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Biden Seen Forming Fresh Policies on Trade, Climate and Infrastructure

While some views on issues might seem similar to the outgoing administration, experts at law firm Kelley Drye expect a fresh approach on some topics and a polar opposite on others when Joe Biden begins his presidency on Wednesday.

Setting the stage, Dana Wood, director of government relations at the New York City law firm, noted that Democrats newly in control of the Senate will sway the floor schedule of what bills are brought up, and faster committee action and more likely approval on nominations. After a Blue Wave win in last week’s Georgia Senate runoffs, Democrats have a 50-50 split with Republicans, with Vice President-elect Kamala Harris representing a tie-breaker as president of the Senate.

Paul C. Rosenthal, a partner focusing on international trade, said, “the biggest issue will continue to be China,” and expectations are for continued tensions on trade, economic and human rights issues. These include Section 301 “Phase One” tariffs put in place by the Trump administration for unfair trade practices, and are expected to remain in place.

“It’s clear that the Phase One Deal really hasn’t worked as intended and many businesses that were innocent bystanders have had to pay a lot in tariffs…Plus, U.S. exports have been hurt by retaliation by China. With that said, if the [Biden] administration eliminates tariffs without getting anything worthwhile, it will be subject to significant criticism, why they are going to be sensitive to going into the 2022 elections,” Rosenthal said. “Probably the easiest thing to do would be to liberalize the exemption process while exploring a whether a meaningful Phase Two deal could be reached which would then justify dropping the tariffs.”

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But there will also be an increased focus on human rights, including forced labor, and a greater emphasis on cooperation with allies and working through multilateral institutions, Rosenthal said.

“You can expect a continued focus on forced labor, particularly from China’s Xinjiang region,” Rosenthal added. “Beyond human rights issues, expect continued bipartisan interest in China’s trade and economic policies.”

While Biden has laid out plans for making ‘Buy America’ real, with specific actions and legislation to support industry and reshoring supply chains, “generally, domestic issues will be put before new trade agreements, despite an immediate focus on global reengagement,” he said.

Biden, he added, is unlikely to remove Trump’s signature trade and tariff programs, at least in the short-term, “but expect program reviews and possible modifications.”

“Trading partners may seek resolution of trade disputes or a renewed emphasis on multilateral work in the context of Biden administration’s efforts to restore our alliances and international relationships,” Rosenthal said.

Working with a Democratic-controlled Congress, the Biden administration may seek to improve and authorize presidential Trade Promotion Authority (TPA), which allows for an up or down vote on trade agreements, including more Congressional input and authority, and more emphasis on environmental and labor issues.

“Expect ongoing focus from Congressional Democrats on implementation and enforcement of the new U.S.-Mexico-Canada Agreement (USMCA), with Mexico’s labor commitments a primary concern,” he said.

There should also be an increased, bipartisan focus on supply chains and raw materials production reshoring, as the coronavirus pandemic shed light on major supply-chain concerns for critical medical products, as well as concerns regarding vulnerabilities in domestic manufacturing capabilities.

He sees potential action by the spring on the expired General System of Preferences (GSP), which allows lesser developed countries to export products to the U.S. duty free under certain conditions, with new provisions negotiated in. On the Miscellaneous Tariff Bill, which also allows for duty-free imports in certain products and has also expired, Rosenthal said faster renewal is possible or it could be rolled into a larger legislative package.

Dustin Painter, a partner specializing in government relations, said Biden’s four-year, $2 trillion “Build Back Better” infrastructure and clean energy proposal focuses on repairing crumbling transportation infrastructure such as roads and bridges, rail, ports and airports, water systems, electricity grids, universal broadband and green spaces.

“While Biden has suggested raising the corporate tax rate from 21 to 28 percent to help pay for long-term investments, tax increases may prove difficult with slim Democratic majorities in the House and Senate,” Painter said.

Wayne D’Angelo, a partner who focuses on energy issues, said Biden is expected to prioritize environmental justice while reversing Trump policies and approaches.

Biden administration climate goals include a net-zero carbon power sector by 2035, 100 percent clean energy economy by 2050 and immediately rejoining the Paris Climate Accord.

D’Angelo sees a “whole-of-government” approach to environmental and energy policy and whether projects are permitted and where, consideration of cumulative impacts rather than thee impacts of a particular project, and enhanced enforcement.