This article is from the Trade in 2021 and Beyond: The Biden Administration’s Policy for Jobs, Economic Recovery and Circular Economy session during ISRI2021. Many of the programs available in ISRI2021 will remain available to convention registrants through May 20 on demand. The exhibit hall will remain open during that time as well.
As he reaches 100 days in office, it’s clear that President Joe Biden’s trade policies emphasize domestic recovery and job growth. The president said so in his April 28 message to Congress. To get a sense of how that may impact the recycling industry, Adina Renee Adler, ISRI’s vice president of advocacy, explained U.S. trade policies, the response from congressional leaders, and ISRI’s advocacy role at ISRI2021.
Commerce Secretary Gina Raimondo and U.S. Trade Representative Katherine Tai have signaled they’ll focus policy efforts on the American worker, Adler notes. They’re interested in using trade to improve the economy, getting people back to work and businesses up and running again. Members of ISRI staff belong to several trade advisory committees, providing unique access to U.S. officials as they formulate policies affecting the industry.
Adler discussed two recent executive orders that may affect recyclers. The Buy American Executive Order calls on government agencies to buy American-made goods with American-sourced components and materials. The order notes 90-95% of steel and aluminum must be domestically sourced, which should create an opportunity for recyclers. “This would be great for market generation,” Adler says.
The second executive order focuses on America’s supply chains, examining U.S. reliance on foreign supplies, including semiconductors, pharmaceuticals, and other critical goods. The order focuses on finding ways to create more resilient and secure supply chains in case of pandemics, cyberattacks, or other national emergencies. But Adler notes the administration hasn’t factored the necessary transportation networks into its discussions—which affects recyclers. “We want to remind the administration that those goods and materials need to be delivered to U.S. consumers,” she says.
Although free-trade agreements are on hold, climate change and environmental justice are top priorities for the administration. Environmental justice in the context of trade means providing access to everyone through trade policy, and generating opportunities for minority-owned or women-owned businesses and ensuring they have access to opportunities, Adler says. The administration also is examining how trade can help fight against climate change. In an April 15 speech at the Center for American Progress, Tai said the administration intends to use trade policy to protect the environment and fight climate change.
Congressional leaders want the administration to return to negotiations on the World Trade Organization (WTO) Environmental Goods Agreement (EGA). In 2014, WTO members launched negotiations to break tariff and non-tariff barriers on environmental goods, services, and technologies. Talks collapsed in 2016 when China submitted a list of demands other countries found unacceptable. If EGA negotiations resume, several scrap commodities are targeted for zero tariffs. “That would be an incredible boost for our industry,” Adler says, by relieving tariffs on scrap commodities in other countries.
The administration hoped to resume constructive negotiations with China, but those hopes dimmed after an unsuccessful March summit meeting. The administration likely views its relationship with China as one of strategic competition, and plans to use foreign and trade policy to rein in Chinese power. The White House may keep tariffs on Chinese goods the Trump administration levied in place for their leveraging power. Unfortunately for recyclers, shredder wear parts are among the products subject to the tariffs. A Trump-era shredder wear-parts exemption expired April 18, with no indication by the current administration that it will create a new exemption process. In response, congressional leaders, ISRI and other associations are asking the administration to enact a new exemption.
In contrast to the Trump administration, the Biden administration sees the E.U. as an ally in trade relations. The current administration plans to resume negotiations with the E.U. about the Airbus-Boeing WTO dispute. The 17-year fight over government subsidies to Toulouse, France-based Airbus and Chicago-based Boeing resulted in WTO-authorized duties in 2019-20 targeting nearly $12 billion in transatlantic trade. In March 2021, the U.S. and E.U. agreed to temporarily suspend duties, signaling a shift in the transatlantic relationship. It’s a similar story with U.S.-U.K. relations. The U.S. recently exempted the U.K. for four months from retaliatory Airbus-Boeing tariffs.
The U.S. is finding opportunities to collaborate with multilateral institutions including the WTO and the Organization for Economic Cooperation and Development on issues concerning supply chains, carbon tax adjustments, and equal access to economic opportunity through trade. Congressional leaders are in favor of re-engaging with these institutions and working with allies to counter China. Members of Congress, particularly Democrats, are using trade policy to promote labor and environmental standards.
For example, Adler points to the Generalized System of Preferences (GSP). The GSP trade program affords duty-free access to the U.S. market for goods made in the least-developed countries. If the GSP—which expired in December 2020—is renewed, many congressional leaders want to include standards for more access to economic opportunities through trade and strong environmental protections. “Congressional leaders are signaling countries without good climate policies or standards, or that don’t support women in the workforce, could lose the GSP benefits,” Adler notes. Congress also is calling for carbon border adjustments to impose high tariffs on goods from countries without climate protections. These are taxes on imports and rebates on exports that account for variance in carbon pricing policies across different countries.
ISRI is advocating on many areas of U.S. trade policy. The association has addressed the administration and Congress regarding ongoing shipping issues. “We want to make sure there’s public attention to spur action,” Adler says. In addition, the association has explained to the White House and the Office of the U.S. Trade Representative the impact this issue will have on the U.S. trade deficit. ISRI has also spoken with congressional leaders who oversee transportation—specifically the Federal Maritime Commission—to keep federal agencies focused on the issue.
ISRI is extending its efforts to key foreign markets including Europe, India, Indonesia, and the Middle East. When the Malaysian government recently announced new import requirements for ferrous and nonferrous metals and recovered paper, ISRI talked to government agencies there to ensure regulations and inspections align with current market dynamics. In addition, ISRI is monitoring new Chinese standards for imports of ferrous and nonferrous metals. The association knows the E.U. may include import and export restrictions on scrap materials in updated waste-shipment regulations. “We’re working with the Bureau of International Recycling to advocate against that,” Adler says.