tv U.S. Trade Representative Robert Lighthizer Testifies on Trump... CSPAN June 23, 2017 7:13am-10:01am EDT
>> senate republicans release a discussion draft of the health care law replacement on thursday morning. the congressional budget office will score the bill by early next week when senate floor debate is expected to begin. we posted the bill at c-span.org, follow life senate coverage next week on c-span2 online at c-span.org and on the free c-span radio app. u.s. trade representative robert lighthizer, topics renegotiating the north america free trade agreement and the transparency atlantic trading partnership and pursuing trade enforcement. this hearing is two hours and 45 minutes. [inaudible conversations] >> committee will come to order.
good morning, today our committee is honoring in welcome the trade representative robert lighthizer. thank you for joining us. we look forward to your testimony. this embassador is a former u.s. deputy representative under president reagan. you understand that u.s. leadership and participation and rules base trading system is essential to our nation's prosperity. america has led the world in global commerce for the better part of the last 100 years, through our network of strong and forceful trade agreements we have expanded economic freedom toward our businesses, workers and consumers can thrive. through strict enforcement of the rules we created in our leadership in the world trade organization, we've held our competitors accountable and through our steadfast committee to free enterprise, open markets and rules based international commerce our nation has set itself apart.
the world looks to us not china to lead in setting the standards of global commerce. when we set an example, the world follows. today american leadership on trade is more important than ever specially in the asia-pacific region where china's influence is growing every day. it's urgent that we take charge on trade in the asia pacific so that we don't lose ground to china after all preserve and strengthen american leadership in global commerce it's not enough to simply buy american products and services, sell american and we need strong trade agreements that allow us to do so in asia and fast-growing markets throughout the world. our trade agreements including nafta have been tremendously successful. they have created american jobs, lowered prices for consumers and helped our businesses compete and win in all three crucial segments of our economy, agriculture, services and, yes, manufacturing. that said, we have to take
action to strengthen our existing agreements and ensure they continue to benefit the american people. i'm pleased that president trump is taking this approach with nafta. nafta was negotiated nearly 25 years ago. it should be updated to reflect the modern realities of trade on digital commerce and intellectual property, state-owned enterprises and custom barriers and among others following negotiating objectives congress set forth in tpa. and as you commended to us during earlier consult allegations, this modernization must be accomplished in a manner that retains current benefits in a seemless way that doesn't disrupt the current agreement, ongoing trade or the millions of american jobs at stake. with the administration's commitment toward strong objectives and delivering timetables established by tpa, i'm confident we can work together to deliver a high-quality deal for the american people. given that the
administration does not support a multilateral approach we must move quickly together on an ambitious network of deals that break down barriers an allow us to sell american all over the world. i'm particularly interested in ttip, once european union can conclude -- they can conclude ambitious and comprehensive deal, also i'm interested in trade agreements with japan and the united kingdom when it can come to the table as well as the trade and services agreement in the environmental goods agreement and we plan to renew gsp and move quickly on miscellaneous bill and i'm encouraged to see the president and the president has taken important steps by putting in action many new enforcement tools passed by congress last year. if countries upheld this allows
us to challenge them and if necessary push back strongly on behalf of our businesses and our workers. and when it comes to america's trade deficits, we welcome the president's efforts to examine the issue. there are as you know many factors behind our trade deficit. some maybe related to trade but many are not. for example, the dollar status of the world's reserve currency is a significant factor. examining the trade balance is black or white conceals what's going on. many exports from say, méxico, tre flect tremendous u.s.-value added through research development, design, intellectual property, services support and manufacturing. tothe extent that it's caused by unfair trade practices we must break down barriers and through our powerful tools we can. through trade agreements that
are strictly enforced, we've reduced and even eliminated trade deficits and manufacturing, agriculture and services and in many cases we turned deficits into surpluses while at first instipg maybe to restrict the import, history shows that the most successful approach is not protectionism it's breaking open new markets to american-made goods and services. if we can reach customers on a level playing field in america, we usually come out on top. that's the recommendation i offer as the administration considers whether to restrict steel and aluminum import. i agree, we mustards market distortions created by china. section 232 authority must be used with careful consideration of consequences to our economy and trade rules that we wrote and fully expect our trading partners to abide by.
done improperly we cut off support to stay competitive, we raise cost and improve partners that we aren't reliable. done indiscriminantly, we harm countries that trade fairly and send a protectionist signal for those looking for an excuse to do the same. it will encourage others to restrict exports even in unrelated sectors but hurts growth of jobs and paychecks here at home. i want to work with the administration to identify a remedy that's balanced, effective and protects our national security and economic interest. america must continue to set the standards of global commerce. 96% to have world's customers outside of the united states, we cannot afford to sit on the sidelines or worse, lead the world abandoning that rules that has served us well. we are eager to work with you and president trump in a progrowth agenda that creates jobs, grows paychecks and
improves the lives of all americans. thank you again, mr. embassador and we look forward to your testimony and now i yield to the distinguished ranking member mr. neal. >> i want to welcome you on behalf of the committee democrats, it's an opportunity for us to hear from you about the administration's vision for u.s. trade. the administration has certainly been youse on trade, the headlines has been filled about modernizing nafta, withdrawing from nafta, executive orders, executive memos, section 232 national security reviews on steel and aluminum import, canada dairy, mexican sugar and u.s. china and 100-day plan and certainly the issue of currency manipulation. what we have been missing in the overall vision as well as specifics behind it is activity. one of the administration's trade policy goals, what
priorities are you trying to serve, how are you going to do it and i hope this morning you can provide us with some answers. on a range of issues, there's been a lack of clarity, consistency and consultation. for example, by statute, the administration was required to submit a report on trade policy and its agenda by march first. on that date, the administration instead submitted a statement and promise today submit a full report after ustr was confirmed and had the full opportunity to participate in developing the report. the report has still not been submit today this congress. so i hope you will clarify the administration's position on a full range of trade issues today from specific object i was of a nafta rewrite to the administration's position on negotiating tti opinioned and environmental goods agreement to how the administration will address currency manipulation to the administration's current thinking in steel and aluminum, national security investigations as well.
as you know, house democrats have the most open mind when it comes to revisiting and taking new directions in u.s. trade policy, we look forward to working with you to prioritize the needs of american workers and their families through trade policy and we await your testimony. thank you, mr. embassador. >> thank you, without objection, the member's opens statements will be made part of the record. today's soul witness is embassador robert lighthizer. the committee has received written statement and made part of form hearing statement and five minutes for oral remarks. welcome, and you may begin when ready. >> thank you, mr. chairman. chairman brady -- >> can you check that microphone to make sure we have it on. there you go. >> is it better now? all right.
chairman brady, ranking member neal, members of the ways and means committee, it's an honor to appear before you today. in recent weeks it has been a pleasure getting to know the chairman, the ranking member and several members of the committee. i look forward to looking these relationships and to working with each of you. the usgr has a special relationship with the committee and i intend to continue that tradition. i met some of you for the first time on may 16th when i appeared before the house advisory group on negotiations and the ways and means committee bipartisan meeting. those consultations are critical to helping the administration establish its negotiating objectives for nafta and more generally they are helpful for developing trade priorities going forward. to implement this agenda, the president has requested increase funding for ustr in the coming
fiscal year. our budget calls for $57.6 million in increase of nearly 6% over the 2016 level. these additional resources will be used to implement the internet -- interagency and will allow to hire eight additional staff to support our trade enforcement activities. the president's budget request is consistent with his desire to control federal spending as well as his insistence on a strong and aggressive trade policy. since being sworn in last month, i have been working with our team to advance the president's trade policy. we have been active on the international front with trips to the apec minister's meeting, a meeting of the oecd in paris and wto mini minnisterrial.
in many cases they have indicated a willingness to work with the united states on efforts to reform global -- the global trading system in ways that will lead to market outcomes that are both fairer and more efficient. we have also reached out to members of this committee, other administration officials and key stakeholders in an effort to determine what improvements are needed in the international trading system. we are already making progress in four vital areas. two advancing the strong enforcement agenda, three, opening markets for u.s. exports and four, luring the nation's trade deficits.
first on may 18, i notified that canada and méxico followed by 90-day notification. that means that the nafta negotiating rounds can begin as august 16th and we intend to move very quickly n. the meantime, ustr is talking to stakeholders, staff and public to help us develop policy outcomes for the negotiations. we have put out a request for comments and received more than 12,000 responses. we have scheduled hearings for june 27th, 28th and 29th, during the 90-day period we will continue working with congress to develop and refine
negotiating objectives. in the interest of a transparent process and required we will require summary on july 17th, second we have an aggressive enforcement agenda. we are both defending our rights and holding other countries accountable for trade violations. for too long the united states, one of the freest and most open markets in the world has been the chief target of litigation at the wto. this makes no sense, at the same time we are proceeding with several wto cases and this is only the beginning. we will atbresessively pursue countries that violate trade deals with the united states. we have a number of potential cases under review as i speak. third, we intend to improve market access for u.s. producers. let me be very clear on this point, we at ustr want to help every american business that
makes a product or provides a service increase exports to the world. sometimes it requires enforcement action, other times negotiations are sufficient. the administration is currently engaged with conversations with all of our major trading partners about how to lower barriers that harm u.s. companies, workers, farmers and ranchers, finally, we hope that these and other efforts will help to lower the chronic trade deficit. i understand that many observers believe that we should not concern ourselves with the trade deficit, that this figure is merely a number that reflects macro economic factors not related to trade policy but the president's view and mine is that the trade deficits in the hundreds of billions of dollars that persist for years and years regardless of changes in the broader economy are indicate
caytive of structural problems and global trade. >> thank you, mr. embassador. five minutes always goes fast. thank you for your testimony and now proceed to the question and answer session. let me lead off, i want to ask two very basic questions about freedom and leadership. freedom that if you and i build a better product we should have the freedom to sell it around the world and freedom to buy it for our family and business. it's really one of the greatest economic rights of every american. so given the choice between more economic freedom and less, we should always choose more. the question is, will the trump administration work to expand
americans' economic freedom to trade or ultimately restrict it? >> the trump administration wants to expand economic freedom, wants to expand trade. we can reduce our trade deficits. that certainly is our objective. philosophically i will say that the president believes in free trade. it doesn't think that it exists right now and the question is what do you do to get there. so there are a variety of approaches. his approach is to aggressive i will go after people that are engaging in unfair trade and hope that that leads to market efficiency, more economic freedom and globally more
wealth. >> thank you, embassador, that steps into leadership. i think the view of many of us if america doesn't lead in fair and free trade, we will grow weaker. my state of texas is made for trade, america is made for trade. that's no where more important than in asia-pacific region. it's imperative that we continue to communicate with trading partners and the rest of the world we are not abandoning the asia-pacific region even though we are no longer part of tpp, one of the reasons i along with ranking member neal and our senate colleagues introduced resolution last month expressing our strong support for continuing the u.s. leadership engagement with other apec countries. so in the area of leadership
specially in that region, at the end of the day, do you see america's trade values and standards per vialing -- per pervailing in that region or do you see china's pervailing in that region? >> i would say in the issue of engagement, i was on the job four days when the president sent me off to go to apec meeting. i remember walking around trying to read briefing papers so that i could tell one country from another. these people have to know that we are coming and that we are going to do business and sell american products that we are
going to do bilateral agreements and pulling out of tpp was by no means pulling out of the asia pacific. in terms of overall whose model works ours or china's, i mean, that's a very big, very serious question. my belief is that ours is the best and that it would prevail and i believe that a lot of people in that part of the world are concerned about this question, but the question that i ask is how do we -- how do we prove that. we have to take on china when they do things that are i consistent with our values, with the way we think the economy should develop and work. if we look at it objectively, you would say, for example, in an area like steel, they have now huge steel industry, none of it is based on economics and somebody in a country in asia
looking at that might think that their system is succeeding and ours is failing, they have 1.1 at least billion tons of steel capacity and we can't produce a 10 million tons. -- 100 million tons. a we have to prevail and b we have to prevail for the good of the world. the question we have and the president has is what do we do to assure that and that to me is taking on china whenever they do something that's inconsistent with not only our models. i apologize for being too long. >> mr., embassador, i am very interested in ttip negotiations which we discussed in my office when you paid a visit. as we look at the negotiations between the united states and
eu, i'm hoping that you can give us an update on the plan and one of the things that also found interesting, i suggest today president obama early on that we just oppose the two trade agreements, europe and asia, that we would have considered europe first because it would have been much easier to accomplish and given the fact that there were many prospects of actually doing that and now to find that the administration, i think, needs to update us on what their plans us for ttip, i do think it has awful lot of potential for america's east coast if done correctly and the second question, we all read about ford motor company decide to go build small cars not in méxico but in china and importing those cars to the united states. that seems to be inconsistent with the president's promise to
keep jobs here in america and with ford's decision, it also seems to indicate that now china despite the president's comments during the course of the campaign is hastening a relationship with automobiles in china and what we are trying to discover perhaps with your comment today is this suggests, we are focusing more on china than we are on nafta. >> on ttip we believe that's an important negotiation for a variety of reasons. it stalled when it did and this was not a good year to get it started because of internal european reasons. they had a series of elections which made difficult to make compromises and to really make an agreement.
the final -- the final one of those elections is september and it's in germany and then after that, i think, we will talk to them. i have certainly met with the trade commissioner, commissioner and i've talked to her about bilateral issues and cooperating issues and i'm not here to make any announcement about it but it is something that we realize the importance of. on the issue of -- of ford moving a plant, which i saw in the paper also from méxico to china, i agree with you. i think that is troubling. we don't have an administration position that i've sat in on and talked about this point but i find that very troubling. i want to look and see what the incentives there are. it doesn't necessarily make sense to me. obviously it makes sense to ford or they wouldn't be doing it but i think it is incumbent upon to sit back and look at the incentives and figure out
exactly why that happened and if it happened for reason that is are not economic reasons then i think the administration should take action in terms of the president relationship to the ford move, i guess, i'm reminded of a quote in the back of profiles and courage where the -- when you sort of take little -- a congressman once wrote in the 30's that one of the problems with being elect today congress was that this was in response to a constituent letter, is that i get letters from people like you that say that i ran for congress based on reforesting the nevada mountains and i've been in office six weeks, sorry, i can't help or something like that. that's a long way of saying, i think it's probably early to say that the president's policies are responsible for ford doing whatever it is that it is doing. it's something that we look at. i-- we have to look at
incentives. >> i hope that you might inform the committee of the administration's position as promptly as you can on that issue. i hope that you can inform the committee promptly on the administration's position on that issue of those cars being manufactured in china? >> i appreciate that question. we will use that as a mandate to develop a position and report it to you. >> thank you, mr. embassador, thank you, mr. chairman. >> i have three topics i want to cover with you. the first is nafta. i think we are all looking for ways to improve nafta, however, as you know with all negotiated trade, with every action becomes awry action and there could be a reaction from our allies and our partners, trading partners. agriculture specifically, the united states produces more food
than we can consume and i'm worried about any type of retribution that either méxico or canada can take, canada can take on our u.s. farmers and so i know you're aware of this but i wanted to just get your thoughts on ensuring that we protect agriculture in these upcoming negotiations on nafta. >> congressman, that's very important. i've testified on this before. we realize there have been winners and there have been losers in the nafta process as its developed over the 23 years, 25 years since the negotiation themselves began. agriculture has been a winner, i would say even with that i would drop a footnote and say that although we have a $4.7 billion in deficit even in agriculture but not the product that is you're thinking about, and it is very important that we do no harm. so our very high priority will be making sure that we do not
disrupt our sales in agriculture products to either canada or méxico and that is a problem, it's a legitimate worry, something we are worried about and concerned about. >> there's no question that canada could do a lot more to open up their trading practices for our agriculture products. if i could, i would like to move to india, i know -- i think you and i share, the administration share the goal of enhancing our partnership with india, the world's largest democracy. they've made a lot of growth over the years but they've continued to -- to have trading practices that make it hard for us to actually get to the table with each other and one of those issues that i want to make sure that maybe you can just bring to your attention in case you're not aware of it and maybe you can come back to us just for the record, but specifically with -- with almons and other types of
walnuts and mys -- pitaccios, there continues to be problems on moving products to india but if you could come back to us and report on india's different potential problems that they're creating with these trade practices, ill appreciate it. >> i will certainly do that and with the prime minister coming to washington, this is an opportune time. i have raised the almon issue with the indians. that's one of the ways to help america in export. >> thank you, embassador, i appreciate that comment. finally, i want to -- i wanted to just explore a little bit,
there's been a lot of debate about whether or not our tax system needs to be -- to have a border adjustment. as you know 150 countries around the world border adjust and i just find it hard to believe in the long run how we are going to be competitive if everything that we export to most of our trading partners has anywhere from a 15 to 25% bat put on top of the products and anything that we import doesn't pay the bat and i'm not asking you to weigh if you support border adjustment but i would be interested in your thoughts how we can fix discrepancy with the countries that border adjust. >> thank you, congressman, i have from time to time written op-eds and the like on this subject. it's troubling to me. i am not the treasury secretary
so i don't have to worry about negotiating a tax deal and i -- i don't envy any member of the committee who has that as we go forward but i do agree that value added tax create an unfair advantage and there's been a clear migration throughout the world from income tax and value added taxes precisely for that reason so i don't agree with people who say it doesn't make any difference. i think it does make a difference. so that isn't to say i'm endorsing any particular solution or anything like that but i'm -- i am sympathetic to the problem and i think it has an impact on manufacturing and competitiveness in america so it's a major issue. >> thank you, mr. embassador, my time has expired. thank you so much. >> you're recognized.
>> welcome. nafta became very much involved in controversy mainly because of the lack of enforceable labor and environmental provisions. the auto sector is a major source of the trade deficit. let me just review a few facts and ask you some questions. in the last decade or two, the employment in the mexican auto sector has gone up over 200,000 people while in the u.s. it's dropped 90,000, really more than that if you go back over a decade. in terms of competition, mexican workers in the auto workers are paid 19% of what are paid in the big three and the president called mexican factories sweat
shops, and that's further evidence that auto worker wages in méxico went down 20% and productivity went up 80% and sweat shops, that's correct, because workers in the auto industry in méxico cannot form unions. they are sham outfits. so let me ask you three questions if i might relating to it. first, do you agree that the pressed wages in méxico are leading to negative wage pressure and job loss in the united states? if so, can any renegotiation of nafta truly promote jobs here in the u.s. without addressing labor rights in méxico? two, with that in mind, can you tell us what specific proposals,
specific proposals the administration is considering to require méxico to change its laws and practices relating to labor rights as a way to create and safeguarded jobs in the u.s. and number three, i take it on this year the lead person in the administration though that isn't always clear but i assume you will be and hope you will be, will the administration insist that méxico bring its labor laws and practices into compliance with basic labor standards before congress is asked to vote on a renegotiated nafta agreement? so far away. >> thank you, congressman.
do i believe that mexican labor laws are having a negative effect on u.s. jobs, yes, i believe that. it will have to have an effect on that. i do believe, though, that the -- that the mexican government itself understands that there's a problem. i think they are taking steps which is a good sign, but i'm not suggesting -- you need to talk further about that, but keep going. >> with respect to what are specific proposals are, we are still in the process of talking to stakeholders and the congress and interested in people's views, we do believe that you have to have course standards and we believe that they have to be enforceable like we pleaded in every position that has to be enforceable. do i believe there should be a commitment and put forward, we
are going to put together an agreement and put forward and in the final analysis the united states congress will rule on whether it's sufficiently good agreement and i don't think they'll be preconditions like this. >> okay. i think in -- unless practices are shown before we vote laws and practices that essentially it will be difficult and should be difficult to pass nafta. we insisted with perú that they change their laws and practices before we voted on it. may tenth was a major breakthrough but unless it was made real before we voted, it was impossible to vote for it and time has shown with colombia and other countries that if you don't have that standard, you
chase enforcement everywhere, so we are going to be very emphatic about that. >> thank you, mr. levin. >> i know that you know that the valium, complexity, the challenges of trade have only grown over the years. i want to associate myself with what mr. nunes said with respect to nafta and agriculture in ohio, trading partners and agriculture is number one issue -- number one job economic driver. but mr. embassador, i want to focus on our trade agreement with korea. we have seen an influx of import of oil country tubular goods, octg from the republic of korea. gave you authority in the production of foreign merchanted ice and calculate margins of
foreign exports. can you commit to this committee that you will make it a priority of this administration to engage with our trading partners particularly in this case korea, the republic of korea who continue to dump these products into our country? >> yes. >> thank you. i certainly appreciate that. the other issue the chairman mentioned that i want to comment on is ongoing section 232 investigation on national security implications of steel and aluminum import and, i again, want to applaud and say i appreciate the administration's commitment to america's security and playing level with trading partners. however, i heard from a number of employers from my district, manufacturers about the potential that some of our trading partners could misuse national security justifications to have retaliatory and
protectionist actions taken against them. are you all concerned about the potential for retaliation by some of our trading partners and the effect it would have on manufacturers? >> yes. we are concerned. although we started with the proposition that we have a global extraordinary excess amount of capacity that's basically created by china and that we can talk about some other potential problems but we have this 1.1 or million billion tons which i mentioned before and the question is how do we deal with that, you can't deal with it at the border with china because it's not that kind of a problem, t sending it everywhere in the world. you're sending it to korea and sending it to us in the form of octg. given that problem is reasonable and saying what are all the possible tools we have and one of the tools we have is 232 because it does have a national
security effect that's quite significant. there's the response one of retaliation, we are always worried about retaliation. but if we don't defend ourselves because of a fear of retaliation then we are just going to be the residual of what nobody else wants. so we can't let unfair trade go forward just for that reason but certainly a reasonable thing to think about and i don't disagree with that at all. the argument that other people will use their national exemption for four ways that are really hidden, protectionism, that's also a concern and i'm inclined to believe personally that with respect to a lot of the countries, they will use every tool they have right now to defend their interest or take advantage of our market. so i've kind -- i'm kind of less persuaded but i think we have an
obligation to all americans when you see something that's very bad going on, we have a kind of a contract with all of our workers and all of our farmers that we are going to defend america or free trade doesn't mean anything. i think every member in this committee understands that. >> i certainly appreciate your work and expertise on the issue. i guess you would hope that you and your team would clearly review the chairman's opening statement because it reflects on this side of the aisle some concern about the balance in this area. thank you so much. >> thank you. >> thank you mr. tiberi. >> thank you, mr. embassador. you have been a long-time critic of dispute panels overreaching and effectively declaring new obligations and undermining our democratic processes. under nafta, the investor state
dispute settlement procedures with which you are familiar with, the isds promotes three attorney who is are not subject to appeal to effectively create new obligations and commit unlimited amounts of taxpayer funds to foreign corporations for claim violations. yesterday at the finance committee you testified concerning your concerns about isds, you're aware that the national association attorneys general, the state legislators have objected to isds that recently the american automotive policy, manufacturers said that isds provisions in nafta is unnecessary. do you agree with them?
do you agree that isds is unnecessary in nafta? >> i won't take a final position right now. i would say this, it clearly is a balance. there is a legitimate interest in people who go overseas and invest and the united states has an obligation to do what it can to make sure that the people are treated fairly. on the other hand, as you suggest congressman, i am troubled by the sovereignty issue. i'm troubled by the fact that anyone, anyone can overrule the united states congress and the president of the united states when it's passed allow, that's troubling to me. so trying -- >> thank you. >> trying to balance those two things is something that i want to work through. >> certainly we don't want to see our investors protected wherever they are and canada has a mature system, a few more challenges in méxico but i hope that you will be looking closely at a system that i think has failed us and you say in your testimony and i was please today hear it that you expect
significant action far beyond previous administrations including, for example, self-initiated litigation in defense of u.s. workers. while that's good, it's a fairly low bar since usdr under all previous administrations, i think, has never successfully challenged a laborer environmental provision with any trading partner and as you know yesterday the united states lost in its drug-out, lengthy nine-year action with reference to guatemala labor with a finding apparently that it was not a manner affecting trade. i believe that the failure to effectively enforce our environmental and working condition provisions is one of the reasons many of us do not have confidence in the tpp and other recent agreements that the comments about labor and environmental were really meaningless. given the short time, i would
ask you to respond in writing as to whether you consider artificially su prezzed wages to be a subsidy and whether these subsidies impact trade between countries to tell us how this decision may effect the need for changes in the nafta agreement with reference to workers similarly with perú, they're both labor complaints on which there are provisions that have not been enforced and i would ask you to respond concerning the complaint filed in 2015 on perú labor concerning the fact that they were effectively denying improved wages and conditions in perú and also in perú on the environmental provision that about 90% of timber leaving perú was harvested illegally when we set up the agreement and still is and if you believe that perú is in compliance with its environmental obligations under
foreign and no audits of producers and exporters and i will submit others concerning all the pending enforcement actions on which we see really no effective enforcement. finally, you've got 500 advisers on trade agreements, corporate advisers. when will the members of congress be able to see the specific language that usdr proposes to méxico and canada on nafta changes? >> we will submit an answer in writing as you requested, congressman. in terms of the language, we have an agreement with the chairman, we expect to be very transparent, we are going to follow the tpa to the letter. i realize it in the past there have been issues about whether or not congress has had adequate
while we work to update nafta we must begin to put other negotiations in the pipeline. i'm an old career law enforcement retired and i get the enforcement piece, but there is always community outreach. in my view countries are left hanging and frank i was disappointed that the present with the goat bilateral agreements. i'm on board without. as you know we have had a chance to visit, but there has to be an aggressive energetic outreach to these countries and in my question, the-- beyond canada
and mexico, which country regions and/or sectors are priorities for the trump administration. with the next step after nafta? >> we are still in the process of developing those priorities and that list. first, i would say that the president is very pro- trade and secondly that we as you say are objective is to have bilateral views and we think we can do that using model agreements and it do it effectively and have agreements which are better for american workers and growers and others. in terms of what to specific countries we would go to, there are a lot on the table. there has been some mention and a lot of people that believe we have to go to the ttp countries and negotiate those and of course we are among those and in
some people opinion it's japan-- >> you are in communication with those ttp countries? >> i have met with several of them and there are a variety of issues in various places. the japanese my guess are not ready for a bilateral agreement with the us, but these things are developing. >> after nafta you are still considering tee tip or japan or uk. >> the uk is another, but i think there's a lot of pressure to move in the direction where the ttp would have filled the gap and to go in and my instinct is that members of congress would also feel comfortable if we started doing that. the other thing is it takes two to tango so we have to develop this. >> i went to be engaged on the picture other members of the committee do. how do you see the bilateral
agreements coming together to great high standards throughout the world that have been touched on by a couple of members. my personal experience with one country, mr. t barry mentioned south korea and with my discussions asking the question after the korean agreement was finalized, what was their opinion as far as the impact it had on china and their first response was china should pay attention because high standards are in the region and will be developing. ttp was the thing people will look into, so that one agreement with korea made an impact on that region and is so again emphasizing the need to reach out to those countries, ttp country-- countries, strengthening opposition of strong standards, how do you see a bilateral agreement with japan, for example, strengthening that standard, our standards throughout that region in the world? >> i don't want to suggest we
will have a bilateral agreement at this time with japan. that something we're looking at, but i agree with the chairman basic point that the us moves in we have an agreement that is a high standards agreement and in many cases on a bilateral basis you can have higher standards because the country you are negotiating with may not have a particular problem where you get high standard and a good example would be currency. it's easier to get to high standard on currency and set the standard, so there are a lot of things that can be done, but coming those kinds of agreements does push back against china, does change the standard and it does have people realizing the us is engaged and it has a ripple effect throughout the region, so i completely endorse them. >> thank you, mr. thompson you're recognized.
>> thank you, mr. chairman. and vaster, thank you for being here. priorities for our trade policies must be to support and create good american jobs, croak-- grow the economy, set basic standards for our partners to live up to, improve market access and protect labor rights in the environment and i think that congress has an important role in this. i value the opportunity to work with you to ensure this happens. increasing exports and elevating trade barriers could be a win for our economy, provided the playing field is leveled and everyone operates under a fair and basic set of rules and that those rules are enforced, so i went to-- in that regard and went to associate myself with that tag comments made by a couple of my colleagues on the dais and i also want to associate myself with something
mr. doggett said when he asked if you thought wages, suppressed wages and other countries are subsidy to manufacturers in those other countries and i would ask similarly, do poor environmental rules equal a subsidy to producers and other countries? >> first of all, i think: labor standards are an unfair advantage to someone with so we are dealing whether it's a subsidy is not something of addressing right now here in this case, so i don't want you to misunderstand. same thing is true with respect to the environment, but i look at it the other way. i think it's wrong in the way we think about these things to have something to be a legitimate competitive advantage and to me
environmental pollution is not a legitimate competitive advantage in the way we analyze grade because at a level we are all really free traders with the same objective. i look at it the other way around. i think it is not a legitimate competitive advantage to have very low environmental standards , so that's why i'm troubled by it and i can do same thing is true with respect to labor standards. >> i certainly not my business if i didn't have to pay attention to regulations and rules and particularly with environmental standards, i could make a lot more money than i do and that would put me at a competitive advantage over someone who had to do that. us wine exporters continue to face highly burdensome trade barriers in canada. british colombia has a very discriminatory growth restore
program that prohibits american wine from being sold on the same shelves as domestic wine. given the bc producers of enormous competitive advantage. in january, 2017, ustr requested wto dispute settlement consultations with canada on this matter, but the consultations of failed to bring about any grocery access for american winemakers. given canada's continual refusal to modify its discredit reprogram in any way, will ustr now work to enforce us rights under the wto agreement on formally request dispute settlement panel? >> congressman, i am very much aware of this problem. i completely agree with the sentiments of your question. whether we go to the panel stage is something under review right now. you can take for my general
attitude that i'm very pro- enforcement. the only caveat i would add is it something you're better off dealing with after negotiations, so i can to think think about that and members have to think about it. i have to be informed by all of you, but that is a very serious problem, the kind of problem that should be brought to a panel in my opinion. the only thing i would say is we have to think about whether this belongs to the nafta context in which case you would make more sense to negotiate and do it in a less hostile way, but it's a major problem, extort a problem for those people affected and there's no justification for it. >> so, in modernizing nafta, is this something, the elimination of this practice we can see is a possibility? >> certainly is something we will raise and you with one way or the other. >> it was said that if ttp feels it would give china on upper
hand. , which time do we have to addressof work they do in fact have an upper hand? >> i'm minus seven seconds. >> i'm afraid we will have to come back to you on that. >> i'm sorry, sir. >> mr. buchanan, you're recognized. >> thank you, mr. chairman and it went to think that and vaster just a couple of points. we have a 14 ports, one in five jobs in florida are tied to jobs in trade of. i believe in free trade, but trade needs to be a win win. i'm concerned especially with bigger countries with large trade imbalances. i think it something we need to look at, but i think on some of our trade agreements over the years we have been played. that's my opinion and we can talk about further going forward. i want to drill down a bit on
florida issue in terms of nafta. we are the second largest state in terms of fruits and vegetables grown. we have pretty much the same growing season as mexico, 12 billion-dollar industry, but a lot of people feel because of some of the techniques, anti- dumping and other things going on in florida it costs us about one to $3 billion in terms of florida opportunities down there i just want to get your thoughts that's-- is on your radar, is it something you are looking at? mexico is next to us and a good neighbor, but we want to make sure it's fair. >> i would say i completely agree with you. i'm familiar with the issue, not as familiar as you are. when i say we have a trade deficit in agriculture with mexico, we are tied about the problem you raise because with respect to everything else we have a surplus. i think it is something that we
have to work on and i you work with you on. we ought to be talking about this in the nafta context and then there are issues of: there -- unfair trade. i realize it's an acute problem that becomes more and more acute and it's something i want to focus on. >> i would appreciate the opportunity to work with you going forward. i want to talk, mr. neil brought this up about ttip and it seems to me and i've had the opportunity to travel in europe and met a lot of american businesses in europe. makes sense. we have same shared values and we look at labor rates and a lot of it is fairly competitive, carpal size markets in terms of the eu and i never last administration because i met with several folks in your office back a couple years ago there's been work product and
effort done and i know there is individual issues with various countries, but what is your sense of where that is out today is a something we can resurrect or are we going to move forward on a bilateral agreement with every single country individually which we have seen take a long time to get anything done, but i just want to get your comments. >> first of all it something the president has spoken on. you mentioned it during his meeting with chancellor merkel months ago. we are reviewing these agreements, so i don't want to prejudge it. it something i understand there is momentum behind and there's a lot of reasons to do it. on the other hand it was not accomplished, so there are problems. it's in the group of things that we are going to review, agreements that we are in the process of reviewing.
there are a lot of arguments against it, but as i say it so close to being done. right now it can be done-- >> let me throw this out. i have watched-- meaning congress for for 10 years i have watched trying to get agreements done and it takes it seems like forever, so when you go at it with a bilateral basis and there are probably reasons it to do some countries that way, but it seems like there has been work product in terms of the eu because of shared values it makes sense to see if there is an opportunity do do something in a big way and i know it's not easy because there are a lot of issues with individual countries in europe, but i would be interested in you being open-minded to that is a possibility. >> we are. is under review and i can make an argument if i had to that it's a bilateral agreements. >> thank you and i yield back. >> thank you, mr. buchanan.
mr. lewis, you are recognized. >> thank you, mr. chairman. mr. ambassador, thank you for being here. out like for you to give me some idea when it comes to trade policy, ways your position on the issues of human rights, labor rights, protecting the environment? is my belief that a trade policy should be a reflection of our own values. i would just like to hear you out. >> well, that's a very important point. i think it's not really fundamentally different than the point that chairman made i mean we have a system and we are proud of that system and of the system has created an enormous amount of good for, not just americans, but for the people
around the world. in terms of-- and we have an obligation to push that ford and to be honest personally i view myself as a green about the dollars and cents part of it. not worried at the foreign policy-- >> are use adjusting mr. ambassador, that we make money, we get the dollar at any cost? >> no-- >> you just said you're concerned about the dollar. >> no, i don't think that's right. i don't believe that at all and in the second place my focus has to be on trade and economics. that's what i'm paid to do. that is to say the other things are more important, but my focus-- where we overlap is i think that labor and the environment are economic issues and i approach them as economic issues. i think the united states and many of the members have said the united states, every
businessman, every farmer every worker has led you to fair in their own market and we have to remember that. we have a right to have a fair-- we have a contract with these people, but we will pursue a certain economic policy, which we think is the right policy. part of that contract is that we will give them a fair price and that means fair competition in their own market and overseas in part of that competition in my judgment are things like labor rights overseas and the environment. that isn't to say i think you want to ratchet up or do any of those things, but there are certain standards that are part of her system and to fall below that is an economic advantage which i believe is a fair advantage, so i did disagree with your premise. i'm saying i'm bored about the economic side of it, worried about workers, farmers making more money at the end of the day and the other things are important, but not my focus.
>> but, you are not prepared to submit to me just one member that our trade policy should be a reflection of our value of a country. to keep one thing at home and do something else abroad. >> i think it should be a reflection of our values. >> thank you very much. i yield back. >> inc. you, mr. lewis. mr. roskam, you are recognized. >> thank you, mr. chairman. to shift gears a bit. one of the big priorities is our relationship with israel historically and back in the last congress we overwhelmingly passed into tpa a stated trade objective of the united states is to push back against the anti- israel boycott divestment
and sanctions movement. former ambassador from israel to the united states wrote an op-ed in which he a few years ago made this point, he said the first wave of anti- israeli activity was military and we know how that turned out. the second wave was the terror movement against israel, but the third wave is in some ways more insidious and that it is trying to take away israel's legitimacy and therefore to simply remove it from the world stage, so one of the tools you have that trade ambassador is the capacity to push back against that particularly as it relates to european governmental actors. can you give us a sense of where that stands and how the administration is adopting that tpa objective? >> right now, we are not in negotiations with europe, but we
understand that's an objective and indeed i would say it's a threshold, more than that of objective. i think i shouldn't speak for the administration, but i miss when i think it's clear. the administration is strongly agrees with that sentiment. we think that the boycotts investiture's are dangerous, not just as a precedent for the whole economic system, so personally i'm very sympathetic work i believe the president is sympathetic and that will be a import and objective when we get the point we are talking israel -- i'm sorry when we are talking europe about this or other agreements. >> thank you. i yield back. >> mr. larson, you are recognized. >> thank you, mr. chairman. inc. you, ambassador.
in my state of connecticut, we have a great deal of exports. in fact, nearly six thousand tummies in connecticut are involved in exporting nearly 90% small businesses. that's why we believe it's critical to ensure our businesses and workers maintain the economic competitive position in the international markets and i know you understand this thoroughly and i know you also understand that many american workers feel that international trade has eroded the middle-class wages and the job losses you can hear in some of the questions a number of our members are asking. that means enforcement of labor and environmental positions in the existing agreements insist on strong protections in any future agreement is essential. i know you understand that, but what i have and there's not enough time for me, but i want to propose six questions with
permission of the chair if i could pose the questions and have them in writing because i don't believe the ambassador-- it would be fair to him, but at least he will get the gist and then we can further correspond be on the committee and i won't supersede the time i have been allotted. the first with regard to nafta, how do you plan to see greater access to the canada and mexican security markets while protecting our own priorities. we seem to be in conflict and so what specific changes will you seek for that chapter of nafta. that's question number one. what kind of enhancements with regard to nafta with respect to international property protection is the administration contemplating in the nafta rewrites. surly, what is your plan when it comes to the enforcement of
labor and environmental provisions in our future fta's? the fourth at deals with currency that a number of people have discussed. what is the administration's intention with respect to seeking the inclusion of currency rules in its trade agreements. you have already elaborated on standards and the need for those and again, i would appreciate if you could respond to that. with regard to further-- do you support including strong enforceable disciplines in nafta and other trade agreements? finally, mr. ambassador, we are very concerned about the issue that was raised when the president said that he might terminate the us korea free trade agreements. what are the administration's plans with respect to the us
korea trade agreement and if you can answer that that would be great. >> i'm going to put six in the record and answer the last one? >> yes. >> we are looking at all of our trade agreements and this is what we're looking at closely. i would be less than candid if i didn't say it was troubling to me. it's a negative effect on the us trade balance. having said that, in the group we are looking at, there are no plans to drop out at this point. it's just something were talking about. i have a meeting today or tomorrow on these issues. we have a variety of issues, issues we think are costing us exports. if it's in the category of things i say. if you have a big trade surplus
with the us you better get rid of the barriers to our exports to you and it fits into that category of things and i'm going down the line, insisting with these people that you can't have barriers to trade and have a 20 or $30 billion surplus. you better get rid of the barriers and let us sell their because we won't tolerate it anymore, but in terms of a plan to get out of it, of course, no, but it's seriously under review and the president is troubled by the imbalance. >> that's reassuring to hear. i know a number of people over the recess will travel to korea for a variety of purposes, not the least of which is national security, but i think it's important that message be reinforced i couldn't agree more in terms of the trade and balance, so i commend you on that area and also for the encouragement we won't be dropping the agreement. >> you may have set a record for
the number of questions stuffed into five minutes. mr. smith, you are recognized. >> thank you, mr. chair. i want to associate my comments and concerns with my colleagues who have raised the issue of agriculture and nafta and the progress that's been made with it nafta. know producers across rural nebraska appreciate the gains that have been made and i think you have heard from us numerous times that-- call is that agriculture delegation here on the committee. you have heard us mention and emphasize several times how important these issues are, art and culture issues and we not undermine the successes nafta has brought to us agriculture. shifting gears a bit, i thank you for the work you in the presence and others in the administration have done on pressing china on a number of
trade issues, not just a marked access issue for the biotech firms and lack of approval for these products, also us producers to choose-- choose between the current variety or continuing access to china's 1.3 million consumers. obviously, that's a big deal. as agreed to under the us china 100 day plan china's national wireless safety committee has recently met to review approval conditions for a tech bile products that have seen their approval for the chinese market delayed by an average of five years. that's pretty astonishing. following the biosafety committee meeting, agriculture approved only two of the eight ending products, so approval of only two of these eight is disappointing and i'm concerned china will not honor the spirit
of the 100 day plan in approving the remaining six products. i understand they are said to meet again by the end of june giving us the opportunity to have the other six products approved. what is ustr doing to make sure china follows through and approve the remaining six products before the conclusion of the 100 day plan? >> thank you, congressman. first, i would say there was some progress made in the 100 day plan as you suggest and this is one of the principal areas where there was progress. we are continuing to press china. we expect and will require that after they follow their process and quickly approve all eight-- having 08 applications this is important not just because of those, but because it delays us farmers for in-- from implementing a lot of these high-tech-- high techniques in
domestic markets as well as international, so i can assure you that secretary ross is very focused on this in making this clear as to be done. we have been in contact with the chinese as recently as the last couple days on this and my feeling is that before long we will have all eight agreed to. that's what we expect work that's what we think was agreed to in the secretary as i say who actually had the negotiation at that time is very focused on it. >> thank you. i know there's a great opportunity in being good stewards of our national resources with biotechnology and we have a great story to tell with how far we have come with utilizing biotechnology and it's promising for the future. i was pleased to see the president's budget included a renewal of the gsp program and
this is very important. more specifically, the recent reauthorization included language to also consider for duty free access and a variety of travel goods. previous administrations did not provide the consideration for travel goods from all eligible countries intended by the law and instead only provided it to the least developed nations. i appreciate the ambassador delegating that or deferring that expansion to the current administration of. could you give us an update on that effort? >> yes. welcome i don't necessarily appreciate him deferring it. [laughter] >> i say that in just. we are in the process of looking at it right now. we are close. the documents are phentermine i think you will see outcome very
soon. my guesses you won't be disappointed. >> thank you, ambassador and thank you, mr. chairman. >> mr. kind, your recognize. >> thank you, mr. chairman. investor, thank you for being with us today. going to ask a question regarding the dairy issue with canada, but the first comment is i hope this-- you are approaching congress will be extremely open, consultative, collaborative. i think it's going to be beneficial that whatever you negotiate you will have to come back here for our approval and is better for us to be on the take off rather than getting us on the landing with these agreements because we have to justify and explain this to our bosses back home. secretary fromme and i think that a high standard as far as outreach at the time he spent on
the hill gave feedback from us and ask if you that from him in the course of the negotiations. that also included language of what was being negotiated. past offices have been reluctant to share language with us and if that occurs in the future it will cause problems. i'm just telling you right now and with that in mind i recently just sent you as well as secretary purdue a letter inviting you to come back with me to my home in wisconsin and have a good meeting with our agriculture producers. i think you'll find getting out of the bubble of washington can be helpful, just going out in the countryside and listening to people and getting feedback. with a great visit with secretary froman called years ago where he got some great input, so i hope you seriously consider the invitation possibly find time to come to the midwest and have a conversation with folks back home. in regards to nafta, i may be in the minority on this side of the
dais and even within my own party, but i happen to believe our withdraw from the transpacific partnership trade agreement will go down as one of the great strategic mistakes we made in the 21st century unless you in this demonstration figures out a way to get us back in the game, into the fastest-growing economic market on the globe. right now a tremendous vacuum has been created. these countries were looking to us for leadership and they don't have it. we turn our back on them and that vacuum will be more than willing to be filled by china and if we had to operate from the outside looking in trying to compete with china's rules that will be a race to the bottom and won't help us. with ttp in mind i hope ended talking to the secretary about this it seems to me logically a good place to start with nafta renegotiating and look at what mexico and canada has agreed to under ttp, the elevation of
standards included in the agreement, reduction of tariff and nontariff barriers they agreed to and if you have ideas on how to improve upon that, let's go. lets do it, but if i see slippage in those standards or what's already agreed to under ttp will be a problem for my perspective. we can't go backwards on something already agreed to with canada and mexico and a lot of people think nafta renegotiation i'm a mainly mexico we also have problems with canada and one is the dairy issue with the classics and class seven system with all the filtered melt, something that was not addressed with nafta, but all of our dairy producers feel they are being treated in a discriminatory manner, so i'm hoping you have a plan for moving forward and trying to resolve this so we level the playing field and it's a two-way street when it comes to the exchange, but especially the issue we have with canada right now with dairy and i'd be interested to hear if you've
been thinking about this at all or if you have some type of plan to move forward and hopefully look forward to additional meetings where we can talk more in detail of what we feel needs to be done dealing with canada and renegotiations. >> thank you, congressman. first of all, i do believe that it's a partnership and we don't want an agreement back here that doesn't pass. that makes docents, so we want to be involved. i completely agree. senator dole would say the same thing. if you want the plane when it lands, put me on it when it takes off and i thought that was good advice. second-place, i have some background on the hill and i understand that imports of congress and to be candid i enjoy working with them, so that's number one. number two, with respect to ttp
the president did not pull out of that, he pulled out of ttp and he's very much engaged and i think we will do a better job and there is also questions i always have when i talk to people about ttp going to pass anyway and there were questions whether that plane was going to leave the airport. having said that, the final thing i would say because i'm soak conscious is that on the issue of canadian dairy we are involved with that. you say do we have a plan, i have this chick of options, so it is something we are focused on for a variety of reasons. >> i would love to stay in touch with your not. >> ms. jenkins, you're recognized. >> thank you, mr. chairman. and asked her you for being here. national security should unquestionably be a priority of any government, but i'm using-- word using national security as a basis for trade restriction in nafta or elsewhere could
backfire if other countries do the same to us, in particularly security for many countries is a battle component of national security. along that being here at home we to farmers in my eastern kandra's district are just finishing their wheat harvest and it continues to roll more than west across the state and many of those farmers will look to for markets here in north america or abroad to sell their products in the coming months. what arguments would you make to a country that tries to restrict its imports of us wheat or other products for security reasons? >> well, in the first place as i said before, it's over should omit argument should use national security in that case of steel. i believe it's a legitimate argument. however, i think it's a
legitimate use of this touch it if the president tries to go in that direction. these are national security issues in my opinion. now, there's always the argument, are you worried about someone else using it and yes, but they have to have a legitimate reason also or we would challenge them. my guess is any country that thought they had a legitimate reason to use national security would in fact use it whether we use it or not. that's my own personal belief. i don't see how someone could conclude-- preclude kansas wheat based on national security of food needs basis. that doesn't strike me as legitimate. if it would happen we would have to decide what makes sense in our judgment and i can assure you that the president will look at this very very hard.
the reaction will be the same we are going to have with respect any time we take an action on traded all there's always a possibility of someone retaliated. it happens, it's always a possibility of retaliation and the question you have is what it you going to do in response, but if we get unfair retaliation against us i would expect that the president would act strongly and take the position we won't tolerate that scenic great. thanks. about 50% of all us grown wheat is exported making trade incredibly important to a wheat state like kansas. mexico, for example our largest export market for us wheat last year made possible by benefits of nafta. according to the national wheat growers in us wheat associates mexico imported 3.1 million metric tons of wheat in the
2016-2017 marketing year. in the views of many my constituents nafta has been overwhelmingly successful. i do agree. however, there is room for updating this agreement, which is more than 20 years old to include strong and enforceable sps ruled based on sound science like those that were negotiated under the ttp. can risk-- kansas farmers are also looking to future trade deals. what are your views on how nafta can serve as a blueprint for securing as future trade deals, which would mean that inclusion of strong spf tradition-- provision that would help producers gain new markets? >> it is something that needs upgrading. it's a important objective. generally, there are advantages in putting in model agreements
and negotiations between mexico, us, and canada. we don't have some of outlier economic activity that you might have if you were negotiating with someone else. for example,-- [inaudible] >> i think nafta is as you suggest a great opportunity to put in place including the three countries, high-level provisions with respect to a variety of things. this is one of them, but other people suggest currency as kind of a class example of what you're talking about where there really aren't currency polos between the us, mexico and canada. that makes a good opportunity for everyone to sit down and say let's put together a model agreement to apply to everyone. i look upon nafta as an opportunity to create a model and i believe with respect to
some of these things, the canadians and mexicans look upon it the same way and then take those provisions, with additional legitimacy of being in nafta and be able to use those in future negotiations. >> thank you mr. ambassador and we look forward to working with you. without, mr. chairman, i yield back. >> you are recognized. >> good morning mr. chairman. >> good morning. >> mr. ambassador, congratulations on your confirmation. good luck. you are going to need it. we have heard a lot of talk about what should be changed. i have to say that in various meetings with the us trade representative and former commerce, white house officials
i and many of my colleagues find ourselves confused. by the inconsistency from this administration when it comes to trade. we need some very basic questions answered. so, i'm going to get into the questions, but i want to associate myself with the words of mr. buchanan concerning the difference between the bilateral agreements and regional agreements. i think he is on target. i think it would be foolish simply to deal in those bilateral agreements. this is a different world. we need to understand that. i would like to associate myself , also, with mr. larson comments on the relationship
between our trade agreements and stagnant wages in the united states and the ability to create new jobs. there's a lot of data coming out on this. trade affects things in their own country and we need to take a look at the labor market to understand it fully now, the president called nafta a disaster and a holes i'm hearing so far is tweaking the edges. if it's a disaster, then i'm looking at at least 22 speeches he made during the campaign where he riled up people, riled up people about the trade agreements. now, i voted against many of those trade agreements, so one would think we were on the same side.
we are not. we are not. the administration has noticed congress of intent to renegotiate nafta. your office failed to provide us with specific negotiating objectives for detailed descriptions of what you would like to see changed. many american manufacturing companies have moved to mexico, for instance, because of the lower labor costs across the board-- across the border. mexican manufacturing workers make only 20 cents on the dollar they have yet to comply with minimum, internationally recognized labor standards. today, when mr. levin asked about implementing reforms prior to renegotiation, you were not committed to labor improvements
in mexico and you did the same thing yesterday when you were questioned by the good senator from ohio. now, i'm disappointed you did not respond, so how will you ensure mexico-- how will you ensure that mexico enforces labor for-- provisions in a new nafta, now that we are going to abandon this disaster. if they fail to meet basic internationally recognized labor standards and before you answer that question i want to remind you i did submit to you the principles of trade, which we are having as our standards. i want to know what your standards are. thank you, mr. ambassador. >> we expect to negotiate an
agreement that has enforceable labor standards and we expect them to be consistent with agreements that the committee had with the bush administration on may 10, 2007. we expect them to be enforceable and i look forward to working with members of the committee to make sure that that happens in spite of the disagreements that you articulated. with respect to labor standards, my guess is we are not that far apart. >> time is expired. thank you. >> mr. chairman, i will cement other questions to the ambassador with your approval. >> without objection. you are recognized. >> mr. ambassador, the movement of data around the world is in social-- essential for all
businesses from automobiles to airplanes to agriculture and different access to data around the globe is paramount for businesses of all sizes to compete. the data flows today have increased and grown by 45 times in 2005 and dark specter to grow another nine-- nine times by 2020. as far as you know currently there are no enforceable trade rules specifically protecting data flow leaving american comedies vulnerable to digital manipulation by foreign governments including data localization, forced technology or sourced transfers and other efforts that undermine competition from us companies. both you and secretary ross have public support for enforceable digital trade rules in your confirmation hearings as will as more recently, so does the it ministration view inclusion of these rules is a top priority for nafta modernization and
other future trade agreements? >> absolutely. >> good to hear. and master, you mentioned you notified congress of the intent to initiate negotiations with mexico and canada regarding nafta. given nafta modernization will set the precedent for future negotiations with other countries and other agreements, it's a terminus opportunity to break down barriers to trade and allow us companies to compete in north america. can you share with us or the committee any information about mexico and canada as views on digital trade heading into those negotiations? >> i have not had discussions with mexico or canada with respect to this issue. we expect to have a digital chapter as you suggest and expect to be a high level agreement. i will have discussions with them, but i have to be careful because we're not allowed to begin negotiations until we go through the tpa process, which we take as a very important
commitment. having said that, i would be surprised if both didn't make agreements that we need this. either one of them are in a group of countries that are, as it you suggest, trying to create new industries by using tactics like a force transfer of technology, like data localization rules, so i'm optimistic we will be able to put together a good chapter, but i certainly take it from our point of view that would be difficult to pass nafta implementing bill that doesn't have a very high standard digital chapter. >> good to hear. let me shift gears quick. the usa and in my home state of minnesota is a leader in medical device innovation and growing exports in the area that create
good jobs here home and then help improve health care outcomes around the world. in other countries now they are increasingly taking very extreme and misguided measures to control health care costs as example in india we severe-- cease about-- price control is proportionally affect manufacturers, putting them at a disadvantage work india has rejected a request by us medical device manufacturers to withdraw products from the market and has announced its intention to impose price control on a discernible categories of devices. another example and is only were only us publicly traded companies are required to account for expected revenue losses related to yet to be implemented and highly controversial payback law that would require companies to pay back to the governments in medical device spending in excess of an arbitrary predetermined level of spending. these are policies that hurt american companies and deters these companies from introducing
new innovative technology in these markets, which ultimately means patients will have less access to these products, so can you share how the will the administration work with india or other foreign governments to make sure our country-- copies are not being driven out of the market by rules that make it impossible for them to compete? >> thank you. i have met with the group of medical device executives and have heard the horror stories and that's really what it is. this is an issue we are raising within-- india and we will use the prime minister's visit as a launching pad to make sure this gets proper attention. everything you say, we completely agree with. all we can do at this point is raise it with them and show the unfairness and this to me fits into the category of things that if you have a big trade surplus with the us, you should not do
things like this to the us and you should try to encourage imports from the us. of their problem is even bigger because this is another example of where china has now move in. has on their made in china 2025 list of industries that they want to become world class in, so this is an industry that i think we have to focus on and we met with them and expect to put together an action plan. >> thank you. >> you are recognized. >> thank you, mr. chairman. thank you, ambassador, for being here. have a couple questions to bring to you about the negotiations of nafta and how they may affect my district in texas. my district is the dfw airport. dfw airport is the center of my congressional district. the airport has astonishing
value adding to our economy of $37 billion a year. the metroplex area that comes as my congressional district is generating nearly half a trillion dollars in the gdp at the-- in the dfw airport is the driving force behind much of the growth. most people in texas say that the airport really is the economic generator for the whole state. adjust recently, the mayors of fort worth and dallas in a delegation travel to toronto, and their main concern was that both parties, both those in toronto and dallas-fort worth are an easy about the upcoming negotiations and they want to make sure that these relationships that they have developed over the past few decades are going to last, so i would like to know what steps the administration is taking to
make sure that your ease of the country that experience economic growth as a benefit of nafta won't be harmed or ca downtick in the results of authorization. >> thank you congressman. first of all, we are aware of how important it airport is to the state of texas and also aware that texas is the number one exporting state in the country, as i understand it. our objective is to have more trade, not less and our objective is to first of all do no harm. we expected that as a results of this the us will have more sales and we hope there's more trade, but really with respect to wear nafta has been successful we want to secure that going forward. >> thank you. lastly, i would like to bring up a letter that was sent to you by
our two senators and basically the letter states nafta has played a key role in all-american-- north american energy markets such as oil and natural gas and that the nafta agreement allows the us to maximize the benefits of being the world's largest energy producers. as the administration moves forward i'd like to echo the sediments of this letter and ask for your opinion on the free flow of energy products of putting electricity, oil and natural gas across the us and mexico and the canadian borders? >> i agree with you. we think that-- the senator was on the finance committee where i testified yesterday and this did come up. we support the free flow of energy across the border as we think it's one advantage we have as a north american market.
>> and you don't think that any of the nafta negotiations that we contemplate will have any effect on the free flow? >> well, i'm not privy to what the other people want to do. we think it's been a success. we hope if it's in the category of the do no harm and we hope everyone agrees with that. although, there are consultations in this area as you know. >> thank you, mr. ambassador. >> ms. tool, you are recognized. >> thank you, mr. chair. thank you, mr. ambassador, for being here with us today. first, we talked a bit about digital trade and digital trade is important. we have 3 million americans who are employed in the internet sector and it's helped the us
achieve a trade surplus with 1,509,000,000,000-dollar trade surplus, so it's important. in order to build on this and i know you mentioned digital trade would be a priority in the nafta renegotiation. how will you ensure digital trade is prioritize the within your office with appropriate levels of the agency? >> well, first of all as i went through my confirmation process and in meeting with members of the ways and means committee, digital trade after agriculture is probably the number one thing raised. it is self-evident that it's very very important to the us economy and it's an area where we had a real competitive advantage, so it is important. we have at us gr a decision created last year that has not been filled yet, but for an intellectual property innovation and master who is a negotiator.
we are in the process right now of filling that spot ended that will be someone who will along with a few other things focus very much on exactly this area, so we do understand how important it is and we think it's important to get our trade deficit down, primary objective. >> thank you. i urge you to fill that position quickly. >> are you available? [laughter] >> i also wanted to talk about about cloud computing and some of the issues we are seeing with china. various chinese regulations make it difficult or even impossible for us technology companies to operate in china possibly in violation of commitments. specifically i'm concerned with china's proposed draft regulation that when combined with existing chinese law would require us, providers to transfer valuable intellectual
property and effectively hand over control of their businesses to chinese companies to operate. global cloud services totaled more than $100 billion in 2016, has a very strong presence in my district and in my state, so it's very critical that the us china comprehensive economic dialogue 100 a workplan includes a commitment by china to resolve this problem, so i went to hear from you. are you aware of this issue and can you talk about any progress that the administration is making towards addressing this issue? >> yes. i am aware of the issue. it's extremely important and when i read about it, it's another example of the country basically having an industrial policy. they see on industry or sector that has value that's high technology with huge growth potential affecting not just its
own sector, but every sector, this linkage that is so important and they try to get themselves in a position where they take over first within their own country and then beyond that and it's exactly the same pattern we see everywhere. you have to have a partner. anyone that has not followed this issue, it's worth looking at. it's a prototype of aware they have gotten to where they are in a whole bunch of industries for noneconomic reasons, so it's an extremely important issue and something i'm focused on that the secretary of congress is focused on and we are raising our complaints with the chinese and we are looking at all of our options, so we are aware of the issue and we realize how important it is and we are engaged on it. >> thank you. the fact that china has these regulations in particular,
really offensive given the fact that the chinese cloud computing companies don't paste these restrictions when they operate in the us. >> i mean, this is extremely important. there's no reciprocity at all and it's something that we can take care of through current law we should do and if we can, congress should look at it in my judgment. >> one quick point for the record because we don't have time. i want to make sure you are aware of some concerns and questions we have heard about the covered agreement with respect to that be you and also a question for the record on there and i would appreciate your feedback on the. thank you. >> thank you. you are recognized. >> thank you, mr. chairman. i want to welcome that ambassador from one buckeye to another. of my district starts in northeast ohio and rolls on the way down into wayne county. because of that, wayne county is
one of the largest dairy producing districts in the state ohio dairy sector relies on exports with particular interest on making good use with our engagement with canada and to tackle excessive tariffs our industry faces there and just importantly the non- tariff policies canada's been using to extort trade. pricing tools seem designed to let canada have its cake and eat it too at our expense. not only our companies exporting to canada, but also exporting protein products around the world. the canadian programs are designed to undercut ourselves on both fronts. had we tackle the problems facing us now with canada on dairy and to establish more open conditions on dairy. >> first of all, we are very
much aware of this issue. i have talked to mr. freeland in canada about-- about it. as you say the way to think about it is exactly the way you put it. it's not just about exports to canada for its exports from the united states to everywhere because they have created such really-- such a volume of milk that they can knock us out of markets everywhere, so it's way beyond just a problem with canada. it's something we are engaged on and making sure that not only from members from ohio, and wisconsin and all over. it's a something we want to deal with in the context of nafta and our agriculture people are engaged and have a variety of options that we are looking at right now. >> thank you. >> mr. ambassador, i'm an avid
motorcycle rider and i learned this past week the vice president is also a avid motorcycle rider, but on the hormone trade dispute issue motorcycles are on the list for 100% import tariffs the cynically 51 cc to 500 cc-- ceci. if this goes into effect it would economic harm to motorcycle dealerships in the state of ohio and seriously impact domestic consumers. a number of us here in congress have expressed concern over the import care proposal on motorcycles and how harmful it would be on our constituents as the ustr has done in the past. would you withdraw motorcycles from the tariff list in the eu us beef hormone trade dispute? >> well, my hope is we negotiate our way out of this. that's our objective. i realize there are a variety of products that are on the potential. nothing has happened at this
point. i know the motorcycle industry and motorcycle riders are activated on this intensive pathetic to their position. right now we just hope to negotiate it out. i'm not taking anything off of the list at this point. i think it would be counterproductive to the negotiations. >> i hope we take a good look at this and again, i want to thank you, mr. chairman, for allowing me to participate and i yield back. >> you are recognized. >> thank you, mr. chairman and thank you, ambassador, for being here today. you are one of the themes of it by the time you get down to this point, but i want to attach myself to the comments made by a couple of my colleagues with regard to the importance of the free flow of data in the effort we are putting in with the recognition that what you do here with nafta may also may have influence with regard to
bilateral agreements you intend to reach with other countries as we are looking at europe and other places in the questions of privacy demands and others in the european sector creating genuine concern for the free flow data. you did say you were looking towards putting the highest level of people in your organization. may i inquire, the position you're looking for with the ip and vaster, is it something that require senate approval or is that within your own approval? >> it requires a senate approval. >> this is part of a problem and i hope might lose on the other side who are concerned about this issue would be weighing in with their colleagues in the senate to assure that we would have this kind of support for that very very important position, but i think you for your emphasis on that and hope in blue of that appointment you will still look to assure their
senior-level people working on most associations. another issue i know you are well aware of that continues to have great significance has been the patent protection for innovation that takes place in the us and the bio pharma area. there are questions about data protection for biologic drugs and other kinds of-- this has really been a part of ttp negotiations in the past and were not really resolved in a way that was as clear in ttt-- ttp negotiations with the five plus three being about the best notwithstanding. many representations by the trade, they were looking at the 12 years of patent protection that are enjoyed here in the us.
currently, best i can understand canada does not recognize 12 years of protection for the biologics and mexico is ambiguous at this point in time. is it your intention to try to work in that space to maximize protections for biologics? >> yes, absolutely. >> would be grateful for your continuing commitment to that. and you address what you might be able to do with regard to mechanisms for patent disputes where they may arise in the context of essays québec. >> well, this is another area where we want to have discussions and where the whole protection for intellectual property will be a major issue in this negotiation, not just in the biologic area, but in the disputed area. there have been for those members who aren't aware, there's been a number of cases
in canada where we think unfairly people lost their patent protection and this is something we are going to focus on and we understand the issue in a tickets eight significant issue in a surprise to a lot of members who focus on it like you do. >> i think you for your attention to those important issues. mr. chairman, i yield back. >> doctor davis, you're recognized. >> thank you, mr. chairman and welcome, mr. ambassador. i live in chicago, illinois. my hometown has the largest concentration of companies that process sugar contained products made in our country. they are currently, though, paying 75% more for sugar than their competitors who can buy on
the world market. in the ttp partnership agreement negotiations, a consensus was reached without significant dissent in the us to increase the sugar export quotas for australia and canada, but my constituents would like to know is are these legacy negotiations regarding additional access for the us sugar market going to be on the table during the renegotiation of nafta with canada and mexico? >> well, we have with respect to mexico we have an agreement entered into, a suspension agreement entered into and it's likely that that's going to change in the context of nafta.
we certainly with respect to mexico and canada it's a something that members care about wii will be informed by what the members views are and we will certainly take note of the fact that you are concerned about it. we do have the biggest sugar issue we have right now is mexico and in the context of that litigation of the title vii litigation we have a suspension agreement, which i think will probably in the resolving that issue through the negotiations. >> i serve as cochair of something called the sugar caucus. chicago used to be known as the capital of america. our members are expressing serious concerned-- concerned
about the continuing domestic rising sugar prices, which is actually caused already a number of our companies and corporations and entities to move or relocate out of the country or to look elsewhere to purchase their sugar because they use huge amounts of it. some of the candy and other things that are made are mostly sugar. can you share with us the administration's concerns relative to this continuing rise in domestic sugar prices for these businesses? >> congressman, i don't have any views on that issue. it's more of an agriculture
issue from my point of view. i'm concerned about the trade affects and is wanted to engage with many on that, but the domestic price of sugar is out of my review. i'm not been so pathetic to the points you make, but i had this whole world of things that are probably impossible to do and if i add agricultural prices to it then i will go from small chance to zero chance, so i think i have to state in the realm of trade. >> we would urge you to add this trade issue. anytime we continue to lose jobs that we can't replace, that becomes, for me, a trade issue as well as an agriculture issue, so we would urge you to take a real serious look at this issue and this problem. thank you so much for being here
and i yield back the balance of my time. >> and you, doctor davis. ms. it known, you're recognized. >> thank you, mr. chairman. thank you, ambassador, for being with us today. i want to thank you also for your work with secretary ross and the commerce department's allowing usb-- us beef back into china. that's huge four minus-- for my state of south dakota. what concerns me about the deal is that our people have a tough time getting back up to the 70% imports market share that american beef producers enjoyed previously. australia, one of our top competitors in the region has negotiated a free trade agreement with china to completely reduce tariffs on their beef by 2024. as we were to modernize nafta other countries are working on free trade agreements and we are losing market shares in foreign
economies, so what is your plan to ensure american agriculture exports will be on a level playing field in foreign markets so we won't continue to see our market share reduction in other countries and also getting there quickly before those other countries are able to snatch up that market share before we get other agreements completed? >> well, first of all, we are pleased with what was accomplished with respect to beef in the china 100 day plan. we think there are lots of other restrictions that we can eliminate with respect to all agricultural products in china. many times us has the best and cheapest products and there is some impediment to the importation and that was a classic example in the beef case and in many cases, also poultry with a whole variety of these
issues, so the first thing we have to do is remove impediments to us trade, us agriculture as you know far better than i do. it's the best. it's the most competitive and cheapest and if we have a level playing field we will do fine. i think it's extremely unlikely we will end up with a free trader grote-- negotiation with china for a variety of reasons, but i would be happy to sit down and talk with you. we do have a lot of leverage with china in terms of them moving impediments and giving access to us agricultural products, usb particular. of the reality is they have 350 billion-dollar surplus with us. you get a certain amount of leverage with that if you're willing to use it and it fits in the category of the people who can't have that kind of a-- i mean, in the history of the world there's never been anything that is so unbalanced as that and that gives us a certain amount of leverage, so
continue to push on those issues is important. in addition, there's a lot of talk about other fta's, bilateral fta's, one that the beef producers talk about is a japan, so we had discussions with the japanese. we are not necessarily rooted in the direction of an fta because they're probably not ready to talk and neither are we, but it's under the vice president where we are engaging in an economic dialogue and we are talking about a variety of issues, these kind of issues. it's the kind of thing that at some point may lead to an fta, which i know is very important to agriculture. final thing i would say on this issue is japan has had a 60 or 70 billion-dollar trade surplus with the us since i was at ustr 30 years ago and i've taken the position that on these kinds of areas, at least on a temporary
bases the japanese art to make unilateral concessions. the reality is that it's in their interest. it's not like you are pushing out japanese production. you would be pushing out another competitor, so i think that's something we ought to look at. we ought to let our beef in at least on a temporary basis. just as an effort to get their trade deficit down to show we moved forward in developing a close relationship. >> i think any reassurance you can give that we are not just focus on a seamless negotiation of nafta that we are continue to focus on china and continuing to focus on japan, that there's many of these. outnumber an industry in in south dakota is agriculture and i'm a lifelong farmer and rancher, so i know that market shares are incredibly important and they see other countries being aggressive and like reassurances we are not unilateral cleat focused on the renegotiating nafta and we are focused on pushing those other
areas, so i appreciate your work on all of that. also, i know i'm out of time, the geographical indicators in the european union as well as an issue. thank you for your time and with that i yield back. >> mr. holding, you are recognized. >> thank you, mr. chairman. mr. a pastor, first i would like to thank you and your very able staff for your assistance you provided to our sweet potato farmers as they face issue in the eu, pending issue that can greatly harm their ability to export and north carolina makes great sweet potatoes and we would not want to deprive the world of their great taste and benefits. touching on other issues, as you can imagine and i know you know a lot of members of congress are looking forward to a bilateral agreement with the united kingdom. i have watched the press reports from the meeting that secretary
ross had with secretary fox earlier this week and out of that meeting announced that as early as july, with a preliminary scoping for trade agreement, so i would ask you to explain what: mary scoping means. what does the working group consist of? do you have the lead in this? is congress taking the lead in this and additionally regarding tpa, will tpa procedures be followed in this: mary scoping? consultation with congress during the scoping process. >> thank you, congressman. yes, as you say secretary of state fox was in town last week we met with him also. ustr agreements like this while secretary ross will be much
involved, ustr will be the hub of the negotiations. first thing we have to remember is that the uk really can't do anything for a while they have another several months, probably until i guess the middle of 2019 before they can actually get out of the the you-- you. there are brighter things you can do that we can both agree on , things like licensing and this kind of thing. i think there is an effort to talk about that do that in the meantime. to discuss the issues as we get closer to the time that they can actually act, then we will start going through the process. i think at the right time the uk would like to have an the united states and i believe the united states was in agreement there
also, so it's important activity. something that has its own timeframe because of their situation, so we have begun talks about matters of mutual interest and there is-- they are natural partner. >> i agree with you, and as you engage in your scoping, members of congress engage on this engage with our counterparts in the parliament to talk about what the agreement would entail and getting the idea of where sticking points might be as-- we have always had interest in some regard. stain on the topic of the uk, i would urge you as you look at towards 232 investigations that you recognize the unique relationship, special relationship with the united kingdom particularly in regard
to national security between our two countries. take that into account and perhaps consider exempting countries like the united kingdom. perhaps there is no other country like the united kingdom regarding our special relationship and national security when you decide what actions you will take regarding the 232. lastly, ics has been touched on in numerous times a day. i sds in the carveout of tobacco was absolute fatal flaw in a would encourage you as you look at trade agreements and look at this and whether it's appropriate and various trade agreements that you commit to not carving out any sector of our economy from i sds as you and i talked about before you always have to be mindful with getting to 218 i trade agreement
and any carveout of tobacco or really any other privilege benefits of a trade agreement would be fairly fatal at arriving to twittered 18. thank you. >> thank you. mr. smith, you are recognized. >> thank you, mr. chairman. thank you for being here. the focused in southeast east and central missouri definitely agree with president trump and yourself that we believe are trade deals need to put american workers and american farmers and ranchers in american families first. i think that's extremely important. in the last two decades since nafta was assigned a lot has changed in our economy. when you talk with folks i represent they associate nafta with the job loss. they know someone who lost factory jobs making shoes or
bicycles and even clothing and southeast missouri. it's incredibly important that nafta be updated and modernized and we need to do it in such a way that puts american workers, businesses, farmers and consumers first. while the full promise of american manufacturing was not realized under nafta, american agriculture bill-- saw significant gains in the market. this must be preserved. of the district i represent is the most diversified agriculture district outside california. every august, i do a two-week farm two were visiting all counties promoting diversity in the different aspects of our district and in missouri, we are the fourth-largest rice producing state in the country and all of that rice is produced
in just the five counties in my entire congressional district. nafta is responsible for making mexico and canada the largest market for missouri rice with 87% of our exports going to those two countries. ambassador, missouri farmers want to maintain market access that they currently have an agriculture trade with mexico and canada. any disruption of trade with mexico and canada is a concern of our farmers and our ranchers. what will your approach be in the renegotiation to be sure that no new barriers to us agriculture trade are established under nafta? >> we intend in this negotiation to do no harm to the agriculture sector. ..
lack of fairness in selling across the mexican and canada orders where there is a very low dollar value in shipments threshold. it was set aside as a low dollar shipping for faster and easier processing in and out of countries, but at this point in time, it's been years since that agreement was made, we really are in a situation of unfairness. in the u.s., the shipment level is $800 but when you look at mexico, it's less than $50 and canada is $15. there is unequal treatment and cost to some of those folks that are doing business such as fedex. fedex has thousands of workers and employees in my home state that are potentially affected by this as well as individuals. i would like to know from you
if that is something you are looking at and if you think we can find some resolution and quality for individuals and companies in this area. >> thank you. yes, it is something we are looking at and we take it very seriously. it's one of those issues where you think you know something about trading you look the issue and you think how is that possible this could be happening. it is a real burden to everybody who ships back and forth it's a very large problem. it fits into the category of rapper prosody where you say how is it possible. we will look at it. i hope there is a resolution that satisfactory to your constituents.
from a management point of view, it has to be a burden on them. i hope it's not done intentionally. i hope it's just a question of something that's built up over time. but we will look at it and focus on it. >> thank you. i understand these thresholds were set many years ago when things were different, as far as the way in which shipment was done, the cost of product and so on. it seems to be something that has been around for a while it needs to be revisited. the sooner the better for individuals and companies on the cost that's borne by this inequity. the second one i want to talk about has come to my attention just recently and it's the issue of the u.s. eu agreement
on insurance. it actually came to me by a couple sources. one was the tennessee farm bureau in my state, which is a very large industry and does a lot of business around the country. they were here couple weeks ago testifying before the senate and this agreement that was put into place, i understand it was pretty much rushed through by the previous administration to change the way insurance policies are treated across borders, has not seemed to be in the best interest to those in the united states. there is not clarity and there are a lot of questions about what these agreements mean.
i wanted to know if that is something you are aware of and looking at getting some clarity for those who do insurance. >> thank you. i am very much aware of the issue. i will have meetings scheduled very soon for you and i to discuss this issue. it is a good time to have your view on it. >> i appreciate that. i think since the president is very adamant about america first, we need to make sure we are not putting our companies and our folks in the united states behind other countries with the lack of clarity. thank you. i yield back.
>> thank you for being here and your patience in waiting for two and half hours to allow me to ask you a few questions. i think i am very much aligned with the administration. they saved make america great again and i say make america competitive again. to the things that give me optimism about this administration are your appointment and the appointment of mr. ross. i'm very excited about fair and free trade. i appreciate your work on the steel industry during my four years here i've had a constant stream of legitimate complaints about trade practices from chin china.
i have companies who have lost employees because of these unfair trade practices and i very much appreciate your focus on that. i want to talk about something more fundamental. that is what mr. nunez discussed earlier about the fact that 140 other country have adopted order taxes through the value-added tax system. i know this hearing is about trade, but we have heard how so many factors enter into. trade. earlier today, whether it's employment practice or environmental practices, environment and other. what i am curious about is, in negotiating these trade agreements, how can you ensure we achieve fair trade, trade where american companies and workers can compete on a level playing field. how can you ensure that when
other countries are applying border adjustment taxes on our products when they hit our short and were not doing the same thing to them. when you renegotiate nafta, account for the fact that mexican has a 16% border adjustment and we don't have the same offsetting tax, and therefore american workers and american companies are a huge disadvantage. >> thank you. first of all i have spent a lot of time thinking about this issue. i think this equilibrium between direct and indirect taxes is a serious problem. there are a lot of different ways to deal with it. i'm not in a position where i want to say what's the best way, and in addition i'm not paid to worry about taxes. i'm paid to worry about other things.
>> i understand and i agree and this is a trade hearing, but don't taxes have a direct impact. >> absolutely. they have a direct effect in our competitiveness and that is what trade is all about. taxes are a huge issue. in terms of direct or indirect taxes, i think there is a real problem, but when i do my negotiations i take those systems away. they make their own judgments as to whether or not the one have value add taxes or income taxes or how they want to structure all that. i'm not blind to the fact that it does make a difference in the real world. the most important thing is to get taxes down and do all the other things we need to be doing to become competitive. in the area of taxes, there are different options. there has been a tendency on
behalf of most countries or many countries to move income taxes to indirect taxes. >> there has been that tendency. would you speculate that tenancy was due in some part to the fact that it makes it more competitive with respect to manufacturing and importing and exporting? >> my guess is, did they do it for a variety of reasons, and probably that is one in respect to some issues and it's always been a concern to republicans with respect to value-added tax but i think some people go to it because they think it's easier to raise taxes and there's a lot of people who have the view that one of the principal reasons, one reason europe has gone the way they've gone is because it's been too easy to raise taxes.
these are not totally, there's a lot of things to think about in this discussion. >> this issue of competitiveness, it doesn't just apply to manufacturing, it applies to agriculture as well. >> absolutely correct. >> thank you. ambassador, it's great to see you. thank you for hanging in with us. i am from a state of indiana and i want to thank you for indulging me in talking to me about this, section 232. we talked a little bit about this but i'm more than concerned about the impact on aluminum as it pertains to my district in my state. i would just ask to consider the anxiety from my constituents about the tariffs and quotas that they used to make rvs and trailers and other products. i've already been contacted by some of these manufacturers and their already being impacted by price differences
and they are very uncertain as to what will happen. i appreciate your willingness to look into it. could you convey to the president and the secretary my request what is the action for american companies and to avoid any quick action that would help these companies. could you convey that information. >> i would be happy to do that. i just want to associate my remarks with representative paulson about this issue in india and our issue. that goes along with medical device manufacturing. we are full of those in my state. they are worried about a
sudden and drastic nature to cuts and what it means to products being sold there and products in the future. myself and mr. kind previously sent a letter with 16 of our colleagues to the ambassador voicing our strong concerns and i'm happy to provide that letter to you. my question to you is what else can we do on capitol hill to help you with these issues with the medical devices when looking specifically at stints and some of the prohibitions and the things you referred to earlier. is there anything we can do to help you. >> first of all, the issue is a very serious one. i have met with the manufacturers and they are in a position where they literally are forced to sell something they don't want to sell way below the price of manufacturin manufacturing. it's like you can't even understand it. i think it's something we are taking seriously. were focusing on it and just the more pressure congress can
put, the better. >> specifically to the ambassador, or does it need to go any other direction. >> it's probably better if i don't talk about that in public session. this may be one of those things where we have to go to executive session. no, i'm kidding about that. the prime minister of india is coming to town so there are a lot of opportunities where they are looking at irritants, and this is clearly a major irritant and they know that. we have pressed them. from their point of view, they have a different take on this. we press them and our arguments are stronger when they're backed up by the congress. the power in washington is right in front of me. >> i appreciate it. a final issue i wanted to discuss is one that you brought previously enough
candidates promise utility doctrine that's resulted in 28 pharmaceutical patterns being partly or completely invalidated which will be a big priority for us in any nafta update. any comments on those protections and that doctrine? >> ambassador, could you move closer to the microphone. you end up losing patents because of use and then someone makes a generic drug on the same product and they start selling it. it's a serious problem. it will be part of this negotiation. >> i appreciate it. could you give me how you see it as it pertains to steel and aluminum? i'm particularly interested in how it pertains to the aluminum part. >> i think you will see decisions fairly soon.
the view and administration is that we have a very serious issue and the president has asked us to look at these things before they have hearings on the other today and the president wants action. he is worried about what's happening in those industry. to the extent you have concerns, it is certainly timely. >> i appreciate that. i yield back. >> thank you. >> thank you. one issue i wanted to bring up is the affect trade agreements have on the farmers of the south florida district. many people not from south florida might be surprised to know that miami-dade county is one of the largest egg producing counties in the state. most people think about our beaches, and we are proud of those, but we have a robust egg industry in south florida. we have avocados, mangoes, tomatoes and other specialty crops which can be grown
year-round. as we know negotiate, we know farmers have benefited greatly from nafta but the story is a little bit different in south dade. i try to spend as much time with these farmers and they have many issues they're concerned about. immigration, taxes and nafta is a major one. specialty crops like tomato squash, eggplant, strawberries, but much anything that is handpicked faces a significant disadvantage when it comes to mexican competition. they have a similar climate and for a whole host of reasons can on fairly compete against many of my constituents. i have raised this issue multiple times as nafta is being renegotiated for the fair treatment of south dade,
especially these crops and the farmers who grow them. i've mentioned this to you and your staff, secretary ross and mr. navarro. this issue is of critical importance to the south a farming community. can you discuss what we might be able to achieve through this nafta renegotiation to put these south florida farmers on a level playing field with mexico moving forward. >> we appreciate your input and those other members from florida on this issue. we realize how important it is when we talk about how important agriculture is an agricultural sales to mexico and they are extremely important, overall we have a trade deficit with mexico and it's entirely because of the specialty crops that you're talking about. there are a whole additional elements and a lot of things that make a very complicated issue.
i assure you it is something we are going to focus on in this negotiation and hopefully getting out come that will satisfy the producers in your districts and in all of florida. it's a major problem, and you're right, it's a major outlier in the whole agricultural and we need to be conscious of it. i appreciate your involvement. >> we will continue working with you in your office and other administration officials to try to make as much progress as possible. another issue is like to touch on is the transatlantic trade and investment partnership. earlier i joined members in sending a letter to your office in support of continued tea tip negotiations. can you talk about the positive benefits tea tip could have for our economy, especially with the inclusion
of a dedicated chapter in the agreement identifying the importance of small and medium-sized enterprises? >> we have an ongoing reevaluation of all of our trade agreements and our ongoing negotiations. we are looking at the benefits and drawbacks, the trade-off that we see, but i think that tea tip is an area where there are a lot of very positive reasons to go forward. it requires two people to be involved in a negotiation and, for a variety of reasons, largely electoral process, the european union is not in a position to be negotiating at this point. the last election they had this year was in september in germany and i think at that point they will start focusing
on that but then they have brexit to focus on. they have a lot of things they have to look at. we also have priorities but clearly this is a very likely potential agreement and it was entered into because an awful lot of people saw benefit to it. as we go through this process, i think we will make an analysis and look at the plus and minuses and the views of the members of the caucus will be very important to us. >> thank you. >> thank you, mr. chairman. last and least, or however the saying goes, trying not to repeat any of the questions, and when your last a lot of them have been used up, but first off, conceptually, i have a great appreciation for how complex your world is. you have this area of authority, but everything from currencies to local national
regulations to technology and infrastructure, everything ends up affecting how trade works. i do have a couple odds and ends for you. being from arizona, we are one state that if you look at the baseline data, nafta has helped our state's economy. as you move towards modernization, can i beg of you to have fixate on this customs technology, the ability to have those vegetables move across the border efficiently. the ability to say we are going to embrace a common platform for technology. i don't care if it's based in a distributive ledger where you have gps tags were ids, but the ability to say how do you maximize the efficiency of those cross-border
transactions and the movement of the customers. >> thank you, that is such an important question. we sort of touched on it in various ways because we talk about a lot of different things. one of the things we are going to focus on is just, i think the mexicans and the canadians will be in agreement, how do we make whatever you decide your policy is, once you set it, it's gotta be easier to move product and data across the border. this is important. facilitating trade is our objective. there will be tactical problems, of course, but as a matter of direction, i can't imagine the three of us would have a disagreement on that. >> it's a great opportunity with technology and the ability to track it down to certification at the dock to the movement to the backbone
that's half proof, i just embrace that technology. and this may be slightly more conceptual, but as you're working on the drafting, how do you design something that is partially future proof if this is substantially the driver of much of the u.s. innovation and technology, what happens when that handheld supercomputer is my transmission of making purchasing decisions or paying my fees or moving money back and forth that the agreement be robust enough to understand everything from the way we transmit data to where we house the data to the encryption of such data. it's that digital trade world that we are very good at that would also make the relationships with their trading partners more efficient.
>> i think there has to be a focus, my guess is we are probably miss the mark because nobody really knows what's going to happen and it's always unpredictable, but hopefully we won't mess up as much as the people who did it 23 years ago. >> that is one of the great difficulties, and trust me, i'm part of a body were sometimes we commit the sin of thinking we know what the future looks like. how do you design language that has technology and the movement of whether it's a crypto currency or documents of value or certification or ownership, that the way you britney agreement there aren't these great gaps that we have to wait 25 years for the next major negotiation to fill. >> this is so important, and
hopefully we are focusing on it and we will certainly try too. then we had to build in processes within the agreement that allow you to make amendments to go through the whole process when there is a huge directional change. this is something that were cognizant of and we perhaps haven't thought enough about it but we certainly will. we want to work with the congress to do it. trans shipments, something that might be a product made that comes through mexican port, i'm hoping the same movement toward the identification and technology can actually deal with what are part of the nafta agreement and those were just passing through. with that i yield back. >> thank you. please be advised, in addition to the questions he received here, members have two weeks to submit written questions which we answer later.
senate republicans release the discussion draft of their health care law replacement thursday morning. the congressional budget office will score the bill by early next week when senate floor debate is expected to begin. we posted the bill at cspan.org. follow live senate coverage next week on c-span2, online at cspan.org. >> now to a hearing on extending federal safety net health program such as the children's health insurance program which expires september 30. let's talk about the program's track record and planned initiatives. this is live coverage on c-span c-span2.