[Senate Hearing 117-847]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-847

                THE PRESIDENT'S 2022 TRADE POLICY AGENDA

=======================================================================

                                HEARING

                               BEFORE THE

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION
                               __________

                             MARCH 31, 2022
                               __________


                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                                     
                                     

            Printed for the use of the Committee on Finance
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
54-949--PDF                WASHINGTON : 2024


                          COMMITTEE ON FINANCE

                      RON WYDEN, Oregon, Chairman

DEBBIE STABENOW, Michigan            MIKE CRAPO, Idaho
MARIA CANTWELL, Washington           CHUCK GRASSLEY, Iowa
ROBERT MENENDEZ, New Jersey          JOHN CORNYN, Texas
THOMAS R. CARPER, Delaware           JOHN THUNE, South Dakota
BENJAMIN L. CARDIN, Maryland         RICHARD BURR, North Carolina
SHERROD BROWN, Ohio                  ROB PORTMAN, Ohio
MICHAEL F. BENNET, Colorado          PATRICK J. TOOMEY, Pennsylvania
ROBERT P. CASEY, Jr., Pennsylvania   TIM SCOTT, South Carolina
MARK R. WARNER, Virginia             BILL CASSIDY, Louisiana
SHELDON WHITEHOUSE, Rhode Island     JAMES LANKFORD, Oklahoma
MAGGIE HASSAN, New Hampshire         STEVE DAINES, Montana
CATHERINE CORTEZ MASTO, Nevada       TODD YOUNG, Indiana
ELIZABETH WARREN, Massachusetts      BEN SASSE, Nebraska
                                     JOHN BARRASSO, Wyoming

                    Joshua Sheinkman, Staff Director

                Gregg Richard, Republican Staff Director

                                  (II)


                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee 
  on Finance.....................................................     1
Crapo, Hon. Mike, a U.S. Senator from Idaho......................     3

                         ADMINISTRATION WITNESS

Tai, Hon. Katherine C., United States Trade Representative, 
  Executive Office of the President, Washington, DC..............     5

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Crapo, Hon. Mike:
    Opening statement............................................     3
    Prepared statement...........................................    47
Tai, Hon. Katherine C.:
    Testimony....................................................     5
    Prepared statement...........................................    48
    Responses to questions from committee members................    52
Wyden, Hon. Ron:
    Opening statement............................................     1
    Prepared statement...........................................    89

                             Communications

American Apparel and Footwear Association........................    91
American Farm Bureau Federation..................................    93
Americans for Free Trade.........................................    95
Center for Fiscal Equity.........................................    99
Coalition for Economic Partnerships in the Americas..............   104
Consumer Technology Association..................................   109
Embassy of the Republic of Mauritius.............................   112
National Electrical Manufacturers Association....................   114
Outdoor Industry Association.....................................   115

                                 (III)

 
                         THE PRESIDENT'S 2022 
                          TRADE POLICY AGENDA

                              ----------                              


                        THURSDAY, MARCH 31, 2022

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10:06 
a.m., via Webex, in Room SD-215, Dirksen Senate Office 
Building, Hon. Ron Wyden (chairman of the committee) presiding.
    Present: Senators Stabenow, Cantwell, Menendez, Carper, 
Cardin, Brown, Bennet, Casey, Warner, Whitehouse, Hassan, 
Cortez Masto, Warren, Grassley, Thune, Portman, Toomey, 
Cassidy, Lankford, Daines, Young, and Barrasso.
    Also present: Democratic staff: Michael Evans, Deputy Staff 
Director and Chief Counsel; and Sally Laing, Chief 
International Trade Counsel. Republican staff: James Guiliano, 
Policy Advisor; John O'Hara, Trade Policy Director and Counsel; 
Mayur Patel, Chief International Trade Counsel; and Gregg 
Richard, Staff Director.

   OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR FROM 
             OREGON, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The committee will come to order. Today we 
are focused on Russia and China, because those are the big 
national security and economic developments in our world. Their 
governments, Russia's and China's, are united in putting up 
barriers to American values and our products.
    Since Putin launched his invasion of Ukraine, the United 
States and our allies hit Russia, Putin, and the oligarchs with 
the most powerful sanctions in history. It is not just about 
yanking away super-yachts and private jets; Putin is now the 
head of a pariah state. The Senate, and my colleague Senator 
Crapo, the ranking member, and I are working very hard to 
formally designate Russia as a pariah state by revoking 
permanent normal trade relations.
    Our country is showing Russia that taking this abusive, 
totalitarian road is a bad bet. The United States and our 
allies must prove the same to China. China's Government is a 
human rights-abusing, jobs- and tech-stealing behemoth, and the 
government is the head of this economic superpower.
    One of my top concerns about the Chinese Government's 
economic model is censorship. When the Internet took off, 
America's innovators were first out of the gate with big ideas. 
The Chinese Government responded by using the Great Firewall to 
block those companies and allowed Chinese firms to rip off 
their ideas. Even worse, Chinese tech comes with Chinese 
censorship, and China censors the American people and our 
businesses as well.
    The China model of censorship is now popping up all over 
the world. It fractures the Internet, and it certainly is 
something we see in Russia, where the people are being fed lies 
about what is going on in Ukraine.
    The United States has to stand up to this kind of 
censorship, and USTR has a big role in fighting for a free and 
open Internet through smart digital trade policy. The Chinese 
Government obviously wants to dominate the technologies that 
will dominate the rest of the 21st century, such as 
semiconductors, EV batteries, and artificial intelligence as it 
continues its horrendous record of abusing human rights and 
trampling on workers.
    Again, this is where USTR comes in. USTR has the 
responsibility to take on China's anticompetitive and anti-
freedom practices, and we are going to be working closely with 
them as they do.
    The United States and our allies have recently shown, with 
Russian sanctions, that our collective economic power is 
certainly anything but soft. A big reason why the United States 
is able to marshal such strength is because the Biden 
administration and USTR have worked to mend our relationships 
in Europe.
    The United States has racked up significant wins that 
always are important but do not seem to get a lot of 
discussion. USTR finally brokered a deal in an aircraft trade 
dispute with the EU and the UK that had been unresolved for 
nearly 2 decades. USTR and the Commerce Department reached 
deals with the EU, the UK, and Japan on steel and aluminum, and 
will help us remove existing tariffs, bring down prices for 
Americans, and fight carbon emissions.
    Before resolving these disputes, the American firms had 
been in the crossfire, with tariffs on everything from 
airplanes to cranberries to wine. EU tariffs on distilled 
spirits endangered Oregon's thriving craft beverage industry. 
Ambassador Tai's work eliminated significant tariff threats and 
helped to ensure that Americans could grow good-paying jobs and 
more exports.
    Last week, USTR persuaded Japan to allow in more U.S. beef 
at lower tariff levels. That is big news for ranchers. In a new 
agreement with the EU, American fishers are exporting live 
oysters and clams and mussels to Europe for the first time in a 
decade. Resolving these issues brings the U.S. and our 
traditional economic allies closer together.
    Finally, the committee held a hearing on the Indo-Pacific 
Economic Framework. This was another opportunity to strengthen 
our economic ties and marginalize the Russia-China model. The 
Indo-Pacific effort is especially important to folks in our 
part of the world, the Pacific Northwest, because the Pacific 
Northwest in our country is the gateway to the Pacific.
    A good agreement will bulldoze overseas barriers to Oregon 
products from Columbia Gorge pears to Wallowa beef. Reducing 
barriers means better market access for farmers and 
manufacturers. This is so important in our State, where the 
trade-related jobs--as you and I have talked about, Ambassador 
Tai--often pay better than the non-trade jobs because there can 
be a higher value-added component.
    It is also an important opportunity to raise standards for 
labor rights, environmental protections, and a free and open 
Internet. And I am going to close with one last point that is 
especially important to Senator Crapo and me.
    This is a positive development, also with respect to 
transparency in government. Ambassador Tai has made it clear to 
us that there are going to be new transparency and consultation 
efforts to make sure that there is a broader debate about how 
to get more American workers and small businesses in the 
winner's circle.
    Ambassador, thank you for joining us.
    [The prepared statement of Chairman Wyden appears in the 
appendix.]
    The Chairman. My friend, Senator Crapo.

             OPENING STATEMENT OF HON. MIKE CRAPO, 
                   A U.S. SENATOR FROM IDAHO

    Senator Crapo. Thank you, Mr. Chairman. And welcome, 
Ambassador Tai.
    I agree with the concerns and issues that Senator Wyden 
raised and the progress that he has identified. But I am going 
to issue kind of a strong statement today.
    On your drive here, Ambassador Tai, you probably passed an 
inscription engraved on the National Archives that says ``past 
is prologue.'' An enduring piece of past wisdom is President 
Reagan's 1982 address to the Nation on international free 
trade, which was founded on his personal commitment to free 
market principles both at home and abroad.
    He explained that as Americans, we must ``insist on sound 
domestic policies at home that bring down inflation and provide 
opportunity for free world countries to go forward and sustain 
the drive toward more open markets,'' such as the meeting he 
organized in Geneva that eventually led to the creation of the 
World Trade Organization. And most importantly negotiate--
particularly for free trade agreements--like the United States' 
first two free trade agreements with Israel and Canada that 
were led by President Reagan's administration.
    President Reagan's policies helped to break inflation and 
restore American leadership on trade. But it seems President 
Biden's trade policy takes the opposite stance. At a time when 
inflation has soared to 7.9 percent, President Biden says he 
will not pursue trade agreements until his domestic agenda is 
complete.
    If ever enacted, this reckless spending agenda would not 
only make inflation worse, it would undercut U.S. leadership on 
trade by promoting a China-styled industrial policy. The 
proposed electric vehicle provisions, for example, will 
discriminate against 48 of the 50 models available for sale in 
the United States. It is no wonder why 25 foreign ambassadors 
told Congress these provisions breached our international trade 
obligations.
    I am disappointed that the administration continues to 
pursue this agenda, instead of focusing on negotiations for new 
trade agreements. This is a shame, because the Biden 
administration knows better. Its 2022 trade agenda opens on the 
very point, and I quote: ``The Biden administration recognizes 
that trade can and should be a force for good.''
    Absolutely. My home State of Idaho is proof positive of 
that proposition. In 2019, international trade supported over 
200,000 jobs in Idaho--almost 20 percent of the State's 
employment. Trade liberalization also saves the average Idaho 
family of four more than $10,000 per year.
    The problem here is that President Biden's recognition of 
trade's overall importance is not matched with an agenda that 
contains the requisite ambition to succeed. There is not a 
single free trade agreement under consideration in this agenda.
    Free trade agreements open opportunities. We have seen it 
over and over, and the past really is prologue. Idaho's dairy 
exports to Korea have increased by more than 250 percent since 
our free trade agreement entered into force in 2012. But in 
lieu of trade agreements, this administration is proposing 
dialogues and frameworks, including the new Indo-Pacific 
Economic Framework, or IPEF. IPEF may be a positive first step 
to engagement in Asia, but it is no substitute for 
comprehensive trade agreements.
    The Center for Strategic and International Studies will 
soon release its upcoming analysis on IPEF. Based on 
conversations with over a dozen governments in the Indo-
Pacific, two points from its analysis are instructive.
    First, U.S. engagement is welcome in the Indo-Pacific. One 
diplomat stressed in particular that his country wants the 
United States to lay out an affirmative economic strategy that 
complements its security presence in the region.
    Second, our partners see the IPEF as a proposal with many 
U.S. asks, few U.S. offers, and a variety of credible regional 
alternatives to the framework that could provide more tangible 
benefits. If the U.S. is to meet and exceed China's challenge, 
then the U.S. must make stronger commitments than China.
    Regrettably, if the administration's negotiating ambitions 
are low, its consultations with Congress on the few 
negotiations actually taking place are even lower. At last 
year's trade agenda hearing, Ambassador Tai, you stated that 
you would brief this committee before and after each 
negotiating session with respect to a waiver of the WTO TRIPS 
Agreement.
    That has not happened. USTR recently issued a press release 
confirming that it had reached a compromise outcome on the 
TRIPS waiver in discussions with South Africa, India, and the 
European Union. USTR refuses to share the text of that outcome 
with this committee.
    While members may have different views on the merits of 
this waiver, every member here should agree with me that the 
administration cannot withhold documents concerning U.S. rights 
under a congressionally approved trade agreement. We need to 
see the document, and we need to ask questions, because that is 
what respect for the Constitution requires.
    There are serious questions to be asked. For example, last 
week South Africa and India joined with Russia and China to 
establish the BRICS Vaccine R&D Center on vaccine cooperation. 
Congress should know whether the text permits South Africa and 
India to share insights on U.S. intellectual property with 
Russia and China.
    USTR's transparency with the public is also poor. The 
American innovators who developed the vaccines provided plenty 
of evidence on why a waiver is unnecessary, including that 20 
billion doses will be produced this year, more than enough to 
achieve the World Health Organization's vaccination target.
    The administration, however, has not shared with the public 
any evidence as to why a waiver will get shots into arms any 
faster. I am disappointed about negotiations and congressional 
consultations, but I also have concerns about enforcement.
    Americans need to compete on a level playing field, and I 
appreciate the administration's prosecution of two USMCA labor 
disputes under the Brown-Wyden mechanism. Yet much more can be 
done.
    With respect to the USMCA, agricultural market challenges 
remain. Mexico continues to restrict potatoes and delay 
approval of biotech crops. Discriminatory practices targeting 
our technology companies are also increasing. Rather than 
launch cases, the administration appears to be in retreat.
    For example, the trade agenda highlights that USTR reached 
agreements to terminate our section 301 investigations against 
various countries over discriminatory digital service taxes. 
Let's be very clear about what this means.
    Those countries are going to continue imposing 
discriminatory taxes on U.S. firms. They may give a credit one 
day, but only if Congress approves the Biden administration's 
international tax deal. The Biden administration is blessing 
foreign governments which discriminate against Americans as 
long as Congress refuses to go along with its plan to cede 
taxing rights and revenue to foreign competitors.
    Let me close with where I started: past being prologue. 
History proves that Americans do not fear competition but rise 
to it. And now is the time to seize on that history and go 
further on trade, not shrink from it.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Crapo appears in the 
appendix.]
    The Chairman. Thank you, Senator Crapo. I know we will be 
working closely together on many of these issues.
    Ambassador, welcome. Please proceed.

    STATEMENT OF HON. KATHERINE C. TAI, UNITED STATES TRADE 
REPRESENTATIVE, EXECUTIVE OFFICE OF THE PRESIDENT, WASHINGTON, 
                               DC

    Ambassador Tai. Thank you, Chairman Wyden, Ranking Member 
Crapo, and members of this committee. I appreciate the 
opportunity to be here today to discuss the President's trade 
agenda.
    President Biden believes that trade can be a force for 
good; that it grows the middle class and addresses inequality. 
And he believes we are at our strongest when we work with 
others around the world.
    Over the last year, in coordination with my colleagues 
across the Biden administration, we have worked to repair 
strained relationships and recommitted the United States to the 
world's institutions. These partnerships have led to the united 
response to Russia's unjustified attack on Ukraine.
    Turning specifically to our work at USTR, our agenda begins 
with putting workers at the center of our trade policy. When we 
defend the rights of workers at home and abroad, labor 
standards go up, and we drive that race to the top.
    Farmers, ranchers, fishers, and food manufacturers are key 
to our trade agenda, and we have delivered real, economically 
meaningful wins for them. The 232 tariff arrangements and large 
civil aircraft frameworks with the EU and UK lifted retaliatory 
tariffs on billions of dollars of U.S. agricultural exports.
    The agreement with Japan will allow our exporters to meet 
Japan's growing beef demand. We regained access to the EU for 
our shellfish industry, and we have opened access for U.S. pork 
exports to India.
    We are also realigning the U.S.-China trade relationship. 
We launched a conversation with the PRC about its Phase One 
purchase commitment shortfalls and broader nonmarket practices. 
Those discussions have been unduly difficult, and it is time 
for us to turn the page on the old playbook. That starts with 
developing new domestic tools and making strategic investments 
to maintain our global competitive edge.
    We have made progress on this effort through the American 
Rescue Plan, the administration's focus on supply chain 
resilience, and the bipartisan infrastructure law. Passing the 
bipartisan innovation act will build on this significant 
progress.
    We have renewed our engagement with partners and allies and 
are developing innovative arrangements that strengthen our 
resilience and address the China challenge. For example, the 
global arrangement we are negotiating with the EU will be the 
world's first sectoral arrangement on steel and aluminum trade 
to tackle both emissions and nonmarket excess capacity.
    Beyond this cooperation, we have deepened our engagement 
with key trading partners through other avenues. We launched 
the U.S.-EU Trade and Technology Council to promote shared 
economic growth. We relaunched the United States-India Trade 
Policy Forum to enhance our bilateral relationships. And we 
hosted the first dialogue on the future of Atlantic trade in 
Baltimore last week with the United Kingdom. We will meet again 
in Scotland next month to consider what concrete, economically 
meaningful steps we can take to deepen our trade relationship.
    We are also committed to intensifying economic engagement 
in the Indo-Pacific. USTR will lead efforts to craft a trade 
arrangement with our Indo-Pacific partners that includes high-
standard labor commitments, environmental sustainability, the 
digital economy, sustainable food systems and science-based 
agricultural regulation, good regulatory practices, and trade 
facilitation.
    On the multilateral front, the Biden administration has 
continued efforts to make the WTO a force for good. We are 
working towards an intellectual property outcome to help end 
the pandemic. We will continue to engage with WTO members to 
get safe and effective vaccines to as many people as possible, 
and we are committed to bringing reform to the organization.
    The Biden administration also knows that enforcement is key 
to trade policy delivering on its promises. We have used the 
USMCA rapid response mechanism twice to defend workers' rights 
in Mexico, which helps workers here by driving a race to the 
top. We pursued dispute settlement with Canada to ensure that 
U.S. dairy farmers are treated fairly. We also initiated 
environmental consultations with Mexico to prevent unreported 
and unregulated fishing.
    A final important part of our trade agenda is promoting 
trade policy that is equitable, inclusive, and durable. And the 
President's trade agenda includes objectives to advance racial 
and gender equity. We will continue to pair these values with 
sustained stakeholder engagement.
    I want to close with one final point. Congress is our 
constitutional partner on trade, and collaboration is critical 
to our agenda and America's success. In an increasingly 
complicated world, I am more confident than ever that we can 
walk, chew gum, and play chess at the same time. I look forward 
to continuing this work with you in the year ahead.
    Thank you, and I look forward to answering your questions.
    [The prepared statement of Ambassador Tai appears in the 
appendix.]
    The Chairman. Ambassador, thank you very much. We 
appreciate your being here. Let me start by focusing on what 
you said in your trade agenda with respect to environmental 
issues being front and center.
    You highlighted your goals of promoting sustainability, 
addressing carbon emissions, and enforcing the environmental 
commitments in trade agreements. So I want to focus on a 
concern that hits on all of these issues.
    Mexico is a key partner in the USMCA, and it sure looks to 
me like they are slamming the brakes on renewable energy 
reform. In recent years, Mexico made substantial efforts to 
modernize and green the electricity market. They gave the green 
light to foreign investment, and they opened their market, 
particularly to innovative American providers of renewable 
electricity. But as I just indicated, now it looks like they 
are in retreat. They are considering laws that concentrate 
market power and regulatory authority in the hands of the 
state-owned electric company.
    That result will mean a bigger focus on fossil fuels and 
limit opportunities for clean energy providers. So Mexico's new 
reforms are a one-two punch against environmental progress in 
America. Not only are they a setback in the fight against the 
climate crisis, but they are denying American companies--
companies in the Pacific Northwest, for example--a fair shake 
in the Mexican market.
    And my view is, what Mexico is doing now looks to me like 
it is running opposite from the promises Mexico made in the 
USMCA.
    So, Ambassador, as we talked about, the United States needs 
to make sure that every chapter of the USMCA is fully 
implemented and pays off for American workers and businesses 
and a cleaner climate in the Americas. That is what was pursued 
in USMCA.
    What are you doing to address Mexico's actions in the 
energy market that I have described?
    Ambassador Tai. Chairman Wyden, thank you for asking this 
very, very important question. Let me begin by affirming my 
agreement with you and my commitment that the USMCA must be 
enforced and implemented across all of its chapters. And we 
will be--that is an organizing principle of our work.
    I am also deeply concerned with the legislative and 
regulatory developments in the Mexican energy industry that we 
have seen in recent months. My team and I at USTR, along with 
much of the U.S. Government, have expressed these concerns 
regularly and directly to our counterparts in the Mexican 
Government.
    Just last week I convened a roundtable with members of 
Congress, with members from our environmental organization 
community, from our energy industry that includes renewable 
energy companies, as well as our more traditional energy 
companies. And the testimony I heard from them was powerful.
    They have been unified in expressing concerns with what is 
happening in Mexico, specifically with respect to the 
competitiveness of the North American energy market, as well as 
the competitiveness of Mexico's own energy industry.
    I have informed Mexico, and I assure you that we at USTR 
are looking at all available options under the USMCA to address 
these issues so that the USMCA can work for our stakeholders 
and protect our environment across all three countries.
    The Chairman. Well, we will want to work very closely with 
you, because it seems to me that you have Mexico on one area 
after another as it relates to greener energy, and the 
challenge of environmental reform, walking back what they 
pledged in USMCA. And we cannot sit by and abide that.
    Let me ask you one other question, if I might. It deals 
with Russia and China and the challenge of today. We all 
remember the searing image at the opening ceremony at the 
Olympics of President Xi and President Putin standing there 
together asserting that their friendship has, quote, ``no 
limits.'' And obviously, Xi was flexing his power to expand his 
authoritarian orbit, and basically kind of thumbing his nose at 
the American-led international order. And that was before 
Putin's brutal invasion of Ukraine.
    So how are you working with our allies to ensure that when 
the United States confronts China's anticompetitive behavior 
and theft of home-grown innovation, it has the allies onboard?
    Ambassador Tai. Well, Chairman Wyden, let me begin by 
saying that working with our allies is a key component of the 
Biden administration's approach to a smarter and a more 
effective strategy towards China. And this has been the case 
since day one of this administration.
    I have invested a lot of time personally, as have my 
colleagues in the Cabinet, to rebuild relationships and trusts 
that were, at the beginning of our administration, badly 
damaged. This has involved finding creative, sometimes 
unconventional, but ultimately effective solutions to 
longstanding problems and irritations that we have had with our 
strongest partners and allies. Like, for example, the WTO 
aircraft disputes, or the steel and aluminum tariffs.
    We have also worked to establish new cooperative mechanisms 
like the U.S.-EU Trade and Technology Council, as well as 
frameworks and dialogues so that we can focus with our allies 
on effectively addressing the massive distortions being caused 
by other economies like China, but frankly, in more recent 
weeks, like the challenges that we are facing with Russia's 
invasion of Ukraine.
    As I have mentioned, it is high time for us to turn the 
page on the old playbook with respect to China. That old 
playbook had us focused exclusively on changing China's 
behavior. We must now expand our work to include a strategy to 
vigorously defend our values and economic interests.
    The Chairman. Senator Crapo?
    Senator Crapo. Thank you very much.
    I want to follow up first, Ambassador Tai, with regard to 
the issue which Senator Wyden raised--namely, the enforcement 
in Mexico of our USMCA agreement.
    You have indicated, and Senator Wyden pointed out, that on 
the environmental and labor front you are actively pursuing 
efforts to try to enforce the agreement. But I see no activity 
to try to enforce the market access parts of the agreement. And 
let me focus my question specifically on potatoes.
    I think it was a little over a year ago now both you and I 
were in Mexico, and both you and I raised the potato issue. And 
both you and I got a response from the Mexican Government that 
they were going to resolve it. The Mexican Supreme Court even 
is ruling in our favor on this issue.
    Yet, I do not see any enforcement action against Mexico on 
USMCA with regard to potato access. Could you respond to that?
    Ambassador Tai. Well, Mr. Crapo, I know how important the 
potatoes are to you, and you know how much I love potatoes. 
With respect to USMCA enforcement, again let me reiterate my 
commitment to enforcing all aspects. And on market access, I 
want to also raise the dairy case that we have prosecuted.
    Senator Crapo. Exactly.
    Ambassador Tai. On potatoes in particular, I just spoke to 
USDA Secretary Vilsack last night about this issue. We have not 
given up hope, even though we have been taking two steps 
forward and one step backwards for many months now. I just want 
to let you know how high on our radar this is, and how focused 
we are on trying to secure a win here, and to let you know that 
all options are on the table if we are not able to secure that 
win.
    Senator Crapo. All right; thank you. I appreciate that.
    With regard to the IPEF, the administration is very clear 
that IPEF will not include market access initiatives. Given 
that the administration wants to raise our trading partners' 
labor and environmental standards through IPEF, with which I do 
not disagree, why take the carrot of market access off the 
table?
    Ambassador Tai. So I appreciate this opportunity to talk a 
little bit more about the approach that we are contemplating, 
and consulting with you all on, with respect to the Indo-
Pacific Economic Framework.
    It is true that market access, strictly speaking as a trade 
terminology, is not on the table at this time in the framework. 
But I want to distinguish between what we mean by ``market 
access'' in trade vocabulary versus market access in ordinary 
English.
    Market access, as we talk about it in trade discussions and 
negotiations, typically means tariff liberalization. And that 
is true. We are not starting these conversations with tariff 
liberalization, in large part because our traditional trade 
models and traditional FTAs have led us to a place where we are 
facing a considerable backlash that we are listening to from 
our own people about concerns regarding the offshoring and 
outsourcing of American jobs and opportunities through these 
types of arrangements.
    That does not mean, however, that we are not bringing an 
economic engagement to this region that does not have 
economically meaningful outcomes. So, in the sense of market 
access in ordinary English, which is to enhance our access to 
each other's markets, that is very much a part of what we are 
doing.
    In terms of the high labor and environment standards, I 
really want to thank you for affirming your commitment to the 
standards in U.S. trade policy practice, because that is 
exactly the kind of practice that we want to bring to our 
trading partners in order to counteract those forces that have 
tended to bleed out our industries to other regions. We would 
like to use trade to raise standards around the world, to raise 
standards to the standards that we have here, so that we can 
all enjoy the kinds of lives and opportunities that we would 
like.
    Senator Crapo. Well, I understand. And as I said, I agree 
with that. But I define ``market access'' as free trade 
agreements. And I just do not see why we cannot engage and 
develop--and we have nations in the Indo-Pacific that are 
crying out for free trade negotiations with us so that they can 
strengthen their relationship to us economically rather than 
being tied to China.
    And so, I just wanted to state that I believe that we need 
to engage in free trade negotiations in terms of market access 
and not define market access as some kind of a framework or 
something else.
    One last quick question. This is regarding our China 
policy. In your opening statement you report that China failed 
to meet its Phase One agreement. It is easier for the public to 
see China's unfulfilled purchase commitments, but it is much 
harder for anyone to know where China fell short on these 
structural commitments.
    Why doesn't the USTR provide this committee with its 
assessment on which obligations China failed to comply? And how 
do you plan to redress China's failure to meet these 
commitments?
    Ambassador Tai. Well, Ranking Member Crapo, you are right 
in terms of the purchase commitments. Those are the most 
transparent because everybody has access to the trade data. I 
would be happy to engage with you beyond the public statements 
that I have already made with respect to our assessment of 
China's performance under the Phase One agreement.
    One point I would like to make, however, is that with 
respect to the commitments that China signed up for, there are 
a number of different kinds. Obviously, there are the purchase 
commitments. There are commitments on laws and regulations that 
China had to pass. And then over time, especially with respect 
to the intellectual property and forced tech transfer 
commitments, China's compliance is going to need to be measured 
by the experience of our own industries that are seeking to do 
business in China.
    So, it is a dynamic picture, but I am all for having that 
conversation with you and others, and I believe that we have 
been having that conversation as well.
    Senator Crapo. Thank you.
    The Chairman. I thank my colleague.
    Senator Stabenow and Senator Grassley are involved in a 
discussion, and the order would, under normal circumstances, go 
to Senator Cantwell. Thank you.
    Senator Cantwell. Thank you, Mr. Chairman, and thank you 
and the ranking member for holding this hearing. And, 
Ambassador Tai, thank you for being here. I know you are a 
representative of the Biden administration, and you are 
reflecting the views of the Biden administration.
    I would just like to say I agree with my colleagues from 
the Northwest, but particularly my colleague from Idaho. I do 
not find where we are--and we had a conversation with you, a 
roundtable discussion with our members, and you said, ``Well, 
we are trying to reset the table here with China.'' So we gave 
you more time.
    And now we are here, and we are hearing this focus where we 
are not saying that opening market access and getting rid of 
tariffs is a priority. And that is what the people in my State 
want to hear. As a very trade-dependent State, they want to 
know that we are fighting to increase market access. When you 
think about wheat, when you think about potatoes, when you 
think about some of these other products, it is more than 70 
percent of the product that is for an export market. And when 
you look at the impacts of the 301 tariffs and how bad apples 
have been hurt, we want resolution to these issues.
    I mean, we are not even getting the exclusion at this 
point. So it is very hard to look at this equation--and this is 
not specific to the Biden administration. I did not agree with 
the last administration's approach on this. I do not agree that 
just throwing down tariffs, as we did on the solar industry--
and now we are 10-plus years later and we have no resolution of 
this issue--I do not think that is the path forward.
    So I have wholeheartedly supported enforcement. I got USTR 
a bunch of money out of the Customs agency so you could hire 
more lawyers and we could beef up USTR so that it could go 
around the globe and do enforcement. And guess what: it is 
working.
    I led the charge on getting more money for capacity 
building in Mexico, something nobody really wants to say. They 
do not want to say that our government is paying to help build 
capacity in Mexico so we can enforce trade agreements. I will 
say that because I believe in trade.
    So I am just trying to understand this notion that somehow 
trade agreements are 20th-century tools, and that they are some 
sort of, you know, recluse or something we are not going to do 
anymore, and that the Indo-Pacific agreement will not have a 
mechanism that is specifically focused on opening up markets.
    So my people believe, the people in the State of 
Washington--doing business, growing crops--want to know always, 
always, what are we doing to increase market access? That is 
what they want to know.
    So I just want to understand exactly how this--I hear what 
you are saying to my colleague here. You are saying, ``Well, it 
is kind of on the table, but it is not really on the table.'' 
And right now, with these tariffs and the impacts in India, in 
other places--there was no place to go. There was no place to 
go. This whole effort--I blame a lot on the Trump 
administration and their policies. It is easy to throw down. It 
is easy to throw down around here. And then, guess what? Do you 
get any bills done? No. So, it does take the negotiation.
    So I really want to understand. I am for the labor rights. 
I am for enforcement. I am for capacity building. But why can't 
we be for opening market access right now and getting rid of 
tariffs, or at least getting the exclusions done on time?
    Ambassador Tai. Well, Senator Cantwell, your views on trade 
are well known to me, and I know that, for the State of 
Washington--you are an export powerhouse. And I understand your 
views.
    Let me just clarify some of my remarks. We have been 
opening markets. When we began our administration, we began our 
administration in what I would describe as a tariff-rich 
environment. In the last year, we have either lifted or averted 
over $20 billion of tariffs just between the U.S. and Europe, 
$7 billion of which was applied or going to be applied to 
agricultural products.
    So, we are--we are--opening markets. We are also opening 
markets in other ways in our work with our trading partners 
through trade and investment framework agreements through the 
TPF with India. Is there more work to do? Absolutely there is.
    On my comments about free trade agreements being 20th-
century tools, that really is just a statement of fact, that 
free trade agreements are something that we did a lot of in the 
late 1900s, 1980 to 2010 or 2012 or so. There is a place for 
free trade agreements in our toolbox, but even there I feel 
like our approach to free trade agreements needs to be updated. 
We need to update our toolbox to reflect the realities of 
today. And that has to do with bringing along all of our 
economy for the United States in these trade policies so that 
we can continue to trade.
    I take very seriously the lessons that we have learned in 
the past 5 to 7 years around trade agreements that we have 
pursued that have been so big and have been so uneven in terms 
of the wins and losses they are going to deliver for our 
economy that they have collapsed under their own weight.
    Our approach is guided by the principle that we need to be 
able to trade in a way where we bring along our stakeholders 
instead of pitting them against each other. And so, your 
stakeholders are absolutely important to me, as are the 
stakeholders of your colleagues on this committee.
    Senator Cantwell. I see my time has expired. I would just 
say that I do not see these issues as an exclusion to one or 
the other, and people here have been working to update the 
tools that we have. I see the difference here is we have a 
President who has a great global presence. He should be 
advocating a global economic opportunity for the United States. 
We are working hard to get a bill to increase our export 
capacity as it relates to the supply chain that we are going to 
build here in the United States to build great products. So we 
are going to do everything that we can, but trade changes 
culture. Trade helps us build partnerships around the globe. 
But it is not just us.
    The biggest economic opportunity for the United States is 
to sell things outside of the United States. That means you 
have to have market access, and you have to have trade.
    Thank you, Mr. Chairman.
    The Chairman. I thank my colleague, who knows so much about 
this subject. And let me see if I can kind of bring the two 
points together, and then we will go quickly on to Senator 
Grassley.
    I am all in in the fight for market access. And Senator 
Cantwell makes important points about why that is so urgent to 
folks in the Pacific Northwest. Part of our challenge is 
building a modern market access toolbox, and it needs to have 
all of these tools that we are all talking about, and then we 
work on a bipartisan basis to apply that appropriate tool to 
the appropriate situation.
    So we will have a lot of conversations about this in the 
days ahead, but certainly my Northwest colleagues know an awful 
lot about trade, and we are going to be working together.
    Okay; next is Senator Grassley.
    Senator Grassley. Thank you, Mr. Chairman.
    And thank you for coming, Ms. Tai, and particularly it has 
not always been easy to get people in your position to come and 
do what the law requires by being here for these sort of 
oversight hearings.
    When you met with us last year, you were just getting 
started. I am happy to have you as our Trade Representative. 
However, I am extremely concerned that more than a year into 
this administration it seems to me--and you will probably 
protest this--that the White House is not allowing you to use 
your talents to be an advocate for free and fair trade.
    You probably heard me say that agriculture market access is 
the locomotive that drives any trade negotiations. I believe 
this administration is falling behind China and other 
competitors by not negotiating market access in the Indo-
Pacific. On top of this, we also see the administration falling 
behind on confirming very important key trading posts, 
particularly Chief Agricultural Negotiator, and even outside of 
your department we do not have an Under Secretary for Trade and 
Foreign Affairs and Agriculture.
    So my first question is--and I have at least three 
questions I want to ask you. You could eat up all the time on 
this question, but try to save some time. Could you tell us if 
you have a strategy to increase market access for U.S. 
agricultural products?
    Ambassador Tai. Yes, Senator Grassley. And let me just 
begin with a statement of values. I think our American farmers 
are some of the most admirable Americans and hardest workers 
that I have ever met.
    Market access for our farmers is absolutely important to me 
and important to our ability to conduct trade policy. I work 
with Secretary Vilsack extremely closely. I consider him to be 
an exemplar of leadership at the USDA, and also a very good 
personal friend. And so, I want you to know that I care deeply 
about our farmers and about allowing them to have opportunities 
to compete and also to diversify their opportunities.
    Senator Grassley. Thank you.
    We have all seen the suffering from Russia's invasion of 
Ukraine. A byproduct of this invasion is a disruption in our 
trade markets. Apart from the Ukrainians, President Biden has 
said that this invasion will lead to rising food prices and 
human suffering in the poorest countries.
    The President also said that the administration has been 
talking to the EU about ending trade restrictions. The EU has 
said that they are considering it.
    What engagement has your agency had with the EU on issuing 
an important waiver for biotech crops? And will your agency 
engage with the EU moving forward to enable science-based 
regulations for biotechnology so farmers in our country and 
around the world can use biotech to increase production?
    Ambassador Tai. We are continually engaging with our EU 
counterparts on ag trade issues between the U.S. and the EU, 
including biotech trade. This has been a traditionally 
difficult area between the United States and the European 
Union. I saw that through the course of last year as well, 
working with Secretary Vilsack.
    I do believe that the current disruptions to trade created 
by Russia's invasion of Ukraine may provide us new 
opportunities and windows for collaboration with the EU, which 
we are also seeking to capitalize on.
    Senator Grassley. While it appears that the EU might be 
moving in the right direction along this line, it also appears 
that Mexico is going the other way. It seems like Mexico is 
blatantly violating the commitments made under USMCA regarding 
the treatment of biotech products.
    What is your strategy to encourage Mexico to implement a 
transparent science-based risk-assessment process for 
agricultural biotechnology? And do you plan to use the USMCA to 
engage with the Mexican Government and resolve its treatment of 
agricultural biotechnology?
    Ambassador Tai. This is another area where I have been 
closely coordinating and cooperating with Secretary Vilsack. 
And just to get to the bottom line on your question, yes, we 
are looking at all of our tools under the USMCA and thinking 
through our strategy.
    Senator Grassley. In regard to what you said to Senator 
Crapo about potatoes, I know that the Secretary of Agriculture 
is very committed to doing what you want done, Senator Crapo.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Grassley.
    Next will be Senator Stabenow.
    Senator Stabenow. Well, thank you very much, Mr. Chairman 
and Ranking Member.
    Welcome back. We were so glad to have you and so 
appreciate, Ambassador Tai, all of your hard work. Thank you 
for being with us today. I know you were at Ways and Means 
yesterday, so it is a busy week on the Hill.
    And I first want to mention, I know that my friend, Senator 
Grassley, has stated it, and maybe others, but it is critical 
we get a Chief Agricultural Negotiator at USTR. It is just 
absolutely important, as you know. Markets are critical for 
agriculture, and so we really need to get this across the 
finish line as soon as possible. Please let me know how I can 
help to be able to make that happen.
    I also know you have been very focused on a number of 
fronts, including USMCA enforcement, as well as your ongoing 
negotiations with China, as well as new challenges we face 
holding Russia accountable for their brutal invasion of 
Ukraine. So, a lot of important work to do.
    Let me first start with USMCA though. Thank you for your 
leadership and your team's leadership to hold Canada 
accountable for failing to meet their dairy market access 
commitment under USMCA. This is something I worked hard on as 
part of this USMCA, and congratulations on the first successful 
dispute settlement panel verdict you secured earlier this year.
    It is critical for our dairy farmers in Michigan and around 
the country that we also make sure that Canada comes into 
compliance. It is just absolutely critical. And I hear concerns 
all the time that Canada is going to continue to play games in 
their recent proposal allowing them to limit dairy market 
access. And so, we really need your continued focus in this 
area.
    So could you speak just a little about your plan for 
ensuring that Canada lives up to their original commitments 
under USMCA so that our dairy farmers see the full benefits 
that were promised?
    Ambassador Tai. Senator Stabenow, yes, my view on Canada's 
commitments under the USMCA with respect to dairy is that 
Canada promised increased access to its market for American 
dairy farmers. And until we are able to accomplish that, we 
will continue to pursue the tools and avenues available to us 
under USMCA, hard tools and soft tools. I have a very 
collaborative and good relationship with my Canadian 
counterpart, and I have raised these issues in my conversations 
with her. But we will not give up until we see those promises 
realized.
    Senator Stabenow. Thank you so much. And of course, coming 
from Michigan, we have wonderful relationships and friendships 
with our Canadian friends. This is an area that is really so 
important for us to push back on.
    I think you have also been asked about biotech issues, and 
so let me just say, and agree with colleagues, that 
biotechnology has enormous potential to help us increase 
productivity while farmers address the climate crisis. And as 
you know, we need regulatory systems that are effective, that 
are science-based, and that are transparent.
    So I am very concerned that Mexico seems to be making 
decisions that are not founded in science and causing long 
delays in biotech approvals that could have real-world 
consequences on farmers and future innovation in the industry. 
And importantly, these decisions are in violation of the 
commitments that Mexico made under the USMCA.
    So what is your strategy to engage with Mexico and 
encourage them to implement transparent, science-based approval 
processes for agriculture biotechnology that they already 
agreed to?
    Ambassador Tai. So, Secretary Vilsack and I have been 
working hand in glove on the Mexico agriculture challenges, and 
we have been pursuing the strategy of cooperation and 
consultation with our counterparts in Mexico.
    I do think that, at this point, we are reassessing where we 
are, and the kind of tools that we need to bring to bear at 
USTR. And we are looking at the full range of tools, in close 
coordination with our partners at USDA, and with you and others 
here, we will look at next steps.
    Senator Stabenow. Thank you. I appreciate that.
    And then finally, let me just say the race to be a leader 
on research and manufacturing of next-generation technology is 
an important part of our future economy, and it is not just 
limited to agriculture. So we need to make things and grow 
things, and in my opinion we have not lost the future to China 
or any place else.
    And so, we are working to pass important investments in 
clean energy and advanced manufacturing through competition and 
innovation, and important legislation is in front of us right 
now. Senator Manchin and Senator Daines and I have legislation 
to invest in clean energy domestic manufacturing, which is so 
important.
    Could you speak at all about what we need to do here in 
this competition, and what role that our trade policies can 
play?
    Ambassador Tai. Senator Stabenow, I am delighted to hear 
about all of the efforts that are being undertaken up here in 
the Congress. We have been tracking them closely. They are 
sometimes inside of the trade lane and oftentimes adjacent to 
trade. In order to continue to be the competitive powerhouse 
that the United States has been and wants to continue to be, we 
are going to need to coordinate our trade policies with these 
types of investments, and we are going to need to do it on a 
sustained basis.
    So I want to commend you and your colleagues for doing this 
work. And I look forward to continuing our work and connecting 
your efforts with our trade policies.
    Senator Stabenow. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Stabenow.
    Next will be Senator Thune.
    Senator Thune. Thank you, Mr. Chairman. Ambassador, welcome 
back to the committee.
    Just when does the administration plan to nominate a Chief 
Agricultural Negotiator?
    Ambassador Tai. Senator Thune, we have nominated one, and I 
am very grateful for Elaine Trevino's willingness to serve, and 
I look forward to working with her in another capacity that she 
will take on in the Biden administration. At the moment, I am 
working very hard with our administration to name a new Chief 
Agricultural Negotiator nominee as soon as possible. I want to 
assure you here that your interests and mine are absolutely 
aligned.
    Senator Thune. Okay.
    Well, you are in the administration, and it is an 
expression I think of priorities, and I can tell you that there 
are a lot of farmers and ranchers and agricultural producers 
and growers around this country who are very, very concerned 
that the promotion of agricultural exports be a priority. And 
it does not seem like it is.
    Is the administration planning to submit Trade Promotion 
Authority, the proposal request?
    Ambassador Tai. Well, Senator Thune, with all due respect, 
in terms of Trade Promotion Authority, that is legislation. And 
I am happy to speak with you and to work with you on it, if it 
is something that you are interested in.
    Senator Thune. Well, I am interested in it, but typically 
what happens is that it is an administration's request. And in 
the Obama administration, there were many of us here, 
Republicans, who were willing to work with the President from 
another party on something that is a big priority, I think, for 
America's economic vitality, obviously economic security, and I 
would argue--in parts of the world--we are talking here about 
national security.
    Is the administration right now pursuing any trade 
agreements in the Indo-Pacific, specifically the CPTPP, which 
would more strongly promote American interests and leadership?
    Ambassador Tai. We are pursuing economic engagement in the 
Indo-Pacific right now. That does not mean the CPTPP. And let 
me just draw together a point on CPTPP and the TPA, which is, I 
also lived through the fights up here in the Congress over TPA 
and TPP back in 2014, 2015, and 2016. I feel very strongly that 
American trade policy is at its best, strongest, and most 
durable when we are acting in the most bipartisan way.
    And so my commitment to you is--with respect to trade 
policy, promoting trade, and also working with the Congress--
that I am looking for strong bipartisanship and a unified 
American voice, and I am happy to engage with you on those 
issues from that viewpoint.
    Senator Thune. Well, and I am not--and that is great, and 
you know your subject well. And because you know your subject 
well, I just think that the 2022 trade policy agenda that 
supports a worker-centered trade policy may be a convenient 
political slogan, but it is not a serious trade strategy. And 
you know, we are the leading economy in the world for a reason, 
and a major part of that is because American exporters--and by 
that I mean farmers, businessmen and women, innovators, and 
entrepreneurs--boldly go into global markets and oftentimes 
succeed.
    And just as an example, U.S. farm and food product exports 
grew from $46 billion in 1994 to more than $177 billion last 
year. The U.S. exports support a lot of good-paying jobs at 
home and help spread the reach of American influence abroad.
    So I am just trying to get you all to focus. I understand 
this framework, but because there is not market access in 
there, because there are not, you know, tangible benefits 
delivered, it is a lot of really flowery rhetoric, but I am 
trying to see where this does anything to open markets for our 
farmers and ranchers in areas of the world where America just 
flat needs to be a presence, needs to be competitive, and needs 
to be leading the way.
    If we are going to isolate China, doing business with a lot 
of countries in that region just seems like it makes a lot of 
sense. So let me just ask a fairly direct question.
    Do you agree that farmers, producers, and others that rely 
on exports and lower-cost imports are part of the backbone of 
our economy?
    Ambassador Tai. I do agree that they are.
    Senator Thune. And will the administration work to build 
upon the success of U.S. exports in the context of any new 
trade agreements or initiatives?
    Ambassador Tai. We are doing so across everything in trade 
policy that we are pursuing right now.
    Senator Thune. And I think a lot of us would differ with 
that, and I would hope that your clear-eyed focus would be 
market access, creating opportunities that are real, that are 
meaningful, that are tangible, and working with us in a 
bipartisan way to do that. You expressed a willingness to do 
that, and I certainly hope that you would, and starting with 
nominating an Ag Negotiator. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Thune. You and I have 
worked together often on trade issues, and I look forward to 
doing that again.
    Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman.
    As chairman of the Foreign Relations Committee, I regularly 
hear from ambassadors in some of the countries that may 
participate in IPEF that it is not sufficiently ambitious. What 
has been the administration's response to that criticism? And 
how, if at all, has the scope of the negotiations changed based 
on requests from other potential partners?
    Ambassador Tai. Well, Senator Menendez, I disagree with the 
sense that it is not sufficiently ambitious. In a lot of our 
interactions and conversations with our trading partners in the 
Indo-
Pacific, we have been making the case that what we are trying 
to do in the Economic Framework for the Indo-Pacific is new. It 
will include innovative elements, some innovative for the 
region, some innovative for the trade policy conversation 
overall, because of the evolving challenges that we are facing.
    So that is where I would begin, which is that new things 
require some time for socialization and for people to 
appreciate where the economic meaning is going to come. But we 
are committed to this region, to our partners, and to engaging 
and enhancing our economic relationships.
    Senator Menendez. Well, I appreciate that. Let me just say, 
as my own observation, not theirs, I do not think it is as 
robust as I think we need. I think we missed an opportunity in 
TPP, and that has happened, and we are not going to revisit it. 
But at the same time, when we are thinking about our challenge 
with China--which the administration has adopted as their 
number one geo-strategic challenge, the geo-economic strategy 
to compete with China--you certainly, I hope, will pursue an 
ambitious agreement that sets high standards across the breadth 
of our economic relationships within the region.
    And it is critical that the IPEF make real progress in 
setting strong standards across the Indo-Pacific to further 
solidify a democratic rule of space trading regime.
    Let me ask you. Taiwan is a key trading partner of the 
United States, one with whom we have a strategic relationship 
that is intimately intertwined with our economic security, 
particularly as it relates to trade in semiconductors. It is a 
key stakeholder in the Indo-Pacific economic community. It is a 
vibrant democracy that respects the rule of law. It is exactly 
the type of partner whom we should work with to strike high-
standard trade agreements.
    Several weeks ago, the Taiwan Government officially 
requested to be part of the IPEF negotiations. What has been 
the administration's response to that request?
    Ambassador Tai. Senator Menendez, I completely agree with 
you that Taiwan is an essential trading partner for us, and 
also an essential partner overall.
    The Indo-Pacific Economic Framework--and I want to 
emphasize this for everyone on this committee and publicly as 
well--is a framework that we are developing, and it is 
something that must reflect also the views of all of you and 
our stakeholders.
    So, on the point of Taiwan, we are, in general, in 
conversations with those who are interested in joining this 
framework. I do also want to emphasize and recall that in the 
last year we have revived the trade and investment framework 
agreement engagements with Taiwan, including at my level, which 
had been idle for 5 years. And we will continue to look at 
all----
    Senator Menendez. So let me get back to my original 
question. What has been the administration's response to that 
request? Are you going to invite Taiwan to be part of the IPEF 
negotiations or not?
    Ambassador Tai. Participation in the IPEF is still under 
consideration, and as far as I am aware, no decisions have been 
made.
    Senator Menendez. Okay. Well, I hope--and I get a sense 
from that answer that we will not include Taiwan within the 
IPEF, which is missing an opportunity both for the vision we 
have for Taiwan and also for the regional and trade economic 
architecture.
    If it is not invited to join the negotiations, I hope the 
administration considers an agreement with Taiwan that extends 
the benefits on a bilateral basis, which would certainly be the 
next runner-up.
    Finally, at last year's trade agenda hearing, I asked you 
to commit to brief the committee before and after each 
negotiating session with regards to the TRIPS waiver, and you 
agreed to do that. Do you believe you have kept that 
commitment?
    Ambassador Tai. I do.
    Senator Menendez. Well, about 3 weeks ago the press 
reported on a proposed text that appeared to be a detailed 
compromise on the issue, and USTR in fact released a statement 
confirming that a compromise had been reached. Yet no one on 
this committee appears to have known anything about the details 
of that agreement before it was announced. We were kept in the 
dark.
    And so, to me this is an example--you know, there is a 
difference between notification and consultation. Notification 
is when we got that. Consultation is when there is an 
engagement about what it is that you may be considering 
agreeing to so that you can have input from Congress. And that 
is why, you know, I have real concerns.
    In your testimony you said Congress is your constitutional 
partner on trade, but from my perspective, you have not acted 
that way.
    Thank you, Mr. Chairman.
    Ambassador Tai. Chairman Wyden, if I may respond to that, 
because I think it is important for the overall conversation, 
and for a sense of my integrity as the U.S. Trade 
Representative.
    Senator Menendez, in my testimony yesterday at the House 
Ways and Means Committee, I made the point, and I want to make 
it here for all of you as well, that there have been no 
agreements made at the WTO. And so, with respect to whatever 
may be on the table, I consider these hearings to be a part of 
a consultation process, and I continue to want to hear from all 
of you.
    In fact, you and others on this committee have made 
yourselves very clear to me in terms of your positions. And I 
want you to know that I have heard your concerns, and I have 
also heard the concerns of the other members of the committee.
    Senator Menendez. Mr. Chairman, I'm sorry, but to say--USTR 
put out a statement that there had been a compromise agreement 
before anybody was involved. So having come to talk to us after 
you had the compromise agreement is not input, because I do not 
think you are going to change the compromise agreement based 
upon anything you hear. So I do not think it is the 
fulfillment, and I hope we can get to a better place.
    Thank you, Mr. Chairman.
    The Chairman. My colleague is raising this issue of 
consultation, and I think the point, Ambassador, is it can 
bring us all together. We need consultation apart from 
hearings. In other words, it needs to be ongoing. So, thanks.
    All right; we are now at Portman, Carper, Toomey, and 
Cardin, who will be the next four in order of appearance.
    Senator Portman?
    Senator Portman. Thank you, Mr. Chairman. And Ambassador, 
it is good to have you back before us.
    As you know, I feel strongly that you need to have the 
ability to negotiate trade-opening agreements. That would make 
your job a lot more interesting, as well as the jobs of your 
associates. So that is a broader topic, I think, in the context 
of the COMPETES Act, also known as USICA, also known by a lot 
of other names. I think there is an opportunity for us to do 
something, and you and I have talked about it. I have talked to 
the Secretary of Commerce about it. So I hope you will be 
working with us on that. If there is going to be Trade 
Adjustment Assistance, typically that is with Trade Promotion 
Authority. And my view is that these agreements that are right 
before us, including the UK agreement, which has virtually no 
issues as it relates to labor or the environment, are low-
hanging fruit, and it would be great to get America back in the 
game.
    With regard to China and your discussion in your testimony 
about the need to use existing tools, you refer to the Phase 
One agreement as part of the old playbook because China has not 
lived up to its commitments. And I get that. It is frustrating 
when China does not live up to its commitments.
    But I do not think we can just move along and say, let's 
start to work on other ways in which we can open more 
opportunities. Instead, I think we have to stick with that 
agreement and use what is in the agreement, which is dispute 
resolution.
    I think if we just say we are going to forget that and make 
that part of the old playbook, I think it sends a terrible 
message. Because I think, when China makes an agreement with us 
and they do not fulfill their obligations, we have to exercise 
our legal rights under that. And I think it is going to be much 
more difficult to make progress with China on the subsidies, on 
state-run enterprises, on suppression of labor rights, and 
other things, if we do not insist that the agreement be adhered 
to.
    So I guess my question to you would be, are you willing to 
move forward with dispute resolution? Are you willing to commit 
to utilizing the dispute resolution process that the United 
States enjoys as part of that Phase One agreement, possibly 
culminating in restrictions on trade with China as necessary to 
enforce the agreement?
    Ambassador Tai. Senator Portman, it is always a pleasure to 
see you. On your question on China, I appreciate the 
opportunity to clarify my position and what I said, because I 
have seen it reported, perhaps inaccurately, which is to say, 
it is the time to turn the page on the old playbook which 
focused exclusively on pressuring China and seeking China to 
change its ways or pressing China for compliance.
    We are not giving up on pressing China on compliance or on 
changing its ways. And yes, all tools remain on the table with 
respect to dispute settlement and enforcement.
    But my main point is that that is not the only thing we can 
do now. And we have to expand our strategy to include 
developing the tools that we need to defend the interests of 
our economy. So in fact what I am saying is, we are committing 
to doing more work, and our strategy needs to expand.
    Senator Portman. Okay. Well, thank you. I appreciate that. 
And using those existing tools we have is important. Again, 
setting a precedent of not using the dispute resolution tools 
that we have, I think would be problematic for China and 
others.
    Let me talk to you about new tools, because that is the 
other point that you make. You and I have talked about this a 
lot. We just do not have the tools to keep up with China, in my 
view, as they undermine our national competitiveness. They are 
subsidizing manufacturing in many countries through their Belt 
and Road Initiative, and yet our trade enforcers are powerless 
to combat those subsidies.
    Our bipartisan legislation with Senator Brown, called 
Leveling the Playing Field 2.0, contains new tools to deal with 
that reality. It is what is happening out there, the 
transshipments and particularly the Belt and Road subsidies. 
That bill is something I am pushing very hard, as you know, to 
have included, as it is, in the House version of the U.S. 
Innovation and Competition Act we talked about earlier.
    Thank you for your support of this approach. Can you 
explain to the committee how this legislation would help to 
combat China's unfair trade practices?
    Ambassador Tai. Well, Senator Portman, let me begin by 
commending you and Senator Brown for working in a bipartisan 
way and bicamerally on this legislation and this initiative.
    In terms of how it would help us, I just want to emphasize 
that most of our trade enforcement tools date back to the 1970s 
and the 1980s, and it is critical that we retain those tools. 
But over time, as the global economy has evolved around us, our 
tools have not kept up. And so, the updates and the 
enhancements that are in the Leveling the Playing Field Act 2.0 
are exactly in the spirit of what we need right now, which is 
the tailoring of the tool set and expansion of the tool set 
that is going to be up to the task of meeting the challenges 
that we are facing today.
    Senator Portman. And with China, in particular. Would you 
agree?
    Ambassador Tai. Yes.
    Senator Portman. Thank you, Mr. Chairman.
    The Chairman. I thank my colleague. I always like the 
exchanges of you kind of NBA All Stars of U.S. trade history.
    Senator Toomey is next.
    Senator Toomey. Thank you, Mr. Chairman. Ambassador Tai, 
welcome.
    You know, I supported your nomination because I knew you 
had the knowledge and the competence and the ability to do the 
job, but also because you stated in your nomination hearing, 
and I quote, your intention to ``pursue trade policies that 
support American innovation and enhance our competitive edge,'' 
unquote.
    A year later, I am still kind of waiting to see that. And 
one of the reasons I say that is because I just do not see a 
focus on expanding market access. One of the major areas of 
responsibility for the USTR, according to your own website, is, 
and I quote, ``expansion of market access for American goods 
and services.''
    And of course, that is a two-way street. The phrase 
``expanding market access'' is not in your testimony today. It 
is not a part of the IPEF. And aside from dialing back some of 
the previous administration's most counterproductive trade 
wars, to my knowledge you really have not been pursuing tariff 
reductions.
    Every single presidential administration since Reagan has 
initiated negotiations on a new FTA. They have done this to 
increase market access and to help U.S. industries and workers 
grow and thrive.
    The UK, Kenya, Taiwan, the Indo-Pacific countries, are just 
a few of the countries that have reached out to us. They want 
to strengthen their trading relationship, and that includes 
having more market access. And yet, thus far we are not taking 
them up on it.
    Now I get that President Biden ultimately makes this 
decision; it is not yours. But you are the U.S. Trade Rep. You 
are the President's primary trade advisor.
    Let me ask you this: do you think it is in America's best 
interest to pursue free trade agreements with other countries?
    Ambassador Tai. So, Senator Toomey, if you will allow me to 
back up just a little bit----
    Senator Toomey. But we have to do it quickly, because I am 
going to run out of time.
    Ambassador Tai. Okay. If by ``market access'' you mean 
economically meaningful outcomes, and if by ``market access'' 
you mean the removal of tariffs, we have accomplished quite a 
bit of that in the first year.
    And I mentioned this to Senator Cantwell, but we began in a 
very, very tariff-rich environment, and we have removed $20 
billion worth--or avoided $20 billion worth of tariffs in our 
first year.
    To your point about free trade agreements, let me say this. 
I encounter this quite a bit, including from many members of 
Congress on these two committees, which is that trade policy, 
market access, trade enforcement take lots of different forms. 
And I know that trade agreements are maybe the most fun form, 
and our traditional trade agreements--let me put it this way.
    We are interested in pursuing trade agreements with our 
partners. But we are also interested in ensuring that, just 
like our toolbox on enforcement, we are committed to ensuring 
that our trade agreements practice evolves with time.
    Senator Toomey. Okay. Here's the thing. My understanding is 
the U.S. currently has 14 FTAs with 20 countries. You recently 
seem to be suggesting that you think FTAs are a 20th-century 
tool. But the fact is, China has 8 currently being negotiated. 
The EU has 14 in the process of being negotiated. You may think 
this is a 20th-century tool, but it looks like the rest of the 
world thinks this is a 21st-century tool. And what this means 
is that China and the European Union are expanding market 
access for their producers and competition for their consumers, 
and they are getting market share that we are going to miss out 
on. I think the data is very, very clear--there are all kinds 
of studies that show that trade agreements lead to more jobs, 
higher pay, increased economic growth, more options, and lower 
costs for consumers. It is all kinds of great net outcomes.
    Foreign trade supports over 40 million U.S. jobs. I think 
you know this data. But without putting market access on the 
table, and lowering tariffs, and eliminating barriers, we are 
just not going to make the progress we could be making, that 
other countries want to make, that we should want to make.
    In my understanding, in the 40 years since the U.S. began 
negotiating our first free trade agreement with Israel, every 
single U.S. Trade Rep has worked on or completed negotiations 
of an FTA. My concern is that you might be on track to be the 
first Trade Rep not to continue that streak, and that would 
come at a big cost to our country. I just hope that you will be 
an advocate for this really important tool to expand trade.
    The Chairman. The time of the gentleman has expired. I 
think Senator Carper is online, and then Senator Cardin.
    Senator Carper, are you online?
    Senator Carper. I am right here.
    The Chairman. Great. So, Senator Carper, and then Senator 
Cardin.
    Senator Carper. Trade Rep Tai, welcome aboard. It is great 
to see you, and thank you for your leadership and service in 
this capacity.
    I have three points. One is, I want to talk about a worker-
centric approach to a digital trade policy. Second, reform of 
the 301 trade exclusion process, a thing that Senator Portman 
and I have been focused on. And third would be the intellectual 
property waiver.
    The first is the worker-centric approach to the digital 
trade policy. Ambassador, I want to thank you for testifying 
not just before our committee today, but thank you for your 
service way, way back, going back to the Ways and Means 
Committee before that.
    I applaud the Biden administration's commitment to engage 
with our allies for the creation of an Indo-Pacific Economic 
Framework. And one area of bipartisan interest is the 
development of standards to promote openness and transparency 
in the digital economy, something we have talked about. Through 
digital trade rules, we have the opportunity to uplift workers, 
to help small businesses compete, and support American 
innovation and entrepreneurship.
    Here is my question. Ambassador Tai, what approach should 
the United States take when negotiating digital trade 
standards? How can this approach advance the Biden 
administration's vision for a worker-centered trade policy?
    Ambassador Tai. Senator Carper, thank you so much. It is 
always a pleasure to see you. And I appreciate this question, 
in particular because I think it gets lost in the shuffle some.
    When we are talking about digital trade, that is actually a 
really inclusive topic, because so much of our economy is 
becoming digitalized every single day. So, in terms of an 
approach to digital trade, it is absolutely critical that we 
bring a comprehensive approach, a holistic one with respect to 
how we think about digital trade, and the fact that digital 
trade at this point effects everyone. And therefore, our 
engagement with our stakeholders needs to be holistic, robust, 
and comprehensive.
    The concerns that we hear from our stakeholders around the 
offshoring and outsourcing of our jobs extends increasingly 
beyond the manufacturing sector to the services sector. And we 
take very seriously at USTR the necessity to conduct our trade 
policy in a way that brings along all of the U.S. economy and 
our stakeholders.
    And so, a worker-centric approach to digital trade is one 
that is comprehensive, that is meaningful, that recognizes the 
limits of where Congress has acted and spoken and where it has 
not, and also reflects the views, the aspirations, and also the 
anxieties of our stakeholders across our economy.
    Senator Carper. Great. Thank you.
    If I could turn to the section 301 tariff exclusion 
process. As you know, since 2018 the trade war initiated by 
President Trump has wreaked havoc on American businesses, on 
manufacturers, on farmers, and consumers.
    Senator Portman and I have long advocated for relief from 
the section 301 tariffs, especially for imported goods that are 
only available from China. And I appreciate the recent 
announcements by the USTR that a limited number of tariff 
exclusions would be reinstated. That is good news. However, I 
remain concerned about the impact of existing tariffs on 
businesses in my State and across our country.
    The question is this: moving forward, are you considering 
more comprehensive section 301 tariff exclusions? How do these 
tariffs fit in the Biden administration's broader China 
strategy? Please go ahead.
    Ambassador Tai. Senator Carper, we need--and I think that 
there is very broad bipartisan support for this particular 
view--we need a realignment in our trade relationship with 
China. We need for our relationship to be more strategic and in 
favor of our ability to compete.
    Tariffs do have a role. Nevertheless, in this realignment 
we need to take a strategic look at our tariffs, and we also 
need to recognize that realignment is something that requires a 
transition and cannot be accomplished overnight.
    So I committed in my speech on the Biden administration's 
China trade policy last October that we would start the first 
exclusions process--which we did and just concluded last week--
and that we would consider additional exclusions processes as 
warranted. That continues to be true today.
    Senator Carper. Mr. Chairman, my time is about to expire. I 
just want to mention the third question and ask the Ambassador 
to respond for the record. I understand the administration has 
been working with some of our WTO partners to develop a 
possible agreement on waiving the intellectual property 
protections for COVID vaccine. But yet the status and details 
of the agreement remain unclear.
    And my question I would ask you to answer for the record 
is, how does the administration intend to increase its 
engagement with Congress and outside stakeholders as this 
process continues?
    Will you answer that for the record? I would be most 
grateful. It is great to see you, and thanks for your good 
work. Thank you.
    [The question appears in the appendix.]
    Senator Cardin [presiding]. Thank you, Senator Carper. I am 
going to recognize myself. And after I complete my questions, 
Senator Cassidy will be next.
    Ambassador Tai, first, thank you for coming to Baltimore. 
It was, I thought, an incredible occasion. You could see 
firsthand the investment made in the Port of Baltimore to be as 
competitive as we can globally. We have the supermax capacities 
in our cranes and in our berths. And you got to see some of the 
container ships actually come in. They timed it for your visit, 
which I thought was good. And the UK is a critically important 
trading partner to the United States, and certainly to the Port 
of Baltimore. So we are very pleased to see that we are engaged 
in conversations with our trading partners in UK to expand 
opportunity for both countries. That will mean more jobs for 
people in Maryland. So I just really first wanted to thank you 
for that initiative, and thank you for coming to Baltimore.
    I want to cover first the Indo-Pacific Economic Framework. 
I watch every word you say, so I want to just critique, if I 
might, that in your list of objectives you included, rightly 
so, workers' issues, promoting workers and businesses, 
advancing strong labor standards, tackling climate change--all 
of which I completely agree with. But I was disappointed, 
knowing the countries that are in the framework, you did not 
include one of the areas that has been a very high priority of 
this committee: advancing good governance and anticorruption.
    I know that you are committed to that, but I would ask that 
there is sensitivity when that is not included in the list of 
our objectives.
    Ambassador Tai. Senator Cardin, your leadership on those 
issues just is very, very clear. Good governance issues are 
included in the trade pillar under what we call ``good 
regulatory practices.'' And again, this gets lost in our 
jargon. And if I were to translate it into ordinary English, it 
is in our regulations, and engaging with our partners, ensuring 
that there is a notice and comment process that allows for 
participation. So that part is in the trade pillar.
    On anticorruption, that is in our organization in a 
separate pillar on anticorruption and tax. And that is a pillar 
that Secretary Raimondo and her team will be leading. It does 
not mean that USTR will not be involved, but we will lead the 
trade pillar, and that pillar she and her team will lead.
    Senator Cardin. Thanks for the explanation. I would assume 
that the environmental issues will also be in the regulatory 
framework. So the more you can put a spotlight on them--it is 
our expectation. We made it--I know you are not using TPA. I 
know TPA has expired. But we made that a principal trading 
objective.
    So I just would appreciate keeping us engaged on the 
progress made, particularly in several of the countries that 
are included in the framework. We recognize there is no 
enforcement. We recognize the challenges of enforcement.
    Let me talk about one country that is in this discussion--
that is, Japan. Congratulations on being able to complete some 
really difficult issues with the beef industry and some others 
with Japan. It looks like it has been extremely positive. And 
quite frankly, Japan is a major trading partner in the Port of 
Baltimore, as well as with our country.
    And it does not go unnoticed that Japan was extremely 
aggressive in supporting the sanctions against Russia, and 
helping provide important equipment to the Ukrainians. So they 
have been a true partner.
    So it seems to me that Japan is one of the easier partners 
that we have in the Indo-Pacific area, and I was just curious 
as to how you see the next chapter as our trade relations are 
unfolding?
    Ambassador Tai. Well, Senator Cardin, I would agree with 
you that Japan is an absolutely important partner with whom we 
have a really strong relationship. I would not necessarily use 
the adjective ``easy'' to describe Japan in my list of first 
five adjectives, but I will agree with you that, in terms of 
the Kishida administration that is in place now, we are 
creating momentum in terms of our work.
    So I think really, on a bilateral basis, we at USTR have 
begun a new bilateral trade communication channel with Japan to 
address our bilateral issues. We have a trilateral discussion 
and forum that we have reignited with Japan and the EU on new 
subsidies rules and also new tools for addressing the 
challenges that we face in this 21st century. And also, we look 
forward to working with Japan in a very robust way in the Indo-
Pacific Economic Framework.
    Senator Cardin. Thank you.
    Senator Cassidy is recognized.
    Senator Cassidy. Madam Ambassador, thank you for being 
here. First is context, and this will be along the lines of 
what we have discussed in the past.
    If we have a problematic trading partner, say China, that 
is able to lower their price by noncompliance with 
environmental and labor regulations, that gives them an 
advantage not just over us, but over a country like Mexico or 
Guatemala that must comply with those by treaty with us. And 
every time we enforce that upon them, we raise their price 
relative to that in China, which then grows stronger and 
pollutes even more. I think you are with me on that.
    So, in your opening remarks you mentioned that we need new 
domestic tools. And in the press release as regards the U.S.-EU 
agreement upon aluminum and steel, there is a suggestion that 
you might have a new domestic tool looking at the carbon 
content of the products that are being based.
    But it occurs to me that we put barriers and penalties upon 
China, they promise that they will change their behavior, so we 
relax those barriers and penalties. Then they do not comply, 
and then we have to enforce.
    But it is different if you establish a standard which they 
must reach in order to have access to the market, or by which 
to avoid the penalty. It is a different--it is less a promise 
and more ``if you do not comply, you pay a lot.''
    So are these the domestic tools of which you speak, 
including this kind of border carbon adjustment?
    Ambassador Tai. Senator Cassidy, I think in general my 
answer is ``yes,'' although I do not know that I would describe 
it as a border carbon adjustment. But you are absolutely 
correct that the global steel arrangement that we are in the 
process of negotiating with the European Union exactly does 
that, which is, it is a mechanism for creating a market between 
the United States and the European Union that is going to 
ensure fair competition and the promotion of clean industries.
    And I agree with you in terms of the sense of leverage, 
where you have a market gate-keeping mechanism as opposed to, 
you open your market and are stuck having to increase barriers 
as a form of enforcement. It is a bit of a carrot and stick 
distinction.
    Senator Cassidy. Well, the nice thing about having the 
border carbon adjustment is, it rewards our people who are 
doing the right thing, and therefore paying a price, but then 
losing business because that business moves to a place where 
there is lower cost of compliance.
    I want to stick up for my folks, and I think this is a way 
to do so. So we are very interested in partnering with you as 
you kind of develop these schemes.
    We have also spoken before regarding India's dumping of 
shrimp into the United States. And I am told that they are 
pushing back hard on this. Can you give any update on that?
    Ambassador Tai. So this is something that I have spoken to 
you multiple times about. I know how important this is to you 
and your constituents. Secretary Raimondo and her team are in 
good conversation with mine around the dumping issue. And yes, 
I raised this directly with my Indian counterpart in Delhi last 
November when I visited him. I did get very forceful pushback. 
But, Senator Cassidy, I am committed to working with you on 
this issue, and that means in our own system, but that also 
means in engaging the Indian Government. And I look forward to 
exploring ways to do that.
    Senator Cassidy. I am told they complained that we somehow 
put barriers on cold shrimp importation, but they do not have 
cold shrimp. And so, if you do not have something, big deal. 
But it is their warm-water shrimp that are heavily subsidized 
and perhaps don't meet phytosanitary standards. Similarly, they 
heavily subsidize their rice from even before the seed is 
planted, and our folks are competing against something that is 
being sold below cost because of heavy subsidies.
    Is there any progress on addressing that?
    Ambassador Tai. We are looking at this issue carefully with 
our partners in the U.S. Government in terms of progress. Let 
me get back to you since the last time I asked and make sure 
that you have the very latest.
    Senator Cassidy. Sounds great.
    Another concern we had--that I had with Ambassador 
Lighthizer way back when--was the absence of a dispute 
resolution for energy companies. It turns out that if your 
company was nationalized by Mexico and you are directly 
contracting with the government, then you had some sort of a 
deal, but not if you were a subcontractor. Think of somebody 
required to build something there because of cabotage laws. 
Then they get nationalized and you would not have recourse.
    I gather that is currently taking place, and you addressed 
this in an earlier question, but just to explore, a group out 
of Houston has had their stuff nationalized. What are we going 
to do to push back against that sort of issue?
    Ambassador Tai. I have worked with partners across the 
administration on this. This issue has the attention of many of 
us working in our different issue areas, from energy to trade 
to commerce and more, including climate.
    So I want to assure you that this has the attention of the 
Biden administration and of USTR. We are looking at all the 
tools that we have to enforce what we know is in that 
agreement, but also to champion the cause of our stakeholders 
and North American competitiveness.
    Senator Cassidy. Thank you.
    I yield.
    The Chairman. All right. There is lots going on here today, 
Ambassador Tai. My understanding is the good souls here have 
agreed that Senator Warren will go next.
    Senator Warren. Thank you, Mr. Chairman. And thank you, 
Senator Brown.
    So, let's start with some good news. Ambassador Tai, your 
approach to a worker-centered trade policy is actually 
beginning to pay off. Thanks to your work, large groups of 
employees in Mexico voted overwhelmingly for new unions. That 
is good for those workers, and it helps level the playing field 
for American workers who do not have to compete against 
overseas factories that are paying below-poverty wages.
    But now the administration has announced plans to negotiate 
a new trade deal called the Indo-Pacific Economic Framework. 
Lobbyists for the giant corporations are celebrating the IPEF 
as the second-coming of the Trans-Pacific Partnership.
    Now, there is a reason that the original TPP was derailed. 
It would have offshored more jobs to countries that use child 
labor and prison labor, and pay workers almost nothing. Let me 
be clear. The IPEF cannot be TPP 2.0.
    Ambassador Tai, you will lead the negotiations on a key 
pillar of this new framework on fair and resilient trade. 
Commerce Secretary Gina Raimondo will lead the negotiations on 
several other pillars, and I urge the chairman to schedule a 
public hearing with her soon as well. But I want to ask you 
about your approach to these new negotiations.
    Ambassador Tai, you have included labor and climate as your 
two top areas of focus in these negotiations. Are you committed 
to including strong, enforceable commitments in these two areas 
in IPEF, and extending trade benefits only to countries that 
can meet these standards?
    Ambassador Tai. Senator Warren, thank you so much for this 
question, and thank you for highlighting the objectives that we 
have put out, including in our Federal Register notice 
recently.
    The short answer is ``yes.'' And the reason why these two 
areas are listed at the top of our list is to indicate that, in 
the exercise of setting high standards, one of the areas where 
the United States has consistently led around the world has 
been in incorporating strong, enforceable labor and environment 
standards to demonstrate our commitment to the importance of 
these areas in our competitiveness and in our terms of trade.
    Senator Warren. Good. They are the right goals, and you are 
already proving we can make this work. You know, our trade 
policy for far too long has been about lowering standards so 
that giant corporations can increase profits. Let's raise 
standards and build more of these jobs at home.
    Now I know that you are also going to be negotiating rules 
on the digital economy. Tech companies like Facebook and Amazon 
are a huge part of global trade, and are also involved in 
spreading misinformation, mistreating workers, and squashing 
competition. They also hire hordes of lobbyists to protect 
their appalling way of doing business.
    Ambassador Tai, will you ensure that any new digital trade 
rules promote competition so they benefit workers, consumers, 
and small businesses, and not just a handful of big tech 
companies?
    Ambassador Tai. Senator Warren, let me assure you that one 
of our guiding principles in all of our exercises, but in 
particular in the Indo-Pacific Economic Framework and the 
digital component of the trade pillar, is to ensure that our 
stakeholders' views are represented robustly and 
comprehensively, so that that table of advice and input is 
going to reflect our entire economy and not just parts of it.
    Senator Warren. I am very glad to hear that, and I very 
much appreciate your demonstrated commitment to labor, 
environmental, and competition standards. But frankly, I am 
worried that these higher standards will only be included in 
the trade pillar that you are responsible for negotiating.
    Secretary Raimondo will lead the negotiations on the three 
other pillars. And when she listed her priorities, labor 
standards and competition were absent. Based on this and her 
other comments, I am concerned that her approach will boost 
profits for giant corporations, the ones that offshore jobs and 
squash small businesses. That should be a nonstarter in our 
negotiations.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Warren.
    Senator Brown?
    Senator Brown. Thank you, and I----
    The Chairman. Always standing up for workers.
    Senator Brown. Thank you, Mr. Chairman. And Ambassador, it 
is wonderful to see you. I look at the chairman of this 
committee and the Trade Rep and, frankly, the last questioner, 
and I see the most pro-worker officials I have seen in this 
government in my time here. As the chair of the Finance 
Committee and Ambassador Tai have, I commend the administration 
on the recent success of the USMCA in raising labor standards 
in Mexico, to the use of the Brown-Wyden rapid response 
mechanism, and your leadership in lifting worker standards 
everywhere. We hope you say, when we lift worker standards 
everywhere, we help American workers. That is what your 
predecessors never understood, or never cared to understand. 
You do, and thank you for that.
    The President's 2022 trade policy agenda makes clear--as 
Senator Warren said, as Senator Wyden has said--this 
administration is taking a worker-centered approach to trade 
policy, as it always should have been.
    I know what bad trade policy has done in my State. We have 
lived with the wreckage caused by a trade policy lobbied by 
corporate interests, where Congress and administrations went 
along, that encouraged corporations to move products overseas 
in the name of efficiency--always ``efficiency,'' which I think 
is just business school speak for lower wages and more 
environmental pollution.
    You have taken a different approach. I am deeply indebted 
to you, and that is why I was at your confirmation a year-plus 
ago.
    My question--a couple of questions. In your testimony at 
Ways and Means, you said China is continuing to double down on 
unfair trade practices. You explained the administration will 
need to explore, quote, ``the design and build of new tools and 
strategic investments.''
    I have called for those strategic investments in 
manufacturing, in American industrial production, for all my 
time in Washington, including, as you know, as part of the 
failed TPP effort. I am glad you mentioned that. Yesterday--I 
know my colleague from Ohio brought up our bill, Leveling the 
Playing Field 2.0, which was included in the House-passed 
American COMPETES package. I am depending on Senator Portman to 
help us keep it in this version.
    You spoke about how this could help strengthen the 
enforcement. What other tools do we need to make good on the 
administration's commitments in supporting American workers?
    Ambassador Tai. Senator Brown, it is wonderful to see you. 
And thank you for your kind words. And I also celebrate the 
wins and our demonstration of how a worker-centered trade 
policy can work, and how we can do trade right.
    On new tools and strategic investments, let me just mention 
some of the efforts that are currently underway that are 
extremely promising. Leveling the Playing Field 2.0 is one of 
them, and I talked to Senator Portman about that. Frankly, the 
Uyghur Forced Labor Prevention Act that was passed and signed 
into law at the end of last year is another example--the CHIPS 
legislation that has been proposed in both chambers. And let me 
just say that all of these components are critically important 
and necessary, but also not sufficient.
    And so I look forward to working with you and your 
colleagues here in the Senate and the House on building out our 
suite of tools, including keeping all of you informed and 
engaged in receiving input on exercises like the negotiation 
with the European Union on a global steel arrangement that will 
promote fair competition as well as clean industries.
    Senator Brown. Thank you. It is very important to our 
country and to climate, so thank you.
    I have one other question, Mr. Chairman. I would like to 
bring up what the chairman spoke about earlier on revoking 
permanent normal trade relations with Russia. We have been 
appalled, all of us of course, well, most all of us, by 
Russia's invasion of Ukraine. It is a moral imperative that we 
do every single thing we can.
    I know that the former Vice President's daughter, Liz 
Cheney, a House member in Wyoming, talked about the Putin wing 
of the Republican Party. I am hopeful that that is not 
represented in the Senate, but I am not sure of that. But we do 
have agreement that Russia should not have free and unlimited 
access to our economy, or the global economy.
    The Senate has a chance to revoke PNTR with Russia. Senate 
Republicans keep blocking it, as you know. Every day that we 
let this stay on the books is another day we fail to support 
the Ukrainian people who have to live under the fire from this 
unprovoked imperialist Russian invasion.
    Could you speak to the importance of ending PNTR as the 
administration works to support Ukraine?
    Ambassador Tai. Senator Brown, I would be pleased to. The 
swiftness of the coordinated actions between the United States, 
the European Union, and our other allies and partners on the 
issue of pushing back and creating real, significant 
consequences for Russia's invasion of Ukraine and Russia's 
violation of Ukrainian sovereignty has been a real achievement.
    I want to commend the members of Congress for speaking up 
very quickly in a united way, in a bipartisan fashion, 
bicamerally, on the need to take PNTR away from Russia. That 
said, we are only halfway there. And we have said the words, 
but now we need to finish the act.
    It has been so important to have the U.S. Government 
speaking in one voice, and I look forward to working with you 
and others to get this over the finish line.
    Senator Brown. Thank you.
    The Chairman. Thank you, Senator Brown. I also very much 
appreciate your bringing up PNTR this morning, because this is 
the way--revoking PNTR--this is the way you deal a powerful 
body blow to Putin and the oligarchs. There were stunning 
reports over the weekend that basically anybody who makes money 
in Russia is giving Putin a cut. These oligarchs have enormous 
influence, and we have to get this PNTR revocation passed.
    And then, as Senator Brown and I have talked about, I would 
like to move on to another bill. If American companies are 
doing business in Russia and paying taxes to the Russian 
Government, we ought to take away foreign tax credits, because 
there is no reason that people in Oregon and Ohio ought to be 
subsidizing the Putin war machine.
    So we've got to get this PNTR done. Then we can move on to 
other important issues, and I thank Senator Brown.
    All right; our next three in order are Senator Casey, 
Senator Daines, and Senator Warner. And I hope we can get all 
three of them done before the vote.
    Senator Casey, are you online? Senator Daines is here.
    Senator Casey. Yes.
    The Chairman. Okay; Senator Casey, Senator Daines, and then 
Senator Warner. We are going to get them all done before the 
vote.
    Senator Casey?
    Senator Casey. Mr. Chairman, thanks very much. And I want 
to thank Ambassador Tai for coming to the hearing today and for 
being with us. I want to commend both you and the Biden-Harris 
administration for your critical work to promote a worker-
centric trade policy that lifts up our domestic production and 
our manufacturing capacities.
    As you know, Senator Cornyn and I have been working on a 
piece of legislation now for a good while, the National 
Critical Capability Defense Act, which sets up a committee to 
review offshoring of critical U.S. supply chains. As the 
pandemic has demonstrated, we need to enhance visibility of the 
supply chain vulnerabilities. This legislation, as you know, is 
also being led in the House by Representative Pascrell as well 
as Representative DeLauro. And I know you spoke in front of 
their committee yesterday, talking about leaving no stone 
unturned.
    And you may have seen last week that Secretary Raimondo 
said publicly that she would, quote, ``support enhancing our 
outbound investment screening.''
    So here is the question: how would outbound investment 
screening add to and enhance existing tools and strategies to 
prevent further offshoring that threatens our national 
security, our domestic supply chains, as well as threatening 
U.S. workers and leaving us dependent upon foreign adversaries, 
especially China and Russia?
    Ambassador Tai. Senator Casey, it is a really important 
issue, and I know you and I have spoken directly about your 
bill. In terms of your question, I think that what is critical 
about this particular type of tool is that it is keeping pace 
with the challenges that we are facing, and the risks that we 
are seeing in the competitive environment that our economy is 
in right now.
    So again, with respect to inbound screening, that is 
something where we have existing tools. As we are seeing new 
vulnerabilities arise in the outbound area, I think it is 
critical for us to be taking a look at tools like the one that 
you have proposed.
    Senator Casey. Thanks very much. And I have one final 
question for you on the Indo-Pacific Economic Framework. I hope 
that as the administration develops the framework, you take 
into account the decades of offshoring and unfair practices by 
these non-market economies that have left both our workers and 
our businesses at a competitive disadvantage.
    We need to ensure that our trade policy supports both safe 
and fair working conditions for workers across the globe. I 
know you understand that and believe that.
    I have been working on policies like the particular bill, 
the Women's Economic Empowerment in Trade Act, working with 
Senators Cortez Masto and Senator Menendez. As you know, the 
USMCA trade agreement included sweeping labor provisions, and 
we have seen the early success of the rapid response mechanism 
in supporting the workers' rights.
    So here is the question: how would USTR build on the 
lessons we have learned from past trade agreements and 
approaches to ensure that our trading partners are treating 
workers fairly in the future?
    Ambassador Tai. Senator Casey, I think that the United 
States is truly a global leader in this area as well, in terms 
of our trade practice and bringing our trade policies back to 
their roots, which is all about creating opportunities for all 
people. We are, I would like you to know, getting very good 
pickup from our trading partners, and at the World Trade 
Organization, in trying to renew this principle that trade 
policies are intended to benefit our economies, and the human 
components in our economies above all.
    So, in terms of the mechanisms and the standards that we 
have in USMCA, they are really at the cutting edge of 
international practice. We are looking forward to building on 
what we have already accomplished in the USMCA, and that is a 
guiding principle for our work across the board.
    Senator Casey. Thank you, Ambassador.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Casey.
    Next is Senator Daines, then Senator Warner.
    Senator Daines. Ambassador Tai, welcome. It is good to have 
you here.
    When I think about Montana, certainly reducing these unfair 
barriers to trade are so important for our farmers, our 
ranchers, our small businesses, so we can compete on a level 
playing field. Ninety-five percent of the world's consumers are 
outside the United States. That is a lot of mouths to feed, and 
the importance of being engaged in those markets is critical 
for Montana, for U.S. jobs, for economic growth.
    It is especially true, given China's growing economic and 
geopolitical influence in the Asia-Pacific and around the 
world. Regarding China, despite growth in exports for some 
commodities, it is pretty clear that China has not been meeting 
its agricultural purchasing or intellectual property 
commitments in that Phase One agreement.
    I was there in Beijing in 2019 working to get that Phase 
One agreement finalized, and we want to hold both sides 
accountable to make sure that we are living up to what we 
agreed to. So, would you tell us the latest on any negotiations 
with your Chinese counterparts on that Phase One deal? And how 
are you working to enforce both the ag and the IP provisions of 
the agreement?
    Ambassador Tai. Well, Senator Daines, I know that your 
experience with respect to China runs very deep, and you 
understand both the opportunities and also the significant 
challenges that we have coexisting with China in the global 
economy.
    We, as the Biden administration, thought it was very, very 
important to begin our bilateral engagement with China on that 
Phase One agreement and the commitments that China made to the 
U.S. Government and to U.S. stakeholders in that agreement. And 
that is why we have spent the past couple of months focused, in 
our conversation with China, on two aspects.
    One is China's performance in view of the promises that it 
made in that agreement, especially with respect to its purchase 
commitments which mean so much to our farmers and our ranchers 
and our agricultural producers. We have fought very, very hard 
to secure accommodations from China for the shortfalls that are 
apparent in the trade data.
    So far, as I have noted, the conversations have been very 
difficult. We are not going to close the door on those 
conversations. Nevertheless, we do need to move to a new phase 
of our engagement. And that includes looking more intensively 
at the overall industrial policy----
    Senator Daines. Let me ask you this. What confidence do you 
have--if we are not willing to get better compliance on the 
Phase One deal, why would that give you confidence we will do 
better here on another deal?
    Ambassador Tai. I think that we are not necessarily looking 
at another deal in the next phase, but to expanding out our 
focus on China's challenges, beyond its commitments and 
compliance in Phase One, to the issues that were not captured 
by Phase One or the original investigation on intellectual 
property and forced technology transfer, to industrial 
targeting practices, where we have seen China again and again 
corner the market in critical industries and now increasingly 
in future industries.
    Senator Daines. Thank you.
    I want to talk about another important country, and that is 
India. Late last fall, I traveled to India. I met Commerce 
Minister Goyal to advocate for reducing tariffs on Montana and 
U.S. ag. We talked a lot about pulse crops and saw firsthand 
some of the leading technology companies.
    I was down in Bangalore--it was Delhi and Bangalore where I 
spent some time. It is clear that in the coming years, India is 
going to play an even larger role in the region. And while it 
will not be easy, the U.S., I think, should consider entering 
formal negotiations with India, which presents an enormous 
opportunity for growth for U.S. farmers, especially in States 
like Montana, which is the number one producer of pulse crops, 
and indeed the number one consumer.
    What is USTR doing for the U.S.-India trade policy forum, 
or otherwise, to address these longstanding agricultural market 
access issues--it is not a new problem we have had with India--
and particularly related to pulse crops?
    Ambassador Tai. I heard about your visit also from Minister 
Goyal, who is very, very charismatic, and also a very strong 
advocate for his country's policies, some of which I think we 
will be able to strategically align with, and some of which 
will and have proven to continue to be challenging for us.
    It was very important for us at USTR, and for me 
personally, to go to Delhi to revive that Trade Policy Forum. 
As a result of the Trade Policy Forum, we secured commitments 
from India to open up trade for the first time, or to resume 
trade in a number of areas. The one that has been delivered on 
soonest has been access for U.S. pork and pork products into 
India.
    We will continue to build on this relationship, which is so 
strategically important, but also has traditionally been quite 
challenging.
    And I want to thank you for making that trip to India. That 
kind of tag-teaming is really critical, and I look forward to 
continuing to be able to do that with you with respect to India 
and other trading partners.
    Senator Daines. Ambassador Tai, thank you.
    I just want to conclude by saying I echo some of my 
colleagues' frustrations with the lack of a Chief Ag Negotiator 
at USTR. While we have you here, I just want to make sure you 
hear my frustration as well. That can hinder some of these 
efforts to go forward.
    This Chief Ag Negotiator is such an important role for ag-
producing States like Montana. It is the number one economic 
driver. In fact, well over 15 months into the administration, 
you currently do not even have a nominee to consider, which is 
unacceptable and, frankly, hurtful to our farmers and ranchers 
who, at the time, are battling high costs of fuel and high 
costs of fertilizer and drought.
    Ambassador Tai. Senator Daines, if I may quickly, the 
President has nominated someone, and we will nominate another 
person. I commit to you on that today.
    Senator Daines. Thank you.
    The Chairman. The time of the gentleman has expired.
    Okay, Senator Warner is next.
    Senator Warner. Thank you, Mr. Chairman. Ambassador Tai, it 
is good to see you, at least remotely, and I appreciate the 
chance that we had to meet in person recently.
    I am going to start my questions in terms of discussing our 
country's trade relationships with Africa, and first, 
specifically Ethiopia. I know that the President made a 
determination that Ethiopia, because of some of the human 
rights and other circumstances, was being pushed out of AGOA.
    I am concerned--I have a very large Ethiopian diaspora 
community in Virginia--that as we do that, we do it carefully, 
because of the ramifications it will have with the Ethiopian 
civilians, for the economy, for civil society, and particularly 
in light of the fact that there has been progress made. The 
government has reached some level of at least lifting the state 
of emergency and working with the Tigrayans to try to create 
some level of cease-fire. My hope is that we can improve our 
relationships with the Ethiopian government and, frankly, get 
Ethiopia back in AGOA.
    Can you speak about that relationship? And has the recent 
progress on the ground in Ethiopia sped up any of this process?
    Ambassador Tai. Senator Warner, I would be happy to comment 
here. I think that we have all been watching what has been 
happening in Ethiopia with grave concern. And as a humanitarian 
issue, it is really heartbreaking to see what is happening in 
that country.
    The revocation of AGOA benefits is a result of the criteria 
and the AGOA program as it is written. We are following the 
latest developments in Ethiopia. We are very much encouraging 
the government and others in Ethiopia to continue to make 
progress. We have set out a very, very clear set of benchmarks 
for Ethiopia that will create its pathway back into AGOA. And 
on this, we are working not just as USTR, but with partners 
throughout the administration, including the Special Envoy for 
the Horn of Africa, to support that pathway back.
    Senator Warner. Well, I would like to continue that 
conversation. I think the government in Addis Ababa has made 
significant strides forward. I think I want to make the 
humanitarian relationship with the Tigrayans. I think the 
lifting of the state of emergency is important.
    I am going to try to get two more questions in. One, I 
wanted to raise the status of the negotiations with Kenya, 
another opportunity. In Virginia, and I think in probably many 
States around the country--the fastest-growing population in 
the Commonwealth is the African diaspora, and this is an 
incredibly talented asset we feel in Virginia, and increasing 
our trade with everywhere in Africa is a great opportunity, but 
I know U.S.-Kenya trade conversations have been on your agenda. 
And if you can, give me any update on that; that would be 
great.
    Ambassador Tai. Yes, I would be happy to provide you an 
update. I believe this week--and if it is not this week, it 
will be next week--the head of my African Affairs Office is 
leading a delegation to Nairobi to continue to engage with our 
counterparts in the Kenyan Government around trade enhancements 
that we can work on. And we have exchanged a set of ideas back 
and forth, and I will be happy to report back, and have my team 
report back to yours on that trip as soon as they are back.
    Senator Warner. In my last comment and my last minute--and 
this is, respectfully, an area that the chairman and I have had 
some disagreements on--but I want to raise it with you, and 
that is the growing debate in our Congress about reforms to 
section 230 around the Communications Act and the protections 
that provides to many of our social media companies.
    I was concerned when section 230 protections were included 
in USMCA. And while there is a great amount of debate on this 
issue, I hope we can have that fulsome debate here and not 
individually include section 230 protections on other future 
trade agreements when I think there is a growing bipartisan 
consensus here in the Congress that we need to reform section 
230.
    So I will not ask for a comment on that, but I will look 
forward to continuing working with you and with the chairman on 
this issue.
    The Chairman. And, Ambassador, because I feel very strongly 
that that approach would be a mistake for America and a mistake 
for the world, Senator Warner and I will continue this debate 
offline, because we've got lots of members ready to ask 
questions. I just wanted to repeat how strongly I feel about 
it, and we will be talking about that.
    Okay, next is Senator Whitehouse, and then Senator 
Barrasso.
    Senator Whitehouse. Thanks, Mr. Chairman----
    The Chairman. Senator Whitehouse, are you there? And then 
Senator Barrasso.
    Senator Whitehouse. I am here. Thank you, Mr. Chairman, and 
thank you, Ambassador Tai.
    Ambassador, I would like to ask you a few questions about 
the Indo-Pacific Economic Framework on specific issues. And I 
have four different areas, and they are fairly complex, so I 
hope that you will feel free to, given that I have 4\1/2\ 
minutes now, take this as a question for the record and have 
your team get back to me, and I would hope by a set date so it 
is not just an unknown obligation to answer.
    The first has to do with ocean plastic waste. Scientific 
American has reported that 10 rivers contribute about a quarter 
of all the ocean plastic waste, and 8 of those rivers are in 
Asia. So, getting agreements to deal with the ocean plastic 
waste problem in the Indo-Pacific framework would seem to me to 
be a very important priority. That is one.
    Two is predatory Chinese fishing, which is a problem around 
the world, but particularly throughout Asia. I traveled 
extensively throughout Asia with Senator McCain, and in every 
Asian coastal country that we visited there was very strong 
resentment about the way the Chinese fishing fleet, often 
supported by the Chinese Navy, was treating their sovereign 
fisheries. I think this is actually an issue that really goes 
round the world, but particularly in this Indo-Pacific 
framework, I would be interested in what you are doing on both 
Chinese predatory fishing practices, and more generally pirate 
fishing, what is called IUU fishing, illegal fishing. So that 
is two.
    The third is climate. I am not sure what you are looking at 
for climate provisions in the framework, but we are obviously 
facing a huge crisis in particularly the sea level-impacted 
areas of the Pacific that are going to be crises in the future 
as they get overwhelmed by sea level rise, and unfortunately, 
in the not-too-distant future, it looks like for some of the 
major cities, and even breadbaskets like the delta in Vietnam.
    And the fourth is anti-kleptocracy. We have just seen 
played out in the Ukraine what happens when fossil fuel-funded 
kleptocrats can run their countries like dictators and destroy 
other nearby countries, or at least try to, using their 
military. I think the Biden administration has wisely 
understood that kleptocracy is actually a national security 
issue, and that areas in which people hide money and are able 
to seek rule-of-law shelter for ill-gotten gains, we have got 
to clean up that mess. And wherever there is a leak, that is 
where the crooked kleptocrats' money will go. So it is really 
important to have agreements across the nations of the world 
that they will stop providing that kind of sanctuary to crooked 
criminals and corrupt money around the world.
    So you now have 1 minute and 15 seconds to answer on all of 
that. So, it may be no more than ``I will get you an answer by 
X date on each one,'' but I offer those four questions to you.
    Ambassador Tai. Senator Whitehouse, let me just say a 
couple of words here. We will get answers to you on the QFR 
schedule that Senator Wyden sets out.
    On all of the issues that you have identified, we are 
interested and intending to cover them in the Indo-Pacific 
Economic Framework, many of them within the trade pillar. Anti-
kleptocracy I think, if we understand it, generally is 
anticorruption also.
    Senator Whitehouse. It is.
    Ambassador Tai. It will be a pillar that Secretary Raimondo 
is leading. I just want to emphasize that Secretary Raimondo 
and I have been working hand in glove on this economic 
framework, as have our teams and that, as we move forward into 
launch and into the discussions, we will continue that hand in 
glove partnership with each other, but also I want to 
incorporate all of the priorities that you and other members of 
this committee have.
    So I look forward to doing that work with you.
    [The questions appear in the appendix.]
    Senator Whitehouse. Start strong. These things usually do 
not get stronger in negotiations.
    Thanks; my time is up.
    The Chairman. The time of the gentleman has expired.
    Ambassador, I was not clear whether you wanted to answer 
today about 230, or to send a response for the record. What is 
your pleasure?
    Ambassador Tai. I would be happy to begin by responding 
today, Senator Wyden.
    The Chairman. Very well.
    Ambassador Tai. To Senator Warner's question, which is, we 
are at USTR very, very aware of the dynamics and the debate 
around this particular provision in U.S. law, and we will 
continue to follow it closely as we conduct our trade 
conversations.
    [The question appears in the appendix.]
    The Chairman. Very good. And we will obviously work with 
you. My interest here is very much connected to the trade 
space. And that is, 230 is all about the innovators. It is all 
about the risk-
takers. The big guys, they never have to worry. They can 
monetize any claims and the like. It is always about the people 
with the big new ideas. And what is striking is a lot of these 
platforms, when they were small, oh, my goodness, they thought 
230 was the greatest thing since night baseball was invented. 
But as they got big and powerful, they pulled up the drawbridge 
to try to hold down the little guys and the innovators.
    We will have that conversation in the future. Thank you.
    Senator Barrasso?
    Senator Barrasso. Thanks so much, Mr. Chairman. Madam 
Ambassador, it is nice to see you again. Thanks for your 
service. Thanks for taking time to meet with us today.
    When we last met to discuss President Biden's trade agenda, 
I raised some concerns about a number of issues. They included 
U.S. intellectual property rights protections; opening new 
markets to Wyoming's beef, soda ash, and energy; unfair Chinese 
trade practices; human rights violations; carbon border 
adjustments; World Trade Organization reform; and trade 
enforcement as well.
    And after more than a year, the administration, I believe, 
failed to address any of these concerns that I had. Instead of 
protecting American intellectual property for COVID vaccines, 
the administration worked vigorously at the WTO to give this 
intellectual property away.
    We have had the interaction, you and I, in this committee 
room about that. Instead of aggressively seeking new markets 
for American goods, President Biden has allowed our Nation to 
fall behind.
    Last year the trade deficit increased to an all-time high. 
From day one, the President made it clear that he was not 
really interested in negotiating new free trade agreements, and 
unfortunately, he has kept his word. Instead of prioritizing 
energy production at home so we can lower prices and increase 
exports to our friends, the President remains focused on 
shutting down U.S. energy production and exporting a wide array 
of liberal labor, social, and environmental policies instead.
    While America sits on the sidelines, China clearly is 
winning in this confrontation. This year, China signed the 
largest trade deal in history. The Regional Comprehensive 
Economic Partnership, the RCEP, encompasses one-third of the 
global GDP, 15 Indo-Pacific countries, and 53 percent of the 
world's exports. China understands the importance of not only 
market access, but also securing market share.
    So the question I have is, what is the Biden 
administration's solution to an Indo-Pacific Economic Framework 
that fails to provide market access or increased market share 
for U.S. producers? Is it a series of pillars or modules that 
countries in the region may or may not voluntarily join? It is 
also not clear to me how the framework will help us counter our 
adversaries and our competitors, including China.
    My home State of Wyoming understands and appreciates the 
importance of trade. It has been very important for us 
historically and presently. We need to work with our allies to 
exchange goods and services across resilient, reliable supply 
chains, and lower tariff barriers and trade barriers. We must 
provide relief for families facing skyrocketing prices, supply 
constraints, and the global pandemic. But Wyoming wants to 
strengthen our economy and create jobs, and the trade agenda 
falls way short of that.
    So, given your wealth of experience in international trade, 
can you explain how an agenda that exports progressive ideas 
instead of American-made goods and services is going to help 
our country keep pace with China?
    Ambassador Tai. Well, Senator Barrasso, it is good to see 
you. And I know we have had some very good conversations in the 
past. You know, I am disappointed to hear that you do not think 
that we have been doing anything, because I can assure you that 
my commitment to the United States, our economy, our 
stakeholders, and our trade policy is absolute.
    I guess I am trying to suss out the specific question that 
you have for me, which is, what have we been doing?
    Senator Barrasso. And I want to know how we recover the 
market share that we have already lost without aggressively 
pursuing market access for U.S. producers.
    Ambassador Tai. I do not actually think that we have lost 
market share, and let me just take as an example your point 
about the RCEP.
    That is a trade agreement between 15 countries that already 
have multiple trade agreements between them. So I think that in 
the economic analysis of the impacts of the RCEP on the United 
States economy, I do not think that there are significant or 
detectable impacts, because it is kind of a remix and match of 
what is already there.
    But let me also just--I want to stick up for myself in 
terms of all of the work that we have been doing over the 
course of the past year. And it does include market opening. 
Over the previous years, there was a lot of market closing, if 
you will. And there was a reason for it. But we feel very 
strongly that our approach to trade needs to be more strategic.
    And the first year, I dealt a lot with converting trade 
tensions that we had taken over into real wins for America, for 
our farmers, for our workers, and for our economy as a whole. 
You know, I do want to focus on your interest in this question 
of market share, because it is something that we are looking 
at.
    Specifically, with respect to our competition in trade with 
China, there I would say with respect to steel and aluminum, 
with respect to solar panels, we have lost market share. But 
that is because of the negative impacts of China's policies on 
us. And that is an area where we are extremely motivated to act 
and to act along with the U.S. Congress.
    Senator Barrasso. Thank you, Mr. Chairman. My time has 
expired.
    The Chairman. The time of the gentleman has expired.
    We have the good fortune of having Senator Hassan here, who 
is very knowledgeable about trade issues. She will close our 
hearing out. We may have a couple of other people, maximum, but 
just a very quick close for you, Ambassador, and I am glad we 
have Senator Hassan here.
    Ambassador, you have made significant progress on key 
issues, and this past year has been a bit less chaotic but no 
less challenging. You have had your hands full, and you have 
reduced tariffs on our exports to the EU. That is a good thing. 
It increased market access for our ag products, for example, to 
India. So your job is not for the faint-hearted. I am really 
glad that you keep coming back to the importance of 
transparency and consultation. A lot of members focus on that, 
and we look forward to working with you in the days ahead.
    Senator Hassan, we are ready for your comments, and 
probably one or two others coming back to close the hearing. 
Senator Hassan?
    Senator Hassan [presiding]. Well, thank you very much, Mr. 
Chair. And I appreciate your and Ranking Member Crapo's 
decision to hold this hearing. And I want to thank you, 
Ambassador Tai, for testifying today and for all your work on 
behalf of the American people and American businesses.
    The United States has led our allies around the world in 
imposing crippling economic sanctions on Vladimir Putin and his 
cronies for Russia's unprovoked invasion of Ukraine. We have to 
ensure that Putin cannot circumvent our sanctions, which is why 
Senator Cornyn and I are leading a bipartisan effort to close a 
loophole that allows Russia to prop up its economy by selling 
off its massive gold reserves.
    Ambassador, what tools does your office have available to 
help ensure that Russia does not evade any existing sanctions? 
And how can you continue to apply pressure on Putin for these 
unprovoked attacks?
    Ambassador Tai. Senator Hassan, this is such an important 
issue and so extremely timely and responsive to the challenges 
that we are facing in the global economy. The most direct tool 
that we have in the trade toolbox is how we treat Russia at the 
WTO. And the U.S. Congress has certainly spoken, and we have, 
in concert with our allies and our partners, made it very clear 
that Russia's behavior has disqualified it from the courtesies 
that we grant to our partners at the WTO.
    In terms of the circumvention concerns that you have 
raised, those are critical issues to how effective our 
sanctions will be. And I think that, in terms of the largest 
sets of sanctions that are related to the financial system and 
export controls, we are happy to work with our lead partners at 
the Commerce Department and at the Treasury Department in 
whatever way that we can.
    Senator Hassan. I appreciate that very much. This is not 
only a whole-of-government, it is a whole-of-country and whole-
of-
democracies response. So, thank you.
    I want to follow up with a question now about supply 
chains. Earlier this month, this committee held a hearing on 
out-competing China by strengthening economic ties with our 
allies in the Indo-Pacific region. I spoke with witnesses about 
ways to increase our supply chain resiliency, including through 
legislation I have developed to help bring back American 
manufacturing in strategically critical sectors.
    Ambassador, how is your office working to increase the 
security of critical U.S. supply chains, while also 
strengthening our alliances in the Indo-Pacific and beyond?
    Ambassador Tai. Well, this is really one of the critical 
issues that is before us and our trading partners right now, 
which is, after pursuing decades of efficiency-first trade 
policies that were all about unfettered trade liberalization, 
what are we going to do today in the face of 2 years of a 
pandemic where lockdowns are continuing even now, and also 
Russia's invasion of Ukraine, which is deeply disruptive to 
certain parts of our global trade?
    What are we going to do about our supply chain resilience? 
And in terms of USTR's role, we have been working in the inter-
agency, whole-of-government, whole-of-country effort. We need a 
supply chain task force, which is looking at combinations of 
our trade tools, whether they are around the enforcement and 
defensive side, or they are on the negotiation side, in terms 
of how we come together with our trading partners to help each 
other make each other stronger. How do we not just trade more, 
but trade smarter with each other?
    And we have had very, very good conversations. And I think 
that the Indo-Pacific Economic Framework is going to be a 
really critical forum for this type of collaboration, and 
frankly innovative thinking in terms of our trade policies. It 
is not something--it is not a problem we have solved for 
before, but it is really clear to all of us that the version of 
globalization that we have today is fragile and is reinforcing 
our insecurity.
    We need to figure out how we can trade with each other in a 
smarter way. And I do want to reinforce where you started, 
which is, it is about trade, and it is also about rebuilding 
the U.S. manufacturing base.
    Senator Hassan. Right. Thank you.
    I want to follow up on another important issue that we 
discussed at last year's trade agenda hearing regarding the 
small business chapter of the bipartisan U.S.-Mexico-Canada 
Agreement.
    In addition to cutting red tape for small New Hampshire 
business exporting to Canada and Mexico, the agreement also 
created a committee to give the small business community a 
voice in shaping our trade policy. Can you update us on your 
office's efforts to be responsive to small business input 
regarding trade with Canada and Mexico?
    Ambassador Tai. I would be happy to. I believe it was last 
October that we had actually a USMCA small business outreach 
event in Texas, I think San Antonio, but my team will correct 
me if I have gotten the wrong city.
    The small business chapter is one of the clear wins of the 
USMCA. And I just want to reinforce for you that in our ongoing 
conversations and our forward-looking conversations, we are 
carrying that small business record from USMCA into these new 
conversations, because this is a critical part of democratizing 
trade, bringing our trade policies to our people in our 
communities.
    Senator Hassan. Thank you very much. I really appreciate 
that.
    And I now will turn it over to Senator Cortez Masto. She is 
available virtually.
    Senator Cortez Masto. Thank you, Maggie. Thank you, Mr. 
Chairman.
    Ambassador Tai, it is always great to see you. Thank you 
for joining us again.
    There is one thing we talk about, and I am going to just 
bring it up with you again, and this is the tariff on solar 
panels. Here is my concern, and I think the concern of so many 
in the industry. With these aggressive tariffs, we are running 
the risk of actually undermining rapid solar deployment, and 
risking our ability to achieve the President's climate goals.
    Right now, in Nevada I have 600 IBEW-trained union workers 
ready to go to work this year building a 300-megawatt solar 
project in Nevada, but it is at risk if they cannot get the 
materials they need for construction.
    I also know the latest petition that has been presented to 
Congress risks cutting off the supply of over 80 percent of the 
solar panels needed to build out the development of our clean 
energy economy and create good-paying jobs and reach our 
climate goals.
    Now, I have raised this concern with Secretary Raimondo 
directly. We have sent letters in opposition. I have been 
joined by my colleague Senator Rosen on our concerns about 
this.
    Here it is in a nutshell. At the end of the day, I 
absolutely understand we need to grow solar manufacturing in 
this country. But we cannot do it overnight. And if we are 
going to make sure we continue with the growth and the jobs, 
and go down the clean energy path, we cannot chill it by 
continuing these tariffs or these investigations that are 
happening that are going to prevent installers and others from 
moving forward towards this clean energy future.
    So here is my ask of you, just as to Secretary Raimondo: 
how can you help us? Is there a path forward for resolving this 
issue so that we can support growing our domestic industry, 
holding countries like China accountable, but without putting 
critical clean energy projects and workers in my State and 
across the States, putting their jobs on the line?
    Ambassador Tai. Senator Cortez Masto, I know your views on 
this, and I know the impacts to the community that you 
represent in Nevada.
    Let me try to respond to your direct question in this way. 
I think that we do have the tools to thread this needle, where 
we need to rebuild our manufacturing capacity here at home, but 
also be able to deploy this available technology and support 
jobs in both parts of this sector.
    I will be the first one to admit that trade tools are 
powerful, but they have their limitations in bringing about the 
policy change that we need, and need to be deployed in 
combination with other policies. And I know that there are 
legislative initiatives as well to address some of these 
issues, and I want to let you know that we are very interested 
in ensuring that our trade policies can work in concert with 
other policies to better support all parts of our economy.
    Senator Cortez Masto. Thank you, Ambassador; I appreciate 
that. And I look forward to working with both you and Secretary 
Raimondo.
    I also--but let me just say this on a separate subject--I 
understand Senator Casey already talked to you about the 
Women's Economic Empowerment in Trade Act that he and I both 
worked together on. Thank you. Thank you for the good work you 
are doing there and your support of that legislation.
    Then finally, let me just jump to workers' rights. On March 
2nd, the USTR released both its 4-year strategic plan as well 
as its 2022 trade policy agenda and 2021 annual report to 
Congress. Both focus on pursuing a worker-centric trade policy 
and standing up for workers' rights.
    So, Ambassador, can you discuss how you plan to implement 
these policies and talk a little bit about them?
    Ambassador Tai. Certainly, Senator Cortez Masto. We have 
been implementing the policy already now for more than a year, 
and let me talk a little bit and give you some examples of our 
wins there, and talk a little bit about where we want to take 
this.
    So, the worker-centered trade policy is taking a new 
approach to our trade policies, where we are championing not 
just the biggest economic stakeholders and the biggest winners 
in our economy, but also bringing trade policy back to regular 
people and the communities in which they live.
    Our approach to resolving the 17-year-long dispute with the 
European Union on large civil aircraft is an example of 
bringing the spirit of worker-centrism to our trade policy. We 
worked with not just our aircraft makers and their suppliers, 
but also with the machinists who work for those companies, as 
we negotiated the agreement with the European Union and the 
United Kingdom so that when we got to the outcome, it was an 
outcome that reflects not just the interests of one part of our 
economy, but all parts.
    In this case, that agreement also led to the lifting of 
tariffs on both sides of the Atlantic, which we feel strongly 
further champions the interests of large segments of our 
economy.
    So the spirit of worker-centrism is one around uniting as 
much as possible American economic interests, including those 
of our people, behind what we do in trade. And we are very 
excited to build on our record from the first year, and do more 
in our second year.
    Senator Cortez Masto. Ambassador, thank you. Thank you 
again for joining us.
    Senator Hassan. Thank you, Senator Cortez Masto.
    I believe, Senator Bennet, you are out there in cyberspace 
somewhere?
    Senator Bennet. Thank you, Madam Chair. I really appreciate 
it very much. Can you hear me?
    Senator Hassan. Yes. And I am going to just interject for a 
minute. Because of the timing of votes and the timing of this 
hearing, Senator Bennet, I am going to turn over the gavel to 
you virtually, and you will ask your questions and close the 
hearing out, which we have confirmed with the knowledgeable 
people in the room is okay. And I am going to go back and vote.
    And, Ambassador, thank you so much.
    Senator Bennet [presiding]. That is bad news for Ambassador 
Tai, because I have about an hour's worth of questions for 
her--I am just kidding. I am just kidding.
    Ambassador Tai, can you hear me?
    Ambassador Tai. Yes, I can.
    Senator Bennet. Okay. Thank you for testifying before the 
committee today. I want to also lend my voice to underscore the 
need to nominate and confirm a Chief Agricultural Negotiator. I 
am hearing from Colorado farmers about their concerns on high 
input costs and regulatory challenges they are facing in 
international markets. And they need a permanent chief trade 
advocate for them here in Washington.
    Moving to the question, I am concerned that for years, 
across Democratic and Republican administrations we have 
neglected to implement a coherent strategy in the Indo-Pacific 
region. You and I have talked about that before. And instead, 
China has expanded its influence in that region and the world, 
including across Latin America, for example, in our own 
hemisphere.
    And I just wonder--in light of the supply chain disruptions 
due to COVID and ongoing global instability--whether you see 
potential opportunities to reshore critical supply chains to 
the U.S. where you can save our opportunities to strengthen 
partnerships across the Western Hemisphere through trade, and 
that might also give us a greater chance of strengthening the 
supply chains. And what challenges do you think we face in 
reshoring, or even near-shoring critical industries, and how 
can Congress help reduce any barriers there?
    Ambassador Tai. Senator Bennet, this is such a critical 
question. I think that one of the greatest barriers that we 
face is that we require new thinking. And new thinking is often 
met with fear, but then also sometimes just met quizzically.
    And so I think that the first barrier is bringing 
innovation to our trading partners around how we accomplish 
resiliency through trade. I have spoken a little bit about 
this, but our traditional trade policies have been about 
maximizing liberalization and creating incentives for 
efficiency for our firms. I think that our experience shows us 
that where we are today, we need to look for resilience. We 
need to look for ways to reestablish a sense of security and 
confidence in the global economy. And I think that that will be 
done through a combination of rebuilding a manufacturing base 
here in the United States and establishing trusted and 
strategic trade relationships with our partners and our 
friends.
    Senator Bennet. I would like very much the opportunity, if 
you have somebody who is doing some of that new thinking, to 
talk to them about it. Because I do think that this a moment 
where we are realizing that prioritizing making stuff as 
cheaply as possible in China versus, as you say, resilience or 
the chance to make things here in the United States for our own 
national security--there are all kinds of other values that I 
think our trade policy ought to reflect.
    Let me just quickly, in the last 2 minutes that I have, 
Ambassador, shift gears slightly. In your testimony, you state 
that the administration really wants the United States-India 
Trade Policy Forum. I know that has come up this morning, but I 
did not have the chance to hear it.
    India has been a critical U.S. ally. I am deeply concerned 
about the status and trajectory of our relationship with India, 
especially in light of Russia's invasion of Ukraine and India's 
reluctance to condemn what Vladimir Putin has done.
    Could you elaborate on the progress of that forum and 
discuss any challenges we face, and how our trade policy could 
strengthen our partnership with India? And then I will let you 
go.
    Ambassador Tai. Thank you, Senator Bennet. With respect to 
India, India is such an important trade partner, and a 
strategic partner. It is complicated. And we live in a 
complicated world.
    It was extremely important for us in the Biden 
administration to restart that Trade Policy Forum with India, 
and to do it at the ministerial level. So I went to Delhi last 
November to meet with my counterpart, Minister Goyal, and it 
was the first time in 4 years that the TPF had met at all. And 
the last time it met in 2017, it was so fraught that the two 
sides did not even issue a joint statement.
    This time we issued a joint statement that was really 
robust, around 5 pages I think, and it included important 
principles where we agreed to work together, as well as market 
access commitments that we have made to each other.
    So, I think that this will continue to be a complicated 
relationship, but to your point, it is an extremely important 
one and one where we need to continue to invest our dedication 
and our ability to make breakthroughs.
    Senator Bennet. Thank you for that. And on behalf of the 
committee, thank you for your testimony today, Ambassador Tai.
    This hearing is adjourned.
    [Whereupon, at 12:37 p.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


                Prepared Statement of Hon. Mike Crapo, 
                       a U.S. Senator From Idaho
    Thank you, Mr. Chairman. Welcome, Ambassador Tai.

    On your drive here, Ambassador Tai, you passed an inscription 
engraved on the National Archives: ``past is prologue.'' An enduring 
piece of past wisdom is President Reagan's 1982 address to the Nation 
on international free trade, which was founded on his personal 
commitment to free market principles, both at home and abroad.

    He explained that as Americans, we must, ``[I]nsist on sound 
domestic policies at home that bring down inflation . . . provide 
opportunity for free world countries [to] go forward and sustain the 
drive toward more open markets,'' such as the meeting he organized in 
Geneva that eventually led to the creation of the World Trade 
Organization (WTO). And most importantly negotiate--particularly for 
free trade agreements, like the United States' first two free trade 
agreements, with Israel and Canada, that were led by Reagan's 
administration.

    President Reagan's policies helped to break inflation and to 
restore American leadership on trade. But it seems President Biden's 
trade policy takes the opposite stance. At a time when inflation has 
soared to 7.9 percent, President Biden says he will not pursue trade 
agreements until his domestic agenda is complete. If ever enacted, this 
reckless spending agenda would not only make inflation worse, it would 
undercut U.S. leadership on trade by promoting a China-styled 
industrial policy.

    Proposed electric vehicle provisions, for example, will 
discriminate against 48 of the 50 models available for sale in the 
United States. It is no wonder why 25 foreign ambassadors told Congress 
these provisions breached our international trade obligations.

    I am disappointed that the administration continues to pursue this 
agenda, instead of focusing efforts on negotiations for new trade 
agreements. This is a shame, because the Biden administration knows 
better. Its 2022 trade agenda opens on the very point, and I quote: the 
``Biden administration recognizes that trade can--and should--be a 
force for good.''

    Absolutely. My home State of Idaho is proof positive of that 
proposition. In 2019, international trade supported over 200,000 Idaho 
jobs--or almost 20 percent of the State's employment. Trade 
liberalization also saves the average Idaho family of four more than 
$10,000 per year.

    The problem here is that President Biden's recognition of trade's 
overall importance is not matched with an agenda that contains the 
requisite ambition to succeed. There is not a single free trade 
agreement (FTA) under consideration in this agenda. Free trade 
agreements open opportunities. We have seen it over and over. The past 
really is prologue.

    Idaho's dairy exports to Korea increased by more than 250 percent 
since our free trade agreement entered into force in 2012. But, in lieu 
of trade agreements, this administration is proposing dialogues and 
frameworks, including the new Indo-
Pacific Economic Framework, or IPEF. IPEF may be a positive first step 
to engagement in Asia, but it is no substitute for a comprehensive 
trade agreement.

    The Center for Strategic and International Studies will soon 
release its upcoming analysis on IPEF, based on conversations with over 
a dozen governments in the Indo- Pacific.

    Two points from its analysis are instructive: first, U.S. 
engagement is welcome in the Indo-Pacific. One diplomat stressed, in 
particular, that his country wants the United States to ``lay out an 
affirmative economic strategy that complements its security presence in 
the region.'' Second, our partners ``see the IPEF as a proposal with 
many U.S. asks, few U.S. offers, and a variety of credible regional 
alternatives to the framework that could provide more tangible 
benefits.''

    If the U.S. is to meet and exceed China's challenge, then the U.S. 
must make stronger commitments than China. Regrettably, if the 
administration's negotiating ambitions are low, its consultations with 
Congress on the few negotiations actually taking place is even lower.

    At last year's trade agenda hearing, Ambassador Tai stated that she 
would brief this committee before and after each negotiating session 
with respect to a waiver of the WTO TRIPS Agreement. That hasn't 
happened.

    USTR recently issued a press release confirming that it had reached 
a ``compromise outcome'' on the TRIPS waiver in discussions with South 
Africa, India, and the European Union. USTR refuses to share the text 
of that ``outcome'' with this committee. While members may have 
different views on the merits of this waiver, every member here should 
agree with me that the administration cannot withhold documents 
concerning U.S. rights under a congressionally approved trade 
agreement. We need to see the document, and we need to ask questions, 
because that is what respect for the Constitution requires.

    There are serious questions to be asked. For example, last week, 
South Africa and India joined with Russia and China to establish the 
BRICS Vaccine R&D Center on vaccine cooperation. Congress should know 
whether the text permits South Africa and India to share insights on 
U.S. intellectual property with Russia and China.

    USTR's transparency with the public is also poor. The American 
innovators who developed the vaccines provided plenty of evidence on 
why a waiver is unnecessary, including that 20 billion doses will be 
produced this year--more than enough to achieve the World Health 
Organization's vaccination target. The administration, however, has not 
shared with the public any evidence as to why a waiver will get shots 
into arms any faster. As disappointed as I am about negotiations and 
congressional consultation, I also have concerns about enforcement.

    Americans need to compete on a level playing field, and I 
appreciate the administration's prosecution of two USMCA labor disputes 
under the Brown-Wyden mechanism. Yet, much more can be done. With 
respect to USMCA, agricultural market challenges remain. Mexico 
continues to restrict potatoes and delay approval of biotech crops. 
Discriminatory practices targeting our technology companies are also 
increasing. Rather than launch cases, the administration appears to be 
in retreat.

    For example, the trade agenda highlights that USTR reached 
agreements to terminate our section 301 investigations against various 
countries over discriminatory digital services taxes.

    Let us be very clear about what this means--those countries are 
going to continue imposing discriminatory taxes on U.S. firms. They may 
give a credit one day, but only if Congress approves the Biden 
administration's international tax deal. The Biden administration is 
blessing foreign governments which discriminate against Americans as 
long as Congress refuses to go along with its plan to cede taxing 
rights and revenue to foreign competitors.

    Let me close with where I started--past being prologue. History 
proves that Americans do not fear competition, but rise to it. Now is 
the time to seize on that history and to go further on trade, not 
shrink from it.

                                 ______
                                 
       Prepared Statement of Hon. Katherine C. Tai, United States
        Trade Representative, Executive Office of the President
    Thank you, Chairman Wyden, Ranking Member Crapo, and members of the 
committee. I appreciate the opportunity to be here today to discuss the 
President's trade agenda.

    President Biden believes that trade can be a force for good that 
grows the middle class and addresses inequality--if we get the rules 
right. To achieve those goals, trade must be grounded in fair 
competition, and workers should not have to compete against 
artificially low wages or unsafe working conditions. They should 
compete on the merits and today, I am pleased to update you on our path 
toward achieving those goals.

    The President also believes we are at our strongest when we work 
closely with our partners and allies around the world. Over the last 
year, in coordination with my colleagues across the Biden 
administration, we have worked to repair strained relationships and 
recommitted the United States to the world's institutions. These 
renewed partnerships have been instrumental to the strong, united 
response to Russia's unjustified attack on Ukraine.
                advancing a worker-centered trade policy
    Our agenda begins with a commitment to putting workers at the 
center of our trade policy. When we defend the rights of workers--both 
at home and abroad--labor standards go up, workplaces are safer, and we 
drive a ``race to the top.''

    This commitment is evident both in our enforcement of existing 
agreements like the United States-Mexico-Canada Agreement, as well as 
our efforts to put workers at the center of our discussions at 
multilateral fora like the OECD, WTO, ASEAN and APEC.

    We have also stepped up our efforts to eliminate the use of forced 
labor in global supply chains, and in January, USTR announced that we 
will develop the first-ever focused trade strategy to combat forced 
labor. Paired with the implementation of the Uyghur Forced Labor 
Prevention Act, this will send a clear message that the United States 
will use every tool available to block the importation of goods made 
partially or entirely with forced labor.

    Our agenda also recognizes that farmers, ranchers, fishers, and 
food manufacturers are key to our worker-centered trade policy, and we 
are fighting to achieve quick, economically meaningful wins. Some 
highlights from last year include:

          The 232 tariff arrangements and cooperative 
        frameworks for large civil aircraft with the EU and UK lifted 
        retaliatory tariffs on billions of dollars of U.S. exports--
        including agriculture products like butter, cheese, pork, nuts, 
        and distilled spirits;

          An agreement with Japan to increase the beef 
        safeguard trigger level under the U.S.-Japan Trade Agreement. 
        The new three-trigger safeguard mechanism will allow U.S. 
        exporters to meet Japan's growing demand for high-quality beef 
        and reduce the probability that Japan will impose higher 
        tariffs in the future;

          Regaining access for our shellfish industry to 
        the EU for the first time in a decade;

          Opening access for U.S. pork exports to India in 
        December 2021, following USTR's engagement under the U.S.-India 
        Trade Policy Forum;

          The Philippines' unilateral lowering of its 
        tariffs in April 2021 on imported fresh, chilled, and frozen 
        pork, and a 1-year increase of tariff rate quota volumes 
        following TIFA meetings; and

          Vietnam's approval in 2021 of pending biotech 
        regulatory applications following TIFA engagement, as well as 
        MFN duty reductions for corn, all classes of wheat, and frozen 
        pork.
              realigning the u.s.-china trade relationship
    The next major component of our trade agenda is the realignment of 
the U.S.-China trade relationship.

    As President Biden often says, competition with China must be fair. 
American workers, farmers, producers, and businesses must be able to 
compete on the merits, not against unfair state-led industrial planning 
and targeting of certain sectors, labor rights suppression, a weak 
environmental regime, or other distortions that put market-oriented 
participants out of business.

    In October, we launched a direct dialogue with the People's 
Republic of China (PRC) regarding our concerns with distortions and 
imbalances in our relationship. This included the PRC's failures to 
fulfill the purchase commitments detailed in the Phase One agreement, 
as well as the state-centered and non-market practices not addressed in 
the Phase One deal. It was important for us to fight for the farmers 
and businesses that benefit from those obligations and test how 
committed the PRC was to the obligations it signed up to.

    However, over time it became clear that the PRC would only comply 
with those trade obligations that fit its own interests. This is a 
familiar pattern with the PRC--from their actions at the WTO and in 
various bilateral high-level dialogues. The United States has 
repeatedly sought and obtained commitments from China, only to find 
that follow-through or real change remains elusive.

    While we continue to keep the door open to conversations with 
China, including on its Phase One commitments, we also need to 
acknowledge the agreement's limitations, and turn the page on the old 
playbook with China, which focused on changing its behavior. Instead, 
our strategy must expand beyond only pressing China for change and 
include vigorously defending our values and economic interests from the 
negative impacts of the PRC's unfair economic policies and practices.

    In the last year, we have worked hard to deepen our understanding 
of how these policies and practices affect our workers and industries, 
as well as those of our allies and partners, and global supply chain 
resiliency. We have seen what happened in the steel and solar 
industries when existing mechanisms were too slow or ill-suited to 
effectively address the distortions wrought by China's targeting of 
those sectors. In the meantime, we know that the PRC is targeting 
critical industrial and high-tech sectors, like electric vehicles, 
batteries, semiconductors and others.

    To ensure that our industries remain competitive, we must develop 
new domestic tools targeted at defending our economic interests, and 
make strategic investments in our economy. We have already made 
significant progress through the American Rescue Plan, the 
administration's focus on supply chain resilience, the Made in America 
Office and the Bipartisan Infrastructure law. But to truly boost 
America's competitiveness, we urge Congress to quickly pass the 
Bipartisan Innovation Act.

    President Biden also recognizes that our ability to defend against 
unfair PRC economic practices requires that market economies act in 
concert to confront policies and practices that are fundamentally at 
odds with the modern global trading system. That is why we have also 
brought a renewed focus to engagement with our partners and allies, who 
also are negatively impacted by the PRC's unfair trade and economic 
practices.

    At the same time, we are also working towards innovative 
arrangements with our allies and like-minded partners to strengthen our 
resilience. For example, the global arrangement we are currently 
negotiating with the EU will be world's first sectoral arrangement on 
steel and aluminum trade to tackle both emissions and non-market excess 
capacity.
    engaging with key trading partners and multilateral institutions
    Beyond this cooperation, we have deepened our engagement with key 
trading partners through new and existing bilateral, plurilateral and 
multilateral agreements and arrangements.

          We launched the U.S.-EU Trade and Technology Council to 
        promote shared economic growth through an expanded trade and 
        investment relationship by avoiding unnecessary barriers to 
        trade in emerging technology products and services, promoting 
        cooperation on labor rights, combatting child and forced labor, 
        and expanding resilient and sustainable global supply chains.

          We launched the U.S.-Japan Partnership on Trade to advance 
        an agenda of cooperation, as well as to address bilateral trade 
        issues of concern to either side.

          We continued our work under the USMCA to ensure that Canada 
        and Mexico fully implement their commitments.

          We relaunched the United States-India Trade Policy Forum to 
        enhance our relationship with India and make progress on 
        important bilateral trade irritants.

          And most recently, we hosted the first Dialogue on the 
        Future of Atlantic Trade in Baltimore, MD last week. We will 
        hold the second leg in Scotland next month to consider what 
        concrete, economically meaningful steps we can take to deepen 
        our trade relationship with the United Kingdom and create more 
        durable trade policies.

    The Biden administration is also committed to economic engagement 
with partners in the Indo-Pacific. The Indo-Pacific is one of the most 
dynamic regions in the world, and it is one of strategic importance to 
the United States. Additionally, the region is home to some of our 
closest allies and trading partners, including some with which we have 
longstanding trade agreements. By working closely with allies and 
partners to bolster our economic engagement in the Indo-Pacific, we can 
establish a new path forward that supports the global competitiveness 
of American workers and businesses and further the shared interests of 
our allies in the years to come.

    The goal of this framework will promote inclusive growth for 
workers and businesses, advance strong labor standards, and tackle 
climate change. The framework is also central to the Biden 
administration's economic strategy in the Indo-Pacific and complements 
our national security goals in the region.

    USTR will lead efforts to craft a trade arrangement with our 
partners that includes provisions on: high-standard labor commitments; 
environmental sustainability; the digital economy; sustainable food 
systems and science-based agricultural regulation; transparency and 
good regulatory practices; competition policy; and trade facilitation.

    Going forward, USTR will remain in close coordination and 
consultation with this committee and Congress to keep you updated and 
to develop this framework.

    On the multilateral front, the Biden administration has made clear 
its commitment to the WTO, and ensuring that it can be a force for good 
that confronts the pressing global challenges affecting the lives of 
people.

    The Biden administration supports a WTO reform agenda that reflects 
the priorities of our worker-centered approach, grounded in fair 
competition, to benefit workers and the environment.

    One of the top issues we are working towards is an outcome on 
intellectual property as part of the administration's broader efforts 
to end the pandemic. This has been a long and difficult process--and it 
is never easy to reach a consensus across the 164 members of the WTO. 
While no agreement on text has been reached, we will continue to engage 
with members to get as many safe and effective vaccines to as many 
people as fast as possible.
        promoting confidence in trade policy through enforcement
    The Biden administration is also clear-eyed about what happens when 
trade policy fails to deliver on its promises. Manufacturers, farmers 
and ranchers do not always get the full benefits of access to new 
markets and too many workers and communities suffer due to unfairly 
traded imports. This has created a trust gap with the public and is why 
enforcement is a key component of our worker-centered trade policy.

    For example, we have already employed the USMCA rapid response 
mechanism in two instances to defend workers' rights in Mexico. One 
critical aspect of this work is that we have been able to partner with 
the Mexican Government to deliver real results to workers. Working with 
other governments to advance a worker-centered trade policy is a 
bedrock of the Biden administration's approach because when we fight 
for workers abroad, we are fighting for workers here at home by 
combating a global race to the bottom.

    We cannot always achieve these results through cooperation, and we 
are also using state-to-state mechanisms when we need to. We pursued 
dispute settlement with Canada to ensure U.S. dairy farmers receive the 
fair treatment in the Canadian marketplace that is due to them. We have 
also initiated environmental consultations with Mexico designed to 
prevent illegal, unreported, and unregulated fishing.

    We are also upholding the eligibility requirements in our 
preference programs. The African Growth and Opportunity Act has unique 
rules to value rule of law and respect for human and labor rights as 
cornerstones of development.

    In November 2021, President Biden announced the termination of 
eligibility for Ethiopia, Guinea, and Mali due to a failure to meet the 
eligibility criteria, including those relating to human rights and rule 
of law. We remain committed to working with all three countries to meet 
the statutory benchmarks that would enable them to be reinstated in the 
AGOA program.

    We also recognize that despite our enforcement efforts, many of our 
existing trade tools were crafted decades ago. In some cases, they do 
not adequately address the challenges posed by today's economy. We are 
reviewing our existing trade tools and will work with Congress to 
develop new tools as needed.
           promoting equitable, inclusive, and durable trade 
              policy and expanding stakeholder engagement
    A final, important part of our trade agenda is promoting trade 
policy that is equitable, inclusive, and durable for all Americans and 
expanding stakeholder engagement.

    In order for our trade policies to be effective and lasting, we 
must make sure diverse perspectives are represented in the policymaking 
process, and that our policies reflect those viewpoints.

    The President's Trade Policy Agenda and Annual Report now includes 
strategic objectives and actions to advance racial and gender equity in 
trade policy. These actions will reflect the principles outlined in the 
executive orders President Biden has signed to date, namely Advancing 
Racial Equity and Support for Underserved Communities Through the 
Federal Government and Worker Organizing and Empowerment. It will also 
incorporate elements of the United States' first National Strategy on 
Gender Equity and Equality and the Presidential Memoranda on Tribal 
Consultation and Strengthening the Nation-to-Nation Relationship.

    We have been--and will continue pairing these values with 
sustained, long-term engagement with partners and stakeholders.

    Congress, including this committee, is our constitutional partner 
on trade. Having worked on the House Ways and Means Committee for 7 
years, I am committed to close consultations and a robust partnership 
between our two branches of government. We will continue this 
partnership through regular briefings and one-on-one engagement with 
you and your staffs.

    That engagement is critical given the ambition and scope of our 
agenda. One year into this position, I am more confident than ever that 
we can walk, chew gum, and play chess at the same time. Serving as 
United States Trade Representative and representing the Biden 
administration at home and abroad is the honor of my career. I am 
always inspired by the outstanding work and professionalism of the 
people that make up USTR--and I look forward to continuing this work in 
the year ahead.

    Thank you for your time, and I look forward to answering your 
questions.

                                 ______
                                 
      Questions Submitted for the Record to Hon. Katherine C. Tai
                 Questions Submitted by Hon. Ron Wyden
    Question. China has cheated, bullied, and stolen from American 
companies for decades. The playing field for American workers isn't 
just uneven--in some cases, we aren't even playing the same sport. The 
last administration correctly identified these problems--but they 
didn't get China to fix them. Stopping China's trade cheating is going 
to be tough, and your testimony highlights two big reasons why. One, 
China keeps making empty promises on trade. And two, China's government 
keeps meddling in the markets by targeting whole industrial sectors--
from steel to electric vehicle batteries--that it can subsidize, take 
over, and control. These issues are far too big to be solved by tariffs 
alone.

    How do you intend to chart a new course on China and ensure their 
trade cheating doesn't undercut U.S. manufacturers and workers?

    Answer. In October 2021, we launched a direct dialogue with China 
regarding our concerns with distortions and imbalances in our economic 
and trade relationship. This includes China's failures to fulfill the 
purchase commitments detailed in the U.S.-China Economic and Trade 
Agreement signed in January 2020, commonly referred to as the Phase One 
agreement. We also have been raising our concerns relating to China's 
harmful non-market policies and practices that were left unaddressed by 
the U.S.-China Phase One agreement, particularly China's industrial 
targeting, which can have a devastating impact on American workers and 
businesses as well as global trade.

    While we continue to keep the door open to conversations with 
China, including on its Phase One agreement commitments, we also need 
to acknowledge the Phase One agreement's limitations. Going forward, 
our strategy includes vigorously defending our values and economic 
interests from the negative impacts of China's non-market economic 
policies and practices. At the same time, we are not solely relying on 
bilateral engagement. We are actively reaching out to and enhancing our 
engagement with like-minded trading partners, both directly and through 
multilateral institutions, as we seek to develop and execute joint or 
coordinated strategies for addressing the unique challenges posed by 
China.

    As part of this effort, we are prepared to use whatever trade tools 
we have that may be necessary to protect U.S. interests, including our 
manufacturers and workers. That includes working with Congress to 
develop new trade tools. Our current trade tools are decades old and do 
not always take into account the realities of what trade looks like 
today.

    Question. When you were confirmed a year ago, you had a lot of 
tariffs--and retaliatory tariffs--on your plate. The Trump 
administration loved to place tariffs on products as a one-size-fits-
all response to any trade problem. But one thing it couldn't do was use 
the tariffs to actually solve the problems. In the last year, you 
brokered a truce in the 17-year Boeing-Airbus dispute, lifting tariffs 
that hurt American workers. And you've reached deals with our allies--
the EU, the UK, and Japan--to remove Trump's section 232 tariffs on 
steel and aluminum and get their commitment to fight overcapacity and 
carbon emissions in these sectors. But there's always more work to be 
done, especially on the China 301 tariffs. They're still hitting 
American companies that are reeling from COVID, supply chain 
disruptions, and inflation.

    Can you tell me about the work you've done--and the work you're 
continuing to do--to take the tariffs that were handed to you and turn 
them into solutions that benefit U.S. workers, farmers, and businesses?

    Answer. The administration is continually reviewing the China 
section 301 tariffs; this process is a key part of the Biden-Harris 
administration's deliberative, long-term vision for realigning the 
U.S.-China trade relationship around our priorities and making trade 
work for American workers and businesses. As part of this process, we 
have initiated and completed two separate exclusion processes--one on 
COVID-related products, and one addressed to over 500 previously 
extended but expired exclusions. In March, we reinstated exclusions 
where American workers, farmers, and domestic producers would benefit. 
We are continuing to consider additional exclusions processes, as 
warranted.

    Furthermore, we have started the process for the mandatory 4-year 
review of all the China 301 tariffs, as provided in the statute. The 
first step in the process is to notify representatives of domestic 
industries that benefit from the tariff actions of the possible 
termination of those actions and of the opportunity for the 
representatives to request continuation. If a request for continuation 
is received, USTR will conduct the statutory review of the tariff 
actions. That review would include a consideration of the effectiveness 
of the action in achieving the objectives of section 301, other actions 
that could be taken, and the effects of such actions on the United 
States economy, including consumers. The review would include an 
opportunity for all interested persons to submit their views.

    Further information may be found on the Four-Year Review page of 
the USTR website: https://ustr.gov/issue-areas/enforcement/section-301-
investigations/section-301-china-technology-transfer/china-section-301-
tariff-actions-and-exclusion-process/four-year-review.

    Question. The details of the Indo-Pacific Framework are still being 
worked out, however you've said the U.S. must ``bring something new to 
the conversation.'' Secretary Raimondo, for her part, has hailed the 
initiative as a ``new framework for a new economy''--a chance for the 
U.S. to accomplish things that wouldn't be possible in a garden-variety 
trade deal. This administration is thinking creatively about how to do 
more in the Indo-Pacific. That's important, because it's a region that 
is bustling with opportunity for Pacific Northwest farmers and 
manufacturers.

    How is the Indo-Pacific Economic Framework going to bulldoze 
barriers to trade and help folks in Oregon reach consumers in Asia?

    Answer. We are working to develop a worker-centered trade policy 
that benefits U.S. workers and consumers, and ensures that U.S. 
companies can continue to innovate and create new economic 
opportunities both in the United States and abroad. The Biden-Harris 
administration is committed to deepening our economic engagement with 
partners in the Indo-Pacific region and has launched the Indo-Pacific 
Economic Framework for Prosperity (IPEF). The IPEF will strengthen our 
economic ties to the region, while promoting inclusive growth for 
workers and businesses, advancing strong labor standards, and tackling 
climate change. As part of this effort, USTR will lead the work on a 
trade arrangement with our partners that includes high-standard 
commitments in the areas of labor, environmental sustainability, the 
digital economy, sustainable food systems and science-based 
agricultural regulation, transparency and good regulatory practices, 
competition policy, and trade facilitation. We look forward to 
continued close coordination with Congress on this initiative.

    Question. Today, digital trade is at the heart of our economy. It's 
not just how millions of consumers access everything from e-books to 
online banking. The Internet also underpins the logistics for getting 
American exports--from Oregon blueberries to Massachusetts 
cranberries--shipped around the world. A free and open Internet is also 
a critical engine for democracy, human and worker rights, and free 
expression--if you want proof, just look at China and Russia. Their 
governments are actively working to control the Internet so they can 
censor, surveil, and repress their citizens. It's a human rights 
disaster. If the U.S. wants to promote red, white, and blue American 
values and stay competitive in the 21st-century economy, strong digital 
trade rules are a necessity.

    It's important to leverage the Indo-Pacific Economic Framework to 
unite our allies and set strong digital rules of the road. Can you talk 
about your strategy? How will strong digital trade rules help U.S. 
workers, exporters, and consumers--as well as Internet users around the 
world?

    Answer. The development of strong digital trade rules remain a key 
priority in the Indo-Pacific Economic Framework for Prosperity. We will 
work together to build strong digital rules designed to help workers, 
consumers, and businesses effectively participate in the digital 
economy. New rules will build consumer trust, expand network access for 
all, and promote network security and reliability. These rules will 
allow like-minded countries to work together to protect our freedoms.

    Question. I fought hard to ensure USMCA would knock down barriers 
to Canadian markets for Oregon's dairy farmers. But if our dairy 
farmers are going to realize the benefits of the agreement, it must be 
fully implemented and enforced. And, right now, it sure looks like 
Canada is viewing its binding commitments as little more than a pinky 
swear.

    I commend you for staying tough on the Canadians on behalf of our 
dairy farmers. You have already filed and won a dispute to ensure that 
our farmers are getting the Canadian market access that was bargained 
for. But as I understand it, Canada's proposed remedy looks nearly 
identical to what it was already doing!

    What are your next steps? How will you make sure Canada comes into 
compliance with its USMCA obligations?

    Answer. Fully implementing the USMCA and ensuring that it benefits 
American farmers, exporters, and workers is a top priority for the 
administration. We secured a major win for the dairy sector when a 
USMCA dispute settlement panel agreed with the U.S. claim that Canada 
reserving access to in-quota quantities of its dairy tariff-rate quotas 
(TRQs) exclusively for processors breaches its USMCA commitments. These 
reserved pools undermine the value of the TRQs for U.S. farmers, 
processors, and exporters. On May 16, 2022, Canada published policy 
changes to implement the panel's finding. The United States rejects 
these changes as a basis to resolve the dispute because Canada remains 
out of compliance with its USMCA obligations. USTR initiated a second 
USMCA dispute on Canada's allocation measures on May 25th.

    Question. United States trade policy should ensure a level playing 
field for American workers and companies of all sizes. If the rules are 
fair, the U.S. can out-
compete and out-innovate anybody.

    But when our trading partners pass laws that target American 
companies and favor their homegrown industries, they aren't playing by 
the rules. They're tipping the scales against American workers and 
making it harder for the U.S. to compete.

    One of our biggest trading partners--the EU--seems to be tipping 
the scales of the digital economy. EU leaders have been pretty clear 
that they want to achieve ``tech sovereignty'' by preventing U.S. 
companies from competing fairly in Europe. In the past few years, the 
EU has hit U.S. companies with discriminatory taxes. They've finalized 
new competition rules over the objections of the Biden administration 
and some members of this committee. And they're pursuing a raft of 
other digital measures that will make it harder for U.S. companies to 
compete on a level playing field. Now, the EU is a critical ally, 
especially given the situation in Ukraine. But that doesn't mean we can 
stand down when they toss the trade rule book out the window

    What steps are you taking to ensure the EU's digital trade policies 
don't unfairly discriminate against American companies and workers?

    Answer. We are engaged with the EU on digital trade issues both in 
the Trade and Technology Council and also in bilateral discussions. In 
the context of the digital economy, the United States and the EU are 
both committed to protecting workers, privacy, cybersecurity, and 
consumer rights and we both want our markets to be fair and 
competitive. We share many of the concerns animating EU action on many 
policy issues. When governments exercise their regulatory powers, they 
should not do so on the basis of advancing the interests of national 
champions at the expense of foreign competitors.

                                 ______
                                 
                 Questions Submitted by Hon. Mike Crapo
    Question. In your opening statement, you report that China failed 
to live up to the Phase One agreement. It is easier for the public to 
see China's unfulfilled purchase commitments but it is much harder for 
anyone to know where China fell short on its structural commitments.

    Why doesn't USTR provide this committee with its assessment on 
which obligations China failed to comply?

    How do you plan to redress China's failure to meet any commitments?

    Answer. As noted in our China WTO Compliance Report, China followed 
through in implementing some provisions of the Phase One agreement. At 
the same time, China has not yet implemented some other significant 
commitments, such as those in the area of agricultural biotechnology 
and the required risk assessment that China is to conduct relating to 
the use of ractopamine in cattle and swine. Other commitments that 
China made, such as in the area of technology transfer, are difficult 
to verify given the tactics that China takes to obscure its activities. 
And as you note, it is clear that China did not fully implement its 
Phase One agreement purchase commitments, and we have been discussing 
with our Chinese counterparts how China plans to rectify the purchase 
shortfalls.

    We continue to consult with China on the implementation of the 
Phase One agreement, and all options remain on the table in dealing 
with China's compliance failures. We also need to acknowledge the 
limitations of the Phase One agreement and past approaches to dealing 
with China. Our strategies must expand beyond exclusively pressing 
China for compliance with past commitments. We need to include the 
vigorous defense of our economic interests in the face of China's 
unfair policies and practices. And we need to work more closely with 
like-minded trading partners on new strategies, as we are doing.

    Question. Chinese companies are manufacturing vaccines in 
developing countries, including Egypt and Algeria.

    Would the ``compromise outcome'' allow such countries to let 
Chinese-owned facilities take advantage of the TRIPS waiver?

    Answer. I appreciate your concerns. Since the WTO Director-General 
has released an official draft text, USTR has been conducting 
consultations with Congress and stakeholders on all aspects of the text 
and its implications, including the concern you have raised.

    Question. According to the Pharmaceutical Industry Labor Management 
Association, or PILMA, America's biopharmaceutical industry supports 22 
million union labor hours. As they note, ``union hands craft the COVID 
cure.'' PILMA opposes the waiver. Given that USTR is focused on a 
worker-centered trade policy, I would hope USTR at least examined the 
potential impact on U.S. jobs if a waiver goes forward.

    Has USTR prepared any assessment on how a waiver would affect 
workers in the biopharmaceutical industry, and if so, why has it not 
published it?

    Answer. USTR has had regular consultations with interested parties 
throughout the process of discussions on this issue. These interested 
parties have included Congress, labor organizations, civil society, 
public health advocates, public health experts both inside and outside 
of the government, and vaccine manufacturers themselves.

    Now that the WTO Director-General has released the official text, 
USTR has begun its consultations on that text with Congress and 
stakeholders.

    Question. The administration is very clear that IPEF will not 
include market access initiatives.

    Given that the administration wants to raise our trading partners' 
labor and environmental standards through IPEF, why take the carrot of 
market access off the table?

    Answer. The Biden-Harris administration is committed to economic 
engagement with partners in the Indo-Pacific region and has launched 
the Indo-Pacific Economic Framework for Prosperity (IPEF). The IPEF 
will strengthen our economic ties to the region, while promoting 
inclusive growth for workers and businesses, advancing strong labor 
standards, and tackling climate change. It is correct that market 
access, in the form of tariff liberalization, is not currently being 
considered as part of the IPEF trade pillar. However, the trade pillar 
will include binding and non-binding rules that will enhance access to 
markets by creating a common set of rules and norms. The high-standard 
commitments we are seeking will establish a strong foundation for a 
worker-centric trade policy that will support high-quality American 
jobs and underpin innovative growth for American farmers, producers, 
and businesses. As part of this effort, USTR will lead work on a trade 
arrangement with our partners that includes high-standard commitments 
in the areas of labor, environmental sustainability, the digital 
economy, agriculture, transparency and good regulatory practices, 
competition policy, and trade facilitation. We look forward to 
continued close coordination with Congress on this initiative.

    Question. Earlier this month Canada released proposed changes to 
its dairy Tariff Rate Quota, or TRQ, system.

    Unfortunately, that proposal would land U.S. dairy farmers and 
manufacturers in basically the same spot they are today--forced largely 
to sell to their direct competitors in Canada.

    This is neither the type of reform I expected to see when the U.S. 
launched the case last year nor one that I expect the U.S. to settle 
for, now.

    How will you leverage the tools available in USMCA to bring about 
Canadian compliance with all of its USMCA dairy obligations?

    Answer. Fully implementing the USMCA and ensuring that it benefits 
American farmers, exporters, and workers is a top priority for the 
administration. We secured a major win for the dairy sector when a 
USMCA dispute settlement panel agreed with the U.S. claim that Canada 
reserving access to in-quota quantities of its dairy TRQs exclusively 
for processors breaches its USMCA commitments. These reserved pools 
undermine the value of the TRQs for U.S. farmers, processors, and 
exporters. On May 16, 2022, Canada published policy changes to 
implement the panel's finding. The United States rejects these changes 
as a basis to resolve the dispute because Canada remains out of 
compliance with its USMCA obligations. USTR initiated a second USMCA 
dispute on Canada's allocation measures on May 25th.

    Question. The European Union (EU) speaks of promoting ``European 
digital sovereignty.''

    The recent text of the European Digital Markets Act appears to 
target U.S. companies through thresholds that exclude not only European 
firms, but also Chinese firms.

    Rather than targeting our companies, the EU should be partnering 
with the United States in the face of increasing digital 
authoritarianism globally

    How will you convince the EU to apply its digital measures even-
handedly--including with respect to the Digital Markets Act?

    Answer. We are engaged with the EU on digital trade issues both in 
the Trade and Technology Council and also in direct bilateral 
discussions. It is clear that, in the context of the digital economy, 
the United States and the EU are both committed to protecting workers, 
privacy, cybersecurity, and consumer rights and we both want our 
markets to be fair and competitive. We share many of the concerns 
animating EU action on many policy issues. When governments exercise 
their regulatory powers, they should not do so on the basis of 
advancing the interests of national champions at the expense of foreign 
competitors.

    Question. The trade agenda states that ``the Biden administration 
supports a WTO reform agenda.''

    One of the major issues to reform is dispute settlement, including 
the Appellate Body. There are problems with the dispute settlement 
process, including the amount of time it took to resolve cases.

    However, our allies tell me that it is very important to bring back 
dispute settlement so that they may confront China's practices, since 
they otherwise lack the economic scale necessary to wage a trade war.

    When will the Biden administration table a proposal to reform WTO 
dispute settlement, and what ideas might it include?

    Answer. There have been longstanding, bipartisan concerns with the 
way that the dispute settlement system has been functioning and for 
years the United States has been saying there needs to be a course 
correction. The Biden administration shares these bipartisan concerns, 
including on decisions by the WTO Appellate Body that have harmed the 
ability of the United States and other market economies to address 
China's non-market economic distortions that harm U.S. workers and 
businesses. I believe that a central feature of reform must be to 
revitalize the agency of WTO members in securing acceptable resolutions 
and to ensure that WTO dispute settlement does not impose new 
obligations and take away rights in a way that was never agreed to by 
members--or approved by Congress.

    The first step to achieving lasting reform is to understand what 
all WTO members want and need from dispute settlement. A true reform 
discussion should aim to ensure that WTO dispute settlement reflects 
the real interests of members. An inclusive, informal discussion that 
does not prejudge what a reformed system would look like provides us 
with the greatest chance of achieving reform. We look forward to 
continuing these informal discussions with WTO members. While those 
discussions occur, WTO dispute settlement remains available through a 
number of different procedures, including arbitration agreed between 
WTO members.

    Question. In terms of the USMCA, as I have said before in concert 
with Chairman Wyden, enforcement needs to be the priority. America's 
businesses, workers and farmers need to compete on a level playing 
field--but the administration can also stand up for them by challenging 
other market access barriers at the same time.

    Do you agree that Mexico appears to be moving in the wrong 
direction, in many ways?

    If so, what do you intend to do about it?

    Answer. USTR has serious concerns with the deteriorating trajectory 
of Mexico's energy policies, including a series of ongoing actions the 
Mexican Government has taken to increase state control over, and limit 
competition in, the energy sector. USTR is actively assessing these 
developments, and as I wrote to Secretary of Economy Tatiana Clouthier 
on March 31, 2022, I will be considering all available options under 
the USMCA to address these concerns.

    Additionally, I have been working closely with Secretary Vilsack to 
address challenges for American agriculture in Mexico. I am examining 
biotech policies and developments in Mexico carefully and have raised 
concerns with Mexico's Secretary of Economy Clouthier and Agriculture 
Secretary Villalobos. I will continue engaging them to ensure Mexico 
fulfills its USMCA obligations and addresses issues that affect the 
commercialization of biotech products.

    USTR is considering all options available under the USMCA to 
address these issues, as well as other areas of concern.

    Question. I am disappointed to see that USTR has not decided to 
pursue free trade agreement negotiations with the UK and Kenya to date. 
I think it is important that we act in a timely fashion as the UK is 
already pursuing new trade deals, and it is critical that we deepen our 
engagement with Africa.

    Is USTR still reviewing whether to pursue free trade agreement 
negotiations with these countries, and if so, why has the review not 
concluded?

    Answer. In March 2022, I hosted United Kingdom Secretary of State 
for International Trade Anne-Marie Trevelyan for the first joint U.S./
UK Dialogues on the Future of Atlantic Trade in Baltimore, Maryland. 
Then in April 2022, we held the second round of dialogues in Scotland 
and England. Following President Biden and Prime Minister Boris 
Johnson's announcement last year of a new ``Atlantic Charter,'' the 
U.S./UK Dialogues on the Future of Atlantic Trade are exploring how the 
United States and United Kingdom will collaborate to advance mutual 
international trade priorities rooted in our shared values, while 
promoting innovation and inclusive economic growth for workers and 
businesses on both sides of the Atlantic.

    I have also held several meetings with Betty Maina, the Kenyan 
Cabinet Secretary for the Ministry of Industrialization, Trade, and 
Enterprise Development, to discuss the importance of the U.S.-Kenya 
relationship and strengthening ties between both countries. We agreed 
to direct our respective teams to pursue a deepening of the United 
States-Kenya trade relationship in a manner that benefits workers, 
attracts investment, and promotes regional economic integration. Toward 
that end, Assistant United States Trade Representative for African 
Affairs Constance Hamilton held meetings in Kenya on May 3rd through 
May 6, 2022. She led a delegation of 14 Washington-based U.S. officials 
that included subject-matter experts from USTR and the Departments of 
State, Labor, Commerce, and Agriculture. The discussions between the 
U.S. and Kenyan delegations covered a wide range of topics and proved 
very productive, identifying areas of convergence and deepening our 
mutual understanding on how to best strengthen our bilateral trade 
engagement.

                                 ______
                                 
               Questions Submitted by Hon. Chuck Grassley
    Question. I understand that the Brazilian Government was facing 
pressure over high gas prices so they moved to eliminate the tariff 
this year on American ethanol which is good news.

    What work is being done to permanently end this tariff?

    Answer. USTR and USDA have engaged extensively with Brazil on this 
issue in the nearly 5 years since it implemented a tariff rate quota on 
imports of ethanol in September 2017. As part of Mercosur, Brazil 
started applying, an across-the board tariff of 20 percent on all 
ethanol imports in December 2020, before temporarily lowering that 
tariff to 18 percent in November 2021. We are very pleased by Brazil's 
more recent elimination of tariffs on ethanol imports for the remainder 
of this calendar year. Bilateral trade of ethanol is in both of our 
interests, and USTR will continue engaging with Brazil in advance of 
the expiration of tariff relief in efforts to avoid the uncertainty of 
past years and establish reciprocal conditions for bilateral trade.

    Question. I have seen one of your pillars in the 2022 trade policy 
agenda is to engage with key trading partners to incentivize climate 
action.

    As you likely know, emissions from corn ethanol are 46-percent 
lower than conventional gasoline. Biodiesel and renewable diesel can 
reduce emissions by 85 percent over conventional diesel.

    Does this include U.S. produced biofuels?

    Answer. We have encouraged trading partners to establish biofuel 
policies that align with current U.S. law and regulations under the 
Renewable Fuel Standard, and will continue to do so.

    Question. India has aggressive timelines for implementing E20 
across the country. However, without imports they will not be able to 
meet their climate and air quality goals.

    How can the United States best engage with India on market access 
for U.S. biofuels?

    Answer. We are actively engaging through the U.S.-India Trade 
Policy Forum's working group on agricultural goods to expand access to 
the Indian market for U.S. biofuels. We continue to press India to 
rescind its prohibition on imports of ethanol destined for fuel use, 
which would also help India to meet its own climate goals.

    Question. President Biden has set forth extremely ambitious 
renewable energy goals. Please explain generally, how does the current 
investigation at the Department of Commerce regarding solar cells from 
four southeastern Asian countries comport with those clean energy and 
climate goals, particularly his net-zero carbon goal by 2035 for the 
electric utility sector?

    Answer. The Commerce Department has authority for antidumping and 
countervailing duty investigations and is following the statutory 
processes, including the deadlines set by statute, for investigating 
possible circumvention of AD and CVD orders on solar cells and modules 
from China. USTR does not have a role in how or when the Commerce 
Department makes anticircumvention determinations.

    Question. The investigation initiated by the Department of Commerce 
adds great uncertainty to the solar supply chain and may impact solar 
projects in Iowa as well as the local economies and jobs they support. 
An efficient and expeditious investigation is imperative to removing 
that uncertainty as quickly as possible.

    Do you support accelerating the investigation timeline for a 
preliminary determination identified in the Commerce decision?

    Will USTR help in resolving this issue so that critical clean 
energy projects can move forward?

    Answer. The Commerce Department has authority for antidumping and 
countervailing duty investigations and is following the statutory 
processes, including the deadlines set by statute, for investigating 
possible circumvention of AD and CVD orders on solar cells and modules 
from China. USTR does not have a role in how or when the Commerce 
Department makes anticircumvention determinations.

    Question. Separate from the Commerce investigation, what longer 
term steps are USTR taking to ensure that clean energy is deployed with 
more international trade certainty?

    Answer. USTR continues to examine how we can leverage U.S. 
companies' innovation and domestic production of environmental goods to 
benefit U.S. jobs and increase exports. We also continue to work with 
international partners bilaterally and multilaterally to discuss how we 
can facilitate trade in climate aligned and low-emissions goods, 
including those used to generate clean energy.

    Question. Record-high lumber prices and volatility continue to harm 
housing affordability. This will continue to be the case as long as 
lumber remains expensive and scarce.

    We still do not have a softwood lumber agreement with Canada. As 
best as I can tell, we are not even at the negotiating table on this. 
Why is this and what progress, if any, can you speak to on this 
critical issue?

    Answer. I continue to discuss softwood lumber with my Canadian 
counterpart. The United States is open to resolving our differences 
with Canada over softwood lumber, but it would require addressing 
Canadian policies that create an uneven playing field for the U.S. 
industry. Unfortunately, to date, Canada has not been willing to 
address these concerns adequately.

    Question. I would like to have more information on the Indo-Pacific 
Economic Framework that the Biden administration continues to work on.

    What criteria is the administration using as it considers which 
countries are appropriate partners?

    What is the timeline for this framework?

    Will Taiwan be included in the framework?

    Answer. We are working to develop a worker-centered trade policy 
that benefits U.S. workers and consumers, and ensures that U.S. 
companies can continue to innovate and create new economic 
opportunities both in the United States and abroad. The Biden-Harris 
administration is committed to economic engagement with partners in the 
Indo-Pacific region and has launched the Indo-Pacific Economic 
Framework for Prosperity (IPEF). The IPEF will strengthen our economic 
ties to the region, while promoting inclusive growth for workers and 
businesses, advancing strong labor standards, and tackling climate 
change. We are pleased to have launched IPEF with an initial strong, 
diverse group of Indo-Pacific partners.

    We expect that negotiation of the Indo-Pacific Economic Framework 
will progress at different speeds across the various pillars. While we 
want to produce results quickly, we must let the substance drive the 
timeline.

    Taiwan is a critical trading partner of the United States, and 
under President Biden, we've only strengthened and deepened our 
economic partnership by restarting Trade and Investment Framework 
Agreement talks and launching the Technology Trade and Investment 
Collaboration (TTIC) framework under Commerce. We look forward to 
continuing to strengthen and deepen those economic ties under the Biden 
administration. In fact, on June 1, USTR launched the U.S.-Taiwan 
Initiative on 21st-Century Trade, which is intended to develop concrete 
ways to deepen the economic and trade relationship, advance mutual 
trade priorities based on shared values, and promote innovation and 
inclusive economic growth for our workers and businesses. We are 
pleased to be launching IPEF with an initial strong, diverse group of 
Indo-Pacific partners. Moving forward, we will work with IPEF partners 
to considering expanding membership in IPEF.

    Question. The Biden administration often outlines a top priority is 
having a 
worker-centered trade policy.

    Could you explain to me how support for an IP waiver advances U.S. 
economic, entrepreneurial, and worker interests? How does this grow 
American jobs and support American workers?

    Answer. The pandemic has taken a devastating toll on the global 
economy. It is in our collective interest, both morally and 
economically, to end the pandemic. In announcing support for a waiver 
of intellectual property protections, the Biden-
Harris administration showed its commitment to promoting access to 
vaccines for people all over the world, as part of the effort to end 
the pandemic and put the global economy back on sound footing. A 
healthier global economy will, in turn, be good for American economic, 
entrepreneurial, and worker interests.

    Question. Has the administration conducted an analysis on the 
impact of a TRIPS waiver on U.S. competitiveness? If so, please provide 
this analysis and any background materials.

    Answer. USTR has had regular consultations with interested parties 
throughout the process of discussions on this issue. These interested 
parties have included Congress, labor organizations, civil society, 
public health advocates, public health experts both inside and outside 
of the government, and vaccine manufacturers themselves. Also, in light 
of variants, there is considerable uncertainty about how many vaccines 
will be required to vaccinate the world over the long term.

    Now that the WTO Director-General has released the official text, 
USTR has begun its consultations on that text with Congress and 
stakeholders.

                                 ______
                                 
               Questions Submitted by Hon. Maria Cantwell
    Question. If we could just remove the section 232 tariffs on Indian 
steel and aluminum, I would expect India would get rid of their 
retaliatory tariffs on lentils, apples, and a host of other goods. 
Washington apple exports have declined precipitously after India placed 
retaliatory tariffs on the product in June 2019, declining from a $120 
million market in 2018 to $21 million in 2021.

    You're working on the IPEF and it has no provisions to open 
markets. You said that trade agreements were so 20th century. Putting 
these facts together, I'm not sure how you are going to increase and 
open up trade. My agriculture industry wants to grow exports to India--
very simply, we need to get rid of the tariffs and rebuild our trade 
relations.

    I appreciate that steel and aluminum negotiations are progressing 
with the UK. Are you undertaking similar negotiations with India? How 
are we going to resolve the trade conditions we currently have with 
India and facilitate the opening of the India market for Washington 
apples, and other goods?

    Answer. I understand that India's retaliatory tariffs have 
negatively impacted U.S. exports, particularly agricultural exports, 
and I will explore prospects for working with India to address the root 
causes of excess capacity in the global steel and aluminum markets. We 
believe that India's duties are inconsistent with WTO rules and are 
challenging them in a WTO dispute. As the Secretary of Commerce's 
findings formed the bases for the actions taken under section 232 and 
the Secretary is charged with, among other things, reviewing the status 
of steel and aluminum imports with respect to the national security, we 
encourage countries interested in discussing the section 232 measures 
to engage the Department of Commerce on this matter.

    Question. I am concerned about the timeline of the section 301 
tariff exclusions. As you know, the first round of section 301 
exclusions expired at the end of 2020. Last October, you announced some 
exclusions could be reinstated, and announced the first round of 
reinstatements last week.

    Now, the exclusions apply between October 12, 2021 through December 
2022.

    However, the companies still have to pay the tariff between January 
1, 2021 and October 12, 2021. I have one small business in my State 
that makes lower-cost electric bikes. They want to add jobs in the U.S. 
and move some manufacturing back here. But if required to pay the $25 
million in tariffs from January to October 2021, they won't be able to 
afford to.

    If the companies had the exclusions before January 1st, why does 
the reinstatement of the exemption only go back to October? Why are you 
not making the reinstatement retroactive to January 1, 2021? Why should 
companies pay the section 301 tariffs for the time in between the 
expiration of December 31, 2020 and October 12, 2021?

    Answer. In developing a process for the possible reinstatement of 
previously extended exclusions, we sought to create a process that was 
administrable, fair, and transparent, and had integrity. An important 
element of our consideration was administrability with respect to past 
entries, and the finality of Customs liquidation. The outcome of our 
deliberation was that making the exclusions retroactive to the date 
when the process was announced created the most administrable and fair 
process for stakeholders seeking refunds for goods imported prior to 
the reinstatement of the exclusions.

    Question. As you know, after years of disputes with the U.S. 
Government over potato market access, Mexico agreed to open their 
market to fresh potatoes from the United States in 2014. Upon taking 
that action, the National Confederation of Potato Growers of Mexico 
(CONPAPA) sued their own government to prevent U.S. potato imports. In 
April 2021, those lawsuits were decided unanimously in the U.S. favor 
by the Mexican Supreme Court. However, I understand Mexico is still not 
adhering to its trade commitments and continuing efforts to delay U.S. 
potato growers access to the market. Washington State exports over $40 
million worth of potatoes to Mexico.

    How is USTR engaging on this issue to ensure fair access for 
American potatoes in the Mexican market?

    Answer. I have raised the issue with Mexico's Secretary of Economy, 
Tatiana Clouthier, and Secretary of Agriculture and Rural Development, 
Victor Villalobos. In April, Secretary Vilsack received a commitment 
from Mexico that access for U.S. fresh potatoes beyond a 26-kilometer 
zone along the U.S.-Mexico border would be authorized no later than May 
15th. Earlier this month, U.S. fresh potatoes were successfully 
exported beyond the border zone.

    Question. Washington State is home to over 130,000 aerospace 
workers. In June, 2021, USTR along with EU and UK counterparts 
negotiated a settlement to the 17-year Boeing-Airbus case at the WTO 
for large civil aircraft.

    Since we are near the 1-year mark, can you please give us an update 
on the status of the implementation and engagement in the working 
groups?

    Answer. The United States reached understandings on cooperative 
frameworks with the EU and the UK, in which each side intends not to 
impose the WTO-
authorized countermeasures for a period of 5 years starting from July 
4, 2021. The working group established under each framework aims to 
analyze and overcome any disagreements in the sector, including on any 
existing support measures. The working group will also collaborate on 
jointly analyzing and addressing non-market practices of third parties 
that may harm the U.S. and EU large civil aircraft industries.

    Since then, we held our first official meetings with the UK and the 
EU in October and November, respectively, and have held numerous 
preparatory and follow-up meetings at the staff level.

                                 ______
                                 
                Questions Submitted by Hon. John Cornyn
    Question. Last week, the chair of President Biden's Council of 
Economic Advisors, Cecilia Rouse, said that the administration is 
evaluating and reviewing the existing tariffs on products from China. 
As part of that review, she said the administration is also looking 
``for those still consistent with our trade goals and rolling off those 
that are not.''

    Can you confirm for us today that the administration is reviewing 
the tariffs?

    Can you provide additional insight regarding the administration's 
review of the tariffs?

    Given that the administration has been in office for more than a 
year, and that we discussed a tariff review at last year's Trade Agenda 
hearing, when can we expect the review to be completed and the results 
shared with Congress and the public?

    Answer. The administration is continually reviewing the China 301 
tariffs; this process is a key part of the Biden-Harris 
administration's deliberative, long-term vision for realigning the 
U.S.--China trade relationship around our priorities and making trade 
work for American workers and businesses. As part of this process, we 
have initiated and completed two separate exclusion processes--one on 
COVID-
related products, and one addressed to over 500 previously extended but 
expired exclusions. In March, we reinstated exclusions where American 
workers, farmers, and domestic producers would benefit. We are 
continuing to consider additional exclusions processes, as warranted.

    Furthermore, we have started the process for the mandatory 4-year 
review of all the China 301 tariffs, as provided in the statute. The 
first step in the process is to notify representatives of domestic 
industries that benefit from the tariff actions of the possible 
termination of those actions and of the opportunity for the 
representatives to request continuation. If a request for continuation 
is received, USTR will conduct the statutory review of the tariff 
actions. That review would include a consideration of the effectiveness 
of the action in achieving the objectives of section 301, other actions 
that could be taken, and the effects of such actions on the United 
States economy, including consumers. The review would include an 
opportunity for all interested persons to submit their views.

    Further information may be found on the Four-Year Review page of 
the USTR website: https://ustr.gov/issue-areas/enforcement/section-301-
investigations/section-301-china-technology-transfer/china-section-301-
tariff-actions-and-exclusion-process/four-year-review.

    Question. American importers have been assessed close to $130 
billion in tariffs since President Trump first imposed tariffs on 
products from China nearly 4 years ago. As you know, List 1 of those 
tariffs is set to expire in July unless USTR receives a petition for a 
continuation of the tariffs.

    Has USTR received a petition to continue the tariffs?

    If not, does USTR anticipate that it will receive a petition for a 
continuation of the tariffs?

    If USTR received or receives a petition, what will USTR's process 
be for conducting a review of the tariffs?

    Will you commit to including an opportunity for all stakeholders--
including American importers who pay the tariffs--to provide input into 
the review process?

    Further, will USTR consider a consolidated review of all four 
tariff lists to create administrative efficiencies for USTR and 
American companies, to provide a more holistic assessment of whether 
the tariffs achieved their stated objectives, and to provide a fuller 
picture of the tariffs' impact on the U.S. economy, as well as American 
businesses, workers, and consumers?

    Answer. USTR has started the process for the mandatory 4-year 
review of all the China 301 tariffs, as provided in the statute. The 
first step in the process is to notify representatives of domestic 
industries that benefit from the tariff actions of the possible 
termination of those actions and of the opportunity for the 
representatives to request continuation. If a request for continuation 
is received, USTR will conduct the statutory review of the tariff 
actions. That review would include a consideration of the effectiveness 
of the action in achieving the objectives of section 301, other actions 
that could be taken, and the effects of such actions on the United 
States economy, including consumers. The review would include an 
opportunity for all interested persons to submit their views.

    Further information may be found on the Four-Year Review page of 
the USTR website: https://ustr.gov/issue-areas/enforcement/section-301-
investigations/section-301-china-technology-transfer/china-section-301-
tariff-actions-and-exclusion-process/four-year-review.

    Question. The section 301 product exclusion process expired at the 
end of 2020, except for a small number of exclusions that were extended 
for products needed to respond to the COVID-19 pandemic. USTR announced 
in October a narrow exclusion process for 549 products that previously 
enjoyed an exclusion. Last week, USTR announced its determination to 
reinstate 352 of those exclusions--approximately two-thirds of those 
eligible. The exclusions are retroactive to October 12, 2021.

    Why did USTR make the determination to only allow retroactivity for 
these reinstated exclusions to October 12, 2021?

    The Federal Register Notice announcing USTR's determination 
regarding the reinstatement of this narrow set of exclusions did not 
include any reasoning for why the remaining exclusions were denied. 
Does USTR intend to notify petitioners regarding why the remaining 
exclusions were not reinstated?

    Can you share USTR's rationale for denying those exclusions now?

    Answer. In developing a process for the possible reinstatement of 
previously extended exclusions, we sought to create a process that was 
administrable, had integrity, fair, and transparent. An important 
element of our consideration was administrability with respect to past 
entries, and the finality of Customs liquidation. The outcome of our 
deliberation was that making the exclusions retroactive to the date 
when the process was announced created the most administrable and fair 
process for stakeholders seeking refunds for goods imported prior to 
the reinstatement of the exclusions.

    The USTR notices announcing the reinstatement decisions explained 
the factors USTR considered in making its decisions. The decision not 
to reinstate a particular exclusion reflects a determination that, 
based on all public comments received, both supporting and opposing 
reinstatement, on balance the exclusion did not meet the criteria for 
reinstatement.

    Question. The House and Senate are preparing to go to conference on 
their China competition bills--the U.S. Innovation and Competition Act, 
which was passed last year by the Senate, and the America COMPETES Act, 
which the House passed earlier this year. The Senate bill includes a 
trade title that was adopted by an overwhelming bipartisan vote of 91-
4. The trade title includes language amending section 301 of the Trade 
Act of 1974 to require USTR to reinstate an exclusions process for 
those experiencing ``severe economic harm'' for the current section 301 
tariffs and would require USTR to have a similar process for any future 
section 301 actions.

    Does USTR intend to create a broader section 301 exclusions 
process, or will Congress be forced to act to ensure that American 
businesses have a mechanism to seek relief from the tariffs?

    Answer. The administration is continually reviewing the China 301 
tariffs; this process is a key part of the Biden-Harris 
administration's deliberative, long-term vision for realigning the 
U.S.-China trade relationship around our priorities and making trade 
work for American workers and businesses. As part of this process, we 
have initiated and completed two separate exclusions processes--one on 
COVID-
related products, and one addressed to over 500 previously extended but 
expired exclusions. In March, we reinstated exclusions where American 
workers, farmers, and domestic producers would benefit. We are 
continuing to consider additional exclusions processes, as warranted.

    Furthermore, USTR has started the process for the mandatory four-
yea review of all the China 301 tariffs, as provided in the statute. 
The first step in the process is to notify representatives of domestic 
industries that benefit from the tariff actions of the possible 
termination of those actions and of the opportunity for the 
representatives to request continuation. If a request for continuation 
is received, USTR will conduct the statutory review of the tariff 
actions. That review would include a consideration of the effectiveness 
of the action in achieving the objectives of section 301, other actions 
that could be taken, and the effects of such actions on the United 
States economy, including consumers. The review would include an 
opportunity for all interested persons to submit their views.

    Further information may be found on the Four-Year Review page of 
the USTR website: https://ustr.gov/issue-areas/enforcement/section-301-
investigations/section-301-china-technology-transfer/china-section-301-
tariff-actions-and-exclusion-process/four-year-review.

    Question. We are now 4 years into a trade war with China, and the 
commitments the United States was expecting to see from China have not 
materialized. It is well documented that China failed to meet its 
purchase commitments under the Phase One agreement, and there has been 
no indication that they have fulfilled their other obligations in the 
agreement.

    Do you believe China has lived up to the commitments it made for 
the Phase One trade deal?

    At what point do you intend to begin negotiations on a Phase Two 
deal?

    Do you believe that the tariffs have failed to create leverage for 
getting China to make lasting structural changes and that we should 
instead seek new tools?

    Answer. As noted in our China WTO Compliance Report, China followed 
through in implementing some provisions of the Phase One agreement. At 
the same time, China has not yet implemented some other significant 
commitments, such as those in the area of agricultural biotechnology 
and the required risk assessment that China is to conduct relating to 
the use of ractopamine in cattle and swine. And it is clear that China 
did not fully implement its Phase One agreement purchase commitments, 
and we have been discussing with our Chinese counterparts how China 
plans to rectify the purchase shortfalls. Other commitments that China 
made, such as in the area of technology transfer, are difficult to 
verify given the tactics that China takes to obscure its activities.

    We continue to consult with China on the implementation of the 
Phase One agreement, and all options remain on the table in dealing 
with China's compliance failures. We also need to acknowledge the 
limitations of the Phase One agreement and past approaches to dealing 
with China. Our strategies must expand beyond exclusively pressing 
China for change or for compliance with past commitments. We need to 
include the vigorous defense of our economic interests in the face of 
China's unfair policies and practices. We also need to work more 
closely with like-minded trading partners on new strategies, as we are 
doing.

    Question. USTR recently published a Federal Register Notice 
soliciting comments on the Fair and Resilient Trade pillar of the Indo-
Pacific Economic Framework (IPEF). This is a positive first step 
towards the U.S. acceding to a comprehensive free trade agreement in 
the region.

    The U.S. must engage in the Indo-Pacific and around the world that 
reinforce the rules-based international trading system.

    This is especially true as China continues to enter into agreements 
like the Regional Comprehensive Economic Partnership and shows 
ambitions to join the Comprehensive and Progressive Agreement for 
Trans-Pacific Partnership (CPTPP). However, I am concerned that the 
administration has taken market access off the table, and that the 
administration does not believe congressional approval will be 
required. This suggests IPEF may not be a high ambition agreement with 
enforceable commitments and that the U.S. is not serious about getting 
off the trade negotiation sidelines.

    Can you explain why the United States has taken market access off 
the table for IPEF?

    Will IPEF commitments be enforceable?

    Will USTR commit to consulting with Congress and stakeholders every 
step of the way?

    Answer. It is correct that market access, in the form of tariff 
liberalization, is not currently being considered as part of the IPEF 
trade pillar. However, the trade pillar will include binding and non-
binding rules that will enhance access to each other's markets by 
creating a common set of rules and norms, including by leveling the 
playing field for works. The high-standard commitments we are seeking 
will establish a strong foundation for a worker-centric trade policy 
that will support high-quality American jobs and underpin innovative 
growth for American farmers, producers, and businesses. As part of this 
effort, USTR will lead work on a trade arrangement with our partners 
that includes high-standard and binding commitments in the areas of 
labor, environmental sustainability, the digital economy, and 
agriculture, subject to negotiation. We expect to have both binding and 
non-binding obligations. We look forward to continued close 
coordination with Congress on this initiative.

    Question. The Comprehensive and Progressive Agreement for Trans-
Pacific Partnership (CPTPP) agreement represents approximately half a 
billion people and 14 percent of the global economy. American companies 
were negatively impacted when the U.S. withdrew from the TPP agreement 
in 2017. Joining the CPTPP would be a good opportunity for the U.S. to 
reclaim global leadership and write the rules of the road regarding 
trade, intellectual property, environmental, and labor standards. It 
would also serve as an important foothold into key markets and help the 
U.S. compete against China. The U.S. could go back to the negotiating 
table to improve the agreement and to ensure it can receive broad 
bipartisan support in Congress. But instead of CPTPP, the 
administration has announced an Indo-Pacific Economic Framework with 
few details, no market access, and questions about enforceability. IPEF 
is a good first step for re-engaging in the Indo-Pacific region, but it 
is just that--a first step.

    What is USTR's plan for ensuring IPEF is a meaningful, high-
ambition agreement that helps American businesses and workers compete 
against China?

    Answer. The Biden-Harris administration is committed to economic 
engagement with partners in the Indo-Pacific region and has launched 
the Indo-Pacific Economic Framework for Prosperity (IPEF) to strengthen 
our economic ties to the region, while promoting inclusive growth for 
workers and businesses, advancing strong labor standards, and tackling 
climate change. As part of this effort, we are specifically focused on 
negotiating provisions in IPEF that can help American businesses and 
workers compete in the global economy and will seek to include 
commitments on labor, environmental sustainability, the digital 
economy, agriculture, transparency and good regulatory practices, 
competition policy, and trade facilitation. The administration's focus 
will be on developing high-standard rules that can increase 
interoperability and competitiveness among Parties to the arrangement, 
which can generate increased access to foreign markets for U.S. 
exporters.

    Question. Many imports from China facing tariffs have no relation 
to the original concern of intellectual property theft that the Trump 
administration used for issuing tariffs.

    Have these tariffs been successful at reducing intellectual 
property theft?

    Answer. The United States has been closely monitoring China's 
progress in implementing its Phase One agreement commitments under the 
intellectual property chapter. On the one hand, China has enacted 
certain legislative changes aimed at addressing intellectual property 
protection and enforcement. On the other hand, we continue to have 
concerns about the adequacy of China's written measures, their 
effective implementation, and unwritten practices involving forced 
technology transfer. More work needs to be done, including in critical 
areas not covered by the agreement.

    Going forward, our strategies must expand beyond only pressing 
China for change or for compliance with past commitments and include 
the vigorous defense of our economic interests in the face of China's 
unfair policies and practices. We also need to work more closely with 
like-minded trading partners on new strategies, as we are doing.

    Question. In the October USTR Federal Register Notice regarding a 
process to petition for exclusions, included as one of the factors in 
determining if an exclusion would be granted was ``whether the 
particular product and/or a comparable product is available from 
sources in the United States and/or in third countries.'' Recently, 
USTR announced exclusions to some petitions and not others.

    Was there a specific threshold you were looking for to help meet 
this factor?

    Answer. As the October 8th Federal Register notice seeking public 
comments on the possible reinstatement of certain exclusions indicated, 
USTR would evaluate possible reinstatement on a case-by-case basis. 
Additionally, in addressing the availability factor, USTR requested 
that commenters address specifically:

          Whether the particular product and/or a comparable product 
        is available from sources in the United States and/or in third 
        countries;
          Any changes in the global supply chain since September 2018 
        with respect to the particular product or any other relevant 
        industry developments;
          The efforts, if any, the importers or U.S. purchasers have 
        undertaken since September 2018 to source the product from the 
        United States or third countries; and
          Domestic capacity for producing the product in the United 
        States.

    The decision not to reinstate a particular exclusion reflects a 
determination that, based on all public comments received, both 
supporting and opposing reinstatement, on balance the exclusion did not 
meet the criteria for reinstatement.

    Question. The four factors included in USTR's October 2021 Federal 
Register Notice regarding the process to petition for exclusions seem 
rather vague.

    Could you provide some specificity on each of the four factors?

    Answer. The October 8th Federal Register notice seeking public 
comments on the possible reinstatement of certain exclusions provides 
that USTR would examine three factors: (1) whether the product remains 
available only from China; (2) whether or not reinstating the exclusion 
will impact or result in severe economic harm; and (3) the overall 
impact of the exclusion on the goal of obtaining the elimination of 
China's acts, policies, and practices. Regarding availability, as noted 
above, USTR requested comment and considered the availability of the 
product from sources in the United States and/or in third countries; 
changes in the global supply chain since September 2018; efforts to 
source the product from the United States or third countries; and 
domestic capacity for producing the product in the United States. With 
respect to severe economic harm, USTR considered whether or not 
reinstating the exclusion will impact or result in severe economic harm 
to the commenter or other U.S. interests, including the impact on small 
businesses, employment, manufacturing output, and critical supply 
chains in the United States. Finally, in examining the overall impact 
of the exclusion on the goal of obtaining the elimination of China's 
acts, policies, and practices, USTR examined whether reinstating the 
exclusion would undermine efforts to incentivize China to address the 
acts, policies, and practices covered in the section 301 investigation.

    Question. Last year, President Biden issued an executive order to 
address the root causes of migration at our southern border. To ease 
this migration challenge, communities in Central America need jobs with 
higher wages and long-term stability. Increasing trade and investment 
in the region will do this. Some businesses are creating proposals to 
do this.

    Will you commit to bringing all stakeholders to the table to 
discuss creative solutions that protect current and planned U.S. 
investments in the region while also creating conditions to sustainably 
and permanently grow textile and apparel investment for the benefit of 
U.S. apparel and textile companies?

    Answer. One of the five pillars of the administration's Strategy 
for Addressing the Root Causes of Migration in Central America, led by 
Vice President Harris, is ``addressing economic insecurity and 
inequality.'' The textile and apparel industry in Central America, 
already one of the biggest employers in the region, holds great 
potential for driving new, inclusive, worker-centered economic growth 
and creating new jobs, especially for women and underserved and 
marginalized populations. The Dominican Republic-Central America-United 
States Free Trade Agreement (CAFTA-DR) provides the foundation upon 
which the industry can grow and the agreement's rules of origin provide 
the certainty needed by industry to invest and expand operations in a 
way that promotes economic opportunity for both U.S. workers and those 
in the region. We are now, and will continue to be, in dialogue with 
all stakeholders to explore ways to make the most of CAFTA-DR's 
provisions in order to increase two-way trade and boost sustainable 
investment in region.

    Question. Two critical trade preference programs--the Generalized 
System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB)--
lapsed at the end of 2020 imposing a tax increase on American workers, 
American consumers, and American businesses at a time when they can 
least afford it. Both the GSP and MTB programs have been supported for 
decades by overwhelming bipartisan majorities. The COVID-19 pandemic, 
the shipping crisis, and inflation have caused great uncertainty for 
American companies and their U.S. workers. This is not the time to 
impose new costs on U.S. supply chains.

    Can you confirm the administration's support for retroactive 
renewal of GSP and MTB in short Order?

    Answer. The Generalized System of Preferences is a program intended 
to promote development in eligible beneficiary countries, and we 
support Congress renewing this program. As you note, the Miscellaneous 
Tariff Bill, which similarly expired in 2020, helps U.S. manufacturers 
produce domestically, create jobs, and compete in a global marketplace, 
and we support Congress's renewal of this program as well.

    Question. According to the 2021 Review of Notorious Markets, 
``commercial-scale copyright piracy and trademark counterfeiting cause 
significant financial losses for U.S. right holders and legitimate 
businesses, undermine critical U.S. comparative advantages in 
innovation and creativity to the detriment of American workers, and 
pose significant risks to consumer health and safety.''

    What commitments can USTR make to focus more keenly on this growing 
issue?

    And specifically, with the most trusted e-commerce and social media 
platforms here in America?

    Answer. USTR will continue to use the Review of Notorious Markets 
for Counterfeiting and Piracy to highlight prominent and illustrative 
examples of online and physical markets that reportedly engage in, 
facilitate, turn a blind eye to, or benefit from substantial piracy or 
counterfeiting, with a goal to motivate appropriate action by the 
private sector and governments to reduce piracy and counterfeiting. 
USTR regularly engages with trading partners on these important issues.

    Question. Key allies, like the United Kingdom and Germany, have 
expressed concern that the WTO waiver would erode incentives for 
innovation.

    Why doesn't USTR have similar concerns?

    Answer. The COVID-19 pandemic has highlighted the importance of 
pharmaceutical, medical device, and other health-related innovations, 
as well as a lack of widespread, timely, and equitable global 
distribution of these innovations. The administration recognizes that 
extraordinary circumstances such as pandemics call for extraordinary 
measures. The administration continues to seek an appropriate balance 
through adequate and effective protection for pharmaceutical and other 
health-related intellectual property around the world to ensure robust 
American innovation in these critical industries to treat diseases and 
to fight the current pandemic.

    Question. Congress was not adequately consulted before USTR agreed 
to a ``compromise'' on the TRIPS waiver.

    Were the Departments of State, Commerce, and Defense? Please tell 
us about the interagency review process that led to your decision.

    When administration principals discussed the importance of boosting 
vaccine supply, how did you determine that the best path forward is to 
eliminate intellectual property protections for American companies 
rather than exporting our Nation's extra doses?

    As you are aware--I hope--the United States threw away more than 15 
million vaccine doses between March and September of last year, many of 
which could have been exported instead.

    What role did China play, if any, in restricting the equipment 
necessary to refrigerate the vaccines sent to foreign nations, blocking 
U.S. diplomacy efforts and harming the health of millions?

    Answer. USTR has consulted with Congress on the TRIPS waiver 
discussions at the WTO. When waiver discussions at TRIPS Council 
stalled, the WTO Director-General decided to engage more directly in 
order to facilitate an outcome. She convened an informal discussions 
process with four WTO members (the United States; EU, which presented a 
paper on addressing pandemic exigencies through the TRIPS agreement in 
June 2021; and South Africa and India, which co-led the original TRIPS 
waiver proposal in October 2020) to identify a possible path forward on 
this important issue for deliberation by the entire WTO membership. The 
informal process convened by the Director-General resulted in draft 
text, released on May 3rd. The text has not been agreed to, either by 
the four members, or by the WTO membership as a whole. All WTO members 
currently have the opportunity to consult with their governments, 
legislatures, and stakeholders. Those consultations, including ones 
being conducted by USTR, are ongoing.

    Question. Last week, USTR announced that an agreement-in-principle 
has been reached on revisions to Japan's beef safeguard that should 
provide greater opportunity for growth in the Japanese market. As you 
know, Japan is a very important market for U.S. cattle producers, 
accounting for nearly $2.4 billion in U.S. beef sales in 2021, or $91 
per head. As we have learned, it was wise to include a provision in the 
Japan agreement that called for consultation on safeguards when market 
demand exceeds the negotiated thresholds. This is great news for Texas 
cattle ranchers, feeders, and raisers.

    As consumer demand continues to grow in Japan and other key Asian 
markets, and food security becomes a focal point of trade policy, will 
USTR continue to advocate for similar measures in future market access 
agreements?

    Answer. This administration takes a strategic approach when 
engaging our partners worldwide. As each partner is different, we have 
and will continue utilizing all our trade policy tools to come up with 
innovative arrangements, whether in the context of a large trade 
arrangement or through other formats that would secure market access 
and provide the greatest economically meaningful outcomes for the 
United States. U.S. farmers are integral to the Biden administration's 
worker-
centered trade policy. Therefore, the consultation mechanism similar to 
the one we used with Japan will continue to be one of many options that 
USTR will reference as we engage with our partners.

    Question. Geopolitical instability in recent months and supply 
chain disruptions over the past couple years have underscored the 
importance of building stronger economic relationships with 
trustworthy, dependable markets. Higher input costs, scarcity of 
supplies, and other market pressures are making it difficult for 
primary industries like agriculture to remain competitive, resulting in 
food security concerns among U.S. allies, including the United Kingdom. 
Last week, USTR concluded high-level discussions with the British 
Government and focused on digital trade, decarbonization of economies, 
and strengthening supply chains. Unfortunately, agriculture was not a 
prominent part of the discussion even though farmers, ranchers, and 
consumers in the United States and United Kingdom will benefit greatly 
from increased trade with goods produced with high standards.

    As part of addressing food security concerns and strengthening 
supply chains, will the Biden administration commit to prioritizing 
trade with the United Kingdom, and do we have assurances that 
agriculture will be included in future discussions and negotiations?

    Answer. The trade dialogue I am conducting with my UK counterpart, 
Secretary of State Trevelyan, is a strong signal of the priority the 
Biden-Harris administration places on our trade relationship with the 
UK. With the cost of global food prices recently rising to their 
highest levels on record, according to the Food and Agriculture 
Organization, we added a food security component to our ongoing supply 
chain work in the trade dialogue with the UK, including in meetings in 
Aberdeen, Scotland, following meetings in Baltimore. In these 
discussions, we are exploring how trade policy may contribute to food 
security, both by strengthening and making more efficient our bilateral 
agricultural supply chains, and more closely collaborating with the UK 
in international forums on this issue.

    Question. You have stated that the Biden administration will ensure 
that our trading partners fulfill their commitments under existing 
agreements. Since entry into force of the USMCA, the government of 
Mexico has announced and enacted policies that threaten our access to 
the Mexican market and undermine our investment in multiple sectors. 
This is particularly true in energy where government policy is 
discriminating against U.S. energy companies and instead favors state-
owned enterprises. With rising energy prices and inflation, North 
American energy security and protecting U.S. investments in energy 
infrastructure is paramount. By April 12th-13th, the Mexican Chamber of 
Deputies plans to act on a constitutional electricity reform measure 
that would further harm U.S. investment in energy infrastructure in 
Mexico, eliminate independent regulators, and give priority to the 
state-owned utility.

    Could you share your perspective and what steps USTR will take to 
ensure that Mexico lives up to its USMCA commitments?

    Would you consider requesting consultations with the government of 
Mexico before these April votes, after which many believe it may become 
more challenging to discourage Mexico from going down this troubling 
path on energy?

    Answer. USTR has serious concerns with the deteriorating trajectory 
of Mexico's energy policies, including a series of ongoing actions the 
Mexican Government has taken to increase state control over, and limit 
competition in, the energy sector. USTR is actively assessing these 
developments, and as I wrote to Secretary Clouthier on March 31, 2022, 
I will be considering all available options under the USMCA to address 
these concerns.

    Question. What specific action is USTR going to take to help 
companies that are on the verge of bankruptcy and have been forced to 
file intent to submit claims to arbitration under USMCA and NAFTA due 
to Mexico's illegal actions and pattern of non-compliance for these 
trade agreements?

    Answer. USTR has serious concerns with the deteriorating trajectory 
of Mexico's energy policies, including a series of ongoing actions the 
Mexican Government has taken to increase state control over, and limit 
competition in, the energy sector. USTR is actively assessing these 
developments, and as I wrote to Secretary Clouthier on March 31, 2022, 
I will be considering all available options under the USMCA to address 
these concerns.

    Question. Lumber remains at historically high levels almost a year 
since you were last before this committee, and is adding substantially 
to the cost of constructing a home. This is having a huge, negative 
impact on housing affordability. We still don't have a softwood lumber 
agreement with Canada.

    What is the status on discussions with regards to the softwood 
lumber agreement with Canada?

    Answer. I continue to discuss softwood lumber with my Canadian 
counterpart. The United States is open to resolving our differences 
with Canada over softwood lumber, but it would require addressing 
Canadian policies that create an uneven playing field for the U.S. 
industry. Unfortunately, to date, Canada has not been willing to 
address these concerns adequately.

    Question. Global biopharmaceutical companies are on track to 
produce more than 20 billion COVID-19 vaccine doses in 2022, which is 
more than enough to vaccinate the globe (and in fact developing 
countries have already had to destroy/turn away over 100 million 
expiring doses due to logistical/distributional challenges).

    If we're already producing the vaccines needed, why is the United 
States even entertaining the proposed COVID-19 TRIPS IPR waiver, which 
would only undermine IP rights and harm the competitiveness of U.S. 
life-sciences innovators?

    Answer. The Biden-Harris administration supports a waiver of 
intellectual property protections for COVID-19 vaccines under the TRIPS 
Agreement. This is one part of a holistic approach to getting as many 
safe and effective vaccines to as many people around the world as 
possible. The United States continues to work with the private sector 
and all possible partners to expand vaccine manufacturing and 
distribution around the world. It is clear that there are vaccine 
production powerhouses and vaccine deserts; we must close the gap. We 
will also work to increase the raw materials needed to produce those 
vaccines.

    There are certainly last mile issues. However, in light of 
variants, there is considerable uncertainty about how many vaccines 
will be required to vaccinate the world over the long term.

    WTO members look to the United States for leadership. As part of 
that leadership, USTR is committed to engaging in good faith to address 
concerns like this one, which relates to a global public health and 
economic crisis like the COVID-19 pandemic, raised by over half of the 
WTO's membership, primarily representing the world's developing and 
emerging economies.

    Question. I authored the SECRETS Act, which creates a rapid-
response, deterrent mechanism to intellectual property theft by foreign 
governments as defined in the Economic Espionage Act of 1996 through 
creation of a National Security Exclusion Order with the Attorney 
General as the lead prosecutor, the International Trade Commission as 
the forum of law, and USTR as the final arbiter.

    This new ex parte process prevents foreign governments from tying 
up our court system and profiting off American ingenuity.

    Finally, it addresses the core issue of why billions in tariffs in 
trade with China are currently in place, even on non-critical goods-
intellectual property theft.

    Much to my chagrin and without explanation, this bill was excluded 
as an amendment from the FY 2022 NDAA consideration. Yet I am hopeful 
that we can include this in the Conference negotiations on the U.S. 
Innovation and Competition Act. You yourself have said we need new 
tools in the trade toolbox.

    Can you discuss your thoughts on this proposal and if you would 
support its inclusion in the USICA negotiations?

    Do you have any concerns with the bill, and if so, will you commit 
to having your staff engage with mine to reach a workable solution?

    Answer. Protecting U.S. innovation through intellectual property 
rights is key to our Nation's economic success. China's illicit 
practices with regard to intellectual property theft have harmed 
American innovators, manufacturers, and workers. I am open to 
consideration of any proposal aimed at combating China's illicit 
practices while protecting U.S. innovation and industry. My staff has 
met with your staff several times to discuss the SECRETS Act proposal 
over the course of last year, and provided substantive feedback on the 
proposal. We look forward to continuing to work with your staff on 
these issues.

    Question. Discussions are underway to refine the scope of and 
receive input on the National Critical Capabilities Defense Act. By 
providing additional resources to USTR as the head of an interagency 
committee, similar to the three it already chairs such as the 21-agency 
Trade Policy Committee, we can replicate outbound screening mechanisms 
already in place by allies such as Taiwan and South Korea.

    Last week, former Trump National Security Adviser H.R. McMaster 
stated: ``Last year venture capital firms financed $114 billion in 
Chinese companies that are developing dual-use and sensitive 
technologies that are going to be weaponized against us or are already 
aiding and abetting the Russians.''

    This proposal was included in the U.S.-China Economic Security and 
Review Commission's recommendations for this year, and no other 
authority besides the International Emergency Economic Powers Act 
exists to address it.

    Yet some in the business community believe we should put this issue 
off to another day. I tried that 5 years ago when writing legislation 
to authorize the Committee on Foreign Investment in the United States.

    It's only become more of a problem. I am particularly interested in 
the intersection of companies that receive taxpayer funding, develop 
critical technologies, and want to continue doing business in China 
without any guardrails in place unlike their competitors in Taiwan and 
South Korea.

    We need to have awareness of things like human, financial, and 
intellectual capital where it really matters. A ``small garden with 
high walls'' approach.

    We don't need to know about salespeople or every transaction under 
the sun. Trade with China must continue, but we should protect the 
crowned jewels so to speak.

    If provided additional resources as our bill currently foresees, 
would you be up for chairing another interagency committee that can 
task various cabinet departments, such as Treasury, DOD, or Commerce, 
as needed?

    Do you believe it is acceptable for us to continue doing business 
in China with the status quo?

    Answer. I wholeheartedly agree with focusing on critical supply 
chain resiliency, which has been a priority for the administration from 
Day 1. The concept of an outbound screening mechanism also has merit. 
If a committee were established, USTR would want to serve as a member 
of the interagency committee implementing a mechanism for screening 
outbound investments. USTR has a unique role as a small, policy-focused 
agency, and another agency would be more appropriate to chair this 
committee. The committee contemplated under NCCDA would likely have 
ongoing administrative and case management responsibilities, as well as 
workstreams devoted to monitoring, enforcement, and international 
engagement--much like the interagency Committee on Foreign Investment 
in the United States (CFIUS) chaired by Treasury and of which USTR is a 
member. The CFIUS process involves an enormous amount of resources 
employed by the lead agency to review, coordinate, monitor, and enforce 
its decisions. Therefore, even with additional resources, USTR would 
not be the best fit for the lead role for a new committee. USTR stands 
ready to engage with our executive branch partners and members of 
Congress as needed.

    With regard to doing business in China, there are many problems 
that need to be addressed, including forced technology transfer and the 
theft of intellectual property, among others. To ensure that our 
industries remain competitive, our strategies must expand beyond only 
pressing China for change and must include vigorously defending our 
values and economic interests from the negative impacts of China's 
unfair policies and practices. We must also develop new domestic tools 
targeted at defending our economic interests, and make strategic 
investments in our own economy.

    Question. Your predecessor supported the approach in the CHIPS for 
America Act to provide incentives to restore domestic semiconductor 
production as a matter of national security. Funding for that bill I 
authored with Senator Warner will be discussed in a formal conference 
committee. It is my priority. There are currently significant 
differences in the trade titles of each bill, however. A bipartisan 
trade title is vital to passage of a final package. I believe the 
longer we wait to enact this legislation, the more time China has to 
build out its own capacity. Time is of the essence.

    As the lead executive branch trade official, will you commit to 
working with the House and Senate to reach a sensible compromise on the 
trade title of the U.S. Innovation and Competition Act?

    Answer. To secure America's supply chains and ensure the United 
States remains the most productive and innovative Nation in the world, 
the Biden-Harris administration urges Congress to pass a final version 
of comprehensive competitiveness legislation, building on USICA and the 
COMPETES Act.

                                 ______
                                 
              Questions Submitted by Hon. Robert Menendez
    Question. What statutory obligations for consultation with Congress 
does the administration believe apply to the Indo-Pacific Economic 
Framework negotiations? Please provide all applicable statutory 
citations.

    Answer. 19 U.S.C. 2211(c) provides that USTR shall consult, on a 
continuing basis, with the House Ways and Means Committee and the 
Senate Finance committee on the development, implementation, and 
administration of overall trade policy, which would include the 
development of the Indo-Pacific Economic Framework. Pursuant to this 
obligation, we will continue to develop the Indo-Pacific Economic 
Framework in close consultation with Congress.

    Question. What statutory obligations for consultation with private-
sector and civil-society stakeholders does the administration believe 
apply to the Indo-Pacific Economic Framework negotiations? Please 
provide all applicable statutory citations.

    Answer. 19 U.S.C. 2155 requires USTR to ``consult with 
representative elements of the private sector and the non-Federal 
governmental sector on the overall current trade policy of the United 
States'' and, in particular, to consult with the Trade Advisory 
Committees regarding ``significant issues and developments'' and 
negotiating positions. This obligation would cover the development of 
the Indo-Pacific Economic Framework. Pursuant to this obligation, USTR 
staff has briefed relevant Trade Advisory Committees on the Indo-
Pacific Economic Framework, and we will continue to develop the 
Framework through robust engagement with the Trade Advisory Committees 
and interested stakeholders. Indeed, although no provision of U.S. law 
specifically requires it, USTR recently published a Federal Register 
notice soliciting comments on the IPEF's trade pillar. The comment 
period closed on April 11th, and we are now reviewing these 
submissions.

    Question. What statutory obligations for sharing negotiating text 
with Congress does the administration believe apply to the Indo-Pacific 
Economic Framework negotiations? Please provide all applicable 
statutory citations.

    Answer. We are still in the early stages of developing the Indo-
Pacific Economic Framework. We will continue to develop the framework 
in close consultation with Congress, including with respect to 
developing negotiating text.

    Question. What statutory obligations for sharing negotiating text 
with the Trade Advisory Committees does the administration believe 
apply to the Indo-Pacific Economic Framework negotiations? Please 
provide all applicable statutory citations.

    Answer. We are still in the early stages of developing the Indo-
Pacific Economic Framework. We will continue to develop the Framework 
through robust engagement with all interested stakeholders, including 
engagement with the Trade Advisory Committees on developing negotiating 
text.

    Question. Does the administration intend to abide by the 2015 
Guidelines for Consultation and Engagement with respect to the Indo-
Pacific Economic Framework negotiations?

    Answer. The Indo-Pacific Economic Framework will not be a 
traditional free trade agreement, and its development likely will 
proceed differently than that of traditional free trade agreements. The 
2015 Guidelines for Consultation and Engagement were developed for 
traditional free trade agreement negotiations. However, consistent with 
19 U.S.C. 2211(c), we intend to consult closely with Congress 
throughout the development of the Indo-Pacific Economic Framework, 
which is in line with the substance of what the Guidelines sought to 
achieve.

    Question. I strongly support the emphasis you've placed on 
enforcement and want to recognize the progress you've made, 
particularly on labor rights in Mexico. We must also ensure that Mexico 
lives up to its USMCA commitments in the energy sector, particularly 
when it comes to treatment of U.S. investments in clean energy in 
Mexico that can contribute to our shared goal of addressing climate 
change. I know you share that concern and I appreciate your letter to 
Secretary Clouthier on this issue late last month. As you know, the 
government of Mexico has recently announced and enacted policies that 
discriminate against U.S. renewable energy producers, and instead favor 
state owned enterprises. In the coming days, the Mexican Chamber of 
Deputies plans to act on a constitutional electricity reform measure 
that would further harm U.S. investment in clean energy infrastructure 
in Mexico, eliminate independent regulators, and give priority to the 
state-owned utility that relies heavily on fossil fuels.

    Could you share your perspective and specific steps you plan to 
take to ensure that Mexico fulfills its USMCA commitments and remains a 
reliable partner in the fight against climate change? Would you 
consider requesting consultations with the government of Mexico before 
action by the Chamber of Deputies, after which some believe it may 
become more challenging to discourage Mexico from going down this 
troubling path on energy?

    Answer. USTR has serious concerns with the deteriorating trajectory 
of Mexico's energy policies, including a series of ongoing actions the 
Mexican Government has taken to increase state control over, and limit 
competition in, the energy sector. USTR is actively assessing these 
developments, and as I wrote to Secretary Clouthier on March 31, 2022, 
I will be considering all available options under the USMCA to address 
these concerns.

    Question. There is an ongoing standards-setting competition between 
free and authoritarian regimes in the realm of digital governance. Last 
Congress, I released a report on China's digital authoritarianism and 
how they are exporting digitally enabled products and the training and 
expertise to other countries in an attempt to sway other nations to 
adopt this alternative, authoritarian model for the digital domain.

    How does the administration plan to approach IPEF partners on 
digital standards setting, and how are we going to incentivize 
countries to join an open and transparent rules-based approach? Is the 
administration prioritizing critical and emerging technologies in these 
standards-setting discussions?

    Answer. Strong digital trade rules remain a key priority in our 
strategy for the Indo-Pacific Economic Framework for Prosperity. These 
rules will be designed to help workers, consumers, and businesses 
effectively participate in the digital economy. They will build 
consumer trust, expand network access for all, and promote network 
security and reliability. These rules will serve as an alternative to 
the efforts by certain countries in the region to promote a siloed, 
tightly controlled version of the Internet.

    Question. On August 13, 2021 eight colleagues and I wrote asking 
you to correct an inequity related to exclusions from section 301 
tariffs for COVID-19 products. For HTSUS codes that had not previously 
received an exclusion, the COVID exclusions began on January 1, 2021--
leaving some companies responsible for millions in tariffs incurred 
during the months in 2020 when demand for such products were at record 
highs, supply chains were nearly shut down, and store shelves were 
empty. Your office extended those COVID-related exclusions multiple 
times, and you have recently provided tariff relief--including 
retroactive relief--for certain non-COVID products. Each of those 
actions was an opportunity to also correct the previous 
administration's mistake of punishing companies for importing 
lifesaving products to provide to hospitals, schools, businesses, and 
homes during a period when importing from China was, in some cases, the 
only option to meet demand.

    What was the rationale for extending COVID-related exclusions for 
2021 and 2022 but not providing such tariff relief for the period in 
2020 when the products were most needed and least available in the 
U.S.? Does USTR have the statutory authority to provide retroactive 
tariff relief for these 2020 imports?

    Answer. In developing a process for COVID-related exclusions, we 
sought to create a process that was administrable, fair, transparent, 
and had integrity. Additionally, an important consideration was the 
need to address ongoing efforts to address COVID-19. The outcome of our 
deliberations was that making new COVID exclusions retroactive to the 
date when the exclusions were published created the most administrable 
and fair process for stakeholders seeking refunds.

                                 ______
                                 
              Questions Submitted by Hon. Thomas R. Carper
    Question. In September 2021, Senator Cornyn and I sent a letter to 
President Biden underscoring the importance of working with allies to 
break down trade barriers to more efficiently distribute health 
products used in the fight against COVID-19, including inputs used in 
vaccine manufacturing, vaccine distribution and approval, therapeutics 
and pharmaceuticals, diagnostics, PPE and medical devices.

    As we continue to fight new and emerging variants of COVID-19 and 
work to prepare for future pandemics, how will the administration work 
with our allies at the WTO and through initiatives like the Indo-
Pacific Economic Framework to address export restrictions, reduce 
tariffs, strengthen supply chains, and break down other medical trade 
barriers to help boost global cooperation on pandemic response?

    Answer. In addition to exacting a dreadful human toll, the pandemic 
has also exposed the extent of the fragility of our supply chains. This 
fragility has left us too dependent on concentrated sources of supply, 
leading to shortages that in turn have left Americans with a lingering 
sense of insecurity. In order to address the current pandemic, and 
prepare for future ones, we must ensure that we fully understand how 
our supply chains became so fragile and concentrated, so that we can 
adopt policies that will mitigate that risk. We look forward to working 
with like-minded parties on developing secure, resilient supply chains 
that will withstand shocks such as pandemics, but also wars and 
shipping bottlenecks.

    Question. I have long advocated for a comprehensive exclusions 
process on section 301 tariffs--especially for products that can only 
be sourced from China. In previous rounds, USTR has established the 
precedent of providing full retroactivity for these exclusions.

    Will you consider extending full retroactivity for exclusions 
granted during the most recent process, and how will USTR approach the 
issue of retroactivity in possible future exclusions processes?

    Answer. In developing a process for the possible reinstatement of 
previously extended exclusions, we sought to create a process that was 
administrable, had integrity, and was fair and transparent. An 
important element of our consideration was administrability with 
respect to past entries, and the finality of Customs liquidation. The 
outcome of our deliberation was that making the exclusions retroactive 
to the date when the process was announced created the most 
administrable and fair process for stakeholders seeking refunds for 
goods imported prior to the reinstatement of the exclusions.

    We are considering and will continue to consider additional 
exclusions processes, as warranted, and will continue to review the 
issue of retroactivity.

    Question. I have heard from stakeholders that the agreement 
tentatively reached between the U.S., the EU, India, and South Africa 
regarding the WTO vaccine IP waiver may allow countries to disclose 
trade secrets that companies regularly submit as part of their 
regulatory filings.

    Will you commit to work with my office and relevant stakeholders to 
ensure that any agreement protects valuable trade secrets from being 
disclosed to competitors?

    Answer. I appreciate your concerns. Now that the WTO Director-
General has released the text, USTR is conducting consultations with 
Congress and a broad base of stakeholders on that text. The decision to 
support a waiver of intellectual property protections for COVID-19 
vaccines reflects the extraordinary circumstances of this pandemic. In 
discussions at the WTO, I will continue to be clear-eyed about 
potential risks. The compromise text has not been agreed to, either by 
the four members, or by the WTO membership as a whole.

    Question. I view the Indo-Pacific Economic Framework as an 
opportunity for the United States to push back against the steady 
increase of digital protectionism, including restrictions to data 
flows, forced data localization, complex certification schemes, and 
regulatory barriers that disadvantage American companies and workers.

    How can the IPEF serve as a counterweight against these harmful 
policies?

    Answer. Strong digital trade rules remain a key priority in our 
strategy for the Indo-Pacific Economic Framework for Prosperity. These 
rules will be designed to help workers, consumers, and businesses 
effectively participate in the digital economy. They will build 
consumer trust, expand network access for all, and promote network 
security and reliability. These rules will allow like-minded countries 
to work together to protect our freedoms.

                                 ______
                                 
                Question Submitted by Hon. Richard Burr
    Question. I am greatly concerned by the potential for a TRIPS 
agreement that would gut the intellectual property rights of 
innovators. For example, I understand that such an agreement could 
allow foreign governments to disclose companies' proprietary 
information to their competitors.

    Given the global availability of vaccines for COVID-19, and the 
commitments of COVID-19 manufacturers to provide doses across the 
globe, what specific gaps would the TRIPS waiver address that are not 
already being met for the COVID-19 emergency? What will you do to 
ensure that any such waiver expressly protects proprietary information 
from disclosure by foreign governments?

    Answer. The COVID-19 pandemic has highlighted the importance of 
pharmaceutical, medical device, and other health-related innovations, 
as well as a lack of widespread, timely, and equitable global 
distribution of these innovations. The administration recognizes that 
extraordinary circumstances such as pandemics call for extraordinary 
measures. The administration continues to seek an appropriate balance 
through adequate and effective protection for pharmaceutical and other 
health-related intellectual property around the world to ensure robust 
American innovation in these critical industries to treat diseases and 
to fight the current pandemic. In the discussions at the WTO, I will 
continue to be clear-eyed about potential risks.

                                 ______
                                 
                Questions Submitted by Hon. Rob Portman
    Question. At present, there is only one remaining producer of 
Grain-Oriented Electrical Steel (GOES) in the United States. GOES 
production is a capability critical to our national and economic 
security; GOES is at the heart of the technology that powers our 
electrical grid. During the last administration, the Department of 
Commerce undertook an investigation into the national security threat 
posed by imports--particularly from Canada and Mexico--of laminations 
and cores made of GOES. With the public release of that report, we know 
that the Department of Commerce found that there is, in fact, a 
national security threat posed by these imports.

    What steps do you intend to take to address this threat? Will you 
commit to discussing ways to limit circumvention of the section 232 
tariffs with respect to GOES imports with our trading partners 
generally, and Canada and Mexico specifically?

    Answer. The previous administration conducted an investigation on 
imports of transformers and transformer components, including 
electrical steel lamination and electrical transformer cores, under 
section 232 of the Trade Expansion Act of 1962, but did not take any 
action within the statutory timeframe. However, it is my understanding 
that the Department of Commerce will continue to assess the issue you 
raised.

    I would also like to take this opportunity to assure you that my 
staff will continue to work with the Department of Commerce and other 
U.S. Federal agencies, as appropriate, to prevent the circumvention of 
U.S. trade measures, and will engage the governments of Canada and 
Mexico on this important issue.

    Question. Haiti currently enjoys trade preferences with the United 
States under the Hemisphere Opportunity through Partnership 
Encouragement (HOPE) Act, and the Haitian Economic Lift Program (HELP) 
Act. Combined, the HOPE-HELP program helps promote economic development 
in Haiti. Apparel accounts for over 90 percent of Haiti's exports to 
the United States. However, the program will expire at the end of 
September 2025.

    Do you agree that the HOPE-HELP program should be renewed? And if 
so, do you agree that Congress should not wait until the eve of 
expiration to renew in order to provide maximum certainty to workers, 
industry and investors in Haiti?

    Answer. I firmly support the trade preference programs provided for 
in the HOPE and HELP Acts. Since 2006, these programs have been an 
important element in our trade relationship with Haiti and have 
contributed to increased trade between both our countries. I encourage 
Congress to renew both programs in the near term. Haiti is going 
through a difficult time, and investors are making long-term decisions 
now about whether to suspend, continue, or expand operations. Renewing 
these programs now would help support workers and industry, provide 
jobs for youth who might otherwise be lured into gangs, and contribute 
to the country's economic growth and stability at a critical time.

    Question. Thank you for your efforts to identify, and resolve, 
points of friction with U.S. trading partners. One outstanding friction 
point is the ongoing dispute with Canada over their unfair 
subsidization of softwood lumber.

    Do you intend to focus additional time and resources on reaching a 
fair settlement to the softwood lumber dispute? Will you commit to 
active discussions with Canada in an effort to seek a resolution to 
this dispute in the next 90 days?

    Answer. I continue to discuss softwood lumber with my Canadian 
counterpart. The United States is open to resolving our differences 
with Canada over softwood lumber, but it would require addressing 
Canadian policies that create an uneven playing field for the U.S. 
industry. Unfortunately, to date, Canada has not been willing to 
address these concerns adequately.

    Question. I am disappointed that the European Union (EU) has agreed 
to the Digital Markets Act (DMA), which is a protectionist policy aimed 
at discriminating against American companies. At a time when the United 
States and the EU should be working more closely in strategic and high-
technology sectors, it is troubling to see the EU embracing a blatantly 
discriminatory agenda. This only makes it more difficult for us to work 
together and present to adversaries a unified front against such 
policies, digital or not.

    What will be your strategy to defend U.S. trade interests against 
protectionism like the Digital Markets Act? How are you engaging with 
EU officials to challenge these policies? What tools can the United 
States deploy in response to the DMA?

    Answer. We are engaged with the EU on digital trade issues both in 
the Trade and Technology Council and also in direct bilateral 
discussions. It is clear to me that, in the context of the digital 
economy, the United States and the EU are both committed to protecting 
workers, privacy, cybersecurity, and consumer rights and that we both 
want our markets to be fair and competitive. On many policy issues we 
share many of the concerns animating EU action. When governments 
regulate, they should not do so on the basis of advancing the interests 
of national champions at the expense of foreign competitors.

                                 ______
                                 
                  Question Submitted by Hon. Tim Scott
    Question. South Carolina is home to a large number of family 
farmers who grow perishable fruits and vegetables during the fall to 
spring months of the year. I've heard from those farmers that they are 
losing output, revenue, and in many cases their farms because of 
surging imports of unfairly priced foreign fruits and vegetables. I 
believe it is the case that a number of other states are being harmed 
for the same reason. Our country's import relief laws were not 
structured to protect seasonal and perishable products from unfair 
imports.

    In view of the growing urgency, will you work quickly to help 
contain any unfairly priced import surges and keep our fruit and 
vegetable farms in business?

    Answer. In 2020, USTR heard directly from stakeholders across the 
country, including members of Congress, during a USTR-led public 
hearing on this issue. The initiative resulted in USTR requesting the 
U.S. International Trade Commission to initiate several section 332 
investigations into imports of seasonal produce, and a section 201 
investigation into importers of blueberries, that concluded with a ``no 
injury'' determination. I welcome input and ideas from you as to how 
USTR can further utilize the range of tools that are available to 
address the challenges facingU.S. producers, including those in South 
Carolina.

                                 ______
                                 
            Questions Submitted by Hon. Robert P. Casey, Jr.
    Question. A recent report by the U.S. International Trade 
Commission, titled ``Foreign Censorship, Part 1: Policies and Practices 
Affecting U.S. Businesses,'' highlights key foreign markets where 
censorship presents a trade barrier for American businesses and 
companies operating globally. Among these is China, Russia, Turkey, 
Vietnam, India and Indonesia, which together represent nearly half of 
the global population, billions of Internet users, billions of dollars' 
worth of digital exports and a significant share of global GDP.

    How is USTR working to better understand the worldwide impact of 
censorship as a trade barrier for the U.S. and how these censorship 
regimes restrict freedom of expression?

    Answer. Over the years, the United States has repeatedly expressed 
concerns to trade partners, including China, regarding the impact of 
content-related policies on market access. For example, the United 
States has raised concerns regarding China's burdensome restrictions on 
content, which are implemented through exhaustive content review 
requirements that are based on vague and otherwise nontransparent 
criteria. Content and information services are key exports for the 
United States, and we will continue to raise concerns when access to 
these services is unreasonably denied.

    Question. As you know from our many discussions with you, 
Cleveland-Cliffs operations in Butler, PA and Zanesville, OH are the 
last locations in all of North America that melt and finish Grain-
Oriented Electrical Steel (GOES). This market continues to face 
significant challenges. Circumvention of U.S. duties has been well 
documented, with foreign producers using unfair practices to skirt the 
systems in place that are intended to provide relief for domestic GOES 
producers. Lately, foreign producers have been entering the market by 
way of Canada and Mexico. Foreign producers export their product to 
Canada or Mexico where they alter their product and ship it to the U.S. 
to avoid section 232 tariffs.

    How will you work with our trade partners to the north and south to 
resolve this issue and ensure that our trade protections are not being 
undermined by bad actors?

    Answer. The previous administration conducted an investigation on 
imports of transformers and transformer components, including 
electrical steel lamination and electrical transformer cores, under 
section 232 of the Trade Expansion Act of 1962 but did not take any 
action under the statutory timeframe. However, it is my understanding 
that the Department of Commerce will continue to assess the issue you 
raised.

    I would also like to take this opportunity to assure you that my 
staff will continue to work with the Department of Commerce and other 
U.S. Federal agencies, as appropriate, to prevent the circumvention of 
U.S. trade measures, and will engage the governments of Canada and 
Mexico on this important issue.

                                 ______
                                 
                Question Submitted by Hon. Bill Cassidy
    Question. With agricultural input costs, such as fuel fertilizer 
continuing to rise and India continuing to offset these higher costs 
with increased subsidies, our Louisiana rice farmers will suffer severe 
financial losses this year as a result.

    Will USTR commit to raising the issues of India's cheating on rice 
subsidies at the next working group discussion with the Indian 
government? Furthermore, should India's cheating continue, what tools 
are at USTRs disposal in its trade policy forum working groups with 
India to ensure issues practices such as unfair rice subsidies do not 
continue to harm U.S. rice farmers?

    Answer. India maintains several concerning agricultural subsidy 
programs, in particular for rice, and we will raise these issues in the 
upcoming meetings of the U.S.-India Trade Policy Forum working groups. 
In addition, the United States is working with several WTO members who 
share similar concerns about Indian subsidies on agricultural products. 
With these likeminded WTO members and independently, USTR is 
considering several options to bring more transparency to India's 
agricultural policies and increase pressure on India to reform its 
subsidy programs.

                                 ______
                                 
               Questions Submitted by Hon. Mark R. Warner
    Question. Following the President's decision to terminate 
Ethiopia's eligibility for the African Growth and Opportunity Act 
(AGOA) trade preference program, I have heard from a number of my 
constituents who are concerned about the impact of this decision on the 
citizens of Ethiopia.

    While I understand the administration's determination that Ethiopia 
currently does not meet AGOA's statutory requirements due to human 
rights concerns--I do think that, as with any instance where we're 
enacting some sort of restrictions, it's important that we're doing so 
in a way that most appropriately impacts those responsible for 
violence, and as possible, minimizes the spillover costs to average 
citizens.

    I do share the concerns that have been raised about the impact of 
this decision on the people of Ethiopia--and now, nearly three months 
since the administration has terminated Ethiopia's eligibility, I 
remain worried about the long-term economic impacts that this may have, 
particularly among women in civil society.

    Now, thankfully, it appears progress has been made in recent 
months, including the Ethiopian government lifting the state of 
emergency last month, and then just recently, aid convoys have arrived 
in Tigray after the Tigray People's Liberation Front (TPLF) agreed to 
the Ethiopian government's announcement of a humanitarian ceasefire to 
facilitate humanitarian aid into the Tigray region.

    Is there any update you can provide on the status of Ethiopia's 
eligibility for AGOA? How has the recent progress impacted the 
country's ability to meet the statutory requirements for reinstatement? 
Is there a timeline for reassessing Ethiopia's eligibility?

    Answer. USTR engages regularly with relevant stakeholders and the 
Government of Ethiopia to gauge progress towards meeting the specific 
benchmarks we provided as a path for regaining AGOA eligibility. We 
routinely monitor Ethiopia's efforts on humanitarian access and on 
human rights. The 2023 AGOA eligibility review will begin shortly and 
that assessment will be the next opportunity to determine whether 
Ethiopia meets the statutory obligations for AGOA eligibility, which 
include to not engage in any gross violations of internationally 
recognized human rights and to cooperate fully in international efforts 
to eliminate human rights violations.

    Question. I was pleased to see President Biden meet with Kenyan 
President Kenyatta early in his administration. I strongly support 
strengthening the U.S.-Kenya trade relationship and believe its effects 
would be mutually beneficial.

    In my State, the African diaspora, our business community, and the 
Virginia Economic Development Partnership, have all been particularly 
interested in increased trade between the U.S. and Kenya.

    Last year, I had the opportunity to participate in a discussion 
regarding the U.S.-Africa trade relationship with the head of the 
African Continental Free Trade Area (AfCFTA) and the State Department.

    During that conversation, I was encouraged to hear about the 
standardization efforts AfCFTA can set for increased trade between the 
U.S. and Africa.

    How do you view a potential trade agreement with Kenya affecting 
the U.S. trade relationship with the rest of the continent? How is USTR 
working to ensure we formalize increased reciprocal trade opportunities 
between countries and regions in Africa, and the U.S.?

    You mentioned during the annual Trade Agenda Hearing that the head 
of the USTR Office of African Affairs was leading a delegation to 
Nairobi. When they return, I would like to get together your team with 
my staff to hear about how the trip went.

    Answer. The USTR-led delegation you referenced has now returned 
from talks with their Kenyan counterparts on a range of trade issues, 
with a view to advancing of the United States--Kenya trade relationship 
in a manner that benefits workers, attracts investment, and promotes 
regional economic integration.

    Assistant United States Trade Representative for African Affairs 
Constance Hamilton held meetings in Kenya on May 3rd through May 6th, 
2022. She led a delegation of 14 Washington-based U.S. officials that 
included subject-matter experts from USTR and the Departments of State, 
Labor, Commerce, and Agriculture. The discussions between the U.S. and 
Kenyan delegations covered a wide range of topics and proved very 
productive, identifying areas of convergence and deepening our mutual 
understanding on how to best strengthen our bilateral trade engagement.

    We will certainly arrange for them to brief your staff regarding 
the trip. The discussions between the U.S. and Kenyan delegations 
covered a wide range of topics and proved very productive, identifying 
areas of convergence and promoting mutual understanding. This effort 
will help us explore how best to deepen our reciprocal trade 
relationship, and ideally this will help serve as model we can 
replicate with other willing partners on the continent.

    Question. As co-chair of the Senate India Caucus, I have put forth 
a lot of effort during my time in the Senate to helping further the 
really important and strategic bilateral relationship between India and 
the U.S.

    On the trade front, I have pushed multiple administrations now to 
prioritize the advancement of this relationship--whether it is a 
comprehensive trade agreement or one with a more limited scope. Being 
able to resolve outstanding barriers and support American businesses in 
overcoming market access issues in India is all incredibly important.

    We have unfortunately seen, in the aftermath of Russia's invasion 
of Ukraine, that India and Russia retain longstanding ties on a number 
of fronts--certainly on the economic side. I think this highlights a 
real opportunity for the U.S. as we look to present more diversified 
and compelling avenues for Indian partnership, relative to what the 
Russians can offer.

    What role do you envision India playing in the broader Indo-Pacific 
Economic Framework? How are you prioritizing our relationship with 
India as part of this broader regional trade framework?

    What are the areas you see as ripe for progress in the U.S.-India 
trade relationship, and which issues do see as the major sticking 
points to a more comprehensive agreement?

    Answer. India is an important player in the Indo-Pacific region and 
is one of the countries that joined the launch of the IPEF. With 
respect to the anticipated trade pillar of the IPEF, we will be aiming 
for high-ambition outcomes in areas like digital trade and labor. We do 
regard the U.S.-India Trade Policy Forum (TPF), which my Indian 
counterpart and I relaunched in November 2021, as a vital part of the 
broader U.S.-India relationship, as well as an integral element of the 
Biden administration's Indo-Pacific Strategy. The TPF will continue to 
afford us important opportunities to resolve some of the existing trade 
concerns and to engage and build trust on important emerging trade 
policy issues. Among other issues, agricultural and digital trade will 
continue to be priorities for U.S. engagement with India, including 
with respect to proposed Indian policies that may unduly restrict the 
free flow of data across borders.

    Question. Technological leadership in emerging and critical 
technologies will determine the political, economic, and military 
strength of countries in the 21st century.

    For the last half century, the U.S. and other democratic countries 
led in scientific research and development of transformational 
technologies. Our leadership enabled us to set the global rules of the 
road for the use of new technologies, including software, satellites, 
and telecommunications, for example. We set the standards, and our 
values were embedded throughout. Leadership in these technologies will 
have major implications for our democracy and the growth--and 
security--of democracies around the world.

    For several years now, I have been leading calls to update our 
approach to digital trade, working with like-minded allies to develop 
rules to reflect and uplift democratic values. Therefore, I am pleased 
to see the White House announced over the weekend an agreement with the 
EU on a new Trans-Atlantic Data Privacy Framework. I am encouraged by 
this new framework, in addition to other recent efforts by the 
administration to engage in better global cooperation, such as the 
U.S.-EU Trade and Technology Council (TTC).

    While these initiatives serve as important steps forward, it is 
vital that we continue working to expand beyond this framework and 
develop global rules and protocols surrounding new technologies--
encompassing data privacy provisions, cybersecurity standards, and 
more.

    What do you see as the biggest barriers to cooperation or agreement 
on a global framework here?

    What are the administration's goals beyond this new agreement with 
the EU? Will the Trans- Atlantic Data Privacy Framework be used as a 
foundation for future data privacy and technology rules?

    In your view, what role should Congress play in developing these 
sort of digital governance rules?

    Answer. We are engaged with the EU on digital trade issues both in 
the Trade and Technology Council and also in direct bilateral 
discussions. It is clear to me that, in the context of the digital 
economy, the United States and the EU are both committed to protecting 
workers, privacy, cybersecurity, and consumer rights and that we both 
want our markets to be fair and competitive. We share many of the 
concerns animating EU action on many policy issues. When governments 
regulate, they should not do so on the basis of advancing the interests 
of national champions at the expense of foreign competitors.

                                 ______
                                 
               Questions Submitted by Hon. James Lankford
    Question. Taiwan is the 8th largest economy in the region, the 18th 
largest economy in the world, the 10th largest trading partner of the 
United States, 8th largest export market for agricultural commodities, 
and a thriving democracy with a market-based economy. Many of us on 
this committee support a Free Trade Agreement with Taiwan.

    The administration has used the term ``inclusive'' to describe the 
Indo-Pacific Economic Framework. Will Taiwan be included in the IPEF?

    Answer. Taiwan is a critical trading partner of the United States, 
and under President Biden, we've only strengthened and deepened our 
economic partnership by restarting Trade and Investment Framework 
Agreement talks and launching the Technology Trade and Investment 
Collaboration (TTIC) framework under Commerce. We look forward to 
continuing to strengthen and deepen those economic ties under the Biden 
administration. In fact, on June 1st, USTR launched the U.S.-
Taiwan Initiative on 21st-Century Trade, which is intended to develop 
concrete ways to deepen the economic and trade relationship, advance 
mutual trade priorities based on shared values, and promote innovation 
and inclusive economic growth for our workers and businesses. We are 
pleased to be launching IPEF with an initial strong, diverse group of 
Indo-Pacific partners. Moving forward, we will work with IPEF partners 
to consider expanding membership in IPEF.

    Question. Everything we've heard about the IPEF is that it doesn't 
include market access. If we are going to robustly compete with China, 
then we need to reduce tariff barriers with similar countries in the 
region so that companies have a viable alternative to China.

    Will the IPEF include any free trade agreements--or any provisions 
expanding market access? What is the incentive for countries to join 
his framework if there are no provisions expanding market access for 
their exports?

    Answer. While the focus of this trade arrangement is not market 
access, it does offer robust incentives that are priorities for 
countries in the region, including digital and trade facilitation. USTR 
will lead work on a trade arrangement with our partners that includes 
high-standard commitments in the areas of labor, environmental 
sustainability, the digital economy, agriculture, transparency and good 
regulatory practices, competition policy, and trade facilitation.

    The administration's focus will be on developing high-standard 
rules that can increase interoperability and competitiveness among 
Parties to the arrangement, which can generate increased access to 
foreign markets for both U.S. exporters and exporters from 
participating countries. We look forward to continued close 
coordination with Congress on this initiative.

    Question. I recently introduced the Quad Critical Minerals 
Partnership Act with Senators Warner, Cornyn, and King that would 
establish a partnership with the Quad countries for critical minerals 
security. A similar provision was included in the Trade Act of 2021. 
China controls nearly two-thirds of the world's supply of critical 
minerals. For our own security interest, we desperately need to reduce 
our risk exposure to China.

    What does the IPEF say about critical minerals and how will the 
IPEF help to reduce reliance on China for rare earths?

    Is the administration supportive of including language in China 
competitiveness legislation that incentivizes working with our Quad 
partners towards critical minerals security?

    Answer. We are in the early stages of consulting with stakeholders, 
including Congress, on the content of IPEF. We received submissions to 
a Federal Register notice on April 11th and are reviewing these 
submissions. We welcome your feedback on IPEF, including with respect 
to critical minerals and rare earths, and want to continue close 
consultation with Congress as we move forward in its development.

    Question. The 232 tariffs on steel and aluminum continue to 
compound the price of those commodities for our businesses. I 
appreciate the initiative you've taken to establish tariff-rate quotas 
with the EU, Japan, and the UK, but most countries are still subject to 
the 232 tariffs and those costs are being passed on to our small 
manufacturing businesses and their customers. These tariffs, coupled 
with inflation, are compounding the price of steel and aluminum for 
producers in my State. Lifting them would provide tremendous relief.

    Now that the deal with the UK has been finalized as of last week, 
who is the next country you plan to engage on lifting 232?

    Would the administration be open to a multilateral 232 negotiation 
with the Abraham Accords countries--Israel, the UAE, Bahrain, Morocco, 
Jordan, and Egypt? Would this step be consistent with the 
administration's stated objectives of rebuilding alliances and 
supporting the Abraham Accords?

    Answer. While we are not in the position to consider launching 232 
negotiations with additional countries at this time, the United States 
welcomes effective actions by like-minded trading partners to address 
the distortive effects of non-market excess capacity and carbon-
intensive production in the global steel and aluminum sectors. As the 
Secretary of Commerce's findings formed the bases for the actions taken 
under section 232 and the Secretary is charged with, among other 
things, reviewing the status of steel and aluminum imports with respect 
to the national security, we encourage countries interested in 
discussing the section 232 measures to engage with the Department of 
Commerce.

    Question. I've been disappointed in the administration's engagement 
on pursuing a TRIPS waiver. All of the reports coming out of the WTO 
indicate that the latest proposal for a waiver goes beyond COVID 
vaccines, but also therapeutics and diagnostics. Our efforts would be 
better spent ramping up our manufacturing of U.S.-made vaccines and 
then sharing them with the world--not going through this exercise of 
giving away American intellectual property at the WTO. You talk about a 
``worker-centered'' trade policy, but I don't see how it's ``worker-
centered'' to give our IP away to other countries for them to 
manufacture. It could be American workers producing American products 
with American IP. It seems like this administration is ``buy American'' 
on some things, but when it comes to pharmaceuticals or energy, you're 
set on outsourcing it to China and Russia.

    Why are you continuing to pursue a TRIPS waiver that will put 
future American innovation at risk?

    Answer. The COVID-19 pandemic has highlighted the importance of 
pharmaceutical, medical device, and other health-related innovations, 
as well as a lack of widespread, timely, and equitable global 
distribution of these innovations. The administration recognizes that 
extraordinary circumstances such as pandemics call for extraordinary 
measures. The administration continues to seek an appropriate balance 
through adequate and effective protection for pharmaceutical and other 
health-related intellectual property around the world to ensure robust 
American innovation in these critical industries to treat diseases and 
to fight the current pandemic.

    Question. Constitutionally, trade policy is set by Congress, yet 
Congress has been kept in the dark on the TRIPS negotiations.

    Will you commit to sharing the latest text proposal of the TRIPS 
waiver to this committee in conjunction with your responses to our 
questions for the record from this hearing?

    Answer. USTR has consulted with Congress on the TRIPS waiver 
discussions at the WTO. When waiver discussions at TRIPS Council 
stalled, the WTO Director-General decided to engage more directly in 
order to facilitate an outcome. She convened an informal discussions 
process with four WTO members (the United States; EU, which presented a 
paper on addressing pandemic exigencies through the TRIPS agreement in 
June 2021; and South Africa and India, which co-led the original TRIPS 
waiver proposal in October 2020) to identify a possible path forward on 
this important issue for deliberation by the entire WTO membership. The 
informal process convened by the Director-General resulted in draft 
text, released on May 3rd. The text has not been agreed to, either by 
the four members, or by the WTO membership as a whole. All WTO members 
currently have the opportunity to consult with their governments, 
legislatures, and stakeholders. Those consultations, including ones 
being conducted by USTR, are ongoing.

    WTO members look to the United States for leadership. As part of 
that leadership, USTR is committed to engaging in good faith to address 
concerns like this one, which relates to a global public health and 
economic crisis like the COVID-19 pandemic, raised by over half of the 
WTO's membership, primarily representing the world's developing and 
emerging economies.

    Question. Mexico continues to violate the USMCA with their state-
owned oil company Pemez, and last year's change to the Electric Power 
Industry Law favors Mexican state energy companies at the expense of 
private investment in the energy sector. Permits for private-sector 
energy projects continue to be blocked, harming U.S. competitiveness in 
the energy industry and compounding the spike in energy costs that 
Americans are experiencing. I've been pushing USTR to engage on this 
since last year, and you finally issued a statement last month noting 
your ``serious concerns'' with Mexico's energy policies and that you 
are ``actively assessing these developments.''

    What is your plan to pursue corrective action on this issue? When 
will you be done ``assessing'' the situation and take action?

    Will you commit to pushing back on any country who is harming the 
U.S. oil and gas industry, or will this issue not be prioritized due to 
the climate agenda?

    Do you agree that gas prices and energy costs are increasing the 
burden for American workers?

    What do you view as USTR's role in decreasing energy costs as part 
of your ``worker-centered'' trade policy?

    Answer. USTR has serious concerns with the deteriorating trajectory 
of Mexico's energy policies, including a series of ongoing actions the 
Mexican Government has taken to increase state control over, and limit 
competition in, the energy sector. USTR will continue to pursue ways to 
address these issues to advance the administration's worker-centric 
trade policy. As I wrote to Secretary Clouthier on March 31, 2022, I 
will be considering all available options under the USMCA to address 
these concerns.

    Question. The biggest challenge we've faced since the 
administration took over is the migrant crisis at our southern border. 
The Biden administration announced that they are expecting the number 
of migrant encounters at the border to double in the coming months with 
title 42 authority ending. What strikes me is that many of the migrants 
coming to our border are from countries with whom we have a Free Trade 
Agreement. For example, all three Northern Triangle Countries are 
parties to the Dominican Republic-Central America Free Trade Agreement 
(CAFTA-DR).

    What mistakes have we made over the last 15 years that have 
inhibited CAFTA from having a bigger impact on the prosperity and 
stability of the Northern Triangle? What is USTR's role in the 
administration's strategy for this region?

    How can we better utilize CAFTA as presently written to promote 
stable and resilient economic development in this region?

    During the Trump administration, we renegotiated NAFTA to update 
the provisions and adapt to modern challenges. Is USTR open to 
revisiting CAFTA and revising it as part of our strategy to get to the 
root causes of migration in the Northern Triangle?

    If we decided to renegotiate CAFTA, should Nicaragua be excluded 
due to Ortega's erosion of the rule of law and democracy?

    Answer. One of the five pillars of the administration's Strategy to 
Address the Root Causes of Migration in Central America is ``addressing 
economic insecurity and inequality.'' The administration is committed 
to promoting investment and trade engagement under the CAFTA-DR 
(Dominican Republic-Central America-United States Free Trade Agreement) 
to strengthen our economic ties to the region, generating inclusive 
growth for Central America workers and businesses, and supporting 
strong labor protections. The CAFTA-DR is critical to the well-being of 
the people of Central America. It provides a strong framework to foster 
economic opportunity, transparency and rule of law, but a trade 
agreement cannot address the full range of socioeconomic and political 
challenges in the region. Given the dramatic deterioration of respect 
for democratic principles and human rights in Nicaragua, the United 
States has already taken a number of actions and will continue to use 
diplomatic and economic tools at our disposal to promote accountability 
in the Nicaraguan government, while supporting the people of Nicaragua.

                                 ______
                                 
             Questions Submitted by Hon. Sheldon Whitehouse
    Question. Eight million metric tons of plastic end up in the oceans 
each year, which is the equivalent of a garbage truck of waste every 
minute. One study found that 10 rivers account for a quarter of that 
waste, eight of which are in Asia. Including plastic waste commitments 
in USMCA was a positive step, but we must go further.

    What would the Indo-Pacific Economic Framework do to address 
plastic pollution and how would it be more ambitious than the USMCA 
commitments?

    Answer. In the trade pillar of the Indo-Pacific Economic Framework 
(IPEF) we will seek trade-related environmental commitments that can 
measurably contribute to improving environmental sustainability, 
including protecting the marine environment. Marine debris, 
particularly ocean plastic pollution, harms coastal economies and 
vulnerable communities, particularly those that rely heavily on tourism 
and fishing, as is the case for much of the Indo-Pacific region. 
Stemming the tide of litter from land to the oceans depends on 
environmentally sound waste management and the sustainable use of 
materials, including through recycling and reuse. Accordingly, under 
the IPEF, we will seek ways to support solid waste management and 
recycling infrastructure, including through capacity building for sound 
regulatory frameworks, and through policies that promote more circular 
economies, including the development of markets for and trade in 
recyclable materials. The Commerce Department leads on the 
Infrastructure and Decarbonization and Clean Energy pillar of the IPEF.

    Question. Pirate fishing--fishing that is illegal, unreported, and 
unregulated (IUU)--is another major threat to our oceans, undermining 
both responsible fisheries management and human rights. Predatory 
Chinese fishing is particularly problematic, and many coastal Asian 
countries resent how the Chinese fishing fleet, with the help of the 
Chinese navy, treats their sovereign fishing fleets.

    What would the Indo-Pacific Economic Framework do to combat IUU 
fishing generally and predatory Chinese fishing in particular?

    Answer. USTR intends to seek trade-related environmental 
commitments under the trade pillar that can measurably contribute to 
improving environmental sustainability, including by building on 
previous efforts with provisions related to IUU fishing and other 
fisheries-related issues.

    Question. It has been more than 20 years since WTO negotiations 
over an agreement on fisheries subsidies began, and reaching a robust 
agreement is long overdue.

    What is are you doing to ensure we achieve an ambitious agreement?

    Answer. We remain fully engaged in the ongoing negotiations on 
harmful fisheries subsidies, where we have long been leading efforts to 
try to arrive at a meaningful result. We are urging members to focus on 
building ambition back into the negotiating text to try to bring the 
negotiations to a successful conclusion. This includes supporting 
greater transparency with respect to the use of forced labor on fishing 
vessels, and ensuring any outcome includes effective disciplines on the 
most harmful fisheries subsidies that apply to all members, including 
China. If we are to achieve an ambitious agreement, WTO members must 
support an outcome that does more than simply lock in the status quo 
and provide the WTO's blessing to continue harmful subsidies practices 
in perpetuity.

    Question. We are facing a climate crisis. Sea level rise threatens 
to overwhelm coastal regions in the pacific.

    What meaningful, enforceable commitments on fighting climate change 
will you pursue as part of the Indo-Pacific Economic Framework?

    Answer. Under the IPEF trade pillar, we intend to work with 
partners to mobilize technologies, investments, and technical resources 
to scale up clean energy. We also intend to pursue commitments by 
participating IPEF countries to decarbonize their industries, explore 
low- emission procurement opportunities, pursue methane and carbon 
reductions, and promote sustainable land use. The Commerce Department 
leads on the Infrastructure and Decarbonization and Clean Energy pillar 
of the IPEF.

    Question. The Biden administration has wisely understood that 
kleptocracy and corruption abroad is a national security issue. We have 
seen what happens when kleptocrats seek out rule-of-law nations to 
shelter their ill-gotten gains. Wherever there is a leak, the money 
will follow, which is why it is so important to reach agreement 
internationally to stop providing sanctuary for corrupt money.

    What would the Indo-Pacific Economic Framework do to combat 
kleptocracy and what would you do to ensure other countries agree to 
meaningful commitments?

    Answer. We are in the early stages of consulting with stakeholders, 
including Congress, on the content of IPEF. We received submissions to 
a Federal Register notice on April 11th and are reviewing these 
submissions. We welcome your feedback on IPEF, including with respect 
to addressing kleptocracy, and want to continue close consultation with 
Congress as we move forward in the IPEF's development.

                                 ______
                                 
                 Questions Submitted by Hon. Todd Young
    Question. I have been closely following the progress of the Indo-
Pacific Economic Framework (IPEF). There is a lot a stake if the United 
States cannot meaningfully increase trade engagement with countries in 
the region. China has used economic coercion to pull nations deeper 
into dependency and away from American businesses. I would be thrilled 
if we can offer nations real certainty and benefit through trade 
agreements--this would be an effective way to incentivize a 
relationship between us and our Indo-Pacific partners.

    In this vein, can you explain what outcomes the IPEF will hope to 
achieve, and more importantly how you will measure those outcomes? 
Furthermore, will there be an opportunity to edit the modules over time 
to increase effectiveness?

    Answer. The Biden-Harris administration is committed to economic 
engagement with partners in the Indo-Pacific region and has launched 
the Indo-Pacific Economic Framework for Prosperity (IPEF) to strengthen 
our economic ties to the region, while promoting inclusive growth for 
workers and businesses, advancing strong labor standards, and tackling 
climate change. As part of this effort, USTR is specifically focused on 
negotiating provisions in IPEF that can help American businesses and 
workers compete in the global economy, and will seek to include 
commitments on labor, environmental sustainability, the digital 
economy, agriculture, transparency and good regulatory practices, 
competition policy, and trade facilitation. The administration's focus 
will be on developing high-standard rules that can increase 
interoperability and competitiveness among parties to the arrangement, 
which can generate increased access to foreign markets for U.S. 
exporters. The final structure of the IPEF pillars will be part of the 
negotiation undertaken with trading partners, however, we expect to 
have both binding and non-binding obligations that contribute to a 
meaningful outcome for all parties. We look forward to continued close 
coordination with Congress on this initiative.

    Question. Beyond technology exports and economic significance, 
Taiwan holds vital strategic and normative importance for the U.S.

    With respect to the Indo-Pacific Economic Framework, can you 
confirm whether or not the administration is planning to include or 
consult with Taiwan? If the administration is opposed to Taiwan joining 
IPEF, how is the U.S. collaborating with them in terms of broad supply 
chain integration and trade agreements?

    Answer. Taiwan is a critical trading partner of the United States, 
and under President Biden, we've only strengthened and deepened our 
economic partnership by restarting Trade and Investment Framework 
Agreement talks and launching the Technology Trade and Investment 
Collaboration (TTIC) framework under Commerce. We look forward to 
continuing to strengthen and deepen those economic ties under the Biden 
administration. In fact, on June 1st, USTR launched the U.S.-
Taiwan Initiative on 21st-Century Trade, which is intended to develop 
concrete ways to deepen the economic and trade relationship, advance 
mutual trade priorities based on shared values, and promote innovation 
and inclusive economic growth for our workers and businesses. We are 
pleased to be launching IPEF with an initial strong, diverse group of 
Indo-Pacific partners. Moving forward, we will work with IPEF partners 
to consider expanding membership in IPEF.

    Question. Anticipating that Russia's economy is not going to 
survive in isolation, it will likely turn to the Chinese for goods and 
market access. As you may know, there have been several reports of 
Chinese financial firms offering payment services to Russian banks and 
potential new deals for China to purchase Russian commodities, which 
would very easily provide impactful assistance to Moscow.

    Is the administration considering action to hold China accountable 
for providing assistance to Russia, and what might those actions 
entail?

    Answer. The Biden-Harris administration, working closely with our 
allies and partners, is committed to ensuring that the Russian 
Federation and the Lukashenka regime in Belarus--and those aiding 
them--pay a severe economic and diplomatic price for their unprovoked 
aggression against Ukraine.

    Question. As Congress debates legislation to out-compete China, 
nations are actively debating their own policies to boost domestic 
production. Japan, for example, is considering an economic security 
bill to secure supply chains specifically with sensitive technologies. 
Given that Japan is a trusted ally of the U.S., it would seem prudent 
for us to pursue deeper collaboration on the sensitive technology issue 
specifically. And, it would make sense for the U.S. to collaborate with 
partners like Taiwan for more collaboration.

    Does the administration plan to engage on supply chain resiliency--
particularly for sensitive technologies--with like-minded partners?

    Answer. The Biden-Harris administration, working closely with our 
allies and partners, is committed to ensuring that the Russian 
Federation and the Lukashenka regime in Belarus--and those aiding 
them--pay a severe economic and diplomatic price for their unprovoked 
aggression against Ukraine.

    As the leader of the administration's Supply Chain Trade Task 
Force, USTR is bringing together a broad range of U.S. Government 
agencies to consider ways to address unfair trade practices that 
undermine critical U.S. supply chains, and to look at how we can use 
our trade agreements with other countries and trade tools to strengthen 
supply chain resilience.

    USTR is also working closely with trading partners and stakeholders 
through our many bilateral and multilateral venues, including the U.S.-
Mexico-Canada Agreement (USMCA), U.S.-European Union Trade and 
Technology Council, U.S.-Korea Free Trade Agreement (KORUS), Japan 
Comprehensive Partnership, and U.S.-United Kingdom Trade Dialogue, as 
well as multilateral organizations such as the World Trade Organization 
(WTO), Asia-Pacific Economic Forum (APEC), and Organisation for 
Economic Co-operation and Development (OECD).

    USTR's main focus so far has been on areas related to advanced 
batteries, semiconductors, and critical materials and permanent 
magnets.

    It will be important that the administration and Congress work 
together to implement the recommendations that emerge from the 
administration's significant work on supply chains. These include 
critical investments in sensitive technologies such as the 
semiconductor, medical, and clean energy supply chains.

    Question. Indiana is a hub for biotechnology innovation, allowing 
farmers and producers globally to withstand weather challenges and 
boost yields. Today, Mexico is perhaps our most important trading 
partner, but so far, they have not honored their commitments made under 
USMCA regarding biotechnology. In fact, their approval delays and lack 
of a science-based approach are really stunting our agriculture 
industry's ability to export and move forward with plans for this 
planting season.

    How will you, in consultation with Secretary Vilsack, seek to 
improve the biotech approval process in Mexico? What engagement have 
you had on this issue with the Mexican Government thus far, and are you 
considering using enforcement levers if there is a stalemate?

    Answer. I have been working closely with Secretary Vilsack to 
address challenges for American agriculture in Mexico. I am examining 
biotech policies and developments in Mexico carefully and have raised 
concerns with Mexico's Economia Secretary Clouthier and Agriculture 
Secretary Villalobos. I will continue engaging them to ensure Mexico 
fulfills its USMCA obligations and addresses issues that affect the 
commercialization of biotech products. USTR is looking at all of our 
tools under the USMCA and considering our strategy on Mexico's biotech 
policies.

    Question. American companies, including many of my constituents, 
are experiencing circumvention tactics deployed by China in order to 
skirt our trade laws. Of particular concern is stainless steel 
production in Indonesia that is subsidized by the Chinese Government, 
and then exported to the U.S. market outside of the bounds of the 
section 232 tariffs. The stainless steel industry in Indonesia now 
produces double what is produced in the United States, and Indonesian 
stainless steel imports have tripled over the last few years.

    Is USTR concerned about circumvention tactics deployed by China to 
undercut American businesses? Is USTR specifically aware of this issue 
related to stainless steel and Indonesia? In your view, how can trade 
tools be strengthened to target bad actors that engage in circumvention 
to the detriment of our domestic manufacturers?

    Answer. The administration is concerned about the cross-border 
investment activities of Chinese steel enterprises in Indonesia and 
other countries throughout Southeast Asia. The United States is also 
closely monitoring the ongoing WTO dispute regarding Indonesia's export 
ban on nickel ores-- an essential raw material for U.S. stainless steel 
producers.

    Regarding your question on new tools to address trade circumvention 
and other unfair trade practices by China, we believe some of the 
efforts underway in Congress are extremely promising. For example, the 
updates and the enhancements present in the Level the Playing Field Act 
2.0 are exactly in the spirit of what we need right now, which is the 
tailoring of a toolset and expansion of a toolset that will be up to 
the task of meeting the challenges that our workers and industries are 
facing today.

    I would also like to take this opportunity to assure you that my 
staff will continue to work with the Department of Commerce and other 
U.S. Federal agencies, as appropriate, to prevent the circumvention of 
U.S. trade measures.

    Question. With respect to the COVID-19 vaccine, the World Health 
Organization's vaccine equity website states, ``With global vaccine 
production now at nearly 1.5 billion doses per month, there is enough 
supply to achieve our targets, provided they are distributed equitably. 
This is not a supply problem; it's an allocation problem.''

    Given that there are currently enough vaccines in production for 
everyone who needs them, what is the rationale for the administration's 
view that the recently announced TRIPS waiver compromise is truly 
necessary? Is the administration worried that waiving patent 
protections for COVID vaccines will threaten the supply chain for safe 
and efficient manufacturing?

    Answer. The Biden-Harris administration supports a waiver of 
intellectual property protections for COVID-19 vaccines under the TRIPS 
Agreement. This is one part of a holistic approach to getting as many 
safe and effective vaccines to as many people around the world as 
possible. The United States continues to work with the private sector 
and all possible partners to expand safe and effective vaccine 
manufacturing and distribution around the world. It is clear that there 
are vaccine production powerhouses and vaccine deserts; we must close 
the gap. We will also work to increase the raw materials needed to 
produce those vaccines.

    There are certainly last mile issues. However, in light of 
variants, there is considerable uncertainty about how many vaccines 
will be required to vaccinate the world over the long term.

                                 ______
                                 
                 Questions Submitted by Hon. Ben Sasse
    Question. During the hearing, you said that USTR continues to hold 
Trade and Investment Framework (TIFA) talks with Taiwan. The last round 
of TIFA talks were held in June 2021.

    Will you commit to holding the next round of TIFA talks in 2022?

    Has the Biden administration decided to exclude Taiwan from IPEF 
discussions? If so, why?

    Are the current section 232 tariffs placed on Taiwan under review? 
When can we expect that review to be complete?

    Answer. We are committed to holding regular TIFA Council meetings, 
and are exploring with Taiwan the possibility of holding the next round 
this year. The United States and Taiwan have been working hard to 
implement the commitments made during the TIFA Council meeting last 
year. Over the past several months, the two sides have held several 
TIFA working group meetings on a host of important issues. We welcome 
Taiwan's meaningful engagement and will continue to remain in close 
contact in the coming months as we assess the progress being made and 
consider the appropriate time for the next TIFA Council meeting.

    Taiwan is a critical trading partner of the United States, and 
under President Biden, we've only strengthened and deepened our 
economic partnership by restarting Trade and Investment Framework 
Agreement talks and launching the Technology Trade and Investment 
Collaboration (TTIC) framework under Commerce. We look forward to 
continuing to strengthen and deepen those economic ties under the Biden 
administration. In fact, on June 1st, USTR launched the U.S.-Taiwan 
Initiative on 21st-Century Trade, which is intended to develop concrete 
ways to deepen the economic and trade relationship, advance mutual 
trade priorities based on shared values, and promote innovation and 
inclusive economic growth for our workers and businesses. We are 
pleased to be launching IPEF with an initial strong, diverse group of 
Indo-Pacific partners. Moving forward, we will work with IPEF partners 
to consider expanding membership in IPEF.

    While we are not in the position to consider launching section 232 
negotiations with additional trading partners at this time, the United 
States welcomes effective actions by like-minded trading partners to 
address the distortive effects of nonmarket excess capacity and carbon-
intensive production in the global steel and aluminum sectors. As the 
Secretary of Commerce's findings formed the bases for the actions taken 
under section 232 and the Secretary is charged with, among other 
things, reviewing the status of steel and aluminum imports with respect 
to the national security, we encourage trading partners interested in 
discussing the section 232 measures to engage with the Department of 
Commerce on this matter.

    Question. The Biden administration needs to request, and Congress 
should reauthorize, Trade Promotion Authority (TPA) to give our allies 
and partners the confidence that they are negotiating trade deals with 
the American people, not just with one administration.

    Will you commit to publicly asking Congress to reauthorize TPA in 
2022?

    Answer. There are strong views on both sides of the Trade Promotion 
Authority issue, and I look forward to working with Congress should you 
decide to advance TPA legislation.

    Question. When will Congress be presented with formal text of the 
TRIPS agreement that has allegedly been reached between the 
administration and WTO member nations?

    Does this agreement include COVID-19 therapeutics, diagnostics, 
medical devices, and health technologies, or is it limited to vaccines?

    Can you point to specific examples where American manufacturers 
have been unwilling to work with developing nations to produce and 
distribute COVID-19 resources and technologies?

    Answer. The WTO Director-General released official draft text on 
May 3rd. Accordingly, USTR has begun its consultations on that text 
with Congress and stakeholders. Those consultations, including on scope 
of coverage regarding products, are ongoing.

    USTR has had regular consultations with interested parties 
throughout the process of discussions on this issue. These interested 
parties have included labor organizations, civil society, public health 
advocates, public health experts both inside and outside of the 
government, and vaccine manufacturers themselves as well as their trade 
associations.

    Question. According to USTR's website, ``American trade policy 
works toward opening markets throughout the world to create new 
opportunities and higher living standards for families, farmers, 
manufacturers, workers, consumers, and businesses.'' During the 
hearing, you attempted to draw a distinction between ``market access'' 
as tariff liberalization and ``market access'' as mean meaningful 
economic outcomes. I agree that meaningful economic outcomes are an 
important trade policy objective, but I think opening markets through 
trade agreements is the key mechanism for securing meaningful economic 
outcomes for our farmers, ranchers, and businesses.

    Will you commit to prioritizing opening markets for farmers, 
ranchers, and businesses as a core trade policy objective for the Biden 
administration?

    Answer. The Biden administration is using our trade tools to create 
new opportunities for American agriculture, including using our 
existing Trade and Investment Framework Agreements (TIFAs) and Free 
Trade Agreements (FTAs), to eliminate tariff and non-tariff barriers to 
U.S. agricultural products. Last year, we secured a number of wins that 
will provide more certainty for U.S. farmers, ranchers, and food 
producers around the country, including removal of retaliatory tariffs 
due to resolution of the EU aircraft dispute and a historic agreement 
on steel and aluminum; removal of tariffs due to agreements with four 
European trading partners on Digital Services Taxes; new access to the 
Indian market for U.S. pork following the U.S. India Trade Policy 
Forum; favorable outcomes on products such as pork, beef, rice, wheat, 
corn and grape juice in negotiations with the United Kingdom and the EU 
on tariff rate quotas resulting from Brexit; Vietnam's approval of 
pending biotech events following TIFA engagement; MFN duty reductions 
in Vietnam for corn, wheat, and frozen pork; and regaining access to 
the EU market for our shellfish producers. We are also committed to 
strong enforcement of our agreements, as our recent win in the Canada 
dairy dispute illustrates, to promote predictability and level the 
playing field in agricultural trade.

    Finally, the Biden administration has launched the Indo-Pacific 
Economic Framework for Prosperity with allies and partners to deepen 
economic relationships in the region and coordinate approaches to 
addressing global economic challenges. We intend to use this framework 
to set standards that promote fair and open competition and inclusive 
growth for farmers, ranchers, workers, and businesses small and large. 
Within the trade pillar, we are developing agriculture provisions that 
include high-standard commitments to address some of the persistent 
challenges that American farmers face in accessing markets in the 
region.

                                 ______
                                 
                Questions Submitted by Hon. John Barasso
    Question. International trade plays a critical role in our economic 
security and our national security. American security as well as the 
security of our allies around the world are supported through trade. 
Russia put the world on notice.

    More and more nations are waking up to the realization that energy 
security equals national security. Countries around the globe are 
scrambling to find new energy supplies to replace Russian oil, coal, 
natural gas, and nuclear fuel. This is because Russia uses its energy 
monopoly as a weapon. Russia understands that energy is power. 
President Biden's 2022 Trade Agenda fails to outline a strategy to help 
our allies be more energy secure. America is a global energy 
superpower. We should act like it, especially through trade.

    Wyoming has an abundance of coal, oil, natural gas, and uranium. 
The U.S. can provide our allies around the world with reliable, 
affordable, and secure energy resources. I see no plan or urgency to do 
this in the President's Trade Agenda. This is a mistake.

    How can we leverage American energy in international trade to 
counter our adversaries like Russia who use their own energy exports as 
a weapon?

    Answer. Natural gas plays an important role in U.S. energy 
security, and U.S. LNG exports now contribute to the energy security of 
our allies and trade partners. The Department of Energy is responsible 
for authorizing LNG exports, and as new LNG export capacity comes 
online U.S. exports of LNG are expected to continue to grow.

    President Biden and European Commission President Ursula von der 
Leyen recently announced a joint Task Force to reduce Europe's 
dependence on Russian fossil fuels and strengthen European energy 
security as President Putin wages his war of choice against Ukraine.

    This Task Force for Energy Security will be chaired by a 
representative from the White House and a representative of the 
President of the European Commission. It will work to ensure energy 
security for Ukraine and the EU in preparation for next winter and the 
following one while supporting the EU's goal to end its dependence on 
Russian fossil fuels.

    Question. I'm deeply concerned about the current nationalization of 
U.S. energy assets in Mexico despite specific protections from U.S.-
Mexico-Canada Agreement (USMCA). Despite bipartisan pressure from 
Congress, USTR has not prioritized USMCA enforcement of energy industry 
in Mexico. As a result, U.S. companies' facilities have been seized by 
the Mexican Government with little enforcement support from USTR.

    What specific action is USTR going to take to help U.S. companies 
who are suffering the consequences of Mexico's actions with respect to 
the energy sector; and will you commit to requesting direct 
consultations with the Government of Mexico under USMCA regarding their 
recent activities in the energy sector?

    Answer. USTR has serious concerns with the deteriorating trajectory 
of Mexico's energy policies, including a series of ongoing actions the 
Mexican Government has taken to increase state control over, and limit 
competition in, the energy sector. USTR is actively assessing these 
developments, and as I wrote to Secretary Clouthier on March 31, 2022, 
I will be considering all available options under the USMCA to address 
these concerns.

    Question. I'm concerned about the lack of action taken to date by 
this administration to open new markets for U.S. ranching and 
agriculture products. Wyoming's farmers and ranchers take great pride 
in their work. Our beef, barley, sugar, grain, feed and other ranching 
agriculture products are second to none. In order to showcase these 
products around the world, Wyoming's producers need access to 
international markets.

    Will you commit to fighting for fair market access and market share 
for America's farmers and ranchers; and

    Will you aggressively highlight and push back against market access 
barriers that disadvantage producers in Wyoming and across the country?

    Answer. The Biden administration is using our trade tools to create 
new opportunities for American agriculture, including using our 
existing Trade and Investment Framework Agreements (TIFAs) and Free 
Trade Agreements (FTAs) to eliminate tariff and non-tariff barriers to 
U.S. agricultural products. Last year, we secured a number of wins that 
will provide more certainty for U.S. farmers, ranchers, and food 
producers around the country, including: removal of retaliatory tariffs 
due to resolution of the EU aircraft dispute and a historic agreement 
on steel aluminum; removal or aversion of tariffs due to agreements 
with four European trading partners on Digital Services Taxes; new 
access to the Indian market for U.S. pork following the U.S. India 
Trade Policy Forum; favorable outcomes on products such as pork, beef, 
rice, wheat, corn and grape juice in negotiations with the United 
Kingdom and the EU on tariff rate quotas resulting from Brexit; 
Vietnam's approval of pending biotech events following TIFA engagement; 
MFN duty reductions in Vietnam for corn, wheat, and frozen pork; and 
regaining access to the EU market for our shellfish producers. We are 
also committed to strong enforcement of our agreements, as our recent 
win on Canada dairy illustrates, to promote predictability and level 
the playing field in agricultural trade.

    Finally, the Biden administration has launched the Indo-Pacific 
Economic Framework for Prosperity with allies and partners to deepen 
economic relationships in the region and coordinate approaches to 
addressing global economic challenges. We hope to use this framework to 
set standards that promote fair and open competition and inclusive 
growth for farmers, ranchers, workers, and businesses small and large. 
Within the trade pillar, we are developing agriculture provisions that 
include high-standard commitments to address some of the persistent 
challenges that American farmers face in accessing markets in the 
region.

    Question. U.S. businesses are often at a disadvantage vis-a-vis 
state-owned enterprises (SOEs) that are not guided by market 
principles. Such SOEs benefit from environmental, health, and labor 
standards below that of publicly traded companies. The uranium miners 
in Wyoming know this only too well, as U.S. mining has come to a 
standstill at the hands of increased imports from places like Russia, 
Uzbekistan and other countries where the Chinese have significant 
mining investments. U.S. trade policy needs a clear strategy for 
addressing the SOE imbalance.

    Can you describe in detail how USTR intends to address the 
challenges posed by SOEs in China and elsewhere; and

    Does what tools, if any, will the Indo-Pacific Economic Framework 
include to address the challenges posed by SOE's in the region?

    Answer. We are committed to using the full range of tools we have, 
and to develop new tools as needed, to defend American economic 
interests from the harmful economic and trade policies and practices of 
others, including the challenges posed by state-owned enterprises 
(SOEs) in China and elsewhere. The administration is also actively 
working with like-minded partners, both directly and in multilateral 
institutions like the Organisation for Economic Co-operation and 
Development, to advance new international disciplines on SOEs. In 
addition, we are currently pursuing the negotiation of additional SOE 
disciplines with Mexico and Canada under the USMCA.

    We are in the early stages of consulting with stakeholders, 
including Congress, on the content of IPEF. We received submissions to 
a Federal Register notice on April 11th and are reviewing these 
submissions. We welcome your feedback on IPEF, to include with respect 
to addressing the challenges posed by SOEs, and want to continue close 
consultation with Congress as we move forward in its development.

    Question. The COVID-19 pandemic has starkly demonstrated--through 
trade restrictions, supply chain breakdowns, and other unpredictable 
actions by countries around the world--the importance of food security. 
Russia's unprovoked invasion of Ukraine has exacerbated this critical 
issue and placed enormous pressure on the global food supply chain. 
Fertilizer shortages are already changing American farmers' approach to 
planting and this will put additional pressure on the food supply.

    What actions is USTR taking to address the current challenges 
facing the U.S. and global food Supply?

    Answer. The United States is working with our partners and allies 
around the world to address the disruptions to supply chains that 
Russia's unprovoked invasion of Ukraine has caused. Specifically, USTR 
is working bilaterally and multilaterally, with like-minded countries 
to avoid the use of trade distorting measures, eliminate unjustified 
non-tariff barriers, fully implement the Trade Facilitation Agreement, 
and continue notifying and informing other WTO members of relevant 
trade programs and measures that affect agricultural production and 
global trade.

    Question. As we discussed numerous times in the past, soda ash is 
very important to my home State. U.S. ``natural soda ash'' is refined 
from the mineral trona. The Green River Basin in Wyoming has the 
world's largest trona deposit.

    Soda ash is a key manufacturing component of glass, detergents, 
soaps, and chemicals. U.S. natural soda ash sets the standard for 
quality, purity, and energy efficiency in production. Like many U.S. 
industries, soda ash faces significant trade barriers around the world.

    As part of your effort to promote U.S. industries in international 
markets, will you recommit to advocate for eliminating trade barriers 
for soda ash and other important U.S. industries in the international 
marketplace?

    Answer. The U.S. soda ash industry is among the most competitive in 
the world. Often, countries competing for the global soda ash market do 
so through the degradation of worker rights and the environment. I will 
work to remove trade barriers and to ensure U.S. exports of soda ash 
and other important goods face a level playing field in the 
international market.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    The biggest trade and economic security stories in the world today 
are Russia and China. Their governments are united in putting up 
barriers to American products and American values.

    Since Putin launched his unprovoked invasion of Ukraine, the U.S. 
and our allies have hit Russia, Putin, and his circle of oligarchs with 
the most powerful economic sanctions in history. It's not just about 
yanking away super-yachts and private jets. Putin is now the head of a 
pariah state. In terms of trade, the Senate is currently in the process 
of formally designating Russia as a pariah state by revoking its 
Permanent Normal Trade Relations status.

    The U.S. has proven to Russia that going down the abusive 
totalitarian road is a bad bet. The U.S. and our allies must prove the 
same to China. China's Government is a human-rights abusing, jobs- and 
tech-stealing behemoth at the head of an economic superpower. One of my 
top concerns about the Chinese Government's economic model is 
censorship.

    When the Internet took off, American innovators were first out of 
the gate with big ideas. The Chinese Government responded by using its 
Great Firewall to block those companies, and allowing Chinese firms to 
rip off their ideas instead of competing with them directly. Even 
worse, Chinese tech comes with Chinese censorship, and it even censors 
American people and American businesses.

    The Chinese model of censorship is popping up all over the world. 
It's fracturing the Internet. It's distorting reality for entire 
nations, as you see in Russia, where the people are being fed lies 
about what's going on in Ukraine. The U.S. must stand up to that kind 
of censorship, and USTR has a big role in fighting for a free and open 
Internet through smart digital trade policy.

    You can also bet that the Chinese Government will want to dominate 
the technologies that will dominate the rest of the 21st century, such 
as semiconductors, EV batteries, and AI. It's also continuing its awful 
record of abusing human rights and trampling on workers.

    Again, this is where USTR comes in. The U.S. must do everything it 
can to stand up to China, protect American workers and businesses, and 
prevent a race to the bottom on basic rights.

    As I said at the outset, the U.S. and our allies have proven with 
the sanctions on Russia that our collective economic power is anything 
but ``soft.'' A big reason why the U.S. was able to marshal such 
strength was because the Biden administration, USTR included, had 
worked hard to mend our relationships in Europe and elsewhere.

    USTR racked up a lot of significant wins in the process that don't 
always get lots of discussion. USTR finally brokered a deal in an 
aircraft trade dispute with the EU and the UK that had been unresolved 
for nearly 2 decades. USTR and the Commerce Department also reached 
deals with the EU, the UK, and Japan on steel and aluminum trade--which 
will remove existing tariffs, bring prices down for Americans, and 
fight carbon emissions.

    Before those disputes were resolved, American firms had been hit in 
the crossfire, with tariffs on everything from airplanes to cranberries 
to wine. EU tariffs on distilled spirits were a big danger to Oregon's 
thriving craft beverage industry. Ambassador Tai's work to negotiate 
deals has wiped away these tariff threats, ensuring our businesses can 
grow, create good-paying jobs, and export with confidence.

    Just last week, USTR got Japan to agree to allow in more U.S. beef 
at lower tariff levels, which is huge news for our ranchers. And thanks 
to an agreement with the EU, American fishers are exporting live 
oysters, clams, and mussels to Europe for the first time in over a 
decade. There's no question that resolving these issues has brought the 
U.S. and our traditional economic allies closer together.

    Two weeks ago, this committee held a hearing on the Indo-Pacific 
Economic Framework, which is another opportunity to strengthen our 
economic ties and marginalize the Russia-China model. It's got a lot of 
promise for Oregon workers and businesses, who live at one of the 
gateways to the Pacific. A good agreement will bulldoze overseas 
barriers to Oregon products from Columbia Gorge pears to Wallowa beef. 
Reducing barriers means better market access for farmers and 
manufacturers, which is incredibly important to Oregon--where one in 
five jobs are trade jobs, and trade jobs often pay better.

    It's also an important opportunity to raise standards for labor 
rights, environmental protections, and a free and open Internet. And 
because sunlight is the best disinfectant, it's a positive sign that 
USTR has committed to handling those discussions with transparency and 
close consultations. My view is, that's key to getting the best 
possible deal for American workers.

    I want to thank Ambassador Tai for joining the committee today. I'm 
looking forward to discussing these issues with her, and more.

                                 ______
                                 

                             Communications

                              ----------                              


                American Apparel and Footwear Association

                           740 6th Street, NW

                          Washington, DC 20001

                            P: 202-853-9080

                      https://www.aafaglobal.org/

April 14, 2022

The Honorable Ron Wyden             The Honorable Mike Crapo
Chairman                            Ranking Member
U.S. Senate                         U.S. Senate
Committee on Finance                Committee on Finance
Washington, DC 20510                Washington, DC 20510

RE: Statement for the Hearing Record: The President's 2022 Trade Policy 
Agenda, March 31, 2022

Dear Chairman Wyden and Ranking Member Crapo,

On behalf of the members of the American Apparel and Footwear 
Association (AAFA), we appreciate this opportunity to submit a 
statement for the record for the Committee's hearing on the ``The 
President's 2022 Trade Policy Agenda.''

The American Apparel and Footwear Association (AAFA) is the national 
trade association representing apparel, footwear and other sewn 
products companies, and their suppliers, which compete in the global 
market. Representing more than 1,000 world famous name brands, AAFA is 
the trusted public policy and political voice of the apparel and 
footwear industry, its management and shareholders, its three million 
U.S. workers, and its contribution of more than $350 billion in annual 
U.S. retail sales.

Trade Agreements

The U.S. apparel, footwear, and related products industry encompasses 
domestic manufacturers, exporters, importers, and global suppliers. Our 
members make and sell products in the United States and around the 
world. Because nearly every U.S. job in our industry depends on access 
to foreign customers, access to global supply chains, or both for its 
existence, trade agreements are vitally important for the 
competitiveness of the industry. We encourage the Committee to urge 
USTR complete negotiations with Kenya and the United Kingdom. We also 
support \1\ a comprehensive Indo-Pacific Economic Framework (IPEF) that 
includes market access, tariff liberalization, customs facilitation, 
strong intellectual property provisions, sustainability provisions, and 
a clear strategy \2\ on supply chain resiliency.
---------------------------------------------------------------------------
    \1\ https://www.aafaglobal.org/AAFA/AAFA_News/
2022_Letters_and_Comments/AAFA_Sub
mits_Comments_to_USTR_on_IPEF.aspx.
    \2\ https://www.aafaglobal.org/AAFA/AAFA_News/
2022_Letters_and_Comments/AAFA_Sub
mits_Comments%20to_Commerce%20_on_IPEF.aspx
---------------------------------------------------------------------------

Generalized System of Preferences (GSP)

We are pleased to see full retroactive renewal of GSP in both the House 
and Senate bills. However, we are concerned the increased eligibility 
criteria may make it more difficult for many countries to comply. We 
must remember that GSP is a critical development tool needed to help 
lift people out of poverty. Thus, any proposal must preserve as much 
``good trade'' as possible during country practice reviews, including 
the possibility of removing GSP on a case-by-case basis for only bad 
actors, updating the Competitive Need Limit (CNL) rules to raise the 
value thresholds, and amending the statute to say that GSP benefits 
should be restored for products that fall below the (new) thresholds. 
Further, the longer duration in the Senate version provides more 
business certainty, providing more incentives to meet any new 
eligibility criteria.

Miscellaneous Tariff Bill (MTB)

The MTB allows American companies the ability to eliminate or reduce 
duties on nearly 2,500 items not available or manufactured in the 
United States. We urge the Committee to consider renewing retroactively 
back to when it expired at the end of December 2020. Further, since the 
process already includes a thorough vetting process by the U.S. 
International Trade Commission and allows Members of Congress to object 
to specific petitions, provisions that seek to exclude finished 
products are arbitrary and unnecessary. If the goal of the MTB is to 
support U.S. jobs, it should not matter whether U.S. value-add occurs 
at the beginning or end of a product's value chain. Excluding only 
finished products suggests that the only U.S. value-add that comes at 
the end of a value chain are worthwhile to protect, sending a terrible 
message to the millions of Americans employed in developing, designing, 
sourcing, moving, marketing, and ensuring the compliance of products. 
We also have serious questions over whether a ``finished product'' 
exclusion is even administrable.

Section 301 China Tariff Exclusions

We have called on the Office of the U.S. Trade Representative (USTR) to 
reinvigorate the exclusion process for products subject to additional 
tariffs under Section 301 of the Trade Act of 1974. Such a provision 
was included as part of the Trade Act of 2021 in the U.S. Innovation 
and Competition Act (S. 1260) after an overwhelming bipartisan 91-4 
vote. While similar language was not included in the House America 
COMPETES Act, a bipartisan letter signed by 141 Members of the House of 
Representatives was recently sent to Ambassador Tai asking for the 
establishment of this process. AAFA supports a new exclusion process 
that retroactively renews any expired exclusions and is transparent and 
fact-based.

Central America

Through smart trade policies, we can promote billions of dollars of new 
investment in the region's most promising industries and create 
sustainable civil societies where opportunity can flourish. By 
encouraging further investment in textile and apparel manufacturing 
within the Western Hemisphere, we can provide communities in Central 
America with more jobs, higher wages, sustainable growth and long-term 
stability. This will ease the pressures on its citizens to migrate out 
of the Central America--all while protecting existing manufacturing and 
trade flows, and the jobs they support.

The Coalition for Economic Partnerships in the Americas \3\ (CEPA) has 
submitted comments to the Committee and encourages Members to review 
them for additional details on how we can grow jobs, investment, and 
trade in the region.
---------------------------------------------------------------------------
    \3\ https://cepacoalition.com/.
---------------------------------------------------------------------------

Haiti

The apparel industry now provides more than 50,000 formal Haitian jobs 
and, by some estimates, supports another 450,000 Haitian citizens. 
Congress has made this possible through successive enactment of the 
Haiti HOPE/HELP programs to provide duty free access to the U.S. market 
featuring practical rules of origin that support responsible and 
sustainable sourcing.

We urge you to act now to ensure that there is no gap in the trade 
preference programs that Haiti currently uses. Early renewal of the 
programs that expire in just under 4 years cannot come soon enough. 
Last year, Congress rightly extended the Caribbean Basin Trade 
Partnership Act (CBPTA) for 10 years, which is used almost exclusively 
by Haiti, a few days after it expired. The Generalized System of 
Preferences (GSP)--another trade program that Haiti uses--expired more 
than 13 months ago. Such delays, and the prospect that the HELP and 
HOPE programs (which now support nearly 80 percent of Haiti's garment 
exports to the U.S.) could face similar obstacles, discourage U.S. 
companies from making long term plans. Such delays not only harm 
Haitian families and the communities who depend on the jobs created by 
U.S. apparel sourcing in Haiti, but they also hurt U.S. textile 
manufacturers and their workers who depend on that production to 
support their exports. Therefore, we urge you to pass the Haiti 
Economic Lift Program Extension Act of 2021, recently introduced by 
your colleagues, as soon as possible.

African Growth and Opportunity Act (AGOA)

AGOA is an important program for the U.S. apparel and footwear 
industry. Even though the AGOA expiration date is three years away, 
U.S. investment in the region already faces mounting uncertainty. 
Companies are poised to diversify out of China, and Africa is a logical 
place for many of them. The on-again, off-again nature of the program 
before the ten-year renewal was extremely disruptive and meant the 
industry was not able to take full advantage of the first 15 years of 
the program. If AGOA were to be renewed this year for another 10 years, 
companies would have the necessary certainty and timeframe they need to 
grow a vertical, responsible, and competitive industry in Africa up to 
and past 2025.

As more companies are beginning to utilize AGOA, and specifically the 
third country fabric provision, the quota fill rate will be 
significantly increasing in the coming years. Therefore, we also 
suggest raising the existing 3.5% limit to at least 4.5%, with a growth 
provision, so that it not be a constraint going forward.

We ask that you renew this important program this year for another 10 
years and that we increase the quota so that we can reinject 
predictability to support investment well ahead of the current 2025 
expiration.

Thank you for your attention on these important trade matters.

Sincerely,

Beth Hughes
Vice President, Trade and Customs Policy

                                 ______
                                 
                    American Farm Bureau Federation

                   600 Maryland Ave., NW, Suite 1000W

                          Washington, DC 20024

                            p. 202-406-3600

                            f. 202-406-3606

                          https://www.fb.org/

The American Farm Bureau Federation, the nation's largest general farm 
organization, submits this statement for the Committee hearing on the 
President's 2022 trade policy agenda. Trade is critically important to 
the current welfare and future prosperity of U.S. farmers and ranchers. 
America's farmers and ranchers depend on growing and stable export 
markets for the success of their businesses.

President's Trade Agenda for 2022

The Administration's approach on trade includes dealing with China; 
pursuing the Indo-Pacific Economic Strategy; supporting agriculture; 
reducing trade barriers; promoting sustainable environmental practices; 
focusing on supply chain improvements; and promoting stability.

The Indo-Pacific Economic Framework (IPEF) was introduced as a part of 
the overall Indo-Pacific Strategy. It is a strong start to improve 
relationships and reach agreements with the region's countries. It 
should also be used to reach science-based standards that will assist 
exports. The inclusion of sanitary and phytosanitary (SPS) standards 
will reduce barriers and expand opportunities for our agricultural 
exports.

The IPEF can be significantly improved. As released, it does not 
include a strategy of improving market access for agriculture by 
working to reduce tariff barriers. The Administration is also not 
proposing a reauthorization of Trade Promotion Authority nor a 
commitment to pursuing trade negotiations with binding and enforceable 
commitments. Farm Bureau supports trade agreements in the region as the 
most durable and effective means to improve market opportunities for 
farmers and ranchers.

Indo-Pacific Region Agricultural Trade

Current agreements in the region show the importance of moving forward 
with additional efforts to improve opportunities for U.S. agricultural 
exports.
U.S.-China Phase 1 Agreement
The U.S.-China Phase 1 Agreement has and will continue to result in 
real progress toward a mutually beneficial trade relationship. We are 
already seeing positive results for agricultural trade and substantial 
progress in the removal of barriers that impact the competitiveness of 
U.S. products in this important market. In the Phase 1 Agreement, China 
committed to increase purchases of U.S. agricultural products. For 
2020, China purchased over $27.5 billion of U.S. agricultural products. 
In 2021, China purchased $33.5 billion of U.S. agricultural exports.

While the purchase commitment has ended, the outlook for Chinese 
purchases of soybeans, corn, wheat, sorghum, beef, pork, and other 
products is forecast by USDA to be over $36 billion in FY 2022.

China has also been addressing the commitments they made to improve and 
reform many standards in the Agreement. Long-standing barriers to the 
export of U.S. beef, pork, poultry, and other products have been or are 
being resolved, pursuant to the Agreement. As these barriers go down, 
the opportunity for increased U.S. commodity sales goes up.

Also helping our sales growth is China's granting, upon application by 
importers, waivers of their retaliatory tariffs on U.S. agricultural 
products, which were put in place in 2018 and 2019, with direct, 
substantial impacts on agricultural sales.

China is U.S. agriculture's number one export destination. As such, an 
ongoing trade relationship with China is critical for U.S. farmers and 
ranchers.
U.S.-South Korea Agreement

The U.S.-South Korea Free Trade Agreement (KORUS) entered in force on 
March 25, 2012. The agreement eliminated or reduced tariff and non-
tariff barriers on agricultural and other products.

U.S. agricultural exports to South Korea reached an all-time high in FY 
2021 at $9.2 billion. The forecast for FY 2022 is $9.8 billion.
U.S.-Japan Agreement
The U.S.-Japan Trade Agreement went into effect on Jan. 1, 2020. The 
tariffs applied to U.S. products are now the same as those applied to 
the products of the other countries with a trade agreement with Japan. 
Tariffs are being reduced or eliminated on a variety of U.S. 
agricultural exports to Japan. The U.S. and Japan should continue talks 
on the remaining issues, such as SPS rules, which would help lead to a 
comprehensive FTA between the U.S. and Japan. The recent agreement on 
the operation of Japan's beef safeguard mechanism will help increase 
sales of U.S. beef products.

U.S. agricultural exports to Japan were over $14 billion in 2021.

USMCA

The U.S.-Mexico-Canada Agreement is important for the continuation and 
improvement of trade among the nations of North America. Canada ($24 
billion) and Mexico ($23.9 billion) are the second and third largest 
export markets for U.S. agriculture. The implementation and enforcement 
of this Agreement will yield future growth for our exports.

U.S.-United Kingdom

The U.S. and the United Kingdom (UK) have just reached an agreement to 
resolve the steel tariffs dispute between the two countries. This 
agreement will remove the retaliatory tariffs on U.S. agricultural 
products placed by the UK after the U.S. placed tariffs on UK steel and 
aluminum.

We support a resumption of trade negotiations between the U.S. and the 
UK to deal with non-science-based barriers to our agricultural exports.

Trade Promotion Authority

The Bipartisan Congressional Trade Priorities and Accountability Act of 
2015 (Trade Promotion Authority) ended on July 1, 2021. Farm Bureau 
recognizes the crucial importance of Trade Promotion Authority and 
supports its reauthorization. The negotiating objectives set by 
Congress, the consultation requirements of the Administration with 
Congress and the voting procedures established under TPA are important 
to the successful negotiation and conclusion of trade discussions.

World Trade Organization

The Biden Administration will need to deal with various WTO reform 
issues such as the operation of the Appellate Body. For agriculture, we 
support working toward increased transparency through an improved 
notifications process. We do not support discussion of subsidy levels 
without a full discussion of market access initiatives.

Sustainability

U.S. farmers and ranchers look to be partners in addressing the 
challenges of our changing climate. Not only are agriculture's 
emissions low, farmers and ranchers are taking active steps to make 
their footprint even smaller. This is best accomplished through 
policies that provide voluntary, incentive-based tools for farmers, 
ranchers, and forest owners to maximize the sequestration of carbon. 
This approach will also help achieve a reduction in greenhouse gas 
emissions; increase the resilience of the land; advance science-based 
outcomes and help rural economies adapt.

Conclusion

U.S. farmers and ranchers rely on export markets for over twenty 
percent of agricultural production. As Congress considers future 
discussions with the nations that are our most important export 
destinations, and those that have the potential to grow in importance, 
we need to consider how the proposed Indo-Pacific Economic Framework 
can most effectively expand agricultural exports to the benefit of U.S. 
farmers and ranchers.

                                 ______
                                 
                        Americans for Free Trade
April 13, 2022

The Honorable Ron Wyden             The Honorable Mike Crapo
Chairman                            Ranking Member
U.S. Senate                         U.S. Senate
Committee on Finance                Committee on Finance
Washington, DC 20510                Washington, DC 20510

The Honorable Richard Neal          The Honorable Kevin Brady
Chairman                            Ranking Member
U.S. House                          U.S. House
Committee on Ways and Means         Committee on Ways and Means
Washington, DC 20515                Washington, DC 20515

RE: Statement for the Hearing Record: The President's 2022 Trade Policy 
Agenda

Dear Chairman Wyden, Ranking Member Crapo, Chairman Neal, and Ranking 
Member Brady,

The Americans for Free Trade coalition, a broad alliance of American 
businesses, trade organizations, and workers united against tariffs, 
respectfully submits this written statement to include in the public 
record of the House Ways & Means Committee and Senate Finance 
Committee's (``the Committees'') 2022 Trade Policy Agenda hearings, 
which took place on March 30 and 31, respectively. We appreciate the 
Committees holding hearings on this important matter.

By way of background, Americans for Free Trade represents every part of 
the U.S. economy including manufacturers, farmers and agribusinesses, 
powersports, retailers, technology companies, service suppliers, 
natural gas and oil companies, importers, exporters, and other supply 
chain stakeholders. Collectively, we employ tens of millions of 
Americans through our vast supply chains.

As companies in the U.S. continue to recover from the global pandemic, 
face supply chain disruptions, and operate in an inflationary economic 
environment, we continue to call upon the administration to use more 
strategic tools to address China's unfair trade practices without 
further damaging U.S. competitiveness. To date, U.S. Customs and Border 
Protection has assessed more than $130 billion dollars in tariffs from 
U.S. companies who import products from China. These taxes increase the 
cost of doing business in the United States and place a financial 
burden on U.S. businesses--negatively impacting their ability to invest 
in their companies, hire more American workers, innovate cutting-edge 
goods and services and remain competitive globally.

We continue to call for an end to the China 301 tariffs that have had a 
disproportionate economic impact on American companies, consumers, and 
workers and that have failed to change China's unfair trade practices. 
But until the tariffs are lifted, we believe reinstituting a fully 
retroactive section 301 exclusion process for all covered products is 
critical to providing interim relief for U.S. businesses. According to 
a recent Moody's Investor Service Report, the tariffs ``hit American 
businesses and consumers hardest,'' with China absorbing only 7.6 
percent of the tariffs ``while the rest of the tab was picked up by 
Americans.'' Further, recent articles have highlighted that the tariffs 
are having a modest but real impact on inflationary pressures.\1\ A 
new, comprehensive, transparent, and fair exclusions process would help 
alleviate the economic burden on American businesses and consumers.
---------------------------------------------------------------------------
    \1\ See the attached list of articles discussing the section 301 
China tariffs' contributions to U.S. inflation woes.

We welcomed USTR's announcement in October to open an exclusions 
process for a limited set of products. However, that process was only 
available to 549 products, which is approximately 1 percent of the 
original exclusion applications. USTR recently announced the 
reinstatement of 342 of the 549 exclusions, but it did not explain why 
the remaining requests were denied or why the exclusions were 
retroactive only to October 12, 2021. While these 342 reinstated 
exclusions are an important first step, a more robust process is needed 
to provide meaningful relief. This view is shared by at least 141 
bipartisan House members and 41 bipartisan Senators who recently wrote 
to Ambassador Tai urging USTR to open a broader exclusions process. 
During the Trade Agenda hearings, many Members of the Committees asked 
Ambassador Tai whether USTR intended to make available a broader 
exclusion process. Ambassador Tai responded that she was happy to 
discuss the issue further with Members of Congress and that USTR would 
continue to consider a broader exclusions process if circumstances 
warranted it. These responses provided no insight to the Committees or 
the public regarding USTR's intentions for opening a broader exclusions 
---------------------------------------------------------------------------
process or what circumstances might prompt USTR to do so.

Absent a clear indication from USTR that it will use its authority to 
provide a comprehensive, transparent, and fair exclusions process, 
Congress must act. We therefore urge the Committees to include language 
in a conferenced China competition bill that would require USTR to 
reinstitute a comprehensive, transparent, and fair exclusions process--
with retroactivity--for all products subject to the section 301 
tariffs, not just an arbitrary, narrow subset of products.

As the Committees may also be aware, List 1 of the China 301 tariffs is 
set to expire in July unless USTR receives a petition for a 
continuation of the tariffs, which we understand is almost certain to 
occur. Such a request would trigger a review process under the statute, 
requiring USTR to examine the effectiveness of the tariffs in achieving 
their objectives and other actions that could be taken, as well as the 
effects of such actions on the U.S. economy, including consumers.

While USTR would only be required to conduct this review with respect 
to List 1, we have written to Ambassador Tai urging USTR to include all 
four tariff lists in its review. A single review for all four tariff 
lists would create administrative efficiencies for USTR and American 
companies. It would also permit a more holistic assessment of whether 
the tariffs achieved their stated objectives and provide a full picture 
of the impact the tariffs have had to the U.S. economy, as well as 
American businesses, workers, and consumers. It would also give USTR 
the opportunity to consider whether the 301 tariffs represent the best 
path forward considering U.S. companies continue to face many of the 
same challenges with respect to trade with China today as they did when 
the tariffs were first imposed.

Further, it is essential that the review process be fully transparent 
and include a public comment period and public hearings to ensure that 
the Administration gives all stakeholders--including stakeholders who 
pay the tariffs--the opportunity to provide input. A review that does 
not include the American businesses, workers, farmers, and consumers 
burdened by the tariffs would be inconsistent with the commitments USTR 
has made in its Transparency Principles, congressional testimony, and 
the 2022 Trade Policy Agenda and 2021 Annual Report regarding public 
outreach, engagement, and transparency.

We strongly support a fully transparent review of the Section 301 
tariffs on products from China, including a comprehensive economic 
assessment of the tariffs' impact on American businesses, workers, 
farmers, and consumers. We urge the Committees to inquire about USTR's 
plans for reviewing the tariffs, including timing and opportunities for 
stakeholder input. We believe the review presents an important 
opportunity to assess the tariffs and determine whether this 
Administration will continue them as part of its China trade policy.

We appreciate the Committees' continued engagement on these critical 
issues and urge it to continue weighing in with the Administration to 
ensure that destructive tariffs are lifted, and that a new and more 
effective approach to addressing China's unfair trading practices is 
adopted. We thank the Committees for holding these hearings and look 
forward to continuing to work with you.

Sincerely,

Accessories Council                 American Rental Association
ACT | The App Association           American Seed Trade Association
Agriculture Transportation 
Coalition (AgTC)                    American Specialty Toy Retailing 
                                    Association
ALMA, International (Association of 
Loudspeaker Manufacturing and 
Acoustics)                          American Trucking Association
American Apparel and Footwear 
Association (AAFA)                  Arizona Technology Council
American Association of Exporters 
and Importers (AAEI)                Arkansas Grocers and Retail 
                                    Merchants Association
American Association of Port 
Authorities                         Association for Creative Industries
American Bakers Association         Association for PRINT Technologies
American Bridal and Prom Industry 
Association (ABPIA)                 Association of American Publishers
American Chemistry Council          Association of Equipment 
                                    Manufacturers (AEM)
American Clean Power Association    Association of Home Appliance 
                                    Manufacturers
American Coatings Association, Inc. 
(ACA)                               Auto Care Association
American Down and Feather Council   Beer Institute
American Fly Fishing Trade 
Association                         BSA | The Software Alliance
American Home Furnishings Alliance  Business Alliance for Customs 
                                    Modernization
American Lighting Association       California Retailers Association
American Petroleum Institute        Can Manufacturers Institute
American Pyrotechnics Association   Carolina Loggers Association
Colorado Retail Council             Chemical Industry Council of 
                                    Delaware (CICD)
Columbia River Customs Brokers and 
Forwarders Assn.                    Coalition of New England Companies 
                                    for Trade (CONECT)
Computer and Communications 
Industry Association (CCIA)         Coalition of Services Industries 
                                    (CSI)
Computing Technology Industry 
Association (CompTIA)               Indiana Retail Council
Consumer Brands Association         Information Technology Industry 
                                    Council (ITI)
Consumer Technology Association     International Association of 
                                    Amusement Parks and Attractions 
                                    (IAAPA)
Council of Fashion Designers of 
America (CFDA)                      International Bottled Water 
                                    Association (IBWA)
CropLife America                    International Foodservice 
                                    Distributors Association
Customs Brokers and Freight 
Forwarders Assn. of Washington 
State                               International Housewares 
                                    Association
Customs Brokers and Freight 
Forwarders of Northern California   International Warehouse and 
                                    Logistics Association
Distilled Spirits Council of the 
United States                       International Wood Products 
                                    Association
Electronic Transactions Association ISSA--The Worldwide Cleaning 
                                    Industry Association
Energy Workforce and Technology 
Council                             Jeweler's Vigilance Committee
Experiential Designers and 
Producers Association               Juice Products Association (JPA)
Fashion Accessories Shippers 
Association (FASA)                  Juvenile Products Manufacturers 
                                    Association
Fashion Jewelry and Accessories 
Trade Association                   Leather and Hide Council of America
Flexible Packaging Association      Licensing Industry Merchandisers' 
                                    Association
Florida Ports Council               Los Angeles Customs Brokers and 
                                    Freight Forwarders Assn.
Florida Retail Federation           Louisiana Retailers Association
Footwear Distributors and Retailers 
of America (FDRA)                   Maine Grocers and Food Producers 
                                    Association
Fragrance Creators Association      Maine Lobster Dealers' Association
Game Manufacturers Association      Maritime Exchange for the Delaware 
                                    River and Bay
Gemini Shippers Association         Maryland Retailers Association
Georgia Retailers                   Michigan Chemistry Council
Global Chamber                     Michigan Retailers Association
Global Cold Chain Alliance          Minnesota Retailers Association
Greeting Card Association           Missouri Retailers Association
Halloween Industry Association      Motor and Equipment Manufacturers 
                                    Association
Home Fashion Products Association   Motorcycle Industry Council
Home Furnishings Association        NAPIM (National Association of 
                                    Printing Ink Manufacturers)
Household and Commercial Products 
Association                         National Association of Chain Drug 
                                    Stores (NACDS)
Idaho Retailers Association         National Association of Chemical 
                                    Distributors (NACD)
Illinois Retail Merchants 
Association                         National Association of Foreign-
                                    Trade Zones (NAFTZ)
Independent Office Products and 
Furniture Dealers Association 
(IOPFDA)                             National Association of Home 
                                    Builders
National Retail Federation          National Association of Music 
                                    Merchants
National Ski and Snowboard 
Retailers Association               National Association of Trailer 
                                    Manufacturers (NATM)
National Sporting Goods Association National Council of Chain 
                                    Restaurants
National Confectioners Association  National Electrical Manufacturers 
                                    Association (NEMA)
Natural Products Association        National Fisheries Institute
New Jersey Retail Merchants 
Association                         National Foreign Trade Council
North American Association of Food 
Equipment Manufacturers (NAFEM)     National Grocers Association
North American Association of 
Uniform Manufacturers and 
Distributors (NAUMD)                National Lumber and Building 
                                    Material Dealers Association
North Carolina Retail Merchants 
Association                         National Marine Manufacturers 
                                    Association
Ohio Council of Retail Merchants    National Restaurant Association
Outdoor Industry Association        RV Industry Association
Pacific Coast Council of Customs 
Brokers and Freight Forwarders 
Assns. Inc.                         San Diego Customs Brokers and 
                                    Forwarders Assn.
Pennsylvania Retailers' Association SEMI
PeopleforBikes                      Semiconductor Industry Association 
                                    (SIA)
Personal Care Products Council      Snowsports Industries America
Pet Food Institute                  Software and Information Industry 
                                    Association (SIIA)
Pet Industry Joint Advisory Council South Dakota Retailers Association
Plumbing Manufacturers 
International                       Specialty Equipment Market 
                                    Association
Power Tool Institute (PTI)          Specialty Vehicle Institute of 
                                    America
PRINTING United Alliance            Sports and Fitness Industry 
                                    Association
Promotional Products Association 
International                       TechNet
Recreational Off-Highway Vehicle 
Association                         Telecommunications Industry 
                                    Association (TIA)
Retail Association of Maine         Texas Water Infrastructure Network
Retail Council of New York State    The Airforwarders Association
Retail Industry Leaders Association The Fertilizer Institute
Retailers Association of 
Massachusetts                       The Hardwood Federation
RISE (Responsible Industry for a 
Sound Environment)                  The Toy Association
Travel Goods Association            Truck and Engine Manufacturers 
                                    Association (EMA)
United States Council for 
International Business              United States Fashion Industry 
                                    Association
U.S. Global Value Chain Coalition   U.S.-China Business Council
Vinyl Institute                     Virginia Retail Merchants 
                                    Association
Virginia-DC District Export Council 
(VA-DC DEC)                         Washington Retail Association
Window and Door Manufacturers 
Association                         World Pet Association, Inc. (WPA)

Articles Related to Tariffs' Effect on Inflation:

      Larry Sommers on potential recession: ``Nothing is inevitable or 
certain in economics,'' The Hill, April 10, 2022.

      For inflation relief, the United States should look to trade 
liberalization, Peterson Institute for International Economics, March 
30, 2022.

      Opinion: Biden wants more price-reducing ``competition.'' Except 
in this one circumstance, The Washington Post, February 8, 2022.

      Trump's China tariffs continue to vex small Minnesota importers, 
Star Tribune, February 6, 2022.

      Will inflation see off the Trump tariffs? Vogue Business, 
January 5, 2022.

      Retreat From Globalization Adds to Inflation Risks, The Wall 
Street Journal, December 5, 2021.

      Facing Down a Surprising Inflation Surge, Harvard Kennedy 
School, December 1, 2021.

      PPI's Trade Fact of the Week: Trump tariff increases 
contribution to inflation: 0.5%, Progressive Policy Institute 
Newsletter.

      Inflationary Effects of Trade Disputes with China, Federal 
Reserve Bank of San Francisco, February 25, 2019.

Administration Comments on Tariffs and Inflation

      Rolling back U.S.-China tariffs would ease inflation in the 
U.S., former Treasury secretary says, CNBC, November 30, 2021.

      The inflation-fighting step Biden has yet to take, CNN, November 
21, 2021,

      Janet Yellen Interview with ``Face The Nation,'' November 14, 
2021.

      Yellen says reciprocal lowering of tariffs could help ease 
inflation, Reuters, November 1, 2021.

Recent AFT coalition member pieces:

Two Years Since Trade Deal with China, Tariffs Aren't Working for 
American Businesses, Entrepreneur, MSN, February 11 2022.

Trade Wars Worsen Shipping Crisis, Townhall, September 7, 2021.

Joe Bell: Ongoing trade war limits recovery for U.S. businesses, 
Tribune Review, June 23, 2021

Repeal Tariffs to Boost the Economy, Help Small Businesses, 
RealClearMarkets. March 25, 2021.

Removing tariffs is key to economic relief, Washington Examiner, 
February 24, 2021.

                                 ______
                                 
                        Center for Fiscal Equity

                      14448 Parkvale Road, Suite 6

                          Rockville, MD 20853

                      [email protected]

                    Statement of Michael G. Bindner

Chairman Wyden and Ranking Member Crapo, thank you for the opportunity 
to submit these comments for the record. Please consider the following 
issues, which are likely left off of the President's current agenda.

If the Belt and Road and forced labor in China are still an issue, the 
answer is probably resurrecting some form of the Trans-Pacific 
Partnership. The right of businesses to short-circuit local law in 
special tribunals must be modified or ended in any redux. This should 
be the case with all such trade agreements.

Agreements which try to modernize other nation's labor arrangements 
need an awareness that America's performance on issues of democracy, 
organized labor, wage and hour and safety enforcement are far from 
stellar. Perhaps any arrangements should include monitoring American 
employers and the government agencies that should be looking out for 
them.

At the very least, end right-to-work. Such laws are really right-to-
exploit laws, including through the use of human trafficking. Migrant 
workers in the food industry, from harvesting to processing and packing 
face all sorts of bad treatment, sometimes with that treatment abetted 
by local law enforcement.

Immigration reform must be part of the trade policy agenda. Workers who 
do not have documentation problems cannot be easily exploited--
especially if they are able to unionize. This will also help level the 
playing field for American workers. A unionized worker, whether they be 
an immigrant or a citizen, will make more money and be safer. The 
stories of workers having to do so sick was highlighted in the early 
days of the Pandemic. I have not heard that things have gotten any 
better.

An analysis of how consumption taxes can improve our trade policy is 
found in a second attachment. The first attachment on tax reform is 
included to clarify the terms of the second. These are attachments 
because they have been provided before. I am available to explain these 
topics. There are many who can talk about how value added taxes relate 
to trade, but I am the only one who can walk the Committee and staff 
through how an employer-paid subtraction value added tax applies.

Part of the trade equation is the recently completed agreement on 
Corporate Minimum Taxes. This faces challenges to enactment in the 
Senate. Perhaps it should. I am no fan of corporate income taxation 
when value added taxes (both GST/Invoice VAT and Subtraction VAT) are 
available.

Our proposal for an Asset Value-Added Tax will require international 
cooperation. Part of trade is moving money around--including financial 
assets. An asset VAT as a replacement for capital gains taxes and 
capital returns must go farther than the border. It is too easy to 
shift to offshore stock exchanges where such taxes do not exist. 
International agreements on rates and enforcement structures are vital 
for such a tax to work. The model for negotiating the CMT on a multi-
national basis can be used for this effort.

The other issue not usually discussed with Trade Policy is its impact 
on national debt ownership. Bond holdings backing the currencies of our 
trading partners is a key consideration. The possibility that the debt 
may outpace our trading capital needs must be a concern. A more urgent 
concern is the impact on Treasury bond prices if the European Union 
creates a consolidated debt with a continental tax system to back the 
Euro. Such an option would bring about a day of reckoning on our debt--
a reckoning that income taxpayers will have to face.

It is important to understand who owns and owes the debt. We are 
currently revising our previous study: Settling (and Squaring) 
Accounts: Who Really Owes the National Debt? Who Owns It? available 
from Amazon at https://www.amazon.com/dp/B08FRQFF8S. I can provide free 
copies of the prior version upon request and will distribute the latest 
edition once it is completed. The most recent bottom line estimates can 
be found in the second attachment. This shows who is on the hook for 
the debt and who benefits from it.

Note well that the top 22,000 households break even on debt owned and 
owed. Everyone else is in hock. Such an imbalance cannot continue. 
Please see the third attachment for more on this issue.

A main conclusion of our analyses is that the national debt is the 
leverage for capitalism to the extent that debt securities allow Wall 
Street to offer riskier assets, such as mortgage backed securities 
embedded in Exchange Traded Funds, as well as more traditional 
offerings. Wealth held by the few (and the attachment shows how very 
few we mean), provides management absolute control of most workplaces. 
Employee-owned firms would not need such an unbalanced economy 
leveraged by American Treasury holdings.

As you may have heard, China is in the middle of a housing finance and 
development crisis. The impact of these developments on both bilateral 
and world trade will be huge. They demand a separate set of hearings by 
multiple committees--but especially Finance and Ways and Means.

The most important long-term trade issue is international employee 
ownership, which is discussed in the second attachment. Domestic 
employee-owned firms will find it in their interest to offer the same 
standard of living and ownership rights to overseas subsidiaries and 
their supply chain. In the long term, such ownership ends the need for 
any political agenda on trade.

Trade issues will take care of themselves within the enterprise, 
leaving currency arbitrage in the dust. Enacting the proposed Asset 
Value-Added Tax, with zero rated sales to such firms, will make that 
day come sooner--leading to a more integrated world without the need 
for a worldwide war machine.

Our most urgent concern in trade is climate change. Our current 
approach is inadequate. We need to put our money where our mouths are--
or rather--where the world is. We need more than international 
agreements. We need international retrofitting, primarily in the energy 
sector. This means funding abatement issues in the developing world--
and helping to carry them out. It is not enough to insist on goals. We 
must pay for action anywhere our trading partners will let us.

Thank you for the opportunity to address the committee. We are, of 
course, available for direct testimony or to answer questions by 
members and staff.

Attachment One--Tax Reform, Center for Fiscal Equity, December 7, 2021

Individual payroll taxes. Employee payroll tax of 7.2% for Old-Age and 
Survivors Insurance. Funds now collected as a matching premium to a 
consumption tax based contribution credited at an equal dollar rate for 
all workers qualified within a quarter. An employer-paid subtraction 
value-added tax would be used if offsets to private accounts are 
included. Without such accounts, the invoice value added tax would 
collect these funds. No payroll tax would be collected from employees 
if all contributions are credited on an equal dollar basis. If employee 
taxes are retained, the ceiling would be lowered to $100,000 to reduce 
benefits paid to wealthier individuals and a $16,000 floor should be 
established so that Earned Income Tax Credits are no longer needed. 
Subsidies for single workers should be abandoned in favor of radically 
higher minimum wages. If a $10 minimum wage is passed, the employee 
contribution floor would increase to $20,000.

Wage Surtaxes. Individual income taxes on salaries, which exclude 
business taxes, above an individual standard deduction of $100,000 per 
year, will range from 7.2% to 57.6%. This tax will fund net interest on 
the debt (which will no longer be rolled over into new borrowing), 
redemption of the Social Security Trust Fund, strategic, sea and non-
continental U.S. military deployments, veterans' health benefits as the 
result of battlefield injuries, including mental health and addiction 
and eventual debt reduction.

Our proposed brackets have been increased from $85,000 to $100,000 
because this is the income level at the top of the 80% of tax paying 
households who earn the bottom third of adjusted gross income. Earners 
above this level are considered middle class. Likewise, the top 1% of 
income earners are at the $500,000 level, which will be used as the 
start of the highest rate.

Asset Value-Added Tax (A-VAT). A replacement for capital gains taxes, 
dividend taxes, and the estate tax. It will apply to asset sales, 
dividend distributions, exercised options, rental income, inherited and 
gifted assets and the profits from short sales. Tax payments for option 
exercises, IPOs, inherited, gifted and donated assets will be marked to 
market, with prior tax payments for that asset eliminated so that the 
seller gets no benefit from them. In this perspective, it is the 
owner's increase in value that is taxed. As with any sale of liquid or 
real assets, sales to a qualified broad-based Employee Stock Ownership 
Plan will be tax free. These taxes will fund the same spending items as 
income or S-VAT surtaxes.

This tax will end Tax Gap issues owed by high income individuals. A 26% 
rate is between the GOP 23.8% rate (including ACA-SM surtax) and the 
Democratic 28.8% rate as proposed in the Build Back Better Act. It's 
time to quit playing football with tax rates to attract side bets. A 
single rate also stops gaming forms of ownership. Lower rates are not 
as regressive as they seem. Only the wealthy have capital gains in any 
significant amount. The de facto rate for everyone else is zero. For 
now, however, a 28.8% rate is assumed if reform is enacted by a 
Democratic majority in both Houses.

Subtraction Value-Added Tax (S-VAT). These are employer paid Net 
Business Receipts Taxes. S-VAT is a vehicle for tax benefits, including

      Health insurance or direct care, including veterans' health care 
for non-
battlefield injuries and long term care.
      Employer paid educational costs in lieu of taxes are provided as 
either 
employee-directed contributions to the public or private unionized 
school of their choice or direct tuition payments for employee children 
or for workers (including ESL and remedial skills). Wages will be paid 
to students to meet opportunity costs.
      Most importantly, a refundable child tax credit at median income 
levels (with inflation adjustments) distributed with pay.

Subsistence-level benefits force the poor into servile labor. Wages and 
benefits must be high enough to provide justice and human dignity. This 
allows the ending of state administered subsidy programs and 
discourages abortions, and as such enactment must be scored as a must 
pass in voting rankings by pro-life organizations (and feminist 
organizations as well). To assure child subsidies are distributed, S-
VAT will not be border adjustable.

The S-VAT is also used for personal accounts in Social Security, 
provided that these accounts are insured through an insurance fund for 
all such accounts, that accounts go toward employee-ownership rather 
than for a subsidy for the investment industry. Both employers and 
employees must consent to a shift to these accounts, which will occur 
if corporate democracy in existing ESOPs is given a thorough test. So 
far it has not. S-VAT funded retirement accounts will be equal-dollar 
credited for every worker. They also have the advantage of drawing on 
both payroll and profit, making it less regressive.

A multi-tier S-VAT could replace income surtaxes in the same range. 
Some will use corporations to avoid these taxes, but that corporation 
would then pay all invoice and subtraction VAT payments (which would 
distribute tax benefits. Distributions from such corporations will be 
considered salary, not dividends.

Invoice Value-Added Tax (I-VAT). Border adjustable taxes will appear on 
purchase invoices. The rate varies according to what is being financed. 
If Medicare for All does not contain offsets for employers who fund 
their own medical personnel or for personal retirement accounts, both 
of which would otherwise be funded by an S-VAT, then they would be 
funded by the I-VAT to take advantage of border adjustability. I-VAT 
also forces everyone, from the working poor to the beneficiaries of 
inherited wealth, to pay taxes and share in the cost of government. 
Enactment of both the A-VAT and I-VAT ends the need for capital gains 
and inheritance taxes (apart from any initial payout). This tax would 
take care of the low-income Tax Gap.

I-VAT will fund domestic discretionary spending, equal dollar employer 
OASI contributions, and non-nuclear, non-deployed military spending, 
possibly on a regional basis. Regional I-VAT would both require a 
constitutional amendment to change the requirement that all excises be 
national and to discourage unnecessary spending, especially when 
allocated for electoral reasons rather than program needs. The latter 
could also be funded by the asset VAT (decreasing the rate by from 
19.5% to 13%).

As part of enactment, gross wages will be reduced to take into account 
the shift to S-VAT and I-VAT, however net income will be increased by 
the same percentage as the I-VAT. Adoption of S-VAT and I-VAT will 
replace pass-through and proprietary business and corporate income 
taxes.

Carbon Added Tax (C-AT). A Carbon tax with receipt visibility, which 
allows comparison shopping based on carbon content, even if it means a 
more expensive item with lower carbon is purchased. C-AT would also 
replace fuel taxes. It will fund transportation costs, including mass 
transit, and research into alternative fuels (including fusion). This 
tax would not be border adjustable unless it is in other nations, 
however in this case the imposition of this tax at the border will be 
noted, with the U.S. tax applied to the overseas base..

Tax Reform Summary

This plan can be summarized as a list of specific actions:

1.  Increase the standard deduction to workers making salaried income 
of $35,000 and over, shifting business filing to a separate tax on 
employers and eliminating all credits and deductions--starting at 7.2%, 
going up to 28.8%, in $50,000 brackets.

2.  Shift special rate taxes on capital income and gains from the 
income tax to an asset VAT. Expand the exclusion for sales to an ESOP 
to cooperatives and include sales of common and preferred stock. Mark 
option exercise and the first sale after inheritance, gift or donation 
to market.

3.  Employers distribute the child tax credit with wages as an offset 
to their quarterly tax filing (ending annual filings).

4.  Employers collect and pay lower tier income taxes, starting at 
$100,000 at 7.2%, with an increase to 14.4% for all salary payments 
over $150,000 going up 7.2% for every $50,000 up to $250,000.

5.  Shift payment of HI, DI, SM (ACA) payroll taxes to employers, 
remove caps on employer payroll taxes and credit them to workers on an 
equal dollar basis.

6.  Employer paid taxes could as easily be called a subtraction VAT, 
abolishing corporate income taxes. These should not be zero rated at 
the border.

7.  Expand current state/federal intergovernmental subtraction VAT to a 
full GST with limited exclusions (food would be taxed) and add a 
federal portion, which would also be collected by the states. Make 
these taxes zero rated at the border. Rate should be 19.5% and replace 
employer OASI contributions. Credit workers on an equal dollar basis.

8.  Change employee OASI of 7.2% from $18,000 ($20,000 for $10 minimum 
wage) to $100,000 income are optional taxes for Old-Age and Survivors 
Insurance.

Attachment Two--Trade Policy and Value-Added Taxes

Consumption taxes could have a big impact on workers, industry and 
consumers. Enacting an I-VAT is far superior to a tariff. The more 
government costs are loaded onto an I-VAT the better.

If the employer portion of Old-Age and Survivors Insurance, as well as 
all of disability and hospital insurance are decoupled from income and 
credited equally and personal retirement accounts are not used, there 
is no reason not to load them onto an I-VAT. This tax is zero rated at 
export and fully burdens imports.

Seen another way, to not put as much taxation into VAT as possible is 
to enact an unconstitutional export tax. Adopting an I-VAT is superior 
to it's weak sister, the Destination Based Cash Flow Tax that was 
contemplated for inclusion in the TCJA. It would have run afoul of WTO 
rules on taxing corporate income. I-VAT, which taxes both labor and 
profit, does not.

The second tax applicable to trade is a Subtraction VAT or S-VAT. This 
tax is designed to benefit the families of workers through direct 
subsidies, such as an enlarged child tax credit, or indirect subsidies 
used by employers to provide health insurance or tuition reimbursement, 
even including direct medical care and elementary school tuition. As 
such, S-VAT cannot be border adjustable. Doing so would take away 
needed family benefits. As such, it is really part of compensation. 
While we could run all compensation through the public sector.

The S-VAT could have a huge impact on long term trade policy, probably 
much more than trade treaties, if one of the deductions from the tax is 
purchase of employer voting stock (in equal dollar amounts for each 
worker). Over a fairly short period of time, much of American industry, 
if not employee-owned outright (and there are other policies to 
accelerate this, like ESOP conversion) will give workers enough of a 
share to greatly impact wages, management hiring and compensation and 
dealing with overseas subsidiaries and the supply chain--as well as 
impacting certain legal provisions that limit the fiduciary impact of 
management decision to improving short-term profitability (at least 
that is the excuse managers give for not privileging job retention).

Employee owners will find it in their own interest to give their 
overseas subsidiaries and their supply chain's employees the same deal 
that they get as far as employee-ownership plus an equivalent standard 
of living. The same pay is not necessary, currency markets will adjust 
once worker standards of living rise.

Over time, ownership will change the economies of the nations we trade 
with, as working in employee-owned companies will become the market 
preference and force other firms to adopt similar policies (in much the 
same way that, even without a tax benefit for purchasing stock, 
employee-owned companies that become more democratic or even more 
socialistic, will force all other employers to adopt similar measures 
to compete for the best workers and professionals).

In the long run, trade will no longer be an issue. Internal company 
dynamics will replace the need for trade agreements as capitalists lose 
the ability to pit the interest of one nation's workers against the 
others. This approach is also the most effective way to deal with the 
advance of robotics. If the workers own the robots, wages are swapped 
for profits with the profits going where they will enhance consumption 
without such devices as a guaranteed income.

Attachment Three--Debt Ownership as Class Warfare, February 16, 2022

Visibility into how the national debt, held by both the public and the 
government at the household level, sheds light on why Social Security, 
rather than payments for interest on the debt, are a concern of so many 
sponsored advocacy institutions across the political spectrum. Direct 
household attribution can be made by calculating direct bond holdings, 
income provided by Social Security payments and secondary financial 
instruments backed with debt assets for each income quintile.

Responsibility to repay the debt is attributed based on personal income 
tax collection. Payroll taxes create an asset for the payer, so they 
are not included in the calculation of who owes the debt. Using 2019 
tax data and the national debt as of COB February 15th, the ratio is 
$19 of debt owed for every dollar of income tax paid.

The top 4% take home 33% of AGI (not shown in table), with the next 20% 
and the bottom 75% each taking a third. This is how we classify class 
distribution in America. To allow estimates of asset ownership, we have 
distributed income using rounder numbers.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


The bottom 80% of taxpaying units hold few, if any, public debt 
assets in the form of Treasury Bonds or Securities or in accounts 
holding such assets and only take home one-third of adjusted gross 
income. Their main national debt assets are held on their behalf by the 
Government. They are owed more debt than they owe through taxes. The 
next 10% (the middle class), hold more in terms of long-term 
investments and mutual fund and bond assets. They hold a bit under a 
fifth of social insurance assets.

The top 10% pay more than half of income taxes (the dividing line is 
about 97.5%--and has been for a while). Asset shares within the top 10% 
are estimated using the same breakdown as the entire population, that 
is, the top 1% hold 54% of Federal Reserve and Long Term Investment 
Assets and 77% of mutual funds and bonds as held by the top 10%. A 
similar fraction is used to estimate holdings by the top 0.01%--which 
is consistent to how much income they receive (note that I did not say 
earn.

This illustration shows who benefits the most from having a national 
debt, therefore who has the most to lose through default.

                                 ______
                                 
          Coalition for Economic Partnerships in the Americas
April 14, 2022

The Honorable Ron Wyden             The Honorable Mike Crapo
Chairman                            Ranking Member
U.S. Senate                         U.S. Senate
Committee on Finance                Committee on Finance
Washington, DC 20510                Washington, DC 20510

RE: Statement for the Hearing Record: The President's 2022 Trade Policy 
Agenda, March 31, 2022

Dear Chairman Wyden and Ranking Member Crapo,

On behalf of the members of the Coalition for Economic Partnerships in 
the Americas (CEPA), we appreciate this opportunity to submit a 
statement for the record for the Committee's hearing on the ``The 
President's 2022 Trade Policy Agenda.''

CEPA brings together companies, trade associations, think tanks, and 
other stakeholders with a decades-long track record of creating 
thousands of jobs in the Americas through investment and trade. We are 
a coalition of major American companies and manufacturers focused on 
the humanitarian, security, and economic crisis in the Americas, ready 
to dedicate resources, experience, and expertise to create enduring 
humanitarian, worker-centric, and sustainable solutions that work for 
the United States and Central America.

Through smart trade policies, we can promote billions of dollars of new 
investment in the region's most promising industries and create 
sustainable civil societies where opportunity can flourish. By 
encouraging further investment in textile and apparel manufacturing 
within the Western Hemisphere, we can provide communities in Central 
America with more jobs, higher wages, sustainable growth and long-term 
stability. This will ease the pressures on its citizens to migrate out 
of the Central America--all while protecting existing manufacturing and 
trade flows, and the jobs they support.

Job Growth

A recent economic study, Close Knit: Migration and Apparel Production 
in Central America, conducted by Raymond Robertson at the Mosbacher 
Institute for Trade, Economics, and Public Policy at Texas A&M 
University found the United States can address the root causes of 
instability in Central America by creating jobs, reducing poverty, and 
contributing to economic growth through international trade. Mr. 
Robertson estimates that at least a hundred thousand more jobs will be 
created in the region if there were access to more yarns and fibers to 
increase apparel production. Specifically, the study found:

      Both the dollar value and the share of apparel imports from 
Central America into the United States has declined while both the 
dollar value and share of apparel imports from China and Vietnam has 
dramatically increased since CAFTA-DR went into force.

      Apparel imports from Central America are highly concentrated in 
low value-add apparel products that do not use technologically advanced 
yarns and fabrics.

      Increasing the diversity of apparel inputs that may be 
incorporated into finished goods and receive CAFTA-DR duty-free 
treatment through modernizing the rules of origin could support 
economic growth in Central America.

      Apparel is a significant share of Central American countries' 
exports to the U.S., and, therefore, improving the region's position in 
the apparel value chain could have significant economic effects for 
those countries.

In addition, the study cited other research supporting the fact that 
retail-supported apparel production increases economic opportunity and 
creates good jobs for would-be migrants. The World Bank report Stitches 
to Riches? Apparel Employment, Trade, and Economic Development in South 
Asia notes that ``the apparel industry contributes to the social, 
economic, and policy realms of developing countries'' and ``increases 
female labor-force participation.'' Mr. Robertson cites another World 
Bank report, Globalization, Wages, and the Quality of Jobs, noting that 
``apparel workers earn more in apparel than they would earn in their 
most likely domestic alternatives (domestic service and agriculture).''

Access to these new yarns and fabrics will incentivize more cut and sew 
production in the region. This will serve as a long-term demand signal 
to the U.S. textile industry and lead to new investments in yarns, 
fabrics, and apparel that simply do not exist in the hemisphere right 
now. To begin making progress, it is imperative that the right policies 
are put in place to attract more cut and sew jobs as soon as possible. 
This will have the two-fold impact of (1) creating the jobs today 
needed to make a significant dent in the migration crisis and (2) 
creating a demand signal that will stimulate even more textile 
investment (in both the U.S. and the region) that will support more 
trade tomorrow (accounting for the lag in textile investments to come 
online).

CAFTA-DR Trade

It is through trade, specifically incentivizing the utilization of the 
Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) in 
apparel, where we will see progress. Sadly, as it has been for the past 
20 years, CAFTA-DR is currently not structured as a magnet to attract 
the kind of textile and apparel investment we need to move a broader 
diversity of sourcing from Asia. Companies are indeed diversifying out 
of China--both goods and materials. While some of that is moving to 
CAFTA-DR, it may be only temporary, and the vast majority is still 
bypassing the region and will continue to do so because the terms of 
trade are simply not structured to support the industry of 2022 or the 
future.

According to data released by the Office of Textiles and Apparel 
(OTEXA) (enclosed as charts in this statement), the utilization rate of 
CAFTA-DR for apparel sourcing fell to a new low of only 73.7% in 2021. 
A record number of U.S. apparel imports (26.3%) from CAFTA-DR member 
countries did not claim duty-free benefits most notably due to an 
insufficient supply of qualifying yarns and fabrics. It is important to 
note that U.S. yarn and fabric exports to CAFTA-DR continues to lag 
behind U.S. yarn and fabric exports to the rest of the world. There is 
no question that CAFTA-DR continues to be a strong market for U.S. yarn 
and fabric exports (about 20% go there), but growth in apparel from 
other parts of the world continues to be stronger. In 2021, about 64% 
of the new growth over the previous year came from the rest of the 
world.

The current trade consists heavily in basic cotton tee shirts, socks, 
and underwear. In fact, about 80% of the trade is concentrated in only 
25 tariff lines. CEPA is committed to protecting the current trade in 
these items and partnering with the U.S. cotton industry. At the USDA's 
Agricultural Outlook Forum in February 2022, Chief Economist Seth Meyer 
presented data showing U.S. cotton planted area is rising with 
historically strong cotton prices. The U.S. cotton industry is an 
important partner providing good American jobs and sustainably sourced 
cotton free of forced labor.

China

U.S. apparel companies understand the concern that access to more yarns 
and fabrics will mean a flood of Chinese inputs into the region that 
will harm U.S. production. We share this concern and have championed an 
outcome that will prevent this result. First, we have urged that a go 
forward process with respect to CAFTA-DR include ALL stakeholders to 
make sure any changes insulate current trade and investment flows. This 
will also ensure that textile companies advocate for areas where they 
need to rely upon foreign inputs, similar to the way many textile 
companies currently support duty reductions or suspensions for Chinese 
inputs under the Miscellaneous Tariff Bill (MTB) in a manner that does 
not harm U.S. production. Second, we are actively trying to drive more 
trade under the CAFTA-DR umbrella so they will be subject to CAFTA-DR's 
strong customs provisions. This enforcement tool is vital to provide 
added visibility for CBP to make sure that textile and apparel inputs 
are not infected by forced labor. Given heightened concerns about the 
use of cotton from the Xinjiang Uyghur Autonomous Region (XUAR), CAFTA-
DR provides excellent guardrails to ensure that supply chains, which 
are increasingly diverse, are free and clear of forced labor.

CEPA Policy Recommendations

Fashion apparel production in the Western Hemisphere cannot be 
diversified and expanded unless there is access to yarns and fabrics. 
With only 10% of the world's yarns produced in the Western Hemisphere, 
many fashion yarns are in short supply in the region even if they are 
not recognized as such by the CAFTA-DR short supply list. Modern 
apparel is made up of thousands of fabrics, yarns, and fibers and only 
a tiny fraction of those are produced in the U.S. Fibers, yarns, and 
fabrics determined not to be available in commercial quantities in a 
timely manner should be allowed to be sourced from outside the CAFTA-DR 
countries for use in apparel products and imported to the U.S. duty-
free. For example, U.S. apparel companies need heathered yarns, 
textured yarns, fine count yarns, sustainable yarns, and printed woven 
fabrics to increase apparel production in Central America. Despite a 
few promises of new investments, there have not been commitments by 
textile companies to produce these much-needed yarns and fabrics in the 
region. Moreover, the current short supply process is too burdensome 
and slow to allow sufficient flexibility for modern apparel producers. 
The current process has become tainted due to the blocked submission of 
valid petitions and by certain textile producers failing to provide the 
product at a commercially available price, quality, volume, and time 
frame. We believe the current process could be improved to provide the 
needed flexibilities to modern apparel producers without negatively 
impacting U.S. jobs.

Further, the Central America-Dominican Republic Apparel And Textile 
Council (CECATEC-RD) supports short supply and stated in a press 
release from August 2021 that the short supply mechanism is an 
important provision and ``would be open to review this mechanism to 
ensure it stays transparent, efficient and responsive to the needs of 
the supply chain.'' In fact, short supply and other flexibilities were 
specifically included in CAFTA-DR in recognition that the yarn forward 
provisions alone would be too rigid to support trade.

In addition to modernizing the short supply process to be more 
responsive to industry needs, CEPA also recommends capitalizing on 
another flexibility that already exists in CAFTA-DR as well as in other 
U.S. trade preference programs like Haiti HOPE/HELP--cumulation. CAFTA-
DR allows cumulation for knit fabric used in garments classified under 
Chapter 62 (See Appendix 4.1-B). In his article from January 2021, 
Central America: Promoting Prosperity with Targeted U.S. Trade Policy, 
Matthew Rooney of the George W. Bush Institute argues in favor of 
linking CAFTA-DR with the U.S. Mexico-Canada Agreement (USMCA) to 
``allow a company manufacturing in Mexico to source components in 
Central America that would count toward the threshold for duty-free 
access to the United States under USMCA.'' CEPA supports linking all 
U.S. trade agreements, Trade and Investment Framework Agreements, and 
trade preference programs together, which would create a virtuous web 
among U.S. trading partners without allowing textile and apparel 
products using inputs from China to receive the benefits of the CAFTA-
DR agreement.

In addition to allowing access for more yarns and fabrics, reducing 
nontariff barriers and harmonizing export and import processes in 
Central America is key to promoting regional trade, investment, and job 
growth in the region. CEPA supports the report of the Commercial 
Customs Operations Advisory Committee (COAC) Rapid Response 
Subcommittee Northern Triangle Working Group which provides 
``recommendations on reducing the nontariff trade barriers and 
improving customs processes in the Northern Triangle region of Central 
America, comprised of Guatemala, El Salvador, and Honduras, for the 
purpose of reducing migration driven by economic push factors.''

CEPA has called on the Biden Administration to bring all stakeholders 
to the table to discuss creative solutions that protects current and 
planned U.S. textile investments while also creating conditions to 
sustainably and permanently grow textile and apparel investment for the 
benefit of U.S. apparel and textile companies.

Thank you for your attention to this important issue. CEPA looks 
forward to working with the Committee to foster CAFTA-DR and ensure it 
fulfills its purpose for investors, workers, and communities.

Sincerely,

Beth Hughes
Vice President, Trade and Customs Policy
American Apparel and Footwear Association
On behalf of CEPA

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                 
                    Consumer Technology Association

                            1919 S. Eads St.

                          Arlington, VA 22202

                              703-907-7600

                         https://www.cta.tech/

In response to the March 30th \1\ and March 31st \2\ congressional 
hearings on the 2022 U.S. Trade Policy Agenda, the Consumer Technology 
Association (CTA)' submits this statement for the record on 
U.S. trade priorities in this time of uncertainty and upheaval in the 
international arena.
---------------------------------------------------------------------------
    \1\ House Ways and Means Committee, Biden Administration's 2022 
Trade Policy Agenda, https://waysandmeans.house.gov/legislation/
hearings/biden-administration-s-2022-trade-policy-agenda (last accessed 
March 23, 2022).
    \2\ Senate Finance Committee, The President's 2022 Trade Policy 
Agenda, https://www.
finance.senate.gov/hearings/the-presidents-2022-trade-policy-agenda 
(accessed March 28, 2022).

CTA represents the $505 billion U.S. consumer technology industry, 
which supports more than 18 million U.S. jobs. Our industry appreciates 
the Office of the U.S. Trade Representative's (USTR's) efforts to 
strengthen U.S. trade relationships with allies and key trading 
partners, roll back prior harmful trade actions, establish a worker-
centric trade policy, and use trade policy to address other important 
U.S. objectives like combating the COVID-19 pandemic and eliminating 
---------------------------------------------------------------------------
forced labor from supply chains around the world.

Ambassador Tai's successes in her first year as U.S. Trade 
Representative are creating a solid foundation for a more proactive and 
market-opening U.S. trade policy. Her testimony and responses to 
questions, however, clearly indicated that USTR under her leadership is 
not prioritizing the negotiation of free trade agreements and opening 
new markets through tariff liberalization.

CTA's statement highlights key themes and actions for USTR to pursue to 
support American businesses and workers and advance U.S. engagement 
with key partners and allies.

    I.  USTR can act immediately to improve U.S. economic health, 
decrease inflation, and ensure the continued availability of innovative 
tech products to all Americans by reducing harmful tariffs.

Strong consumer demand for home technology products has allowed total 
industry revenue to grow over the past 4 years. However, industry costs 
are also up significantly, and businesses have been forced to increase 
their average unit sales prices for many products for the first time in 
decades in no small part due to increased tariffs, exploding 
transportation expenses, supply chain disruptions, profiteering by 
foreign ocean carriers, and counterproductive trade policy actions 
taken by the prior Administration and continued by this one.

These price increases in the consumer electronics industry are, in 
turn, contributing to the highest U.S. inflation rate in 40 years and 
jeopardizing our overall national economic health.\3\ They also 
undermine USTR efforts to establish a worker-centric trade policy, as 
workers increasingly use consumer technology both in the office and at 
home with their families. Higher tariffs--taxes that U.S. businesses, 
consumers, and workers pay on imports--are regressive in nature, with 
the greatest impacts felt by the poorest and most vulnerable people in 
our society, particularly in combination with high prices. As the May 
2021 report ``Imports Work for American Workers''\4\ demonstrates, 
imports support over 21 million American jobs. Maintaining high tariffs 
undermines both workers supporting the importation of consumer 
technology and those using consumer technology throughout the country. 
More, given that inflation is known to be reduced only by raising 
interest rates or enhancing productivity, maintaining a special tax on 
productivity enhancing products is especially counterproductive.
---------------------------------------------------------------------------
    \3\ See February 2022 data from the Bureau of Labor Statistics: 
https://www.bls.gov/news.release/pdf/cpi.pdf. See also A. Galloni and 
D. Lawder, Yellen says cutting some tariffs on Chinese goods could ease 
price pressures, Reuters (December 2, 2021), https://www.
reuters.com/markets/rates-bonds/yellen-says-cutting-some-tariffs-
chinese-goods-could-ease-price-pressures-2021-12-02/
#:-:text=WASHINGTON%2C%20Dec%202%20(Reuters),no%20%22game%
2Dchanger.%22.
    \4\ Trade Partnership Worldwide LLC, Imports Work for American 
Workers (May 2021), https://tradepartnership.com/wp-content/uploads/
2021/05/ImportStudy2021FINAL.pdf.

CTA has long advocated for tariff elimination for consumer technology 
products and inputs for these products through trade agreements, 
whether bilateral, regional, plurilateral, or multilateral. In our 
experience, tariffs do not lead to the creation of new industries, re-
shoring, on-shoring, near-shoring, or friend-shoring. They simply are 
an extra cost that drags down U.S. productivity and curtails U.S. 
innovation and hiring. At a time when the United States is striving to 
achieve greater digital integration, advance telecommunications 
technology and increase Internet access for rural populations and 
underrepresented communities, any additional, punitive tariffs on 
technology products directly undermine these goals. USTR is not the 
Federal Reserve, but it can immediately contribute to the resolution of 
this significant economic challenge by eliminating punitive tariffs on 
consumer technology products and continuing progress in international 
negotiations to otherwise lower normal tariff rates on these products. 
These actions will enable everyone in the United States to access new, 
productivity enhancing technologies at lower costs and improve the 
---------------------------------------------------------------------------
condition of our economy.

    II.  USTR should proactively address the U.S.-China trade 
relationship with new tools and not continue to rely on the 
fundamentally flawed Section 301 action taken by the prior 
Administration.

The Section 301 tariffs on China have been among the greatest 
contributors to our present inflationary situation, and they have 
imposed significant costs on consumers, businesses and the United 
States in the form of higher expenses, greater prices, taxes paid, jobs 
lost or never created, and innovation and product development 
squandered. CTA applauds USTR's recent reinstatement of certain product 
exclusions,\5\ but we hope that USTR also recognizes the limitations of 
that narrow process, which was inherently constrained by the arbitrary 
nature of the prior Administration's initial exclusion process.\6\ We 
are disappointed that Ambassador Tai did not announce during her 
testimonies a new solution to provide meaningful relief to U.S. 
businesses from these harmful Section 301 taxes. Such a mechanism could 
include a new process for U.S. companies to request exclusions of 
products from the tariffs across all four lists. Additional exclusions 
should be issued on a rolling basis, and USTR should give appropriate 
due process and provide detailed rationales for its decisions to 
companies. The process should not be time-limited, nor be subject to 
arbitrary eligibility criteria.
---------------------------------------------------------------------------
    \5\ USTR, USTR Issues Determination of Reinstatement of Certain 
Exclusions from China Section 301 Tariffs, Press Release (March 23, 
2022), https://ustr.gov/about-us/policy-offices/press-office/press-
releases/2022/march/ustr-issues-determination-reinstatement-certain-
exclusions-china-section-301-tariffs.
    \6\ See Letter from CTA to Ambassador Katherine Tai (November 30, 
2021), https://cdn.cta.
tech/cta/media/media/advocacy/pdfs/ustr-tai-letter.pdf.

Yet even a broader exclusion mechanism cannot address the fundamental 
flaws of the current Section 301 tariff action. CTA has always opposed 
the Section 301 tariffs as bad policy hastily made by the prior 
Administration in violation of statutory and procedural 
requirements.\7\ For this reason, CTA urges USTR to allow the automatic 
expiry of the tariff lists once they reach their 4-year statutory 
sunset period.\8\
---------------------------------------------------------------------------
    \7\ See In re Section 301 Cases, No. 1:21-cv-00052-3JP (Ct. Int'l 
Trade 2021) (arguing violations of Section 301 of the Trade Act of 1974 
and the Administrative Procedure Act with respect to the promulgation 
of List 3 and List 4).
    \8\ The 4-year sunset date of each list is as follows: July 5, 2022 
(List 1); August 22, 2022 (List 2); September 23, 2022 (List 3); and 
August 31, 2023 (List 4A). As List 4B was never imposed, it should be 
considered to expire no later than the same date as List 4A.

If other parts of U.S. industry petition USTR to continue the tariffs, 
USTR must faithfully engage in the comprehensive review process 
required by statute.\9\ CTA is confident that USTR's review will 
consider the overwhelming evidence that the tariffs have not been 
effective against China and have instead have severely harmed U.S. 
economic interests. While CTA shares this Administration's concern 
about China's unfair trade practices, the United States must develop a 
more sophisticated solution that actually applies pressure on China, 
rather than on U.S. businesses, workers, and consumers. Continuing the 
tariff status quo is not the solution to promote fair and equitable 
international policy or to resolve regulatory disagreements. With the 
expiration of the Section 301 tariffs, the United States will be able 
to move on from this harmful and unsuccessful attempt at protectionism 
and craft a more strategic and beneficial trade policy for growing the 
U.S. economy and creating U.S. jobs while also strengthening 
relationships with U.S. allies around the world. To this end, 
Ambassador Tai has long called for the development of new trade tools 
in the U.S. toolbox to deal with China's role in the international 
trading system.
---------------------------------------------------------------------------
    \9\ 19 U.S.C. Sec. 2417(c).

Many of the tools suggested by USTR, the Congress, or stakeholders are 
unilateral and therefore merit careful consideration of the costs and 
benefits. Suggested tools encouraged by other stakeholders could 
include a new Section 301 investigation on China's industrial subsidies 
and other harmful non-market economy practices with subsequent actions 
that are not tariff-based; new export controls to prevent strategic 
industries in China from accessing critical U.S. technologies, which 
would require close coordination with allies; reviews of outbound U.S. 
investments to strategic industries in China; revisions to U.S. trade 
remedies law to address circumvention of U.S. anti-dumping and 
countervailing duties by China; further restrictions on imports 
presumed to be made with forced labor; and restrictions on carbon-
intensive imports produced in markets with low environmental standards. 
In considering these and other tools, U.S. actions must be 
unambiguously WTO-consistent, or we stand to set a poor example for our 
trading partners; undermine our own international policy objectives; 
---------------------------------------------------------------------------
and invite harmful retaliation.

    III.  USTR should work to create an ongoing and consistent dialogue 
with China that is supported by robust engagement with American 
businesses as well as U.S. partners and allies.

To be truly effective, any new U.S. policy towards China must not only 
engage China, but it must also break down and prevent trade barriers 
between U.S. allies and key trading partners. American businesses have 
an important role in U.S.-China relationship and can be an instrumental 
part of a positive solution. CTA encourages the U.S. government to 
engage in a robust, transparent, and comprehensive dialogue with U.S. 
stakeholders as it crafts and deploys effective and narrowly tailored 
tools to change China's behavior and ensure that China abides by its 
international trade commitments. That dialogue should respect U.S. 
norms regarding stakeholder input wherever possible and include 
opportunities for public comment, public hearings, and administration 
responses to comments from stakeholders.

More, CTA notes that diplomacy and re-engagement with both China and 
U.S. allies and key trading partners (e.g., under the U.S.-EU Trade and 
Technology Council and the new Indo-Pacific Economic Framework (IPEF)) 
can achieve concrete, commercially meaningful, durable, and sustainable 
results and create better economic futures for all parties. We urge the 
Administration to prioritize working with our allies to develop a 
longer-term strategy that holds China accountable and raises labor and 
environmental standards in China, while abiding by international laws 
and strengthening the rules-based trading system (rather than 
undermining it, as the Section 301 tariffs have done). Coordinating 
policies at the highest levels is necessary and important, but only the 
negotiation of binding and enforceable trade commitments is durable and 
sustainable. As CTA outlines in our April 2021 white paper on the 
semiconductor shortage,\10\ to combat illegal trade practices, or to 
counter foreign competition, policies must be derived in accordance 
with our international trade obligations and in concert with our many 
global trade allies.
---------------------------------------------------------------------------
    \10\ When the Chips are Down: Industry Outlook and Policy Response 
to the Semiconductor Crisis. Consumer Technology Association, April 
2021. https://www.cta.tech/Resources/Articles/2021/When-the-Chips-are-
Down.

CTA supports the creation of a concrete pathway to re-enter the 
Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the 
negotiation agreements on digital trade rules (including through the 
IPEF and at the WTO), and the negotiation new free trade agreements 
with U.S. allies that open markets and prevent barriers to trade. A 
free trade agreement with the United Kingdom is the best near-term 
opportunity to negotiate the highest standard binding and enforceable 
---------------------------------------------------------------------------
trade rules to prepare for negotiated U.S. entry into the CPTPP.

    IV.  USTR should capitalize on the competitive advantage of the 
U.S. technology and innovation economy by pursuing new market access 
opportunities.

Ambassador Tai's testimony was a lost opportunity to signal stronger 
and more focused USTR's efforts to open new markets and create new 
trade rules with U.S. allies and key trading partners. Instead, it was 
clear from her testimony and answers to questions that the 
Administration has no interest in opening new markets through tariff 
liberalization and negotiating robust new U.S. trade agreements.

CTA urges U.S. negotiation of comprehensive new free trade agreements 
with U.S. allies and key trading partners as soon as possible. A free 
trade agreement with the United Kingdom and U.S. negotiated entry into 
the CPTPP must be high priorities for the Administration's trade policy 
agenda. The proposed Indo-Pacific Economic Framework should serve as a 
market-opening forum and leads to U.S. negotiated entry into the CPTPP. 
For context, the last two trade agreements that opened new markets for 
U.S. companies were the expansion of the WTO Information Technology 
Agreement in 2015 and KORUS in 2008.

By contrast, other governments, including U.S. adversaries, are 
negotiating new trade agreements at a rapid pace, resulting in U.S. 
firms losing market share in key growth markets to their foreign 
competitors. While free trade agreements may be a tool of the 20th 
century, there is no other viable mechanism at the present time to 
secure favorable market access commitments from trading partners. More, 
it is nonsensical for potential trading partners to make general, 
unilateral commitments on framework rules and principles when they 
stand to get nothing in return. For these reasons, the pause in U.S. 
trade agreement negotiations is not in the short or long-term interests 
of the U.S. economy, U.S. businesses, U.S. workers, and most 
importantly, U.S. innovation. Other governments are setting the new 
rules of trade, forcing the United States to catch up and adapt rather 
than lead.

CTA greatly appreciates the opportunity to submit these comments for 
the record. We look forward to continuing to work with the House Ways 
and Means and Senate Finance Committees and with the Administration to 
fight inflation, strengthen U.S. relationships with allies by opening 
new markets and negotiating high standard, binding and enforceable 
trade rules, and bolster the U.S. innovation economy.

                                 ______
                                 
                  Embassy of the Republic of Mauritius

                           1709 N Street, NW

                          Washington DC 20036

       Statement of Mauritius on Sub Saharan Africa and the AGOA

The Trade Policy Agenda 2022 highlights President Biden's vision for 
trade that is equitable, fair and lasting. Of particular importance to 
Mauritius, is that the USTR will continue to support the 
Administration's work to coordinate with allies on shared priorities, 
while exploring new partnerships around the world.

Mauritius fully shares the view that the U.S.-Kenya approach (whereby 
both countries are working to deepen their trade and investment 
relationship) should serve as the model to deepen trade and investment 
relations with African countries.

Benefits of AGOA to Sub Saharan Africa including Mauritius

Since its enactment, AGOA has had a very positive impact on U.S. Africa 
trade flows and by extension, has indeed led to economic 
diversification and created regional value chains. This has in turn 
contributed to the socio-economic development of Africa. Indeed, AGOA 
is the corner stone of the economic and trade relations between the 
U.S. and Sub Saharan Africa.

Predictability--Important Prerequisite for Trade

While AGOA has had a positive impact on the development of the AGOA 
eligible countries, however the full potential of the U.S. and SSA 
trade and investment relations has yet to be unleashed. This is partly 
attributed to the fact that AGOA is a temporary trade arrangement and 
limited in time. Investors and the business community need 
predictability for trade and investment to flourish. In this respect, 
the short-term renewals of the AGOA programme do not create the much 
needed certainty for long term investment plans and adequate production 
planning. Investment from the U.S., for instance has remained quite low 
in Africa as compared to U.S. investment in other regions.

Implications of High-Income Country Status

The AGOA has a graduation clause which is based on the World Bank Gross 
National Income (GNI) threshold. The high income threshold is the 
benchmark for graduation from both the GSP and AGOA regimes.

It is important to note that Mauritius may be classified a high income 
country before the expiry of AGOA in 2025 and would therefore not 
qualify for AGOA eligibility. We are making a request to the U.S. 
authorities to consider removing the graduation clause based on per 
capita GNI.

In fact, GNI per capita is not the ideal criteria to determine the 
graduation of a country as countries like Mauritius have a high GNI on 
account of its small population. Small countries with relatively higher 
national per capita income face significant challenges in finding a 
viable path towards sustainable growth and remain highly vulnerable to 
global economic and global trade patterns. The COVID-19 pandemic for 
instance which has led to the disruption of the global supply chains 
and rising transport costs have impacted Mauritius heavily.

Rather than using the GNI per capita as the graduation criteria, it 
might be better to use the share of exports in relation to the overall 
imports of the U.S.. If a country's share is over 1% of U.S. total 
imports then the graduation criteria may apply.

Post AGOA 2025

Regarding the renewal of AGOA, there is unanimity that the AGOA 
programme has been beneficial to the eligible countries, and has 
provided one of the poorest regions in Africa with a powerful tool to 
increase exports, create jobs and economic welfare. Any post AGOA 2025 
strategy should not lead to the disruption of trade in any AGOA 
eligible country, including those that may graduate out by virtue of 
the per capita Gross National Income criteria.

In this respect, it is extremely important for both sides to work 
together on a mutually acceptable solution before AGOA expires. The 
extension of AGOA on a long term basis to ensure predictability and 
legal security should be given serious consideration.

During the opening of the last AGOA Ministerial Forum held in October 
2021, Ambassador Katherine Tai, USTR, alluded to the fact that the U.S. 
was willing to engage with AGOA countries at the national, regional and 
continental level to ensure that the African Continental Free Trade 
Area (AfCFTA) delivers real benefits to African workers. She also 
mentioned that the U.S. is open-minded and is willing to explore all 
possible solutions for trade policy to make a positive contribution to 
economic development.

Kenya is already negotiating a Free Trade Agreement with the U.S. and 
it would be crucial for countries that risk graduation to have the 
option to conclude bilateral Free Trade Agreements with the U.S. 
Otherwise, sudden graduation from AGOA would disrupt trade and have 
drastic socio-economic consequences.

In the longer term consideration should be given to conclude a new 
generation of Comprehensive Economic Partnership Agreement between U.S. 
and Africa that encompasses trade in goods, trade in services, 
investment liberalisation and facilitation, intellectual property 
rights, competition policy, sustainable amongst others. This can be 
done when the AfCFTA would have matured and a customs union established 
on the continent.

To ensure effective implementation and address structural adjustment 
which such a framework would entail, a financial and technical support 
package should also be included.

Mauritius is proposing a hybrid approach as follows:-

     (i)  Renew AGOA preferences in 2025 whilst prioritising a long 
term comprehensive trade agreement between the U.S. and Africa using 
the AfCFTA as a vehicle;

    (ii)  Allow interested countries to negotiate bilateral Free Trade 
Agreements with the U.S., in particular those that risk graduation.

In addition, Mauritius is also proposing a review of the criteria for 
graduation from the per capita Gross National Income to one based on 
the share of exports relative to overall U.S. imports from the world.

Position of Mauritius

Mauritius is prepared to negotiate a comprehensive trade agreement with 
the U.S. which would be based on the core values of the new U.S. Trade 
Policy Agenda. Mauritius welcomes the idea of a Worker-Centred Trade 
Policy as we are compliant with several International Labour Convention 
(ILO) Agreements. A comprehensive and ambitious Free Trade Agreement 
would enable the U.S.-Mauritius trading relationship to evolve on a 
predictable basis and be conducive to investment promotion.

                                 ______
                                 
             National Electrical Manufacturers Association

                   1300 North 17th Street, Suite 900

                           Rosslyn, VA 22209

The National Electrical Manufacturers Association (NEMA) represents 
more than 325 electrical equipment and medical-imaging manufacturers 
that make safe, reliable, and efficient products and systems. Member 
companies support more than 370,000 American manufacturing jobs in 
6,100 locations across all 50 states. NEMA companies play a key role in 
transportation systems, building systems, lighting, utilities, and 
medical-imaging technologies and will thereby serve a critical role in 
the implementation of the recently enacted Infrastructure Investment 
and Jobs Act (IIJA). These industries produce $130 billion in shipments 
and $38 billion in exports of electrical equipment and medical imaging 
technologies per year.

President Biden's 2022 Trade Policy Agenda outlines key accomplishments 
of the Administration in its first year in office, including important 
information about how the Administration is advancing a worker-centered 
trade policy that ensures the benefits of trade reach everyone. The 
electroindustry has a robust domestic manufacturing base and shares 
with the Administration the fundamental goal of creating well-paying 
American jobs and shoring up our domestic supply chains.

NEMA supports a comprehensive approach to international trade policy 
that results in fair and open global markets. NEMA believes in global 
free enterprise based on solid legal infrastructure and due process to 
define and protect property rights as well as negotiate and ensure 
adherence to international trade agreements. NEMA strives to eliminate 
barriers to international trade such as tariffs, quotas, and technical 
regulations that unfairly limit market access. NEMA works with 
governments and international organizations to strengthen property 
rights protections and enforcement. With those objectives in mind, NEMA 
submits a statement for the record to highlight three key areas of 
focus for the organization as the Committee considers the Biden 
Administration's 2022 Trade Policy Agenda.

U.S. leadership in International Standards Setting Organizations

As USTR continues its work to engage with key trading partners and 
multilateral institutions, NEMA urges the Administration to address 
growing concerns about declining U.S. involvement and influence in 
multilateral standards setting organizations. Participation in 
development processes and technical standards setting bodies are 
crucial to preserving and expanding international market access for 
U.S. companies. Although the United States has historically been a 
leader in these fora, China has increased its membership and leadership 
participation in recent years.\1\ Further, as Congress continues to 
deliberate on a path forward for pending competitiveness legislation it 
has the opportunity to provide incentives to support U.S. participation 
in international standards organizations. The House COMPETES Act 
codifies the National Institute of Standards and Technology's role as a 
convenor and federal coordinator in international standard setting and 
includes a pilot program for grants to small businesses, nonprofits, 
and universities to participate in international standards setting. 
Congress and the Administration should consider providing additional 
support to all U.S. businesses, as well as relevant trade associations 
to support U.S. involvement and capacity building given the key roles 
these organizations play in establishing international manufacturing 
standards.
---------------------------------------------------------------------------
    \1\ https://www.lawfareblog.com/what-us-competition-and-innovation-
act-gets-right-about-standards.
---------------------------------------------------------------------------

 Access to materials needed to secure the electric grid and support 
                    electrical infrastructure

NEMA believes any effort to bolster national security must not disrupt 
the very supply chain that ensures our ability to produce reliable, 
resilient, and affordable energy, including electrical transformers in 
the U.S. for the grid, as well as for industrial, commercial, and 
residential buildings. The supply chain for transformer cores and 
laminations is facing unprecedented challenges to meet demand. Over the 
past six months, NEMA has been contacted by the respective trade 
associations that represent both public and private utilities with 
concerns about growing lead-times (in some cases extending well beyond 
12 months) for orders for new electrical transformers. The 
implementation of the IIJA will only add to this demand. These supply 
chain challenges in and of themselves pose an immediate threat to 
energy security particularly in the face of severe weather events that 
often necessitate the immediate replacement of hundreds of 
transformers. As the Administration receives requests to impose 
policies that would reduce U.S. imports of downstream GOES products 
from Canada and Mexico, we urge the Administration to consider the 
current state of the supply chain and high demand for this material and 
potential detrimental impacts on U.S. citizens, our domestic base, and 
the nation's infrastructure goals.

Section 301 Tariff Relief

NEMA member companies continue to experience supply chain disruptions, 
labor shortages, and resulting inflationary pressures which have 
resulted in disrupted domestic production, reduced sales, increased 
consumer costs, and delayed delivery of critical products. If these 
concerns are not addressed, they will have a negative impact on 
implementation of the IIJA. These supply chain issues require both 
near-term and long-term solutions and Congress and the Administration 
can help with both.

In the immediate term, the Biden Administration should use the looming 
expiration of List 1 of the Trump Administration's Section 301 tariffs 
on Chinese imports as an opportunity to conduct a robust, thorough, and 
transparent review of the effectiveness of the full list of tariffs put 
in place in achieving their objectives and their impact on U.S. 
importers and consumers of electrical goods. And while USTR announced 
its decision to reinstate certain previously granted and extended 
product exclusions pursuant to the China Section 301 investigation last 
week, NEMA urges the Administration to fully restart and reform the 
Section 301 tariff exclusions process in a way that has clear 
eligibility standards for applicants, is transparent, and fair to all 
who apply.

                                 ______
                                 
                      Outdoor Industry Association

                             P.O. Box 21497

                           Boulder, CO 80308

April 7, 2022

Chairman Ron Wyden                  Chairman Richard Neal
U.S. Senate                         U.S. House
Committee on Finance                Committee on Ways and Means
219 Dirksen Senate Office Building  1102 Longworth House Office 
                                    Building
Washington, DC 20510                Washington, DC 20515

Ranking Member Mike Crapo           Ranking Member Kevin Brady
U.S. Senate                         U.S. House
Committee on Finance                Committee on Ways and Means
219 Dirksen Senate Office Building  1102 Longworth House Office 
                                    Building
Washington, DC 20510                Washington, DC 20515

Dear Chairman Wyden, Chairman Neal, Ranking Member Crapo, and Ranking 
Member Brady:

On behalf of Outdoor Industry Association (OIA), we write to express 
the critical need for inclusion of trade provisions in the reconciled 
version of H.R. 4521--The America Competes Act of 2022 \1\ (``COMPETES 
Act'') and S. 1260--The United States Innovation and Competition Act of 
2021 \2\ (``USICA''). Outdoor companies continue to face exorbitant 
transportation costs, increases in raw material prices, and other 
inflationary pressures. Action on important trade provisions is 
necessary to sustain their U.S. operations, preserve their ability to 
create U.S. jobs, and develop innovative new products.
---------------------------------------------------------------------------
    \1\ https://pascrell.house.gov/news/documentsingle.aspx.
    \2\ https://www.congress.gov/bill/117th-congress/senate-bill/
1260?q=%7B%22search%22%3A%
5B%22united+states+innovation+and+competition+act%22%2C%22united%22%2C%2
2states%22
%2C%22innovation%22%2C%22and%22%2C%22competition%22%2C%22act%22%5D%7D&s=
5
&r=1.

---------------------------------------------------------------------------
Specifically, we urge:

      Retroactive reauthorization of Generalized System of Preferences 
(GSP) for at least 7 years, with the addition of certain footwear not 
made in the United States;
      Passage of Miscellaneous Tariff Bills (MTBs) as recommended by 
the International Trade Commission (ITC) with the reauthorization of 
future cycles that preserves the eligibility of finished goods;
      Amending Section 321 de minimis entry to grant U.S. Foreign 
Trade Zones (FTZs) parity with foreign warehouses and operations; and
      The reinstatement of previously granted exclusions to the China 
301 tariffs and the establishment of a new exclusion process.

The outdoor recreation economy is a $689 billion economic engine 
supporting 4.3 million American jobs. Outdoor companies produce 
innovative, high-tech apparel, footwear, and equipment designed to 
enhance the outdoor experience. As we emerge from the COVID-19 
pandemic, relief from certain tariffs is essential to helping our 
businesses grow and take advantage of a surge in interest in the 
physical and mental health benefits of outdoor recreation.

GSP has been instrumental to our industry, particularly as we move 
production out of China. Congress agreed on a bipartisan basis to 
remove the statutory exclusion for travel goods--such as backpacks, 
sports bags, and hydration packs--in 2015. Since that time, China's 
market share has plummeted, with $5 billion of trade in travel goods 
shifting to GSP countries. Annual duty savings have been in the range 
of $300 million, leading to lower costs, new U.S. jobs, and new product 
development.

We appreciate and support bipartisan efforts to modernize country 
eligibility criteria for GSP participation. These are consistent with 
our industry's values. We believe the addition of certain footwear not 
made in the United States would create a powerful incentive for 
countries to meet these new criteria and remain in the program--and we 
urge you to include such a provision in any renewal of GSP.

We also support passage of the MTBs included in USICA, which were 
recommended by the U.S. ITC after rigorous vetting by the Commerce 
Department and Customs and Border Protection (CBP). These provisions 
will only be in place until the end of 2023, leaving little time for 
companies to benefit from them. Because of the harm to U.S. industry 
due to the delay in enacting MTBs and their limited duration, we urge 
Congress to make all provisions, both extensions and new MTBs, 
retroactive to January 1, 2021.

In addition, we urge you to authorize future MTB rounds that maintain 
eligibility of finished products that have been included in MTBs since 
their inception. Each proposed MTB undergoes a thorough vetting process 
that ensures duty relief is only granted for products that do not 
compete with domestic production. Removing eligibility for finished 
products would eliminate a critical tool for outdoor companies and 
inhibits the ability to use duty savings to create new jobs, develop 
new products, and support economic growth. We oppose any MTB process 
that does not include finished goods.

Next, we strongly urge you to provide parity for U.S. FTZs vis-a-vis 
offshore facilities relating to e-commerce fulfillment. Failure to 
change the law to allow Section 321 de minimis entry from U.S. FTZs 
will only encourage more U.S. companies to move their U.S. e-commerce 
distribution operations offshore and result in the loss of tens of 
thousands of American jobs. The COMPETES Act fails to address this 
problem; in fact, it de facto treats U.S. FTZs like facilities in 
China.

Finally, while we continue to call on the administration to negotiate 
an agreement with China that will lift all punitive tariffs, we urge 
you to reinstate all previously granted Section 301 exclusions, provide 
for the refund of such tariffs paid, and establish a new exclusion 
process.

Tariff relief from GSP and MTBs, along with a meaningful exclusion 
process from Section 301 tariffs on imports from China, will help 
sustain the strong economic recovery. Moreover, eliminating the 
economic advantage for distributing e-commerce orders from offshore 
warehouses and companies by allowing Section 321 de minimis entries 
from U.S. FTZs will prevent further American job losses in the e-
commerce distribution sector.

We appreciate your attention to our letter and your support for prompt 
action on GSP, MTBs, de minimis for FTZs, and Section 301 tariffs.

Sincerely,

Outdoor Industry Association

Advanced Elements, Inc.             Nite Ize, Inc.
ALPS Brands                         Oberalp North America
Bates                               Oboz
Bell Helmets                        Osprey
Black Diamond Equipment Ltd.        Outdoor Element
Bridge City Kid                     prAna
CamelBak                            QuietKat
Camp Chef                           REI Co-op
Cat Footwear                        Sanitas Sales Group
Chaco                               Saucony
Cheers Suz                          Simms Fishing Products
Columbia Sportswear Company         SOREL
Full Circle Ocean Gear LLC          Sperry
Giro                                Stride Rite
Global Cases/XPack                  Sweaty Betty
Harley-Davidson Footwear            Swen Products, Inc.
Helen of Troy                       Swrve, Inc.
Hush Puppies                        Tiara Yachts
Hydro Flask                         Toad&Co
HYTEST                              Turtle Fur
Kahtoola                            U.S. Hang Gliding and Paragliding 
                                    Association
Keds                                VF Corp.
L.L.Bean                            Vista Outdoor
La Sportiva N.A., Inc.              W.L. Gore and Associates
LaCrossse Footwear, Inc.            Westfield Outdoors
Merrell                             Wolverine World Wide Inc.
Mountain Hardwear
Mountain Shades, Inc.
NEMO Equipment

                                 [all]