. A glance at the membership of the 15 ITACs shows small and large companies, with different sectoral niches, participating together.

Good trade policy also requires effective interagency coordination and, perhaps most of all, congressional leadership. The Constitution gives Congress the authority to regulate foreign commerce and to levy tariffs, though a partnership with the executive branch—which has the authority to negotiate with foreign governments—is imperative. Executive-legislative engagement on trade mustn’t be limited to ad hoc engagement with select groups of members of Congress from a single party.

In sum, seeking and heeding the advice of individuals with expertise in making goods, producing food, and providing services—and trading them internationally—is essential to good trade policy. It makes a world of sense for the U.S. business and agriculture community to have a strong voice on the U.S. trade advisory committees. It’s that simple.

John Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy.

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