[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
U.S. TRADE POLICY AGENDA
=======================================================================
HEARING
before the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
JUNE 22, 2017
__________
Serial No. 115-FC05
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
U.S. GOVERNMENT PUBLISHING OFFICE
33-478 WASHINGTON : 2019
COMMITTEE ON WAYS AND MEANS
KEVIN BRADY, Texas, Chairman
SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts
DEVIN NUNES, California SANDER M. LEVIN, Michigan
PATRICK J. TIBERI, Ohio JOHN LEWIS, Georgia
DAVID G. REICHERT, Washington LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois MIKE THOMPSON, California
VERN BUCHANAN, Florida JOHN B. LARSON, Connecticut
ADRIAN SMITH, Nebraska EARL BLUMENAUER, Oregon
LYNN JENKINS, Kansas RON KIND, Wisconsin
ERIK PAULSEN, Minnesota BILL PASCRELL, JR., New Jersey
KENNY MARCHANT, Texas JOSEPH CROWLEY, New York
DIANE BLACK, Tennessee DANNY DAVIS, Illinois
TOM REED, New York LINDA SANCHEZ, California
MIKE KELLY, Pennsylvania BRIAN HIGGINS, New York
JIM RENACCI, Ohio TERRI SEWELL, Alabama
PAT MEEHAN, Pennsylvania SUZAN DELBENE, Washington
KRISTI NOEM, South Dakota JUDY CHU, California
GEORGE HOLDING, North Carolina
JASON SMITH, Missouri
TOM RICE, South Carolina
DAVID SCHWEIKERT, Arizona
JACKIE WALORSKI, Indiana
CARLOS CURBELO, Florida
MIKE BISHOP, Michigan
David Stewart, Staff Director
Brandon Casey, Minority Chief Counsel
C O N T E N T S
__________
Page
Advisory of June 22, 2017, announcing the hearing................ 2
WITNESS
Honorable Robert E. Lighthizer, Ambassador, United States Trade
Representative................................................. 6
QUESTIONS FOR THE RECORD
Questions from Trade Subcommittee Chairman Reichert to Ambassador
Lighthizer..................................................... 61
Questions from Ranking Member Neal to Ambassador Lighthizer...... 64
Questions from Trade Subcommittee Ranking Member Pascrell to
Ambassador Lighthizer.......................................... 72
Questions from Representative Johnson to Ambassador Lighthizer... 77
Questions from Representative Lewis to Ambassador Lighthizer..... 78
Questions from Representative Nunes to Ambassador Lighthizer..... 84
Questions from Representative Larson to Ambassador Lighthizer.... 86
Questions from Representative Jenkins to Ambassador Lighthizer... 88
Questions from Representative Crowley to Ambassador Lighthizer... 90
Questions from Representative Marchant to Ambassador Lighthizer.. 92
Questions from Representative Higgins to Ambassador Lighthizer... 93
Questions from Representative Reed to Ambassador Lighthizer...... 95
Questions from Representative DelBene to Ambassador Lighthizer... 96
Questions from Representative Holding to Ambassador Lighthizer... 97
Questions from Representative Chu to Ambassador Lighthizer....... 99
Questions from Representative J. Smith to Ambassador Lighthizer.. 102
Questions from Representative Schweikert to Ambassador Lighthizer 104
Questions from Representative Rice to Ambassador Lighthizer...... 105
Questions from Representative Walorski to Ambassador Lighthizer.. 107
Questions from Representative Bishop to Ambassador Lighthizer.... 109
SUBMISSIONS FOR THE RECORD
Advanced Medical Technology Association (AdvaMed)................ 110
American Farm Bureau Federation.................................. 121
Borderplex Alliance.............................................. 126
Center for Fiscal Equity......................................... 136
Flexible Packaging Association (FPA)............................. 139
Fresh Produce Association of the Americas (FPAA)................. 143
National Pork Producers Council (NPPC)........................... 146
TechNet.......................................................... 156
U.S. TRADE POLICY AGENDA
----------
THURSDAY, JUNE 22, 2017
U.S. House of Representatives,
Committee on Ways and Means,
Washington, DC.
The Committee met, pursuant to call, at 10:05 a.m., in Room
1100, Longworth House Office Building, Hon. Kevin Brady
[Chairman of the Committee] presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Thursday, June 22, 2017
FC-05
Chairman Brady Announces Hearing on
U.S. Trade Policy Agenda
House Ways and Means Chairman Kevin Brady (R-TX), announced today
that the Committee will hold a hearing on the U.S. trade policy agenda
with U.S. Trade Representative Robert Lighthizer. The hearing will take
place on Thursday, June 22, 2017, in room 1100 of the Longworth House
Office Building, beginning at 10:00 a.m.
In view of the limited time to hear the witness, oral testimony at
this hearing will be from the invited witness only. However, any
individual or organization may submit a written statement for
consideration by the Committee and for inclusion in the printed record
of the hearing.
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Chairman BRADY. The Committee will come to order.
Good morning. Today, our Committee is honored to welcome
United States Trade Representative Robert Lighthizer to testify
on President Trump's trade policy agenda.
Ambassador Lighthizer, thank you for joining us. We look
forward to your testimony.
Mr. Ambassador is a former Deputy U.S. Trade Representative
under President Reagan, and as an experienced trade negotiator,
you understand that U.S. leadership and participation in a
rules-based trading system is essential to our Nation's
prosperity. America has led the world in global commerce for
the better part of the last 100 years. Through our network of
strong and forceful trade agreements, we have expanded economic
freedom so that our businesses, our workers, and our consumers
can thrive.
Through strict enforcement of the rules we created and our
leadership in the World Trade Organization, we have held our
competitors accountable. And through our steadfast commitment
to the principles of free enterprise, open markets, and rules-
based international commerce, our Nation has set itself apart.
The world looks to us, not China, to lead in setting the
standards of global commerce. When we set an example, the world
follows.
Today, American leadership on trade is more important than
ever, especially in the Asia-Pacific region where China's
influence is growing every day. It is urgent that we take
charge on trade in the Asia Pacific so that we don't lose
ground to China. After all, to preserve and strengthen
America's leadership in global commerce, it is not enough to
simply buy American products and services; we also have to sell
American. And we need strong trade agreements that allow us to
do so in Asia and in fast growth markets throughout the world.
Our trade agreements, including NAFTA, have been
tremendously successful. They have created American jobs,
lowered prices for consumers, and helped our businesses compete
and win in all three crucial segments of our economy:
agriculture, services, and, yes, manufacturing.
That said, we have to take action to strengthen our
existing agreements to ensure they continue to benefit the
American people. I am pleased that President Trump is taking
this approach with NAFTA. NAFTA was negotiated nearly 25 years
ago. It should be updated to reflect the modern realities of
trade on digital commerce, intellectual property, state-owned
enterprises, and customs barriers, among others, following the
negotiating objectives Congress set forth in TPA.
And as you have committed to us during earlier
consultations, Mr. Ambassador, this modernization must be
accomplished in a manner that retains current benefits in a
seamless way that doesn't disrupt the current agreement,
ongoing trade, or the millions of American jobs at stake.
With the Administration's commitment to our strong balanced
negotiating objectives and deliberate timetable established by
TPA, I am confident we can work together to deliver a high-
quality deal for the American people, one that can serve as a
model as you move forward with other bilateral agreements.
Given that the Administration does not support a
multilateral approach, we must move quickly together on an
ambitious network of deals that break down barriers and allow
us to sell American all over the world. I am particularly
interested in T-TIP once the European Union can conclude an
ambitious and comprehensive deal. Also, I am interested in
trade agreements with Japan and the United Kingdom, when it can
come to the table, as well as the Trade in Services Agreement
and the Environmental Goods Agreement. And we plan to renew GSP
and move quickly on our miscellaneous tariff bill to help U.S.
exporters.
I am encouraged to see the President's dedication to strict
enforcement of trade rules. The President has already taken
important steps by putting in action many new enforcement tools
passed by Congress last year. If countries fail to uphold their
trade obligations, these powerful tools and our participation
in the WTO allow us to challenge them and, if necessary, push
back strongly on behalf of our businesses and our workers.
And when it comes to America's trade deficit, we welcome
the President's efforts to examine the issue. There are, as you
know, many factors behind our trade deficit. Some may be
related to trade, but many are not. For example, the dollar
status as the world's reserve currency is a significant factor.
Examining the trade balance as black or white conceals what is
really going on. Many exports from, say, Mexico reflect
tremendous U.S. value added through research, development,
design, intellectual property, services support, and
manufacturing. To the extent the trade deficit is caused by
unfair trading practices, we must rip down those barriers. And
through our powerful enforcement tools, we can. Another
solution is to push for strong trade agreements that open up
new markets worldwide for American products and services.
Through trade agreements that are strictly enforced, we
have reduced and even eliminated trade deficits in
manufacturing, agriculture, and services. In many cases, we
have even turned deficits into surpluses. While our first
instinct may be to restrict imports, history shows that the
most successful approach is not protectionism; it is breaking
open new markets to American made goods and services. We have
some of the best businesses, workers, and products in the
world. If we can reach these customers on a level playing
field, America will usually come out on top.
That is the recommendation I offer as the Administration
considers whether to restrict steel and aluminum imports. I
agree: We must address market distortions created by China.
Section 232 authority must be used with careful consideration
of consequences to our economy and trade rules that we wrote
and fully expect our trading partners to abide by. Done
improperly, we cut off supply that our companies need to stay
competitive. Done hastily, we raise costs and prove to our
partners that we aren't reliable. Done indiscriminately, we
harm countries that trade fairly and send a protectionist
signal to those looking for an excuse to do the same. It will
encourage others to restrict our exports even in unrelated
sectors, which only hurts the growth of jobs and paychecks here
at home.
I want to work with the Administration to identify a remedy
that is balanced, effective, and protects our national security
and economic interests.
America must continue to set the standards of global
commerce. With 96 percent of the world's customers located
outside of the United States, we cannot afford to sit on the
sidelines, or worse, lead the world into abandoning the very
rules that have served us so well.
Ambassador Lighthizer, we are eager to work with you and
President Trump on a pro-growth trade agenda that creates jobs,
grows paychecks, and improves the lives of all Americans.
Thank you again, Mr. Ambassador, for being here. We look
forward to your testimony. And I now yield to the distinguished
Ranking Member, Mr. Neal, for the purposes of an opening
statement.
Mr. NEAL. Thank you, Mr. Chairman.
Ambassador Lighthizer, I want to welcome you on behalf of
the committed Democrats. Today's hearing is an opportunity for
us to hear from you about the Administration's vision for U.S.
trade. The Administration has certainly been busy on trade. The
headlines these past few months have been filled with stories
about modernizing NAFTA, withdrawing from NAFTA, Executive
orders, Executive memos, Section 232 national security reviews
on steel and aluminum imports, Canadian dairy, Mexican sugar,
U.S. China, a 100-day plan and certainly the issue of currency
manipulation.
What we have been missing in this overall vision, as well
as the specifics behind all of it, is activity. What are the
Administration's trade policy goals? What priorities are you
trying to serve? How are you going to do it? And I hope this
morning you can provide us with some answers.
On a range of issues, there has been a lack of clarity,
consistency, and consultation. For example, by statute, the
Administration was required to submit a report on trade policy
and its agenda by March 1st. On that date, the Administration
instead submitted a statement and promised to submit a full
report after USTR was confirmed and had the full opportunity to
participate in developing the report. The report has still not
been submitted to this Congress. So I hope you will clarify the
Administration's position on a full range of trade issues
today, from specific objectives of a NAFTA rewrite to the
Administration's position on negotiating T-TIP and an
Environmental Goods Agreement to how the Administration will
address currency manipulation to the Administration's current
thinking in steel and aluminum national security investigations
as well.
As you know, House Democrats have the most open mind when
it comes to revisiting and taking new directions in U.S. trade
policy. We look forward to working with you to prioritize the
needs of American workers and their families through trade
policy, and we await your testimony.
Thank you, Mr. Ambassador.
Chairman BRADY. Thank you.
And, without objection, other Members' opening statements
will be made a part of the record.
Today's sole witness is Ambassador Robert E. Lighthizer,
United States Trade Representative.
The Committee has received your written statement. It will
be made part of the formal hearing record. You have 5 minutes
to deliver your oral remarks. Ambassador Lighthizer, again,
welcome, and you may begin when you are ready.
Ambassador LIGHTHIZER. Thank you, Mr. Chairman, Chairman
Brady.
Chairman BRADY. Ambassador, can you check that microphone
just to make sure we have it on? There you go.
Ambassador LIGHTHIZER. Is it better now?
Chairman BRADY. Yes, sir.
STATEMENT OF HONORABLE ROBERT E. LIGHTHIZER, AMBASSADOR, UNITED
STATES TRADE REPRESENTATIVE
Ambassador LIGHTHIZER. All right. Chairman Brady, Ranking
Member Neal, Members of the Ways and Means Committee, it is an
honor to appear before you today. In recent weeks, it has been
a pleasure getting to know the Chairman, the Ranking Member,
and several Members of the Committee. I look forward to
developing these relationships and to working with each of you.
The USTR has a special relationship with this Committee, and I
intend to continue that tradition.
I met some of you for the first time on May 16th when I
appeared before the House Advisory Group on Negotiations and
the Ways and Means Committee bipartisan meeting. Those
consultations are critical to helping the Administration
establish its negotiating objectives for NAFTA, and more
generally, they are helpful for developing trade priorities
going forward.
To implement this agenda the President has requested
increased funding for USTR in the coming fiscal year. Our
budget calls for $57.6 million, an increase of nearly 6 percent
over the 2016 level.
These additional resources will be used to implement the
Interagency Center on Trade Implementation, Monitoring and
Enforcement, and will allow USTR to hire eight additional staff
to support our trade enforcement activities.
The President's budget request is consistent with his
desire to control Federal spending, as well as his insistence
on a strong and aggressive trade policy.
Since being sworn in last month, I have been working with
our team to advance the President's trade policy. We have been
active on the international front with trips to the APEC
ministers meeting in Hanoi, a meeting of the OECD in Paris, and
a WTO mini ministerial. At all of these meetings, as well as
the numerous bilateral meetings here in Washington, I have
conferred with my counterparts from almost every major world
economy.
In many cases, they have indicated a willingness to work
with the United States on efforts to reform the global trading
system in ways that will lead to market outcomes that are both
fairer and more efficient. We have also reached out to Members
of this Committee, other Administration officials, and key
stakeholders in an effort to determine what improvements are
needed in the international trading system.
We are already making progress in four vital areas. One,
the President's plan to renegotiate NAFTA. Two, advancing a
strong enforcement agenda. Three, opening markets for U.S.
exports. And, four, lowering the Nation's trade deficit.
Let me briefly discuss each of these topics.
First, on May 18th, I notified Congress that the President
will conduct negotiations with Canada and Mexico in an effort
to renegotiate and modernize NAFTA.
As you know, the congressional notification is followed by
a 90-day period of consultations with the public and Congress.
This means that the NAFTA negotiating rounds can begin as soon
as August 16, and we intend to move very quickly.
In the meantime, USTR is talking to Members, stakeholders,
your staffs, and the public to help us develop policy outcomes
for the negotiations. We have put out a request for comments
and received more than 12,000 responses. We have scheduled
hearings for June 27, 28, and 29.
During the 90-day period, we will continue working closely
with Congress to develop and refine our negotiating objectives.
In the interest of a transparent process and as required by
TPA, we will be publishing a detailed summary of negotiating
objectives on July 17.
Second, we have an aggressive enforcement agenda. We are
both defending our rights and holding other countries
accountable for their trade violations. For too long, the
United States, one of the freest and most open markets in the
world, has been the chief target of litigation at the WTO. This
makes no sense. At the same time, we are proceeding with
several WTO cases, and this is only the beginning. We will
aggressively pursue countries that violate trade deals with the
United States. We have a number of potential cases under review
as I speak.
Third, we intend to improve market access for U.S.
producers. Let me be very clear on this point. We at USTR want
to help every American business that makes a product or
provides a service increase exports to the world. Sometimes
this requires an enforcement action. Other times negotiations
are sufficient. The Administration is currently engaged with
conversations with all of our major trading partners about how
to lower barriers that harm U.S. companies, workers, farmers,
and ranchers.
Finally, we hope that these and other efforts by the Trump
Administration will help to lower the Nation's chronic trade
deficit. I understand that many observers believe that we
should not concern ourselves with the trade deficit, that this
figure is merely a number that reflects macroeconomic factors
not related to trade policy. But the President's view, and
mine, is that the trade deficits in the hundreds of billions of
dollars that persist for years and years and years, regardless
of changes in the broader economy, are indicative of structural
problems in global trade.
[The prepared statement of Ambassador Lighthizer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman BRADY. Thank you, Mr. Ambassador.
That 5 minutes always goes fast. Thanks for your testimony.
We will now proceed to the question-and-answer session. Let
me lead off. I want to ask two very basic questions about
freedom and leadership.
My view is that free trade is economic freedom. It is a
freedom to buy and sell and compete around the world with as
little government interference as possible. It is a freedom
that, if you and I build a better product, we should have the
freedom to sell it throughout the world, and if someone else
builds a better product, we should have the freedom to buy it
for our family and for our business. It is really one of the
greatest economic rights of every American. So, given the
choice between more economic freedom and less, we should always
choose more. So the question is, will the Trump Administration
work to expand American's economic freedom to trade or
ultimately restrict it?
Ambassador LIGHTHIZER. The Trump Administration wants to
expand economic freedom, wants to expand trade, believes that
we can reduce our trade deficits through sales. That certainly
is our objective. Philosophically, I would say that the
President believes in free trade. He doesn't think that it
exists right now, and the question becomes, what do you do to
get there? So there are a variety of approaches. I think his
approach is to aggressively go after people that are engaging
in unfair trade and hope that leads to market efficiency, more
economic freedom, and globally more wealth.
Chairman BRADY. Thank you, Ambassador.
That really steps into leadership. I think the view of many
of us is, if America doesn't lead in free and fair trade, we
will grow weaker and our foreign competitors will grow
stronger. Our factories and farmers, our technology companies,
local businesses will be priced out and shut down around the
world. My State of Texas is made for trade. America is made for
trade. And that is nowhere more important than in the Asia-
Pacific region. It is imperative we continue to communicate to
our trading partners and the rest of the world we are not
abandoning the Asia-Pacific region, even though we are no
longer part of TPP. This is one of the reasons that I, along
with Ranking Member Neal, Chairman Reichert, and our Senate
colleagues introduced a resolution last month expressing our
strong support for continued U.S. leadership engagement with
other APEC countries.
So, in the area of leadership, especially in that region,
at the end of the day, do you see America's trade values and
standards prevailing in that region, or do you see China's
trade values and standards prevailing in that region?
Ambassador LIGHTHIZER. I certainly believe that America's
trade values will prevail. I would say, this issue of
engagement, I was on the job 4 days when the President sent me
off to Hanoi to go to the APEC meeting. I remember walking
around bleary-eyed trying to read briefing papers so that I
could tell one country from another. But he did that because he
wanted to make the point that you are making, that we have to
be engaged. These people have to know that we are coming, that
we are going to do business, that we are going to sell American
products, that we are going to do bilateral agreements, that
pulling out of TPP was by no means pulling out of the Asia
Pacific. In fact, to the contrary, the President's view is that
we can get better deals on a bilateral basis and engage.
In terms of, overall, whose model works, ours or China's? I
mean, that is a very big, very serious question. My belief is
that ours is the best and it will prevail. And I believe that a
lot of the people in that part of the world are concerned about
this question, but the question that I ask is, how do we prove
that? We have to take on China when they do things that are
inconsistent with our values, with the way we think the economy
should develop and work.
If you look at it objectively, you would say, for example,
in an area like steel, they have now a huge steel industry.
None of it is based on economics. And somebody in a country in
Asia looking at that might think their system is succeeding and
ours is failing. They have at least 1.1 billion tons of steel,
a billion tons of steel capacity, and we can't produce 100
million tons.
So what we look at, A, I think we are going to prevail; B,
I think we have to prevail not just for our own good but for
the good of the world. The question that I always had and that
I believe the President has is, what do we do to assure that?
And that to me is taking on China whenever they do something
that is inconsistent with not only our model but their
obligations. I apologize for that being too long.
Chairman BRADY. No, Ambassador, thanks for your thoughtful
answers.
And, Mr. Neal, you are recognized.
Mr. NEAL. Thank you, Mr. Chairman.
Mr. Ambassador, I am very interested in T-TIP negotiations,
which we discussed in my office when you paid a visit. And as
we look at the negotiations between the United States and EU, I
am hoping that you can give us an update on the plan. There are
500 million consumers in Europe. They have a very similar
lifestyle to us, and one of the things that I also found very
interesting was I actually suggested to President Obama early
on that we juxtapose the two trade agreements, Europe and Asia,
that we would have considered Europe first because I think it
would have been much easier to accomplish, and given the fact
that there were many prospects of actually doing that and now
to find that the Administration, I think, needs to update us on
what their plans are for T-TIP, I do think it has an awful lot
of potential for America's East Coast if done correctly.
And the second question--and you perhaps can just answer
both--we all read this week about Ford Motor Company deciding
to build small cars not in Mexico but in China and importing
those cars to the United States. That seems to be inconsistent
with the President's promise to keep jobs here in America. And
with Ford's decision, it also seems to indicate that now China,
despite the President's comments during the course of the
campaign, is hastening a relationship with automobiles in China
and what we are trying to, I think, discover perhaps with your
comments today, does this suggest that for some reason we are
focusing more on China than we are on NAFTA?
Ambassador LIGHTHIZER. Mr. Neal, first of all, on T-TIP, we
certainly agree that is an important negotiation. For a variety
of reasons, it stalled when it did, and this was not a very
good year to get it started because of internal European
reasons. They had a series of elections which made it difficult
to make compromises and to really make an agreement. I guess
the final one of those elections is September, and it is in
Germany. And then, after that, I think we will talk to them. I
have certainly met with the Trade Commissioner, Ms. Malmstrom,
and I have talked to her about bilateral issues and cooperating
issues, and I am not here to make any announcement about it,
but it is something that we certainly realize the importance
of.
On the issue of Ford moving a plant, which I saw in the
paper also, from Mexico to China, I agree with you. I think
that is troubling. We don't have an Administration position
that I have sat in on and talked about at this point, but as
the USTR, I find that very troubling. I want to look and see
what the incentives there are. It doesn't necessarily make
sense to me. Obviously, it makes sense to Ford, or they
wouldn't be doing it. But I think it is incumbent upon us to
sit back and look at all the incentives and just figure out
exactly why that happened. And if it happened for reasons that
are noneconomic reasons, then I think the Administration should
take action.
In terms of the President's relationship to the Ford move,
I guess I am reminded of a quote in the back of ``Profiles in
Courage'' where--when he is sort of taking little quips, and he
says that a Congressman once wrote in the thirties that one of
the problems with being elected to Congress was that--this is
in response to a constituent letter--he said: is that I get
letters from people like you who say that I ran for Congress
based on reforesting the Sierra Nevada Mountains; I have been
in office 6 weeks, and I haven't gotten it done. I am sorry;
can't help--or something like that.
So I guess that is a long way of saying--I think it is
probably early to say that the President's policies are
responsible for Ford doing whatever it is that it is doing, but
I think it is something we have to look at. We have to look at
incentives, and it was as troubling to me as it was to you.
Mr. NEAL. I thank you, and, Mr. Ambassador, I hope that you
might inform the Committee of the Administration's position as
promptly as you can on that issue.
Ambassador LIGHTHIZER. I am sorry?
Mr. NEAL. I hope that you can inform the Committee promptly
on your position and the Administration's position on that
issue of those cars being manufactured in China.
Ambassador LIGHTHIZER. I will undertake that, and I
appreciate that question. And I will use that as a mandate to
develop a position and report it to you.
Mr. NEAL. Thank you, Mr. Ambassador.
Thank you, Mr. Chairman.
Chairman BRADY. Thank you, Mr. Neal.
Mr. Nunes, you are recognized.
Mr. NUNES. Thank you, Mr. Chairman.
Ambassador, I have three topics I want to cover with you
and try to get through all three of them quickly here. The
first is NAFTA. I think we are all for looking at ways to
improve NAFTA. However, as you know, with all negotiated trade,
whatever action becomes a reaction, and so there could be a
reaction from our allies and our partners, trading partners.
With agriculture specifically, as you know the United States
produces more food than we can consume, and I am worried about
any type of retribution that either Mexico or Canada could
take. Canada could take on our U.S. farmers. And so I know you
are aware of this, but I wanted to just get your thoughts on
ensuring that we protect agriculture in these upcoming
negotiations on NAFTA.
Ambassador LIGHTHIZER. Congressman, that is very important.
I have testified on this before. We realize there have been
winners, and there have been losers in the NAFTA process as it
has developed over these 23 years, 25 years since the
negotiations themselves began. Agriculture has been a winner. I
would say, even with that, I would drop a footnote down and say
that, although we do have a $4.7 billion deficit even in
agriculture, it is not for the kind of products that you are
thinking about, and it is very important that we do no harm.
So our very high priority will be making sure that we do
not disrupt our sales in agricultural products to either Canada
or Mexico, but presumably you are mostly thinking about Mexico.
And that is a problem. It is a legitimate worry. It is
something we are worried about and very concerned about.
Mr. NUNES. There is no question that Canada could do a lot
more to open up their trading practices for our agricultural
products.
If I could, I would like to move to India. I know I think
you and I share and the Administration share the goal of
enhancing our partnership with India, the world's largest
democracy. They made a lot of growth over the years, but they
have continued to have trading practices that make it hard for
us to actually get to the table with each other. And one of
those issues I want to make sure that maybe I can just bring to
your attention in case you are not aware of it and maybe you
can come back to us just for the record, but specifically with
almonds and other types of walnuts and pistachios, there
continues to be problems with moving those products to India,
and I am not going to ask you to be an expert on specific
products, but if you could come back to us with a report on
India's different potential problems that they are creating
with these trade practices, I would appreciate it.
Ambassador LIGHTHIZER. I will certainly do that. And with
the Prime Minister coming to Washington, this is an opportune
time to do that. I have raised the almond issue with the
Indians----
Mr. NUNES. Great.
Ambassador LIGHTHIZER [continuing]. So it is clearly
something that we are concerned about, and part of my response
always is, look, with the size of the trade surplus you have
with the United States, you ought to be looking for things to
buy to get that trade deficit down, and that is one of the ways
we are trying to help America export.
Mr. NUNES. Well, thank you, Ambassador. I appreciate that
comment.
Finally, I want to just explore a little bit, there has
been a lot of debate about whether or not our tax system needs
to have a border adjustment. As you know, 150 countries around
the world border adjust. And I just find it hard to believe in
the long run how we are going to be competitive if everything
that we export to most of our trading partners has anywhere
from a 15 to 25 percent VAT put on top of those products, and
then, of course, anything that we import doesn't pay the VAT in
their country.
And I am not asking you to wade into whether or not you
support or oppose border adjustment, but I would be interested
in your thoughts as to how we can fix these discrepancies with
these countries that border adjust.
Ambassador LIGHTHIZER. Well, thank you, Congressman. I have
from time to time written op-eds and the like on this subject.
It is troubling to me. First of all, I am not the Treasury
Secretary mercifully. So I don't have to worry about
negotiating a tax deal, and I don't envy any Member of the
Committee who has that ahead of them as we go forward. But I do
agree that value-added tax creates an unfair advantage, and
there has been a clear migration throughout the world from
income taxes to value-added taxes precisely for that reason.
So I don't agree with people who say it doesn't make any
difference. I think that it does make a difference. So that
isn't to say I am endorsing any particular solution or anything
like that, but I am sympathetic to the problem, and I think it
has an impact on exports. I think it has an impact on
manufacturing and competitiveness in America, so it is a major
issue.
Mr. NUNES. Thank you, Mr. Ambassador. My time has expired.
The Chairman is going to gavel. Thank you so much.
Chairman BRADY. Thank you, sir.
Mr. Levin, you are recognized.
Mr. LEVIN. Welcome. Hi. NAFTA became very much involved in
controversy mainly because of the lack of enforceable labor and
environmental provisions. The auto sector is a major source of
the trade deficit. So let me just review a few facts and ask
you some questions.
In the last decade or two, the employment in the Mexican
auto sector has gone up over 200,000 people, while in the U.S.,
it has dropped 90,000; really more than that if you go back
over a decade. And in terms of competition, Mexican workers in
the auto industry are paid 19 percent of what is paid in the
big three, and the President called Mexican factories
sweatshops. And that is further evidence that autoworker wages
in Mexico went down 20 percent, though productivity went up 80
percent. And sweatshops, that is correct, because workers in
the auto industry in Mexico cannot form unions. There are sham
outfits.
So let me ask you three questions, if I might, relating to
it. First, do you agree that depressed wages in Mexico are
leading to negative wage pressure and job loss in the United
States? If so, can any renegotiation of NAFTA truly promote
jobs here in the United States without addressing labor rights
in Mexico?
Two, with that in mind, can you tell us what specific
proposals--specific proposals--the Administration is
considering to require Mexico to change its laws and practices
relating to labor rights as a way to create and safeguard jobs
in the United States?
And, number three, I take it on this you are the lead
person in the Administration, though that isn't always clear,
but I assume you will be and hope you will be: Will the
Administration insist that Mexico bring its labor laws and
practices into compliance with basic labor standards before
Congress is asked to vote on a renegotiated NAFTA agreement? So
fire away.
Ambassador LIGHTHIZER. Yes.
Mr. LEVIN. Since I did.
Ambassador LIGHTHIZER. Thank you, Congressman.
First of all, do I believe that Mexican labor laws are
having a negative effect on the United States? Yes, I believe
that. And I believe if we are going to get the deficit down, if
we are going to have an appropriate agreement and one that will
pass, it will have to have an effect on that. I do believe,
though, that the Mexican government itself understands there is
a problem, and I think they are taking steps, which is a good
sign. But I am not suggesting----
Mr. LEVIN. You need to talk further about that, but keep
going.
Ambassador LIGHTHIZER. With respect to what our specific
proposals are, we are still in the process of talking to
stakeholders and the Congress, and we are interested in
people's views. We do believe you have to have basic ILO core
standards, and we believe that they have to be enforceable just
like we believe that every provision in the agreement has to be
enforceable. Do I believe there should be a commitment and
proof before a vote? No, I don't. I think we are going to put
together an agreement. We are going to come forward. It is
going to be an aggressive agreement that we have, and in the
final analysis, the U.S. Congress will rule on whether it is a
sufficiently good agreement, and I don't think there will be
preconditions like this.
Mr. LEVIN. Okay. I think, unless practice is showing that
changes are made before we vote both in laws and practices,
that essentially it will be difficult and should be difficult
to pass NAFTA. We insisted with Peru that they change their
laws and practices before we voted on it. May 10th was a major
breakthrough, but unless it was made real before we voted it
was impossible to vote for. And time has shown with Colombia
and other countries that if you don't have that standard, you
are chasing enforcement everywhere. So we are going to be very
emphatic about that.
Thank you, Mr. Chairman.
Chairman BRADY. Thank you, Mr. Levin.
Mr. Tiberi, you are recognized.
Mr. TIBERI. Thank you, Ambassador, for being here. I know
that you know that the volume, the complexity, the challenges
of trade have only grown over the years. I want to associate
myself with what Mr. Nunes said with respect to NAFTA and
agriculture. In Ohio, my home State, Canada is our number one
trading partner, and agriculture is our number one issue,
number one job economic driver.
But, Mr. Ambassador, I want to focus on our trade agreement
with Korea. We have seen an influx of imports of oil country
tubular goods, OCTG, from the Republic of Korea. In 2015,
Congress gave the Department of Commerce new authority to
address market distortions in the production of foreign
merchandise and to calculate dumping margins that more
accurately account for the unfair pricing practices of foreign
exports.
Can you commit to this Committee that you will make it a
priority of this Administration to engage with our trading
partners, particularly in this case, Korea, the Republic of
Korea, who continue to dump these products into our country?
Ambassador LIGHTHIZER. Yes.
Mr. TIBERI. Thank you. I certainly appreciate that. The
other issue the Chairman mentioned that I want to comment on is
our ongoing section 232 investigation on national security
implications of steel and aluminum imports. And I again want to
applaud and say I appreciate the Administration's commitment to
America's security in ensuring a level playing field with our
trading partners. However, I have heard from a number of
employers in my district, manufacturers, about the potential
that some of our trading partners could misuse national
security justifications to have retaliatory and protectionist
actions taken against them. Are you at all concerned about the
potential for retaliation by some of our trading partners and
the effect it would have on domestic manufacturers?
Ambassador LIGHTHIZER. Yes, we are concerned, although we
start with the proposition that we have a global extraordinary
excess amount of capacity that is basically created by China
and that we can talk about some other potential problems, but
we have this 1.1 or more billion tons, which I mentioned
before, and the question becomes, how do you deal with that?
You can't deal with it just at the border with China because it
is not that kind of a problem. It is sending it everywhere in
the world. And as you said in your first question, they are
sending it to Korea, who is then sending it to us in the form
of OCTG. So it is a huge problem.
Given that problem, it is reasonable to sit back and say,
what are all of the possible tools we have? And one of the
tools we have is 232, because it does have a national security
effect that is quite significant.
Now, there is the response, one, of retaliation. We are
always worried about retaliation, but if we don't defend
ourselves because of a fear of retaliation, then we are just
going to be the residual of what nobody else wants. So we can't
let unfair trade go forward just for that reason, but it
certainly is a reasonable thing to think about and try to
control. So I don't disagree with that at all.
The argument that, well, other people will use their
national security exemption for ways that are really hidden
protectionism, that is also a concern, something we have to
think about, but I am inclined to believe personally that, with
respect to a lot of these countries, they will use every tool
they have right now to defend their interests and to take
advantage of our market. So I am kind of less persuaded by that
argument, although I think it is a legitimate argument,
something we have to be concerned about, but I think we do have
an obligation to all Americans: When you see something that is
very bad going on, we have kind of a contract with all of our
workers and all of our farmers that we are going to defend
America or free trade doesn't mean anything. I think every
Member of this Committee agrees with that. And this is one of
the tools that it is legitimate to look at and use in that
context.
Mr. TIBERI. I certainly appreciate your work, your
expertise on this issue, and I just would hope that you and
your team would clearly review the Chairman's opening statement
because I think it reflects on this side of the aisle some
concern about the balance in this area.
Thank you so much.
Ambassador LIGHTHIZER. Thank you, Congressman.
Chairman BRADY. Thank you, Mr. Tiberi.
Mr. Doggett, you are recognized.
Mr. DOGGETT. Thank you, Mr. Chairman.
And thank you, Mr. Ambassador.
You have been a personal long-time critic of WTO dispute
panels overreaching and effectively declaring new obligations
and undermining our democratic processes. Under NAFTA, the
investor-state dispute settlement procedures with which you are
very familiar, the ISDS, permit three private attorneys whose
decisions are not subject to appeal to effectively create new
obligations and commit unlimited amounts of taxpayer funds to
foreign corporations for claimed violations.
Yesterday, at the Finance Committee, you testified
concerning your concerns about ISDS. You are aware that the
National Association of Attorneys General, the National
Conference of State Legislatures have objected to ISDS, that
recently the American Automotive Policy Council, our major
manufacturers said that ``ISDS provisions in NAFTA--or an ISDS
provision in NAFTA is unnecessary.'' Do you agree with them?
Ambassador LIGHTHIZER. I am sorry?
Mr. DOGGETT. Do you agree--without reading it--do you agree
that ISDS is unnecessary in NAFTA?
Ambassador LIGHTHIZER. I think ISDS is something that we
have to discuss and be informed of more by the Members. So I
won't take a final position right now.
I would say this: It clearly is a balance. There is a
legitimate interest in people who go overseas and invest, and
the United States has an obligation to do what it can to make
sure those people are treated fairly.
On the other hand, as you suggest, Congressman, I am
troubled by the sovereignty issue. I am troubled by the fact
that anyone, anyone can overrule the U.S. Congress and the
President of the United States when it has passed a law. That
is troubling to me. So trying to balance those two things is
something that I really want to kind of work through and be
informed of----
Mr. DOGGETT. Certainly----
Ambassador LIGHTHIZER [continuing]. Members' views.
Mr. DOGGETT [continuing]. We do want to see our investors
protected wherever they are, and Canada has a mature court
system. There are a few more challenges in Mexico, but I hope
you will be looking closely at a system that I think has failed
us.
And a second area, you say in your testimony--and I was
pleased to hear it--that you expect significant action far
beyond previous Administrations, including, for example, self-
initiated litigation in defense of U.S. workers. While that is
good, it is a fairly low bar, since USTR under all previous
Administrations I think has never successfully challenged a
labor or environmental provision with any trading partner. And
as you know, yesterday, the United States lost in its drug out
lengthy 9-year action with reference to Guatemala labor with a
finding apparently that it was not a matter affecting trade. I
believe that the failure to effectively enforce our
environmental and working condition provisions is one of the
reasons many of us do not have confidence in the TPP or in
other recent agreements, that the comments about labor and
environment were really meaningless.
Given the short time, I would just ask you to respond in
writing as to whether you consider artificially suppressed
wages to be a subsidy and whether these subsidies impact trade
between countries? Tell us how this decision may affect the
need for changes in the NAFTA agreement with reference to
workers.
Similarly, with Peru, there are both labor complaints on
which there are provisions that have not been enforced, and I
would ask you to respond concerning the complaint filed in 2015
on Peru labor concerning the fact that we are effectively
denying improved wages and conditions in Peru, and also, in
Peru, on the environmental provision, that about 90 percent of
all timber leaving Peru was harvested illegally when we set up
the agreement and it still is and if you believe that Peru is
in compliance with its environmental obligations under the
forest annex, and why there have been no audits of producers
and exporters.
And I will submit others concerning all the pending
enforcement actions on which we see really no effective
enforcement.
Finally, you have 500 advisers on trade agreements,
corporate advisers. When will the Members of Congress be able
to see the specific language that USTR proposes to Mexico and
Canada on NAFTA changes?
Ambassador LIGHTHIZER. Well, in the first place, we will
submit an answer in writing as you requested, Congressman.
In terms of the language, we have an agreement with the
Chairman. We expect to be very transparent. We are going to
follow the TPA to the letter. I realize that, in the past,
there have been issues about whether or not the Congress has
had adequate access to text, and I think I am in agreement with
the Chairman. We have a plan. I expect to follow that plan and
make that text available, and I expect the Chairman to
instantly tell me when I haven't followed the plan, which, if
it happens, will only be by accident.
Mr. DOGGETT. Could you disclose what the plan is?
Chairman BRADY. We are in discussions with the Ranking
Member on this important issue. We agree with you, Mr. Doggett,
about the access to text.
So thank you, Ambassador. I let you run a little long
there.
So, Mr. Reichert, Chairman of the Trade Subcommittee, you
are recognized.
Mr. REICHERT. Thank you, Mr. Chairman.
Welcome, Mr. Ambassador.
Every Member on this panel will tell you that trade is
critical to their home State, and I am here to tell you that is
true of Washington State. Apple growers export one-third of
their crop each year. State services exports over $26 billion a
year, and of the jobs in Washington that are supported by
exports, over 90 percent depend on manufacturers selling their
world class products across the globe. But Washington workers,
farmers, and businesses cannot be left behind as other
countries race to establish strong bilateral and regional
agreements that carve us out. So, while we work to update
NAFTA, we must begin to put other negotiations in the pipeline.
So I am an old career law enforcement retired. I get the
enforcement piece, but there is always community outreach. In
my view, the TPP countries have now been left hanging. And,
frankly, I was disappointed but encouraged that the President
wants to go with bilateral agreements. I am on board with that
and ready to go. As you know, we have had a chance to visit.
But I think there has to be an aggressive, energetic outreach
to these countries, and my question is, beyond Canada and
Mexico, which countries, regions, and/or sectors are priorities
for the Trump Administration? What's the next step after NAFTA?
Ambassador LIGHTHIZER. Thank you, Congressman. We are still
in the process of developing those priorities and that list.
First, I would say that the President is very pro-trade;
second, that we, as you say, our objective is to have bilateral
agreements and a series of them, and we think we can do that
using model agreements and do it effectively and have
agreements, which are better for American workers and American
apple growers and others.
In terms of what specific countries we would go to, there
are a lot that are on the table. Obviously, there is T-TIP,
which has been mentioned. There is a lot of people who believe
that we have to go up to the TPP countries and start
negotiating those, and, of course, foremost among those in some
people's opinion is Japan. So that is something we have to
think about now.
Mr. REICHERT. But you are in communication with those TPP
countries?
Ambassador LIGHTHIZER. We are. I have met with several of
them and there are, you know, there are a variety of issues in
various places, and, you know, the Japanese, my guess is right
now are not ready to do a bilateral agreement with the United
States, but these things are all developing. We are in
discussions----
Mr. REICHERT. So, after NAFTA, you are still considering T-
TIP or Japan or the U.K.
Ambassador LIGHTHIZER. The U.K. is another option. So these
are things--but I do think there is a lot of pressure to move
in the direction where the TPP would have filled a gap and to
go in there--and my instinct is that Members of Congress would
also feel comfortable if we started doing that. So there are a
lot of reasons to militate in that direction, but the other
thing is it does take two to tango, so we have to kind of
develop this.
Mr. REICHERT. I want to be engaged with you on that. I am
sure other Members of the Committee do.
How do you see the bilateral agreements coming together to
create the high standards throughout the world? That has been
touched on by a couple of Members. And, you know, just my
personal experience with one country--Mr. Tiberi mentioned
South Korea. In my discussions with assembly men and women in
South Korea, asking them the question, after the Korean
agreement was finalized, what was their opinion as far as the
impact it had on China, I learned their first response was
China should start to pay attention because high standards now
are in the region and will be developing. Of course, back then,
TPP was the thing that people were looking to. So that one
agreement with Korea made an impact on that region. And so,
again, emphasizing the need to reach out to those countries,
TPP countries, strengthening that position of strong standards,
how do you see a bilateral agreement with Japan, for example,
or others strengthening that standard, our standards,
throughout that region and the world?
Ambassador LIGHTHIZER. Well, I would say, first of all, I
don't want to suggest that we are going to have a bilateral
agreement at this time with Japan. That is something that they
are looking at and we are looking at and all that sort of
thing.
Mr. REICHERT. Sure.
Ambassador LIGHTHIZER. But I certainly agree with the
Chairman's basic point at the very beginning, which you have
also endorsed, which is that the United States moves in; we
have an agreement that is a high standards agreement. In many
cases, on a bilateral basis, you can have higher standards
because that country you are negotiating with may not have a
particular problem in an area where you can get a high
standard. A good example of that would be currency. If you are
negotiating with someone who really isn't a currency
manipulator it is easier to get to a high standard on currency
and then set the standard. So there are a lot of things that
can be done like that, but I think having those kinds of
agreements does push back against China, does change the
standards, and does have people realizing the United States is
engaged, and it has a ripple effect throughout the region. So I
completely endorse them.
Mr. REICHERT. Great point.
Thank you, Mr. Chair.
Chairman BRADY. Thank you.
Mr. Thompson, you are recognized.
Mr. THOMPSON. Thank you, Mr. Chairman.
Mr. Ambassador, thank you very much for being here. The
priorities for our trade policy must be to support and help
create good American jobs, grow the economy, set basic
standards for our partners to live up to, improve market
access, and protect the labor rights and the environment. And I
think that Congress has an important role in this, and I value
the opportunity to work with you to make sure that this
happens. And increasing exports and eliminating trade barriers
can really be a win for our economy, provided that the playing
field is level and everyone operates under a fair and basic set
of rules and that those rules are enforced.
So, in that regard, I want to associate myself with the ag
comments that have been made by a couple of my colleagues on
the dais. And I also want to associate myself with something
that Mr. Doggett said when he asked if you thought that wages,
suppressed wages in other countries are a subsidy to
manufacturers in those other countries. And I would ask,
similarly, do poor environmental rules equal a subsidy to
producers in other countries?
Ambassador LIGHTHIZER. Let me say, first of all, that I
think low labor standards are an unfair advantage to someone
with whom we are dealing. Whether it is technically a subsidy
under the countervailing duty laws is not something that I am
addressing right now here in this case. So I don't want there
to be any misunderstanding. The same thing is true with respect
to the environment.
But I think it is--I look at it the other way. I think it
is wrong in the Ricardian way we think about these things to
have some things be a legitimate competitive advantage, and to
me, environmental pollution shouldn't be--it is not a
legitimate competitive advantage in the way we analyze trade
because, at a level, we are all really free traders. We all
have the same objective. The question is, how do we get there?
So I look at it the other way around. I think it is not a
legitimate competitive advantage to have very low environmental
standards. So that is why I am troubled by it, and I think the
same thing is also true with respect to labor standards.
Mr. THOMPSON. Well, I certainly know, in my business, if I
didn't have to pay attention to regulations and rules and
particularly with environmental standards, I could make a lot
more money than I do, and that would put me at a competitive
advantage over someone who had to do that.
U.S. wine exporters continue to face highly burdensome
trade barriers in Canada. British Columbia has a very
discriminatory grocery store program that prohibits American
wine from being sold on the same shelves as domestic wine,
giving the BC producers an enormous competitive advantage.
In January of 2017, USTR requested WTO dispute settlement
consultations with Canada on this matter, but the consultations
failed to bring about any grocery access for American wine
makers. Given Canada's continued refusal to modify its
discriminatory program in any way, will USTR now work to fully
enforce U.S. rights under the WTO agreement and formally
request a dispute settlement panel?
Ambassador LIGHTHIZER. First of all, Congressman, I am, of
course, very much aware of this problem. I completely agree
with the sentiment of your question. Whether we go to the panel
stage is something that is under review right now. You can take
from my general attitude that I am very pro-enforcement. The
only caveat I would add is, is this something you are better
off dealing with in a NAFTA negotiation? So I think we have to
think about that. The stakeholders have to think about it. The
Members have to think about it. And I have to be informed by
all of you. But it is a very serious problem. It is the kind of
problem that ought to be brought to a panel, in my opinion, if
it can't otherwise be resolved.
The only thing I would say is we have to think about
whether this belongs in the NAFTA context, in which case it
would make more sense to negotiate it and do it in a less kind
of hostile way. But it is a major problem, and it is an
extraordinary problem for those people who are affected, those
producers, and there is no justification for it.
Mr. THOMPSON. So, in modernizing NAFTA, is this something,
this elimination of this discriminatory practice, we can see as
a possibility?
Ambassador LIGHTHIZER. It certainly is something that we
are going to raise and deal with one way or the other.
Mr. THOMPSON. It was said that if TTP fails, that would
give China an upper hand. How much time do you think we have to
address that before they do, in fact, have an upper hand?
Ambassador LIGHTHIZER. Do I have--I am minus 7 seconds.
Chairman BRADY. You are, Mr. Ambassador. I am afraid we
will have to come back to you on that question.
Ambassador LIGHTHIZER. I am sorry, sir.
Chairman BRADY. Thank you.
Mr. Buchanan, you are recognized.
Mr. BUCHANAN. Thank you, Mr. Chairman.
I want to thank the Ambassador. I know all of us look
forward to working with you going forward. Just a couple of
points from Florida. We have 14 ports. One in five jobs in
Florida are tied to trade. So trade is a big opportunity for
us, but I believe--I am a free trader, but I think trade needs
to be a win-win. I am concerned, especially with some of the
bigger countries, with large trade imbalances. I think it is
something we need to look at. I am sure you will. But I think,
on some of our trade agreements over the years, we have been
played. That is just my opinion, and that is something we can
talk about further going forward.
I want to drill down a little bit on a Florida issue in
terms of NAFTA. We are the second largest State in terms of
fruits and vegetables grown. We have pretty much the same
growing season as Mexico. It is a $12 billion industry, but a
lot of people feel, because of some of the techniques, the
antidumping, and other things that are going on in Florida, it
has cost us about $1 billion to $3 billion in terms of
Florida's opportunities down there and a lot of jobs, and I
just wanted to get your thoughts if that is on your radar,
something you are looking at. Mexico is next to us, a good
neighbor, but we want to make sure it's fair.
Ambassador LIGHTHIZER. Well, I would say that I completely
agree with you. I am familiar with the issue. I am not as
familiar, obviously, as you are. I have talked to the Governor
about it who has raised this issue a lot.
When I say we have a trade deficit in agriculture with
Mexico, what we are talking about is the problem that you
raise, because with respect to everything else, we have a
surplus.
So I think it is something that we have to work on,
something I would be happy to work with you on. It is something
that we ought to be talking about in the NAFTA context. And
then there are issues of whether or not there is unfair trade
involved here. There are a lot of things we have to consider.
But I realize it is an acute problem, and it has become more
and more acute. And it is really something that I want to
engage on.
Mr. BUCHANAN. Well, I would appreciate the opportunity to
work with you going forward.
I want to talk--Mr. Neal had brought this up about T-TIP.
It sure seems to me that--and I have had the opportunity to
travel in Europe, I have met with a lot of American businesses
in Europe. It makes a lot of sense. We have a lot of same
shared values. When you look at labor rates, a lot of it is
fairly competitive, comparable sized markets in terms of the
EU.
And I know that the last Administration, because I met with
several folks in your office back a couple of years ago, there
has been a lot of work product and a lot of effort that has
been done. I know there are a lot of individual issues with
various countries.
What is your sense of where that is today? Is that
something we can resurrect? Or do you just see that we are
going to move forward on a bilateral agreement with every
single country individually which would seem would take a long
time to get anything done? But I wanted to get your comments on
it.
Ambassador LIGHTHIZER. Well, first of all, it is something
that the President has spoken on. He mentioned it during his
meeting with Chancellor Merkel some months ago. It is something
we are looking at. We are reviewing all of these agreements.
So I don't want to prejudge it, but it is clearly something
that I understand there is a lot of momentum behind. There are
a lot of reasons to do it. On the other hand, it wasn't
accomplished, so there are obviously problems or it would have
been done and we wouldn't be talking about it at this point.
It is in the group of things that we are going to review,
agreements that we are in the process right now of reviewing to
decide where to allocate our resources. There are a lot of
arguments against it. But, as I say, if it was so close to
being done, it would be done and we wouldn't have to worry
about it. Right now, it can't be done because of----
Mr. BUCHANAN. Let me just throw this out. Being in Congress
for 10 years, I have watched trying to get agreements done. It
takes, seems like, forever. So when you go at it just on a
bilateral basis, and there are probably reasons, strategically,
to do some countries that way, but it seems like there has been
a lot of work product in terms of the EU. Because of shared
values, it makes some sense to see if there is not an
opportunity to do something in a big way that would impact. And
I know it is not easy because there are a lot of issues with
individual countries in Europe, but I would be interested in
you guys being open-minded to that as a possibility.
Ambassador LIGHTHIZER. Thank you, sir. And we are. It is
under review. And I could make an argument, if I had to, that
it is a bilateral agreement.
Mr. BUCHANAN. Well, thank you. And I yield back.
Chairman BRADY. Thank you, Mr. Buchanan.
Mr. Lewis, you are recognized.
Mr. LEWIS. Thank you very much, Mr. Chairman. Thank you for
holding this hearing today.
Mr. Ambassador, thank you for being here. I would like for
you to give me some idea when it comes to trade policy, what is
your position on the issues of human rights, labor rights,
protecting the environment? It is my belief that a trade policy
should be a reflection of our own values. I would just like to
hear you out.
Ambassador LIGHTHIZER. Well, I think that is a very
important point. I think it is not really fundamentally
different than the point that the Chairman made. I mean, this
is--we have a system. And we are proud of that system. And the
system has created an enormous amount of good for not just
Americans, but for people around the world. And we have an
obligation to push that forward.
To be honest, personally, I view myself as worrying about
the dollars-and-cents part of it. I am not worried the foreign
policy part of it or the----
Mr. LEWIS. So are you suggesting, Mr. Ambassador, that we
make money, we get the dollar, at any cost?
Ambassador LIGHTHIZER. No. I think that----
Mr. LEWIS. But you said you are concerned about the dollar.
Ambassador LIGHTHIZER. No, I don't think that is right. In
the first place, I don't believe that at all. In the second
place, I view my focus has to be on trade and economics. That
is really what I am paid to do. That isn't to say that the
other things aren't even more important, but my focus is.
But where we overlap, Congressman, is I think labor and the
environment are economic issues, and I approach them as
economic issues. That is how I think of them.
I think the United States--and many of the Members have
said this--the United States, every businessman, every farmer,
every worker has a right to get a fair shake in their own
market.
And we have to remember that. This is not just about
exports. We have a right to have a fair--we have a contract
with these people where we will pursue a certain economic
policy which we all think is the right policy, which makes
everybody richer. But part of that contract is that we will
give them all a fair break. And that means fair competition in
their own market and overseas. And part of that fair
competition, in my judgement, are things like labor rights
overseas and the environment.
Now, that isn't to say that I think you want to ratchet up
or do any of those things. I am just saying there are certain
minimum standards that are part of our system, and to fall
below that is an economic advantage which I don't think is a
fair advantage.
So I don't disagree with your premise. I am just saying I
am worrying about the economic side of it. I am worrying about
workers and farmers making more money at the end of the day.
And the other things are important, but they are not my focus.
Mr. LEWIS. But you are not prepared to commit to me, this
one Member, that our trade policy should be a reflection of our
values as a country? We can't say one thing at home and do
something else abroad.
Ambassador LIGHTHIZER. I think it should be a reflection of
our values.
Mr. LEWIS. Thank you very much. I yield back.
Chairman BRADY. Thank you. Thank you, Mr. Lewis.
Mr. Roskam, you are recognized.
Mr. ROSKAM. Thank you, Mr. Chairman.
Ambassador, thank you very much for your time today.
Just to shift gears a little bit, one of the big priorities
is our relationship with Israel historically. And back in the
last Congress, we overwhelmingly passed into TPA one of the
stated trade objectives of the United States is to push back
against the BDS movement, the anti-Israel Boycott Divestment
and Sanctions Movement.
This is into a larger context. The former Ambassador from
Israel to the United States, Michael Oren, wrote an op-ed in
which, a few years ago, he made this point. He said the first
wave of anti-Israeli activity was military, and we know how
that turned out. The second wave was terror movement against
Israel. But the third wave is, in some ways, more insidious in
that it is trying to take away Israel's legitimacy and,
therefore, just simply remove it from the world stage.
So one of the tools that you have as the Trade Ambassador
is the capacity to push back against that, particularly as it
relates to European governmental actors. Can you just give us a
sense of where that stands and how the Administration is
adopting that TPA objective?
Ambassador LIGHTHIZER. Well, right now we are not in
negotiations with Europe. But we understand that's an
objective. And, indeed, I would say it is a threshold. It is
more than an objective. I think that I shouldn't speak for the
Administration on matters of foreign policy, but on this one I
think it is so clear. The Administration very strongly agrees
with that sentiment.
And we think that these boycotts and divestitures and the
like are very dangerous. They are not just dangerous for
Israel, they are dangerous as a precedent for the whole
economic system.
So, personally, I am very sympathetic. I believe the
President is very sympathetic. And that will be a very
important objective when we get to the point that we are
talking to Europe about T-TIP or other agreements.
Mr. ROSKAM. Very good. Thank you. I yield back.
Chairman BRADY. Thank you.
Mr. Larson, you are recognized.
Mr. LARSON. Thank you, Mr. Chairman.
And thank you, Ambassador.
In my State of Connecticut we have a great deal of exports.
In fact, nearly 6,000 companies in Connecticut are involved in
exporting. Nearly 90 percent of them are small businesses. That
is why we believe it is critical to ensure our businesses and
our workers maintain their economic and competitive position in
the international markets.
I know you understand this thoroughly. I know you also
understand that many American workers feel that the
international trade has eroded the middle-class wages and led
to job loss, as you can hear in some of the sentiments and the
questions that a number of our Members are asking.
So that means that enforcement of labor and environmental
provisions in our existing agreements and insisting on strong
protections in any future agreements is essential. I know you
understand that.
But what I have, and there is not enough time for me, but I
want to pose six questions with the permission of the Chair. If
I could pose the questions and then have them answered in
writing, because I don't believe the Ambassador, it would be
fair to him. But at least he will get the gist, and then we can
further correspond beyond the Committee, and I won't supersede
the time that I have been allotted.
The first is, with regard to NAFTA, how do you plan to seek
greater access to the Canadian and Mexican procurement markets
while protecting our own Buy American priorities? These seem to
be in conflict. And so what specific changes will you seek to
the government procurement chapter of NAFTA? That would be
question number one.
What kind of enhancements with regard to NAFTA, with
respect to intellectual property protection, is the
Administration contemplating in the NAFTA rewrite?
Third, what is your plan when it comes to the enforcement
of labor and environmental provisions in our future FTAs?
The fourth has to do with currency that a number of people
have discussed and you have raised here. What is the
Administration's intention with respect to seeking the
inclusion of currency rules in its trade agreements? You have
already elaborated on standards and the need for those. And,
again, I would appreciate if you could respond to that.
Further, in that regard, do you support including strong
and enforceable disciplines in NAFTA and other trade
agreements?
And, finally, Mr. Ambassador, we are very concerned about
the issue that was raised when the President said that he might
terminate the U.S.-Korea Free Trade Agreement. What are the
Administration's plans with respect to the U.S.-Korea Free
Trade Agreement? And if you could answer that, that would be
great.
Ambassador LIGHTHIZER. So I am going to put six in the
record and answer the last one?
Mr. LARSON. Yes.
Ambassador LIGHTHIZER. We are looking at all of our trade
agreements. And the KORUS is one of them that we are looking at
very closely. There have been winners and there have been
losers. I would be less than candid if I didn't say it is
troubling to me the direction the trade deficit has gone with
respect to that agreement. It has had a negative effect on the
U.S. trade balance.
Having said that, it is just in the group that we are
looking at. There are no plans to drop out of KORUS at this
point. It is just something that we are talking to the Koreans
about.
In fact, I have a meeting today or tomorrow with the
Koreans on these issues. We have a variety of thorny issues,
issues that we think are costing us exports, and those things
are all we are going to raise.
And it fits in that category of things that I say, if you
have a big trade surplus with the United States, you had better
get rid of the barriers to our exports to you. And it fits into
that category of things. And I am going right down the line,
insisting with these people, that you can't have barriers to
trade and have a $20 or $30 billion surplus to us. You had
better get rid of the barriers and let us sell there, because
we are not going to tolerate it anymore.
But in terms of a plan right now to get out of KORUS, no,
there is no such plan. But it is under review. It is seriously
being looked at. And the President is troubled by the trade
imbalance.
Mr. LARSON. That is reassuring, certainly, to hear. I know
a number of people over the recess will be traveling to Korea
for a variety of purposes, not the least of which is national
security. So I do think it is important that message be
reinforced.
And I couldn't agree with you more in terms of the trade
imbalance. So I commend you in that area, and also for the
encouragement that we are not going to be dropping out of
KORUS.
Thank you.
Chairman BRADY. Thank you, Mr. Larson. You may have set a
record for the number of questions stuffed into a 5-minute
period. Thank you.
Mr. Smith, you are recognized.
Mr. SMITH OF NEBRASKA. Thank you, Mr. Chairman.
And thank you, Ambassador, for your service and for sharing
your time here today.
I certainly want to associate my comments and concerns with
my colleagues who have raised the issue of agriculture and
NAFTA, and the progress that has been made with NAFTA. I know
that producers across rural Nebraska certainly appreciate the
gains that have been made.
And I think you have heard from us numerous times. They
call us the agriculture delegation here on the Committee. You
have heard us mention and emphasize several times how important
these issues are, agriculture issues, that we not undermine the
successes that NAFTA has brought to U.S. agriculture.
Shifting gears just a bit, thank you for the work that you
and the President and others in the Administration have done on
pressing China on a number of trade issues. This isn't just a
market access issue. For the biotech firms, the lack of
approval for these products also forces U.S. producers to
choose between the most current seed varieties or continuing to
access--continuing access to China's 1.3 billion consumers. And
it is obviously a big deal.
As agreed to under the U.S.-China 100-Day Plan, China's
National Biosafety Committee, or the NBC, recently met to
review approval petitions for eight U.S. biotech products which
have seen their approval for the Chinese market delayed by an
average of 5 years. That's pretty astonishing.
So following the Biosafety Committee meeting, the NBC
meeting, the Chinese Ministry of Agriculture approved only two
of the eight pending products. And so approval of only two of
these eight, obviously, is disappointing, and I am concerned
that China will not honor the spirit of the 100-Day Plan in
approving the remaining six products.
So I understand the NBC is set to meet again by the end of
June, giving us the opportunity to have the other six products
approved.
What is USTR doing to ensure China follows through and
approves the remaining six products before the conclusion of
the 100-Day Plan?
Ambassador LIGHTHIZER. Well, thank you, Congressman.
First of all, I would say that there was some progress made
in the 100-Day Plan, as you suggest, and this is one of the
principal areas where there was progress.
We are continuing to press China. We expect and will
require that they, after they follow their process, very
quickly approve all eight documents--I mean, all eight
applications. This is important not just because of those, but
because it actually delays U.S. farmers from implementing a lot
of these high-tech techniques in the domestic market as well as
internationally.
So I can assure you that Secretary Ross is very focused on
this, is making it very clear that this has to be done. We have
been in contact with the Chinese as recently as the last couple
of days on this. And my feeling is that, before long, we are
going to have all eight of them agreed to. That is what we
expect. That is what we think was agreed to. And the Secretary,
as I say, who actually had that negotiation at that time, is
very focused on it.
Mr. SMITH OF NEBRASKA. Thank you. I know that there is
great opportunity in being good stewards of our natural
resources with biotechnology. We have a great story to tell of
how far we have come utilizing biotechnology, and I think it is
very promising for the future.
I was pleased to see the President's budget did include a
renewal of the GSP program, and this is very important. More
specifically, the recent GSP reauthorization included language
to also consider for duty-free access a variety of travel
goods. The previous Administration did not provide the
consideration for travel goods from all eligible countries as
intended by the law, and instead only provided it to the least
developed and AGOA nations. I appreciated Ambassador Froman's
basically delegating that, or deferring that, expansion to the
current Administration.
Could you give us an update on that effort in GSP and
travel goods?
Ambassador LIGHTHIZER. Yes. Well, I don't necessarily
appreciate him deferring it. But I say that just in jest.
No, we are in the process of looking at it right now. We
are very close. The documents are in front of me and I think
you will see an outcome very soon. And my guess is you won't be
disappointed.
Mr. SMITH OF NEBRASKA. Okay. Thank you. Again, thank you,
Ambassador.
And thank you, Mr. Chairman.
Chairman BRADY. Thank you.
Mr. Kind, you are recognized.
Mr. KIND. Thank you, Mr. Chairman.
Mr. Ambassador, thank you for being with us here today.
Mr. Ambassador, I want to just make a couple of comments
before I ask you a question more specifically involving the
dairy issue we have with Canada and NAFTA renegotiation.
But my first comment is I hope--and this is a good start
today--that your approach in dealing with Congress is going to
be extremely open, consultative, collaborative. I think it is
going to be beneficial that whatever you go out and negotiate,
you are going to have to come back here for our approval. And
it is better for us to be on the takeoff, rather than trying to
get us on the landing with these agreements, because we have to
justify and explain this to our bosses back home too.
And Secretary Froman, I think, set a very high standard as
far as outreach and time he spent on the Hill getting feedback
from us, and us getting feedback from him, in the course of
negotiations. That also included language of what was being
negotiated.
Now, past USTR offices have been loath or reluctant to
share language with us. If that occurs in the future, that is
going to cause problems. I am just telling you right now.
And with that in mind, I recently just sent you, as well as
Secretary Perdue, a letter inviting you to come back with me to
my home in Wisconsin to have a good meeting with our
agriculture producers. I think you are going to find that
getting out of the bubble of Washington can be extremely
helpful, just going out into the countryside and listening to
people and getting feedback from them. We had a great farm
visit with Secretary Froman a couple of years ago where he got
a lot of good input from agriculture producers in my large
agricultural area.
So I hope you seriously consider the invitation and
possibly find time to come to meet in the Midwest and have that
conversation with folks back home.
In regard to NAFTA, I may be in the minority on this side
of the dais, or even within my own party, but I happen to
believe our withdrawal from the Trans-Pacific Partnership trade
agreement will go down as one of the great strategic mistakes
that we made in the 21st century--unless you and this
Administration figure out a way to get us back into the game,
into the fastest-growing economic market on the globe, the
Pacific Rim area.
Because right now a tremendous vacuum has been created.
These countries were looking to us for leadership and they
didn't find it. We turned our back on them. And that vacuum
will be more than willing to be filled by China. And if we have
to operate from the outside looking in, trying to compete with
China's rules, that will be a race to the bottom, and that will
not help us or our people economically in this country.
And with TPP in mind, I hope--and we have talked to
Secretary Ross about this--it seems to me, just logically, a
good place to start with NAFTA renegotiation is to look to what
Mexico and Canada has already agreed to under TPP, the
elevation of standards that were included in the agreement, the
reduction of tariff and non-tariff barriers that they had
agreed to. And if you have ideas on how to improve upon that,
let's go. Let's do it.
But if I see slippage in those standards from what they had
already agreed to under TPP, that is going to be a problem from
my perspective too. We can't be going backward now on something
that was already agreed to with Canada and Mexico.
And, you know, a lot of people think NAFTA renegotiation
means mainly with Mexico. We also have problems with Canada.
And one is the dairy issue right now with the Class 6 and Class
7 pricing system with ultrafiltered milk, something that wasn't
addressed with NAFTA but which many, if not all, of our dairy
producers right now feel that they are being treated in an
unfair and discriminatory manner.
So I am hoping that you have a plan for moving forward to
try to resolve this so that we level the playing field and it
is a two-way street when it comes to the exchange of products,
but especially the issue we are having with Canada right now
with dairy. And I'd be interested to hear if you have been
thinking about this at all, if you have some type of plan to
move forward on, and hopefully look forward to some additional
meetings where we could talk a little bit more in detail about
what we feel needs to be done dealing with Canada and
renegotiation.
Ambassador LIGHTHIZER. Great. Thank you, Congressman.
First of all, I do believe that this is a partnership. And
we don't want to bring an agreement back here that doesn't
pass, implementing a bill that doesn't pass. So that makes no
sense. So we want to be involved. I completely agree.
Senator Dole used to always say the same thing: If you want
me on the plane when it lands, put me on it when you take off.
And I always thought that was good advice.
In the second place, I have some background on the Hill,
and I understand the importance of Congress. And, to be candid,
I enjoy working with Congress. So that is number one.
Number two, with respect to TPP, the President didn't pull
out of the Asia-Pacific area. He pulled out of TPP. He is very
much--he wants to be engaged. And I think we are going to do a
better job. It is not going to happen in a week or two.
And there are also questions I always had when I talked to
people about--TPP was going to pass anyway. There are questions
as to whether or not that was ever--whether that train was ever
going to--whether that, I guess, with your analogy, whether
that plane was ever going to leave the airport.
Having said that, the final thing I would say on--because I
am so clock conscious here--is that on the issue of Canadian
dairy, yes, we are very much involved in that. We care very
much. You ask, do we have a plan? I have, like, this thick of
options. So it is something we are focused on for a whole
variety of reasons.
Mr. KIND. Great. I would love to stay in touch with you on
that as we move forward.
Thank you, Mr. Chairman.
Chairman BRADY. Thank you, Mr. Kind.
Ms. Jenkins, you are recognized.
Ms. JENKINS. Thank you, Mr. Chairman.
Ambassador, thank you for being here to talk trade with us
this morning.
National security should, unquestionably, be a priority of
any government. But I worry that using national security as a
basis for trade restrictions in NAFTA or elsewhere could
backfire if other countries do the same to us. In particular,
food security for many countries is a vital component of
national security.
Along that vein, here at home wheat farmers in my eastern
Kansas district are just finishing their wheat harvest, and the
work continues to roll north and west across the State. Many
Kansas farmers will then ultimately look to foreign markets,
here in North America or abroad, to sell their products in the
coming months.
What argument would you make to a country that tries to
restrict its imports of U.S. wheat or other products for food
security reasons?
Ambassador LIGHTHIZER. Well, in the first place, as I said
before, it is a legitimate argument: Should you use national
security in the case of steel? I believe it is a legitimate
argument. I, however, think that it is a legitimate use of the
statute if the President decides to go in that direction.
Steel, aluminum, these are national security issues, in my
opinion.
Now, there is always the argument: Are you worried about
somebody else using it? Yes, I am worried about somebody else
using it. But they have to have a legitimate reason also. They
can't just willy-nilly use it or we would challenge them. And
my guess is that any country that thought they had a legitimate
reason to use national security would, in fact, use it whether
we use it or not. That is my own personal belief.
I don't see how someone could preclude Kansas wheat based
on national security of a food need basis. That doesn't strike
me as a legitimate argument. If it certainly happened, we would
have to decide what makes sense in our judgment. And I can
assure you that the President will look at this very, very
hard. And his--the reaction will be the same as we are going to
have with respect to any time we take an action on trade at
all, there is always the possibility of somebody retaliating
against us. It even happens when you do something in anti-
dumping or countervailing duty or all the normal things.
There is always a possibility of retaliation. And the
question you have is, what are you going to do in response? And
that is something that we are thinking about. But if we get
unfair retaliation against us, I would expect the President to
react very strongly. I would expect him to take the position
that we won't tolerate that.
Ms. JENKINS. Okay. Great. Thanks.
About 50 percent of all U.S.-grown wheat is exported,
making trade incredibly important to a wheat State like Kansas.
Mexico, for example, was the largest export market for U.S.
wheat last year, made possible by the benefits of NAFTA. In
fact, according to the National Association of Wheat Growers
and the U.S. Wheat Associates, Mexico imported 3.1 million
metric tons of wheat in the 2016-2017 marketing year.
In the views of many of my constituents, NAFTA has been
overwhelmingly successful. I do agree, however, there is room
for updating in this agreement, which is more than 20 years
old, to include strong and enforceable SPS rules based on sound
science, like those that were negotiated under the TPP. Kansas
farmers and ranchers are also looking beyond NAFTA to future
trade deals for additional markets.
What are your views on how NAFTA renegotiation can serve as
a blueprint for securing those future trade deals, which would
mean the inclusion of strong SPS provisions that will help the
Kansas producers gain new market access?
Ambassador LIGHTHIZER. Well, SPS is something that needs
updating, and it is an important objective. Generally, there
are advantages in putting in model agreements in negotiation
between Mexico, the United States, and Canada. Because we have
a long history, we don't have a lot of the--some of the outlier
economic activity that you might have if you were negotiating
with somebody else. For example, we don't have massive state-
owned enterprises in either place.
So I think that NAFTA is, as you suggest, it is a great
opportunity to put in place between the three countries very
high-level provisions with respect to a variety of things. SPS
is one of them. But there are also, other people have suggested
currency. It was kind of a classic example of what you are
talking about where there really aren't currency problems
between the United States, Mexico, and Canada, but that makes
it a good opportunity for everyone to sit down and say, okay,
let's put together a model agreement here that ought to apply
to everyone.
So I look upon NAFTA as a real opportunity to create a
model. And I believe that with respect to some of these things
the Canadians and the Mexicans look upon it the same way. And
then take those provisions, with the additional legitimacy of
being in the NAFTA and be able to use those in future
negotiations.
Ms. JENKINS. Thank you, Mr. Ambassador. We look forward to
working with you.
With that, Mr. Chairman, I yield back.
Chairman BRADY. Thanks, Ms. Jenkins.
Mr. Pascrell, you are recognized.
Mr. PASCRELL. Good morning, Mr. Chairman.
Chairman BRADY. Good morning.
Mr. PASCRELL. Mr. Ambassador, congratulations on your
confirmation. Good luck. You are going to need it.
We have heard a lot of talk about what should be changed. I
have to say that in various meetings with the U.S. Trade
Representative and Department of Commerce, White House
officials, I and many of my colleagues find ourselves confused
by the inconsistency from this Administration when it comes to
trade. We need some very basic questions answered. So I am
going to get into the questions.
But I want to associate myself with the words of Mr.
Buchanan concerning the difference between the bilateral
agreements and regional agreements. I think he is on target. I
think it would be foolish simply to deal in those bilateral
agreements. This is a different world, and we need to
understand that.
And I would like to associate myself also with Mr. Larson's
comments on the relationship between our trade agreements and
stagnant wages in the United States and the ability to create
new jobs. There is a lot of data coming out on this. Trade
affects things in our own country, and we need to take a look
at the labor market to understand it fully.
Now, the President called NAFTA a disaster, and all I am
hearing so far is tweaking the edges. If it is a disaster, and
I am looking at, at least, 22 speeches that he made during the
campaign where he riled up people, riled up people, about the
trade agreements.
Now, I voted against many of those trade agreements. So one
would think we are on the same side. We are not. We are not.
In the Administration's notice to Congress of an attempt to
renegotiate NAFTA, your office failed to provide us with
specific negotiating objectives or detailed descriptions of
what you would like to see changed. Many American manufacturing
companies have moved to Mexico, for instance, because of the
much lower labor costs across the border. Mexican manufacturing
workers make only 20 cents on the dollar that we make. And they
have yet to comply with minimum internationally recognized
labor standards.
So today, when Mr. Levin asked about implementing reforms
prior to renegotiation, you would not commit to demanding labor
improvements in Mexico. And you did the same thing yesterday
when you were questioned by the good Senator from Ohio.
Now, I am disappointed you did not respond. So how will you
ensure Mexico--how will you ensure that Mexico enforces labor
provisions in a new NAFTA, now that we are going to abandon
this disaster, if they have failed to meet basic
internationally recognized labor standards?
Before you answer that question, I want to remind you, I
did submit to you the principles of trade which we are having
as our standards. I want to know what your standards are.
Thank you, Mr. Ambassador.
Ambassador LIGHTHIZER. We expect to negotiate an agreement
that has enforceable labor standards. And we expect them to be
consistent with the agreement that the Committee had with the
Bush Administration on May 10, 2007. We expect them to be
enforceable. And I look forward to working with the Members of
the Committee to make sure that happens.
In spite of the disagreements that you articulated, I think
that with respect to labor standards, my guess is we are not
that far apart.
Chairman BRADY. All time has expired. Thank you, Mr.
Pascrell.
Mr. PASCRELL. Mr. Chairman, I will submit the other
questions to the Ambassador with your approval.
Chairman BRADY. Without objection.
Mr. PASCRELL. Thank you.
Chairman BRADY. Thank you.
So we will now move to two-to-one questioning to balance
out the rest of the hearing.
Mr. Paulsen, you are recognized.
Mr. PAULSEN. Mr. Ambassador, the movement of data around
the world is essential for businesses of all types here in the
21st century. From automobiles, to airplanes, to agricultural,
and different apps, access to data around the globe is
paramount in importance for businesses of all sizes in order to
compete in a global economy. So data flows today have
increased, they have grown by 45 times since 2005, and they are
expected to grow by another 9 times by 2020.
However, as you know, currently there are no enforceable
trade rules specifically protecting data flows, which leaves
American companies vulnerable to digital manipulation by
foreign governments. And such efforts include data
localization, forced technology, or source code transfers, and
other pernicious efforts that undermine competition from U.S.
companies.
And both you and Secretary Ross have voiced public support
for enforceable digital trade rules in your confirmation
hearings as well as more recently. So does the Administration
view inclusion of digital trade rules as a top priority for a
NAFTA modernization and other future trade agreements?
Ambassador LIGHTHIZER. Absolutely.
Mr. PAULSEN. That is good to hear.
And, Ambassador, you have also mentioned that you have
notified Congress of the intent to initiate negotiations with
Mexico and Canada regarding NAFTA. Given that NAFTA
modernization will set that precedent also for future
negotiations with other countries and other agreements, it is a
tremendous opportunity to help break down barriers to digital
trade and allow U.S. companies to compete in North America.
Can you share with us, or the Committee, any information
about Mexico and Canada's views on digital trade heading into
those negotiations?
Ambassador LIGHTHIZER. I have not had discussions with
Mexico or Canada with respect to this issue. We expect to have
a digital chapter, as you suggest. We expect it to be a very
high-level agreement.
I will have discussions with them. But I have to be
careful, because we are not allowed to begin negotiations until
we go through the TPA process, which we take as a very
important commitment.
Having said that, I guess I would be very surprised if both
of them didn't agree fundamentally that we need this. Neither
one of them are in the group of countries that are, as you
suggest, trying to create new industries by using tactics like
forced transfer of technology, like data localization rules.
So I am optimistic that we will be able to put together a
good chapter. But I certainly take it from our point of view
that it would be very difficult to pass a NAFTA-implementing
bill that doesn't have a very high standard digital chapter.
Mr. PAULSEN. Good. That is good to hear.
Let me just shift gears real quick. You know, the United
States, and my home State of Minnesota, is a leader in medical
device innovation and growing exports in that area that create
a lot of really good jobs here at home and then help improve
healthcare outcomes around the world. And other countries now
are increasingly taking very extreme and misguided measures to
control healthcare costs.
As an example, in India, we are seeing severe price
controls that disproportionately affect American medical device
manufacturers, putting them at a competitive disadvantage.
India has also rejected requests by U.S. medical device
manufacturers to withdraw affected products from the market and
then has announced its intention to impose price controls on
additional categories of medical devices.
And then another example would be in Italy where only U.S.
publicly traded companies are required to account for expected
revenue losses related to a yet-to-be-implemented and highly
controversial payback law that would require companies to pay
back to the government any medical device spending in excess of
an arbitrary predetermined level of spending.
These are policies that hurt American companies and deter
these companies from introducing new, innovative technologies
in these markets, which ultimately means patients are going to
have less access to these products.
So can you just share a little bit, how will the
Administration work with India or other foreign governments to
ensure that our companies are not being driven out of the
market by arbitrary price caps or spending measures that make
it impossible for innovative companies to compete?
Ambassador LIGHTHIZER. Thank you, Congressman.
I have met with a group of medical device executives and
have heard the horror stories. And that really is what they
are. This is an issue that we are raising with India, and we
are going to use the Prime Minister's visit as a launching pad
to make sure that this gets proper attention.
So everything you say, we completely agree with. All we can
do at this point is raise the issues with them, show the
unfairness of them.
And this, to me, fits into the category also of things that
if you have a big trade surplus with the United States, you
should not be doing things like this to the United States. They
should be trying to encourage imports from the United States.
And their problem is even bigger because this is another
example, the medical device area, is another example where
China is now going to move in, has it on their Made in China
2025 list of industries that they want to become world class
in.
So this is an industry that I think we really do have to
focus on. And we met with them and we expect to put together an
action plan.
Mr. PAULSEN. Thank you, Ambassador.
Chairman BRADY. Thank you, Mr. Paulsen.
Mr. Marchant, you are recognized.
Mr. MARCHANT. Thank you, Mr. Chairman.
Thank you, Ambassador, for being here today.
I have a couple of questions and issues I want to bring to
you about the negotiations of NAFTA and how they may affect my
district in Texas.
My district is the DFW Airport. The DFW Airport is the
center of my congressional district. The airport has an
astonishing value that it adds to our economy of $37 billion a
year. The Metroplex area that encompasses my congressional
district is generating nearly half a trillion dollars in the
GDP, and the DFW Airport is the driving force behind much of
that growth. Most people in Texas say that the airport really
is the economic generator for the whole State.
Just recently, the mayors of Fort Worth and Dallas and a
delegation traveled to Toronto. And their main concern was that
both parties, both those in Toronto and Dallas-Fort Worth, are
uneasy about the upcoming negotiations, and they want to make
sure that these relationships they have developed over the past
few decades are going to last.
So I would like to know what steps the Administration is
taking to make sure that the areas of the country that
experienced economic growth as a benefit of NAFTA won't be
harmed or see a downtick in the results of the modernization.
Ambassador LIGHTHIZER. Thank you, Congressman.
First of all, we are very much aware of how important that
airport is to the State of Texas. And we are also aware, as the
Chairman points out, that Texas is the number one exporting
State in the country, at this point, as I understand it.
So our objective is to have more trade, not less trade. And
our objective is to, first of all, do no harm. We expect that
as a result of this the United States will have more sales and
we hope that there is more trade. But, clearly, with respect to
the provisions where NAFTA has been successful, we want to
secure that going forward.
Mr. MARCHANT. Thank you.
Lastly, I would like to bring up a letter that was sent to
you by our two Senators on June 8th. And, basically, the letter
states that NAFTA has played a key role in all North American
energy markets, such as oil and natural gas, and that the NAFTA
agreement allows the United States to maximize the benefit of
being the world's largest energy producer.
As the Administration moves forward, I would like to echo
the sentiments of this letter and ask for your opinion on the
free flow of energy products, including electricity, oil, and
natural gas, across the United States and Mexico and Canadian
borders.
Ambassador LIGHTHIZER. Yes. I agree with you. We think
that--Senator Cornyn of course is on the Finance Committee,
where I testified yesterday, and this did come up.
We support the free flow of energy across the borders. We
think it is one of the advantages we have as a North American
market.
Mr. MARCHANT. And you don't think that any of the NAFTA
negotiations that we contemplate will have any effect on that
free flow?
Ambassador LIGHTHIZER. Well, I am not privy, obviously, to
what the other people want to do. We think it has been a
success. We hope it fits in the category of ``do no harm,'' and
we hope that everyone agrees with that, although, there are
complications in this area, as you know.
Mr. MARCHANT. Thank you, Mr. Ambassador.
Thank you, Mr. Chairman.
Chairman BRADY. Thank you, Mr. Marchant.
Following the practice of the Gibbons rule, Ms. Sewell, you
are recognized.
Oh, Ms. DelBene, you are recognized.
Ms. DELBENE. Thank you, Mr. Chair.
Thank you, Mr. Ambassador, for being here with us today.
First, we talked a little bit about digital trade, and
digital trade is critically important. We have 3 million
Americans who are employed in the Internet sector, and it has
helped the United States achieve a trade surplus, a $159
billion trade surplus. So this is a very, very important issue.
In order to build on this--and I know you mentioned that
digital trade would be a priority in any NAFTA renegotiation--
how will you ensure that digital trade is prioritized within
your office with appropriate levels at the agency?
Ambassador LIGHTHIZER. Well, first of all, as I went
through my confirmation process, and in meeting with Members of
the Ways and Means Committee, digital trade, after agriculture
probably, is the number one thing that is raised. And it is
self-evident that it is very, very important to the U.S.
economy, and it is an area where we have a real competitive
advantage. So it is important.
We have at USTR a position that was created just last year,
it has not yet been filled, for an Intellectual Property
Innovation Ambassador who is a negotiator, who is responsible
for that area. We are in the process right now of filling that
spot. And that will be someone who will, along with a few other
things, focus very much on exactly this area.
So we do understand how important it is, and we think it is
an important way to get our trade deficit down, which is a
primary objective of the President.
Ms. DELBENE. Thank you. I urge you to fill that position
quickly. That is important.
Ambassador LIGHTHIZER. Are you available between now--you
are probably booked.
Ms. DELBENE. I also wanted to talk to you a little bit
about cloud computing and some of the issues we are seeing with
China. Various Chinese regulations are making it difficult, or
even impossible, for U.S. technology companies to operate in
China, possibly in violation of WTO commitments.
Specifically, I am concerned with China's proposed draft
regulations, that when combined with existing Chinese law would
require U.S. cloud providers to transfer valuable intellectual
property and effectively hand over control of their businesses
to Chinese companies in order to operate.
Global cloud services totaled more than $100 billion in
2016 and has a very strong presence in my district and in my
State. So it is very critical that the U.S.-China Comprehensive
Economic Dialogue's 100-Day Plan includes a commitment by China
to resolve this problem.
And so I wanted to hear from you. Are you aware of this
issue? And can you talk about any progress that the
Administration is making toward addressing this issue?
Ambassador LIGHTHIZER. Well, yes, Congresswoman, I am aware
of the issue. It is an extremely important issue. And it, to
me, when I read about it, is another example of a country being
a mercantilist and basically having an industrial policy.
They see an industry or sector that has value, that is high
technology, that has a huge growth potential that affects not
just its own sector, but every sector, right, because it is
this linkage that is so important. And then they try to get
themselves in the position where they take over, first within
their own country, and then way beyond that. And it is exactly
the same pattern that we see everywhere. They limit. You have
to have a partner before you can go in.
Anyone who hasn't followed this issue, it is worth looking
at. It is a prototype of exactly how they have gotten to where
they are in a whole bunch of industries for noneconomic
reasons. None of this has anything to do with the economy.
So it is an extremely important issue. It is something that
I am focused on, that the Secretary of Commerce is focused on,
and others in the Administration are focused on. And we are
raising our complaints with the Chinese, and we are looking at
all of our options. So we are aware of the issue. We realize
how important it is, and we are engaged on it.
Ms. DELBENE. Thank you.
You know, the fact that China has these regulations is
particularly really offensive given the fact that Chinese cloud
computing companies don't face these types of restrictions when
they operate in the United States.
Ambassador LIGHTHIZER. I mean, this is an extremely
important point. There is no reciprocity at all. And it is
something that if we can take care of it through current law,
we should do. And if we can't, the Congress should look at it,
in my judgment.
Ms. DELBENE. One quick point which will be for the record,
because we don't have time. I want to make sure you are aware
of some of the concerns and questions we have heard about the
Covered Agreement with respect to the EU. And so I will submit
a question for the record, and I would appreciate your feedback
on that.
Thank you.
Chairman BRADY. Thank you, Ms. DelBene.
Mr. Renacci, you are recognized.
Mr. RENACCI. Thank you, Mr. Chairman.
I want to welcome you, Ambassador, from one Buckeye to
another. My district, Mr. Ambassador, starts in northeast Ohio.
So it is in northeast Ohio. It starts in Cuyahoga County and
then rolls all the way down into Wayne County. Because of that,
Wayne County, actually, is one of the largest dairy-producing
districts in the State.
The Ohio dairy sector relies significantly on exports. I am
particularly interested in the potential to make good use of
our engagement with Canada to tackle both the excessive tariffs
our industry still faces there, and just as importantly, the
non-tariff policies Canada has been using to distort trade.
Canada's new Class 6 and 7 pricing tools seem designed to
let Canada have its cake and eat it too at our expense. The
programs are a concern not only to companies exporting to
Canada, but also those exporting protein products around the
world, since the Canadian programs are designed to undercut our
sales on both fronts.
How do we tackle both the problems facing us now with
Canada on dairy and find a way forward to establish more open
and dependable trading conditions with them on dairy?
Ambassador LIGHTHIZER. Well, first of all, if you had said
Ashtabula County, I would have paid more attention.
But seriously, we are very much aware of this issue. I have
talked to Minister Freeland in Canada about it. And as you say,
the way to think about it is exactly the way you put it. This
is not just about exports from the United States to Canada.
This is about exports from the United States to everywhere,
because they have created such a, really as a byproduct, such a
volume of dried skim milk that they can knock us out of markets
everywhere.
So it is way beyond just a problem with Canada. It is
something that we are engaged on, and that we have heard from
not only Members from Ohio, but obviously Members from
Wisconsin and from all over the place. And it is something that
we want to deal with in the context of NAFTA. Our agriculture
people at USTR are engaged and they have a variety of options
that we are looking at right now.
Mr. RENACCI. Thank you.
Mr. Ambassador, I am an avid motorcycle rider. I learned
this past week that Vice President Pence is also an avid
motorcycle rider. But on the EU-U.S. beef hormone trade dispute
issue, motorcycles are on the approved list for a 100 percent
import tariff, specifically 51cc to 500cc. If this import
tariff goes into effect, it would do economic harm to
motorcycle dealerships and facilities in the State of Ohio and
seriously impact domestic consumers.
My question to you is, a number of us here in the Congress
have expressed our concern over the import tariff proposal on
motorcycles and how harmful it would be on our constituents. As
the USTR has done in the past, would you withdraw motorcycles
from the approved import tariff list in the EU-U.S. beef
hormone trade dispute?
Ambassador LIGHTHIZER. Well, my hope is that we are going
to negotiate our way out of this. That is our objective. I
realize there are a variety of products that are on the
potential list and nothing has been happening to anybody at
this point.
I know that the motorcycle industry, the motorcycle riders,
have been very activated on this. I am sympathetic to their
position. But right now we are just hoping to negotiate it out.
I am not taking anything off of the list at this point. I think
that would be counterproductive to the negotiation.
Mr. RENACCI. I would hope we take a good look at this.
Again, I want to thank you, Mr. Chairman, for allowing me
to participate in this hearing. And I yield back.
Chairman BRADY. Thank you.
Mr. Meehan, you are recognized.
Mr. MEEHAN. Thank you, Mr. Chairman.
And thank you, Ambassador, for being here today.
Many of the themes get repetitive by the time you get down
to this point of the aisle. But I want to attach myself to the
comments that have been made by a couple of my colleagues with
regard to the importance of the free flow of data and the
effort that we are putting forth with the recognition that what
you do here with NAFTA may also have some influence with regard
to bilateral agreements that you intend to reach with other
countries.
As we are looking at Europe and other places, the questions
of privacy demands and others in the European sector create a
genuine concern for the free flow of data.
So you did say that you were looking toward putting the
highest-level people in your organization as focused on those
questions. May I inquire, the position that you are looking for
with the IP Ambassador, is that something that requires Senate
approval or is that within your own bailiwick?
Ambassador LIGHTHIZER. It requires a Senate approval.
Mr. MEEHAN. So this is part of a problem. I hope my
colleagues on the other side who are concerned about this issue
would be weighing in with their colleagues in the Senate to
assure that we would have this kind of support for that very,
very important position.
But I thank you for your emphasis on that and hope in lieu
of that appointment you will still look to assure that there
are senior-level people working on those negotiations.
Another issue which I know you are well aware of but which
continues to have great significance has been the patent
protection for innovation that takes place in the United States
in the biopharma area. There are questions about data
protection for biologic and other kinds of drugs.
This has certainly been a part of TPP negotiations in the
past and was not really resolved in a way that was as clear in
TPP negotiations, with the Five Plus Three being about the
best, notwithstanding many representations by the Trade Rep
that they were looking for the 12 years of patent protection
that are enjoyed here in the United States.
Currently, as best as I can understand, Canada does not
recognize 12 years of protections for the biologics, and Mexico
is ambiguous at this point in time.
Is it your intention to try to work in that space to
maximize the protections for biologics?
Ambassador LIGHTHIZER. Yes, absolutely.
Mr. MEEHAN. We would be grateful for your continuing
commitment to that.
And can you address for me, as well, what you might be able
to do with regard to mechanisms for patent disputes where they
may arise in the context of that space?
Ambassador LIGHTHIZER. Well, this is another area where we
want to have discussions and where NAFTA will--the whole
protection of intellectual property will be a major issue in
this negotiation, not just in the biologic area, but in the
dispute area.
There have been, for those Members who aren't aware, there
have been a number of cases in Canada where we think, unfairly,
people have lost their patent protection, and this is something
that we are going to focus on.
We understand the issue. We think it is a significant
issue. And it is a surprise to a lot of Members who don't focus
on it like you do that this is something that would go on in
Canada.
Mr. MEEHAN. Well, I thank you. I thank you for your
attention to those important issues.
And, Mr. Chairman, I yield back.
Chairman BRADY. Thank you, Mr. Meehan.
Dr. Davis, you are recognized.
Mr. DAVIS. Thank you, Mr. Chairman.
And welcome, Mr. Ambassador.
I live in Chicago, Illinois, and my hometown has the
largest concentration of companies that process sugar-contained
products made in our country. They are currently, though,
paying 75 percent more for sugar than their competitors who can
buy on the world market.
In the TPP partnership agreement negotiations, a consensus
was reached without significant dissent in the United States to
increase the sugar export quotas for Australia and Canada. What
my constituents would like to know is, are these legacy
negotiations regarding additional access for the U.S. sugar
market going to be on the table during the renegotiation of
NAFTA with Canada and Mexico?
Ambassador LIGHTHIZER. Well, we have, with respect to
Mexico, we have an agreement that was entered into, a
suspension agreement that was entered into, and it seems
unlikely that is going to change in the context of NAFTA.
Certainly, with respect to Mexico and Canada, if it is
something that Members care about, we will be informed by what
the Members' views are on it, and we will certainly take note
of the fact that you are concerned about it. The biggest sugar
issue we have right now is with Mexico and our chances in the
context of that litigation, of the Title 7 litigation, is that
we have a suspension agreement, and I think we will probably
end up resolving that issue through the negotiation.
Mr. DAVIS. I serve as Cochair of something called the Sugar
Caucus, and, of course, Chicago used to be known as the candy
capital of America. Our Members are expressing serious concern
about the continuing domestic rise in sugar price, which has
actually caused already a number of our companies and
corporations and entities to move or relocate out of the
country or to look elsewhere to purchase their sugar because
they use huge amounts of it. Some of the candy and other things
they make are mostly sugar.
Could you share with us the Administration's concerns
relative to this continuing rise in domestic sugar prices for
these businesses?
Ambassador LIGHTHIZER. Well, Congressman, I don't have any
views on that issue. It is more of an agricultural issue from
my point of view. I am concerned about the trade aspects of it,
and will certainly want to engage with the Committee on that,
but the domestic price of sugar is out of my purview. I am not
unsympathetic to the points you make, but I have this whole
world of things that are probably impossible to do, and if I
add domestic agricultural prices to it, then I will go from a
small chance to zero chance, so I think I have to sort of stay
in the realm of trade.
Mr. DAVIS. We would urge you to add this trade issue. Any
time we continue to lose jobs that we can't replace, that
becomes for me a trade issue, as well as an agriculture issue,
and so we would just urge you to take a real serious look at
this issue and this problem. I thank you so much for being
here, and I yield back the balance of my time.
Chairman BRADY. Thank you, Dr. Davis. Ms. Noem, you are
recognized.
Ms. NOEM. Thank you, Mr. Chairman, and thank you,
Ambassador, for being with us today. I know you are busy
working on NAFTA renegotiations and modernization and new trade
opportunities for us and this country, but I also want to thank
you for your work with Secretary Ross and the Commerce
Department on allowing U.S. beef back into China. That is huge
for my State of South Dakota and our cattle producers and
access to the $2.5 billion market is welcome news for all of
us.
What concerns me about the deal is that our beef is going
to have a tough time getting back up to that 70 percent import
market share that American beef producers enjoyed previously.
Australia, one of our top competitors in the region, has
negotiated a free trade agreement with China to completely
reduce tariffs on their beef by 2024. So as we work to
modernize NAFTA, other countries are working on free trade
agreements, and we are losing market share in foreign
economies.
So what is your plan to ensure that American agricultural
exports are going to be on a level playing field in foreign
markets, so we won't continue to see our market share reduction
in other countries, and also getting there quickly before those
other countries are able to snatch up that market share before
we get other agreements completed?
Ambassador LIGHTHIZER. Well, first of all, we are very
pleased with what was accomplished with respect to beef in the
China 100-Day Plan. And we think there are lots of other
restrictions that we can eliminate with respect to all
agricultural products in China. Many times the United States
has the best and the cheapest product, and there is some
reason, there is some impediment to the importation, and that
was a classic example in the beef case, and in many cases, also
poultry. There are a whole variety of these kinds of issues. So
the first thing we have to do is remove impediments to trade,
to U.S. trade. U.S. agriculture, as you know far better than I
do, is the best, it is the most competitive, and it is the
cheapest, and if we have a level playing field, we will do
fine.
I think it is extremely unlikely that we are going to end
up with a free trade negotiation with China for a whole variety
of reasons that I would be, you know, happy to sit down and
talk about, but we do have a lot of leverage with China in
terms of them removing impediments and granting access to U.S.
agricultural products, U.S. beef particularly. I mean, the
reality is that they have a $350 billion surplus with us. You
get a certain amount of leverage with that if you are willing
to use it. And it fits into the category of the people who
can't have that kind of a--I mean, in the history of the world,
there has never been anything that was so imbalanced as that,
and that gives us a certain amount of leverage. So continuing
to push on those issues is important.
In addition, there is a lot of talk about other FTAs,
bilateral FTAs. One of the ones that the beef producers always
talk about, of course, is Japan. So we have discussions with
the Japanese. We are not necessarily, at this point, moving in
the direction of an FTA, because they are probably not ready to
talk and neither are we, but we have a structure that is under
the Vice-President where we are engaging in an economic
dialogue. We are talking about a variety of issues, these kinds
of issues, and it is the kind of thing that, at some point, may
lead to an FTA, which I know is very important to agriculture.
The final thing that I would say on this issue is Japan has
had a $60- or $70 billion trade surplus with the United States
since I was at USTR 30 years ago, and I have taken the position
that on these kinds of areas, at least on a temporary basis,
the Japanese ought to be making unilateral concessions. The
reality is that it is in their interest, it is not like you are
pushing out Japanese production, in that case, you would be
pushing out another competitor's production.
So I think that is something that we ought to look at. They
ought to be letting our beef in at least on a temporary basis,
just as an effort to get their trade deficit down and to show
good faith in moving forward in developing a closer
relationship.
Ms. NOEM. I think any reassurance you can continuously give
that we are not just focused on a seamless negotiation of
NAFTA, that we are continuing to focus on China, we are
continuing to focus on Japan, that there are many of these--I
know that--our number one industry in South Dakota is
agriculture. I am a lifelong farmer and rancher, and was a
cattle producer for decades, so I know that market share is
incredibly important, and they see other countries being
aggressive and like reassurances that we are not unilaterally
focused on renegotiating NAFTA, that we are continuing to push
those other areas.
And so, I appreciate your work on all of that, and also
just will mention--I know I am out of time--but geographical
indicators in the European Union as well is an issue on which I
will talk with you later, but thank you for your time, and with
that, I yield back.
Chairman BRADY. Thank you, Ms. Noem.
Mr. Holding, you are recognized.
Mr. HOLDING. Thank you, Mr. Chairman. Mr. Ambassador,
first, I would like to thank you and your very able staff for
the assistance you have provided and continue to provide to our
sweet potato farmers as they face an issue in the EU, a pending
issue that could greatly harm their ability to export. North
Carolina makes great sweet potatoes, and we wouldn't want to
deprive the world of their great taste and benefits.
Touching on some other issues, as you can imagine, and I
know that you know, a lot of Members of Congress are looking
forward to a bilateral agreement with the United Kingdom. I
watched the press reports from the meeting that Secretary Ross
had with Secretary Liam Fox earlier this week, and out of that
meeting they announced that as early as July they will begin a
preliminary scoping for a U.S.-U.K. trade agreement.
So I would ask you to explain what preliminary scoping
means? You know, what does the working group consist of? Do you
have the lead in this? Is Commerce taking the lead in this? And
then additionally, regarding TPA, will TPA procedures be
followed in this preliminary scoping, including a consultation
with Congress during the scoping process?
Ambassador LIGHTHIZER. Well, thank you, Congressman. Yes,
as you say, Secretary of State Fox was in town last week. We
met with him, also. USTR negotiates agreements like this, so
while Secretary Ross will be very much involved, USTR will be
the hub of this negotiation.
The first thing we have to remember is that the U.K. really
can't do anything for a while. They have another several
months, probably until the early part, I guess, maybe the
middle of 2019 before they can actually get out of the EU, and
then they would be eligible. There are a variety of things you
can do that aren't really a trade negotiation that we can both
agree on, things like licensing and this kind of thing, and I
think there is an effort to try to talk about and do that in
the meantime, to discuss the issues. As we get closer to the
time that they can actually act, then we would start going
through the process that you allude to.
But I think at the right time, the U.K. would like to have
an agreement with the United States, and I believe that the
United States wants to have an agreement there, also, so it is
an important activity. It is something that has its own
timeframe because of their situation, which is kind of
controlling in this case, but we have begun talks about matters
of mutual interest, and they are, for us, a natural partner.
Mr. HOLDING. Well, I agree with you, and as you engage in
your preliminary scoping, Members of Congress who are engaged
on this are engaging with our counterparts in the Parliament to
talk about what the agreement would entail and get an idea of
where potential sticking points might be, you know, certain--we
will always have adverse interests in some regard.
Staying on the topic of the U.K., you know, I would urge
you, as you look toward 232 investigations, that you recognize
the very unique relationship, the special relationship we have
with the United Kingdom, particularly in the regard of national
security between our two countries, and take that into account,
and, perhaps, consider exempting countries like the United
Kingdom, perhaps there is no other country like the United
Kingdom regarding our special relationship and national
security when you decide what actions you are going to take
vis-a-vis 232.
Lastly, ISDS has been touched on numerous times today. ISDS
and the carve-out of tobacco from ISDS and the TPP was an
absolute fatal flaw, and I would encourage you, as you look at
trade agreements, and look at ISDS and whether that is
appropriate in various trade agreements, that you commit to not
carving out any sector of our economy from ISDS. As you and I
have talked about before, you always have to be mindful of
getting to 218 on a trade agreement. And any carve-out of
tobacco from ISDS or really, any other privilege and benefit of
a trade agreement would be fairly fatal to arriving to 218. So
thank you.
Chairman BRADY. Thank you, Mr. Holding.
Mr. Smith, you are recognized.
Mr. SMITH OF MISSOURI. Thank you, Mr. Chairman. Thank you,
Mr. Lighthizer, for being here. The folks in southeast and
south central Missouri definitely agree with President Trump
and yourself that we believe our trade deals need to put
American workers and American farmers and ranchers and American
families first. I think that is extremely important.
In the last two decades since NAFTA was signed, a lot has
changed in our economy. When you talk with the folks that I
represent, they associate NAFTA with job losses. They know
someone who has lost a factory job making shoes or bicycles,
and even clothing, in southeast Missouri. It is incredibly
important that NAFTA be updated and modernized, and we need to
do it in such a way that puts American workers, businesses,
farmers, and consumers first.
While the full promise of American manufacturing was not
realized under NAFTA, American agriculture saw significant
gains in the market access, and this must be preserved. The
district I represent is the most diversified agriculture
district outside of California. Every August, I do a 2-week
farm tour visiting all 30 counties promoting the diversity and
all the different aspects of our district. And in Missouri, we
are the fourth largest rice producing State in the country. And
all of that rice is produced in just the five counties in the
Bootheel of Missouri, which is my entire congressional
district.
NAFTA is responsible for making Mexico and Canada the
largest market for Missouri rice, with 87 percent of our
exports going to those two countries. Mr. Lighthizer, Missouri
farmers want to maintain the market access that they currently
have in agriculture trade with Mexico and Canada. Any
disruption of trade with Mexico and Canada is a concern of our
farmers and our ranchers. What will your approach be in the
renegotiations to be sure that no new barriers to U.S.
agriculture trade are established under NAFTA?
Ambassador LIGHTHIZER. Well, we certainly intend in this
negotiation to do no harm to the agriculture sector. Our
objective is to modernize, to put in place the things that have
to be put in place, to correct such things as rules of origin
and the like that have become outdated and have led really to a
very large trade deficit. But we clearly will not be part of a
negotiation where there are new barriers to agriculture that
come up for sure.
Mr. SMITH OF MISSOURI. I appreciate that statement. The
task that you have at hand is not an easy one, but I stand with
you and the White House and this Committee to make sure that we
get the best agreement and the best deal for the American
citizens. Thank you.
Ambassador LIGHTHIZER. Thank you.
Chairman BRADY. Thank you. Mrs. Black, you are recognized.
Mrs. BLACK. Thank you, Mr. Chairman, and, again, welcome,
Ambassador. We are delighted to have you here today and look
forward to working with you in the future. I want to talk about
one of the issues that are affecting some of the good people,
and also companies, back in my State, and that is the lack of
fairness in selling across the Mexican and Canadian borders
where there is a very low-dollar value and shipments, the de
minimis shipment threshold. Basically, it was set aside as a
low-dollar shipping--shipments for faster and easier processing
in and out of countries, but at this point in time, since it
has been years since that agreement was made, we really are in
a situation where there is an unfairness.
For instance, in the United States, the de minimis shipment
level is $800, but when you look at Mexico, it is less than
$50. And when you look at Canada, it is $15. And so there is a
real unequal treatment, and actually a real cost to some of
those folks that are doing business, such as FedEx, and FedEx
has thousands of workers and employees in my home State of
Tennessee that potentially are affected by this, as well as
individuals. And so I would like to know from you if that is
something you are looking at, and that you think we can find
some resolution and some equality in, for both individuals and
also companies in this area.
Ambassador LIGHTHIZER. Yes, thank you, Congresswoman. First
of all, yes, that is something that we are looking at that we
take very seriously. It is one of those issues where you think
you know something about trade and then you look at this issue
and you think how is it even possible this could be happening?
And it is a real burden to everybody who shifts back and forth,
probably more in Canada, but even as you say, quite a bit going
back to Mexico.
So it is a very large problem. It is the kind of thing that
fits into the category of reciprocity where you say to yourself
how is it possible that we could--in some ways, it could be so
much easier to ship it here than it is to ship to those two
countries. So we are going to look at it. And I hope there is a
resolution that is satisfactory to your constituents. It is
clearly a priority. It seems like the kind of thing that would
be easy enough to fix. It can't be in anyone's interest, just,
if I may, a management point of view, to have these tiny little
thresholds. It has to be a burden on them, I would think, and I
hope it is not done intentionally, I hope it is just a question
of something that has just built up over time, but it is
something we are going to look at and we are going to focus on.
Mrs. BLACK. Well, I appreciate that, because my
understanding is these thresholds were set many, many years ago
when things were different as far as the way in which shipment
was done, the cost of products and so on, and so this seems to
be something that has been around for a while and needs to be
revisited, and the sooner the better for both individuals and
for companies on the cost that is borne by this inequity.
The second item I want to talk to you about is one that has
come to my attention most recently, and it is the issue of the
U.S.-EU covered agreement on insurance. And it actually came to
my attention by a couple of different sources. One was the
Tennessee Farm Bureau in my State, which is a very large
industry and does a lot of business around the country, around
the world, as well. And then I also heard from the Tennessee
Insurance Commission, and our own commissioner, Julie McPeak,
who is the commissioner of insurance in Tennessee, who was here
a couple of weeks ago testifying before the Senate. And so this
agreement that was put into place, and I understand it was
pretty much rushed through by the previous Administration in
their closing days to change the way that insurance products
are treated across borders, has not seemed to be in the best
interest of those here in the United States, and probably the
biggest part of this is there is just not clarity, and there
are a lot of questions about what these agreements mean.
And so I wanted to know if that is something you are aware
of, and that you are looking at getting some clarity for the
insurance--for those who do insurance.
Ambassador LIGHTHIZER. Yes, thank you, Congresswoman. I am
very much aware of the issue. It is something that the
Secretary of Treasury and I have to come to grips with here in
the not-too-distant future, and, in fact, have meetings
scheduled very soon for he and I to sit down and discuss this
issue. So it is a good time to have your view on it.
Mrs. BLACK. Well, I appreciate that. I think since the
President is really very adamant about America First, that we
need to make sure we are not, in some way, putting our
companies and our folks here in the United States behind other
countries with a lack of clarity and making sure that there is
an equality and treatment there, as well.
Thank you, and I yield back.
Chairman BRADY. Thank you. Mr. Rice, you are recognized.
Mr. RICE. Thank you, Mr. Chairman, and thank you,
Ambassador Lighthizer, for being here and your patience in
waiting for 2\1/2\ hours to allow me to ask you a few
questions.
I think that I am very much aligned with the
Administration. Mr. Trump says, ``Make America Great Again,'' I
say make America competitive again. And two of the things that
give me the most hope, most optimism about this Administration
are your appointment, and the appointment of Mr. Ross. So I am
really excited about fair and free trade.
I appreciate your focus on the steel industry. I have
already had one steel mill in Georgetown, South Carolina close
during my 4 years here. During my 4 years here, I have had a
constant stream of apparently legitimate complaints about
abusive trade practices, particularly from China. So I have
Nucor Steel still in my district, I have a company called
Metglas in Conway who has lost employees because of these
unfair trade practices, and I very much appreciate your focus
on that.
But I want to talk about something more fundamental. And
that is what Mr. Nunes broached earlier, that being the fact
that 140 other countries, including every one of our
significant trading partners, have adopted border adjustment
taxes generally through the value-added tax system.
And I know this hearing is about trade, but we have heard
how so many factors enter into fair trade earlier today,
whether it be employment practices, environmental practices,
taxes, and others. So what I am particularly curious about is
in negotiating these trade agreements, how can you ensure that
we achieve fair trade, trade where American companies and
American workers can compete on a level playing field? How can
you ensure that when other countries are applying border
adjustment taxes on our products when they hit their shores,
and we are not doing the same things to them? How can you, when
you renegotiate NAFTA, account for the fact that Mexico has a
16 percent border adjustment through a VAT, and we don't have
the same offsetting tax, and, therefore, American workers and
American companies are at a huge disadvantage?
Ambassador LIGHTHIZER. Well, thank you, Congressman. First
of all, I have spent a lot of time thinking about this issue,
and I think that this equilibrium between direct and indirect
taxes is a serious problem. Now, there are a lot of different
ways to deal with that, and so I am not in a position where I
want to say what is the best way. And, in addition, I am not
paid to worry about taxes. I am pretty worried about other
things.
Mr. RICE. I agree, and I understand that you are not paid
to worry about taxes, and this is a trade hearing, but don't
taxes have a very direct impact on trade?
Ambassador LIGHTHIZER. Absolutely. Taxes have a direct
effect on competitiveness, and competitiveness is what trade is
all about. At its core, trade is about competitiveness, so
taxes are a huge issue. In terms of direct or indirect taxes, I
think there is a real problem, but when I do my negotiations, I
take those systems the way they are, and people make their own
judgments for their own societal reasons as to whether or not
they want to have value-added taxes or income taxes or how they
want to structure all that, but I am not blind to the fact that
it does make a difference in the real world.
The most important thing, I think, is to get taxes down and
to do all the other things that we need to do to become
competitive. And in the area of taxes, there are a lot of
different options, and as I noted, there has been a tendency on
behalf of most countries really--or at least many countries,
would probably be more accurate--to move from income taxes to
an indirect tax system.
Mr. RICE. There has been that tendency, and would you
speculate that tendency was due, in some part, to the fact that
it makes them more competitive with respect to manufacturing
and importing and exporting?
Ambassador LIGHTHIZER. Well, my guess is that they do it
for a variety of reasons, and probably that is one. In respect
to some issues, and this is something that has always been of
concern to Republicans with respect to a value-added tax; I
think to some extent, people go to it because they think it is
easier to raise taxes, and there are a lot of people who are
conservative Republicans who have the view that one of the
principle reasons--that is an overstatement, but one reason
that Europe has gone the way they have gone is because it has
been too easy to raise taxes. So these are not totally--I mean,
there are a lot of things to sort of think about in this
discussion.
Mr. RICE. And this issue on competitiveness of American
products, it doesn't just apply to manufacturing, it applies to
agriculture, as well, doesn't it?
Ambassador LIGHTHIZER. Absolutely correct.
Mr. RICE. Thank you, sir.
Chairman BRADY. Thank you, Mr. Rice. Mrs. Walorski, you are
recognized.
Mrs. WALORSKI. Thank you, Mr. Chairman. Ambassador, it is
good to see you. Thanks for hanging in with us, and I just
wanted to thank you. I am from the State of Indiana, and I want
to thank you for indulging me when you first came in today and
talking and chatting about this Section 232 that we have talked
a little bit about, but I am more than concerned about the
impact on aluminum and the aluminum industry as it pertains to
my district in northern Indiana and my State. I would just ask
that, you know, to consider the anxiety from my constituents
about the prospect of tariffs and quotas on imports that they
depend on to make RVs, trailers, and all sorts of other
products. I have already been contacted by some of these
manufacturers, and they are already being impacted by price
differences, and they are very, very uncertain as to what is
going to happen as am I, and I appreciate your willingness to
look into it.
But could you convey to the President, to Secretary Ross,
my request that they conduct these investigations and decisions
that they are making thoughtfully, thoroughly, transparently,
to determine what the impact of action might be for American
companies and to avoid any type of quick action that would hurt
these companies, could you just convey that information?
Ambassador LIGHTHIZER. Yes, I will. I would be happy to do
that.
Mrs. WALORSKI. And then I just want to associate my remarks
with previous remarks of Representative Paulsen about this
issue in India. And our issue is the same type of thing, and it
goes along with the medical device industry, and what we are
seeing already, and, again, in Indiana, we are full of medical
device manufacturers, so they are worried about the sudden and
drastic nature of cuts, what it means to the products already
being sold there, and products they may want to sell in India
in the future.
Myself and Mr. Kind, previously who spoke, sent a letter
with 16 of our colleagues to the Indian Ambassador voicing our
strong concerns, and I am happy to provide that letter to you.
My question for you is, what else can we do on Capitol Hill to
help you with these issues with the medical devices? We are
looking specifically at stents, and some of the prohibitions,
and just some of the things you referred to earlier, but is
there anything else we can do to help you besides sending
letters to their Ambassador?
Ambassador LIGHTHIZER. Well, first of all, the issue is a
very serious one. Second, I have met with the manufacturers,
and they are in a position where they literally are forced to
sell something they don't want to sell way below the price of
manufacturing it. I mean, it is like you can't even understand
it. I think it is something that we are taking seriously, we
are focusing on, and just the more pressure Congress can put,
the better, to be honest with you.
Mrs. WALORSKI. Specifically to the Ambassador? Or does it
need to go in any other direction?
Ambassador LIGHTHIZER. Well, it is probably better if I
don't talk about that in a public session. This may be one of
those things that we have to go into executive session to talk
about. No, I am kidding about that. The Prime Minister of India
is coming to town to meet with the President.
Mrs. WALORSKI. Right.
Ambassador LIGHTHIZER. So there are a lot of opportunities
where they are looking at irritants, and this is clearly a
major, major irritant, and it is important that they know that
because we have pressed them. Now from their point of view, you
know, they have a different take on this.
Mrs. WALORSKI. Sure. Oh, yeah.
Ambassador LIGHTHIZER. And we press them and our arguments
are stronger when they are backed up by the U.S. Congress. I
mean, it is just that simple. I mean, the power in Washington
is right in front of me, so.
Mrs. WALORSKI. Okay. I appreciate that. And then a final
issue I want to discuss, one I raised with you previously, and
that is Canada's Promise Utility Doctrine. It has resulted in
28 pharmaceutical patents being partially or completely
invalidated, which is going to be a big priority for us in any
NAFTA update. Do you have any comment on those protections and
that doctrine?
Ambassador LIGHTHIZER. Well, arguments too, but the result
is you end up losing.
Chairman BRADY. Ambassador, could you move a little closer
to that microphone?
Ambassador LIGHTHIZER. I am sorry. You end up losing
patents because of abuse, and then somebody makes a generic
drug out of the same product and starts selling it, so it is a
serious problem, and it is clearly something that we are going
to work on, and it is going to be part of this negotiation.
Mrs. WALORSKI. I appreciate it. And can you just give me
the bottom line, 20 seconds, as you see the Section 232 as it
pertains to steel and aluminum? I am particularly interested in
the aluminum part.
Ambassador LIGHTHIZER. Well, I mean, I think you are going
to see decisions on both of them fairly soon. I think the view
in the Administration is that we have, you know, a very serious
issue. The President has asked us to look at these things. They
had hearings on one before. They have hearings on the other
today, and the President wants action. He is worried about what
is happening in those industries, and the President wants
action. So to the extent you have concerns about effects, it is
certainly timely.
Mrs. WALORSKI. I appreciate that. I yield back. Thanks, Mr.
Chairman.
Chairman BRADY. Thank you. Mr. Curbelo, you are recognized.
Mr. CURBELO. Thank you, Mr. Chairman, and thank you,
Ambassador Lighthizer, for your presence here today.
One issue I wanted to bring up is the effect trade
agreements have on the farmers of my south Florida district.
Many people not from south Florida might be surprised to know
that Miami-Dade County is one of the largest ag producing
counties in the State. Most people think about our beaches, and
we are very proud of those, but we also have a very robust ag
industry in south Florida. We have avocados, mangos, tomatoes
and many other specialty crops which can be grown year-round.
So as we renegotiate NAFTA, which I support, I am concerned
with how the deal will affect our farmers across the country.
We know a lot of farmers have benefited greatly from NAFTA;
however, the story is a little bit different in south Dade. I
try to spend as much time as I can with these farmers, and they
have many issues that they are concerned about, immigration,
taxes, but NAFTA is certainly a major one. Specialty crops like
tomatoes, squash, eggplants, strawberries, pretty much anything
that is hand-picked, faces a significant disadvantage when it
comes to Mexican competition. Mexico has a similar climate, and
for a whole host of reasons, can unfairly compete against many
of my constituents.
Ambassador, I have raised this issue multiple times as
NAFTA is being renegotiated for the fair treatment of south
Dade, especially these specialty crops and the farmers who grow
them. I have mentioned this to you and your staff, Secretary
Ross, and Mr. Navarro. This issue is of critical importance to
the south Dade farming community. Can you discuss what we might
be able to achieve through this NAFTA renegotiation to put
these south Florida farmers on a level playing field with
Mexico moving forward?
Ambassador LIGHTHIZER. Well, first of all, we appreciate
your input and those of other Members from Florida on this
issue. We realize how important it is. As I said before, when
we talk about how important agriculture is and the agricultural
sales to Mexico, and they are extremely important, we, overall,
have a trade deficit in agriculture with Mexico, and it is
entirely because of the speciality crops, the fruits and
vegetables that you are talking about. And there are a whole
lot of additional elements of the seasonality and the
perishability. There are just a lot of things that make it a
very complicated issue, and I assure you, it is something that
we are going to focus on in this negotiation and hopefully, we
are going to get an outcome that is going to satisfy the
producers in your district and in all of Florida.
But it is a major problem, and you are right, it is the
one--maybe not the one, but it is a major outlier in the whole
agriculture story with respect to NAFTA, it is something that I
think we have to be cognizant of and try to work on, so we very
much appreciate your involvement on the issue.
Mr. CURBELO. And I appreciate your commitment, and we will
continue working with you and with your office and other
Administration officials to try to make as much progress as
possible.
Another issue I would like to briefly touch on is the
Transatlantic Trade and Investment Partnership. Earlier this
month, I joined members of the T-TIP caucus, including seven
Members of the Ways and Means Committee, in sending a letter to
your office in support of continued T-TIP negotiations.
Can you talk about the positive benefits T-TIP could have
for our economy, especially with the inclusion of a dedicated
chapter in the agreement identifying the importance of small-
and medium-sized enterprises?
Ambassador LIGHTHIZER. Well, we have an ongoing
reevaluation of all of our trade agreements and all of our
ongoing negotiations right now at USTR. And we are looking at
the benefits and the drawbacks of the trade-offs that we see.
But I think that T-TIP is an area where there are a lot of very
positive reasons to go forward with that. It, of course,
requires two people to be involved in a negotiation and for a
variety of reasons, largely the electoral process, the European
Union is not in a position to be negotiating at this point. The
last election, I think, that they have this year is in
September in Germany, and then I think at that point, they will
start focusing on this. But then they have Brexit to focus on.
So they have a lot of things they have to look at, too, and we
also have priorities.
But clearly, this is a very likely potential agreement, and
it was entered into because an awful lot of people saw benefit
to it. So as we go through this process, I think we will make
an analysis, we will look at the pluses and minuses, and the
views of the seven members of the caucus, of the Ways and Means
Committee, will be very important to us, as I should say will
all Members.
Mr. CURBELO. Thank you. Thank you, Mr. Ambassador.
Chairman BRADY. Thank you. Mr. Schweikert, you are
recognized for the final question.
Mr. SCHWEIKERT. Thank you, Mr. Chairman. And I think last
and least, or however the saying goes, trying not to repeat any
of the questions, and when you are last, a lot of them have
been used up, but first off, just conceptually, I have a great
appreciation for how complex your world is. You know, you have
this area of authority, but everything from currencies, to
local national regulations, to technology, to infrastructure, I
mean, everything ends up affecting ultimately--how trade
ultimately works.
I do have a couple of odds and ends for you. Being from
Arizona, we are one of the States that if you actually look at
the baseline data, NAFTA has actually helped our State's
economy. But as you move toward modernization, can I beg of you
to have someone on the team fixate on just Customs technology,
the ability to have those vegetables move across the border
efficiently, the ability to say we are going to embrace a
common platform for technology, and I don't care if it is based
in a distributive ledger where you have GPS tags or RFIDs, but
the ability to say how do you maximize the efficiency of those
cross-border transactions and the movement of the Customs?
Ambassador LIGHTHIZER. Thank you. That is such an important
question, and we have sort of touched on it in various ways
because we talk about de minimis, there is a lot of different
things, but one of the things that we are going to focus on in
trade facilitation is just--and I think that the Mexicans and
the Canadians will be in agreement on this--just how do we make
whatever you decide your policy is once you have set it, it has
to be easier to move product and data across the border. So,
you know, this is important. Efficiency is clearly our
objective. Facilitating trade is our objective. There will be
technical problems, of course, but as a matter of direction, I
can't imagine that the three of us would have a disagreement on
that.
Mr. SCHWEIKERT. With this great opportunity with technology
now, and the ability to track a truck, a lorry, down to
certification at the dock to the movement to the backbone that
actually is hack-proof. I am just, I embrace that technology.
And the second thing, and this one may be slightly more
conceptual, but as you are working on the drafting, how do you
design something that is partially future proof if, you know,
this is substantially the driver of much of the U.S. innovation
and technology, what happens when, you know, that hand-held
super computer is my transmission of making purchasing
decisions, or paying my fees or moving money back and forth,
that the agreement be robust enough to understand everything
from, you know, the way we transmit data to where we house the
data, to the encryption of such data. It is that sort of
digital trade world that we are very good at that would also
make the relationships with our trading partners more
efficient.
Ambassador LIGHTHIZER. Well, I think this has to be a
focus. My guess is we will probably miss the mark because
nobody really knows what is going to happen, and it is always
unpredictable, but hopefully we won't miss it by as much as the
people who did it 23 years ago. We will have the benefit of all
that learning.
Mr. SCHWEIKERT. And, Mr. Ambassador, that is one of the
great difficulties, and trust me, I am part of a body where
sometimes we commit the sin of thinking we know what the future
looks like. And so how do you design at least language that as
technology improvements move, you know, the movement of whether
it be a cryptocurrency, whether it be documents of value,
documents of certification, documents of ownership, that the
way you have written the agreement, there aren't these great
gaps that we have to wait 25 years for the next major
negotiation to fill?
Ambassador LIGHTHIZER. Well, this is so important, and
hopefully, we are focusing on it enough, we will certainly try
to, and then we have to build in processes, I think, within the
agreement that allow you to make amendments when you--without
actually going back through the whole process when there is
sort of a huge directional change. But this is something that
we are cognizant of, and we, perhaps, haven't thought enough
about it, but certainly will, and we want to work with the
Congress to do it.
Mr. SCHWEIKERT. And the last thing, trans-shipments,
something that actually may be a product made in Asia, comes
through a Mexican port, brought up, I am hoping, actually, the
same movement toward the identifications and technology that
can actually deal with what are products that are actually part
of the NAFTA agreement and what are just those who are passing
through? And with that, I yield back, Mr. Chairman.
Chairman BRADY. Thank you, Mr. Schweikert. I would like to
thank Ambassador Lighthizer for appearing before us today.
Please be advised that in addition to questions you received
here, Members have 2 weeks to submit written questions to be
answered later in writing. Those questions and your answers
will be made part of the formal hearing record. Mr. Ambassador,
we look forward to working with you on trade and expanding
economic freedom, and with that the Committee stands adjourned.
[Whereupon, at 12:48 p.m., the Committee was adjourned.]
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