How the U.S. Government Makes Trade Policy

Since 1962, U.S. trade policymaking has been led by the United States Trade Representative (USTR), a cabinet-level officer whose staff of 200 coordinates input from the Departments of Commerce, Labor, State, and many other agencies, ultimately controlling the agenda and process.

Some candidates, all of them Democrats, have called for reforms to the way the government analyzes and makes trade policy. Their arguments for why reform is needed have relatively little to do with economics—though the picture of whom the United States trades with and what it exchanges has certainly changed dramatically since the existing institutions were created—and a great deal to do with ideas about information and representation. Some candidates argue that the current structure under-represents the interests of organized labor and farm constituencies, and of values—human rights, as well as environmental and climate stewardship—that lack clear constituencies in the bureaucratic process. Senators Warren and Sanders go further, arguing that certain constituencies are unfairly dominating the current process.

Separately, multiple candidates believe that the current policy structure either does not give decision-makers the information they need to defend U.S. interests when other nations violate the terms of trade deals, or doesn’t provide that information in real time.

While Trump has often critiqued the product of past American trade policies and has directed the USTR to investigate China’s trade policies under Section 301 and initiate a World Trade Organization (WTO) dispute with China, he has not put forward specific proposals to reshape the government’s analytical or decision-making processes.

A number of candidates have said that they would enlarge delegations to trade negotiations to include representatives of organized labor, the environmental movement, farmers, and/or local government officials. Former Vice President Biden, Mayor Buttigeig, Senator Harris, and Tom Steyer have all made some version of this proposal. Senator Warren says she would include labor and environment representatives in existing trade advisory groups, and create new ones; she would also make drafts of agreements publicly available for comment (they are currently very tightly held). Congressman O’Rourke pledged to include labor and environment representatives in policy development.

O’Rourke, Warren, and Sanders have each proposed significant changes to how trade results are analyzed and trade policy is made, though their recommendations do not significantly overlap. O’Rourke proposes reforming and increasing analysis to detect currency manipulation, a task currently undertaken by the Treasury Department; and creating an independent trade enforcement commission to investigate violations of labor and environmental standards. Currently, outside actors such as business associations or labor unions must prepare their own investigations and then request that the government open an investigation. Often, the process takes years.

Warren proposes a significant reorganization of existing U.S. economic policy structures, moving the USTR within a new Department of Economic Development. The newly-proposed Department of Economic Development would replace the existing Commerce Department, subsume other agencies like the Small Business Administration, and include other authorities and programs, such as worker training programs. Warren’s plan would create new labor and environment enforcement divisions at the USTR and dramatically increase the number of U.S. embassies that are staffed with a labor attaché tasked with monitoring compliance with labor standards. She also takes up the problem of investigating violations, proposing to create automatic triggers for investigations into unfair labor and environmental practices.

Finally, Warren proposes a major change to the way the federal government approaches trade policy. She would set a requirement that potential partners in trade deals meet the human rights and environmental commitments they have made under existing international agreements as reported in the Department of State’s Country Reports on Human Rights Practices before they can be eligible for trade deals with the United States.

Sanders and a number of other candidates propose that such standards be written into trade agreements rather than being preconditions. Those proposals are discussed further in the sections on using trade to fight climate change and linking trade to worker and other human rights.