USTR Testimony

By Catrina Rorke
June 3, 2024

The following remarks were prepared for testimony given on May 23, 2024, as part of the Office of the United States Trade Representative (USTR)’s Promoting Supply Chain Resilience hearing series:

Thank you for having me and for the opportunity to testify.

My name is Catrina Rorke. I am the Senior Vice President for Policy and Research at the Climate Leadership Council, as well as the Executive Director of the Council’s Center for Climate and Trade. We are a nonpartisan organization devoted to identifying and advancing policies that leverage trade relationships and the global market economy toward greater international cooperation and climate ambition.

We applaud USTR for taking the initiative to address supply chain resiliency and I thank you for including us in this hearing.

It’s fair to wonder why a climate organization is participating in this hearing series; it’s because we see trade, investment, and supply chain security as deeply intertwined with climate outcomes.

The energy transition will require unprecedented amounts of critical minerals, a steady and affordable supply of basic commodities like steel and aluminum, and flexible supply chains that quickly respond to a changing landscape. The U.S. manufacturing renaissance faces a key supply chain vulnerability: adversarial countries using aggressive, non-market practices to dominate supply chains and distort the global market for commodities and manufactured goods.

We encourage USTR to pursue a two-pronged strategy:

  1. Support U.S. manufacturers by securing supply chain agreements to achieve more stable, secure, diverse supply chains in the short-term and mid-term, and
  2. Support long-term supply chain security by exporting more U.S.-made products.

First, we encourage USTR to explore supply chain agreements with international partners capable of mining, refining, or manufacturing necessary goods. Potential counterparts should include market-based economies such as those who have signed onto the Minerals Security Partnership or have expressed interest in the Global Arrangement on Sustainable Steel and Aluminum.

USTR and the development agencies should consider creative approaches that combine trade agreements with investment or development agreements. China has successfully used its One Belt One Road investment strategy to build economic ties and supply chain relationships with many resource-rich developing economies. The U.S. cannot outcompete China in public finance but is uniquely able to leverage institutional investors—who hold roughly $150 trillion in assets—by de-risking investment and building a large, actionable project pipeline in developing countries. Introducing development or investment commitments can be a terrific sweetener for supply chain agreements.

The second prong to this strategy is exports. Secure supply chains are, increasingly, carbon-efficient supply chains. U.S. manufacturers hold a carbon advantage and produce goods with 44% fewer emissions than the global average and 70% fewer emissions than China.

But in 2021, the U.S. supplied just 6% of global clean technology exports compared to China’s 22% share. As recent legislation drives unprecedented volumes of federal and private investment into U.S. decarbonization, American firms are well positioned to supply the goods, services, and deep experience that the global marketplace needs to decarbonize. Indeed, one analysis found that for every ton of emissions that we reduce in the U.S., we’ll reduce up to 3 tons globally. We encourage USTR to identify opportunities for trade or cooperative arrangements to expand markets for U.S. product abroad, particularly by addressing non-market practices and improving tariff and non-tariff barriers, intellectual property protection, and market readiness.

Another component to exporting more U.S.-made product is creating a reward system for lower-carbon goods by introducing border carbon adjustments (BCAs). This would address the 75% of U.S. imports that come from markets with higher carbon intensities than our own and increase the competitiveness of U.S. manufacturers abroad. BCAs will enable the U.S. to out-compete international rivals on the basis of carbon intensity. USTR has already initiated promising discussions through forums like the Global Arrangement; we encourage USTR to hold the course and bring in more international partners.

This framework to shore up supply chains—and leverage U.S. exports to decarbonize our supply chains—can align U.S. economic security and global decarbonization. We look forward to working with you to realize this vision. Thank you for your time and attention.