USA and Europe are aiming for a New Deal to solve the climate dispute

Free trade agreements are legal agreements that the World Trade Organization defines as covering “substantially all trade” between countries, including a wide range of goods and typically services. Their negotiations usually take years and, in the United States, require the approval of Congress.

Scott Lincicome, director of general economics at the Cato Institute, said the Biden administration’s authority to enter into such trade deals was questionable, but that it was unlikely anyone would attempt to legally challenge them.

“Everyone in the room knows this is not kosher, but nobody can really do anything about it,” Mr Lincicome said.

Political appetite for new free trade deals has waned in the United States in recent years, in part due to a perception that such deals have helped multinationals move factories and jobs abroad.

Efforts to secure wide-ranging trade deals with Europe and a group of Asian countries during the Obama administration failed, in part because of this political opposition. During the Trump administration, the United States signed a series of limited trade deals with South Korea, Japan, and China that were implemented through executive orders rather than congressional approval.

Edward Alden, a senior staffer at the Council on Foreign Relations, said that the limited deal would appease Europeans and that the US-EU economic relationship is too important “not to keep Europeans under the tent one way or another.” to permit”. But it could escalate complaints from other trading partners, like South Korea, who feel their concerns have not been addressed, he said.

South Korea already has a comprehensive free trade agreement with the United States, but it has other criticisms of the climate law, centered on how current regulations bar Hyundai electric vehicles from being eligible for tax credits. “Once you’ve made arrangements for one, the pressure increases to make arrangements for others,” he said.

Source