United States trade ambassador Sarah Bianchi says the US is “thrilled” with the deepening bilateral relationship between the US and New Zealand.
In Wellington this week for talks with foreign affairs officials, Bianchi later talked with the Weekend Herald on America’s ambition to have an “early harvest” of the Indo-Pacific Economic Framework for Prosperity (IPEF).
President Joe Biden launched the framework in May 2022: 14 nations are involved: Australia, Brunei, Fiji, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and the US.
“We have been just really thrilled with the participation that we’ve had since then,” says Bianchi.
IPEF has four pillars: trade which is being led by USTR (United States Trade Representative Office), and three others which are led by the US Department of Commerce.
“They’re moving most actively right now trying to close the supply chain pillar,” she says noting that negotiating rounds on the trade pillar were also going “fast and furious”.
“We have tabled a number of chapters, on a range of things, that sometimes sound a little technical: trade facilitation, good regulatory practices, agriculture — which is so important here in New Zealand.”
Reducing frictions between economies in the 21st century which can occur in the digital infrastructure space or customs is a priority.
“They sound sometimes like technical issues, but if you are a small business in New Zealand or the United States trying to export your product, it actually makes a really big difference.
“We’re under no illusion that digital will be a really, you know, important chapter where we get a lot of feedback.”
In effect, the United States — which abandoned the Trans-Pacific Partnership (TPP) under Donald Trump’s watch — wants to set some new “rules of the road” for regional commerce through IPEF.
“We want to deepen our economic engagement between 14 countries that taken together make up 40 per cent of global GDP,” she says. “So that’s where we’re up to, we are trying to do what we technically call an early harvest, by November.”
That November deadline is critical for the US. It’s when Biden will host the leaders of 21 Apec (Asia-Pacific Economic Cooperation) members in San Francisco (probably minus Vladimir Putin).
Being able to announce that “early harvest” on the outskirts of the Apec meeting would be a feather in the cap for US regional leadership.
But from a New Zealand perspective, the inability under the IPEF framework to make meaningful gains on trade access to the United States has been a disappointment. New Zealand has also been disappointed at the Biden Administration’s refusal to remove steel tariffs on our exports to the US.
Bianchi acknowledges there are different perspectives.
She notes that the Commerce Department did make a Section 232 exclusion for high-purity aluminium exports for New Zealand a few weeks ago.
“That doesn’t account for all the steel and other issues, but it’s actually, it is a significant movement.”
The exclusion covers more than five times the volume of New Zealand’s total aluminium exports to the United States in 2022.
The Biden administration has a clear objective to rebalance its economy with a focus on “onshoring” and ensuring greater worker participation which has long been championed by the AFL-CIO, the largest federation of unions in the United States.
The proliferation of AI and its impact on workers’ jobs is a live issue in the US and also for some other IPEF members.
Bianchi says she had the “privilege” of working with Biden when he was vice-president. “So, I know a lot of how he thinks and he’s very sensitive to some of the workers’ stakeholder concerns that we have.”
The upshot is that she probably talks to labour stakeholders in the US every other week.
Bianchi is long blooded in Democratic politics — particularly on the policy side.
The New York Times profiled her in 2000 — “Young and ‘Scary Smart’ Policy Aide Earns Gore’s Ear” — when as a 27-year-old she worked on Al Gore’s presidential campaign.
Bianchi had roomed with Gore’s daughter while at Harvard. Gore said “Sarah B” was “scary smart”.
In that same NYT profile, the then VP and his aides said Bianchi had “earned a place at the table with a passionate commitment to social policy, a steel-trap mind for numbers, a quiet confidence that belies her age and determination that policy not be compromised by politics”.
Bianchi later served as national policy director on John Kerry’s 2004 presidential campaign. During the Obama administration she held an economic policy role before being appointed director of policy for VP Biden.
She was confirmed as Deputy USTR by the US Senate in September 2021.
At our interview at the US Embassy, Bianchi presented as personable and focused as we traversed the trade agenda before she had to catch a plane.
A later readout described her official talks with MFAT deputy secretary Vangelis Vitalis as “productive”.
These talks took place under the Trade and Investment Framework Agreement (TIFA) which was signed in 1992.
In 2022, two-way goods and services trade reached $13.8 billion ($22.04b). US exports of goods and services to New Zealand were US$6.8b, up 22.7 per cent from 2021, and US imports from New Zealand were US $7b, up 20.7 per cent from 2021.
Bianchi also met New Zealand’s lead IPEF negotiator Mark Sinclair and took part in a roundtable focused on Aotearoa New Zealand’s indigenous trade perspective.
Bianchi says the US has asked New Zealand, together with Australia, to take the lead on the drafting of some IPEF chapters relating to inclusivity.
“We really learned, you know, New Zealand just brings so much to the table in this space”.
An IPEF ministerial meeting is planned for May in Detroit, on the sidelines of the Apec trade ministers’ meeting, to move negotiations forward.
Bianchi says the war in Ukraine, and the global response, has really deepened the relationships with like-minded countries.
“Not my area but I am proud of the coalitions that have been built”.
Reflecting on the Covid pandemic, she indicated a lot had been learned through the period, particularly on supply chain vulnerabilities.
“And you know, I think we’re trying to do something that’s very durable that reflects where we are today.”