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tv   Senate Finance Hearing on United States- Mexico- Canada Trade Agreement  CSPAN  August 19, 2019 12:01am-2:23am EDT

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now, the senate finance committee examines the u.s./mexico/canada trade agreement. secretaryiculture along with the panel of trade and industry representatives testified on how the usmca could impact the average american, as well as how it differs from the 1994 north american free trade agreement. >> we welcome our witnesses. telling us about the importance of the united states-mexico-canada agreement. we are referring to that as usmca. fromok forward to hearing the witnesses about the significance of the agreement to america's businesses both small and large.
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farmers that we all represent. thank you for being here. our country's important trading partners according to the international trade commission. the year 2017, more than one third of america's merchandise exports went to mexico and canada. in that year, mexico and canada imported more than half $1 trillion of american goods, plus more than $91 billion of american services for iowa. on mexico tolars canada. support 130,000 jobs. foundation of a strong trading relationship with mexico and canada has been thus far nafta. -mexico andstates
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canada negotiated that agreement between 1990 and 1993 at the time it was a new standard of trade agreements. it helped to mexico reform indoor market economy. enabled american businesses, workers, farmers and ranchers to sell our goods and services in mexico and canada without tariffs and without nontariff barriers that for decades had burdened our ability to complete in -- compete in those two countries. the u.s. economy and global trade have changed dramatically and 25 years of experience with nafta have provided viable license. that's a usmc is all about. it sets a new standard for a trade agreements. for example, once enacted, the agreement will be the first u.s. free trade agreement with robust
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chapters dedicated to digital , good regulatory practices, and small and medium-sized enterprises. benchmark set a new in many other areas as well. such as free transfer of data across borders. strong rules on state owned enterprises. north american content requirements for preferential treatment. food safety and biotechnology standards. facilitation's. intellectual property rights and enforcement environment. chapter affects labor workers rights in mexico. it has resulted in the overall of mexico's labor laws.
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the labor and environmental standards in the agreement are the most rigorous in any u.s. trade deal. unlike with nafta, they are in the core of the agreement and are fully enforceable. addresses squarely ing-standing u.s. concerns the canadian markets, such as on retail salees of wine, dairy supply management , and the distribution of u.s. television programs. these are substantial improvements for nafta. they represent benefits and new opportunities for iowans and americans across the board, according to the international trade commission. the agreement will increase real billion and 176,000 new american jobs.
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not to say that every usmca provision is perfect. trade agreements always need to balance the preferences of different industries with the elected leaders and stakeholders. some of my democratic colleagues in the house of representative have centered their attention on the usmca outcomes that they view in perfect. surely nobody could consider nafta to be better than usmca. , let me emphasize nobody, should dismiss the importance of a half chilean dollar market for u.s. agriculture products. i came away from a meeting that i had with speaker pelosi that was very positive as i heard her words and expressed her attitude towards usmca. push and push,
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but i think we must be patient as she works through this. i have confidence she wants to get ts. i have also supported the of the speakers members with ambassador lighthizer for clarifying our concerns. open mind to workable ideas and stand way for possible agreement.s in the i support strong enforcement of al of the chapters through system that works through reliably and has credibility with the trading partners, i am also pleased at important provisions on russia -- prescription drugs will not require any changes to u.s. law. i would be open to proposals that would confirm that point. at the same time, every day that passes is another day that benefits usmca going unrealized.
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whole to reopen the agreement with risks of unraveling the deal altogether, which would benefit nobody. i urge the house of and ambassador lighthizer to focus on their specific concerns into proposed solutions in short orders are that we can pass usmca. so will provide much-needed certainty to american workers, businesses, farmers workers and enhance global trading. you mr. chairman. i want to make sure and clear of the outset that i look forward to working closely with you on all of these issues. meets this morning to discuss what needs to happen for nafta 2.02 deliver better results. farmersican workers and
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, and particularly american families from sea to shining sea. my remarks byegin giving a big oregon shout out to one of our witnesses. not only because she is an oregonian, but as an entrepreneur, ms. barnett is a perfect example of why the original nafta needs a bold upgrade. artisan andis an has been in the area often for town hall meetings. 1800opulation is about people. she founded a jewelry business that produces in oregon and sells online to customers in the united states and around the world. some of whatces goes into her jewelry from
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abroad. kind of business off the ground would have been a lot harder just a few short decades ago when nafta was created. output of theomic cellar space in oregon is more than $125 million. that is just one of the many online platforms that business is used to grow. oregon's many success stories also include rough where based producer of gear for a very good dogs all over the united states and other countries. updating nafta means addressing the challenges and businesses that operate online. it also means confronting the other areas were older trade continue, to this day to fall short.
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fighting to protect labor rights and the interests of working families. to the bottomace when it comes to the environment. sure there is vigorous enforcement of our trade agreements so that other countries cannot treat those deals as empty documents that give them time and opportunities to rip off american jobs. i want to particularly emphasize the straight enforcement issue. my colleague and i come from the pacific northwest, incredibly trade sensitive. jobs in theive state of oregon revolves around international trade. the trade jobs paid better than the non-trade jobs in many cases because there is a value added complement. in my home state, one of the aboutthings anybody asks when trade topics is brought up hey, what you guys in
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washington, d.c. doing to better enforce the trade laws that are on the books? they understand you need to upgrade these policies, but they want to make clear that the new day has to involve tough and enforceable trade laws. is nafta 2.0 agreement consulting with what comes next. critthe right wrapup your -- pretty quickly, i want to make points on the process. there is important work left to be done on key issues. the new nafta enforcement system is of the old system. it is too easy on trade. it's not good enough for american workers. particularly on labor rights. senator brown and i have proposed additional tools to address specific challenges in mexico, and i hope there will be progress on that front.
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one of the biggest challenges we have confronted is identifying the hundreds and thousands of sham labor contracts in mexico that have exploited more and harmed workers here. mexico must remain on track to get those renegotiated on behalf of the workers interest. in original nafta remains place. workers, farmers, ranchers and businesses should not have to fear that economic uncertainty will cost them their livelihood. it is a problem when the president acts out and makes threats regarding our trade relationship. american farmers, american somers have been hurt by of these presidential impulses and more will get hurt if the president continues to offer threats and chaos, and possibly this ends up causing the congress to have a bad deal. president to the change the rules and jerk around the entire industries that would
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be a dangerous mistake that promotes uncertainty. it constantly comes back to certainty and predictability. you don't get trade done right with all of this uncertainty. based on that i have real concerns about how the administration wants nafta 2.0 to be administration -- administrated. i know my colleagues killed -- care deeply about trade. like to close this comment where i began. ms. barnett, we are so glad you are here. i think you are the face of much -- of much of what the trade challenges all about. how can i do better than he did in introducing you? the only thing i would add from my notes is that you single-handedly run your business selling drollery's to buyers all across the world. you are definitely concerned
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about trade agreements. thank you for being here. next i would like to welcome the president of the american policy council. was the 54th governor of missouri, serving his state as chief executive 2005 2 2009. he has been president of the automotive policy council since 2011. in that role he represents the common policy interest of automotive manufacturers for general motives. we welcome you governor. then we have mr. james collins, chief executive of science. he leads the only major aggro science dedicated to science. his begin -- his work began five years ago. he worked his way up the ladder. he became chief operating
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officer for the agriculture ofision before becoming ceo a recently standalone company. congratulations on your new position. presidentlcome the enterprise founded in 1966. he moved his headquarters from council bluffs iowa to omaha -- council bluffs, iowa to omaha. you are still a proud iom, i hope. i don't agree with the move but i will not fault you for personally making that mistake. he is now one of america's largest transportation and logistics companies with a network of over 7000 to 800 drugs with experience in shipping and distribute in goods.
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prior to joining warner enterprise he was one of the first born members of mexico's trucking association. he was based out of mexico city for several years. thank you. now i have the pleasure of introducing iowa's former governor and former secretary of agriculture for u.s. department of agriculture. tom is now president and chief executive officer of the u.s. dairy export council. was elected iowa's 40th governor in 1998. he served eight years as secretary of agriculture. now is the leader of the u.s. dairy agriculture and represents a trade interest of more than 100 dairy industries and an affiliated industry. thank you for coming mr. secretary. presidentelcome the
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and staff chair to the label advisory council for trade negotiations and trade policy. as the staff chair he helps committee responsibility for advising and consulting secretary of labor and the u.s. trade representative. he worked as a congressional aide for over 20 years, and also on the u.s.-china security review commission. thank you. now we will start with the ms. barnett and we will go that same way across the table as i introduced you. good morning, my name is paul a barnett and i am a jeweler living in oregon with my nine or old daughter. chairman and members of the committee for inviting me to speak to you today about my creative business.
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i am a self-taught find jeweler. studyingix years architecture and history. the clear options are extremely limited. after failing to find a job in my field, i decided to become a jeweler. i have always been a maker. once i decided on this path, i don't headfirst into teaching myself how to make jewelry. i launched my business in 2013 forn online marketplace handmade crafts supplies. within a couple of months i had already earned enough to cover my initial investment in tools and supplies. today i am a full-time goldsmith. i make custom engagement and wedding bands using recycled fine metals. i have come a long way from making brownstones shaped like mountains. my work is 100% made by me with
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my own hands in my home studio in oregon. also a single mother and my business allows me to be there for my daughter. i am home when she gets off the school bus. allows mee schedule to raise my child as i see fit. i am very blessed in this regard. carla also benefits from watching me exert myself creatively. -- excuse me. i am proud of my success but my story is not unique. 87% of this site is women. nearly all of them working out of their homes. micro-businesses, yet we have a significant impact on our communities and the broader economy. alone, we contributed 5.3 trillion to the economy and created over 1.5 2 million jobs.
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is important in communities like my. etsy businesses. small,ually we may be but together we are supporting our families in different communities across the nation. perhaps it is surprising to find that a business as small as mine has to be a part of a trade agreement. but i am a traitor in my own right. 29% of my sales are international. i make my goods available to international buyers from the moment i opened my online shop. sellers2% of all etsy export their goods. the u.s. is the only one with a sellers do etsy not ship their goods to other countries. sellers shipans
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internationally. trade agreements have a huge potential to help u.s. businesses grow our international businesses. the customs thresholds, educational resources targeted to small businesses could help me increase my exports. >> you are doing great. >> thanks. first my business depends on my package is being delivered quickly and with minimal hassle to my customers. my customers must pay extra taxes on fees for exports. unexpectedly. i have had many packages get stuck in customs. must travel in person to pay required fees before collecting the items. the cost can nearly double the price of the item. this is a hindrance to sharing my work with the world. refuteustomers have even packages. in those cases i find myself
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having to resend the item and risk incurring a negative review, which could make or break an e-commerce business like mine. the customs exemptions are the cantest tools policymakers use to make micro-businesses export their goods. they enable my packages to move quickly, which is important as customers expect faster shipping times. of customers in canada and mexico, i encourage to see the usmca would increase the thresholds for these. the threshold is important to my business. in addition to exporting goods i have many supplies. i a supplier in mexico. some of these stones are the of the threshold that congress established in 2015. i occasionally process these returns and i do not need to pay additional fees on the
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shipments. giving the importance of the customs thresholds to my business, i am hopeful congress will ensure the final agreement establishes certainty, not uncertainty around this issue. trade provisions allow me to use the internet and online platforms to reach buyers throughout the world. for your earlyor and ongoing leadership in this. i cannot over emphasize how important the internet is for my business and my family. my entire businesses online. others likeinternet me would be without work. a job is one thing, but doing something you are passionate about is something else entirely. that is what my jewelry business is to me. onm thankful i can focus growing my business and don't need to think about the infrastructure of global e-commerce. whether it is data processing and transfer, electronic across multiple currencies, or the liability protections that will allow
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betsy to operate in an underrated marketplace. to share my story with all of you today. my plan for the future ensures expanding the complexity and craftsmanship of my work. opening a retail studio space, and continuing to make jewelry with my daughter. as an internet-based entrepreneur or in setting the standard for e-commerce policy, these provisions can and ultimately will be enforced to ensure the internet continues to act as a launching pad for millions of businesses and exporters like me. thank you for your time and the opportunity to speak before you today. be very brief, mr. chairman. we so appreciate the input from miss barnett. the senator who is not here right now has also been a leader in this bipartisan effort to
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promote additional opportunities for digital trade. i just wanted to thank you. you should know there has been bipartisan support across the aisle. >> now, governor blunt. >> thank you members of the committee. i thank you for this opportunity to testify today on usmca. truly a 21st-century trade agreement with our canadian and mexican trading partners. i am the president of the american automotive council, which is a part of the u.s. automakers. the emphasis is on international trade and economic policy interest of our member companies. american automakers are confident that once approved by usmca will not only help bring much-needed predictability and help maintain the competitiveness of the u.s. auto industry, it will serve as
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a blueprint for future u.s. trade agreements. would allow our automakers to thrive in an auto market. negotiations began the companies have four priorities. they have two of the largest vehicle market in the world. continued acceptance of u.s. auto safety standards in the region. and help workable rules and origins and parts of north america. we firmly believe the negotiators achieved all of these priorities. includesmca will duty-free access to the markets in the world. they have been incredibly successful. the twoa it counts for main vehicles sold.
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that's part of the 1.4 million vehicle market. the market is expected to grow steadily in the future. we commend negotiators for creating stronger but workable rules for workable parts of the region. the highests raise of any trade agreement and the world with 62 and a half percent to 75.5%. it would require automakers to make changes and shortages. we believe these changes are feasible and will than if it the auto industry and jobs that they directly and indirectly support at home. it was driven in part by the new usmca rule of origin requirements. these new rules of origins would strongly incentivize with the united states. more u.s. investment means more american jobs.
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lighthizer and his team had to groundbreaking provisions that would lock in the acceptance of vehicles built to u.s. safety standards and provisions to prevent currency manipulations. these are the strongest ever including in the free trade agreement. it should be included in every feature of the u.s. free trade agreement. it would not only help the u.s. auto industry remain competitive . lastresident's decision month to lift the tariffs from mexico and canada was a crucial development from our automakers. as well as many automakers on both sides of the aisle. we also understand that conversations between ambassador lighthizer have been constructed . given this momentum we hope members of this committee can work to help resolve any remaining issues so that
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congress can approve usmca and allow its full potential for ..s. automakers to be realized i want to thank you for holding this important hearing. >> i just want to say, welcome. his wife lives in my favor part of delaware. you have been a terrific leader. it is headquartered and we are delighted to see that happen. you are a great community leader, an eagle scout and
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serves on a lot of towards. [indiscernible] and he has been a scout leader for many years of his life. he and his wife have raised 12 children. i think it's like 12 children. >> i appreciate that an injection -- introduction. thank you members of the finance committee for the opportunity to be here to testify. as you have heard, my name is jim collins and i am the ceo of that aggro science. company that was spun off. it is a company with more than
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300 years of combined agriculture experience. i am honored to share the views of our more than 20,000 employees with the over 400,000 u.s. customers. american farmers and ranchers. i am here to address the critical need to pass the united states mexico canada agreement. usmca features elements critical to american agriculture, things like market access and modernized regulatory to ensure our competitiveness. millions of american jobs depend on trade with canada and mexico. international trade supports 39 million jobs across america. usmca would increase u.s. ag and food exports by up to $2 billion. farmers who flourish under the
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access to canada and mexican markets. nafta boosted it to north america by over 350%. that's over the life of the agreement. nearly $45mexico buy billion of ag products annually from the u.s. making them our first and second ag export markets. and all of our conversations with markets, they express trade is one of their key elements is their key to success. passing the usmca will ensure
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that new farmers can continue to survive. let's turn to the ag sector. as chairman grassley stated so well, we need to secure strong agreements so that we can restore the level playing field. theya level playing field, can innovate and help u.s. agriculture become even stronger. industrye food and ag is responsible for the largest segment of u.s. manufacturing jobs. when farmers win, our nation prospers and we all win. the united states is the largest market for seed and the world. mexico and canada, the u.s.' representt markets $600 million in exports. that's one third of the total.
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see varieties could cross as many as six international borders. the bag of seed becomes commercialized and sold to a farmer. usmca offers a world-class regulatory disciplines that prevent rejected or delayed speech shipments that can cause -- and a satisfied customers. and crop protection products represent decades in development. thus the ineffectual property rights protection is also crucial. they are particularly excited about the biotech protections also afforded us under usmca. it has a substantial presence in iowa, indiana and in delaware.
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with offices, sites and employees all across the country. as company about half of our sales are outside of the u.s. we need problems beefed -- we need to solve problems because -- before they become disputes. itbecame integrated and brought deep relationships among our officials. these frank discussions between officials were worth their weight in gold and the usmca will build upon that foundation. pass usmca toly protect the north america market, but we need to replicate the exercise going forward. the studies are clear. usmca creates jobs expands markets for family farmers and
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agribusiness companies like this. thank you for the opportunity to address the committee. members -- >> members of the committee, thank you for the opportunity to testify on behalf .f american trucking i am the president and cao of one or enterprises. warner has grown from a one track operation from a global logistics company employing 13,000 associates and drivers worldwide. one or has 8000 tracks, operated by professional drivers moving america forward everyday. warner continues to grow at home or internationally. our significant growth in mexico is due to the success of north american trade.
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top five one of the u.s. truck load carriers operating in canada with 8600 cross-border movements in 2018. as we celebrated warner, our 21st anniversary in mexico, we are the largest u.s. truckload carrier providing ground transportation to and from mexico. last year we crossed 154,000 shipments. mr. chairman, you would be interested to know that warner hall's protein, be, pork and poultry across iowa to mexico on a daily basis. warner's largest cross-border customer in terms of volume and revenue is based in oregon. i have spent over 25 years in trucking while living in mexico city. hasw firsthand how nafta transformed north america into the most competitive block in the world. nearly 76% of all cross-border freights are transported by tracks.
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when trucks are not the dry merryman at of transportation the others still depends on trucks for final delivery. everyday there are 33,000 trucking trees across our northern and southern borders hauling more than $2 billion of goods. to put this in perspective, 12.2 money and truck crossings moved across $772 billion of goods across our canadian and mexican borders last year alone. beyond the numbers, the best way to grasp the scope is to see it firsthand at our ports of entry. i invite you to visit our terminal where you can see the volume of truck transported freight constantly moving across the u.s.-mexico border. and why we have expanded that location twice in the last three years. we are so inclined, visit us at any one of our officers -- offices and we would be happy to host you.
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technological advances have redefined the trade environment is such a degree that nafta is outdated. the u.s. it m stashed the usda is timely. usmca is timely. it is now inspected by consumers. cross-border trade by truck has increased 191%. the north american supply chains are grown increasingly interconnected. there are countless examples being transported crossing our northern and southern borders multiple times prior to reaching the concern is -- consumers. the usmca represents more than a trade agreement. the flow commerce has become a major cornerstone of our economy. supporting the livelihood of roughly 90,000 people employed in the u.s. trucking industry including nearly 60,000 truck drivers to move freight to in from our borders. companies pay drivers more than $3.25 billion
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in wages, plus health insurance and retirement plans in 2018. trade is crucial for the blue-collar workers in the trucking industry. failing to pass usmca would have negative impact on truck drivers along with the customers we serve along north america. manufacturers, farmers, retailers and consumers. it would offer a new era of innovation. more pay of american jobs and sustained economic growth. the american trucking association, the border trade alliance and the broader trucking industry urges congress to act swiftly and support ratification of the usmca. we stand ready to help drive this agreement across the finish line. tonk you for the opportunity testify today and i'm happy to answer your questions. >> i want to express my
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appreciation for the opportunity to appear today. this is in a hearing that is important to the dairy export counsel. have a simple message for the committee. exports matter to american food and agriculture industry. 30% of all agricultural production and 20% of all agricultural income is directly related to exports. it helps to support $140 billion of activity. nearly one million good paying jobs. exports to mexico and canada matter to the dairy industry, and to farms across the united states. 28 percent of all food and agriculture exports go to mexico and canada. between 40 and $45 billion. five times what it was when nafta was first enacted. for many commodities, canada and mexico represent their top markets.
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ratification of the usmca matters to the dairy industry and to dairy farmers as well as to agriculture producers, poultry producers and those involved with providing alcoholic beverages and many other agricultural commodities. as mr. collins indicated, the itc has projected over $2 billion of additional income for american agriculture in the food industry, which would help to support thousands of jobs. multiple there are benefits. not the least of which is an increase of agricultural exports for canada and mexico amounting to over $300 million annually. it preserves our duty-free access to our number one market, mexico. market access to our canadian market that has been limited for far too long by quotas in our trade cheese, skim milk powder, way it other dairy powder -- removes and reforms key trade distorting canadian pricing policies. repealing last six and seven
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pricing policies and imposing more trade friendly discipline on the canadian supply management system. it establishes strong sanitary provisions that will protect food safety helping to avoid unscientific barriers to exports. it improves safeguards regarding u.s. companies or to use common food names, helping to avoid further of use -- abuse geographical locations that could cause the u.s. dairy industry billions of dollars of lost revenue. ratification of the usmca matters to all of the food and agricultural industries as it will build momentum for progress and other trade discussions, especially in japan impossibly china. ratification of the usmca and and impacts of the industry really matters to the entire country. why do i say that? according to the associates, the u.s. food and agriculture
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industry represents 43 million is 28%d americans, which of our entire employment workforce. it impacts 20% of american economy. whatever helps u.s. food and agricultural industry helps the country. i appreciate the opportunity to be here today. i look forward to responding to questions and assisting the committee and its important work, work that is vital to the future of american agriculture of the food industry as well as to the country. >> i know from following publications you have been doing this for a few months and we thank you for your leadership in that area. members of the, committee, it is an honor to appear before you today. the staff chair of the labor advisory committee for trade negotiations and trade policies. organized labor wants nafta
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fixed. a constructivein good faith effort to find solutions, not just logic complaints. we remain optimistic about the ability to resolve the issues. but we will not hesitate to impose in the agreement that fails to improve nafta and the current trade template meaningful and effective ways by adopting the many recommendations we have made. the currentmains usmca is not enough. the negative impact of the existing nafta cannot be overstated. it has had a corrosive impact on employment and wages in the u.s.. manufacturing public conserver sector workers have all been hurt. at carrier and indiana have seen their jobs go to mexico. break your he workers at nabisco in philadelphia and chicago saw their jobs shipped to mexico where workers are now paid as little as $.97 an hour.
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auto workers in ohio are seeing their jobs relocated to mexico. aerospace workers throughout the country have seen tens of thousands of jobs moved to mexico like workers at utc in chula vista. that is just the tip of the iceberg. it's time to reverse that trend. our engagement and our continued engagement result not only from the depths of our concern, but is also a tribute to ambassador lighthizer and his team. number of quick points, but i don't want to minimize the importance of issues i do not raise. pose, not moving the gold but we will not accept charges if we do not raise an issue with every conversation. that issue must not be of concern. there is a long list. first is the critical need for the improvement to the enforcement provisions that are absent from the current agreement. would disable the
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ability to resolve critical issues that must be fixed. addition we support approaches such as the brown/widen framework as a necessary provision in the agreement. but enforcement is only as good as the standards and laws that are subject to enforcement. we have repeatedly made suggestions for improving the labor standards included in the labor chapter. much work remains. while the labor and ask provided a new framework for mexico, the interpretation of some of the language is stealing question, and we have not seen how mexico will implement and monitor its new laws and provide funding, specific text, adversely limit certain critical rights and must be fixed. mexico's labor reforms are being challenged, including by the employer friendly labor federation. morest count there were than 400 appeals against mexico's labor reform. onre is no infrastructure
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the ground activities to allow workers to achieve their internationally recognized workers rights. needs to be accelerated and frontloaded implementation, rather than waiting for the four-year plot to toll. we need to ensure that the process for bringing complaints is traumatically improved. we need to adjust the access to medicines issues. labor contract in the u.s. deals with health care costs as a core issue with cost increases fueled by huge prescription drug price increases. theirs to protect family's health. fueling drug price increases in mexico and canada the a usmca's provisions is not only unjust, it will have a direct impact on our ability to sell products there. the loophole that allows foreign steel and aluminum to be canada's domestic materials must
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be closed. organized labor is committed to working to in -- improve upon the existing agreement. labor leaders have publicly supported the negotiations. and as it reports to the labor tax, it improves upon the existing framework of laws, but must be strengthened and coupled with successful and timely implementing, monitoring and enforcement provisions. but even if we achieve all of our goals, we will not oversell the final product to our members. they have lived with a devastating impact of existing trade policies. they are rightly skeptical and their leaders will not mislead them. we need meaningful and effective changes based on the recommendations we have made comment and that will meaningfully address the outsourcing that continues across industries. the flaws ind for nafta to be addressed and the substantive those changes and our experience will drive the decisions, not partisan
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politics. we look forward to working with the committee and congress in the coming days. a now we will have five-minute round of questioning starting with mr. collins. this agreement, for the first with dealt specifically biotechnologies to support american innovations in agriculture and continued cooperation of canada and mexico. it improves transparency and functioning of approval process for biotech crops and provides for cooperation and information exchange. on agricultural biotechnology, train banners -- trade manners gene editing. how will these biotechnology provisions of the agreement and if it the ability to innovate and bring benefits to our
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farmers and consumers. ? >> thank you, chairman for the question. usmca creates a process for u.s.-mexico-canadian regulators to share information back and forth across themselves. and to better collaborate on the regulation of biotech crops, including the new breeding techniques that you mentioned. this process has the potential to alleviate trade barriers that can sometimes result from different processes and different procedures that eve off in different countries, including the time frames that are associated with the approval of biotech products. a more coordinated regulatory framework by which we can approach these markets as opposed to sequentially needing help. beneficialtial for
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-- benefits in the u.s., but also all farmers in north america. we think they will provide an important precedent for future trade discussions with other partners as well. secretary, the new agreement will expand market access for u.s. stare products in canada -- u.s. dairy products in canada and the program that has allowed their dairy products to undercut american competitors in canada and third world -- third country markets. additionally, mexico agreed to restrict market access for u.s. cheeses labeled with certain common names. how will american dairy farmers to get of the new market access as a result of usmca? also interested in whether or not it will expand market share in canada. in 2017, america suffered a
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loss of seven dairy farms a day. times were tough out in rural america. it would expand access to a canadian market that has been close. it will increase our market share opportunities in cheese, butter and skim milk pattern. in repealing class six and seven, a gives us an opportunity to have it powder market that provides appropriate pricing. the canadian pricing system basically undercut the world , which created havoc in the powder market globally, impacting our producers, as well as those around the world. the implementation of this provision will be important. we will have to keep an eye on making sure this is not a replacement that has the same effect as classics and class seven.
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there are export controls. there are potential penalties that canadian exports will have to pay if they export more than the limits set forth in the agreements. this is an increase in market share, and increase to afford u.s. gary to do business in canada, and it reserves our number one market, which is mexico. >> you referenced in a bloomberg piece in your testimony about -- cross the border numerous times before it was in the final product. it paints a clear picture that in .5 years since nafta was enacted, technological advances have redefined the trade environment. could you shed a little more light on how technology is revolutionized our trade practice and why it is
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imperative that we modernize our north american trade agreement? the question.or i was on the ground in mexico city before nafta was enacted. living and working and running a mexico trucking company. the 25 years what we think about usmca, and i think about the opportunity in front of us, it contemplates and addresses issues that did not exist back then. we did not have internet to speak of and there was no e-commerce. there was no digitalization of our customs process. the average trucking cross-border time was 24 hours if we were lucky. today we wake up in a world 25 years later where we are doing advance custom clearance of goods. we are digitally interacting with our shippers in our receivers. we are working with the unified customs process with mexican and u.s. officials collaborating at the border in a more seamless and efficient crossing process.
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having the usmca and acted and fromied to help address our perspective, the importance of all of these -- all of the digital information and the ability for these records and their security to be better recognized and have better treatment in the agreement is of critical importance. the future will continue to go in that direction and our business is increasingly one that is moving more digitally by the day. i think your story is incredibly inspiring, how you as a single mom have been able to come up with this attractive, youting new business where are able to look to global markets as a result of digital innovation. i just have a quick question. asked about the rates in american law because the republican senators sitting over .here, it and i wrote it
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this committee is not going to go along with uncertainty in u.s. lot and nafta. why don't you tell us what the across-the-board certainty would mean for you and your business? >> thank you for that question. i export my goods, as well as import supplies. i would like to not have to worry about my items crossing the border. i want my items to get to my customers as fast as possible because they expect that. some of my items are lower priced and some of them are higher-priced. it would be valuable to me to
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have my customers not have to pay so much extra taxes, in since i doe u.s. -- import a lot of my stones, i would like to not have to worry about paying extra taxes because it does cut into my bottom line. i am a full proprietor, every dollar counts. certainty is important because i just make jewelry. i don't want to have to worry about uncertain provisions and laws. >> >> good. and you should know that on this committee there is strong support for the kind of certainty you are talking about, and you have really made the case very well. mr. wessel, i want to turn to you on this whole question of the labor issue and enforcement, and a notch or anybody knows but you and i been talking about these issues for years and years and i so appreciate your good works.
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it seems to me the administration has made progress on improving the labor obligations in the new agreement, but that isn't worth much unless you have tough, real enforcement. senator brown and i have been working on a a new framework in this area so that would be sufficient resources, technical assistance to cooperate with mexico on their new labor law, and also to provide a backstop to protect american workers from being disadvantaged by unscrupulous factories in mexico. what would it mean, mr. wessel, somebody studied this for years, what would it mean for u.s. workers if we were able to finally get full compliance by mexico of their labor obligations? >> it really is the single most critical issue in the question of the balance between our two countries, the outsourcing of jobs, the relocation of a lot of
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our supply chains to mexico because of the artificially low wages in that country, primarily stimulated by low current labor standards and no enforcement. as you know that are roughly 700,000 protection contracts currently in place in mexico the vast majority of which workers have no idea whether they exist or what their terms are. so making sure that workers are paid a decent wage in return for their hard work, their creativity, the skills is the fundamental component of what we are looking for long-term. without strong enforcement we are going to continue to have the same process and results we have today. >> let me follow that up, and in effect tried to take this enforceability issue be on what senator brown and i have been working away on for months now,
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and we've been working with the speaker and house members and the like. i gather yet some additional ideas enforcing trade law and particularly nafta 2.0. do you have some additional recommendations? >> i do. first, enforcement, often means there's been injury and someone has been hurt in the labor context. our goal is to have the infrastructure in place to make sure that workers know what their rights are, are able to freely associate and enjoy the rights that they have, that's a fundamental component of what you and senator brown have talked about in terms of the infrastructure. clearly, we need to make sure the state to state dispute resolution is biting. we need to make sure at the
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front end of this process that we don't see what we saw in the columbia situation where we had an agreement that called for certain actions but those actions were not in fact, adopted prior to certification. so a better certification process and we sat in the past. we also need the infrastructure to provide greater access to the enforcement process. all of the labor rights cases have been brought by organized labor. it is a very difficult process to enter, and time-consuming we need to shorten that process. we need to make sure it is timely. >> i want to thank all of our witnesses. we look forward very much to read with all of you. >> senator toomey. >> thank you, mr. chairman. i want to thank eyewitnesses as well but trento want to focus on some of the concern i have about this agreement. i want to start by pointing out an important fact that we ought to keep in mind. if and when we get to a vote on usmca in the united states senate, the choice will we will be making is not between usmca
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and nothing. the choice we will be making his between usmca and the existing nafta agreement. i say that because the president clearly does not have the constitutional or legal authority to unilaterally withdraw from nafta. and when that is a place it is in place by statute or we should all be very clear about that. it's not going away. the president doesn't have the authority to do that. the question before us should be, is usmca a better agreement than nafta or is it not? most of the witnesses here today in their prepared testimony have cited as one of the biggest benefits of usmca, a reduction in trade policy uncertainty. the blood said usmca will quote help bring much-needed predictability to the auto industry. mr. vilsack, you noted usmca will benefit the dairy industry in part by quote restoring certainty the u.s.-mexico trade relations the mr. collins correctly identified the
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positive effects of usmca bound by the international trade commission, quote, primarily from certainty created by usmca. because markets abort uncertainty. that's also a quarter the question is where does all the uncertainty come from? it doesn't come from nafta. nafta is a well-defined agreement we've had for a couple of decades, establishes zero tariffs on 100% of non-agricultural goods, zero tariffs on 97.5% 97.5% of agricultural goods. there is no uncertainty intrinsic in nafta. the only uncertainty is whether people think we might be unilaterally withdrawing from it, and the president has no authority to do that. i think the question grafted ask ourselves about usmca is due the policy changes in usmca, do they
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promote growth relative to nafta? my colleagues sometimes point to a study from the itc that shows some very modest gains to economic growth from usmca. it does. but the itc found reducing quote policy uncertainty accounts for nearly all the gains of the agreement. and if you back out the little tiny boost to gdp of this reduced uncertainty, then the itc found that usmca would reduce real gdp by a very small amount but it's not a game. it's about $23 billion over six years. and that's despite the fact that the itc analysis did not attempt to quantify, did not factor in at all two of the provisions of the usmca that are virtually guaranteed to increase uncertainty. and diminished investment and reduce trade and access a drag on growth. one is a 16 year automatic expiration date, the sunset
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provision. the itc explicitly chose not to try to quantify the effect of that, and the other is dramatic gutting of protections for american investors in mexico and canada. how could either of those things provide more certainty? they clearly don't. the sunset provision, this agreement goes the way in 16 years unless every one of the parties to the group x agrees to extend. we have no certainty that is going to happen. investors state dispute settlement mechanism is a provision that in every single free trade group we have except for australia. it says mexican or canadian courts treat out our confession
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unfairly vacancy recourse. including monetary damages. folks, this happens and it happened in candid as well as in mexico. there's a case of canadian local government try to shut down a u.s. application to open up a salt mine by climbing the mind violated the quote core community values of the neighboring town. core community values was an invention that was meant to discriminate american investors. the american investor challenge that and one. that's what it is there for is to prevent discrimination against american investors, and it works. but now we're going to under usmca completely eliminate the investor state dispute settlement mechanism for candid and virtually eliminate it in mexico. there are some provisions in the usmca i think our constructive modernization, the digital trade chapters good, enhanced i.t. protection is good policy, very modest reciprocal reductions in agriculture varies but it's worth noting these were all in tpp. these could of been achieved without this. mr. chairman, i see running out of time but i just want to say that if we adopt this agreement it will be the first time that i
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know in the history of the republic that we will agree to a new trade agreement that is designed to diminish trade. the combination of the uncertainty in these provisions and the onerous new costs imposed on mexican automakers is designed to reduce trade in autos and diminish total trade. i don't think that's what we ought to be doing here so i i would urge my colleagues to think hard before we endorse usmca. >> i'm glad you are so wrong. [laughing] >> mr. chairman, could he keep the sign up for one minute? can you put -- i so appreciate many aspects of earmarks, , not all of them but i think the staff got it right with just that one little mathematical sign their of nafta is greater than usmca. and i think we have to remember, as secretary vilsack said, the
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great economic impact that nafta did have in some aspects of our economy. on the same in every aspect but certainly in the state of washington we import/export $2 billion worth of goods to mexico which accounts bobby 170,000 jobs in the state of washington and i agree with my colleague that when we talk about these things we should talk about expanding the economic opportunity. i agree, it's a modernization in some areas that were not previously included, but i want to also say i so support the chairman great activities in giving the administration to relent on 232 terrorist as relates to mexico and canada. i have a feeling we wouldn't be having this hearing today if that first had not been accomplished. greatly appreciate that by the chimp adequately appreciate by the ranking member his focus with senator brown on these enforcement mechanisms. this is a critical aspect.
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i authored some capacity building as part of the customs bill to try to get ustr throughout the capacity to follow up on disputes and enforce trade agreements. i believe there's a big market outside the united states that we have to have the tools and the teams to make sure these agreements are lit up to. i wanted to ask you, mr. wessel, earlier this year mexico entered into new labor laws ensuring mexican workers the right to organize and bargain collectively. now they have to create independent labor courts and as you were mentioning, colombia and the challenges that we faced in getting the right infrastructure there to make these decisions. so now they have to estimate these reforms. what do we need to do to build capacity in this area? and don't when you do put in place enforcement tools to build capacity to protect and enforce
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labor rights? >> thank you the market opportunities are enhanced by workers enjoing rights so they are good consumers of our products. having labor rights in mexico will enhance opportunities for our exporters of all products. what you are talking about is a critical issue. thank you for your leadership on a trust fund. it helped to establish the funding mechanisms we need for this. mexico has a number of things that they need to do on their own. in our opinion, it is is far too lengthy. it is far too certain. not only because of the constitutional challenges, more than 400 of them of them so far, but mexico has failed to define or appropriate the money. that will come later this year. the u.s. helping on capacity
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building. mexico is vital to help those workers that have not had writes or understood their rights for so long to have much to do with trade facility. able to go after the field and help support them and understand what their rights are. it means having capacity here to support unions that we need as well as to have access to the process to make sure injury is occurred, but we can build the capacity to make sure it is a success. >> you said u.s. support to that similar to using the customs bill and using those dollars to hire more lawyers, we should also higher more capacity for implementing, helping to implement or oversee. >> trade conciliation, et cetera, there is a role for u.s. resources. we will not pay for mexico. that is a governmental duty for them. so much more infrastructure that can be put place in mexico.
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having the access and knowing how to interact with their pretrade reunions and government >> we definitely see an economy outside the united states. the key is getting these issues right and making sure we can enforce our agreements. thank you for those ideas today. >> let me thank all of our witnesses for the contribution to this. clearly an important agreement
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for american manufacturers, producers and farmers. the united states, mexico and canada. we all understand the importance of maintaining the trade relations between the three countries. i want to underscore a couple of positive aspects. we worked very hard to make sure there is a principal objective of trade to include good governance. unfortunately, we are not part of that. what i want to just acknowledges those provisions are carried over into the usmca agreements. my vote will be standard for us on all trade agreements moving forward. i also want to speak to the eastern shore of maryland. i want to agree with the senator on the point that you raised in regards to small businesses. small business and entrepreneurship committee. the $800 limit is critically important for small businesses.
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i am deeply concerned that because of the way that this is structured, that number could be significantly reduced affecting small businesses because of the president demanding to negotiate the rule. who gets hurt if he changes it to small businesses here in the united states. i don't know whether we will have a nine on trend an opportunity to negotiate that further. the weight is worded, i think, i think, is extremely damaging to small businesses here in this
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country. i want to concentrate on the dispute provisions and the fact that many of us think there is not effective enforcement on the u.s., mexico, canadian agreement we carry over the provisions which means it is difficult to see what is difficult before your timescale and labor. they don't follow it. a blunt instrument to enforce our trade rules. canada mexico have the right way to challenge us. question. how do we within the context of the current agreement fix that? the house working group. finding a way that panel blocking. the provisions that senator brown and senator wyden have been talking about, but not only is there the capacity within the structure, but there are relief
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measures that are available if in fact a site specific location there has been inadequate labor rights for the workers. we need to supplement with senator brown and wyden between the house and the administration at this point. >> i want to give you an opportunity to respond about the sunset provisions. i find it somewhat unsettling the way they have been drafted in this agreement. leading to as early as six years
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from now. does that raise concerns? >> senator, one of the advantages would e the opportunity to make sure that the candidates have in fact followed through on eliminating class six and seven. less of a concern on the dairy side, the farm side. it gives us a chance to revisit. >> a chance to pull out of the agreement. >> a chance to make sure it is implemented in the way that it was intended. >> there was a replacement
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system for what we are currently using depending on how it is implemented. we are wary because of past agreements with canada. they've had a tendency to fight john their commitments. >> this administration does not seem to have a coherent policy when it comes to trade. i would argue for decades our trade policy don't relationships promote american values. maintain national security interest. you focus on america's relationship that we could have developed a regional counterweight against china both on trade but national security. it appears to me that usmca basically duplicates.
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to allies like canada and mexico actually strengthening our relationship. when the president constantly goes about and threatens to shut down the border. what does that do in terms of uncertainty. going through this notion of approaching our two allies with mexico and canada. >> they are all being silent. the tariff supply under section 232 where mexico and canada where appropriate. the goal of enhancing aluminum and steel production in the u.s. to support national security was a goal.
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the fact that the tariffs were applied more against allies than they were against those that were cheating and breaking the rules to us was an inappropriate structure. from day one said they should not be applied to those two countries.
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challenging china and etc. there are a lot of questions about the execution underlying that. >> i could not agree with you more. the goal was right. the amount of damage we did to both canada and mexico, canada in particular, going against was totally inappropriate. i want you to comment because i do want to come back in a moment >> i just commented on both. first on the issue of whether it rated adversarial relations or concerns with some of the rhetoric, i think we all could agree, and i'm not looking to be political with the statement,
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there may have been times where the way things were expressed could've been done differently and more delicately. in my experience, having lived and worked in 20% of my working life in mexico, 70% has been doing north american trade are working on north american trade activity with my customers. the elevation of the conversation, business-to-business, between companies, talking about the real issues and why they need to be addressed, has never been greater. an open transparent dialogue about issues of concern to both parties. i think that there is a positive and there as well. as it relates to border and
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border shutdowns, it is a concern to me because it's a concern to my customer. i'm delivering their freight so they can make their products. i think one of the things they do is give the opportunity a framework which in my opinion, certainty that we can live with. >> thank you. what happens when things like japan, u.s. come in and take advantage of that opportunity? >> senator, the challenge i think is it opened up an opportunity for some of our competitors to move into market opportunities that they did not have before. europe basically accelerated their negotiations with all mexico and japan to enter into a free-trade agreement that put at risk, names, it negatively impacted our capacity to do trade in both of those countries. the removal began a process of
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restoring that market and mexico. we are keeping our fingers crossed that negotiations with japan will result in us getting back in that market fully and completely. >> on senator whitehouse. because we have three votes, this is how we are going to run this committee. when he comes back, i will go over and vote on the first one and second one and we will keep it going. senator whitehouse is next. >> thank you chairman. thank you to the panel for being here. i think rhode island was pretty hurt by nafta. seeing some interesting views across party lines here. this is an area where geography and economy matter. i can remember going to manufacturing facilities and seeing holes in the floor and asking what they were. those were the places where the machinery had been unbolted so
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they could be shipped to central america. the same product for the same customer on the same machine could be made in a different country, thanks to to nafta. i don't see this as a very significant change. you can call it whatever you want. it looks a lot like nafta. if you focus on the environmental side which i tend to, this is really pretty bleak. in this day and age, it does not even mention climate change. know how grown-ups can write an agreement in this environment and not address the environmental issues and not mention it. second, it singles out the industries to protect so that they remain able to go bully and intimidate small countries that may try to regulate their pollution which is, i think, think, really unnecessary and
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inappropriate. i take as a signal, the area of marine plastic debris. the area is the one environmental area in which the trump administration has tried to give itself some degree of environmental credibility. it has been very bipartisan. after it is dumped into the oceans by other countries as a tremendous problem. without the and thousands of tons of garbage comes to us. on this issue, they are putting their best foot forward. this is how they will try to make up for the environmental disaster for what the trump administration is.
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once you look behind what is said, once you look behind what trade representative says, it ain't good. last year at the g7 meeting in canada, the u.s. refused to sign the oceans plastic charter. in march, u.s. interference produced nonbinding proposals and weak targets in the u.s. then rejected even the final watered-down declaration. in june the g20 failed to agree. reportedly due to u.s. intransigence. most recently, epa administrator wheeler pushed to have countries exempt from new roles. agreed to what was already agreed to. dumping of plastic waste without consent. the headlines that i see on this. tighter rules on plastic waste trade. g 20 urges voluntary action with the united states blocking demand of global targets. one unexpected sticking point of the g7, why, the americans did not want to sign on the charter
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which contained targets. they hope the u.s. would take joint action. in the end, it did not. the communique released at the end of the summit, we the leaders of canada, france, germany, germany, italy, indoors the charter. guess who did not sign. the u.s. nearly all countries agreed to extend. not the u.s. u.s. accused of blocking ambitious global action against plastic pollution. march 15. all of those stories since march. if this is the way that the trump administration enforces environmental concerns that it
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claims to support, then, look out for the other environmental enforcements. as somebody who has been critical of the obama administration for their incredibly weak enforcement of environmental and labor standards, i just see us going off a cliff. no prospect. our companies will lose business to polluters who dump plastic waste into the rivers and oceans and other countries although there's a lot of big talk from the oval office about how this is their big environmental issue, when the rubber hits the road, when the negotiators are working on these agreements, it's always the trump administration that is the weak link and dragging back against process.
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i just find the whole thing pretty incredible at this point. thank you. >> thank you, senator hanson had i want to thank you in the ranking member for having this hearing. i'd also like to associate myself with the remarks about environmental enforcement and protections. secretary, i wanted to follow-up on senator grassley's questioning grassley's questioning to you. about the enforcement mechanisms in the usmca. price and policy and exporters including new hampshire. you raise concerns that canada could potentially work around the elimination of effectively re-creating unfair practices that are like the class seven price and everything. can you explain to the committee how that might happen in practice and how you think the usmca elimination of this price could be effectively enforced. >> senator, thank you very much for the question. no question that they did in fact hurt your dairy producers as well as producers around the united states. six months after the ratification of these agreements by all three countries, canada
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has agreed to eliminate class six and seven replacing it with the pricing system that is tied to our class for. first and foremost, an opportunity to keep an eye on how that is implemented. it does contain restrictions or limits on how much can be exported in these areas. if those limits are exceeded. it gives us a tool that we did not have relative to class vii. then there is the opportunity for periodic review and concerns that all countries can raise whether or not the agreement is in fact being implemented. >> 70% of the the power produced in this country is exported
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anything that affects the export of power is certainly a concern to us. we are hopeful that the elimination of classics and seven and the export limitations and penalties that provide a forceful mechanism for us to ensure that it is indeed a repealed class seven and not a replacement with something similar to it. >> thank you. canada supply management for dairy is not very supply management. we need to make sure they do not restrict its dairy market and some new way. i also wanted to touch on another aspect of the agreement when it comes to dairies. as you know, under the usmca, canada has agreed to increase the amount of dairy exports. you suggested that canada could still play games with these so-called quotas.
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you talked about that a little now. in past years, canada's tariff quotas have counted across border purchases like when canadians drive to new hampshire to purchase dairy products. can you elaborate on the games you believe canada could play with tariff rate quotas and again, how do you think we can effectively stop them? >> there is obviously a concern and how the canadians define certain products and how they define meeting the quote out. there was a quota for fluid milk and they contended that they were complying with the quota because people were crossing the border, purchasing and then coming back into canada. i think the concerns that that practice has raised will ensure that we keep a wary eye on these quotas and making sure that they are in fact enforced. the good news is, the amount of the quotas, the increase is greater than what we would have received and we don't have to
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share that quota with other nations. clearly, again, the opportunity to review gives us a chance to raise issues sooner, rather than later. i think that it is an opportunity for us to make sure our canadian friends are following through. >> your testimony reminds me of the small business owners in my state who are also helping fuel our economic growth. both new hampshire and oregon, the backwards way fair decision has creative massive uncertainty for online entrepreneurs. with all of this uncertainty, i believe that trade certainty for small online businesses is all the more important. that is why i am concerned about a footnote in the usmca that allows the administration to lower our so-called threshold that allows small businesses to ship products terror free. you talked a little bit about this in response to ranking member widens questions.
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just so people can understand this a little better, can you tell the committee how thresholds help cut red tape for your businesses exports to canada and elsewhere? >> when i ship, say a $40 pair of earrings to canada, or mexico, usually mostly canada, not so much mexico, it will generally fly across the border in into the customer's hands. if it's over a certain amount, i'm not sure, but, but around $40, the customer will have to run down to the customs office and pay a fine, or extra taxes and duties just to collect their items. sometimes it could be as much as they paid for the item. >> it is a major hassle for you and for them. it is an impediment for the business. i am over time. i will perhaps follow up with you in writing. i want people to understand how important it is for consistent, predictable border policies. i look forward to talking to you more about it.
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thank you. >> presiding chairman. i would recognize him next. the committee in which i am chair. i am fond of calling him a long time friend. short for a movie star way back, with regards to gary cooper. i realize nobody knew what i was talking about. [laughter] of gary cooper or the movie. nevertheless, for the first time in this committee, you are up. >> thank you, mr. chairman. it is almost high noon and you are my chairman. i appreciate that. i had to look up gary cooper to see if i was flattered by that are not. i want to associate myself with the comments that were made earlier about the strong bipartisan support there is for
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maintaining the threshold which i think is something he and i got signed into law. i think it is really important. i think we need to maintain those levels. it's important to our ability to trade effectively with other countries and make it easy for other businesses to compete. let me ask, this agreement, i think, is a most friendly the united states has ever considered. it is a big improvement. on the issues over which a number of my friends across the aisle have expressed concern.
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i would just like a yes or no answer. given the choice, what would would you choose? >> usmca. >> great. thank you. >> usmca is a significant improvement. >> we would choose usmca. >> usmca. >> 2.2 billion reasons for saying usmca. >> usmca. >> let me just say, my own view is, this is something we can get done and get done quickly. look at the whole gamut from manufacturing to automotive and foreshore to agriculture which i care deeply about. the itc study said it would create 126,000 u.s. jobs in our
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economy and raise for workers. i think it's time to pass the agreement. realizing some of the economic and if it's. is there any reason why we would not act now. someone please explain what the cost of not acting would be. >> obviously, our opinion is we should act now. the cost of not acting as the uncertainty we have talked about several times today. in corporate america, we go through processes to figure out and allocate capital expenditures. that number is at or around $300 million a year. not knowing with great certainty that the usmca will be ratified makes it difficult to make decisions. we have invested heavily on the border. 100 acres. we would like to see that certainty. we believe that it is a huge step forward.
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the time to act is now. >> my view is we cannot afford the current situation. we cannot afford to see jobs like the bakery workers in chicago and philadelphia making orioles and those doubts have now gone to mexico where workers are making $0.97 an hour. the last time the oreo package is not being sold any cheaper here in the u.s. usmca with its variety of provisions, labor laws that will be effectively enforced implemented and enforced can help change that and we are working for that. >> i would just add, putting ourselves in the role of our
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customers here. i typically make decisions about what i plan 12 months ahead. they make their farm management plan. having that certainty of where that demand will come from, global market really helps in that decision-making. they are trying to make the best decisions they can for 2020. having certainty about what that market looks like in the future would be very beneficial. >> i could not agree more. farmers and ranchers are facing a ton of uncertainty. they are being unsure about what the rules will look like in the future. that is very problematic. starting to change the trajectory and bend in the right direction.
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we don't need to wait on this anymore. we need to get it done. the folks in kansas, they desperately need this. i hope they get it done. i think my colleague from ohio for his courtesy and letting me go first. thank you. >> i'm happy to recognize. >> thank you all for being here today. i think this is a great hearing. >> excuse me. >> the reason, i'm going to make it simple. it does modernize the agreement is 25 years old. things like the digital economy, we have to upgrade it. that is done. i think that will be very helpful. raising the threshold. not as much as i would like.
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the alternative is nafta. i think that is what we are stuck with. no way for the president to pull out of nafta at the end of the day. that is what most of the lawyers told me. turning to labor and the environment. we have these in modern agreements. we can talk about enforcement. the choice is not about enforcement or not. it's about having the standard at all. the market access for farmers in ohio is very important to me. strongly in support of it. in terms of the labor standards, not only better and enforceable,
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but we have things in disagreement that we've never had. talking for years about some of these issues. ustr. it surprises me that they are not finally saying that they can accept victory. this is what they've been asking for. >> this is the itc study. >> enforceable labor standards. are they and nafta. no. usmca. yes. 70% made in mexico have to be with steel from north america. 40-45% of vehicles 5% of
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vehicles made by workers made by $16 an hour. frankly, it is surprising to me that they would negotiate that, but they did. give me a break. this is exactly what many have been calling for for many years. is it in nafta? no. of of course not. if we are objective about it and point out what the differences are, i think it's a pretty easy decision. you have talked today about how you would like to see more certainty on the enforcement side. i get that. by the way, i appreciate you are
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on the goodyear board. appreciate all the work you've done over the years. we've made some progress. you are looking at a way to make sure we can have better standards. i would also say if we want mexico to do all of that, the hiring of thousands of judges and they were heights professionals, appropriate the funds necessary, take labor justice seriously. otherwise none of this happens. mexico adopted these reforms legally. they change their statutes because of disagreement and because of our willingness to say we would make good on our promise and support u.s. -- usm ca. i know it will create the playing field for our workers. we have to consider what governs the rules during that period during the transition. , lack labor enforcement for rules that makes it enforceable. >> think you for your question. thank you also for your work. other issues where labor has worked with you in your office. let me respond, if i can, not only to that question, but the
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charges. we are still working to improve some of those standards. as it relates to the 70% of the product, it still would allow for chinese carbon steel to be imported into mexico. your last point about making $16 an hour. you could have two people making 28 which is often the base salary. then you would have a number that would make 12. behind each one of the provisions you have outlined there, there is still a lot of work that needs to be done and we are working on that.
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we are working on trying to have a high-value target approach working with the administration to make sure that in certain trading sectors, auto and auto-parts contributing to the bilateral effort to which we've seen so much job loss, action in those workplaces e a priority first understanding it will take mexico quite some time to be able to implement all of its commitments. we think there can be a phase frontloaded approach to make sure we get high-value targets that honor the u.s. workers the most and implement over time all of the remaining provisions. >> i hope you will be able to work through some of those issues. also not make perfect the enemy of the good. >> for you and your interests.
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it would be a crime if we were to end up not being able to get this agreement done and going to the next year, election year, with all the uncertainty. no question about it. the disagreement is a big improvement. >> this is a tough choice. i will talk to you later about how you receive that. senator, you are are on deck. >> thank you. hotel dupont. was it a state senator? newly elected governor. you are smart and you worked hard. i was impressed by your humility i applaud you for the wonderful
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work you did as governor. to be secretary of ag, the entire eight years of the obama administration. i have a question for three of our witnesses. an issue i raised at our last trade year. a month or two ago in june. through state to state dispute settlement systems. state to state dispute in the new nafta continues to allow for
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panel blocking. the main reason had been established since the early 2000 i would a call. tpp made changes. but these improvements were not included in the new nafta. none of the provisions were included. this is one that has not been included.
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it appears the white house plans to use 301 terrace. enforcing the new nafta. i am concerned that using section 301 terrace was very likely. the new scene over the next year and a half or so. here are the questions. encouraged from just about all. the business certainty. i hear that every day. how the administration section in china's retaliatory tariffs impacted business certainty in the industries that you represent. >> thank you, senator. we have a deep history with canada and mexico. these areas we are talking about covered by u.s. mba. making it possible for disputes. no one country should have the ability to block the enforcement i am not a trade expert.
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i will leave that to the administration and to congress. what we would hope for is the most actual and action oriented system as possible. despite the successes we have had to have some mechanism in their support. >> you and i share something in common. we both married up. specifically to your question. the first five months of 2018 to a record month with china. we declined activity in china. we continue that impact. we would use that other than tariffs to compel enforcement. >> yes. thank you. we have lost far more jobs to
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the protectionists and unfair practices of china over the years. these tariffs have brought this to the table. we are interested in relief and
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therefore support the continuation of tariffs. >> thanks. great to see you all. thank you. >> not a week goes by that i don't hear. hiring more workers. unpredictable trade policy. tens of thousands of american jobs at risk by threatening over an issue unrelated to trade. threatening to do the same to guatemala. the tariff is just a fancy word for attacks. ultimately paid by the american people. he forces businesses to
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rearrange their supply chains and lose export sales due to retaliation. when we talk about strengthening labor protections, these are not insurmountable challenges. he creates more insurgencies and jeopardizes the opportunity to fix the shortcomings so we can get a trade agreement that works for all americans, i think that's greater. >> would you agree on an issue completely unrelated to trade? as related related to uncertainty?
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>> a threat of tariffs just by definition to create the industry. i would say specifically tariffs have created some impact with customers specifically as you mentioned china earlier. and the impact of farmers and trade as that has felt. at the same time, the offset here is we have to at college at there have been other issues on the intellectual property side. >> how about immigration. is that where the putting tariffs that disrupts the realities? >> i won't speak to that because i'm not an expert on that. >> if you apply tariffs to nontariff issues, you are are creating uncertainty. i had every major ceo of the company come to me. while they had different
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provisions of what tax reform would say, the one common thread they were involved in, they said to me two things. the president is driving the y predictability and creating the greatest amount his tariff wars and you all stay quiet over it. it's pretty amazing. would the president be prohibited from imposing tariffs on canada or mexico for issues not related to trade? no, senator. in fact, agriculture, i think, about the use ns it's iffs every time utilized it's agriculture that pays the price. >> it can be a continuing source uncertainty, is that
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not fair? >> yes. any change.ear of >> let me help you out. they are the same procedure. ourselves facing the same uncertainty if the withdraw threatens to over -- on an issue like immigration? >> i think the help from the agriculture community would be hat the president and congress eventually end up with a comprehensive immigration reform package that makes sense. -- we passed one with 67 votes in the senate only to languish in the house and never get a vote. the point is when you use issues for nontrade
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you're creating uncertainty. me ask one last question. here is a lot of work between having reforms and making those reforms enforceable. we be ecifically should looking for when it comes to questions of implementation, enforcement so that we can finally get an agreement with mexico that shortfalls and labor rights? of where s an example we went wrong. i didn't vote for their trade agreement because it didn't have enforceable protections. i was just in colombia recently. enough, everything i was worried about is happening. what should we looking for as it mexico? to >> i think the experience you just outlined with colombia. ertification of its compliance with standards and the action before those provisions were implemented has given us we believe ause and
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there need to be strong certification provisions in the that len sure there are certain steps that have to be aken before the agreement enters into force, and those would look at what mexico has publicly as ified the steps they will take to hire the inspectors, to hire the the insffrastructure in. nd capacity building on the ground. no one should think that nafta s going to enter into force on january 1 if we pass it in the next couple of months. that is a lot of work needs to be done before it should be implemented so that it as the confidence that you're raising about mexico doing the right thing. >> thank you, mr. chair. if i may, could i make one comment to the last lining of questioning. sure. >> i was attempting to make it several times. just this idea of it being
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unrelated and immigration being unrelated, i want to speak to the trucking industry because case some veryis direct relationships for us. as customs and border patrol assets were being shifted from customs to border go ol we saw crossing times from 25 minutes up to nine or 11 hours for extended periods of time. so the immigration issue to us was affecting trade and we saw supply chain he and our ability to deliver on behalf of our customers. that was the point i was trying beginning but here was connectivity in our view. > those wait times were --.reased >> i have seven minutes before the vote. don't worry, i'll be on time. i have been on a trade hearing, and i've been through a lot of trade hearings dating back to nafta,
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that's had a better panel than representing all segments of the american economy and industry. thank you all for coming. have made excellent statements. feather in your cap with regards to that. i wish we would quit beating up nafta. remember the days, when the great chairman of the sometimes -- agricultural ommittee, the ranking member had the distinction of doing that. we worked terribly hard on nafta. take me to florida, he ould take me to texas where there was some opposition. he would say i'm a little mixed, but here's a guy from kansas wants it so let him talk. we had a good time. f you look at the progress, several decades that followed, it's been unprecedented. i had a whole series of
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ask, but i'm going friend, i to my great remember when he was governor, a presidential candidate, when he was secretary. now, of course in his current role. tom, what i'm really concerned is, if this continues, the tariff iffs, retaliation, more especially ith agriculture, look at that scope, we're into mitigation payments. never expected that. aid, they 't want want trade. you've been great proponent of that. we did it, and with the demand situation that we see and a continuation of no real breakthroughs through, possibly get that, but battle, i'm just very worried of the effects on for product, where 2022, if 2020, 2021,
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this keeps up, we're going to ose a lot of folks in agriculture sector. and once that happens, it's very hard, when you lose a market it's hard to get it back. operation, it's very seldom you get at least the same family. maybe somebody else will jump in and take the plunge. where are we headed? do not get say if we a better situation with trade down the road for agriculture? i'm looking over the hill. i'm not talking about right now. senator, thank you for the question. last year we ier, lost seven dairy farms a day. because of market conditions and circumstances impacting and being impacted by trade. i think the future for american griculture long term can potentially be quite bright because there is a rising middle
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population andng obviously an opportunity to feed an ever increasing world urbanizing and's plays into the strength of american agriculture. having said that i think it will incredibly important to have trade agreements that provide for our food industry. let me give you an example. out of ttp in japan we invited the e.u. to come in and complete their free trade agreement. here's what at risk. if we don't get a fair, level our ng field in japan with e.u. friends and new zealand we could lose 1/3 of our market share. as opposed to the possibility of increasing the volume by twice and triple the value. dairy sales in japan if we just playing field. that's an example of the opportunity that exists, but it to be more us competitive, and it requires to us have a level playing field that requires trade agreements that level that playing field. t starts, i think, with u.s.
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mca because that's where our number one market is, mexico, reserving that market and expanding the opportunity in canada. >> i appreciate your comment. want to thank all of you. mca stands for the united states marine corps always. fair trade deal, too. tom, thank you, and thank you to witnesses. we're going to do the best we can on this committee. handle it in a bipartisan way. thank you so much. >> senator brown. > thanks for coming, senator roberts. i want to focus on the need for surprising to some of you, what i call provisions, theg labor, environmental standards in our trade agreements. that corporations offshore, to low wage countries it helps their bottom line in 2014, goodyear, n iconic american company in
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akron, ohio, announced they were oing to make a $500 million investment in the americas. i wrote the c.e.o. urging him to plant in uilding that ohio with our highly skilled generational work force. instead to build the plant in san lou wee. it opened in 2017. committee, means subcommittee chair on trade, asked in advance if they could tour the facility, goodyear said no. showed up at the facility and asked if they could enter, goodyear said no. the company doesn't want members of congress to tour the facility. $6 kers there make less than per hour, many much lower than that. the $23 per hour that their american counterparts make. a collectiveect to bargaining agreement written past n style, of their
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government's, by the employer for the employer. workers wentnd 800 on strike within a year of the plant opening to protest the low working conditions. the company turned around and fired dozens of these workers. goodyear built that factory in mexico instead of akron because they low wages, because wouldn't have to live up to u.s. labor standards. they did it to make more money the expense ofat american jobs. our trade agreements, again, let them get away with it. this new nafta is no different. ur first goal must be to stop american jobs from going to mexico. if this administration doesn't improvements, so that the anti-outsourcing provisions are actually enforceable, then more be built in l mexico instead of ohio. cantwell and others mentioned the amendment and what it means. it's what we're fighting for here. trade agreements to
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race to the bottom. we've authored a proposal to inspect factories in mexico and goods from those factories into the united tates, not just -- blocking goods from those plants into the united states if violations were found. us to enforce our labor standards at the goodyear level where factory the violations occur. -- i stions are four, mr. know you're on the board and have a responsibility to goodyear. answer, as you to the labor representative on the panel and sense i i don't have a lot of time left i would ask no answers.e yes or do you agree that companies like goodyear built new factories in new testament u.s. because they can pay the mexican wages?s lower >> do you believe a u.s. company would deny members of congress access to their mexican they wouldn'tause want elected officials to see the labor violations at that facility? >> yes.
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do you agree without the change democrats are asking for the new nafta will let companies continue to make offshore decisions like that with inpunt? >> yes. that the agree enforcement, what i described make r, are necessary to sure nafta's outsourcing provisions mean something? yes. would say it's vital, >> thank you. i ask unanimous consent to insert two things into the record. chairman, the letter c.e.o. of the goodyear. the c.e.o. of goodyear, to kramer, in 2014, urging the company to build a new second, a ohio and letter sent to the same c.e.o, mr. kramer, yesterday, by house toocrats, asking the company respond to worker reports of labor violation at the facility of congress mbers were denied access to. >> without objection, they will included. senator cortez. thank you, thank you, mr.
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chair. i am committed, i think, and this in the past, to a k collaboratively to get positive outcome. there are some good things within the proposal that i have seen. but we also know that more work needs to be done. to reaffirm my hope that the administration will continue to work with the incorporate the labor enforcement proposal to make the agreement as good as workers for american and to ensure bipartisan support. i also want people to know in have a dairy industry so there are some good proposals and opportunities. you for the hard work. mr. -- let me ask you, you bit about it e protection contracts. they want to phase in their compliance over a four-year period. of whyyour understanding are the old protection contracts allowed to continue for up to
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years before they are phased in and why is that acceptable? >> well, two things. one, provisions of mexico's labor law, if fully implemented, funded, et cetera, will require that for any new contract be the workers. a four-year phase in regards and during tracts, the four-year period every one of them will have to be voted on. so they have tried to have an with 700,000 or however many of those agreements trying to be e able to accommodate that. our view is it needs to be a and it period of time needs to be front loaded in most of making sure the trade impacted or trade ones, that these u.s. jobs be voted on as early as possible. >> what's the shortest period of looking for? do be >> we would like to see this starting mid next year. >> okay. is this something that you
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dentified earlier as the houseworking group is this something they are working on and trying to address? well i said earlier as this administration has been more aggressive about responsive than any i've seen and i've done this for 40 years. work. is still a lot of this is one of the items on the table, and i don't think democrats are willing to push chairs away from the table until this issue is addressed as well. do you think -- are you anticipating it will take for the mexican government legal d the infrastructure to make sure it's fully implemented? document that the department of labor has put out with a schedule for implementation. we think that needs to be kept, toy need to be kept strictly that schedule. entry of the force of the greement should be delayed until there is certification that they are, in fact, living up to the standards and the commitments they have made.
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okay. thank you. thank you, all of you, for being here. i have two questions i want to ask and then if no one else we'll adjourn. -- the u.s. international trade commission highlighted that the agreement will have an important umber of economic things, including 176,000 new jobs for our country. the benefits will actually be larger, particularly for the u.s. auto industry. like to have you, since you have a good view on this, could you explain how you have that conclusion and the benefits that i read about? certainly, senator, and thank you for the question. we believe that the changes in mca, particularly the hanges in the rule of origin, will drive tremendous investment in the united states and in north america but in the united states in particular.
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the u.s. dr has done analysis submitted d on plans by the companies for what they ill need to do the tradition plannings that they will need to comply. those you'll te have new automotive investment $23 a five-year period, billion of annual sourcing of u.s. parts, and then they over 76,000 new jobs. we think the jobs number in probably is conservative but all of those numbers are easy to support. three member companies, fca, ford, and general motors, have a footprint in the united states, $6 billion in nvestment, and all three have cited the need to comply with u.s. mca rules of origin. it's part of the reason why they located that investment in the united states. answer, you for that wessel, do to ask mr.
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you agree or don't disagree, three questions. the first e this is time we've had such strong labor commitments inal a free trade agreement? >> yes, but they need provisions and certain standards need to be fixed. >> okay. publicly expressed my try to see what we can reach particularly to get this through the u.s. house of representatives. by any major -- the agreement exceed those of any agreement, trade would you gray on that? >> i would say on labor they are step forward, which labor has indicated, on environment, there are actually a number of mea's not subject to commitments. so it's actually a step backwards in many areas. okay. and then, the u.s. mca labor heavily encouraged
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mexico to pass and then commit expeditiously implementing historic labor reforms. do you agree? a hink maybe i heard to previous question you responded, repetitive question, still answer it. >> we're very appreciative of he steps that mexico has taken to implement the constitutional changes, it passed two years ago. we still need work and we're engaged to try and make sure they are able to implement on the ground. >> as i should for the hard work you have put f nto this, thank you for your kind commitment and being here from yourself busy schedules to answer questions. input has been extremely valuable i think i want to see this agreement get through even have to be made
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to satisfy people to get it through the house because we bring more jobs and opportunity to american anders, workers, businesses even benefit our consumers. benefit of the staff that are still here, i think have retty normal, we'll until close of business, august 13, for questions to be in writing, and if you folks get such questions, i hope respond to them. thank y'all very much. meeting adjourned. [captions copyright national cable satellite corp 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. first some background.
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aiming to replace the 1994 nafta north american free trade deal. what are some of the major changes? a digital or an e-commerce chapter because e-commerce did not exist at the negotiations were done, and certainly did not came when the agreement into force in 1994. there are some kind of uniformity n or among rules for sanitary things.


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