WASHINGTON — Lawmakers on Tuesday issued a sharp rebuke of a limited trade deal the Biden administration reached with Japan, saying that it should have been made available to Congress and the public for review and that it lacked important protections for the environment and workers.
In a statement viewed by The New York Times, Representative Richard E. Neal of Massachusetts, the Democratic ranking member of the Ways and Means Committee, and Senator Ron Wyden, Democrat of Oregon and the chairman of the Finance Committee, called the agreement “unacceptable.”
“Without enforceable environmental or labor protections, the administration abandons worker-centric trade policy and jeopardizes our climate work by opening the door for another environmental catastrophe,” wrote the lawmakers, who are the two most powerful Democrats in Congress on trade issues.
“Agreements should be developed transparently and made available to the public for meaningful review well before signing,” they added, “not after the ink is already dry.”
The Biden administration announced late Monday that it had reached an agreement with Japan over supplies of critical minerals like lithium, cobalt and nickel, which are used to make car batteries. The agreement provides a potential workaround for the Biden administration in its disagreement with allies over the terms of the Inflation Reduction Act, which invests $370 billion to transition the United States to cleaner cars and energy sources.
The Rise of Electric Vehicles
- Lithium Prices: A decline in the price of the essential battery material, along with those of other commodities, is making electric cars more affordable. But experts disagree on how long it will last.
- Volkswagen: The German automaker said that it would spend $193 billion on software, battery factories and other investments as it aimed to make every fifth vehicle it sold electric by 2025.
- Bulking Up: Electric vehicles are usually a more climate-friendly option. But as they get bigger, their emissions savings, and other environmental and safety benefits, begin to diminish.
- Tesla: The company will open some of its fast chargers, which had been exclusive to its customers, to all electric vehicles by the end of next year, the Biden administration said.
That law has angered some allies who were excluded from its benefits, which include generous tax incentives for companies that make electric vehicles in North America or source material for batteries from the United States or countries with which it has a free-trade agreement. That category does not include Japan or European Union countries.
But because the Inflation Reduction Act does not technically define what constitutes a free-trade agreement, U.S. officials have found what they believe to be a workaround. They are arguing that countries will be able to meet the requirement by signing a more limited trade deal instead. The Treasury Department is expected to issue a proposed rule this week clarifying the provisions of the law.
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A fact sheet distributed late Monday by the Office of the United States Trade Representative said that the United States and Japan had promised to encourage higher labor and environmental standards for minerals that power electric vehicles. The parties also promised to promote more efficient use of resources and confer on how they review investments from foreign entities in the sector, among other pledges.
In a call with reporters on Monday, a senior official said the Biden administration had consulted with Congress and received input from lawmakers. But the official said the administration had the authority to negotiate limited agreements without submitting them to Congress for approval.
Katherine Tai, the United States trade representative, had been expected to sign the agreement on Tuesday.
“It’s clear this agreement is one of convenience,” Mr. Neal and Mr. Wyden said in the statement. “As we warned Ambassador Tai last week, the administration does not have the authority to unilaterally enter into free trade agreements.”
Administration officials have argued that key members of Congress always intended U.S. allies to be included in the law’s benefits. But other lawmakers have also criticized the Biden administration for sidestepping Congress’s authority over new trade deals, a tactic that the Trump administration also frequently used.
“The administration is taking the wrong approach with this new announcement,” Representative Dan Kildee, Democrat of Michigan, said in a statement on Tuesday.
“I believe the administration must come to Congress if they want to enter new free trade pacts,” he added.
