International Trade and Finance: Overview and Key Issues for the 117th Congress

International Trade and Finance: Overview and Key Issues for the 117th Congress

International Trade and Finance: Overview
and Key Issues for the 117th Congress
February 3, 2021
Congressional Research Service
https://crsreports.congress.gov
R46669

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International Trade and Finance: Overview and Key Issues for the 117th Congress

Contents
Introduction ..................................................................................................................................... 1
Overview ......................................................................................................................................... 4
Congress and Trade Agreements ..................................................................................................... 4
Recent U.S. Trade Agreements and Current Negotiations .............................................................. 5
Trade Relations with Major Trading Partners ................................................................................. 5
U.S.-China Economic Relations ...................................................................................................... 6
World Trade Organization ............................................................................................................... 6
International Financial Institutions (IFIs) ........................................................................................ 6
Key Trade Laws to Address Unfair Trade Practices ........................................................................ 6
Trade and National Security ............................................................................................................ 7
Trade and Economics ...................................................................................................................... 7
International Investment .................................................................................................................. 7
Digital Trade and Finance ............................................................................................................... 7
U.S. Trade Promotion and Finance Agencies and Preference Programs ......................................... 8

Contacts
Author Information .......................................................................................................................... 8

International Trade and Finance: Overview and Key Issues for the 117th Congress

Introduction
International trade and finance shape the everyday material life of people in the United States.
How goods, services, and money crisscross the globe can determine the success of U.S. industry
and agriculture, the financial security of U.S. households, the goods and services available to U.S.
consumers, the strength of the U.S. dollar, and the health of the global environment. International
trade and finance are also tools for securing U.S. foreign policy and national security interests.
Since World War II, the United States has used trade policy to promote overall global economic
growth and strengthen links to its allies, sanctions to isolate its adversaries, and participation in
international institutions to establish an open rules-based global economy intended to encourage
peaceful, stable, and expanding economic engagement in the world. Congress is in a unique
position to set U.S. trade policy given its constitutional authority for legislating and overseeing
international commerce.
The U.S. Constitution grants to Congress the authority “[t]o lay and collect Taxes, Duties,
Imposts and Excises” and “[t]o regulate Commerce with foreign Nations.” Over the years,
Congress has delegated some of that authority to the executive branch. For example, Congress
has authorized the President to enforce trade agreements and address unfair trade practices.
Congress has also empowered the executive branch to regulate trade for foreign policy and
national security purposes. Because of such delegations, Congress often conducts oversight and
engages with the administration to manage and influence U.S. international trade and finance
policy. At the same time, the appropriate extent of this delegated authority remains an active area
of congressional debate and subject to potential modification through legislative action.
The start of the 117th Congress coincides with the inauguration of a new president. Members of
Congress have an opportunity to shape the new Administration’s trade policy and define
congressional priorities through confirmation hearings, legislation, appropriations, and oversight.
In some respects, the Trump Administration’s trade policy diverged from that of previous postwar
administrations in that it questioned the benefits of U.S. participation and leadership in the rules-
based global economic system, renegotiated free trade agreements, and invoked infrequently used
U.S. trade laws in new ways to restrict imports of certain foreign goods.
As the 117th Congress engages with the Biden Administration to chart the next phase of U.S. trade
policy, various adjustments are possible. While many analysts expect a change of tone in the new
Administration’s trade policy, particularly with respect to close allies, few expect a total reversal,
particularly with respect to U.S. policy toward the People’s Republic of China (PRC or China).
Some Members have encouraged the Biden Administration to work closely with allies to address
U.S. concerns related to China, reform and improve the functioning of the World Trade
Organization (WTO), and address emerging issues that existing multilateral trade rules and
disciplines may not cover or cover adequately (e.g., digital trade, state-owned enterprises [SOEs]
and state-led subsidies, worker rights, the environment, and anti-corruption). At the same time,
the incoming Administration’s priorities may focus initial attention on domestic economic
policies, which could include addressing questions over U.S. industrial capacity and reliance on
foreign suppliers in key sectors, particularly in light of the various supply challenges related to
the Coronavirus Disease 2019 (COVID-19) pandemic.
Below is a brief overview of certain issues that were the subject of recent discussion and debate,
and that may come before the 117th Congress:
 Congress and Trade Agreements. A central component of the cooperation
between Congress and the executive branch is Trade Promotion Authority (TPA).
Under TPA, Congress establishes trade negotiating objectives, notification and
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consultation requirements, and expedited procedures to consider implementing
legislation for trade agreements that advance those objectives and requirements.
Congress passed the most recent TPA in 2015. This authorization expires on July
1, 2021. The Biden Administration may seek a renewal of TPA. Renewal could
prompt a substantive trade policy debate over U.S. trade negotiating objectives,
the extent of congressional oversight, and the scope and approach to potential
new U.S. trade agreements (e.g., limited or phased vs. comprehensive
agreements). Another issue for Congress may be whether the U.S.-Mexico-
Canada Agreement (USMCA) serves as the new model for comprehensive free
trade agreement (FTA) negotiations going forward or represents a distinct
approach to address a specific trading relationship. The USMCA includes a
number of revisions and new provisions compared to past U.S. trade agreements,
including on digital trade barriers, investment, intellectual property rights (IPR),
government procurement, labor enforcement mechanisms, rules of origin, and
exchange rates. Environmental issues may also take on greater importance in
future trade debates and negotiations. An area of ongoing interest is weighing the
costs and benefits of U.S. trade agreements and their impact on U.S. jobs and the
role of trade adjustment assistance (TAA) programs in protecting U.S. workers
and firms.
 Recent U.S. Trade Agreements, Current Negotiations, and Trade Relations
with Other Major Trading Partners. The status of trade negotiations initiated
by the Trump Administration, including with the United Kingdom (UK) and
Kenya, and the pending second stage talks with Japan and China remain
uncertain. The evolution and resilience of the U.S.-European Union (EU)
economic relationship, underpinned by large, complex trade and investment ties,
is another area of great interest to many Members.
Issues for the 117th Congress include possible U.S.-EU resolution of specific trade
disputes (e.g., Section 232 tariffs on steel and aluminum and the Boeing-Airbus subsidy
dispute at the WTO), renewed momentum for broader U.S.-EU trade liberalization
negotiations, and Brexit-related outcomes and implications for transatlantic trade and
investment. The recent conclusion of the Association of Southeast Asian Nations
(ASEAN)-led Regional Comprehensive Economic Partnership (RCEP), in which China
was a member and leading proponent, may also influence congressional debate about
existing and future U.S. trade agreements in the Asia-Pacific region. This may include
examination of whether and how the United States might join the Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11), which may
expand and become more economically significant through additional participation of the
UK and possibly other Asian countries. The implementation of the USMCA may also be
of interest, particularly its labor and motor vehicle provisions, and could serve as a
platform to apply new provisions into other negotiations and agreements.
 U.S.-China Economic Relations. The U.S.-China trade and economic
relationship is complex and wide-ranging. Members of Congress will likely
continue to voice their views and concerns as the Biden Administration develops
its policies toward China. In addition to specific trade practices, Congress will
likely continue oversight of (1) the status of addressing U.S. government
concerns identified under Section 301 that led to an initial U.S.–China Economic
and Trade Agreement (“Phase One Agreement”) and next steps to address
ongoing concerns with China’s trade and investment practices; (2) the economic
implications of China’s industrial policies in a range of sectors including
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technology, clean energy, advanced manufacturing, and pharmaceuticals, which
could potentially challenge U.S. firms and disrupt global markets; and (3) the
economic and geopolitical impact of China’s “One Belt, One Road” Initiative
(also known as “Belt and Road” Initiative), which finances and develops China’s
global supply chains through trade, investment, and infrastructure projects across
a number of countries and regions. Another topic of growing congressional
interest is whether the U.S. government might pursue a trade agreement with
Taiwan.
 The World Trade Organization (WTO), International Financial Institutions,
and the Global Economic Order. Another issue is the role of the United States
in the multilateral, rules-based trading system underpinned by the WTO.
Historically, U.S. leadership in the WTO and its predecessor the General
Agreement on Tariffs and Trade (GATT) has enabled the United States to shape
the rules governing international trade in ways that both advance and defend U.S.
interests. The growing debate over the role and future direction of the WTO
raises issues for consideration by Congress. These include: (1) electing a new
leadership for the WTO Secretariat; (2) advancing reforms to the institution in an
attempt to safeguard and improve its effectiveness; (3) updating WTO rules to
reflect 21st century realities, such as advances in technology, new forms of trade
barriers, and market-distorting government policies; and (4) resolving ongoing
disputes and longstanding U.S. concerns over the functioning of the dispute
settlement system’s Appellate Body. Broader issues regarding the U.S. role in
major international financial institutions, including the International Monetary
Fund (IMF) and World Bank, to address evolving changes in the global economic
order and the COVID-19 pandemic, may also come before Congress.
 Tariff Actions. President Trump’s use of certain delegated trade authorities (e.g.,
under Section 232 of the Trade Expansion Act of 1962 and Sections 301 through
310 of the Trade Act of 1974) to impose increased tariffs on certain U.S. imports
has been subject to congressional debate, including proposed legislation to
reform these authorities. The Biden Administration will determine whether to
maintain or modify current Section 232 tariffs on steel and aluminum imports
from various countries and Section 301 tariffs on imports from China and the
EU, as well as whether or not to continue additional pending investigations under
these statutes, or support new investigations. Continued congressional debate
may occur on the use of tariffs as a negotiating tool.
 Technology, Foreign Investment, and Trade. Trade policy issues related to
technology and industrial policy, digital trade, data flows and data privacy, the
role of digital platforms, digital currencies, and commercial cyber theft, among
others, may remain active in the new Congress. In addition, the Committee on
Foreign Investment in the United States (CFIUS) process likely will continue to
be of interest to Members, particularly on issues related to the ongoing
implementation and effectiveness of recent legislative reforms. Oversight over
export control reform implementation is also likely to be of interest to Congress.
 Coronavirus Disease (COVID-19) and the Global Economy. The ongoing
pandemic presents policy questions with which the 117th Congress may engage.
In the first months of the pandemic, countries around the world placed export
restrictions on certain finished goods and raw materials. These export restrictions
led to shortages of key goods, including medical supplies, and travel restrictions
impeded the smooth functioning of global value chains. While many of those
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restrictions eased by the autumn of 2020, the shock of the initial shortages led to
congressional interest in encouraging the relocation of essential services and
supply chains to the United States or to certain allies and trading partners like
Canada and Mexico.
Other issues of potential interest to the 117th Congress may include global supply chains; trade
promotion and finance agencies; the role of imports in government procurement; potential
economic crises in economies overseas; trade preference programs, including the recently expired
Generalized System of Preferences; and possible renewal of the Miscellaneous Tariff Bill.
Additionally, continued congressional interest is likely on economic sanctions, such as those
against Turkey, Russia, North Korea, Iran, Cuba, and other countries.
A number of factors may affect the U.S. trade policy landscape for the 117th Congress including
the impact of the COVID-19 pandemic and the U.S. government’s response to it on the U.S.
economy, exports, firms, workers, and supply chains, as well as on U.S. efforts to settle disputes
and reduce trade tensions with major U.S. trading partners. How these issues further develop,
combined with the evolving global economic landscape, raise potential legislative and policy
questions for Congress.
This compilation of CRS In Focus briefs provides a broad overview of select topics in
international trade and finance. It is not an exhaustive list of all issues, nor is it a detailed
examination of any one issue. Rather, each brief provides concise background information of
certain issues that have been the subject of recent discussion and debate, and that may come
before the 117th Congress. They also include references to more in-depth CRS products on the
issues.
Overview
CRS In Focus IF10156, U.S. Trade Policy: Background and Current Issues, by Shayerah I.
Akhtar, Ian F. Fergusson, and Brock R. Williams
CRS In Focus IF11016, U.S. Trade Policy Functions: Who Does What?, by Shayerah I. Akhtar
CRS In Focus IF10038, Trade Promotion Authority (TPA), by Ian F. Fergusson
CRS In Focus IF11030, U.S. Tariff Policy: Overview, by Christopher A. Casey
CRS In Focus IF11189, U.S. Trade: Recent Trends and Developments, by Andres B.
Schwarzenberg
Congress and Trade Agreements
CRS In Focus IF10038, Trade Promotion Authority (TPA), by Ian F. Fergusson
CRS Infographic IG10001, Trade Promotion Authority (TPA) and U.S. Trade Agreements, by
Brock R. Williams
CRS In Focus IF11400, Presidential Authority to Address Tariff Barriers in Trade Agreements, by
Christopher A. Casey and Brandon J. Murrill
CRS In Focus IF11346, Section 301 of the Trade Act of 1974, by Andres B. Schwarzenberg
CRS In Focus IF10645, Dispute Settlement in the WTO and U.S. Trade Agreements, by Ian F.
Fergusson
CRS In Focus IF10161, International Trade Agreements and Job Estimates, by James K. Jackson
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CRS In Focus IF10046, Worker Rights Provisions in Free Trade Agreements (FTAs), by Cathleen
D. Cimino-Isaacs and M. Angeles Villarreal
CRS In Focus IF10972, Labor Enforcement Issues in U.S. FTAs, by Cathleen D. Cimino-Isaacs
CRS In Focus IF10166, Environmental Provisions in Free Trade Agreements (FTAs), by Richard
K. Lattanzio and Ian F. Fergusson
CRS In Focus IF10033, Intellectual Property Rights (IPR) and International Trade, by Shayerah
I. Akhtar and Ian F. Fergusson
CRS In Focus IF10570, Trade Adjustment Assistance for Workers (TAA), by Benjamin Collins
CRS In Focus IF10754, Rules of Origin, by Vivian C. Jones and Liana Wong
Recent U.S. Trade Agreements and Current
Negotiations
CRS In Focus IF10997, U.S.-Mexico-Canada (USMCA) Trade Agreement, by M. Angeles
Villarreal and Ian F. Fergusson
CRS In Focus IF11308, USMCA: Labor Provisions, by M. Angeles Villarreal and Cathleen D.
Cimino-Isaacs
CRS In Focus IF11387, USMCA: Motor Vehicle Provisions and Issues, by M. Angeles Villarreal,
Bill Canis, and Liana Wong
CRS In Focus IF10733, U.S.-South Korea (KORUS) FTA, coordinated by Brock R. Williams
CRS In Focus IF11120, U.S.-Japan Trade Agreement Negotiations, by Cathleen D. Cimino-Isaacs
and Brock R. Williams
CRS In Focus IF11123, Brexit and Outlook for a U.S.-UK Free Trade Agreement, by Shayerah I.
Akhtar, Rachel F. Fefer, and Andres B. Schwarzenberg
CRS In Focus IF11526, U.S.-Kenya FTA Negotiations, by Brock R. Williams and Lauren Ploch
Blanchard
CRS In Focus IF11209, U.S.-EU Trade Agreement Negotiations: Issues and Prospects,
coordinated by Shayerah I. Akhtar
Trade Relations with Major Trading Partners
CRS In Focus IF11284, U.S.-China Trade and Economic Relations: Overview, by Karen M.
Sutter
CRS In Focus IF10256, U.S.-Taiwan Trade Relations, by Karen M. Sutter
CRS In Focus IF11175, US-Mexico Trade Relations, by M. Angeles Villarreal
CRS In Focus IF10930, U.S.-EU Trade and Investment Ties: Magnitude and Scope, by Shayerah
I. Akhtar
CRS In Focus IF10384, U.S.-India Trade Relations, by Shayerah I. Akhtar and K. Alan Kronstadt
CRS In Focus IF10447, U.S.-Brazil Trade Relations, by M. Angeles Villarreal and Andres B.
Schwarzenberg
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International Trade and Finance: Overview and Key Issues for the 117th Congress

CRS In Focus IF10961, U.S.-Turkey Trade Relations, by Shayerah I. Akhtar
U.S.-China Economic Relations
CRS In Focus IF11284, U.S.-China Trade and Economic Relations: Overview, by Karen M.
Sutter
CRS In Focus IF11684, China’s 14th Five-Year Plan: A First Look, by Karen M. Sutter and
Michael D. Sutherland
CRS In Focus IF11667, China’s Economy: Current Trends and Issues, by Karen M. Sutter and
Michael D. Sutherland
CRS In Focus IF10964, “Made in China 2025” Industrial Policies: Issues for Congress, by
Karen M. Sutter
CRS In Focus IF11283, U.S.-China Investment Ties: Overview, by Andres B. Schwarzenberg and
Karen M. Sutter

CRS In Focus IF11735, China’s “One Belt, One Road” Initiative: Economic Issues, by Karen M.
Sutter, Andres B. Schwarzenberg, and Michael D. Sutherland
World Trade Organization
CRS In Focus IF10002, The World Trade Organization, by Cathleen D. Cimino-Isaacs, Rachel F.
Fefer, and Ian F. Fergusson
CRS In Focus IF10645, Dispute Settlement in the WTO and U.S. Trade Agreements, by Ian F.
Fergusson
CRS In Focus IF11651, WTO Agreement on Government Procurement (GPA), by Andres B.
Schwarzenberg
CRS In Focus IF10033, Intellectual Property Rights (IPR) and International Trade, by Shayerah
I. Akhtar and Ian F. Fergusson
International Financial Institutions (IFIs)
CRS In Focus IF10676, The International Monetary Fund, by Martin A. Weiss
CRS In Focus IF11361, The World Bank, by Rebecca M. Nelson
CRS In Focus IF10154, Asian Infrastructure Investment Bank, by Martin A. Weiss
Key Trade Laws to Address Unfair Trade Practices
CRS In Focus IF10018, Trade Remedies: Antidumping and Countervailing Duties, by Vivian C.
Jones and Christopher A. Casey
CRS In Focus IF10786, Safeguards: Section 201 of the Trade Act of 1974, by Vivian C. Jones
CRS In Focus IF11346, Section 301 of the Trade Act of 1974, by Andres B. Schwarzenberg
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International Trade and Finance: Overview and Key Issues for the 117th Congress

Trade and National Security
CRS In Focus IF10667, Section 232 of the Trade Expansion Act of 1962, by Rachel F. Fefer
CRS Infographic IG10012, The International Emergency Economic Powers Act: Key Facts, by
Christopher A. Casey
CRS In Focus IF11730, Economic Sanctions: Overview for the 117th Congress, by Dianne E.
Rennack and Rebecca M. Nelson
CRS In Focus IF11154, Export Controls: Key Challenges, by Ian F. Fergusson
CRS In Focus IF11627, U.S. Export Control Reforms and China: Issues for Congress, by Ian F.
Fergusson and Karen M. Sutter
CRS In Focus IF10177, The Committee on Foreign Investment in the United States, by James K.
Jackson

Trade and Economics
CRS In Focus IF10619, The U.S. Trade Deficit: An Overview, by James K. Jackson
CRS In Focus IF10161, International Trade Agreements and Job Estimates, by James K. Jackson
CRS In Focus IF11706, International Trade in Services, by Rachel F. Fefer
CRS In Focus IF11035, Managed Trade and Quantitative Restrictions: Issues for Congress, by
Andres B. Schwarzenberg
CRS In Focus IF11707, The U.S. Dollar as the World’s Dominant Reserve Currency, coordinated
by Rebecca M. Nelson
CRS In Focus IF10049, Exchange Rates and Currency Manipulation, by Rebecca M. Nelson
International Investment
CRS In Focus IF10636, Foreign Direct Investment: Overview and Issues, by James K. Jackson
and Shayerah I. Akhtar
CRS In Focus IF10177, The Committee on Foreign Investment in the United States, by James K.
Jackson
CRS In Focus IF10052, U.S. International Investment Agreements (IIAs), by Martin A. Weiss and
Shayerah I. Akhtar
CRS In Focus IF10674, SelectUSA Program: U.S. Inbound Investment Promotion, by Shayerah I.
Akhtar
Digital Trade and Finance
CRS In Focus IF10770, Digital Trade, by Rachel F. Fefer
CRS In Focus IF11194, International Trade and E-commerce, by Rachel F. Fefer
CRS In Focus IF11613, U.S.-EU Privacy Shield, by Rachel F. Fefer and Kristin Archick
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International Trade and Finance: Overview and Key Issues for the 117th Congress

CRS In Focus IF10896, EU Data Protection Rules and U.S. Implications, by Rachel F. Fefer and
Kristin Archick
CRS In Focus IF11471, Financial Innovation: Central Bank Digital Currencies, by Marc
Labonte, Rebecca M. Nelson, and David W. Perkins
CRS In Focus IF10049, Exchange Rates and Currency Manipulation, by Rebecca M. Nelson
U.S. Trade Promotion and Finance Agencies and
Preference Programs
CRS In Focus IF10017, Export-Import Bank of the United States (Ex-Im Bank), by Shayerah I.
Akhtar
CRS In Focus IF11436, U.S. International Development Finance Corporation (DFC), by
Shayerah I. Akhtar and Nick M. Brown
CRS In Focus IF10673, U.S. Trade and Development Agency (TDA), by Shayerah I. Akhtar
CRS In Focus IF11232, Generalized System of Preferences (GSP), by Vivian C. Jones
CRS In Focus IF10149, African Growth and Opportunity Act (AGOA), by Brock R. Williams

Author Information

Andres B. Schwarzenberg
Christopher A. Casey
Analyst in International Trade and Finance
Analyst in International Trade and Finance

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