Team Trump to Share Power in Trade Policy

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By Len Bracken

Leaders of the Trump administration’s new trade team will share the job held by the U.S. trade representative over the past eight years, and Commerce secretary nominee Wilbur Ross, a friend of President Donald Trump, will be the chief trade policy strategist.

The current triumvirate of trade officials and staff slated for leadership roles in formulating trade policy departs from the Obama administration model of one primary architect who designed the contours of market-opening trade agreements.

Rounding out the Trump team is Peter Navarro, who will head the new National Trade Council and will be the point person on trade issues at the White House, and Robert Lighthizer, the president’s pick to be the U.S. trade representative (USTR). Lighthizer by statute will have the primary role in trade negotiations and will work in close coordination with Ross and Navarro, White House spokesman Sean Spicer said.

The buck for trade policy stopped with USTR Michael Froman during the Obama administration, industry sources and former trade officials said. Froman’s main focus was on plurilateral deals such as the 12-nation Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and the European Union.

Team Trump is also considering renegotiation of the North American Free Trade Agreement as well as bilateral agreements with Japan and the U.K. Trump said in a February White House meeting with congressional leaders that Ross will be “representing us in negotiations” on NAFTA with Canada and Mexico.

Lawmakers will be closely watching top members of the Trump trade team in the NAFTA talks to see how their roles are defined, a congressional aide told Bloomberg BNA. He added that senators on both sides of the aisle were upset that Lighthizer wasn’t there leading a presentation of the administration’s trade policy agenda at a Feb. 15 closed-door meeting of the Senate Finance Committee. Navarro, unlike Lighthizer, doesn’t need Senate confirmation.

A Senate floor vote on the Ross nomination is expected early the week of Feb. 27 and the Lighthizer nomination still has momentum, but it first must overcome the hurdle of getting a waiver from Congress of requirements in the Lobbying Registration Act of 1995, the congressional aide said. Lighthizer’s previous work in Brazil and China required him to register as a foreign agent, and the act stipulates that such agents cannot serve as USTR.

Ross Closest to Trump

Ross is closer to Trump personally and has some important tools, but fewer of them than Lighthizer, a former U.S. trade official told Bloomberg BNA. USTR was established by Congress to function as a multidimensional hub for trade policy, he said.

“Ross will be a lead on trade policy, if not the lead,” the former U.S. trade official said, adding that Malcolm Baldrige, a commerce secretary under President Reagan, was promised trade policy but was upstaged by successive trade representatives. “Don’t count out Lighthizer—he knows a lot more than Ross about U.S. trade law and agreements, and he has more tools.”

Ross will have many other responsibilities in managing a large agency, so he could be pulled away from trade, the former official said, adding that Navarro has the benefit of proximity to Trump since his office is located in the White House. Past administrations have had the National Security Council and National Economic Council host senior trade policy meetings, a role that could shift to the National Trade Council.

Other Top Trump Players

Another key player on the trade team is Jason Greenblatt, who has the newly created White House position of special representative for international negotiations, Spicer said. Greenblatt has been the chief legal officer and an executive vice president at the Trump Organization and has advised Trump on both domestic and international business and legal affairs.

The president has said Greenblatt, who attended the Senate Finance Committee meeting with Navarro, will be involved in trade talks.

Former Goldman Sachs President and Chief Executive Officer Gary Cohn, director of the National Economic Council, also will have a major voice on trade policy, according to an industry source with close ties to the administration.

Jared Kushner, senior adviser to the president at the White House and the president’s son-in-law, is another key member of the team. Kushner has already met with Canadian and Mexican trade officials, the industry representative said, adding that he is telling his member companies there appear to be six USTRs at the moment.

Trade attorney Stephen Vaughn, a member of Trump’s USTR transition team, is expected to be named USTR general counsel and Gilbert Kaplan, partner with King & Spalding, is likely to become Commerce under secretary for international trade following Ross’s Senate approval, according to sources. Vaughn would replace Maria Pagan, who is the current acting general counsel. Pagan is also serving as acting USTR. The USTR general counsel position does not need Senate confirmation.

A diplomat from a major U.S. trading partner told Bloomberg BNA that it is not yet clear who in this administration is the right person to work with on trade issues. Many of the players appear to have differing views on trade policy, so it remains to be seen whether the administration will have a coherent approach to trade, he added.

Treasury Secretary Steven Mnuchin is expected to take the lead on the trade-related issue of currency manipulation. During his campaign, Trump promised to label China as a currency manipulator. But the president has yet to act on that pledge. Mnuchin said he will use Treasury’s twice-yearly report to make the department’s decision on whether China should be labeled a currency manipulator.

Policy Under Froman

Froman, first in his role as national security adviser for international economic affairs and then as USTR, was the primary architect of the Obama administration trade policy. He supported USTR Ron Kirk in negotiating TPP and TTIP before taking the lead himself.

The “central role played by Froman appears to be more dispersed in the Trump administration,” Bob Vastine, a senior fellow at Georgetown University’s McDonough School of Business, told Bloomberg BNA.

Froman, a friend of President Barack Obama, depended on the other Cabinet secretaries for support in setting trade policy at meetings held by the National Security Council and for complementing the relatively small USTR staff in various negotiations. Officials under Commerce Secretary Penny Pritzker, for example, supported TTIP talks on regulatory cooperation, and finance officials under Treasury Secretary Jacob Lew took the lead in negotiating a declaration against currency manipulation among the TPP partners.

The agriculture talks in both deals benefited from technical support from the U.S. Department of Agriculture, and former Agriculture Secretary Tom Vilsack worked closely with Froman on smaller agriculture-related agreements. Secretary of State John Kerry periodically held discussions on the strategic aspect of the trade deals at the leader and ministerial level with negotiating partner countries as the TPP and TTIP meetings were under way, and the State Department was U.S. co-chairman on the U.S.-China Bilateral Investment Treaty Talks.

Commerce Role Questioned

Vastine, a former Hill staffer and Treasury official, said it remains to be seen whether Ross will be able, under the law, to do all he intends. He noted Obama’s first commerce secretary, Gary Locke, dropped ambitious trade-related plans. The Trump team dropped campaign plans to put USTR under Commerce because it is prohibited by the Trade Expansion Act of 1962 that established the Office of the U.S. Trade Representative within the Executive Office of the President.

The former Commerce secretary was active on many fronts, but renegotiating trade agreements isn’t a role Pritzker would have had because that would have been handled by USTR, Kevin Wolf, partner at Akin Gump’s international trade practice and former senior Commerce Department official in the Obama administration, told Bloomberg BNA.

Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers, agreed that Congress gave USTR primacy on trade negotiations. She added that Lighthizer has the most Washington experience as a former senior Capitol Hill staffer and former deputy USTR. But Ross brings his experience as a businessman who has been affected by trade to the table, and Navarro is an economist, making the primary players on the Trump trade team a good mix of different perspectives, all of which matter in making trade policy.

“Ultimately the structure may enhance the position of trade in the new administration and could make it more effective,” Dempsey told Bloomberg BNA.

National Trade Council

The National Trade Council could be the biggest change in the structure of trade policy, according to Tim Keeler, partner with Mayer Brown’s national security practice and former USTR official under President George W. Bush.

The council could have a focus on technology transfer issues that arise from foreign, notably Chinese, investment in the U.S. and from export controls, Keeler said.

To contact the reporter on this story: Len Bracken in Washington at lbracken@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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