WASHINGTON – U.S. Senator Chris Coons (D-Del.), member of Senate Foreign Relations Committee, delivered a speech yesterday at the Center for Inclusive Trade and Development (CITD) at Georgetown University Law Center on reimagining international trade policy to support sustainable development. In his speech, he outlined challenges, opportunities, and priorities for U.S. trade policy, including harmonizing our efforts to address climate change and digitalization with those of our allies, ensuring a level playing field in economic competition with China, and engaging the Global South in an increasingly multipolar world.
Read coverage here: Global Trade Keynote: Sen. Chris Coons Talks Regulations, Sustainability
His full remarks are below:
Senator Coons: Well, thank you very much, [Yale University Professor] Dan [Esty]; thank you for the introduction. Thank you for helping me take a trip down memory lane as to the different ways in which the arc of my life made no sense at the time – to my parents, my classmates, or me – but looking back on it, now that I’ve managed to find a job where I can do a lot of different things in a lot of different fields, it makes perfect sense.
We are in the Senate, as you may know, right in the middle of a vote with enormous consequences: whether or not we can proceed to provide continued support to those who are fighting for freedom in Ukraine, whether we will do humanitarian relief into Gaza and 30 other countries, or whether we will continue to support other critical partners and allies from the Indo-Pacific and Israel, having failed to pass a hard-fought bipartisan consensus on border security yesterday.
There is an air of uncertainty and a lot of anger and a lot of disappointment in the Senate about whether we can come together and address large challenges in the world. Historically, some have called the Senate “the world’s greatest deliberative body”; that has a certain ring of irony to it today. One of my colleagues said to me this morning, we are living out Winston Churchill’s prognostication that you can count on the Americans to do the right thing, after they’ve tried absolutely everything else.
So, I do want to specifically thank the Georgetown Center on Inclusive Trade and Development and [CITD Co-Directors] Jennifer Hillman, Katrin Kuhlmann; could you give them a round of applause, please, for hosting today? Professor Dan Esty and the others who help lead the Remaking Trade Project, thank you so much.
And my team, I think Sam and Ivan and Joel are here. Please give them a round of applause because they are the folks who do the work, not me.
Figuring out how to better align trade with ambition, climate ambition, the concern about sustainability, is very hard work but it is work worth doing. So, I’m grateful for a chance to be with you here today.
I wanted to balance being realistic about how fractured, divided, and broken the legislative process is with also giving you some reasons for optimism. So, I will continue that duality of giving you both a hard-edged, realistic assessment of the difficulties we face, but also some little windows of encouragement into ways in which we are making some progress.
I began this morning with the latest in a series of meetings in the Climate Solutions Caucus, something that I launched several years ago with Republican Senator Mike Braun (R-Ind.). Mike Braun may or may not be well-known to all of you; he’s from Indiana. Like me, he had a background in manufacturing; unlike me, he is very conservative Republican and evangelical, but someone who believes that climate is changing and that human activity is contributing to it, and that we need to take action.
And so, he and I set to work recruiting other senators and ultimately built a bipartisan group that counted a dozen members and has done dozens of events to bring the leaders in industry and academia, advocates, innovators, and to look at what is possible, both legislatively and in terms of implementation to combat climate change. There is now a bipartisan group in the House that numbers in the dozens; I think they’re up to 80 members. We have moved away from climate denialism as being a simple point that divided the two parties, to having a bipartisan delegation that went to the last COP [U.N. Conference of the Parties]. So again, some encouragement, some challenges.
I want to talk briefly about how the world has changed, and how the global rule book on trade needs to change along with it.
It was 30 years ago, when I was in the private sector working for a global manufacturing company, that a lot of the rules on the modern trade framework were written. It was in 1994 that the Marrakesh [Morocco] treaty creating the WTO [World Trade Organization] was ratified, and it actually includes phraseology about sustainable development being one of its core objectives. So, it’s not new, but it’s not been core to the work of the global trade system over the last three decades.
So, I do want to congratulate the organizers of this conference on working to refocus the WTO on this goal, and I thank those who already delivered recorded comments, and I’m grateful for the work that you’re doing to help contribute. In my view, the trade rules of the last three decades are often sharply at odds with the environmental exigencies of today. As countries like the United States, and many of our partners or allies around the world, work to decarbonize countries and companies, they’re undercut by others who are simply increasing the production of dirty competing products, and that similar dynamic undercuts workers in countries like the United States that have strong labor protections.
Goods produced by workers without any rights are cheaper. Goods that are produced in countries that have no meaningful environmental emissions are cheaper. These goods don’t deserve the protection of our trade, and such a system is not sustainable, either politically, ecologically, or economically. That’s the first challenge that I think we are facing, is that a world today that has changed dramatically, and that climate change is recognized as one of the overwhelming threats to the future of our world. We all, I suspect, just read a news article concluding that this was the first year where for the entire year, the globe had exceeded its 1.5 degrees Celsius as we had previously set as a target. We are now rocketing past it.
A second critical change in the last three decades would be the digital economy – the digitalization of societies and economies, which is creating both huge amounts of opportunity and fundamental disruption.
The WTO members, again, back roughly 30 years ago – it was actually 1998 – agreed not to put any customs duties on electronic transmissions. This is when we were talking about the tubes of the internet in its very beginning stages. In just a few weeks, WTO ministers will debate again, whether to continue or abandon that moratorium, and yet the United States has abruptly stepped away from longstanding trade priorities with nothing clear to take its place. The technology continues to move forward, even accelerate, as artificial intelligence is moving e-commerce forward and digital consequences and at even more rapid pace. But digital trade debates are arguably moving backwards. This is not just a criticism of USTR [the U.S. Trade Representative] and the administration; Congress has fundamentally failed to deliver meaningful progress on data privacy, or on a response to artificial intelligence, although there is good work in this area.
Third, the world is increasingly multipolar. If you look back at the world 30 years ago, it really had been defined by the Cold War between the Soviet Union, the United States, and the aligned countries. There was a lot of excitement about the promise and the prospects of a newly integrated global economy. During the period when I was a young man with a head full of hair and lots of hope and ambition coming out of my graduate education at Yale, there were roughly 2 billion people who were not fully integrated into the world economy, the global trading system, who moved into it, and it was unknown what the outcome would be.
There was a broad consensus in this country that allowing China to fully participate in WTO and giving PNTR [permanent normal trade relations] would change the political predilections in the system and values of China. That demonstrably has not happened. The WTO, the opening of globalization, did have an enormous positive impact. It created a global middle class; it brought hundreds of millions out of abject poverty. It opened markets as its priority, but it undermined the middle-class manufacturing in this country, which has led to populism and a sharp backlash against trade policy, really at all having a meaningful conversation about trade policy. That’s not just in this country; that that was in Europe and many other places around the world.
Bluntly, we failed to enforce the rules. The rules that were set out at the outset were just blatantly, repeatedly violated, principally by the PRC [People’s Republic of China] but many other countries, and the backlash against its impact for middle American towns was not without foundation. So, climate, labor, digitalization, the rise of China: These are global challenges and they have been in no small part challenges that there is now a debate in this country about whether we can or should try to deal with them unilaterally or multilaterally.
America First, and the priorities of the previous president, principally looked at trying to address these things through a U.S.-alone, unilateral lens. I would argue they failed. In my view, these are the challenges in particular – protection of labor rights, advancing climate ambition, dealing with the digital economy – we cannot do these on our own. … [N]ew tariff walls won’t address these problems and will simply deny our businesses and our workers access to a growing global market.
We can’t stand still on trade policy, either. Both China and the E.U., for example, are increasing their pace of opening markets for their exports. They’re advancing their approaches to big challenges, and we need to be in this conversation. We have to be creative. We have to challenge some of the long set of assumptions. In Congress, we need to be a part of this conversation. There are some on both sides of the aisle that see the need for new approaches to pursuing our global trade interests.
So, let me try to briefly offer three priorities, priorities that could guide a reimagined U.S. trade policy, and three priorities that have an impact on how I’m looking at these issues in Congress, and you’ll note, I will sprinkle references to bipartisan work together.
Fundamentally, the structure of our Congress demands bipartisan compromise. We cannot meaningfully legislate without working across the aisle. So, to the extent some of the developments of this week would lead anyone to be despondent about the prospects for bipartisanship, I’m trying to continue to leave behind breadcrumbs of hope.
So first, we need to make climate a trade policy priority. Round of applause. … If we don’t make climate a central priority of our trade policy, we are missing not just this moment, but this century. There is in the becoming a fundamentally new global energy economy. It is the project of this century, and every country and every company needs to be engaged in decarbonization – but it is very uneven, the level and tempo and trajectory of engagement. As someone who routinely goes to the Munich Security Conference and the World Economic Forum, I spent years having our friends and partners around the world beat me senseless about the lack of any progress by the United States. The last two years have been quite entertaining, as European partners have complained bitterly about how the Inflation Reduction Act, the single biggest piece of climate legislation in human history, is now leading to the deindustrialization of Europe.
We have fundamentally different approaches, the U.S. and the E.U. We passed and are now implementing at speed the biggest piece of climate legislation that had a faceplate value of about $369 billion in federal investments through tax incentives, grants, loans, but a recent study by Goldman Sachs suggests it will rocket far past and could be as much as $3 trillion in lifetime investment, all to help spur a clean energy transition here in the United States. That’s one approach. Europeans have taken a fundamentally different approach. They are wildly enthusiastic about regulation, and on this they’ve overperformed.
They have ambitious climate goals that they are achieving through the European Green Deal. They’ve had an internal carbon market since 2005, now they’re torquing it up and they’ve got a CBAM – a carbon border adjustment mechanism – that will begin collecting tariffs on carbon-intensive goods in 2026. The U.K. has recently announced – although they’ve left Europe, they want to rejoin Europe – they’re announcing their own CBAM partnership at the E.U. to begin in 2027. Great! Canada also – I was just with the Premier of Alberta last night – Canada has its own carbon pricing that began at the provincial level and is now nationwide, and they are exploring options for their own border adjustment. There’s movement on using CBAM as a technique for reducing emissions and for showing climate ambition.
We need to harmonize these approaches. We have a tax-incentive approach; they have a regulatory approach. I think we have to find a core path for harmonizing trade policy and climate ambition. An initial step in this direction was mentioned in the introduction. I found a great partner, to my astonishment and surprise, in Republican Senator Kevin Cramer of North Dakota, who wrote an article, along with the former President’s National Security Adviser, General [H.R.] McMaster, in Foreign Policy calling for U.S.-E.U. collaboration in creating a common carbon import fee. What a delight!
So, I went and started working with Senator Cramer, and our initial step in this direction is the PROVE IT Act, which would direct the Department of Energy to study the emissions intensity of industrial goods produced in the U.S. and globally, and looking at things like aluminum and steel and glass and fertilizer. Eleven bipartisan co-sponsors. “Nice, Senator, you’ve got a little bill you’ve introduced, how lovely.” It’s actually been marked up and advanced out of the EPW [Environment and Public Works] committee by a 14-to-five vote. It will begin the process of gathering data that will quantify the climate benefits of U.S. investments in cleaner, more efficient manufacturing processes. We can, I would argue we must, use this data to then develop trade policies to hold nations like China accountable for emissions-heavy production goods like steel.
It’s the first step towards leveling the playing field for our workers and those producers who adhere to high standards here in the United States and who face persistent competition in the industrial sector, so they’re not undercut by dirty competitive products from many countries overseas. Let me also just applaud the administration’s determined efforts to negotiate an agreement on sustainable steel and aluminum and to establish critical mineral security partnerships with a range of countries.
But broadly on this first point: Harmonizing climate and trade policy to show that climate is a trade priority is critical to solving climate change, and to defending and advancing manufacturing jobs in the United States. We have to find a way to do this in concert with our closest partners and allies.
Second, we have to work with those same countries to set digital trade standards. Four years ago, under the previous administration, working with then-Speaker [Nancy] Pelosi [D-Calif.], the USMCA [United States-Mexico-Canada Agreement] got 89 votes in the United States Senate. It set a high bar for labor rights, for environmental protection, and for digital trade. The USMCA is having an impact – it’s shifting supply chains. Just last year, for the first time, we imported more from Mexico than we did from China, and the USMCA contains a number of provisions and chapters that I think should serve as a model.
I think we should double down on negotiating with like-minded allies and partners and focus our negotiations on areas of strategic importance and commercial strength. I’ve got two bills that sort of nod in this direction, one with Senator John Thune – Republican Senator John Thune of South Dakota – the UNITED Act, which authorizes entering into trade negotiations with the United Kingdom: an example of a close ally with whom we should be negotiating. We are in very similar stages of development – there are provisions in USMCA to form the basis for that. Senator Todd Young, Republican from Indiana, we have the Trading Systems Preservation Act, which would authorize negotiation of sector-specific trade agreements, attempting to give a nudge to the direction of engaging meaningfully in trade negotiating.
Look, if we work with allies and like-minded partners, we can develop rules that are rooted in our common values and that reinforce these critical relationships, and I think there’s a number of sectors ripe for core lateral agreements. It’s urgent we collaborate in trade rules for technology. It is creating enormous economic opportunity and disruption, and to work with these partners on accelerating the adoption and deployment of clean energy technologies. We’re also going to have to find out common approaches to govern trading technologies with critical dual use potential, which these days is a very broad range of technologies from semiconductor chip manufacturing to software.
International IP [intellectual property] rules today allow our high-tech companies to ship high-tech products almost immediately around the world. Businesses large and small need access to digital services like data analytics and cloud computing and have to be able to move data securely across borders. Technologies, as I mentioned earlier, like artificial intelligence, digital platforms, are just upending whole industries and disrupting society. So, we need rules to govern these powerful new tools. Domestic debates that seem to be endless, and not reaching a conclusion over new regulations, shouldn’t prevent us from engaging with our allies, who are already moving on without us on some of these points. We have to develop these rules collaboratively with like-minded partners that are also free-market societies and democracies, because as with climate, having divergent approaches to governing technology shouldn’t result in trade barriers.
Second, because how we govern these technologies has critical implications for human freedom and prosperity, for the outcomes in the global contest around whether or not democracy and free market societies are the model for development for the century. Where we and our allies can find common approaches, they can and should become the standard, the model, for the free world, and if democratic governments don’t set these rules, our adversaries will. They will advance digital authoritarianism that is built on surveillance, censorship, propaganda, and control.
Tariff reductions need not be our primary objective in these negotiations. Neither should we rule out discussion of market access – to simply say we won’t to talk about market access at all in any setting anywhere really constrains our ability to engage some of the countries that in the world are looking to see where we are headed. Access to our market is one of our most powerful tools, and we should use it to achieve some of our most desired outcomes, and opening foreign markets also creates valuable opportunities for our exporters and workers.
So, this brings me to my third priority, which I hope resonates with some of the things you’ve focused on, and some of the speakers who follow me will focus on. Deepening our trading relationships with the Global South and with developing countries: I’m about to introduce a bill jointly with Republican Senator Jim Risch [Idaho], to extend the African Growth and Opportunity Act [AGOA]. Africa has been a particular priority and focus of mine in the decades since I was first a student there as a young man. AGOA is a market-access program: It provides tariff-free access to the United States for dozens of African countries. That market access is hugely valuable and gives us an opportunity to shape our relationships and to deepen them. It tries to align aid, trade, and diplomatic efforts so more countries can utilize and benefit from this program to deepen their economic ties with the United States. Today, bluntly, honestly, out of 54 countries on the continent, there’s really half-a-dozen that significantly benefit from AGOA and actively participate in it. I hope by reshaping it somewhat, we could double or triple that number.
We will be proposing changes to enhance trade, but to engage with governance and human rights concerns meaningfully as well. The most important thing is that we extend AGOA promptly and not do what the Senate always does and wait until we have a crisis. Because it expires next year, and so getting the attention of the leaders of the relevant committees to do it this year will have significant consequences for investment, because the industries at issue have options around the world.
Why prioritize AGOA? Africa is the fastest-growing continent on the planet. Five out of 10 of the largest countries in the world will be in Africa by the end of the century. It’s got a lot of opportunities around renewable energy as well. Kenya, a country close to my heart – nearly 80% of its baseload power generation is renewable, geothermal, wind, and solar and it’s steadily moving up the value chain as light manufacturing and advanced manufacturing is happening in a half-dozen countries. With the long-term extension of AGOA on more favorable terms, I think we can send a strong signal of engagement. It matters because Africa has become more and more integrated economically with China. At the turn of the century, there was $8 billion a year in China-Africa trade. 2019, that was at $160 billion; it has gone simply like this. [Gestures upward.] Many U.S. businesses have realized they are overly reliant on China as a critical source for their supply chains and they are looking for opportunities to diversify. I think we have a moment that we should take advantage of.
More broadly speaking, the global trade system is only sustainable if the Global South – countries in Asia and Africa and Latin America – are benefiting and profiting from further engagement in trade. So, figuring out through this exercise a broader approach to a more inclusive and equitable global trading system will help us begin to make real progress towards a more sustainable global trading system.
So, let me conclude. I see everyone’s had a chance to finish their lunch. I’ve been your lunchtime entertainment. I’m going to leave you to get back to substantive and serious people talking about meaningful things.
Our changing world demands new approaches to trade. After 30 years, we have to recognize that we’re in a place where we have to reimagine our engagement with trade. The infrastructure of the global trading system has become creaky and, in many ways, outdated, and we need to update it so that the rules reflect the world as it is and as it is emerging, not as it has been. We have to tackle these global challenges, like digitalization and its consequences for the world, like climate change and its inevitable consequences for the world. We need to do that, principally, in concert with those who share our priorities and values, and we have to put sustainable development at the very heart of our efforts, protecting workers and citizens at home and ensuring that the economic opportunities of trade are available to countries both developed and developing. So, with that, thank you for your attention and the opportunity to engage with you. I look forward to hearing about the outcomes of this conference.
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