USTR Seeks Input on US Supply Chain Resilience
The Office of the United States Trade Representative (USTR) is seeking input from U.S. supply chain stakeholders to inform the creation of trade and investment policy that fosters greater domestic resilience.
USTR published a notice in the Federal Register on Thursday asking for public comments that will help it develop policy tools to support onshoring manufacturing, services, and workforces, as well as bettering relationships with trading partners, benefiting social and environmental best practices and enabling the supply chain to “adapt, rebound, and recover with agility following shocks.”
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“From the Covid–19 pandemic to Russia’s full-scale invasion of Ukraine, Americans have felt firsthand the impacts of supply chain disruptions,” like price volatility at retail and product shortages that contributed to inflation. Now, the Biden-Harris Administration is seeking to facilitate sustainable economic growth by boosting the U.S. manufacturing sector and engendering more “friend-shoring” with regional partners.
“Enduring resilience will require new investments in infrastructure, new incentives to increase the supply of key inputs, and new forms of cooperation with allies and trading partners to prevent and withstand supply chain disruptions and mitigate risks of price spikes and volatility that could contribute to inflationary dynamics,” USTR wrote.
U.S. trade and investment policies over the past few decades “were designed to incentivize short-term cost-efficiency,” and that led to the growth of geographically concentrated offshore supply chains. Production became consolidated in areas with low labor standards, subpar environmental regulations and major issues with governance.
“This is the race to the bottom,” USTR wrote. “It leaves critical sectors vulnerable to non-market policies and practices, economic coercion, and other unfair trade practices, and deprives consumers of goods whose production reflects our core values.”
“It has also contributed to the hollowing out of the American industrial base and vital U.S. jobs, and harmed many of our communities and working families, undermining support for democracy itself,” the notice said.
In the face of these challenges, USTR said it’s seeking answers from the public on several key questions. The federal agency is asking stakeholders to weigh in on how U.S. trade policy in combination with domestic incentives can better support the growth of domestic manufacturing, as well as what tools could help ensure that any new or growing industry doesn’t repeat the same offshoring cycle. It also wants to know how trade and investment can promote a “race to the top” when it comes to labor and environmental practices, and how to service specific sectors with effective policy.
“As President Biden emphasized during a recent meeting of the White House Competition Council, the pandemic disrupted supply chains, which drove up costs on everyday goods for hardworking Americans,” USTR Ambassador Katherine Tai said in a statement. “This is why a centerpiece of our work at USTR is developing innovative trade tools and strategies for connecting trade and other economic policy measures to advance supply chain resilience, while also reevaluating earlier policy approaches that prioritized efficiency to the exclusion of resilience.”
“This request for public input will enable us to draw upon the perspectives and experiences of stakeholders and partners that we need in order to foster a more granular understanding of supply chain challenges across a range of sectors, and identify potential policy solutions,” she added.
According to the notice, written comments on the issue are due by April 22, to be followed by a public hearing beginning on May 2. Those that wish to testify at the hearing must submit their requests by April 12.
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