[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]



                   BIDEN ADMINISTRATION'S 2023 TRADE
                    POLICY AGENDA WITH UNITED STATES
                  TRADE REPRESENTATIVE, AMBASSADOR TAI

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

                                HEARING

                               before the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________


                             MARCH 24, 2023

                               __________


                            Serial No. 118-6

                               __________


         Printed for the use of the Committee on Ways and Means







                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]






                               ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

53-240                    WASHINGTON : 2024













                      COMMITTEE ON WAYS AND MEANS

                    JASON SMITH, Missouri, Chairman

VERN BUCHANAN, Florida               RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska               LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania             MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona            JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois               EARL BLUMENAUER, Oregon
BRAD WENSTRUP, Ohio                  BILL PASCRELL, Jr., New Jersey
JODEY ARRINGTON, Texas               DANNY DAVIS, Illinois
DREW FERGUSON, Georgia               LINDA SANCHEZ, California
RON ESTES, Kansas                    BRIAN HIGGINS, New York
LLOYD SMUCKER, Pennsylvania          TERRI SEWELL, Alabama
KEVIN HERN, Oklahoma                 SUZAN DelBENE, Washington
CAROL MILLER, West Virginia          JUDY CHU, California
GREG MURPHY, North Carolina          GWEN MOORE, Wisconsin
DAVID KUSTOFF, Tennessee             DAN KILDEE, Michigan
BRIAN FITZPATRICK, Pennsylvania      DON BEYER, Virginia
GREG STEUBE, Florida                 DWIGHT EVANS, Pennsylvania
CLAUDIA TENNEY, New York             BRAD SCHNEIDER, Illinois
MICHELLE FISCHBACH, Minnesota        JIMMY PANETTA, California
BLAKE MOORE, Utah
MICHELLE STEEL, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio

                       Mark Roman, Staff Director
                 Brandon Casey, Minority Chief Counsel

                                 ------                                








                         C  O  N  T  E  N  T  S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hon. Jason Smith, Missouri, Chairman.............................     1
Hon. Richard Neal, Massachusetts, Ranking Member.................     2
Advisory of March 24, 2023 announcing the hearing................     V

                                WITNESS

Katherine Tai, Ambassador, United States Trade Representative....     4

                   MEMBER SUBMISSIONS FOR THE RECORD

Member Questions for the Record and Responses from Katherine Tai, 
  Ambassador, United States Trade Representative.................    80

                   PUBLIC SUBMISSIONS FOR THE RECORD

Public Submissions...............................................   134





[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]









 
                   BIDEN ADMINISTRATION'S 2023 TRADE
                    POLICY AGENDA WITH UNITED STATES
                  TRADE REPRESENTATIVE, AMBASSADOR TAI

                              ----------                              


                         FRIDAY, MARCH 24, 2023

                          House of Representatives,
                               Committee on Ways and Means,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:05 a.m., in Room 
1100, Longworth House Office Building, Hon. Jason Smith 
[chairman of the committee] presiding.
    Chairman SMITH. The committee will come to order.
    Ambassador Tai, thank you for appearing here today. It is 
my pleasure to welcome you back to the best committee in 
Congress where you served with great distinction.
    As you know, American families, they want and need results. 
They have lost 2 months of wages in the Biden economy, 
wholesale prices are continuing to weigh on small businesses, 
and our economy continues to struggle. Making matters worse, 
President Biden has left American workers on the sidelines, 
surrendered our economic advantage to China, and refused to 
consult with Congress.
    To be clear, a country that cannot supply their own demand 
for food, energy, and medicine but must instead rely on other 
nations to fulfill those basic needs, they are no longer 
independent, but they are politically dependent.
    Given that this is your first time appearing before the 
Ways and Means Committee in the new Republican majority, I 
believe today's hearing is an opportunity to establish a new 
path forward to put American workers first and China--and hold 
China accountable.
    U.S. trade policy has historically been bipartisan. For 
example, President Trump's USMCA strengthened the trade 
relationship between North American countries and gave a 
stronger enforcement mechanism to stand up for American 
workers. I am glad to see some positive developments with 
regard to enforcement to ensure fairness for American farmers 
and energy producers competing in Canada and Mexico. But the 
American people expect us to go further and to use the tools at 
our disposal to level the playing field for our workers, 
farmers, and job creators.
    Without a trade agenda that puts workers and jobs first, 
the United States is falling behind China and other 
competitors. China is forging ahead with an aggressive trade 
agenda that cheats America. It shapes the global playing field 
in its favor and threatens key American supply chains and the 
livelihoods of American farmers and workers. But rather than 
lead on trade, the Biden administration's tax and trade 
policies surrender the world's customers to China and allow it 
to profit using taxpayer dollars.
    The U.S. must be clear about the Chinese Communist Party's 
human rights abuses and predatory trade practices and work to 
stop them. The Phase One agreement negotiated by President 
Trump included specific enforcement provisions. Yet for some 
reason, the administration has yet to provide a comprehensive 
accounting of China's compliance.
    Ambassador Tai, that should be a no-brainer, and we would 
love to hear that information.
    In the meantime, the committee is prepared to take common-
sense steps to strengthen our supply chains and reduce our 
dependence on China. That includes more U.S. production and 
deeper cooperation with allies. But during hearings in West 
Virginia and in Oklahoma, witnesses representing America's 
farmers, the energy producers, and manufacturers told this 
committee that they are hamstrung by red tape and the Biden 
administration's new taxes. They deserve better.
    The Biden administration unfortunately has refused to 
recognize that the Constitution requires Congress to be at the 
center of U.S. trade policy. Through so-called trade frameworks 
that sidesteps Congress and fail to establish durable 
agreements, this administration is fueling the supply chain 
crisis and plunging American workers, farmers, and 
manufacturers into prolonged uncertainty. Endless dialogues and 
frameworks are no substitute for exercising Congress' 
constitutional authority--and giving the American people a 
voice--over trade. In order to succeed, this administration 
must recognize that Congress is in the driver's seat in setting 
priorities and deciding whether to approve any trade 
agreements. And trade at its core function should be used to 
benefit the American people and increase the wealth of our 
Nation and our economy. Trade plans are only worthwhile so much 
as they accomplish those goals and advance the well-being of 
the American people we all serve.
    Ambassador, I am extremely optimistic that we can work 
together and deliver some real results for the American people. 
Together, we can stand up for workers and farmers and 
manufacturers, build on USMCA's progress, hold the Chinese 
Communist Party accountable, strengthen our supply chains, and 
restore American leadership in the world.
    I am pleased to recognize the ranking member from 
Massachusetts, Mr. Neal, for his opening statement.
    Mr. NEAL. Thank you, Mr. Chairman.
    We want to welcome back Ambassador Tai, one of the 
distinguished alums of the House of Representatives. We are 
thrilled with the emphasis that she has placed upon the 
enforcement of these trade agreements. She, with me and the 
members of our side, along with former Chairman Brady, for 
months, day after day after day, renegotiated USMCA.
    I think perhaps the chairman and I have a slightly 
different versions of how that happened, but we would also 
recall that, in the end, 193 Republicans voted for the 
agreement and 195 Democrats voted for a trade agreement that 
was endorsed by the AFL-CIO and the Teamsters Union, almost 
unheard of and thanks, in many ways, to the guidance that you 
offered along the way. U.S. Chamber of Commerce, Business 
Roundtable, Teamsters, and the AFL-CIO endorsed that trade 
agreement.
    So, this is your first appearance, and we want to 
congratulate not just you but President Biden on the strong and 
sustainable recovery that is focused on workers. More jobs have 
been created under his leadership in the last 2 years than on 
any other President's time in a full term. Wages are on the 
rise, and our investments in supply chains and infrastructure 
are bringing back ``Made in America.'' This is how you rebuild 
an economy from the bottom up and the middle out, and I am 
grateful for your leadership in connecting this to our worker-
centric trade agreement.
    As our Nation's lead trade negotiator, you have put 
American workers and businesses first, strengthening 
relationships with global allies. And under your leadership, we 
are now used to USMCA's Rapid Response Labor Mechanism, which 
you have applied seven times already, standing up for workers' 
rights and showing the world what is possible with strong 
enforcement mechanisms.
    Last year, the committee took decisive action on a 
bipartisan basis to hold Russia accountable for its horrific, 
unprovoked war in Ukraine. We banned Russian energy imports and 
suspended normal trade relations to inflict substantial 
economic pressure on Putin's regime.
    Ambassador Tai, I encourage you to continue working with 
our partners and allies in isolating Putin and improving global 
supply chain resiliency.
    Even in the face of these atrocities, we have seen 
unparalleled unity amongst our allies. Now is the time to 
capitalize on our connections and strengthen our economic ties, 
especially in Europe and Africa.
    I had the opportunity to visit the World Trade Organization 
last year. I met with many of our allies yearning for a deeper 
U.S. engagement. So, I applaud your commitment to strengthening 
the institutions and commend you for delivering a successful 
outcome for MC12. I have seen firsthand the positive impact of 
WTO as it has had on global commerce, but more reforms are 
still needed, and you and I know, share that same view, 
especially with dispute settlement.
    I share your concerns with recent rulings on national 
security, and also understand clearly that it is the integrity 
of that organization whose reputation is on the line.
    You have embraced our climate goals as a key trade 
priority. Ways and Means Democrats probably contributed the 
largest Federal investment to protect our climate in the 
Inflation Reduction Act. And I am delighted with the fact that 
many who we might describe as climate deniers are attempting to 
take advantage of those tax credits. That is a good thing.
    These types of worker-focused economic trade investments 
not only protect our planet, but they create good-paying jobs. 
Strong environmental protections, workers' rights, and human 
rights are all interconnected, which we established in USMCA 
and other trade agreements. In combatting this crisis, 
guardrails will need to be put in place to ensure that the 
environmental problem is not replaced with another substantial 
challenge. There are plenty of lessons to learn from the past, 
and climate solutions of the future should be grounded in those 
lessons.
    Ambassador Tai, the House Democrats fought hard to 
establish a new structure for enforcement, and you have 
followed up on it, and we are grateful for it. USMCA now stands 
as a powerful beacon for what is possible when it comes to 
durable enforcement trade agreements, and I credit that work in 
consensus building to Congress in a bipartisan manner. It is 
the collaboration between Congress and the executive that 
allows trade policy to live up to its fullest potential. In 
this critical moment, that cannot be forgotten.
    I saw our Senate colleagues deliver this message yesterday, 
and I share many of their concerns. We seek long-lasting 
solutions just as you do, and we firmly believe, when done 
right, trade is a powerful driver of good-paying, quality jobs 
in a thriving economy. Thanks for being here today. We welcome 
you back enthusiastically. And I yield the balance of my time. 
Thank you, Mr. Chairman.
    Chairman SMITH. Thank you. Thank you, Ranking Member Neal.
    Today's sole witness is United States Trade Representative, 
Ambassador Katherine Tai. The committee has received your 
written statement and it will be made part of the formal 
hearing record. You have 5 minutes to deliver your oral 
remarks.
    Ambassador Tai, you may begin when you are ready.

      STATEMENT OF MS. KATHERINE TAI, UNITED STATES TRADE 
                         REPRESENTATIVE

    Ambassador TAI. Thank you so much, Chairman Smith, Ranking 
Member Neal, members of this august committee. Congress is our 
constitutional partner on trade, and I appreciate the 
opportunity to discuss the President's trade agenda with you 
today.
    Under President Biden's leadership, this administration is 
writing a new story on trade, one that puts working families 
first and reflects more voices across the American economy, one 
that advances our global priorities and strengthens democracy 
here at home and abroad.
    Whether you have a college degree or not, whether you have 
5 employees or 500, whether you are in rural Ohio or in the 
heart of Baltimore, whether you are a small dairy farmer in 
Michigan or a steelworker in Pennsylvania, we are restoring 
fairness to our trade and economic system for you. This means 
vigorously enforcing existing commitments to reestablish 
confidence and trust in trade. And this starts with the USMCA, 
which has a very special relationship with this committee, 
which Congress and this committee passed on a strong bipartisan 
basis.
    We are pressing Canada to ensure that U.S. dairy farmers 
are treated fairly, finally, and urging Mexico to address our 
concerns with the energy sector and with agricultural 
biotechnology. On the latter, we recently requested technical 
consultations with Mexico under the USMCA, and we will continue 
to consider all options available under that agreement to fix 
the problem.
    Restoring fairness to the system also means empowering 
workers to compete fairly. We are using the USMCA's rapid 
response mechanism to promote workers' rights in Mexico, and we 
are seeing real change and success for workers in independent 
unions. In the last year, we have secured wins for workers at 
four different facilities. We have ongoing open cases, and will 
continue to work with the Government of Mexico. We are also 
working with the European Union, Japan, Canada, and Mexico 
actively to eliminate forced labor from global supply chains.
    Farmers, ranchers, fishers, and food manufacturers are also 
key to our trade agenda. We secured real wins over the past few 
years, and U.S. agricultural exports have reached a record $202 
billion in 2022. We brought into force an agreement with Japan 
to export more beef. We signed a Tariff Rate Quota Agreement 
with the EU to open markets for U.S. rice, wheat, corn, 
shellfish, and beef. And we have opened access for pork and 
pecan exports for India. We have a nimble USTR team that is 
opening markets, and we will continue to work with Congress to 
find additional opportunities for as many of our stakeholders 
as we can, especially for the small- and medium-sized ones.
    Speaking of new opportunities, the United States is leading 
with a positive economic vision around the world, and our 
partners and our allies are joining us. The Indo-Pacific 
Economic Framework is a major priority this year, and we are 
making significant progress. This framework will level the 
playing field for American workers and businesses, create more 
resilient supply chains, boost agricultural exports, build an 
inclusive digital economy, and help businesses compete in the 
region.
    We also kicked off the America's Partnership for Economic 
Prosperity with 11 countries in our hemisphere. Regionalization 
is an integral part of building resilience in the world 
economy. By strengthening our relationships with our closest 
neighbors, we can drive sustainable, economic growth and 
bolster our collective prosperity.
    We are also deepening ties at the bilateral level. Taiwan 
is an essential partner, and our U.S.-Taiwan 21st Century Trade 
Initiative is moving forward. We launched the U.S.-Kenya 
Strategic Trade and Investment Partnership. And we continue to 
work with the European Union through the Trade and Technology 
Council to promote shared economic growth and, importantly, to 
coordinate our actions against Russia and Belarus.
    We are making progress on the world's first sectoral 
arrangement on steel and aluminum trade. This will tackle both 
emissions and nonmarket excess capacity, including from the 
PRC, which threatens American workers and businesses.
    On the multilateral front, our administration worked with 
WTO members to deliver tangible outcomes during the last 
Ministerial Conference, the first time in a decade, including 
on COVID-19 vaccines, fishery subsidy disciplines, and food 
insecurity. And we are committed to transforming the 
institution to be more responsive to the rapidly changing 
global economy and the needs of everyday people.
    We are also taking full advantage of our APEC host year to 
build a more durable, resilient, and inclusive Asia-Pacific 
region. Another component of our trade agenda, of course, is 
realigning the U.S.-China relationship. That means making 
groundbreaking investments here at home to compete from a 
position of strength. That also means renewing our engagement 
with partners and allies to develop new tools to address the 
challenges posed by the PRC.
    The comprehensive 4-year review on the Section 301 tariffs 
is a part of this realignment. We are taking a deliberate and 
strategic look at how we can serve our economic interests in 
light of the PRC's continued unfair policies and practices.
    Lastly, but certainly not least, USTR will continue to 
implement our equity action plan and work with the U.S. ITC to 
better understand the distributional effects of trade on 
American workers.
    I want to close where I started. Congress is our 
constitutional partner on trade. The success of our initiatives 
depends on a robust partnership with all of you. Since last 
year's trade agenda hearings, USTR has held over 380 
congressional consultations, including more than 80 on IPEF 
alone. And your feedback has been incredibly helpful in 
informing and guiding our work.
    I have also heard your concerns about Congress' role on 
trade and transparency with the public, and I have asked my 
team to make further enhancements. That includes making it 
easier for congressional staff to review our negotiating text, 
releasing public summaries of that text, and holding public 
stakeholder meetings, especially with groups who traditionally 
have not been involved in the process. Moving forward, I will 
continue to work hand-in-hand with Members of Congress, your 
staff, and the public to develop effective trade policy 
together.
    Chairman Smith, I want to say, I agree with you; I feel 
that there is bipartisan strength behind American trade 
policies, and there is a lot that we can do together. I look 
forward to continuing this work in the year ahead with all of 
you.
    Thank you.
    [The statement of Ambassador Tai follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman SMITH. Thank you, Ambassador Tai.
    Before we move on to questions, I want to welcome our 
friend and colleague Greg Steube to the dais for the first time 
since becoming a member of this committee.
    As many of you may know, Greg had a terrible accident 
earlier this year and was on the mend for some time. And as 
example of Greg's passion for this committee and hard work, he 
was out of the hospital just a few days calling me, saying, Can 
I still get on my subcommittees? Can you help me get on the 
right subcommittees?--while he was laying with a neck brace and 
everything else.
    But earlier this week, we were at the Republican retreat, 
and I don't think that there was a dry eye in the room whenever 
Greg gave his testimony of the miracle that happened that day 
with Representative Vern Buchanan's staffer that actually saw 
him at the accident and was able to call the paramedics, and 
how everything worked right. It was an amazing, amazing story.
    And I know I speak for everyone in this room, Greg, I 
welcome you to the Ways and Means Committee, and we are glad 
you are home.
    Thank you.
    And I would like to recognize Mr. Neal as well.
    Mr. NEAL. Thank you, Mr. Chairman.
    We are delighted you are back. And I want to say that the 
Democrats' caucus, that we unanimously wish you a speedy 
recovery.
    Mr. STEUBE. Thank you.
    I just want to thank everybody. It is weird to be on a 
committee for 2 months and not step foot in the actual room. 
But this is my first week back, and I want to thank the 
chairman for his understanding and our leadership that was very 
understanding of me going through the process to heal.
    And I want to thank my colleagues on the other side of the 
aisle. Quite a few of you reached out to me during that time, 
and that was a blessing. And it shows that we are all human up 
here, and we are all up here to do what we have been called to 
do. So I want to thank you.
    And I look forward to serving, and I look forward to 
serving with you, Mr. Chairman.
    I yield back.
    Chairman SMITH. Thank you, Mr. Steube.
    We will now proceed to the question and answer session, and 
I will begin.
    As you know, the Mexican Government is violating the terms 
of USMCA by essentially banning U.S.-grown corn from Mexico's 
market. Mexico is America's second largest export market for 
corn.
    I recently led a bipartisan delegation to Mexico last week 
where we met with the President of Mexico and delivered the 
message that Mexico must uphold its USMCA obligations.
    USTR has taken a critical step by initiating technical 
consultations with the Mexican Government. Effective 
enforcement is required to protect American workers and 
farmers, and I will insist on moving forward with dispute 
settlement if our concerns are not addressed.
    What are the next steps the administration is prepared to 
take to ensure enforcement of USMCA in this matter?
    Ambassador TAI. Chairman Smith, thank you for your very 
strong voice and leadership on this issue. The issues here are 
really critical to the integration of our economies and the 
long-standing and fruitful partnership in terms of agricultural 
trade between the United States and Mexico and Canada as well.
    We requested technical consultations, as you referenced. We 
are going through a pretty intensive process of our teams 
sitting down, USTR with USDA, as well as the Mexican teams. And 
we are looking forward to more helpful clarifications from the 
Mexican side on exactly how the decree will work and what will 
be impacted by it.
    Of course, all of the tools in the USMCA are there for a 
reason, and we stand ready to make use of those tools to help 
us to resolve this issue. It is not just a matter of USMCA 
rules. It is also truly a matter of vision for our shared 
prosperity across North America. And the biotechnology 
agricultural trade, the corn trade in particular, has been a 
very important part of the strength of our integrated 
agricultural markets.
    Chairman SMITH. Last week, our delegation also visited 
Ecuador and Guyana, because U.S. engagement in Latin America is 
vital to securing key supply chains and countering China's 
influence in that region as well. China is aggressively 
investing in Latinerican countries to spread its 
influence, just as it has done elsewhere in the world.
    While the United States under this administration has been 
sitting on the sidelines in a lot of degrees, over 2 years into 
the administration, we have yet to see a comprehensive strategy 
on China. What is the administration's plan for a more 
proactive, aggressive strategy to counter China, not just in 
Latin America, but globally?
    Ambassador TAI. Well, Chairman Smith, as you know, China is 
the second largest economy in the world. And the relationship 
between the United States and China is one of profound 
consequence, not just to each of us and our economies and our 
workers and businesses, but to everyone's in the world at this 
point for the global economy.
    I would direct your attention to many of the actions the 
administration has taken across the board with respect to 
standing up to Chinese challenges. The PRC practices and 
policies in the economic area are some of the most, again, 
important ones for us to take on, but to take on deliberately, 
strategically, thoughtfully, with a focus on ensuring that 
realigning our competitive footing with China and the PRC is 
ultimately effective.
    So I want to assure you that every day that I am at work as 
the U.S. Trade Representative, I am in one way or the other 
working on China issues either directly or indirectly, as you 
have noted. I will continue to work closely with you and keep 
you apprised with respect to specific actions that we may take 
in the trade lane especially.
    Chairman SMITH. Thank you.
    The committee still has not seen the final product of 
USTR's China review and is still guessing when it comes to the 
administration's views on several policies established under 
the Trump administration. President Trump's Phase One agreement 
entered into force over 3 years ago, yet this committee has yet 
to see a full scorecard of China's compliance with the 
agreement, including on issues related to IP theft and forced 
tech transfer.
    When do you think we could see a report on China's 
compliance?
    Ambassador TAI. So I think that you will have seen 
conclusions from our own analysis in the speech that I gave in 
October of 2021, in terms of our internal review of the U.S. 
approach to the China economic relationship over the course of 
the past several administrations.
    In terms of--I take your question to be in terms of next 
steps, specifically with respect to Phase One. On this one, let 
me, again, commit to staying in close touch with you. This is 
very much in our sights and something that we spend a lot of 
time working on.
    Chairman SMITH. Thank you.
    U.S. imports from China currently enjoy most favored nation 
status due to permanent normal trade relations legislation for 
China that was passed in 2000 and remain in place today. I 
recognize that you have maintained the Section 301 tariffs that 
President Trump imposed, but China otherwise gets preferential 
treatment when it comes to trade, including qualifying for 
Column 1 in our harmonized tariff schedule.
    Given China's aggressive and hostile approach toward the 
United States, I think it is important that we evaluate all 
aspects of our relationship, including trade. In addition to 
our Section 301 tariffs, are there available trade tools you 
see to hold China accountable?
    Ambassador TAI. Chairman Smith, I think that there are a 
lot of tools that we have been developing over time, and I 
continue to believe that, with respect to our enforcement 
tools, there are a lot of updates and there are a lot of new 
tools that we can develop to ensure that this toolbox of 
enforcement in trade can keep pace with the times.
    A lot of our enforcement authorities and our statutes date 
back to 1974, 1988, and probably the most recent one is 2002. 
Those are the most significant contributions to the trade 
toolbox. I think it is high time, if you think about how 
different the world economy is today from even the early 2000s, 
that we revisit how we can be most effective in competing in a 
very different world economy, something that I would be very 
interested in working with you on.
    Chairman SMITH. As you know, child and forced labor abuses 
are rampant in the production of cobalt and other critical 
minerals, including in China and the Democratic Republic of the 
Congo. No American taxpayer dollars should fund these horrific 
practices, yet the administration is facilitating them through 
its Green New Deal agenda. At the same time, U.S. cobalt mining 
has essentially been taken offline in the United States.
    Is this administration concerned that as it shutters 
domestic development of cobalt, its new and generous so-called 
green taxpayer handouts are going to activities that rely on 
critical minerals extracted through forced labor and child 
labor?
    Ambassador TAI. So, Chairman Smith, I think that you are 
highlighting a particular problem that also goes back to 
remarks that you made in your opening relating to critical 
supply chains and the need for us to have more supply chains 
and more resilient supply chains.
    In this area in particular, and I think across the board in 
terms of trade, we are today, in 2023, asking questions that we 
were not used to asking previously. We now want to know 
specifically where the links in the supply chain are, who is 
producing in that supply chain, and how they are producing. 
This means that our approach to trade needs to evolve and on 
critical minerals in particular.
    I think that what we are doing with respect to the 
Inflation Reduction Act, how we are thinking about our critical 
supply chains, is changing very quickly. It is evolving. And 
this is an area as well that I would love to work with you and 
this committee on in terms of ensuring that the path for 
economic development for, not just the United States, but for 
the rest of the world and, in particular, those who have 
systems like ours and values like ours, can continue to be 
strong and can continue to be sustainable.
    Chairman SMITH. Will the so-called critical minerals free 
trade agreements you are pursuing require Japan and the EU to 
ban the importation of minerals produced with forced labor 
before their companies' cars are eligible to receive the tax 
credits?
    Ambassador TAI. So Japan and the EU have been two of our 
strongest partners in working on the eradication of forced 
labor, actually, in all global supply chains. So I am very 
confident that wherever we may land with those two partners, 
that this part of our agenda will continue to be strong and 
apply.
    Chairman SMITH. I now recognize the distinguished member 
from Massachusetts, Mr. Neal.
    Mr. NEAL. Thank you, Mr. Chairman.
    Madam Ambassador, in your testimony, you noted that you are 
writing a new story on trade that puts working families first 
and creates a more resilient economy. We are delighted with 
your emphasis on enforcement of these trade agreements. Nothing 
is done more to diminish the reputation of international trade 
from the American vantage point than the lack of enforcement.
    So, I know your positions. You have expressed them to me 
privately, and you have done a great job publicly. But we want, 
clearly, a story that has a worker-centered trade policy.
    Could you speak to that as well as what you were 
successfully able to do in the USMCA trade agreement based upon 
the enforcement mechanisms and the aggressive and assertive 
manner in which you have embraced that concept?
    Ambassador TAI. Certainly. I would be very, very pleased 
to. And I think that this committee in particular has a lot to 
be proud of in the USMCA.
    The USMCA continues to be one of the most important 
touchstones of the worker-centered trade policy and where we 
want to grow that policy from.
    If you think back to the renegotiation of the NAFTA, there 
were at least two different reasons why NAFTA was renegotiated. 
One was to update it and modernize it. It had been about 25 
years old when that exercise started. The other one was to 
correct for challenges in that agreement and areas where 
concerns that were expressed at the outset around labor and 
environmental dynamics between our economies bore out over our 
experience with that agreement.
    So one of the most important innovations and one of the 
most important keys to why the USMCA was able to garner such 
broad bipartisan support was the enhancements of the labor and 
environmental protections in that agreement and also a labor-
specific enforcement mechanism that allows for the piercing 
through of the agreement to focus on specific facilities and 
how workers are treated there and whether or not those 
facilities are denying rights to workers in contravention of 
not just the agreement but also Mexican law.
    Because of this mechanism and because we have been able to 
successfully use it multiple times now, to allow for workers in 
Mexico to vote for a truly independent union, to secure better 
wages and better benefits, we are also championing the 
interests of American workers who have had to compete with 
those Mexican workers. As a result, we have turned the 
narrative of trade on its head. We are now offering, through a 
trade agreement, a mechanism to empower workers. And this runs 
exactly counter to the narrative that we have collectively 
struggled against, which is that trade is something that we 
have done that has been hostile to the interests of our 
workers.
    So, to your point, we know that we are on to something, 
that this is critical to establishing trade as a force for 
good, that trade works for people, not just big companies. And 
this is something that we are looking to replicate in our trade 
engagements through our negotiations and, frankly, through all 
the conversations that we have with our partners, to explain 
how to make trade a force for good and how to make trade work 
also for our people.
    Mr. NEAL. Given your distinguished history with this 
committee, I want to also thank you. I know on the inside; you 
are an advocate for the congressional prerogative as it relates 
to the responsibilities that the Constitution lays to this 
committee and to the House of Representatives. If you want to 
use the last 56 seconds just to talk and reemphasize your 
support for the congressional role, that would be terrific.
    Ambassador TAI. So I am on the administration team, but you 
all know that I come from this family to the administration. So 
I am keenly aware of USTR's own origin story, that we were 
created by these committees inside the administration, and 
where we sit at the intersection of the executive and the 
legislative branches. So that is absolutely right.
    And I have ideas that I would like to come back to you and 
Chairman Smith about to show that there is a bipartisan path 
for these two coequal branches to come together to do trade and 
to do trade right by the American people and by the American 
economy.
    Mr. NEAL. Thank you.
    Chairman SMITH. The gentleman from Florida, Mr. Buchanan, 
is recognized.
    Mr. BUCHANAN. Thank you, Mr. Chairman.
    Ambassador, I also want to welcome you back. You are a big 
asset on the committee, and everybody knows that. So thank you.
    You mentioned something--before I get in my other--I got a 
couple other questions. You mentioned that you had an action 
plan. Is that something you have shared with us? I haven't seen 
it, but is that something you are willing to do?
    And I say that because we talked about working together. We 
want to help you have more success. If we have a better sense 
of what that plan is--or you got more time where we can talk 
about it. Because many of us travel overseas and other places, 
and it helps us because we meet with our embassies and other 
things, have a better sense of where we are at but, more 
importantly, where we are going.
    So you said an action plan. Is that something you got that 
we can get a copy of or something we can look at or talk about?
    Ambassador TAI. So, Mr. Buchanan, absolutely. The answer is 
yes. But let me just seek a little bit of clarification. An 
action plan across the board for our trade agenda, or were you 
asking more specifically about one part of the trade agenda?
    Mr. BUCHANAN. I was just looking at what you said. You 
mentioned the action plan. But let us talk a little bit more 
about that a little bit later. But I just like the idea of a 
shared plan, a shared vision, with the Congress, with you, so 
we are all working together, because China is very active and 
engaged on the planet. And you said the world is different 
today. So the more we can work together, the more we will get 
done.
    Ninety-five percent of the jobs--95 percent of the jobs are 
outside the U.S., so the opportunity--95 percent of the 
marketplace, I should say. In Florida, one in five jobs is 
trade-related. So it is a very, very big deal.
    I want to talk to you about something we have talked about 
for a couple of years. You are very familiar with this. It is 
the reauthorization of MTB, Miscellaneous Tariff Bill, and GSP, 
Generalized Systems of Preferences. This is something--it is a 
job creator in our State. A lot of companies are saying, why 
can't we get something done? It has been over 2 years. It 
should be an easy layup. I know I have worked with my friends 
on the other side, and we have talked about that. It was 
something we thought we would get done a year and a half ago.
    What is the holdup? And then give us your sense of a 
commitment to that. It just seems like that is something that 
should get done fairly quickly.
    Ambassador TAI. Well, Mr. Buchanan, I think that there is a 
deal on the table. Even when I was still in my job for Ways and 
Means----
    Mr. BUCHANAN. Bring it up here. Let's get this deal done.
    Ambassador TAI. But, I mean, you know, I think that, again, 
in terms of respecting the coequal branches, both MTB and GSP 
are congressional programs. So I know that--I know that the 
staffs, the teams up here, and the members are working on this. 
I expressed yesterday when I was over at the Senate my support 
for the reauthorization of the GSP, one that updates the 
criteria to----
    Mr. BUCHANAN. Okay. If I could reclaim my time just a 
little bit. I just want to get on a couple other things.
    I introduced legislation, myself and Chairman Brady back 
then, a couple of years ago. That legislation, the companion 
bill, is in the Senate. And as you know, it passed 91 to 4. So 
it is related to these things.
    Second, the other point I wanted to mention is just the 
idea of where we are at. I read something the other day that is 
kind of hopeful, that you said something about the EU, we are 
making some progress, or you seemed--your comment seemed very 
enthusiastic. But when you look at the U.K., EU, Kenya, over a 
billion people on that continent. And I can tell you, I have 
been there maybe 10 times. You know, China is very active and 
engaged, not just there, but around the planet.
    So when you look at--Taiwan and Japan would like to do 
another--I guess we did program one, another step. So there is 
a lot of opportunities out there. Is it we don't have enough 
resources or is it--why don't we get to more of these 
opportunities? Especially as it relates to, I think, the EU. 
You know, we have a lot of the same shared values. The U.K., I 
know they have had some challenges.
    But I have traveled and met with a lot of these leaders 
around the world, 80 different countries, and they want our 
engagement. Everybody talks about--the first thing they want to 
talk about is security. Second thing is trade and commerce. So 
we just got to get more engaged in a big way, I think. That is 
my opinion.
    What are your thoughts?
    Ambassador TAI. Mr. Buchanan, I spend most of my time on 
the road. I am here in Washington all week this week because of 
the hearing so that I can spend time with all of you. And I 
have got to stay connected with the U.S. side, but also, I am 
doing everything that I can. I am spending a lot of time 
reestablishing old relationships, establishing new 
relationships, and exactly to your point, engaging with the 
European Union.
    I haven't even counted how many times I have had meetings 
with my counterpart, Executive Vice President Valdis 
Dombrovskis. This year we have committed to each other that we 
will see each other every month, and we have kept that up 
January, February, and March, and I already have my appointment 
set with him in April when I will see him again.
    That is exactly to your point. There is so much that we 
need to do together right now. And there is a lot that we need 
to do to try to correct for the playing field being uneven 
around the world, to innovate in terms of our trade policies 
and to correct for, frankly, some very disruptive forces that 
we have seen both----
    Mr. BUCHANAN. I am out of time. I just want to mention, if 
you can get us a copy of whatever plan and we can talk about 
that, because I think a shared plan between the Congress and 
yourself, the administration, would make a huge difference 
going forward.
    Thank you, and I yield back.
    Chairman SMITH. I now recognize Mr. Doggett for questions.
    Mr. DOGGETT. Thank you, Mr. Chairman. And thank you, 
Ambassador, for your very valued leadership.
    I know how you worked in a cooperative bipartisan fashion 
with Ambassador Lighthizer in order to secure an important 
trade agreement in this hemisphere, and I appreciate the 
cooperative spirit that you bring here today. I very much favor 
expanding trade so long as it is worker-centered and 
environment is protected, and that includes Asia.
    Now, I have been over personally to the secure room, left 
my phone outside, didn't tell anybody what I read, to see the 
provisions that are being negotiated now with trading partners 
in Asia. I guess the first concern I have is why that process 
is necessary. These documents have been shared with our foreign 
trading partners, with stakeholders, but not with the American 
people. And I think we would be better off if the language was 
public.
    Second concern I have, even greater, is that I found the 
language to be good, helpful, with regard to the environment, 
with regard to workers, but so long as it is not enforceable, 
it is really fairly meaningless. And the only way to make it 
enforceable is to engage the Congress more directly in setting 
up that enforcement mechanism and honoring our constitutional 
responsibility. And I hope you will continue to advocate that 
point of view to others in the administration who may not share 
it.
    One specific success from the USMCA was a significant 
limitation on the use of the investor-state dispute provision. 
While it is important to protect investors and American 
companies from systems that are not fair to them and other 
countries, there has been clear abuse. And I appreciate the 
fact that this administration and you have indicated that you 
will continue to exclude such abusive provisions from future 
trade agreements.
    However, there are still a large number of investors-state 
dispute settlement provisions in existing trade arrangements. I 
am concerned about one particular example of abuse, and that is 
in Honduras, where a U.S. company, Prospera Inc., is suing the 
Honduran Government for close to $11 billion, nearly two-thirds 
of the country's annual budget, questioning whether they should 
have a private court system, a private -- essentially, a 
country within a country.
    Is the administration, are you evaluating existing a use of 
investor-state dispute provisions to see if they are consistent 
with a new 21st century trade policy?
    Ambassador TAI. Well, thank you for all of your 
observations and your insights, Mr. Doggett. They mean quite a 
lot to me.
    On this particular question in reevaluating existing trade 
agreements and how they line up with our current practice, I 
think in this area, and in a number of others as well, we know 
that there has been an evolution in our practice, and our older 
trade agreements reflect a previous era of how we have 
negotiated trade agreements.
    This issue comes up from time to time. Let me take this 
back and give it a little bit more thought. It is not that we 
haven't thought about it, but it hasn't been a major area of 
focus. But let me take this back.
    Mr. DOGGETT. Well, thank you very much. And I hope you will 
review it, and particularly the situation in Honduras with this 
whole private government structure.
    As you know, one of my long-standing concerns going back to 
at least the Obama administration has been the enforcement of 
our agreement with Peru as a part of the overall concern about 
the destruction of the world's rainforest and the impact that 
that has on our planet.
    The Obama administration failed to enforce provisions that 
we negotiated for audits on illegal timber harvest in Peru. The 
Trump administration expressed concern about it but failed to 
secure an audit. Obviously, the Peruvian Government has been in 
turmoil and chaos for recent months. But can you give me any 
update on the enforcement of these provisions against illegal 
logging in Peru and its consideration and new agreements you 
are negotiating?
    Ambassador TAI. Mr. Doggett, it remains very high on my 
radar. As you have noted, the current turmoil in Peru is 
something that informs our approach to raising issues around 
this trade agreement. But I also wanted to share with you that 
the logging annex in the Peru trade agreement continues to be a 
touchstone for how we are thinking about issues like 
deforestation, especially around the Amazon.
    Mr. DOGGETT. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman SMITH. I recognize the gentleman from Nebraska, 
Mr. Smith.
    Mr. SMITH of Nebraska. Thank you, Mr. Chairman.
    And thank you, Ambassador Tai. Welcome back to the Ways and 
Means Committee hearing room, where you spent a great deal of 
time.
    I know you spoke about a new story for trade, and I 
understand that you are taking a different approach, and 
certainly that is the prerogative of a new administration. But 
I am very concerned that in this so-called new age of trade, 
you know, 2 years into the Presidency, that we have actually 
lost momentum on trade and that we have--I am concerned we have 
lost ground. And this is all while China is being very 
aggressive economically and building their own partnerships, 
while we are not as aggressive.
    I do ask unanimous consent to include for the record a 
letter signed by 20 Ways and Means Committee members that I led 
regarding the need for a strong proactive trade agenda. I ask 
for unanimous consent.
    Chairman SMITH. Without objection.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Mr. SMITH of Nebraska. Thank you.
    Now, despite calls for new trade promotion authority from 
Democrats and Republicans in both Chambers--something I thought 
I would never say--but the administration has decided to 
attempt negotiation of new trade pacts without Congress. So 
this has already been touched on briefly. But since there seems 
to be some confusion, I do want to be clear that trade 
agreements must be approved by Congress, and they should 
provide real market opportunities for U.S. producers, reduce 
tariffs, strengthen trade enforcement, and certainly reflect 
American law and values.
    I am glad to and honored to chair our committee's Trade 
Subcommittee. I cannot express strongly enough that the 
administration cannot just come up with new definitions of what 
a trade agreement is for some reason, and certainly not to give 
handouts for electric vehicles. And Congress will not, under 
any circumstance, relinquish our constitutionally mandated 
oversight of all trade matters. This concern, I believe, as we 
have heard already, is bipartisan and bicameral, and I hope you 
take the opportunity to address it today.
    To compete in the global marketplace, we need real 
enforceable trade agreements. The administration's preferred 
framework approach, I am concerned, does not provide this.
    Would it be accurate to say, Ambassador, that the executive 
orders and frameworks like IPEF and APEC could be dismantled 
when a new administration would take office?
    Ambassador TAI. Well, Mr. SMITH, if I can back up just a 
little bit. In terms of your----
    Mr. SMITH of Nebraska. My time is limited. So I want to 
give you a chance to respond, but if you could be brief.
    Ambassador TAI. Let me put it this way: If you take a look 
at the world economy and you look at our place in it, after 
more than 3 years of pandemic and supply chain disruptions and 
pressures on the energy market and food insecurity because of 
Russia's invasion of Ukraine, you have to appreciate that we 
live in a very different world. We can't keep doing things the 
same way.
    Mr. SMITH of Nebraska. I understand that.
    Ambassador TAI. Those things have brought us to this world.
    Mr. SMITH of Nebraska. And I appreciate that.
    Ambassador TAI. And so our engagement with the rest of the 
world is informed by, not a desire, certainly not on my part, 
to bypass the Congress, but by a desire to adapt our trade 
policies to be more successful because they are responding to 
the world we are living in and not the world that we want to 
live in.
    Mr. SMITH of Nebraska. Okay. Well, I worry that a framework 
might be considered successful, although still ineffective, in 
terms of establishing what we need to establish in the world 
economy, especially as leaders in the world economy. But I 
think it is safe to say that, if we want a stable environment 
to encourage investment and economic prosperity, that a 
congressionally approved trade agreement is what is necessary.
    But, you know, take IPEF, for example. Let's just say a 
member nation were to blatantly go against the science, as 
Mexico has done under USMCA. I mean, I fear that there would 
not be tools for us to challenge what another country would be 
doing, and especially as the chairman noted, the glaringly 
noncompliant ways that Mexico is headed with corn, especially 
when USMCA was approved and agreed upon by Mexico not long ago.
    So changing gears just a little bit, let's focus on the 
TRIPS waivers, the notion that our country would give away 
intellectual property to other countries. In December, you 
directed the ITC to conduct a study on the proposed TRIPS 
waiver for COVID-related diagnostics and therapeutics. 
Glaringly, I would say, though, that you did not seem to ask 
ITC to perform any analysis on how such a waiver would actually 
impact our economy and, more importantly, our workers.
    Can you explain why that analysis was not asked of the ITC 
in the letter that you sent?
    Ambassador TAI. Well, Congressman Smith, I think that there 
are aspects of our letter that get to those questions. So we 
could sit down and take a look at that letter. I think it is 
about a two-page long letter.
    More specifically, the question that has been raised at the 
WTO is the interaction between intellectual property rules and 
where they have been set and the ability of people who need to 
access them. And we thought that was a legitimate question. I 
got a lot of feedback from this committee and over in the 
Senate in terms of the process that we tried to run, and so I 
have asked the ITC to run their process, which has included a 
public hearing just a couple weeks ago.
    Mr. SMITH of Nebraska. Okay. Yeah, asking the stakeholders 
is one thing, but I would hope that, as you point out, that you 
are able to get an actual analysis on the impact to our 
economy, and like I said, more importantly the workers.
    Thank you.
    Chairman SMITH. Mr. Thompson, you are recognized.
    Mr. THOMPSON. Mr. Chairman, thank you.
    Ambassador Tai, welcome. It is always glad to have you here 
in the committee room.
    There are no shortage of trade challenges and, at the same 
time, opportunities facing our country. As mentioned by Mr. 
Neal, the work we did on this committee to pass the USMCA 
showed that we can achieve a lot of high-quality trade 
agreement work working together on this committee. We can 
strengthen our economic and national security by creating good-
paying U.S. jobs and deepening our ties with other nations. We 
can strengthen environmental and labor protections and raise 
the international standard in these areas to create a strong 
cycle of progress and trade.
    While it is important to seek market access, labor, and 
environmental provisions, none of these commitments are worth 
anything unless they can be vigorously enforced. And that is 
why the work you are doing to enforce the terms of the USMCA 
trade agreement is setting the stage and expectations for 
future trade negotiations that benefit all American workers.
    I have got a couple of questions. I will give them to you, 
and then you can take them in whatever order works best.
    Mr. Smith--Nebraska Mr. Smith mentioned the corn issue, and 
the USMCA dispute with Mexico in regard to that is important. 
My district is home to a thriving biotech sector, and our 
success is dependent in part on strong global intellectual 
property rules and also the enforcement of the rules which 
ensure the safe--that safe products can be sold and used 
without unnecessary interference from protectionist policies.
    So I would like to hear from you about the administration's 
effort to hold Mexico accountable in the GMO corn case and what 
other opportunities there may be for biotech as we move 
forward.
    I am also interested in Taiwan. And I would like to hear 
about the progress we are making with Taiwan in similar 
agreements that are helping to strengthen our national 
security.
    And then lastly, my third question, the Canadian lumber 
issue. I understand that--we know it has been a long-standing 
dispute, but I understand that some of Canada's top lumber 
producers are interested in seeing this dispute resolve. So I 
would like to hear your thoughts on this, and if the U.S. and 
Canada can restart lumber negotiations.
    Ambassador TAI. Thank you so much, Mr. Thompson. I will 
take your questions in the order in which you have posed them.
    Mr. THOMPSON. Okay.
    Ambassador TAI. In terms of corn and the importance of our 
biotechnology sector, especially in agriculture, I agree with 
you. We have regulations and standards here in the United 
States. We stand by the safety of our product. And we also know 
that innovation and agricultural production is also critical to 
food security as well as a responsible contribution to our 
climate future.
    So, this is one of the areas that we are engaging with 
Mexico on, especially through this technical consultations 
phase where we get deep into the science around the basis for 
our confidence in the safety of our crop.
    On Taiwan, I agree with you. Taiwan is in the top 10 of our 
trading partners, an economy that shares our values, and also 
has implications for our strategic outlook in the region. That 
is why we are, right now, negotiating the 21st Century Trade 
Initiative with Taiwan. We just published summaries of the 
proposals that we tabled with Taiwan for our first negotiating 
round and look forward to providing you with updates on the 
status of those negotiations. We will continue to work with 
Taiwan to enhance and strengthen our economic relationship with 
each other.
    On Canada and the developments in terms of the lumber 
industry there, you are right, this is a long-standing 
challenge that we have had with Canada, one of the areas which 
our economies have traditionally not meshed well, and that 
market conditions and the incentives of the industries are 
really critical to creating opportunities for negotiation. So 
let me go back and revisit with my team that are tracking this 
and circle back with you.
    Mr. THOMPSON. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman SMITH. Thank you.
    Floor votes have been called, but it is my intention to 
proceed to as many members for questions before recessing for 
the hearing. And then we will reconvene immediately after 
votes--the last vote is called.
    Mr. Kelly from Pennsylvania.
    Mr. KELLY. Thank you, Mr. Chairman.
    Ambassador Tai, always good to see you. I think there is 
something that is uniquely American where people put service 
above self. You are certainly an example of that. And for you 
to come before us--it is so difficult. You are getting rapid 
fire questions all across the board of what is important to me, 
what is important to you, what is important to our country. And 
you are the person standing there taking that and trying to 
answer all this.
    And, you know, I am going to come up with the same thing 
you and I have talked about for many years, something called 
GOES. And people say, what do you mean GOES? Well, it is grain-
oriented electric steel. And so why would you be worried about 
that? And it comes down to, if we have not learned anything 
from these last few years with the pandemic, is if you don't 
produce it at home and you are relying on somebody else from 
someplace else in the world, you are in trouble. You are in 
trouble.
    So Mexico comes up with this. And so Gloria and I have been 
talking about what is going on with the steel. So Mexico agreed 
they would limit their imports to historic levels in order for 
President Trump to exempt them from Section 232 steel tariff 
programs, but they are not living up to their end of that 
agreement, which is pretty much consistent with all our 
partners around the world; that they say one thing and then 
they completely get up from the table and walk away from the 
commitment that they made, maybe just touching it a little bit 
at a time.
    In Butler, Pennsylvania, about a quarter of a mile from my 
real life, which as an automobile dealer, which was a lot 
easier. I mean, back there, if somebody says, I have got your 
back, you say, well, you know, I appreciate it. Here, if 
somebody says, I have got your back, the answer is, I know. I 
can feel the knife.
    So this is what it comes down to. If we are not able to 
work together and honestly--and honest brokers--what Mexico has 
done--and they have made this end run about it. Canada also has 
done the same thing to us. Grain-oriented electric steel is the 
steel that goes inside the transformers. So I tell my friends, 
if you don't know what that is, look at phone poles. And if you 
see a gray canister up there, that is what I am talking about, 
because that is what pushes the steel through. It doesn't flow 
naturally--it pushes electricity through. It doesn't flow 
naturally.
    And I am to the point, I don't know what we can do when 
that last producer of grain-oriented electric steel in America 
is in Cleveland-Cliffs in Butler, Pennsylvania. If we lose that 
mill because we have people around the world not living up to 
their commitment of what they would import and what they would 
not import--and you and I have talked about this. In the last 
administration, they told me they would address it. And if they 
had done that, you and I would not be having this conversation 
today.
    It's a really complicated issue. And tariffs are a really 
complicated issue. So I would just ask you, because I know I 
can rely on you for this. Let's keep that conversation going 
and try to find out what it is we can do to limit this flow. 
When I look at the people who make grain-oriented electric 
steel--I am just going to go over this real quickly. Maybe I am 
not. I think I just lost it on my phone.
    Anyways, Cleveland Cliffs is the last producer of this 
steel in America. The rest of it comes from all over the globe, 
but mainly from people that we would think are our closest 
allies because we have supported them so much in the past. So 
let's keep working on it.
    I know the language from the past administration was well 
intended, but it should have been amended because it really 
didn't address the issue when it came to what our partners were 
going to live up to.
    So if we can continue to have that discussion, I would sure 
appreciate it. I know that you get tired of hearing from me. I 
don't mean to be that much of a pest, but I am just looking at 
a really, I think, a national security problem that we have a 
blind eye to and are not paying attention.
    So thank you for being here today. You do a tremendous job. 
It is good to see you. And thank you so much. Mr. Chairman, I 
yield back.
    Chairman SMITH. Thank you. The gentleman from Connecticut 
is recognized.
    Mr. LARSON. Thank you, Mr. Chairman, and thank you 
Ambassador Tai. And thank you for always bringing grace, 
dignity, acumen, and principals, centered leadership to this 
committee.
    I want to associate myself with the remarks of Chairman 
Neal and the efforts with regard to USMCA. And my question is 
something again that you have done extraordinary work on, and I 
hope you will expand on. You are leveling the playing field for 
the American worker, and especially as it is related to rapid 
response, but also what else you see can be done to assist the 
American worker in your capacity.
    Ambassador TAI. Well, thank you, Mr. Larson. And it was an 
honor to work with you on the USMCA in renegotiations when I 
was here on the committee. In terms of leveling the playing 
field, I would say that this is where we are really focused on 
terms of the worker-centered trade policy. I get asked quite a 
bit what does worker centered trade policy mean. It means a lot 
of things. First of all, it means remembering that our economy 
isn't just a collection of data and numbers. We are more than 
just trade flows and production numbers and GDP numbers. At the 
end of the day, what is the American economy? The American 
economy is comprised of people, our people. The American 
economy has to work for our people. So workers centered trade 
policy is putting that worker, that person right at the center 
how we think about trade policy. And that is a correction.
    I think for a long time we relied on the assumption that 
what was good for bumping our numbers, what was good for, you 
know, creating that big pie, would all trickle down and work 
itself out. And that is what we have seen hasn't worked over 
the past couple of decades. While the pie has gotten bigger, no 
question, here at home and around the world, more than just the 
United States, a lot of us are looking at where that pie has 
ended up. And that leads to President Biden's mantra at this 
point that what we need to do is grow the economy from the 
bottom up and the middle out. Who is at the bottom of the 
economy? It is people like us. It is regular people. And that 
middle out is a vision for growing the middle class.
    And so what we were doing in trade is understanding the 
role that we have had in creating an imperfect world in which 
the pie has gotten bigger, but not everyone has gotten access 
or an opportunity to enjoy that pie. And then to think about 
how we can advance trade policies. And this means that we are 
thinking about trade policy in a different way. We are 
reconfiguring our trade policies. We are going to do some of 
the traditional things that promote what we are after, which is 
more inclusive, sustainable, resilient growth, but also we are 
going to be trying to do the new things. And that is our trade 
agenda, which is to make sure that trade is a part of the 
economic policy toolbox that is working in concert with the 
investments that we are making in ourselves, as opposed to 
undermining and undercutting what we are trying to do in terms 
of our own growth and development trajectory.
    Mr. LARSON. Thank you, Ambassador. As a former 
schoolteacher, I used to have above my blackboard for students, 
``Excellence Cannot Be Denied.'' Thank you for your 
articulation of this and thank you for all the effort you bring 
to this job. I yield back.
    Chairman SMITH. The gentleman from Arizona is recognized.
    Mr. SCHWEIKERT. Thank you, Mr. Chairman. Ambassador Tai, 
the long-running conversation you and I have had, because you 
know my intense concern, that is the economy move--becomes much 
more technical, you know, whether it be biologics, whether it 
be, you know, data management, those things, that the speed, 
speeds up, speeds up, speeds up the value of that copyright, 
that patent, that it becomes shorter and shorter because the 
disruptions are coming faster. And, therefore, the constant 
conversation you and I have had is the speed, the efficiency, 
the fairness of the adjudication process, WTO ability dispute 
resolution. Tell me where we are at?
    Ambassador TAI. Great. Well, I am delighted, Mr. 
Schweikert. And I know that you do like the technical aspects 
of all that we do, and it is demonstrated by your question 
about the WTO. Let me talk about the dispute settlement system 
at the WTO.
    First to put it in the context, that the dispute settlement 
system doesn't exist in a vacuum. That it is part of the larger 
WTO institution that we value very, very much for what it 
stands for, for how it brings together 164 economies in the 
world and provides us with a forum for dealing with each other 
and being able to communicate with each other and to resolve 
the disputes that we have when they come up.
    So the reform of the WTO dispute settlement system is tied 
to the consensus at the WTO that the entire WTO ought to be 
reformed to reflect the economy that we are living in today, 
and also to be able to keep up with the changes in our economy 
since the WTO was established almost 30 years ago.
    So on WTO reform broadly, because I also want to make very 
clear the United States and our team at the mission to the WTO 
in Geneva is engaging across the board. We have a special 
responsibility on dispute settlement, but we are engaging at 
the committee level. We are bringing written proposals every 
meeting, and we are also leaning in on how to make this a more 
functional negotiating forum.
    Mr. SCHWEIKERT. Ambassador, you know my fixation also on 
the clock.
    Ambassador TAI. On the clock, here we go. On dispute 
settlement, what we are doing is we are seeking a system that 
is singularly focused on helping two parties resolve a trade 
dispute, to be a dispute settlement system as the system was 
intended. Dispute settlement has evolved into an avenue for 
judicial rulemaking. It has become synonymous with litigation, 
very expensive and time-consuming litigation, to your point 
about the clock; and it allows countries to see through 
litigation what they could not accomplish by negotiation. So 
the results have significantly damaged U.S. interest through an 
interpretation that, for example, shields China's nonmarket 
practices and undermines our ability to defend U.S. workers and 
businesses.
    You may also be aware of the recent national security 
decisions that have come out of the WTO system that are deeply 
concerning to us and to our national security sovereignty.
    Mr. SCHWEIKERT. So, I think one instance--and I--just 
because I am staring at the clock----
    Ambassador TAI. We are engaging on a reform process that 
requires 164 economies and members of the WTO to agree. And 
this is not about us dictating the terms, it is about us being 
very honest about what our interests are, what we need the 
dispute settlement to do for us, but also to craft a renewed 
and better dispute settlement system with our partners at the 
WTO.
    Mr. SCHWEIKERT. And, Ambassador Tai, as the conversations 
continue for the last few years, I know a number of our EU 
trading partners, even some of our free market economies in 
Asia have the same concerns as you have articulated and we have 
articulated. I understand this is supposed to be a consensus 
operation, but at some point we have some bad actors who may 
not join that consensus. How do we use our ultimate leverage? 
The vast majority of the world's trading partners believe that 
the reforms are necessary.
    Ambassador TAI. Yes, we have consensus around the fact that 
reforms are necessary. It is reflected in the MC 12 joint 
statement that came out. The hard work comes now in terms of 
actually doing the reform. And I want to assure you that our 
very dedicated team, led by our ambassador to the WTO 
Ambassador, Maria Pagan, is doing that every single day in 
Geneva.
    Mr. SCHWEIKERT. Please let us know what we can do to be of 
help, but to move it along. At some point, the calcification of 
this discussion is getting tiresome.
    Ambassador TAI. We would be happy to get back to you.
    Mr. SCHWEIKERT. Thank you, Ambassador.
    Chairman SMITH. The gentleman from New Jersey is 
recognized.
    Mr. PASCRELL. Good morning, Ambassador. It is always a 
pleasure, and we have a lot of faith in you. And thank you for 
your service.
    I agree with the Independent Mexican Labor Export Board's 
concern that Mexico's reform--you call it a transition period--
will end next May with a large segment, a large segment of the 
old protection contract system still intact. I think you would 
agree with me on that. To date, only 1 percent of the contracts 
submitted to a vote have been rejected.
    Please describe what you are doing to ensure the Mexican 
Government has sufficient oversight to manage risks in this 
transition period.
    Ambassador TAI. Thank you so much, Congressman Pascrell. I 
know how close to your heart these particular issues are. We 
always knew that the Mexican Government had set out for itself 
an extremely ambitious reform, and that was even before COVID 
hit. I have a lot of confidence in that Independent Mexican 
Labor Exports Board that was created by the USMCA implementing 
legislation, and I know that they are very concerned about what 
is happening on the ground.
    This is an area, Mr. Pascrell, where I would like to stay 
very close with you and to work with you on how we can continue 
to work with Mexico using the tools that we have, both inside 
the agreement, outside the agreement, tools from the 
legislative branch to get Mexico on as positive a track as 
possible. This is an area where the Lopez Obrador 
administration and the Biden administration have overlapping 
visions in an area where our counterparts in the labor 
department in Mexico are really dedicated and have their hearts 
absolutely in the right place. So, I would be happy to work 
with you on what more that we can do.
    Mr. PASCRELL. I also wanted to raise Canada and Mexico's 
implementation of the forced labor provisions of the new NAFTA. 
Please provide a status update, if you can, on the steps each 
nation is taking to prohibit the importation of goods produced 
with forced labor. I would appreciate that very much.
    Ambassador TAI. Certainly.
    Mr. PASCRELL. And I appreciate it, also, that your team is 
energetic in using the new NAFTA's Rapid Response Mechanism to 
hold labor rights' violations accountable and make them 
serious, seriously a concern of our government and not papered 
over. I ask you. That is very important. And there is a 
marriage here. This is not just the Mexican Government. We are 
talking about corporations, some of which have gone to Mexico 
and made a laugh at what they have done. They think they can 
get away with anything. And we talk about what you folks do, 
day in and day out, but we ought to talk to the corporations 
because we are going to need the cooperation, their 
cooperation, if we are going to follow through on the mandates 
of the new law that we are dealing with right now.
    I appreciate the small number of cases actually filed, can 
and should be more proportional to the number of labor rights' 
violations we know are occurring in Mexico.
    And, Chairman, I listened very carefully to what the 
President of Mexico just said 2 days ago about us, and I didn't 
like it. And we have had some battles, as you well know, and 
you were at some of them. I don't know where he is coming from. 
We have been pretty supportive, and we should be of Mexico. But 
I am not going to be any wind player for the President of 
Mexico. Don't ever think that. What do you think----
    Well, my time is up. And I thank you, and I yield back, Mr. 
Chairman.
    Chairman SMITH. Thank you, gentleman. We had a lovely two-
and-a-half hour conversation with the President in Mexico on 
our delegation, and I will be happy to talk to you more about 
it later. I would like to recognize the gentleman from Kansas.
    Mr. ESTES. Thank you, Mr. Chairman. And thank you, 
Ambassador Tai, for being here today. I know with votes, we 
have got people coming in and out, an impact there. I know you 
are familiar with the process, familiar with the room, working 
diligently both in your current role as well as here before 
that with the committee.
    So, you know, I guess I am a little concerned. I guess I 
would like to see more. I mean, this is your third appearance 
or the third year that you have been before the committee. And 
a lot of things are just continuing on without much new being 
accomplished through that and competed through that process.
    And there is so many good trade things that we can address, 
I think, that both Republicans and Democrats agree with. And I 
think if we could get--in my opinion, I think we need the 
administration to be engaged a little bit more on actually 
getting some of these things done. I don't know if there are 
some obstacles that are being put in your way that are keeping 
you from doing some of the things, I think, we all agree with 
you as well, once accomplished.
    I want to talk about two or three things before my time 
runs out. I will start with digital service taxes, and the OECD 
process with Pillar One. You know, as we have talked for the 
last couple of years about the digital services taxes that were 
being implemented by various countries, how much of an impact 
and a burden that was going to place on particularly American 
companies.
    And so I was very supportive of OECD's effort with Pillar 
One and the effort moving forward there to help make sure that 
we address that and get a consistent playing field across all 
of the developed world and the world of the OECD community. But 
I am concerned now that we have kind of dropped the ball on--
not dropped the ball, just paused with Pillar One in order to 
look at Pillar Two. And then the Pillar Two discussion's taking 
all of the time and energy and distraction away from that.
    So I guess my questions, as we get closer and closer to 
December of this year when the 301 suspension expires, are you 
looking at reactivating that, moving that forward, because it 
has taken so long to go through and bring closure to Pillar 
One?
    Ambassador TAI. Mr. Estes, this is a great question and 
scenario where USTR has worked very closely with the Treasury 
Department because they lead in the OECD negotiations, and of 
course, we are responsible for the 301 action. I have to 
confess that I am not up on the latest in terms of the OECD 
work in the Pillar One, Pillar Two. But let me just affirm to 
you that the 301 statute is one of our most important statutes, 
and those DSTs are suspended pending successful conclusion.
    Mr. ESTES. Well, thank you. And I understand there is some 
dynamics there between Treasury, and I had some similar 
questions with Secretary Yellen when she was here as well in 
terms of what do we do going forward.
    I want to talk a little bit about our trade, particularly, 
with China. Obviously, as I think the United States, probably--
we should have gone in a different direction in terms of our 
relationship with the Indo-Pacific region and trade 
arrangements there. But I am concerned now with some of the 
approaches China has made over the years that everybody agrees 
with in terms of intellectual property theft and restrictions 
that they put on American industry.
    So where are you at now? What is your current status on the 
view of China's aggressive approach to trade, and what should 
the U.S. be doing more of to help counter the CCP?
    Ambassador TAI. Well, thank you for that question. This is 
something that we do a lot of thinking on and, also, are 
working quite a bit on as well. As you may be aware, we are 
currently in the process of a statutory, what we call 
comprehensive four-year review of the section 301 actions which 
are based on the 2018 301 findings around economic harm from 
China's IP rights abuses and forced tech transfer policies.
    Overall, we are using a lot of different approaches, both 
domestically here and to continue to invest in ourselves to be 
able to compete from a position of strength. We are working in 
multilateral settings where we area members, along with China, 
like the WTO, the G-20. We are also working in smaller 
settings, like the G-7 and bilaterally with other parties. The 
Indo-Pacific Economic Framework as well is an area where we are 
really trying to work with parties with whom we have shared 
interests across the board in terms of the challenges that we 
face.
    But in this area, you are right, I agree with you, there is 
a lot more for us to do. We are primed to do it. And I commit 
to staying in good touch with you and this committee as we 
prepare for next steps.
    Mr. ESTES [presiding]. All right. Well, thank you. In my 
discussions with some of our countries from around the Indo-
Pacific region, they want us to be engaged. And so my time has 
expired.
    And so now the gentlelady from New York, Ms. Malliotakis, 
is recognized.
    Ms. MALLIOTAKIS. Thank you. I figured, usually, I am last 
in asking questions, but I am smart, and I came here now. I 
went and voted first, so now I can actually move up in the 
timeframe here.
    Thank you, Ambassador, for being with us. I appreciate the 
discussion that we are having today. Obviously, trade is so 
critical. It is critical for our allies, right? It is critical 
for the United States to make sure that we are growing our GDP. 
And I know in the third quarter, it was down comparatively to 
previous years. And so there is one real opportunity for us to 
grow our GDP; it is trade.
    On that front, I would like to talk to you a little bit 
about Taiwan. And, obviously, Taiwan is a great partner. And I 
also want to talk about our neighbors to the south. And, you 
know, we see China investing heavily in those areas. I think 
some of the smart things for us to be looking at are ways that 
we can build the trade relationship with our neighbors in 
Central and South America, and as well as our allies, right; 
talking to whether it is U.K.; whether it is Taiwan; whether it 
is Poland, which is a great like-minded country where we are 
seeing more pharmaceuticals being manufactured.
    But, first, let's start with Taiwan, because many of us 
here are friends of Taiwan, and I appreciate the U.S.-Taiwan 
21st Century Initiative which began last year. However, the 
initiative doesn't touch upon the issue of market access. And 
this is something that I believe would be tremendously 
beneficial to our ally and to the United States as we try to 
reduce our dependency on China. With Taiwan being a U.S. top-
ten trading partner, I would hope that there is a plan to start 
negotiations with Taiwan on furthering trade and market access 
soon. Is there a pathway that you are taking at this moment to 
do that?
    Ambassador TAI. Congresswoman, it is nice to meet you. 
Welcome to the committee. And I have to say that I really 
admire your strategic thinking here, and I am very inspired by 
it. I am delighted to engage on the specific question of Taiwan 
and market access. This allows me to scale out a little bit, 
and I don't want to take too much time because I know you want 
to get to other topics as well. But there is an important 
element of our traditional trade practice which not enough 
people understand or see. And it gets way into the technical 
aspects of how a traditional trade agreement works and how the 
tariff liberalizations work as well. The tariff liberalizations 
are generally--there are references that you get if you can 
meet a certain rule. And so a certain amount of content in the 
thing that is being traded has to have been created in the 
partnership or in the region in order to qualify. That number 
is never 100 percent. So there is always, by design, some 
seepage from outside of the partnership or the region that you 
are negotiating with that also benefits from the 
liberalization.
    One of the concerns that we have, and this is around the 
world, but certainly in the Asia-Pacific region is we have seen 
through the pandemic how far-reaching our supply chains go and 
how many of them are concentrated in terms of production. In 
one particular economy that is sometimes very open to us and 
quite often not really open and where geopolitically 
increasingly we have become very nervous.
    And so when it comes to market access in the sense of 
tariff liberalizations, we are trying to take very strategic 
steps to make sure that when we do engage on these types of 
topics with our partners in this region, that we are doing it 
in a way where we can strengthen each other, where we are 
building resilience for each other, and we are not further 
entangling ourselves in dangerously vulnerable supply chains. 
And that is why we have not moved there.
    Ms. MALLIOTAKIS. I appreciate that, but are we at least 
trying to work toward that with Taiwan? Because I think that is 
important on market access, but also with regards to--and it is 
another issue, it is a different hearing, but the double 
taxation issue that Taiwan faces when trying to invest here in 
the United States.
    Ambassador TAI. I am happy to talk about double taxation. 
That also involves my Treasury colleague, so I want to 
acknowledge that.
    Let me put it this way, in terms of trying to bring this 
advanced and more strategic thinking, especially to the tariff 
liberalization negotiation, I will tell you that it is a very 
lonely place to be. But, Congresswoman, this is something where 
you see the dots that we are trying to connect. I would be 
delighted to work with you and anyone else who can bring 
expertise to this conversation to help us advance it.
    Ms. MALLIOTAKIS. I would certainly like to have a follow-up 
meeting with you on that issue.
    One last thing is, just--and I have no time, so I am just 
going to leave it out there for you to consider--what COVID had 
showed us was our dependency on China could be very dangerous 
in the future. We need to be mindful of that. And I am 
particularly concerned about active pharmaceutical ingredients 
of which 95 percent U.S. imports for ibuprofen are from China; 
45 percent of the penicillin. I just want to lay that out there 
for this administration to consider. Let's not wait. Let's 
start moving now. And I think, again, that is another 
opportunity for us when we talk about near-shoring and friend-
shoring, working with our allies in like-minded nations, there 
could be a very good strategic partnership there.
    Ambassador TAI. I copy that.
    Ms. MALLIOTAKIS [presiding]. And the committee stands in 
recess. So I now became the chair, I guess, temporarily. Thank 
you.
    [Recess.]
    Chairman SMITH. The committee will come back to order. Mr. 
LaHood, you are recognized.
    Mr. LaHOOD. Thank you, Mr. Chairman. And welcome back, 
Ambassador Tai. Great to have you here, and thanks for being 
with us.
    As you know, Ambassador Tai, trade policy is incredibly 
important to me in my district and my constituents. I represent 
a heavy agricultural district and a manufacturing district 
whose jobs and economic successes rely on market access around 
the world and opportunities to send our great American products 
all across the globe. Knowing that, I don't think it should be 
a surprise to anyone here that I have been incredibly 
frustrated that another year has passed without kind of a 
proactive substantive policy on trade and progress on 
enforceable trade agreements from the Biden administration.
    I know you, Ambassador Tai, where you were, in the Senate 
yesterday, or maybe the day before the Senate Finance 
Committee, and I know there was frustration over there. There 
was a Politico article yesterday. It said: Ambassador Tai plays 
defense as Senate rips into trade agenda. In that article, it 
says: Senators on both sides of the aisle criticized Ambassador 
Tai for not initiating trade agreements with foreign partners, 
opting instead for frameworks that lack the same market access 
provisions and enforcement mechanisms as traditional pacts.
    And, you know, we have talked about this a little bit 
before, Ambassador Tai. But as we sit here today 2 years into 
this job, we don't have an FTA with the U.K.; we don't have an 
FTA, Free Trade Agreement with Kenya; we don't have an FTA with 
Taiwan. We have no request to Congress for TPA. We continually 
allow China to take advantage of our IP at the WTO. And we have 
this issue with allowing Europe to set the playing field on 
digital to the disadvantage of U.S. businesses and workers. So 
those are just a few things that I think express my collective 
frustration and others.
    And as a member of the Trade Subcommittee, and I am also a 
member of the new Select Committee on China, which has raised 
awareness in a bipartisan way that what we see every day in the 
Indo-Pacific region is the growing threats of China. And 
considering that, having a really insufficient trade engagement 
in that region, I believe, is unacceptable.
    And I know you mentioned IPEF. And as I look at IPEF today, 
I believe the framework is actually getting weaker.
    Just take the digital pillar as an example. USTR has chosen 
to engage in a framework that lacks tangible policy and avoids 
congressional consultation or approval. And I am hoping to hear 
your views on that. And I worry that we are not countering or 
providing strong enough alternative to the growing pressure of 
nonmarket economies.
    Instead of increasing U.S. leadership in the Indo-Pacific 
region, countering China's influence, and leaning in on 
opportunities like digital trade to set global rules and 
standards that would put countries like China at a 
disadvantage, we are missing an opportunity to use trade as an 
offensive tool.
    And so I mentioned those things--again, as we look at every 
conversation as part of the Select Committee on China when we 
talk to our like-minded allies in the Indo-Pacific region, 
whether it is Japan, whether it is South Korea, whether it is 
Australia is they are craving our leadership economically. And 
I just, I guess, express my frustration and my concerns about 2 
years in, and we have not made any progress on any of these 
things.
    So with that, I would love to hear your specific ideas or 
comments on IPEF, and whether it prevents real economic and 
substantive alternatives to China's pressure in the Indo-
Pacific region.
    Ambassador TAI. Well, it is good to see you, Mr. LaHood. 
And let me say a couple of things before I get to your specific 
question on IPEF. I hear your frustrations. And I think that in 
your frustrations, I would have like to make two points. One is 
you are seeing a key part of our trade agenda, which is that it 
is not the traditional trade agenda. And that is out of a 
recognition that a lot of the challenges that we were facing 
today, whether it is supply chain challenges, whether it is the 
challenges that we are facing from nonmarket economy practices, 
like those from the PRC to Russia's invasion of Ukraine, that a 
lot of these have roots in a traditional trade approach that 
have brought us to where we were today.
    So, yes, we were not pursuing traditional, fully 
liberalizing trade agreements because we see those as part of 
the problem that we were trying to correct for. So your 
frustrations are affirming that, yes, we were not pursuing a 
traditional trade agenda.
    But what I would like to point out to you--and I would be 
delighted spend more time with you as well--is to have you see 
those things that we are doing. That we were putting forward a 
trade agenda to try to correct for exactly some of those 
challenges that you have highlighted, especially with respect 
to nonmarket economic policies and practices that have really 
made the playing field extremely tilted, and that we are going 
to have to adapt to, respond to for as long as those practices 
are there.
    So I am delighted that you are a member of Way and Means 
Committee. I think that there are two of you who are also on 
the China Select Committee. I am looking for an opportunity to 
come up to brief that committee and to get to know all of you 
better to talk about some of the economic pieces of this.
    Let me get to the Indo-Pacific Economic Framework. You are 
absolutely right, our parties in the region are thirsting for 
engagement with us on economic matters. That is what we are 
bringing through the framework, including through the digital 
engagement. We have got very robust, very enthusiastic 
participation from 13 partners in the region, 12 of whom are 
actively engaging with us through now two rounds of 
negotiations. And I am happy to spend more time with you there 
as well.
    But our vision is for an economic engagement, in the Indo-
Pacific that is, first of all, durable and well-supported here 
at home. And, second of all, that promotes the shared interest 
that we have with all of our parties there around adapting to a 
very disrupted global economy that will bring more resilience, 
more sustainability and inclusiveness to all of our economies 
by working together. And I would be delighted to spend more 
time with you and explain how what we are doing here connects 
with those goals.
    Mr. LaHOOD. Well, I am out of time. I just appreciate your 
willingness to meet with the Select Committee on China on this.
    The last point I will make is what the CCP fears the most 
is bipartisan support, engagement by the Congress in the Indo-
Pacific region. We look forward to working with you on it. 
Thank you.
    Chairman SMITH. Ms. Sanchez is recognized.
    Ms. SANCHEZ. Thank you, Chairman Smith, and Ranking Member 
Neal for the opportunity to discuss the Biden administration's 
2023 trade agenda. And I want to thank you, Ambassador Tai, for 
returning once again to brief us about the efforts you are 
leading to advance a worker-centered trade agenda, and for 
your, you know, always willingness to be accessible and 
available.
    Over the past 2 years, you have led the administration and 
supporting U.S. leadership at the WTO, along with calling for 
its much-needed reform. And I want to commend you for the 
strong stance you have taken to defend our national security 
while ensuring a commitment to a rules-based trading system. I 
also want to highlight your continued leadership to support 
implementation and enforcement of strong environmental 
commitments and labor standards through the Rapid Response 
Mechanism under the USMCA.
    As a former labor lawyer, I am proud that our efforts have 
led to an unprecedented number of union elections in Mexican 
facilities. To that end, the USMCA model includes the updates 
that many of us here in Congress want to see reflected across 
our trade agreement under the Western Hemisphere.
    Ambassador Tai, you have stated that the American 
partnership for economic prosperity will build upon the strong 
core of trade agreements in the hemisphere. Yet, the United 
States has not effectively enforced several existing agreements 
with countries in the region, including member states of the 
Dominican Republican, Central American Free Trade Agreement, 
CAFTA-DR. Therefore, I was hoping that maybe you could speak to 
the administration's views on the best way to improve labor 
enforcement under CAFTA. And would it be practical to undertake 
a renegotiation of CAFTA with congressional approval to update 
labor standards and include a Rapid Response Mechanism like we 
see in the USMCA?
    Ambassador TAI. Congressman Sanchez, it is wonderful to see 
you. I really appreciate this question because we do care 
deeply about our partnerships with our neighbors in the Western 
Hemisphere.
    In terms of the DR-CAFTA, as you will recall, DR-CAFTA is 
one of our pre-made tan agreements. And there were enhancements 
and improvements like the ones we made in USMCA. The earlier 
version happened in May 10 to labor, environment provision, 
enforceability of those.
    So to your point about the opportunity for levelling up, if 
you will, the DR-CAFTA, it is something that we think about in 
a number of different ways with respect to that particular 
agreement.
    On the America's partnership, let me just touch on that 
briefly, which is we know that in our own hemisphere, we have 
the most existing traditional free trade agreements that we 
have are in this hemisphere. And yet, the partners with whom we 
have those agreements continue to want something different and 
more from us. And I think it really does reflect the changing 
nature of the world economy and the needs that we have around 
promoting resilience, sustainability, and inclusiveness.
    So whether it is with partners with whom we have an FTA 
already, or those that we do not, the program we are advancing 
right now through our trade agenda is meant to address those 
items.
    To your specific question about how to revisit some of 
these pieces of the DR-CAFTA in the context of America's 
partnership, I would be delighted to explore that with you. I 
think there is a lot of potential here. We are really focused 
on our regional resilience in a new way, and I think that there 
is a lot of opportunity.
    Ms. SANCHEZ. Thank you. I am wondering if you foresee any 
tension between states that are parties to both APEC and CAFTA 
and their compliance with differing agreements if one has a 
stricter standard?
    Ambassador TAI. I have been thinking about it differently 
in terms of the America's partnership. There are 11 of us right 
now. So that is the United States plus ten. Of those ten, eight 
of them have free trade agreements with us; two of them do not. 
We didn't want to make the FTAs a, you know, disqualifying 
factor, because we want to think about the region as a whole.
    We want to advance an agenda here that is complementary to 
the existing arrangements that we have. And this is an area, as 
we get into more detail, that I would be very happy to continue 
to work with you on.
    Ms. SANCHEZ. Great. I have one last question, and my time 
is short. I will submit it for you to respond to in writing. 
But thank you so much for your time, and, again, for always 
being willing to be accessible for questions or input. I yield 
back.
    Chairman SMITH. The gentleman from Pennsylvania is 
recognized.
    Mr. SMUCKER. Thank you, Mr. Chairman. And thank you, 
Ambassador Tai, for testifying today.
    I have noticed the Biden administration has a bad habit of 
redefining things that don't fit your agenda. For example, last 
year, the administration redefined the definition of a 
recession. Now the administration is redefining what is 
considered a free trade agreement. USTR has also been working 
to redefine Congress' role in developing trade arrangements as 
exhibited in our lack of former involvement in IPEF and APEC. 
And you are also redefining what consultation with Congress 
means.
    Before our Senate Finance counterparts yesterday, you told 
multiple Senators that you have been in close consultation with 
Congress as you negotiate critical mineral agreements with 
Japan and the EU.
    But I want people to know, I want my constituencies to know 
what activities USTR is defining as close consultation. 
Apparently, you believe that close consultation is leaving 
documents in a SCIF for Members to review, but not share with 
constituents, and then holding two staff-level Zoom hearings.
    I don't believe that is sufficient consultation to move 
forward with signing any critical mining agreement that our 
constituents have not been allowed to see. I know many of my 
colleagues have raised already today and will continue to raise 
similar concerns, and I hope that it conveys the point that 
Congress finds this wholly inadequate consultation with 
Congress.
    Pivoting from definitions, I want to raise a few 
constituent-specific trade matters. The first relates to GSP. 
And I hear from so many constituent companies about how GSP has 
been an effective tool for them to strengthen their supply 
chains, to create high-paying jobs at home and overseas, and to 
invest in sustainability. And I know Congress is responsible 
for renewal.
    But I would like to ask, what tools does USTR have at its 
disposal, or what tools could Congress provide as part of 
renewal to ensure that any new eligibility criteria in GSP 
promotes a race to the top, both across and within GSP 
countries, but also avoids harming the GSP users like I have 
heard from that are meeting or exceeding the program 
development totals, or goals, I should say? I am sorry.
    Ambassador TAI. Well, Mr. Smucker, I really like your 
question, although your lineup was a little bit brutal. Let me 
just say on consultation--look, I am here before you right now, 
and so let me just commit to a desire to be as knit up with 
this committee as possible on issues.
    And if you have specific concerns with respect to the 
critical minerals, which I am sure that you will, please always 
feel free to reach out. And I am taking the feedback. And we 
will commit to do better as well.
    On about GSP--look, I think that GSP ought to reflect the 
state of modern U.S. trade policy practice. We have an 
established bipartisan, bicameral consensus in U.S. trade 
policy that trade includes labor and the environment. And this 
is something that I carry with me in all of my conversations 
with my counterparts from around the world to say that you 
should be like us and acknowledge that trade is more about just 
goods crossing a border, but it is about economic engagement 
and making our economies work together. So GSP in terms of----
    Mr. SMUCKER. Ma'am, sorry, I would love to keep--I do want 
to----
    Ambassador TAI. I think it needs to reflect both labor and 
environmental criteria. It should reflect that race to the top. 
And, yes, it should be usable. But that is because GSP is at 
heart a development tool. And I think we----
    Mr. SMUCKER. We hope to--we hope to continue to work--there 
is additional USMCA enforcement challenges that a Pennsylvania 
company, QVC, is facing that I just wanted to the bring up as 
well. As you know, Canada committed to ensuring U.S. home 
shopping programming could distribute in the country under 
annex 15-D of USMCA.
    And I understand that President Biden is meeting with the 
Prime Trudeau this week, and I am asking for your commitment to 
work on this enforcement issue with my office. And we will also 
be following up, by the way, with a formal letter. This has a 
huge impact on the Pennsylvania-based company QVC.
    Ambassador TAI. I know this issue well, and I would be 
happy to work with you on it.
    Mr. SMUCKER. Thank you, Ambassador.
    Chairman SMITH. The gentleman from New York is recognized.
    Mr. HIGGINS. Thank you, Mr. Chairman. Ambassador Tai, thank 
you very much for being here. And, also, thank you very much 
for being so responsive to our concerns on behalf of our 
constituents in western New York about the ill-advised property 
tax in Canada that is imposed on vacant and underutilized 
properties.
    It was intended to address a problem with foreign interest 
purchasing large swats of land in both Toronto and Vancouver, 
and then holding that, thus taking supply off the table, 
increasing the cost of housing and the availability of housing, 
or decreasing in the available of housing. So, I just want to 
thank you for that.
    China and Russia are involved in a big land grab in Africa 
for rare earth elements: Cobalt, copper, and lithium. These are 
essential elements to developing electric vehicles and 
semiconductor manufacturing. They are the primary inputs for 
future global economic growth.
    So today, it is a global gold rush for these minerals. 
Combined, China owns about 80 percent of these minerals, 
followed by the United States at about 6 percent. Eighty 
percent of the United States' refined materials are imports 
from China. The production of electric vehicle batteries, 
worldwide, China has 553 gigawatt hours; the United States has 
44 gigawatt hours.
    According to S & P Global, lithium-ion manufacturing 
capacity will have more than double by 2025. China will have 
65.2 percent; Germany will have 11.3 percent; the United States 
6.3 percent. There are 200 battery mega factories being built 
between now and 2030. 148 of them will be in China; 21 will be 
in Europe, and 11 in the United States.
    You know, there is a lot of tough talk here and generally 
in the Congress about being tough on China. While that is true, 
I think we have to be tougher on ourselves about China. The 
Biden administration, I think, is responding to that with both 
the Inflation Reduction Act and also the CHIPS and Science Act 
to incentivize reshoring, friend-shoring, call it what you 
will.
    My concern is giving China's dominance in the continent of 
Africa and in area of electric vehicle lithium ion and 
manufacturing, is that too little too late relative to the 
United States trying to catch up? And what is the vision with 
the Inflation Reduction Act and the CHIPS and Science Act 
relative to that competition?
    Ambassador TAI. Thank you so much, Congressman Higgins. I 
agree with you, and I really appreciate your highlighting all 
of the data and statistics to demonstrate the dominance of the 
PRC in the global marketplace in a lot of these areas. Let me 
address your question with respect to Africa first, which is I 
tend not to think about it as--well, first, I don't think it is 
too little too late. First of all, we can't think like that, 
but also I just don't think it is true.
    With respect to Africa, where I would like to start in 
terms of our partnership with Africa is to ground it in our 
partnership with Africa being inherently valuable for being 
good partners--a good partner to Africa. In terms of the 
demographics of Africa, the use of its population, the growth 
in terms of its population, as well as all of its other 
resources, Africa has the potential to become the engine to 
drive, not just its own growth as a continent in these next 
decades, but a driver of global economic growth.
    Our connections with Africa, historically, in terms of our 
people, our communities, diaspora communities that are recent, 
that have been here for hundreds of years are a part of this 
strength and connectivity and the reason why we should be 
partnering with Africa in the first place.
    To the point in terms of industrial competition and looking 
at some of these critical supply chains and where the 
industries of today and the future are growing up, you are 
absolutely right, it needs to be a combination of policy 
approaches that we take that involve investing here at home, 
but also working out how to secure supply chains that are more 
resilient, that make us less vulnerable and open up more 
opportunities for us and for our parties to be able to thrive 
in the global economy as it continues to evolve.
    So you are right, absolutely, that in terms of the 
investments that we make, but also in terms of the adaptations 
to our trade policy, we got to make a way for our industrial 
vision and trade vision work together, and that is absolutely 
what we are focused on.
    Chairman SMITH. Mr. Feenstra is recognized.
    Mr. FEENSTRA. Thank you, Mr. Chairman. And I thank you, 
Ambassador Tai, for being here today. I am from Iowa. We are 
the breadbasket to the world. We are the second largest 
exporter of agricultural goods, number one, and when it comes 
to grain as an export.
    And so it has been a challenge for us. I mean, it has been 
a real struggle to watch this administration that we are sort 
of in a trade deficit right now when it comes to agricultural 
goods for the first time in decades. And we have not seen any 
new markets being opened.
    I will say this, I do appreciate your work on Mexico and 
the GMO issue. We got to get it resolved. This is paramount to 
the Midwest and the agricultural markets. And I can't tell you 
that--if you can pass along information to the administration 
is that we are not flyover. We actually do a lot of good things 
for the economy in the agricultural breadbasket of America. And 
it just seems like we get neglected because he never mentions 
us.
    But that is not what I want to talk about. I want to talk 
about continuing the section 301 tariffs on amino acids and 
expanding those tariffs to include lysine and threonine.
    After the African swine fever hit China and their hog 
population, the demand for amino acids that went into their 
food plummeted, and the excess was dumped here right here in 
America.
    To the detriment of amino acid producers in Iowa and across 
the country, the United States and China are the world's major 
amino acid producer. But if this dumping by China goes 
unchecked, the America-based amino acid industry will be 
devastated and actually go out of business. So this is critical 
to our supply chain and offshoring and actually fighting 
against our geopolitical rival in China.
    So my ask to you is will you commit to continuing to work 
on section 301 tariff, keep it, and then also expanding it to 
include such things as lysine and threonine?
    Ambassador TAI. Congressman, I have now been to your great 
state of Iowa. In fact, I visited the Iowa State Fair last 
summer with Secretary Vilsack. So I just want to say Iowa is 
not flyover for me. I know how strong Iowa is for our 
agricultural economy and care very deeply and am always 
inspired and impressed by the farmers and the agricultural 
producers from your State.
    Let me say one thing on market access. We have been 
expanding market access for our producers. And our agricultural 
economy, we know, is one of the strongest producers in the 
world. As we adapt our trade policies, we will not forget you. 
We are not forgetting you. And I have a list with me that I 
won't run through right now of all of the market opening that 
we continue to do for our farmers, our ranchers, our producers, 
and especially to champion the interest of the small ones and 
the family farmers and producers as well.
    Mr. FEENSTRA. Thank you.
    Ambassador TAI. On the amino acids, let me say this, 
because I think--I just want to highlight, in terms of the 301 
program, it is a very important program for us. It is important 
for us to bring a responsible, strategic approach to it. As a 
result, we have an ongoing review of the section 301 actions 
and those tariffs where we opened a portal, we invited a 
stakeholder comment. I trust that the amino acid producers in 
Iowa have participated in that process. And we have committed 
to running a serious deliberative process where we do 
everything to do right by our entire economy. So let me just 
highlight for you that that is going on, and we take that very 
seriously.
    Mr. FEENSTRA. And it has got to be solution-based. We have 
got to get it done, okay?
    Yesterday, in a response to my great Senator, Senator 
Grassley, you said that you weren't currently engaged on tariff 
liberalization. But--this is your quote. But when it is fit for 
the partner and when times are right, we are happy to do what 
is right, the right thing for the economy. So what are the 
conditions that indicate that is a right time to start tearing 
done some of these tariff barriers and opening a lot of these 
markets for Iowa farmers?
    Ambassador TAI. Well, thank you for paying attention to 
that hearing and not relying on the reporting by Politico which 
is not always nice. But those do sound like my words. What I 
want to say is there is no allergy to pushing on our partners 
to reduce their barriers. The problem is that our traditional 
approach has been a whole of economy, aggressively tariff 
liberalizing approach, which has led to a lot of the 
vulnerabilities that we are facing today.
    So I am looking for parties from Congress, trading parties 
from our stakeholders to think about how you can use a tool 
like tariff liberalization to advance the greater cause of 
resilience, sustainability, and inclusiveness in our trading 
relationships. And in that context, if we can harvest this tool 
to promote those goals, I am all for it.
    Mr. FEENSTRA. And my time is up. But I just wanted to note, 
you know, China continues to build their economic relations. 
They opened ten new free trade agreements in this last 5 years, 
and they are now trading with 120 countries. We are falling 
behind. That is a real problem for the American farmer. Thank 
you, and I yield back.
    Chairman SMITH. Ms. Sewell from Alabama is recognized.
    Ms. SEWELL. Thank you, Mr. Chairman. And welcome, 
Ambassador Tai. First, I would like to thank you for coming to 
my hometown of Selma, Alabama, to trace the footsteps of John 
Lewis and the civil rights foot soldiers on the 50th 
anniversary of the Bloody Sunday.
    I know that you personally see the Office of the USTR as a 
mechanism to promote human rights and civil rights around the 
globe, so I hope that the pilgrimage to Selma was an inspiring 
experience for you.
    I also need to thank you and Secretary Blinken and 
Ambassador Salazar and the entire Biden administration for your 
tireless efforts to hold the Mexican Government accountable for 
their illegal seizure of Vulcan facilities and ports in Mexico.
    Just yesterday, I joined a letter with the rest of the 
Alabama delegation to the Mexican ambassador demanding answers 
for Alabama workers and Vulcan Materials, which is 
headquartered in Birmingham, Alabama.
    Ambassador Tai, I know that both of us are strong 
supporters of the USMCA and the updated labor, environment, and 
enforcement provisions that we negotiated and secured in the 
new agreement. But I am very concerned that President Lopez 
Obrador is seriously threatening the progress and good will 
that has been established since the implementation of the 
USMCA.
    I think I already know the answer to this, but I was hoping 
to get your commitment to continue to stay engaged on this 
issue and to send a very clear message that this illegal 
seizure is not acceptable.
    Ambassador TAI. Yes, ma'am.
    Ms. SEWELL. Thank you. As you know, I also represent the 
steel workers in my district. I was a supporter of the Section 
232 Steel Tariff, because I know that China and other bad 
actors overseas are actually dumping steel on the global market 
in an effort to kill the U.S. steel industry. We know that this 
has a dramatic and a devastating action, but we have to make 
sure that we are enforcing it correctly.
    I also know that the Biden administration is negotiating a 
global arrangement on steel and alluminum with the EU, so that 
we can find a long-term decision to the steel overcapacity, 
while also partnering with our allies to promote the production 
of a more environmentally friendly steel like that produced in 
Alabama.
    Can you tell me how those negotiations are progressing? And 
what happens if the EU walks away from the table? Do the 232 
tariffs go back in the U.S., or in the EU?
    Ambassador TAI. So Congressman Sewell, I will respond to 
that question backwards. Yes, let me take it off of the EU and 
say, if we don't succeed, that is right, the 232 tariffs come 
back on EU steel and aluminum. And the EU retaliatory tariff 
across the board, on a lot of our agricultural products min 
particular, would come back as well.
    I do want to let you know, and this is getting to the top 
of your question, that I have very strong partnership with my 
European counterpart, that is, Executive Vice-President 
Dombrovskis. We have committed to staying in touch every single 
month this year to ensuring that our team stay on track to meet 
the deadline of October 31 that we have imposed on ourselves 
for a successful conclusion of these negotiations.
    The investigation is exactly as you have described it, 
which is to update our steel and aluminum trade, create a new 
framework that promotes fair trade, that combats overcapacity, 
which has been so devastating to us in market-based economies, 
and also to push for cleaner production and trade as we look to 
the future. It has to do both of these things.
    It is not easy. The technical aspects, in particular, are 
quite challenging in terms of getting our two system to mesh, 
but I want to assure you that we were working very hard, and I 
remain very optimistic that our teams will get us there.
    Ms. SEWELL. Well, thank you so much for all of your 
engagement on these issues. Again, I can tell you that Vulcan 
Materials in Alabama workers are really, really concerned about 
that seizure and really hope that the United States will 
continue to put pressure on the Mexican Government. Thank you.
    Chairman SMITH. Mr. Arrington is recognized.
    Mr. ARRINGTON. I thank the chairman. And, Ambassador Tai, 
good to see you. I feel for you every time I see you and we 
have this opportunity to have a conversation, especially 
because it is public, and I want to be kind and polite and 
sweet like my people back in West Texas, but my people are also 
brutally honest, and they feel like that is only way that we 
are going to ever accomplish anything if we are honest and 
direct. I don't see any action out of the Presidency, out of 
the White House and under his leadership, President Biden, that 
demonstrates that trade is a priority.
    We have worked with you as a former Ways and Means staff 
person. I think I know what you are inclined to do. I think I 
know that you believe that trade is critically important, not 
just the agriculture, which is very trade dependent, and it is 
the lifeblood of the region that I hail from. But you 
understand how important it is to the overall U.S. economy and 
our future growth.
    For all of President Trump's shortcomings, and for all of 
the reasons some people weren't crazy about his personality or 
his leadership style, President Trump was totally committed to 
trade. And Lighthizer had a boss who made trade a priority. And 
the people we were doing trade with, other countries, took him 
very seriously. And that is why we were able to come together 
in a bipartisan way and actually accomplish something for the 
United States, for our workers, for our producers, and 
manufacturers.
    I hate that you don't have that, because I think it is 
wasted talent. I hate it more for the country because we are 
getting whipped on the playing field. I can't stand to see 
America lose when the game is rigged, when people are cheating, 
but worst of all when we don't even show up to the game. And 
that is how I feel about where we are today.
    China and just about every other competitor country is 
taking market share every day from the United States and from 
our great farmers, ranchers, manufacturers, et cetera. And it 
is because we do these--we do more talking than we do making 
deals and having real substantive agreements that will improve 
our economy and our situation.
    Do this for me, it would be helpful, because I am the 
Budget chair now, and we are looking at the various ways to get 
our debt to GDP down because that is a threat to everything in 
our total economy, in our security, in our future.
    Quantify for me--this is not a gotcha question--it is just 
a sort of broad-based question about the impact of trade to our 
economy and to our growth. Can you just speak briefly to that, 
how important is trade to growing our economy?
    Ambassador TAI. I would be delighted to. And, Mr. 
Arrington, I would like to let you know, I wasn't in West Texas 
recently, but I did make a trip to Houston and got to go to the 
rodeo, and it was really quite something to see. And so in 
terms of the spirit of your people in Texas across the board, I 
got to see something there. And there are aspects of the 
hearing today that remind me a little bit of what I saw in the 
rodeo of just a----
    Mr. ARRINGTON. Probably the calf scramble is what it 
reminds you of.
    Ambassador TAI [continuing]. Different format.
    Let me speak to your specific question. Let me put it this 
way: Trade has the potential to be a tremendous tool for growth 
and development if it is done the right way. And we have 
pursued trade policies that have expanded the pie, certainly, 
if you want to look at the GDP and from your budget 
perspective.
    But what we have found over time--and we have a U.S. ITC 
report to back this up--the way we have pursued our trade 
policy is focused too much on the big picture. And the 
distributional effects of trade--we have seen that the benefits 
have clustered in certain places, and they have not flowed 
broadly enough.
    Mr. ARRINGTON. Can I make----
    Ambassador Tai. And so what you see in terms of our trade 
policies now are to try to bring corrective aspects to trade by 
continuing to do trade but by continuing to push ourselves to 
do it better.
    Mr. ARRINGTON. Thank you. And I am out of time to comment, 
so I won't. Thank you.
    Chairman SMITH. The gentlelady from Washington, Ms. 
DelBene.
    Ms. DelBENE. Thank you, Mr. Chairman.
    And thank you so much, Ambassador, for being here with us 
today. It is great to see you.
    Mr. Chairman, I wanted to start and ask unanimous consent 
to enter into the record a letter from members of the 
Washington State delegation raising concern with Japan's 
digital gaming market and its compliance with existing digital 
trade commitments.
    Chairman SMITH. Without objection, so ordered.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Ms. DelBENE. Thank you, Mr. Chairman.
    Speaking of digital, Ambassador Tai, I know you have been 
working very much on the digital economy as part of the Indo-
Pacific Economic Framework. And this is an area where we have 
been behind. The world is deeply impacted by technology, and so 
it is important that we have trade provisions that reflect 
that, including nondiscriminatory treatment of digital 
products, privacy protections, restrictions on data 
localization, source code protections, and bans on internet 
shutdowns. It is important that we have binding and enforceable 
rules. And I do think that this is also very closely connected 
to making sure that we are continuing to provide an engine for 
job growth right here in the U.S. and promoting American values 
like democracy and human rights around the world.
    It is very clear that every industry is impacted by 
digital. From agriculture to manufacturing, all increasingly 
depend on digital tools and the transfer of data to stay 
competitive. And so I wondered if you could speak a little bit 
about how work on digital rules can help benefit small 
businesses, help workers, and strengthen human rights.
    Ambassador TAI. Congresswoman DelBene, I know this is near 
and dear to your heart and to your areas of expertise. I think 
that our engagement on digital is one of the most important 
things that we are doing and one of the most important things 
in terms of pushing the trade conversation into new areas. Not 
only are we behind but, frankly, the international and the 
international trade practice and conversation around digital is 
behind. It is lagging behind the reality of the economy that we 
are living in right now where so much of it has already been 
affected by the digital transformation.
    I also wanted to highlight and build on an aspect of your 
question, which is, how do we engage on the digital economy and 
digital trade in a way that is positive and affirmative, in a 
way that is looking forward and acknowledging the fact that our 
entire economy is touched by digitalization?
    And I think that is a really important part of how we are 
approaching the digital economy, digital trade conversations, 
including in the Indo-Pacific Economic Framework, which is 
acknowledging that the way that we engage with our partners and 
lay the groundwork and draw out the blueprint for digital trade 
negotiations has to reflect more than just the interests of our 
biggest stakeholders in this area. It has got to reflect the 
interests of our small companies, the lifeblood, the backbone 
of our economies--not just ours, but others--but also reflect 
the interests that our workers, that our environment, that our 
content creators all have in this economic ecosystem.
    I think this is also an area, as you and I have talked 
about before, where our ability as negotiators to take forward 
steps is going to be impacted by and really limited by how far 
you as legislators have been able to go in terms of 
establishing regulatory frameworks that are critical to the 
digital economy.
    And one example is privacy legislation. We know that the 
rights to privacy of individual people and consumers in the 
digital economy is an important right to be weighed against in 
how we formulate our rules. But without that legislation here 
in the United States, there is really a limit to how much we 
can do in these negotiations because we have got to leave room 
for all of you to make that decision first.
    So this really is an area where congressional and executive 
partnership and communication is going to be critical. I am 
looking forward to working with you and as many of your 
colleagues on this committee and in the Congress as possible.
    Ms. DelBENE. Obviously, I am a big proponent of Federal 
consumer data privacy legislation.
    Just quickly, I also wanted to bring up Taiwan, which some 
others have brought up, but clearly a key ally to the United 
States and a major partner on defense, trade, technology in the 
Indo-Pacific region. Taiwan is the seventh largest export 
market for Washington farmers and a major export market for 
aircraft and digital products that are built in Washington 
State.
    So our economic partnership with Taiwan is not as extensive 
as it could be. I think we have talked about ways we can 
continue to strengthen that. And so I encourage you to think 
boldly about how we can strengthen our economic ties with 
Taiwan as you proceed with the current initiative.
    Thank you, Mr. Chairman. I yield back.
    Chairman SMITH. Mr. Hern, you are recognized.
    Mr. HERN. Thank you, Ambassador Tai, for being here today. 
The Biden administration's timid approach to trade initiative 
is concerning. Bold leadership is a necessity to ensure 
Americans succeed on the world stage. Any weaknesses from the 
United States will be exploited by our adversaries, mainly 
China.
    Our trade agenda must provide certainty that future 
agreements will create new import and export opportunities to 
the benefit of American businesses and workers. I think you 
would agree with that. This administration has taken no steps 
towards reviving a bipartisan Trade Promotion Authority that 
has expired. Without TPA, we leave a vacuum in the 
international marketplace that China is already capitalizing 
on.
    All free trade agreements have been approved and 
implemented through TPA. It would be a mistake for the 
administration to turn a blind eye to TPA while the 
international marketplace is being actively manipulated by our 
allies and competitors solely for their own priorities.
    Other nations, even our allies, are not looking out for 
American interests. It is on us to go after market share and 
create access for our products around the world. If we fail to 
create an aggressive and robust trade agenda, Americans are at 
a disadvantage and China grows stronger.
    TPA supports U.S. job growth with exports of Made in 
America products and better trade agreements that make the U.S. 
more competitive globally. That being said, with my limited 
time today, I would want to focus on the digital service taxes 
with you.
    Ambassador, I am concerned with the Biden administration 
unilaterally disarming the 301 investigations while other 
countries are still charging digital service taxes today. 
Today, I am even more concerned about the administration's 
action because it is uncertain where we go from here now that 
our leverage has been stripped away.
    Ambassador, 30 out of the 38 OECD nations already have in 
place or plan to have in place a digital service tax if Pillar 
One talks fail. France has already expressed it needs to press 
ahead with their digital service tax because of the 
implementation challenges facing Pillar One. I am afraid other 
countries are growing impatient as well.
    My colleague, Mr. Estes, brought up a serious question and 
concerns with you, and the response was not sufficient enough, 
in my eyes, in the explanation. USTR is the tip of the spear 
when U.S. companies are facing the discriminatory treatment 
abroad.
    What is USTR's plan B if Pillar One talks fail, if they 
haven't already failed so far? Would you reinstate Section 301 
investigations on those 30 countries' DSTs?
    Ambassador Tai. So, Congressman Hern, I have engaged on 
this as well. I disagree with so much of what you have laid out 
at the beginning, but let me be responsive to this particular 
question.
    I don't think you have any unilateral disarming. I believe 
our DSTs under our Section 301 are suspended, right. So that 
means that they can be unsuspended. But I would also like to 
take the opportunity, because you laid so much groundwork, to 
correct for the record a couple of things that you stated.
    One is that it is not true that all FTAs have gone through 
the Congress under TPA. The Jordan FTA was passed by the 
Congress without TPA in place. And the converse is also true, 
that TPA does not always guarantee that an FTA makes its way 
through. We need to look no further than the TPP, where a TPA 
was tailor-made for TPP, and TPP never made its way through.
    So this is all to say that pursuing failed trade policies 
does not guarantee that we become stronger. What I am looking 
for is bipartisan partnership on advancing trade policies that 
make the United States more resilient, our economy more 
sustainable, and our results more inclusive. And if Congress 
and this committee can show me the money and can show me that 
there is bipartisan work that we can do together, then let's do 
that together. I would very much like to----
    Mr. HERN. With all due respect, Ambassador, so what you are 
implying then, it is the Congress' fault that we don't have any 
trade agreements. It is not anything the administration is 
putting forward throwing their energy behind this space. I 
mean, you have been here a number of times and saying, you 
know, we would love to move forward and you can work with us on 
that. So help us with that.
    Ambassador TAI. Meet me with the recognition around the 
kind of world we are living in right now, where we are as an 
economy, where we are strong, where we are vulnerable, and meet 
me on the terms that we need to do things differently. Not 
everything. You don't have to throw the baby out with the 
bathwater. But meet me on the terms that we can work together 
on adapting to the reality that we live in. And I think that 
that is the path to having the kind of bipartisan 
congressional-executive partnership that I think that we all 
are interested in having.
    So I am not casting blame. I am just saying, trade policy, 
where USTR sits at the intersection of the executive and the 
congressional, requires all of us to at least share the vision 
in terms of where we are going. And if we can do that, I think 
that that is where we all come together and get something done 
to be on team United States.
    Mr. HERN. Madam Ambassador, with all due respect, you 
served in this committee a long time, and this committee has 
been well known for working together with an administration 
that wants to work on trade deals. So that would be a great 
message for the administration to hear as well.
    Thank you. I yield back.
    Chairman SMITH. Mrs. Miller is recognized.
    Mrs. MILLER. Thank you, Chairman Smith.
    You certainly are on the hot seat today. I really always 
enjoy working with you, and I want to continue working with you 
as we move forward.
    You know that I made a trip very early--I was still wet 
behind the ears in Congress--to China and realized how 
important trade was to my State and my country. Immediately I 
wanted to be on the Ways and Means Committee and Trade, and as 
some things happen, I am very grateful to be there.
    I have been disappointed with the Biden administration's 
lack of progress, of course, on restrengthening our position in 
the global trade economy. And I have heard from so many of our 
allies that your key trade program, IPEF, just isn't quite 
enough. And as we continue to elevate our competition with 
China in key regions of the world, especially in the Indo-
Pacific, I think it is important for the U.S. to advance trade 
policies and agreements that feature real incentives such as 
market access and tariff cuts. These kind of incentives are 
critical if we truly want to link supply chains with our 
partners and allies and if we want to give our companies an 
incentive to move our supply chains out of China.
    For example, I just traveled to Cambodia--well, this 
summer--and Singapore and heard directly from their Prime 
Minister. Singapore is a fantastic trading partner of the 
United States. But on the other hand, Cambodia is hungry for 
U.S. trade and investment. Unfortunately, we are doing too 
little, too late. We also view IPEF as being too little, too 
late.
    China is outmaneuvering us by implementing the largest free 
trade agreement in history with the Regional Comprehensive 
Economic Partnership and trying to join CPTPP. We need to run 
faster than China in this region and ensure that American 
workers can compete globally.
    Now, quickly, I am going to ask you a question. What are 
you doing to directly counteract the tariff advantage that 
Chinese products have over U.S. products in the Indo-Pacific as 
a result of RCEP, and is there other trade agreements out 
there?
    Ambassador TAI. Congresswoman Miller, it is nice to see 
you. And I always enjoy working with you as well.
    You said something early on in your question about market 
access and tariff cuts leading to better supply chains. And I 
think that that is an area where we are going to have to really 
disagree. And I lead an agency with a bunch of experts that get 
way in the weeds of and the guts of all the trade agreements 
that we negotiate. I think that there is work that we can do to 
come up here to this committee, but also more broadly explain 
how tariff cuts and the rules for accessing those preferences 
have worked in different sectors.
    In certain sectors--we have seen them in the textiles area, 
for instance, in the CAFTA-DR--that the combination of the 
tariffs and the tariff cuts and the rules of origin have 
created really strong supply chains. In agriculture as well we 
have tended to do better on rules of origin and tariff cuts to 
favor our producers.
    But across the industrial areas, what we have seen is the 
combination of the tariff cuts and those rules of origin have 
led to a deindustrialization and an erosion of our 
capabilities. So this is just to say that----
    Mrs. MILLER. I have to move on.
    Ambassador Tai. This is just to say that----
    Mrs. MILLER. A lot of words.
    Ambassador TAI. It is a lot of words. It matters. It 
matters to people on this committee how a trade agreement 
actually works. It is not--what is inside of a trade agreement 
matters in terms of what the result is going to be for your 
economy. And we have seen very uneven results. So let me try to 
be really specific in response to----
    Mrs. MILLER. Well, okay. But I want to----
    Ambassador TAI [continuing]. Your question, which is those 
tariff advantages in the Asia-Pacific have driven already on 
top of the liberalization program supply chains to be deeply 
clustered inside of the Chinese economy. And so for our 
approach, it is not to just go in and further liberalize. Our 
approach needs to bring disciplines and strategic changes to 
the trade program to make those supply chains more resilient. 
And on that, I think we are agreed. Our supply chains need to 
be more resilient.
    Mrs. MILLER. Okay. Because I want to move on to Ecuador, 
Guyana, and Mexico, because so many of the countries want to 
improve their commercial ties with us as well. And just as in 
the Indo-Pacific, China is all over the place, and they want to 
be our trading partners.
    Do Latin-American countries often raise market access and 
GSP renewals as a priority in bilateral talks with you and 
other administrative officials? And do you believe GSP renewal 
would improve your ability to negotiate with these countries?
    Ambassador TAI. Let me reaffirm, I am for the 
reauthorization of GSP in a way that brings it in line with our 
current trade practice.
    In terms of my conversations with partners, especially 
those that you have just highlighted, they are really important 
partners to us. They are our neighbors. They are our allies.
    Mrs. MILLER. Absolutely.
    Ambassador TAI. Yes. And I think that--what I would like to 
do is just say that, when I talk to them, I want to hear from 
them what it is that they want from economic engagement with 
the United States. They want--they want to be more closely tied 
to us, integrated with us, and they want to be able to develop 
their economies in a way that we can rely on each other. How we 
get there----
    Mrs. MILLER. Well, I think we can meet and go over these 
things.
    Ambassador TAI. Yes. How we get there, then, is the next 
question.
    Mrs. MILLER. Yes.
    Ambassador TAI. And I think that--you know, does GSP get us 
there? It may get us part of the way there. But here, I would 
like to push all of you as well in terms of thinking outside of 
the box. Where can we improve our trade programs to really 
serve those interests that we are trying to accomplish as 
opposed to relying on traditional trade practices that have 
been really spotty in terms of their results?
    Mrs. MILLER. We need to meet and really go through these 
things.
    Thank you. I yield back.
    Chairman SMITH. Ms. CHU is recognized.
    Ms. CHU. Ambassador Tai, it is wonderful to see you today, 
and welcome back to the Ways and Means Committee.
    I also want to bring up Taiwan. Last fall, at a hearing on 
this committee, I expressed support for a free trade agreement 
between the U.S. and Taiwan. Such an agreement should include 
high enforceable standards for labor, environment, intellectual 
property, and other priorities for Members of Congress and 
stakeholders in the U.S. and Taiwan.
    I want to thank you for your focus on deepening our trade 
relationship with Taiwan through the Initiative on 21st Century 
Trade. This is an encouraging step towards deepening economic 
relations. But I believe this negotiation should be a first 
step towards a comprehensive FTA with direction and approval 
from Congress between the U.S. and Taiwan.
    I understand that you had an agreement on five areas, which 
you call the early harvest. Could you please elaborate on the 
status of the remaining six trade areas on the negotiating 
mandate? Specifically, will the remaining areas be negotiated 
together or further divided? And will USTR continue to provide 
transparent updates to Congress and the public on these 
negotiations? And what is the timeline for completing the 
initiative?
    Ambassador TAI. Thank you, Congresswoman. We are very 
excited about our trade initiative with Taiwan, and we are 
making very good progress. So you are right that we have 
started with five core areas scoped in light of our desire to 
deepen and expand our economic engagement with Taiwan, which 
already is quite significant. Taiwan is one of our top 10 
trading partners.
    We are making very good progress in terms of the first set. 
And you are right, we have scoped another five or six, I think, 
elements, which will follow. I don't have specifics for you in 
terms of a schedule or timeline, except to say that we continue 
to be encouraged by the progress that we are making and we are 
looking forward to working on those additional areas with 
Taiwan. And, yes, absolutely, we will keep you and others 
updated as we continue to make progress.
    Ms. CHU. Thank you for that.
    On another topic, I am the co-chair of the bipartisan 
Congressional Creative Rights Caucus, and I represent a 
Southern California district that is the hub of our country's 
creative economy and copyright industries. In 2021, the 
copyright industries employed 9.6 million workers, accounting 
for nearly 6 percent of all private employment and almost half 
of all the workers in the U.S. digital economy.
    I also strongly agree with the principle that the AFL-CIO 
recently laid out in its policy agenda on the digital economy 
and trade, which states that trade policy must aggressively 
address the stolen or unlicensed use of copyrighted content on 
digital platforms.
    I believe that a worker-centric trade policy must ensure 
that our trading partners protect intellectual property rights, 
and I am disappointed that, thus far, these protections have 
not been prioritized in the administration's initiatives, 
including the Indo-Pacific Economic Framework.
    Given that is the case, can you tell me how USTR is 
ensuring that trading partners provide adequate protections for 
copyrights in the digital environment? Like, for instance, will 
IPEF countries be asked to join the World Intellectual Property 
Organization Internet Treaties, which ensures that creators can 
control and manage works online?
    Ambassador TAI. Well, Congresswoman, our toolbox on 
intellectual property is quite expansive. Know that my 
Intellectual Property and Innovation Office is always in one 
part of the cycle on the Notorious Markets report, the Special 
301 report. That ends up being a very important tool of ours in 
terms of tracking how intellectual property rights are being 
observed, respected in our partner countries, where the 
problems are, and also tracking progress when they make 
progress.
    In the Indo-Pacific Economic Framework right now, we are 
deeply engaged on a digital conversation that also takes into 
account that there are content creators who have rights and 
interests in the digital economy. Let me leave that there.
    In terms of things that are more specific to that, I will 
have to come back to you. I do not believe that we are pressing 
our partners on WIPO participation. But I am happy to continue 
that conversation with you.
    Ms. CHU. Thank you. I hope you encourage them to do that.
    And I yield back.
    Chairman SMITH. Mr. Wenstrup is recognized.
    Mr. WENSTRUP. Thank you, Chairman. And thank you, 
Ambassador, for being here.
    We are talking about intellectual property quite a bit 
here, and I have concerns when we waive intellectual property 
rights. You know, we have inventors, creators, that develop and 
manufacture in the United States. And there are situations in, 
you know, talking about the vaccines as a concern of just 
giving that intellectual property away. That is a disincentive 
for people in the United States to want to produce and create 
if they are concerned that their own government in the United 
States is going to take their intellectual property rights away 
from them.
    And I believe that there are ways to produce our products 
in another land, under our control, which is very, very 
important for a lot of reasons, especially when it comes to 
health. Because we know that, right now, we are in a huge 
deficit, dependent upon China for our medical prescriptions. 
Generic drugs. They control it, they control the world. It is a 
problem. It leaves us extremely vulnerable. It is a national 
health security issue and a national security issue.
    If we turn over the intellectual property of a 
pharmaceutical or a vaccine to another country that doesn't 
produce it with the same quality, as we have seen from China--
250 people died from Heparin in the United States about 15 
years ago. We turn that over to another company to then make 
it, they tank that product. And then we have a problem.
    And so I think that, you know, as we do look--and by the 
way, the FDA isn't over there trying to make sure everything 
is--they may have an office there, but they are not in there 
every day.
    You know, we now have--in the United States, we are testing 
the drugs we get from other countries for being tainted or 
inefficient, not the right dose. All of these things are 
happening.
    So all I just want to say is, if we in any way, shape, or 
form are giving away our intellectual property--you know, we 
are worried about others stealing our intellectual property, 
but if we are stealing our own intellectual property, it leaves 
us very vulnerable.
    I see you raise your eyebrows. Maybe you are not engaged 
with the situation on the medical side, but that is a shame 
because maybe you need to get into and get a classified brief 
on what is going on.
    Thank you. I yield back.
    Ambassador TAI. Sorry I was making faces a little bit. I 
think it is because I was trying to track how you are 
describing giving away intellectual property. And that doesn't 
bear any resemblance to what we agreed to at the WTO last year. 
So I am happy to clarify some of that.
    In terms of your presentation, especially around our 
reliance on others for API, let me affirm that I completely 
agree with you that that is a critical supply chain that we 
need to work to fix.
    And the answer isn't just about IP. It does also connect to 
this tariff conversation as well. The way that a lot of our 
supply chains and the decisions that our producers have 
prioritized, which is to chase cost efficiency at the expense 
of resilience, at the expense of having more options in terms 
of supply, is part of the change that we need to bring to our 
trade policy.
    So on all of the things that we agree on, I hope that we 
will be able to find a way to work together. I want to say I am 
engaged on the medical issues. They are really, really 
important. And I look forward to continuing the conversation 
and working with you on this.
    Mr. CAREY [presiding]. Thank you.
    The chair now recognizes the gentleman from North Carolina, 
Dr. Murphy.
    Mr. MURPHY. Thank you, sir. Thank you, Mr. Chairman.
    And thank you, Ambassador Tai. I think you can sense the 
frustration, at least over on this side of the dais, because it 
just does not appear we are moving the needle on trade. And I 
don't know you very well. You come very, very highly spoken of 
from members who have worked with you previously.
    I personally think you are too nice a person to be in the 
job that you are in, because I think you are handicapped 
because of administrative folks that you have to report to, et 
cetera, that are handicapping you in your job. Negotiators are 
usually very, very tough and sometimes mean people. They aren't 
nice people like you are.
    And if you look at what has happened with us, we are 
absolutely handcuffing the United States because we worry more 
about green things. It is all the other distractions. We are in 
the Paris climate accord. We handcuff ourself, and we give 
China the ability to buy--you know, build nine this past year, 
27 more coal plants. And if you look at what we are doing to 
the United States, all we are doing is giving the open door for 
China. It is just a fact.
    We don't negotiate--we were talking about critical rare 
earth metals. You know, we are fine to tear them up and get 
them from China where we are using slave labor, but we have 
them in our own country and we are not able to do that. It puts 
us absolutely at a disadvantage. And you are stuck--personally, 
I feel sorry for you. You are stuck in the middle of that.
    And so let me get to just some of the other issues. It is 
just an absolute frustration, because you just see this country 
swirling down the drain because we are just so distracted on so 
many other different issues that China doesn't give a damn 
about. And because they don't give a damn about it, they are 
just swarming over the rest of the world with influence.
    I am happy to hear that we are going to try to work on a 
Taiwan free trade agreement. That is absolutely necessary. I 
come from the second largest pork-producing district in the 
country. It is a big deal. Pigs are a big deal for us. Pork is 
a big deal for us. But unfortunately, with Taiwan, we have seen 
our exports decline 35 percent, one-third, since 2021, in a 
time when Taiwan's imports of pork went up 15 percent.
    Can you help me understand that? Why has that happened? Why 
have we hurt our own pork producers in a time when Taiwan has 
been increasing their importation?
    Ambassador TAI. So, Congressman, I can assure you that I 
know to be nice to members of the Ways and Means Committee. And 
I have never been faulted for being too nice.
    Mr. MURPHY. You have too nice a smile.
    Ambassador TAI. I also don't need you to feel sorry for me. 
So please don't. Please don't do that.
    Mr. MURPHY. I feel like you have been put in a tough spot, 
personally, because there have just been--this administration 
above you has just shown no interest in trade.
    Ambassador TAI. Okay. Well, let me just take off the nice a 
little bit. I don't need your pity. I stand up for the American 
people. When I speak, people listen, because I represent the 
interests of the United States.
    Let me go to your specific question on what--your 
frustrations around our trade policy. Look, I am hearing it 
from this entire side of the dais. I have sat in the backseat 
before also. You guys are staying very well on message, and it 
is great work----
    Mr. MURPHY. It is a good message. It is a true message.
    Ambassador TAI. It is not. It is--I think that you have 
completely missed the point. And you are from a great State, 
which is also a textiles-producing State. I think that should 
inform a particular perspective in terms of where our trade 
policies have been strong for ag but also where our trade 
policies have really bled out some of our critical industries. 
And I do consider textiles to be a critical industry.
    On rare earths, let me tell you a couple things here. Why 
are rare earths important? Rare earths are important because, 
especially now, they have significant applications in clean 
energy and clean technology industries. So that is actually 
part of the greening agenda.
    Mr. MURPHY. We are not getting it from our own country.
    Ambassador TAI. I will tell you why we are not producing 
rare earths anymore. We used to. And I litigated a case at the 
WTO on this 10 years ago, which we won. But it hasn't put us in 
a better place. And that gets us into a WTO conversation. I am 
not going to go down that rabbit hole with you right now. But 
rare earths----
    Mr. MURPHY. All right. Let me just ask this other question 
because I really didn't want to go on rare earths.
    Ambassador TAI [continuing]. Because of predatory Chinese 
practices. Which you are right, we should be working together 
on that. But blaming each other for and not being able to come 
to an agreement on what is actually important for the U.S. 
economy, that is what is holding us back.
    Mr. MURPHY. Absolutely. I don't disagree with that at all.
    All right. Ambassador, let me just ask this one other 
question.
    Ambassador TAI. Let's move on to the reality that we are 
facing in facts.
    Mr. MURPHY. All right. Thank you. I agree. I don't disagree 
with you. I don't disagree with you. We are throttling 
ourselves on some of this.
    I am an original cosponsor of the bipartisan resolution of 
disapproval which would roll back a regulation that suspends 
tariffs on Chinese solar products that have circumvented U.S. 
trade laws throughout four Southeast Asian countries. And I 
hope the Biden administration will reverse the policy so 
Congress isn't forced to act to protect American jobs and keep 
subsidized Chinese products out.
    Can you explain--can you explain the rationale behind the 
decision?
    Ambassador TAI. Do I have grace from the chairman to go a 
little bit beyond time? Yes? Sure. Sure.
    Look, on the solar issue, I think we are in a real bind. 
And I think that this might be--let me see if you and I have 
common cause here as well. As with many other industries, about 
20 years ago, we had a growing, innovative, strong solar 
industry here in the United States, which we lost.
    Mr. MURPHY. Absolutely.
    Ambassador TAI. When we lose industries like that--and it 
is not to say we are not producing. It is just that we are not 
producing at scale. We are not producing enough. When we are in 
a bind like this, we end up fighting ourselves. Our industries 
fight each other. Our regions fight each other. We end up, 
basically, fighting ourselves over the scraps of what we have 
got, and we are in a really hard place.
    Where I would really like partnership with all of you is, 
one, to figure out the really hard work in terms of how we get 
to a better place in areas where we need to build back, but 
also, can we look forward and anticipate the other industries 
where we are at risk of losing and eroding our capacity and 
work together to prevent that from happening.
    Mr. MURPHY. Again, that really didn't answer my question. 
Why were we behind this position? Why were we allowing the 
Chinese to do workarounds?
    Ambassador TAI. I am happy to continue this conversation.
    Mr. MURPHY. Okay. All right. That is fine.
    Ambassador TAI. This is one where our economy is quite 
split.
    Chairman SMITH [presiding]. Mr. Kildee is recognized.
    Mr. KILDEE. Thank you, Mr. Chairman. And thank you, 
Ambassador Tai, for being here.
    Let me just start off by saying, you know, we don't agree 
on everything across the aisle here, but I do want to associate 
myself with the last comments. Not all of the comments, but the 
last comments that Mr. Murphy made. I share his concern 
regarding Chinese solar and the circumvention of American 
tariffs. I disagree with the position the administration took 
on this. And I am leading the effort on the last issue that Mr. 
Murphy raised. I disagree with him that you are too nice. I 
think you are just nice enough.
    So let me first of all say, where I come from, the term 
``free trade'' is a bit of a loaded term. The people that I 
represent in Michigan, particularly in manufacturing and our 
farmers, have seen trade deals come and go and never met the 
promises that they were sold under. NAFTA being a good example, 
where we saw auto workers lose their jobs and have those jobs 
show up in Mexico, sometimes making $13 a day, undercutting 
American workers. There were big promises under NAFTA that 
didn't materialize.
    And it is for that reason that I am equally enthusiastic 
about USMCA. I didn't know that I would get to a place where I 
could support it, but at the end of the day, I was enthusiastic 
in supporting it because it rights the wrongs of some of the 
past trade deals and I think provides a really important 
framework.
    I was proud of the work that the Democratic leadership, 
particularly Mr. Neal, did to improve that trade agreement in 
the late stages of the negotiation. I think that was the game 
changer for many of us, particularly including the labor rapid 
response mechanisms. That has been a lifeline for workers in 
Mexico in plants like the General Motors plant in Silao, which 
obviously you are quite familiar with. Our ability to stand up 
against protectionist unions, against multinational companies 
operating in Mexico taking advantage of workers, is really 
remarkable.
    Last month, I was in Mexico. I met with many of the workers 
who are fighting for their new rights, including workers at the 
VU Manufacturing plant. Right now, these brave workers are in a 
battle at VU, fighting for better wages, for better working 
conditions, for safer working conditions, despite pretty 
significant threats, intimidation, bullying, from the company 
leadership.
    So, I just want to ask if you can assure me and more so 
assure the workers at VU and workers all across Mexico that the 
USTR and the U.S. Government is going to do everything we can 
to help them exercise the new rights that are guaranteed to 
them under USMCA?
    Ambassador TAI. One hundred percent, Mr. Kildee. USTR, the 
United States and, frankly, I think that this committee also 
stand behind the tools that we have in the USMCA, which 
critically are there to empower workers and to turn that 
narrative to say that trade agreements can work in the favor of 
workers.
    Mr. KILDEE. Thank you. And I just want to say, likewise, I 
am pleased with the work that you are doing in Mexico. I know 
it has been raised before, so I won't go too deep into it at 
all. But sticking up for our corn growers as Mexico, I think, 
is trying to circumvent the agreement that they signed in order 
to protect their interest, we need to make sure that doesn't 
happen.
    But I will say this. I do share the concern that some have 
expressed about the new frameworks that the administration is 
pursuing. APEC, I believe, is not the step in the right 
direction that we ought to be taking. What we saw under USMCA, 
I think, is a good example of how we ought to build the 
framework, a high-standards type agreement, that provides us 
the access to markets that we need but also elevates the 
standards of those workers in other places.
    You know, right now, we are seeing violence against union 
organizers in Guatemala, in Honduras, in Colombia. And they 
don't have the recourse that would be protected under USMCA. So 
I am concerned about why we are pursuing this sort of APEC-type 
approach rather than fixing existing trade agreements.
    And one in particular--and I know Congresswoman Sanchez 
raised is CAFTA-DR. I think we have an opportunity to elevate 
our relationship in that region, but we are going to need the 
kind of enforceability that we see in USMCA. And I would like 
to see us pursue renegotiation or improvements to agreements 
like CAFTA-DR in particular in order to achieve that. And I 
wonder if you might be willing to comment on that.
    Ambassador TAI. Mr. Kildee, I note your interest in that. 
It makes sense. And I don't know that APEC and doing upgrading 
work like that need to be mutually exclusive. So let's continue 
to talk.
    Mr. KILDEE. Thank you very much.
    I yield back.
    Chairman SMITH. Mr. Steube.
    Mr. STEUBE. Thank you, Mr. Chairman.
    Ambassador Tai, in your recent testimony before the Senate 
Finance Committee, you dodged questions related to whether the 
administration was taking a go-it-alone course in trade 
negotiations, leaving out Congress and not making deals public 
before signing them. Senator Crapo and Senator Wyden both 
pushed you for a commitment to seek congressional approval and 
make the terms of deals public, but you could not give such a 
commitment.
    What we have seen time and again from the Biden 
administration is an unprecedented lack of transparency, even 
on issues where there might be room for bipartisan consensus. 
Much of your office's work should be bipartisan. A lot in 
Congress is one team versus the other, but when it comes to 
trade, that is not always the case. And that is why it is so 
surprising that we are running into this lack of transparency.
    Whether it is critical mineral agreements, potatoes, or 
citrus from my State, Congress needs to be informed, my 
constituents need to be informed, and the American people need 
to be informed.
    Along the lines of citrus, I have a question for you. Does 
the U.S. allow for the importation of Chinese citrus?
    Ambassador TAI. So, Congressman, I have to say that I 
really have to object to----
    Mr. STEUBE. Okay. Well, the answer to that question is, 
yes, they do. You do allow for the importation of Chinese 
citrus. And do you know roughly how much? Or do you want me to 
answer that question for you too?
    Ambassador TAI. Well, this is a hearing. But since you have 
answered the first question, why don't you go ahead and answer.
    Mr. STEUBE. Sure. Okay. 26.8 million tons of Chinese citrus 
is imported into the United States roughly every year. We 
shouldn't be importing Chinese citrus to the detriment of U.S. 
producers.
    I actually had a bill last Congress that would ban the 
importation of Chinese citrus because of the challenges that 
that faces, not just from a production standpoint, but from a 
disease standpoint. And I intend to do that again this year.
    What is your office specifically doing to promote American 
citrus?
    Ambassador TAI. There is a lot that we are doing to promote 
American citrus. In fact, I believe that in Vietnam, we have 
just gotten approval for the first shipment of American 
grapefruits to Vietnam. So that is one example of something 
that we have been doing with USDA.
    In another area, we have been working closely with seasonal 
produce and fruit growers in the southeast to address serious 
import concerns that they have by setting up a committee to 
allow them to provide us with advice and recommendations 
specifically with respect to their interests.
    So I care a lot about our farmers and our producers, 
including the citrus growers. And if you have concerns with 
respect to the imports and the export opportunities, I am happy 
to talk to you about those.
    Mr. STEUBE. Does the Chinese Communist Party allow for--do 
they adhere to the same regulations that our domestic producers 
have to adhere to here in the United States, related to labor, 
EPA, all of the things that our domestic producers are abiding 
by?
    Ambassador TAI. I mean, I think that part of the bigger 
question you are getting at is, is our trade relationship with 
China reciprocal and does it feel fair?
    Mr. STEUBE. No. I am specifically talking about citrus 
right now.
    Ambassador TAI. No. And on citrus--I mean, yes, you are 
talking about citrus, but I think it is linked to this larger 
issue, which is----
    Mr. STEUBE. Well, it is not when you are bringing in 
cichlids from China that then infect American citrus with 
canker and other diseases that then are a detriment from the 
health and safety and welfare of our groves. I don't understand 
why that is funny that you think it is okay to allow the 
importation of Chinese citrus to the detriment of Florida 
farmers and ranchers that grow citrus every single day. We have 
lost--I mean, all you have to do is look at the numbers--the 
boxes of production because of greening and the diseases that 
have been brought in from China.
    So I am specifically talking about citrus. And I am 
specifically concerned about the importation of Chinese citrus 
to the detriment of our production in America, specifically 
Florida, because the majority of citrus that goes into juice 
comes from the State of Florida.
    Ambassador TAI. So let's talk about this. We work very 
closely with USDA and APHIS. And I think there is a 
conversation to be had, which I don't think needs to be 
oppositional.
    Mr. STEUBE. Okay. Well, I am interested in your China 
strategy as it relates to supply chains. You have been in this 
role for over 2 years, and I would like to know how you plan to 
combat the CCP through trade.
    Ambassador TAI. So there are a lot of things that we are 
doing with respect to the challenges from the PRC's economic 
policies and practices. We have in place still the Section 301 
actions from 4 years ago. We are in the process of reviewing 
the effectiveness of that and taking in all of the comments 
that we have received.
    At the same time, we are working with partners and allies 
consistently and on an everyday basis with respect to 
challenges that we all experience, whether it is in terms of 
large civil aircraft industry, steel and aluminum, economic 
coercion, and overall an unlevel playing field and a lack of 
reciprocity, which I was trying to link to your previous 
questions, which includes with respect to the citrus trade.
    There is a lot for us to do, and we are going to have to 
bring our very best game. And I would be very interested to 
work with you on making sure that what we do is effective and 
puts our stakeholders in the very best position to compete.
    Mr. STEUBE. My time has expired.
    Chairman SMITH. Ms. Tenney is recognized.
    Ms. TENNEY. Thank you, Mr. Chairman. And thank you, 
Ambassador, for being here.
    I just want to jump--I got three questions for you, because 
it is very important. And my district, my new New York 24 
District, is not only the number one ag district in the 
Northeast, it is the number one dairy-producing district in the 
Northeast. And our New York dairy producers rely on a 
consistent access to international markets for their bottom 
line.
    Given my district's proximity to Canada--and we are 
basically mostly the Canadian border with New York--I have deep 
concerns that the dairy market access terms that were 
negotiated with our trading partner to the north have not been 
honored.
    So, Ambassador Tai, can you provide an update on the 
dispute settlement panel process and when we can expect to see 
some tangible results for American dairy farmers? 
Understanding, I mean, we didn't get everything we wanted in 
USMCA, but we really need to--this is a huge issue that is 
plaguing our dairy farmers.
    Ambassador TAI. I would be delighted to give you some 
updates here. As you know, this was actually the first dispute 
settlement panel that we established under the USMCA. It was on 
the dairy dispute, and it is precisely because dairy has been 
such a contentious issue between us. And Canada made promises 
in the USMCA that our dairy farmers would have better access, 
which we have not seen translated into reality.
    So we litigated through that first case, won it, and Canada 
made some changes to claim that it has brought itself into 
compliance. But that hasn't translated into that additional 
access that we know that our dairy farmers deserve, which is 
why we have now requested and moved into the panel phase the 
second time.
    Ms. TENNEY. Okay.
    Ambassador TAI. This time I had my lawyers work very, very 
closely with USDA and with our stakeholders to fashion a case 
that we have a lot of confidence in. That panel----
    Ms. TENNEY. Let me jump to this because----
    Ambassador TAI. That panel is pending right now.
    Ms. TENNEY. If I can reclaim my time. I appreciate the 
second panel. But how far are we going to go to reinforce this? 
And would we consider retaliatory measures against Canada on 
this milk issue?
    Ambassador TAI. We feel very confident in this dispute. And 
I am just trying to check through my notes to look at when we 
would expect that panel decision. But if justified by the panel 
decision, yes, no, absolutely. Everything that we are going to 
do is going to look to translate our rights into access.
    Ms. TENNEY. Great. I appreciate that.
    The second question I want to get to is, I would like to 
follow up on the letter we sent--Representative Sewell and I 
sent you a letter. This is about the European Union is on 
course to impose significant restrictions on steel scrap 
exports by changing its waste shipment regulations.
    Steel scrap is critical to many of my constituents who rely 
on it to be among the lowest cost and most efficient steel 
producers in the world in Upstate New York, believe it or not. 
Also in Ms. Sewell's district. The proposed EU regulations will 
distort global scrap prices and reduce the domestic supply of 
scrap, increasing costs for American steel producers and 
putting them at significant disadvantage compared to their 
competitors around the world.
    Do you agree, if adopted, the EU's proposed regulations on 
steel scrap exports would be detrimental to the American steel 
industry?
    Ambassador TAI. I care deeply about how the American----
    Ms. TENNEY. Well, let me ask you, can you just answer the 
question? Do you think it would be detrimental to the steel 
industry if the EU proposed regulation?
    Ambassador TAI. I have to say that I am not fully briefed 
on this particular, but that we have so many channels of work 
with the EU on steel, and I am happy to raise it.
    Ms. TENNEY. Okay. I just want to get quick, because I want 
to get you to the third question too. So let's work on that.
    And is USTR engaging the European Commission and EU members 
on this matter? Because we want to make sure that, you know, we 
are not excluded from this and that you are on top of this.
    Ambassador TAI. So I think I answered this one already, 
which is to say, if we are not already doing so, we will.
    Ms. TENNEY. Yes. Thanks. I appreciate it. Now, question 
three.
    My district is home to Wayne County, which ranks among the 
top apple-producing counties in the Nation. How will the Indo-
Pacific Economic Framework work to address the significant 
market access with countries in the region, particularly issues 
surrounding the sanitary and phytosanitary measures?
    And I am just looking at just some of these countries where 
there is no market access here, and this is significant. 
Obviously, it is one of the--Wayne County is literally the 
second top apple-producing county in the Nation.
    What are we going to be doing on that? And can we count on 
your commitment to work with this and make sure that we get 
some access?
    Right now, we have, between Australia, no market access, 
tariffs, no market access, Indonesia, Japan, Korea, Thailand, 
Vietnam. How can we--is that something we can count on you to 
make sure that we get access with this huge potentially 
economic growth area for upstate New York?
    Ambassador TAI. Absolutely. And in the Indo-Pacific 
Economic Framework Trade Pillar, we have scoped in an 
agricultural negotiation that goes directly to the SPS issues, 
science- and risk-based regulatory processes, precisely to 
improve market access.
    Some of the countries you just listed we have, actually, 
FTAs with. And we have seen that, even when we have pushed 
tariffs down to zero, oftentimes it doesn't translate into 
market access because of these SPS barriers. So that is scoped 
in the work that we are doing. We are doing that work and happy 
to keep you updated on our progress.
    Ms. TENNEY. Thank you so much. I appreciate it. We are 
looking forward to working with your office to get this done.
    Thank you so much.
    Chairman SMITH. Mr. Beyer is recognized.
    Mr. BEYER. Thank you, Mr. Chairman.
    Ambassador Tai, thank you so much for being with us today, 
and thank you for remaining in close contact with the 
Government of Ethiopia as they pursue reinstatement to the 
African Growth and Opportunity Act trade preference program, 
and for being so responsive to me and my staff as we work with 
the diaspora.
    As the Ethiopian Government implements the peace agreement 
signed last year with the TPLF, I would like to stress the 
importance of AGOA to Ethiopia's economic recovery from the 
recent years of devastating conflict and the COVID pandemic. 
Ethiopia's inclusion in AGOA in 2000 helped foster the growth 
of a burgeoning manufacturing industry, which provides stable 
employment for tens of thousands of Ethiopian workers. The 
textile industry in particular saw tremendous growth and helped 
provide thousands of jobs to Ethiopian women.
    But since Ethiopia was delisted from AGOA, these jobs have 
been disappearing, and I am concerned that the longer they are 
denied access will push the nation deeper into poverty, further 
destabilizing the country, and severely weakening our 
bipartisan, bilateral relationship.
    I know you have delivered to them a targeted list of 
benchmarks that they have to meet, including deescalating the 
conflict, removing barriers to humanitarian assistance, 
addressing human rights violations. Can you provide an update 
on where we are, and is an out-of-cycle review under 
consideration?
    Ambassador TAI. So, Congressman Beyer, an out-of-cycle 
review is always available as part of the AGOA program. And you 
know about the list of benchmarks that we have shared with 
Ethiopia. And I also had the opportunity to meet with Prime 
Minister Abbey on the margins of the Africa Leaders Summit here 
in Washington in December.
    This is something that we work on very closely with the 
State Department. We have a special envoy for the Horn of 
Africa as well. And in terms of the very, very latest, I would 
be happy to have my team send over to yours where things are as 
of today.
    Mr. BEYER. Great. Great. Thank you very much.
    And I really also appreciate your commitment to the WTO and 
the belief that it can be a real force for good. And without 
the WTO, it is a state of nature. And the work you did in the 
last Ministerial Meeting, crucial wins on fisheries and COVID-
19 vaccines, illustrates that, despite the challenges, the WTO 
actually can work under the right conditions.
    To that end, I am a little concerned we are sending mixed 
messages on our support for the WTO and our commitment to abide 
by its decisions and rules even if we don't like the outcome of 
individual cases.
    I know you have worked hard on reform. Could you update us 
on your progress in this area?
    Ambassador TAI. I would be delighted to. In fact, we are 
doing so much work on reform. It is a little frustrating for me 
that not more people know about it, because the issues can get 
technical. And all of this is happening in Geneva, which is far 
away from Washington, D.C. But I know how much you care about 
it.
    Whether it is on the committee processes, whether it is on 
the negotiation function or on dispute settlement, my team 
shows up to every meeting with new ideas. Our motto is to 
reform by doing and to put ourselves out there as a model for 
reform. To not just talk about it, but to behave in the way 
that we would like for members to behave, which is to be very, 
very engaged with the WTO and see it as being there to serve 
our interests and our needs, and not something that we go on 
autopilot about and forget about.
    So on dispute settlement, we are on phase three of work in 
terms of driving an interest-based negotiation conversation, an 
inclusive process that brings in all of the WTO members, with 
the goal in mind that for real reform and change to happen at 
the WTO, we can't dictate that change. It has got to be 
negotiated and accepted by everyone.
    That is just an example, but I would be delighted to 
facilitate a follow-up for you and any others on the committee 
to learn more about what we are doing.
    Mr. BEYER. Great. Thank you.
    And one last question. Given that USTR is not seeking, 
well, congressional approval, at least the traditional way, for 
initiatives like IPEF or APEC, for critical minerals 
agreements. And I know you are constrained to what you can 
formally offer in negotiations.
    Are you concerned that we are not being ambitious enough on 
environment and labor standards in these negotiations?
    Ambassador TAI. I think that you will always find that we 
will be ambitious because we speak on behalf of the United 
States. And we are always going to be pushing for what we think 
is right and our vision for, frankly, a better version of 
globalization.
    But to your point about the congressional role, this is 
something that is very near and dear to my heart and an area 
where, I hope in all the various interactions I have had with 
members of this committee and the Senate Finance Committee 
yesterday, that I have been effective in conveying my interest 
in demonstrating that there are things that we can do, that we 
can do them on a bipartisan basis, and that there is a robust 
role for Congress. I am not afraid of those conversations. I 
would be happy to build those with you and others.
    Mr. BEYER. Thank you very much.
    I yield back.
    Chairman SMITH. Mrs. Fischbach. Mrs. Fischbach is 
recognized.
    Mrs. FISCHBACH. Thank you, Mr. Chair.
    And first of all, Ambassador, I would just like to say, 
Congresswoman Tenney brought up the Canadian border. The entire 
northern part of my district borders Canada. And so that dairy 
producer--that issue is very, very important to me, and so I 
appreciate the update. I won't make you give it again since we 
just got it.
    But, you know, I also did want to just thank you for 
pressing Mexico as it relates to the unscientific ban of the 
GMO corn imports.
    And I do want to say for the record that, while 
consultations can be helpful, I fail to see an obvious reason 
for delaying a formal dispute resolution process that you have 
already used effectively for the Canadian dairy issue. I firmly 
believe it is time to utilize this important tool and urge you 
to do so as soon as possible, because I think it has been 
mentioned--that issue has been mentioned a couple of times.
    While I appreciate the work on the enforcement side, 
Ambassador, I wanted to address something broader and more 
consequential. I was reading through your written testimony, 
and I saw a lot of words like ``framework,'' ``arrangement,'' 
and ``initiative,'' but I failed to see a single mention of 
USTR pursuing the word ``agreement.''
    And my district in western Minnesota is a top agricultural-
producing region in the country, and the rural economies in my 
district depend on those products being exported to markets 
across the world. Between a quarter to half of everything we 
produce in western Minnesota is headed overseas.
    This lack of ambition in pursuing new agreements, 
particularly for ag exports, is putting farmers in my district 
at a disadvantage. For the first time, the U.S. is set to be a 
net importer of agricultural goods. I urge you to be more 
aggressive in pursuing new export opportunities for farmers in 
my district and across the country.
    Getting a little bit more specific, I hear often about 
nontariff trade barriers that our trading partners use to block 
producers in my district to export into their markets. For 
example, the EU's use of geographic indicators to monopolize 
generic cheese name or Taiwan's barriers to U.S. pork exports. 
Resolutions of these issues certainly won't promise the benefit 
of full trade agreements but will help correct the current 
trade imbalance we are seeing in agriculture.
    What are you and your team doing to address these and other 
issues of nontariff barriers blocking access to U.S. 
agricultural goods?
    Ambassador TAI. Well, thank you for this question. We are 
doing a lot. I have an A-plus agricultural trade team. And I 
just had my chief agricultural negotiator confirmed by the 
Senate on December 22. We swore him in first week of January. 
He has hit the ground running. He is exactly the amplifier that 
we needed on top of the head of my ag office and a very 
dedicated team.
    So where nontariff trade barriers come up, especially in 
ag, we have also got good reach in the USDA. We pursue those 
with the specific country when they come up. I am delighted to 
let you know that there are a number of wins that we have over 
the course of the last 2 years--our pecan farmers, our beef 
producers, and also our growers.
    You know, the SPS and the science-based, risk-based 
negotiations that we are doing right now in the Indo-Pacific 
context and also in others are exactly key to that aspect of 
nontariff barriers that a lot of our agricultural producers 
face.
    And we are also working very, very robustly. For example, 
the East-African community has issued their first joint SPS 
notification, which we welcomed. We have wins with Ecuador when 
they declined to implement a ban on powdered milk imports. And 
at the WTO as well, my team, again, as part of our very robust 
Geneva work that often goes unsung is very, very robustly 
engaged on SPS issues and other nontariff barrier issues with a 
lot of focus on our agricultural sector.
    Mrs. FISCHBACH. And, Ambassador, I really appreciate your 
response, but I do want to reiterate the need for a more 
aggressive stance when it comes pursuing new agreements and 
more market access for our agricultural goods. It is just so 
important to our economy, all across the country. And I look 
forward to working with you on it.
    And with that, Mr. Chair, I yield back.
    Chairman SMITH. The gentleman from Utah, Mr. Moore.
    Mr. MOORE of Utah. Thank you, Chairman and Ranking member, 
Ambassador Tai, for being here. I think you have seen that 
almost every question has a district angle as well as an 
overarching U.S. angle. Those are special opportunities for us 
as Representatives to be able to truly focus on, and I am no 
different.
    Utah is a very unique crossroads positioned in the western 
United States within the mountain region, but a very huge 
opportunity for us to lead on trade, you know, with individuals 
like the former Governor and former Ambassador to China, 
Governor Huntsman, Jr.
    Like, there is a huge interest in this. GSP is a--there is 
a huge interest. And I know we already talked a little bit 
about it. And what you know--you have talked about that you do 
overall support it. But the refunding and reauthorization of 
GSP is--it is hugely important and for so many reasons. There 
is an enforcement mechanism that exists. There is a competitive 
nature to China that is essential, in my opinion. Costs--it 
helps reduce the cost of goods.
    Could you share a little bit--one of my Utah constituents, 
they have leveraged this program. Great success. Since 2018, 
their share of imports from China fell from over 90 percent to 
less than 15 percent with much of that product now divided 
among several GSP countries. So this program works. We have 
seen good data come from it. And as it was expiring at the end 
of 2020, they and hundreds of businesses across the country 
have felt the pain. And U.S. importers have paid close to 2 
billion in tariffs on GSP-eligible imports so.
    All right. So it expired in 2020. I am new to this 
committee. It was not reauthorized last year. You have 
expressed support for it. I think there is broad bipartisan 
support. Could you highlight some positives that can come from 
this, maybe share some content on what this committee needs to 
be able to think through the potential reauthorization.
    Ambassador TAI. Well, Congressman Moore, I think of 
Governor Huntsman's many titles.
    Mr. MOORE of Utah. It may be hard--Secretary, Governor, it 
is really hard to keep up.
    Ambassador TAI. Well, and more closer to where I sit, he 
was also a deputy U.S. trade representative and a good friend.
    Mr. MOORE of Utah. Yeah.
    Ambassador TAI. So you know, in terms of the case for GSP, 
I think you have laid out a very, very strong case for GSP. I 
would also say that, you know, it is one of our bedrocks, the 
trade and development programs, and something that our 
developing country trading partners have really come to rely 
on. So that might be one additional dynamic here that wasn't 
already listed in what I thought was a very robust and good 
list of reasons for having the GSP program in place. And, 
again, in terms of my commentary, I think if Congress can 
update it, it is a really helpful tool for all of us in many 
different ways.
    Mr. MOORE of Utah. There are things that would be a barrier 
to the administration and the USTR being supportive of this so 
we can make sure to work these things out and on our 
congressional side.
    Ambassador TAI. I think that if our teams are not already 
in conversation, I know that they have been, intermittently, 
over the last 2 years when there has been a talk around it. We 
will continue to stand ready to work with all of you.
    Mr. MOORE of Utah. Okay. With regards to the WTO 
arbitration dispute, you know, there is serious national 
security implications here. I have taken a note of a series of 
these concerning developments from the WTO related to our 
national security and the challenge by China to the U.S. export 
controls on semiconductors and multiple other WTO rulings 
against the United States. WTO has no authority in matters of 
national security. And members on this committee stand firmly 
behind the USTR's rejection of their fraud conclusions.
    Can you update the committee just on any context of how you 
are thinking about this and other disputes related to national 
security?
    Ambassador TAI. Certainly, I think this gets to an area 
where I think Congressman Beyer mentioned a little bit feeling 
like I have sent mixed messages. Look, you know, you can be 
strong on this principal that national security decisions taken 
by a government by government in their sovereign authority 
shouldn't be subject to WTO panels picking them apart from a 
trade perspective, and at the same time, before the reform of 
the WTO, including its dispute settlement system.
    So, again, you know, I want to credit my WTO ambassador, 
Ambassador Maria Pagan, for carrying the flag, being very 
strong on our position with respect to where the WTO and its 
jurisdiction should properly be while leaning into a reform 
program on how to make the WTO work better for us, certainly, 
and for all of its membership.
    Mr. MOORE of Utah. And I will just, you know, conclude that 
export controls are critical to maintaining our competitive 
edge. We have to be firm and strong on this, particularly, with 
respect to China that this sensitive technology does not end up 
in the hands of our adversaries, and it is so clear of who 
those adversaries are. Thank you. I yield back.
    Chairman SMITH. Mr. Evans is recognized.
    Mr. EVANS. Ambassador Tai, good to see you. I commend you 
and the administration for making workers' rights an essential 
element of our trade agreement. So I applaud you for the 
leadership in the Biden administration.
    I only have really one comment. Coming from Philadelphia, 
the ethnically diverse city with immigrants from many African 
nations, my focus is to expand the African connection. 
Especially in Philadelphia and Pennsylvania, I understand the 
importance of what it means. As a matter of fact, I have a very 
good friend here, her name is San Strowder who is very active 
in the African community in the Commonwealth of Pennsylvania.
    So I share with you that we are willing to work any way we 
can on expansion. So I just wanted to add those comments, and 
thank you for all that you do. I yield back to the chairman.
    Chairman SMITH. I recognize Mrs. Steel.
    Mrs. STEEL. Thank you, Mr. Chairman. And thank you, 
Ambassador Tai. It is how many hours that you are here, so I 
really appreciate that.
    And trade is highly important for my home state of 
California. California companies exported over $185 billion 
worth of goods in 2022. One area of concern is for California's 
agricultural exports. We have been hearing this all day.
    The USTR must continue to protect our farmers and the 
agriculture industry. And I know you have been answering this, 
that, you know, how hard you are working. So, please, continue 
to fight against dumping, especially olives from springs and 
other areas. So we are really fighting in California.
    I have just one concern here is the Indo-Pacific region has 
two major free trade agreements that CCP-controlled China is 
already in regional cooperation, economic partnership, the 
world's largest free trade agreement, and has applied to join 
the CPTPP, Comprehensive Progressive Agreement for Trans-
Pacific Partnership. And currently the United States is not 
part of neither agreement. When the United States leaves, we 
get strong bipartisan free trade agreements that can outlast us 
all.
    How does the United States counter the CCP's, China's 
Communist Party's growing trade and economic influences around 
the world and Indo-Pacific region if we are on the sidelines? 
And how can we counter the CCP's influence without trade deals 
that require congressional approval?
    Ambassador TAI. So thank you for all of those comments, 
Congressman Steel. On the CCP's participation in trade 
agreements in the Asia-Pacific region, we know how deeply 
entangled the supply chains are in that region with China. And 
we know that our partners there want us engaged in the region, 
and not to force them to choose between two of their largest 
trading partners and most important trading partners, but so 
that we can come and provide them with a choice.
    So we are engaged; that is the Indo-Pacific Economic 
Framework. And in terms of how do we compete, I would say 
this--I think a large part of how we compete with that--the 
second largest economy in the world is by putting forward a 
vision and following through on how the United States is a good 
partner. What we stand for, what our principles are, what our 
vision is for the kind of economic engagement that we have 
which is that we provide each other all with more choices, not 
to further restrict or to make vulnerable our partners' 
economies. And that is informing all of our work in this area.
    The other part of your question around the congressional 
involvement, I would say that there has been a lot that has 
happened in the Congress, in the past 5 to 8 years on trade. 
Some of those things go to show how difficult it can be to get 
a bipartisan consensus around here. But there is as strong a 
narrative here around where we have succeeded in accomplishing 
that bipartisan consensus, most recently, on the USMCA.
    So I appreciate this opportunity you have given me to 
reinforce that at USTR on behalf of the Biden administration, 
we are for trade. And it is about how we can do trade right and 
how we can improve the ways that we do trade for our 
agricultural producers, but also for our industrial producers, 
for our workers, and our companies so that make ourselves 
stronger. I think that the way we have done it before has more 
often split us from each other. We are absolutely seeing 
ourselves as a country that leads economically as well, and 
that the core of our leadership is around that affirmative 
vision.
    Mrs. STEEL. So let me just ask a quick question regarding 
Indo-Pacific Economic Framework. That Taiwan is one of really 
big partner, trade partner for the United States, but Taiwan 
was not included. And at the same time, everybody--I think 
everybody asked here that, you know, what is the progress here? 
Because we have been hearing but it is not quite--I cannot 
really say it is transparent, but we want to say the progress 
because it seems it is just up in the air the way I have been 
reading and the way I have been studying. So can you just give 
us a quick answer for that?
    Ambassador TAI. Absolutely. I would be delighted to. And my 
team will follow up with your staff as well. We just published 
the summaries of the proposals that we made to Taiwan in our 
first round of negotiations, which was about 6 weeks ago. And I 
want to let you know we made very, very good progress. And so 
we are looking forward to coming back to you with an update 
very soon.
    Mrs. STEEL. Thank you so much. I yield back.
    Chairman SMITH. Ms. Van Duyne.
    Ms. VAN DUYNE. Thank you very much, Chairman. And thank 
you, Ambassador. I really do appreciate you coming here today. 
I would like to start out by saying I do not envy your job. As 
you know very well, our trade agenda is important for the 
strength around the world, and yet this administration does not 
seem to have an agenda. And I appreciate your response to 
Congressman Murphy. But it is not just Congressman Murphy, by 
the way, who has shown sympathy for your position, we have been 
talking to trade partners around the globe, and they have all 
praised your skills. But they have all said that they feel bad 
because it seems like you have been sidelined by this 
administration; that you would want to be more aggressive in 
making these trade agreements, but you are prevented from doing 
that.
    Last week, I joined the chairman and a number of my 
colleagues in Mexico--this was on the heels of incredibly 
concerning activities by the government encroaching on the 
rights of private, and more specifically, U.S. businesses.
    I will give you an example. Vulcan Corporation had their 
deepwater port seized. I have got videos. You have probably 
seen the videos. But seized because a state-owned Mexican 
company did not like the terms of a contract negotiation. They 
had a court order, and yet it seems as if this government has 
done nothing--our government, our administration has done 
nothing to respond to that abuse.
    As you know, the trade relationship between Texas and 
Mexico is so critical, but actions like this are detrimental. I 
appreciate you saying, you know, you can be a strong voice, and 
when you speak, people listen, and that you are standing up for 
the United States.
    Where are you in Mexico? Are you standing up for the 
working families in Iowa, Nebraska, in South Dakota whose 
livelihood is being threatened because President Obrador is 
falsely attacking them and their quality and their safety 
standards of their produce, which is in direct violation of the 
USMCA?
    Are you standing for the U.S. businesses who are encouraged 
to invest in Mexico with a belief that this investment would 
permit their much-needed help and much needed jobs and much 
needed security to the people of Mexico, but instead these 
companies have been abused and lied to by the Mexican 
Government with little or no response from this administration 
who is charged with enforcing our trade agreements.
    I would love to know your response to Obrador's claims that 
while Mexico is clearly, clearly not abiding by the terms of 
the USMCA, it is actually the U.S.' fault because we are, 
quote, misinterpreting the conditions of the contract.
    And I would love to also know, are you standing up for the 
U.S. while Mexico is partnering with China and Mexican drug 
cartels are being empowered and enriched to bring thousands of 
pounds of deadly drugs, fentanyl, specifically, into our 
country that is targeting our youth in murdering over a hundred 
thousand American lives, all the while making hundreds of 
millions of dollars. Where is your voice in that?
    Ambassador TAI. Well, thank you for the opportunity to 
weigh in. Yes, we know Vulcan as a company very well, and we 
have been in very close touch with them and with the Members of 
Congress whose districts and states are affected and are deeply 
invested in Vulcan success. So here I would say that we are in 
a very good touch with----
    Ms. VAN DUYNE. I am glad to hear that.
    Ambassador TAI [continuing]. All right. On corn, we have 
requested consultation----
    Ms. VAN DUYNE. I do want to switch gears to China, because 
I know that China has----
    Ambassador TAI [continuing]. And you are asking----
    Ms. VAN DUYNE [continuing]. Okay. Thank you. I appreciate 
knowing that you are in touch with them. But trade is a tool to 
improve work----
    Ambassador TAI. You asked me if we are standing up for 
them, and the answer is yes.
    Ms. VAN DUYNE. Yeah, I appreciate it, but the first 30 
seconds of your question is a lot of time spent----
    Ambassador TAI. And on the drug issue, that is an 
enforcement----
    Ms. VAN DUYNE. And I would really like to be able to get an 
answer because I have got one minute and 5 seconds left.
    Trade is a tool to improve some of the workforce 
conditions, enforce ethical business practices, and partner 
with nations across our globe, extend our global influence and 
partnerships, as opposed to using--having to use military 
intervention. Specifically with China, are we effectively 
utilizing our trade relations with China to achieve these 
results? Does China use slave labor? It is a yes or no 
question.
    Ambassador TAI. Do you want me to answer this one? I am not 
sure. I feel like you already know the answer.
    Ms. VAN DUYNE. Does China use slave labor?
    Ambassador TAI. I think you already know the answer, so I 
am happy for you to continue----
    Ms. VAN DUYNE. So I am asking you. You are here at the 
hearing, our witness. Does China use slave labor?
    Ambassador TAI. Well, all indications are yes.
    Ms. VAN DUYNE. Okay. So are U.S. companies benefitting from 
forced slave labor.
    Ambassador TAI. All indications are yes.
    Ms. VAN DUYNE. Do you recognize the genocide of the Uyghur 
slaves as being committed in China.
    Ambassador TAI. All indications, yes, that is happening.
    Ms. VAN DUYNE. So how many coal plants is China building 
each week?
    Ambassador TAI. I don't know the answer, and that is not a 
yes-or-no question. So I have a----
    Ms. VAN DUYNE. I didn't say it was a yes or no question. I 
asked. That is the question.
    Ambassador TAI. I defer to you in terms of the point that 
you would like to make.
    Ms. VAN DUYNE. Okay. And then I would also love to know why 
China is not being subjected to the same constraints that the 
U.S. is in the Paris Climate Accord.
    Ambassador TAI. Sorry, could you repeat that question?
    Ms. VAN DUYNE. Why is China not subject to the same 
constraints that the U.S. is in the Paris Climate Accords?
    Ambassador TAI. Which constraints are those? Just----
    Ms. VAN DUYNE. I yield back my time. Thank you very much.
    Chairman SMITH. Mr. Panetta is recognized.
    Mr. PANETTA. Thank you, Mr. Chairman. Madam Ambassador, 
thank you for being here. And it is great to see you have grown 
into this role tremendously. So, I appreciate it, especially 
considering how busy you have been. Obviously, looking abroad 
with IPEF and APEC and USMCA enforcement, but also looking 
forward with our industrial policy at home and how it has been 
fueled by incentives for electric vehicles and clean energy and 
actually supercharged investment in the United States which 
will inevitably spill over into our regional trading partners, 
Canada and Mexico.
    And I do believe that in regard to our trade policy, I 
think we got to take more of a serious look at our regional 
partnership in using trade to our strategic advantage, 
especially when we compete with China. Because look, I think we 
know U.S. has the biggest and most innovative companies. Mexico 
has a very wide and inexpensive labor pool. And Canada has many 
natural resources. And I read this lately, and I believe where 
North America goes, the world will follow. But I think in order 
to do that, we all got to pull in the same direction.
    So, I was on that trip with Ms. Van Duyne to Mexico, and I 
have to tell you I was a little disturbed by some of the 
comments by the President of Mexico, but more so by his recent 
actions. The populist and national President has proven that he 
may be in our boat, but he may not be rowing in the same 
direction. Looking that he has taken steps to weaken Mexico's 
electoral agency. He has banned GMO corn for nonscientific and 
non-health purposes. He is occupying the private property of 
Vulcan materials in Mexico. And he has even talked taking steps 
to get involved in our congressional elections.
    Obviously, as you know, I have many agricultural companies 
that have investments in Mexico. So, my question to you is what 
actions and assurances can you, the United States Trade 
Representative, provide to my companies in my district, that 
their near-shoring investment in Mexico is safe and secure?
    Ambassador TAI. We will do everything that we can using the 
tools of the USMCA and tools that on are outside of the USMCA 
to secure a positive investment environment in Mexico. At the 
end of the day, though, I think we do have to recognize that 
Mexico is a sovereign nation, and their leaders have the right 
to make decisions that we may see are not in their best 
interest.
    But you are absolutely correct about the nature of the 
relationship that we have with Mexico, we are neighbors. And 
thanks to geography, we will always be neighbors, which means 
that we are committed to using, whether they are powers of 
persuasion, or whether they are tools of enforcement to right 
the ship and to make sure that we are rowing in the same 
direction.
    Mr. PANETTA. Great. Thank you, Madam Ambassador. Going to 
the other side of the world, let's talk Jackson-Vanik. 
Obviously, as you know, that amendment was originally proposed 
to promote free movement in response to Soviet restrictions on 
Jewish emigration. But since the fall of the Soviet Union, 
Kazakhstan has been subject to this requirement, which has been 
lifted for other Soviet states, including Russia. Freeing 
Kazakhstan of the Jackson-Vanik's outdated requirements will 
bring it closer to the Western world. I think that is clear and 
out of Russia and China's sphere of influence.
    Ambassador TAI, the State Department, as you know, is 
supportive of repealing Jackson-Vanik for Kazakhstan, what is 
your position on that?
    Ambassador TAI. My position is that PNTR is in the 
jurisdiction of the U.S. Congress. Mr. PANETTA, it means a lot 
to me to know that you are supportive, and I will be interested 
in working with you and others as you work on PNTR for 
Kazakhstan.
    Mr. PANETTA. I look forward to working with you. Thank you 
for that commitment to work together on removing Jackson-Vanik 
from Kazakhstan. Would you support reinstating GSP for Ecuador?
    Ambassador TAI. Do you mean as part of the reauthorization?
    Mr. PANETTA. Yes. Thank you.
    Ambassador TAI. Yes, I think that it would be--again, I am 
interested in working with all of you as you work towards GSP 
reauthorization.
    Mr. PANETTA. I look forward to working with you. Thank you. 
I yield back.
    Chairman SMITH. The gentleman from Ohio is recognized.
    Mr. CAREY. Thank you, Mr. Chairman. And thank you, 
Ambassador Tai. It is a pleasure to speak with you. One thing 
about being the last person on the list, so many of the 
questions get asked. My dear friend to my left asked the one I 
was going to ask you about, about Ecuador.
    But just a little bit, I grew up in the 1980s, and I grew 
up in a very rural town. Farming was very big. As I represent 
agriculture, so I do support--applaud you guys on the work that 
you are doing. As my colleague to the left mentioned, our 
meeting with the Mexican President was very interesting, to say 
the least.
    So our corn growers in my district are very important. We 
got to open up those markets. But, you know, living in that 
small town, I also saw so many of the factories close down.
    And I was almost going to quote the old Billy Joel song, 
Allentown. You know, to my dear friends from Pennsylvania that 
have all left us, but living in Allentown for the Pennsylvania 
we never found.
    And I just want to make sure that as we look at our trade 
policies, I think one of your former colleagues used to say, we 
want to sing from the same hymnal. We just got to make sure we 
are singing from the same page.
    So a couple of items I just wanted to touch on. You know, 
we look at rare earth materials. There is really nothing about 
rare earth. It is just rare that we can get a permit for a lot 
of these rare earth materials, and also get the financing to 
develop them. Secondly, as we do this rush to the new, the 
renewable energy, we have to go cognizant of the fact--that is 
why Jimmy brought it up--but we have got to look at our 
regional partners when it comes to developing lithium.
    If anybody has Googled or YouTubed a video cobalt mining, 
the environmental practices there are horrendous; the youth 
labor, child labor. And the fact that 14 out of the 16 
companies that have the mines are all Chinese. And so as we 
moved to this economy, we have got to be very cognizant of 
that.
    I am going to divert real quick, because I do have one 
question. I want you to be able to answer it and give you as 
much time as you can. Some foreign e-commerce companies have 
been reported to as avoiding U.S. tariffs by selling directly 
to American consumers under de minimis. Okay. It is estimated 
that U.S. imported about 120 billion in de minimis shipments 
last year. This treatment gives foreign e-commerce companies a 
leg up on many of our U.S. retailers. We are paying millions of 
dollars in tariffs for the exact same products. However, it is 
a balancing act of trying to level the playing field without 
raising costs, obviously, to American consumers, during the 
inflationary times.
    Regarding the foreign trade zones like the one that I have 
in my district in central Ohio, it definitely impacts my 
district, do you think that the U.S. should level the playing 
field for domestic manufacturers by enduring de minimis as 
applied to shipments from U.S. foreign trade zones?
    Ambassador TAI. Congressman, I think I agree with 
everything that you have laid out in your entire presentation. 
Let me come to your specific question on leveling the playing 
field for American producers, and I am sorry it would--I think 
it is at this point in the hearing. The specific proposal was 
by applying de minimis. That is right.
    Mr. CAREY. Yeah.
    Ambassador TAI. Let me just say this, I think that I 
understand why it happened in 2015 when I was up here when we 
expanded de minimis. And I think that the way it is operated 
has raised really legitimate questions around whether or not 
there are loopholes and exploitation and abuse other than how 
it was intended. And so I am absolutely always interested in 
levelling the playing field. And on this, in particular, I 
would be very interested in following up with you to look at 
the specific proposal you are suggesting.
    Mr. CAREY. If you would, I would very much appreciate that. 
Also, again, following up on my colleague to the left, you 
know, we did have an opportunity--and I will tell you, and I 
don't know when you served exactly on this committee--but the 
chairman and the ranking member, I think, have really done a 
great job of trying to get out and talking to real people with 
our field hearings and, obviously, the trade trip that we just 
did. And we got to hear from many different countries. They are 
eager for American leadership around the world. And so it is 
important that this committee work continually in the 
bipartisan way that we have in the past to make sure that we 
all again are singing from the same page and the same hymnal. 
And I yield back, Mr. Chairman.
    Chairman SMITH. Mr. Fitzpatrick is recognized.
    Mr. FITZPATRICK. Thank you, Mr. Chairman. Thank you, 
Ambassador TAI, for being here. Ambassador TAI, your team had 
advised us that you and the administration had begun 
negotiations with the EU and Japan and possibly others designed 
to skirt the requirement in the IRA requiring that critical 
mineral inputs for batteries that come from the United States 
or other countries that the United States has free trade 
agreement with. Obviously, I think we are all clear here the 
agreements that are being sought are not free trade agreements. 
Only Congress can pass FTAs.
    Last week, I asked Secretary Yellen if she was aware that 
both Japan and Germany withheld semiconductors from U.S. 
automakers in favor of their own automakers. She indicated that 
she was not aware of that. I also pointed out Japan's extensive 
use of nontariff barriers that make it almost for the U.S. to 
export autos to Japan. I informed her that cars exported to the 
EU incur a 10 percent tariff compared to a 2 percent tariff on 
European auto imports into our country. Perhaps, most 
importantly, we made her aware that China itself is the biggest 
supplier of battery, technology, and production to both Japan 
and the EU. Which means allowing these foreign battery products 
to take advantage of the IRA's risk benefits benefitting China.
    Domestic investment in American jobs, obviously, in my 
estimation will be clearly impacted by the administration's 
attempt to circumvent the FTA requirements enacted by Congress. 
So I have a few questions.
    First, I--and I know I am not alone in this--am concerned 
as to what, if anything, America is getting out of these 
negotiations. Do you believe that U.S. automakers receive--will 
U.S. automakers receive tariff relief and better market access, 
or are these negotiations really a feel-good exercise?
    Ambassador TAI. Congressman, you raise really legitimate 
questions and concerns regarding the bigger picture of where we 
are and also where we are trying to get to, which is to be in a 
stronger position, especially in this industry. No on the 
specific types of benefits you are talking about. Those are not 
things that our automakers will see as a result of the types of 
thing we are negotiating right now.
    But what I would like to say is what I do feel strongly 
about is the European Union, Japan, being important allies in 
building towards more secure supply chains in the larger 
picture and in the more medium term.
    So I take your point on the specific question that you have 
asked, but also wanted to say that in terms of a vision towards 
near-shoring and friend-shoring, more secure supply chains, 
that these are some of our strongest partners if we are doing 
that work.
    Mr. FITZPATRICK. Thank you. I mean, the concern is given 
how integrated Chinese materials are, specifically, in the 
battery components from these countries. What are we doing as a 
country, what is the administration's plan to ensure these 
Chinese entities, many of them controlled by the CCP, that 
supply European and Japanese battery makers don't benefit from 
this?
    Ambassador TAI. I think part of the issue that we have is 
given where we are, which is not an ideal place, and given 
where we want to go to, there is no switch that we can flip to 
get from where we are to where we want to go to. And so in a 
number of areas we confront this all the time in terms of how 
we are thinking about the U.S.-China trade relationship.
    A lot of it is about how we envision a transition from 
where we are today to where we are trying to get to that can be 
effective and that will work given all of the needs of our 
industries and where we are.
    So I think--that is my best way of responding to your 
question, which is what we need to do is figure out whether or 
not the things that we are doing right now make sense as step 
one in a longer transition that will take probably more medium-
term timeframe to successfully complete.
    Mr. FITZPATRICK. Mr. Chairman, I yield back.
    Chairman SMITH. Thank you, Ambassador TAI. Thank you for 
your testimony and taking all the questions. We look forward to 
partnering with you and working in a bipartisan fashion to make 
sure we address our supply chains and, of course, the 
aggression of China. I appreciate you being here, and I look 
forward to working with you.
    Ambassador TAI. Thank you very much.
    Chairman SMITH. Please be advised that members have 2 weeks 
to submit written questions to be answered later in writing. 
Those questions and your answers will be made part of the 
formal hearing record. With that, the committee stands 
adjourned.
    [Whereupon, at 1:24 p.m., the committee was adjourned.]
      

                    MEMBER QUESTIONS FOR THE RECORD

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

      
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
      

                   PUBLIC SUBMISSIONS FOR THE RECORD

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

      
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

                             [all]