Should he win the US election next month as many anticipate, we should not expect Joe Biden’s administration to take a significantly different approach to trade policy than President Trump did during his first four years in office. This is somewhat ironic given that Biden’s entire campaign seems to rest on his designation as the non-Trump candidate rather than on its own merits. As with other non-trade matters, Biden is counting on America’s disdain for their current President to compensate for his own lack of vision.
Neither man is a free-trader at heart, and both candidates seek the support of blue collar workers who still feel aggrieved by the Clinton-Bush-Obama era of economic globalisation. Biden’s brand of protectionism may be slightly different than Trump’s; the Democrat intends to push through a comprehensive Buy American programme while Trump’s favoured weapon is the tariff. Trade protectionism is harmful in the long term whatever form it takes but, at this moment in history, it is more politically tenable than free trade, whatever your political colours.
While Biden is more of a multilateralist than Trump, should he win we can hardly expect him to offer much of a lifeline to the World Trade Organization (WTO), a global body which has drawn much scorn from Trump’s people over the years. The WTO had already been under attack by the US during Obama’s tenure. Indeed, President Obama was instrumental in blocking the appointment of Appellate Body judges, a policy which Trump has continued, albeit with a much more aggressive tone and with more harmful impact, as the trade court is now effectively defunct. It is a point of pride (and a key electoral strategy) for Biden that he intends to follow in the footsteps of his former boss. But there is no evidence that he has a plan for deeper engagement with the WTO, for example on its e-commerce initiatives, nor does he have any strategy for needed reform to its dispute settlement system. This may be because the American electorate cares little for these things, or it may be because Biden simply hasn’t thought them through.
On the bilateral front, Biden has already conceded that the United States Mexico Canada Agreement (USMCA), one of Trump’s signature achievements in trade, is better than Clinton’s North American Free Trade Agreement (NAFTA), in part because of its stronger protections for labour and stricter rules of origin. Biden has expressed some interest in the US acceding to the Comprehensive Progressive Trans-Pacific Partnership (CPTPP), the 11-nation trade pact from which Trump famously withdrew on his first day in office. This would be a sensible move for America, as it could lead to economic growth and help contain China.
There is less chance that President Biden would have any success in returning to the negotiating table with the EU, a goal which Trump has ignored. The Transatlantic Trade and Investment Partnership (TTIP) collapsed with Obama at the helm and many of the stumbling blocks to a US-EU accord still remain. These include tension over food standards and subsidies, the latter exacerbated by the WTO’s recent authorisation of EU retaliatory tariffs in the Boeing-Airbus saga. Opposition to a Free Trade Agreement (FTA) with the US is still strong among vocal civil society within the EU, where trade relations with the free-wheeling US are still a bête noire among progressives. For some, free trade with the US is unacceptable, no matter who is in charge.
President Trump likes to depict Biden as soft on China and there may be some truth in this. Obama mostly sat idly by while China engaged in questionable trade practices, including intellectual property appropriation and wide-scale subsidisation. Still, geopolitical relations between the two superpowers were on a much stronger footing under Trump’s predecessor than today, although his Phase One US-China deal may yet generate benefits. We could expect Biden to take a more diplomatic tone, but an administration under his control would be unlikely to mend bridges in a meaningful way with the world’s second largest economy. Expect trade tensions to continue between the US and China no matter who is in the Oval Office come January.
Of greatest interest to the UK in the American presidential election is, of course, the health of the ‘special relationship’ and its impact on the ongoing US-UK FTA talks. Here there is no question that a Trump victory would be a better outcome for the UK. A committed Anglophile, the President has made his enthusiasm for a trade agreement with the UK clear from the outset. He has also been one of the few world leaders to support Brexit and he has a very good relationship with Boris Johnson. In contrast, Biden has talked tough against the UK, touting his Irish heritage, probably hoping that it will burnish his ‘ordinary guy’ credentials among American working-class voters. This led to an ill-informed intervention into Brexit in which the former Vice President claimed he would refuse a UK FTA if the UK undermined the Good Friday Agreement, whatever that means. To be sure, neither President Trump nor President Biden will conclude an FTA with the UK unless it makes economic sense for them to do so. Their asks in such negotiations will, again, likely prove remarkably similar, with tariff-free access on agricultural products a top priority.
President Trump’s bombastic personality and un-presidential demeanour have rankled even his staunchest supporters, but the economic achievements of his first term are undeniable. President Biden would reverse much of this, with a programme of higher taxes coupled with expensive green policies foremost on his agenda. While the ensuing downturn could spell an advantageous increase in foreign investment from the US as its investors seek higher returns overseas, a weakened American economy is bad for the world.
It is astounding that, among all of the Democratic politicians in the US, the Democrats chose Joe Biden as their man. While he is a familiar figure and might seem to be a safe pair of hands to an electorate craving a return to something approaching normality, Vice President Biden is painfully past his prime and wholly uninspiring. It is also self-evident that, should he win, he will be little more than a figurehead in the hands of those whose aim is to turn the country sharply leftward, both economically and culturally, from where Biden himself stands. According to polls, President Trump’s chances of re-election are not good. Taking everything into account, we can hope that, as four years ago, on November 3rd they are proven wrong.