By David Lawder

WASHINGTON, (Reuters) -The U.S. Trade Representative Katherine Tai rebutted a barrage from Republican and Democratic senators Thursday by stating that the Biden administration’s Indo-Pacific economic strategy to combat China does not contain a free trade agreement that lowers tariffs.

Tai stated before the trade-focused Senate Finance Committee that while the Indo-Pacific Economic Framework will not lower tariffs in member countries, it will still provide “economically meaningful results” to support trade and market accessibility.

Tai stated that China failed to comply with the conditions of “Phase 1”, a trade deal negotiated by Donald Trump’s former administration. Her agency is now focusing on China’s attempts to control strategic industries.

She stated that USTR will broaden its approach to China beyond Trump’s tariff war — China’s technology transfers policies and intellectual theft — in order curb Beijing’s “industrial targeted practices”, where China has again and again dominated the markets for critical industries.

The comments she made were partly a reference to Beijing’s “Made in China” efforts to control 10 strategically important industries, currently led by America, including semiconductors, aerospace, and information technology.

TRADE DEAL REFRAIN

In a common refrain heard during hearings on the Indo-Pacific framework, Senator Maria Cantwell (a Democrat from Washington) asked, “Why can’t you be for opening markets access now and getting rid off tariffs?”

Republicans representing agricultural countries also wondered why an economic group aimed at isolating China, limiting its influence in Asia, does not aim to strengthen U.S. trade ties with Indo-Pacific countries through tangible benefits.

Referring to the Indo-Pacific plan, Republican Senator John Thune from South Dakota stated that “It is a lot of flowery rhetoric but I’m trying see where it opens markets for our farmers/ranchers.”

Tai clarified that the Indo-Pacific Economic Partnership did not seek to rejoin or recreate the Core Principles of Trans-Pacific Partnership, the Pacific-Rim Free Trade Agreement (FTA), that Obama negotiated in 2015. Trump abandoned it shortly after taking office.

Tai stated that “Traditional FTAs” have brought us to a point where there is a significant backlash from American citizens about the outsourcing and offshoring of American jobs.

As part of its efforts to demonstrate that the Indo-Pacific region is a strategic priority for the Biden administration, the Indo-Pacific framework is being still developed.

Tai explained that the trade component is about setting standards for digital trade, more stringent environmental standards and higher labor standards. Other components of Tai’s system include infrastructure development, building resilient supply chains and decarbonization.

The Taiwanese would also be invited, but she declined to comment.