tv U.S. Trade Rep. Lighthizer at House Ways Means Cmte. Hearing CSPAN March 21, 2018 8:46pm-12:24am EDT
missed. now welcome back u.s. trade representative for president trumps trade policy and our country was born because of trade over the last century part of everything we do as americans. the freedom to trade is the greatest freedom and to compete anywhere in the world. and with roads and bridges and to bring freedom and hope to our people. and then to abandon the greatest freedom of what makes us americans. there is better half from president trumps sign into law increasing america's
competitiveness making it best place on the planet the trade policy must build on that. we have to buy american and south american to those outside america. and then those that create american jobs. and then we win when we open markets for goods and services to high standards and ambition trade agreements. this has to be our top priority. in japan and u.k. and to have those out of other market you cannot wait any longer while they pass us by.
we look forward to your report to show those agreements consistent with those that are good for america as you set out. i am pleased with your progress to modernize the most successful training relationship in the world and your team has worked tirelessly i am hopeful we can vote by the years end. but in those from intellectual property and those harsh restrictive we need solutions procurement to recognize how americans benefit the global supply chain otherwise we lose
to china and all kinds of support congress explicitly set out knowing the only way to hold trading partners accountable that what you agreement -- agrees to make them be held accountable. from steel and aluminum to put many americans out of work and with those intellectual property and i appreciate president trumps leadership to hold china accountable. you cannot do this alone. alternately we will lose and those national security risk
but the remedy to plant the jobs at risk we have to make sure we don't punish american families first for china's misbehaviors. sometimes that is not the right approach to provide a strong opportunity and then to be properly assessed. but you hit the target which is china and their practices on their allies. and finally to be clear with the authority of u.s. trade policy agenda with the executive branch to implement that agenda we want to partner with you mr. bassett are to ensure america continues have the freedom to trade and the
world and have an open and free economy our jobs and values depend upon it and thank you so much for being here on saturday we look forward to your testimony now i will yield to the distinguished ranking member for purposes of an opening statement. >> inc. you mr. chairman we don't even consider this a snow day. [laughter] thank you mr. ambassador on behalf of the democrats this is not for to you for us to hear from you and for you to hear from us about the activity on the trade front over the past year we have seen a great deal of activity and commentary from the administration we are currently in the process to renegotiate nafta and more important to rebalance it also renegotiating the free-trade agreement that it is more
reciprocal outcome for u.s. workers and exporters and businesses administration is recently decided to impose tariffs on steel and aluminum import currently in the process to decide the country exemptions and product inclusions as we read a news report administration will be announced the findings of the 301 investigation of the chinese intellectual property abuses and we should be prepared to put tariffs on imports from china. the president has tapped the fortunes communities of trade policies we have seen in the past month this administration you personally have not been shy about challenging the status quo. for many of us we are taking note of the promises to improve u.s. trade policy making it work for all americans. we have and skeptical in the past of promises made for better enforcement because often times they are weak and we can say we have heard them before but we have seen evidence of your commitment
when you say your task is not just to renegotiate but to update and to restructure from the original agreement like members of congress from supporting it originally. but to wet with tariffs on steel we look at the intention of industries and workers calling for action for a very long time but we also have a lot of questions and we are looking closely determine if those promises can be delivered upon whether nafta the tariffs or the trade agreement or the investigation and the bigger picture it should be clearer to all of us what is facing the economy to be imposed by countries that rely heavily on state intervention and do not operate on market-based principles. also to talk about these challenges it seems to me it makes a good deal of what is
already happening with democrats and republicans as we address each we look forward to hearing from you about your vision and plan about how we take on those challenges effectively and how the administration partners with congress. >> with ambassador trade representative mr. ambassador has made a written statement you have five minutes to deliver your oral remarks begin when you are ready. welcome you and i thank you very much mr. chairman and ranking member or members of the committee i am pleased to be here today we greatly appreciate the expertise of the members of this committee. we are grateful for the time you have given us with truly
bipartisan trade policy to help us with the issues that we face before i continue with my statement but me just say i cannot really complain about the fact i have no deputies i do now so i thought it be appropriate to say will all be seeing you members i believe to members of your staff i should at least let you know who is working for you now besides me. jeffrey is from the middle east and asia and cj mahoney deputy for africa china and western hemisphere also doing investment and services and will be our transparency officer as the appointed official. so those are the two people i want you to focus on if he was
and say our brand-new. first i would like to draw the communities attention -- the committee's attention goods and services rose $565 billion in good from $811 billion there are a lot of causes for these numbers but i also agree long-standing trade deficits to some extent reflect market distortions and they have a negative effect on u.s. workers and businesses. of course we also have a massive trade deficit with china so the numbers essentially got worse last year and although there are a variety of views on the president believes it raises significant concerns that the
global rules of trade make it harder for u.s. companies to compete and export the trade deficit also indicate the united states the cost of globalization is falling more heavily on blue-collar workers this is something that is bad for the economy and society and finally they tend to undermine the support as trade deficit is the problem i would outline the residence trade agenda. first we will support the national security strategy if you haven't looked at that i would recommend it to you to be trade policy to build a stronger america to preserve our national sovereignty responding to hostile economic competitors recognize the importance of technology and seek opportunities to work with other countries that share our goals. second to be competitive in the overseas market need a
strong and robust economy and i commend the committee on the tax cut bill. third, negotiating trade deals working for all americans as members of the committee know the president directed us to six picking changes and we already had seven rounds with our partners in canada and no. . . . . for the possible countries in africa and south asia who might
be appropriate for us to enter into free-trade agreements and the president has asked for the extension of the promotion to accomplish this. fourth, we are enforcing the trade walls to use all available to defend u.s. workers, farmers and ranchers. they failed to promote trade liberalization to the wto members litigation or not as a negotiation form. in short under the direction of president trump to build a better system of trade that would lead to higher standards thank you and i look forward to taking questions. >> thanquestions. >> thank you, mr. ambassador erin for introducing the negotiators. we sent a letter on the discussion urging the senate to move so we are pleased to move
in a bipartisan -- >> i'm grateful to the committee for intervening. >> we need a whole team. it is a small agency and they are on board at this critical moment, so congratulations on that. i'm convinced that it can create incredible job growth and paycheck growth for america. our farmers, workers, local business i think it is a modern nasa is our number one economic priority of this year and i believe not only will it grow jobs in america but when combined with our trading partners can make the american businesses and farmers more competitive in the rest of the world. i want to ask a question about that in a moment. first let's start with the steel and aluminum terex.
we saw president trump's efforts to target steel and aluminum and it's important that we allow aluminum to move forward. it's critical for every economic sector in america. in the determination was included an exemption process for countries negotiating with the president directly in order to address the transshipment issues and multinational efforts against the unfair trade practices and strengthening america's national security footprint. can you give us an update on the exception of the process? >> as you say the president did say a process would allow products to get out into specific countries and
circumstances including the department of commerce is working on the question of the country exemptions. i have to be careful i won't say we are renegotiating that refurbished. we are talking about of course there have been other countries that have come up and that i believe we are in the process of talking to now the.
thinks it is a national economic interest. >> and those discussions are ongoing? would be turned over to a final question. to maximize the economic growth for now one of the most competitive tax codes in the world. we can grow american jobs here to do that, we have to invest in those countries to compete and win against china, europe and the rest of the world but in that investment in the countries is to benefit america our investors have to receive fair treatment from other governments and countries don't provide
basic procedural protections for american businesses to make sure they are treated fairly and are not discriminated against. the property is left unprotected against the discrimination or the seizure and regulatory abuses and unfair acts. it's basically a question when the countries treat american investment unfairly who has their back the answer should be america. they don't want to participate in that.
whatever happens, the kind of issues the members are concerned about the. othey proposed an opt in and opt out proposal. we are skeptical about those reasons i would like to yield if i have a second. number one on the u.s. side, there are questions of sovereignty why should the national be able to come in and not have the rights of americans in the american court system but have no rights that americans have bee in the court system it doesn't -- it strikes me as something we need to be skeptical of and analyze.
we are going to overrule the entire system. over the sovereignty and i will yield myself as a conservative so on the outgoing side there are many people that believe that in some circumstances i can discuss the rise of the object it's more of an outsourcing issue. if i had a plan and want to put it in mexico and when i go down i don't want to take the political risk that they will win in mexico and change my bargain.
if you are going there because we are underinvested and putting our finger on the scale and encouraging you to move, that isn't the job in my opinion at least in the united states government. i would say also. it's an issue that i don't always agree with. -- all legislatures controlled by republicans is on record so there are a whole variety people that respond well we haven't lost cases in the united states opposition and while in fact that is the case we've come close to losing some but more
importantly we have situations where the regulation that should be in place which is bipartisan in everybody's interest hasn't been put in place because of the fear so i think it is something that we have to think about very carefully. rather than have this mandatory position which we think is a problem in terms of our sovereignty in the united states encourages outsourcers in the united states and lowering standards in a variety of places we should be very careful before we put something like that in place. what are the risks and alternatives for the companies, the first alternative is state to state settlement and if you go to any one of these companies and ask them why do you need this and why don't you put in place an arbitration and indeed they did do it and in a country
like mexico they subscribe to the convention did they have to enforce those. if they put that contract arbitration this would result in a similar matter about without the united states seizing sovereignty to encourage people to outsource jobs it is just not a good trade in my opinion. i realize however my view is in the minority in some bearing of intelligence caucuses. >> thank you for that and a couple of quick thoughts before i turn over. for investors in our country we have the greatest standards in the world and secondly, your client is congress and speaking out for the community that once
you to have america's back when they invest in other countries with energy, manufacturing, technology, services, every key industry in america has to compete with china and the rest of the world. we are going to put due to work for it and we will work together to get to a good place and make sure we are keeping this in a trade agreement and we have the backs of our american investors.
in the innovation manufacturing and it gave people lives to ensure the reliable terms of the trade as a priority certainly for the communities across new england. in the trade i understand there are some issues with verifying origin having the effect of burdening trade and making the power mower is for people across new england. is this something on the radar screen and argue willing to prioritize as a part of the negotiation? >> yes, they are. the committees universally on that position we are aware of your situation and it's something we are concerned about. >> as i mentioned earlier we are reading about the substantial tariffs on the imports from
china and apparently announced before the week is over. can you talk about the goals of the administration and what you are trying to achieve from section 301 and in the end abusive practices of products that you are thinking of subjecting whether it's in electronics or toys, companies and many of the districts and consumers that rely upon them and it penalizes them as well. can you talk about from your perspective what makes sense for the economy or are we simply proposing to discipline china? >> that is a great question and one that is quite topical as you suggest. the president is going to make a decision in the very near future on this issue of the 301 which
we started in august and which we have been very thoroughly examined and we spend thousands of hours reading tens of thousands of pages in chinese we studied with american companies and our view is that there is no decision until the president makes it but our view is we have a very serious problem of losing our intellectual property which is the biggest single advantage of the american economy in my opinion is our intellectual property and ability to generate. we are losing that in ways that are not reflected in ways of the economics so it is an enormously important issue i am happy to talk about at some length. we think it is the most
important thing that will have been done in a long time in terms of retail and in trade with china. this problem of intellectual property is something that's been going on for a long time, george herbert walker's presidency in 1991 there was a 301 basically not protecting intellectual property in china. we had another one in the clinton administration that didn't really amount to much. we had a third line i one in tha administration where there was cyber theft and of course none of this changed any of the activity in my judgment, so the question becomes do you think the problem strikes without question clear that there is and do you thoroughly study at which i believe we did if there was a problem and if it is so important what are the likely
revenues they would have. on the terror front which was the specific question, they have the power to direct the president to raise tariffs in the circumstances the way that we would approach it if the president should make the decision is one to study with an algorithm that will excite debate could decide the problem among things that are quantifiable. then you apply to that number and the process that you would use presumably was the one you've developed an algorithm to put maximum pressure on china,
minimum pressure on consumers and certain products or high-tech products that are in the focus point of this and the combination would be the kind of things you would put paragraphs on if you were going to take additional action. i can go through in islam detail if the committee wants to do it now but it is a great interest to the committee and i'm happy to talk about it now or just go on and wait for the other members to ask questions. >> thank you, mr. ambassador. >> you are recognized. >> ambassador, welcome. as you know, that is a dangerous area of the world.
we voted for the u.s. south korea free trade agreement back in 2011 and since that time hundreds of thousands of jobs have been created. over 40,000 jobs in texas are directly tied to that agreement. by the way, according to your own agency exports of goods that increased as a result of the agreement as the president looks to renegotiate the agreement i would like to express my suppo support. >> thank you very much. we are in the process of having discussions the president announced his desire to update
and the balance to the extent it's a more limited kind of negotiation. several months ago we spent months with going through their process getting a mandate within their own legislation to discuss it. i am hopeful we will be able to come to some agreement. in addition to the progress we arcourse we arealso talking abod aluminum because it has now come up and with many people it is a particular problem in the area of steel primarily but we are trying to work through all those things and i am hopeful that we can make headway for an agreement for amendments to the agreement that would satisfy the
committee and i think we are moving in that direction right now. as you know over a million jobs in texas are supported by trade with canada and mexico. while i support the efforts to update nafta i am concerned by the proposed sunset clause and i don't think it is a good policy, necessarily. businesses need certainty. can you tell me what the status of the proposed sunset clause is and what are you trying to accomplish with it?
it wouldn't be a difficult decision and the thought behind it is number one we have a number of members in this heady particularly on the republican side there have to be some setting things so i would have thought this would be something consistent with that and the idea if it is such a good agreement that we would naturally while it over and if it isn't a good agreement, we find.
they are giving is approximately similar benefits and if you find yourself in the position at some point and i would suggest five years is a reasonable period of time. we've got that out of terms and that the deficits are and it's reasonable to take a look at it, but if the agreement is as business people tell me going to be so spectacular, it strikes me the president looking at it after five years won't be a particularly large hurdle but it's a reasonable thing to expect people to do and that is the nature of it.
>> i apologize time is expired. >> thank you. you are recognized. >> two major trade issues, it's a major common attribute. both of them have been decades in the making after the failure to act by the government. during much of the same period as you know china undertook a massive increase in steel production.
it's nearly 20 years earlier. the impact in the industrial sector from these two developments was the loss of middle-class jobs and suppression of wages. in both cases, the response was the lack of any coordinated action either handcuffed by the legions ill-equipped for the realities of the rapidly advancing globalization and after conference after conference whereby putting profits over the person of political impact and working families created a vacuum like any problems left to foster made it more difficult to remedy them effectively and responsibly. in the recent remarks these will
be most effective if used strategically targeting china and other countries that are the source of the problem in fact incident retaliating against the u.s. our allies should work together to address this global economic and national security. after nafta there cannot be a successful renegotiation which i believe most democrats want, unless the central problem as we have discussed is fixed. mexico must tear down the structures of the policy to build on suppressing its workers that impact american jobs. instead, there is evidence that in its congress mexico is now moving backwards.
mexican workers today often make less in real dollar terms than they did 25 years ago. unless on the average now than those in china i recently met to workers in the auto industry who said their take-home pay was 75 cents an hour in one case and $1.25 and the other. the president has spoken about this suppression, and now he must deliver. mr. ambassador, we talked about this and you now addressing this problem we will talk about tomorrow with the commerce secretary in terms of mexico and their industrial policy where are those discussions?
>> every time i've testified here i've taken the position that they are in the u.s. interest and also create cost. there's a number of people that agree completely in that process so with that thought we are in the process of having the negotiations really even as of today my focus has been trying to get to a position where mexican workers actually have secret ballot votes on the collective bargaining agreements and of the workers have real votes and they decide it is reasonable for the workers to expect that there would be a process whereby --
>> can i just say and then finish with this discussion on the important issue but it is and the basic problem in terms of mexico. they were using money to lure in the industry and are not cracking down on the american investment. >> the time is expired. >> mr. ambassador, welcome and congratulations on getting your deputies in place. i want to go first to another region of the world. i can assure you we have tremendous concerns about the investments being made here in the united states by the companies in the intellectual property. a lot of that isn't being done free-trade it's just the way they make the investments in the united states and we continue to investigate that and we have
legislation pending in the congress now on the reforms as it relates to some of the can for with what china is doing. i would also urge you i think you've talked about the philippines possibly vietnam and another direction that weekend in the coming weeks and months is it possible with the philippines, vietnam fixing the agreement and possibly japan and i don't know if you can comment on those negotiations but in terms of planning i would be very interested in them. >> thank you mr. congressman.
we've succeeded or failed in terms of what we were sent here to do and any members that were not on the committee i think in making these judgments it's important that we know the basic facts. it's generally about the idea of having a bilateral agreement with some of these people in that part of the world in the pacific part of the world but also some that were not in like the philippines. so the ambassadors will undertake to do a thorough study on the negotiation but as importantly to find out where the targets are, we'd spoken about a reasonable first step in that direction if it's important we have a positive agenda and
important that we showed that part of the world that we are very interested. besides the philippines which is a smaller kind of a deal generally smaller economy you mentioned at the vietnam is one that has bee there's been a numf members. in japan we indicated we were interested at the appropriate time with japan and right now it isn't that time. japan is in the process of having the tpp become implemented in + on the eighth of the month so there's a process that they are aware the relationship is between the interest in terms of -- >> thank you. i appreciate that and i would be willing to work with you on any other countries that you would be interested in by making the spam out of agreements were making the discussions at least.
but we switch quickly to be negotiations for a long time canada has been getting away with murder in their industry and it is causing tremendous problems for farmers here in the united states. states. they have a very protectionist program and have for a long time. they are dumping products into the country and it's one of the reasons you are trying to update nafta. if you can update us on the process and where we are as in the negotiations specifically, we would be interested in what you have to say. >> this is something we have focused on as one of our objectives in the program but also the agriculture programs in other areas where they have what you consider to not market
oriented and very protectionist approaches on these things. it's difficult for them to change their policies in these areas just like they are in every district in america. having said that is a high priority to make changes in the programs so that we have the kind of access that u.s. farmers did have and so it is a high priority and i'm hopeful when we put the final deal together is somethinitis something we will e headway on. >> you are recognized. >> thank you mr. chairman and mr. ambassador. it's very important in texas and was signed in the district i currently represent in san antonio and i sincerely appreciate your efforts to significantly improve if learning from the experience of the last two decades. though i personally continue to
support trade through nafta and around the world, one of the major reasons i voted against a number of previous trade agreements is the way that they have been subverted by the various special interests to serve their own selfish agenda to the detriment of the public health. big tobacco and big pharma have been examples of that in the past. and i'm very troubled by this morning's "new york times" front-page story that advises the office as directly involved in the negotiations to serve the obesity lobby. you are aware that the center for disease control reports that almost one third of american youth between the ages of 17 to 24 are too overweight to serve in the military that the defense department reports one in 13 13 american servicemembers is clinically obese. i know there is no panacea for this problem and i do not
endorse every action taken by a foreign government, but i think that it's wrong to limit the power of american states and local governments as well as foreign governments to address this challenge. i want to draw your attention specifically to that article in which it is said to trump administration's proposal and the pressure behind it holds the potential to handcuff public-health interest for the decades. the american provision seeks to prevent any symbol, shape or color, and this is apparently drawn from the documents you are advancing inappropriately denotes that a hazard exists from consumption of food or nonalcoholic beverages. is it correct that your office is urging the adoption of the provision as a part of the renegotiation? >> first of all, to put my office on the record, the
question is whether you are against things that prevent us from addressing the problem and if you are supporting this position you are certainly not. >> i guess i would say that for us it is slightly more nuanced than that. >> is this a provision that is being asked by -- >> the idea of putting limits on the ability of the countries to put warning labels or symbols on products is something we are concerned about. >> so is accurate and that the language is being advanced by our negotiators? >> i can't comment on the language. i only have the article in front of me that the issu but the isse are concerned about. the other side, your point is an excellent one and i agreed on the other side of it, there are lots of examples of countries that are using this loophole to basically create a protectionist environment. so, we have -- that is why i see
is from our point of view. we have companies that come in with products that have been on the shelves with no wrapping on them. there is kind of in extreme between one way or another. it can be used as the protectionist we have to be very careful of it. >> i will welcome any further return answer you might have. i want to turn to the investor state because there is one that i applaud your answer to the chairman when he asked the question who's got our back the corporate lobby basically wants it to be three lawyers operating behind closed doors as much as possible and we know from the case the corporate interest will have the rights that they couldn't have known and asking for half a billion dollars now because they were denied the right to expand.
i hope you will stand firm for the protection of american investors, but not a mechanism that allows them to invade our sovereignty as you correctly noted and subvert and undermine health and safety regulation there is no reason that they should be given more rights than american citizen and american companies have and that is what is happening through the investor state mechanism you are right to be skeptical and i hope he will continue to urge that position because if we don't see genuine reform of the investor state mechanism the renegotiation will not have met the objectives that we set out initially. thank you and i look forward to your further response about this troubling issue. >> ambassador, thank you for your time today. may i ask unanimous consen const the times article into the record as well as the earlier stories from the times of mexico
and chile. >> without objection. >> ambassador, thank you for being here today and welcome. i look forward to working with all of you and your team. i know you and i have a few shared priorities including successfully updating and combating unfair trade practices. so i want to continue to work with you to accomplish both. in doing so we should build upon the work during the tax reform to boost the competitiveness of american workers and businesses even though i am very appreciative of your unconventional approach i still have concerns about several actions that have been taken by the administration that could undermine the work that we have accomplished in the reform effort to successfully update naftafter the farmers and
manufacturers require certainty. i know that your aware of that. they need to know their investments will be protected and that the agreement will be enforced. they need to know they can rely on this agreement and targeting on the practices we must take the approach to work in cooperation with our partners we cannot take actions that the consumers, manufacturers and exporters at risk. i am deeply troubled by the questions that remain in the exclusion practice and the terrorists from section 301 investigation. american manufacturers and consumers will be heard by the exclusion process and the placement on the import. i would implore you to think about my constituents for example the family in maple valley that will face higher prices in the manufacturer who will pay more or lose access to
the important parts and the apple exporter who will suffer from retaliation. we must also begin to focus on opening markets as the trade partners move forward without us the farmers, workers and businesses fall behind. whether it is very, wind, potatoes or tree fruit, washington's producers will lose the market share to their foreign competitors without new trade agreements. the trade agreements ensure washington's businesses are treated fairly and can sell their high-quality products around the world. i believe that the free trade agreement is an example of a successful agreement for america and the state of washington and i do agree with you however that the implementation of the agreement has been disappointing and any remaining issues to the implementation need to be resolved quickly. i am glad to see the committee system being used for this
purpose. of course the downside to using the joint committee is that there is less transparency surrounding these discussions and needy with your help we can lift some transparency in the process. i recommend and strongly suggest that we published the details negotiating the objectives of the course to signal to the public the changes that you are seeking within that agreement and those talks. can you comment on the transparency of the process and provide those detailed negotiating agendas do you have a timeline on that? >> first of all, i agree that it is an important agreement. on the issue of transparency i would say since we are not using tpa, what i've tried to do to
the extent possible to talk to the members individually or in the groups it's not always a good idea to talk openly about the negotiations and the tactics, but from the point of view of the united states we are troubled by implementing a whole variety of implementing issues by the speed with which some tariffs come off of the products in the automotive industry and also others. we have issues with currency and others i'm happy to talk about in terms of publishing something that is probably unlikely i'm going to do it and what we hope is we will talk to the members to have some kind of an agreement. my objective is to do this as
quickly as possible with as little disruption as possible. this is why we decided we were better off limiting what we were going to do and not go through the process and overload the system and just try to work with the members and deal with this on a smaller level and in a normal way but to the extent the members view themselves as not knowing what our spook spooks sc objectives are happy to let to the members to do this. if the process comes to a conclusion fairly quickly i think it is having negative effects in a lot of different ways. >> thank you mr. chairman. mr. ambassador, thank you for being here this morning taking our questions and hearing our concerns. i am pleased that you acknowledge not only my colleague but also went on to talk about other agricultural problems, eggs and poultry and i
want to ask about the u.s. wine exports because they continue to face highly burdensome trade barriers in canada. the discriminatory policy in british columbia and ontario, québec are restricting market access for american wine and giving canadian wine producers a real competitive advantage against us and as you know you and i have talked about this before. they requested the dispute consultations on the couple began after lascover beganafters not yielded any results or benefit. since then, australia launched its complaint on the practices affecting australian wine exports.
for ten years we have been trying to find some equitable results and have had to promise after promise but still those markets have not been open to us. so i would like to know what it is that you are doing to make sure the wine exports are traded in canada and what you are giving to take shorter the u.s. rights exports are treated fairly in china. >> first of all, the problem is not exactly as you say it is just protectionism and something that is a case to take time in the process aggressively
litigating the action. we are better off trying to resulted in the context of a nafta negotiations so it is something that we are negotiating on and we can see improvement in the talks. >> are there any specific progress but you can report? >> there is a membe number in te category that you won't know until you get to the end if you look at the kind of issues they are brought together at the end of an agreement so when there is just no progress you talk it
through and no one will make any concessions as a part of a final agreement. having said that i believe we will make headway. >> we have the two cases as you know it's another example of posted on the market access side, they are not doing in our judgment what they are obligated to do. we are pursuing those and we will do whatever is required, but on fact, there are limitations on the wto process and you are seeing it had to all those products. >> it is certainly frustrating to deal with this for quite some time now and even more frustrating that we don't know until we fix it as i point out
that china problem has been going on for ten years into the wine issuand thewine issue has r quite some time and in my view they are pretty obvious and pretty blatant violation. i guess i would like to hear more about what we can expect if things start to go better, if you could let us know and circle back i would appreciate it. but to date it doesn't look like we are making much progress. >> on these other issues it is a difficult process, slow and difficult that is flawed. >> ambassador, a personal word and two questions. i appreciate the way that you
approach things. my wife told me the older then getting the more direct and i find your ability to engage us on these things is refreshing. i am not trying to embarrass you but i find it refreshing. what we get those questions to you and if you could respond i would appreciate it. first one is shifting gears on 232. the press is reporting and i don't need you to comment whether this is true that there's these criteria that you are evaluating these decisions and they are all rational as far as i can tell. the participation and other questions in the trade and so forth. here's my question with ukraine for example. are you considering the strategic interest of the united states as it relates to changes for ukrainian steel? ukraine is in a situation under incredible pressure come and credible distress at a country
that has been invaded by russia we have sanctions even though the whole story, so it's very national security element to youelementary forconsideration n number one then shifting gears entirely question number two as it relates to catfish, this is not an unfamiliar issue to you. we have a situation in the united states where there is double evaluation or usda has a program that's pretty ridiculous and ther there's a number of ust are trying to, so my question is can you speak to how the catfish issue in particular has an impact on the negotiations? >> let me say with respect to the first element i outlined we
didn't put it on the website we found if we say some into anyone it's in the paper so it saves the issue everything becomes public in five minutes. we have criteria and one of the elements of this is the national security interest of the united states so we do have that as an issue and it is a broad decision on his part. he defines national security in the conventional way but also more broadly as affecting the u.s. economic security as a part of the national security you will see that as a theme that has run through the national security strategy and trade and the national security is defined broadly in the united states can't defend its allies or anything else unless it has a strong economy so that is something the president has brought. the issue of the ukraine specifically there are national
security issues but that would be an consideration i would say the likelihood at this point is we are starting to focus more on trade and economic issues but once you get below a threshold of national security interest of course it is clear that there are a lot of issues that are probably more difficult for them to deal with. on the question of catfish, it is a problem in the trade negotiation in some areas we do have a complicated regulatory process in the united states. we've had cases involving people critical of our system is basically a protectionist system and we have a situation where in some other countries there are legitimate health issues so it
is kind of a complicated issue and one that we are familiar with. i would be misleading if i suggest tha that rose to the lel of other things but to the extent that it does for you and us and we are happy to work on it and to the extent we can have influence on your effort to sort through this to try to clean it up and to work with you on it. >> thank you you are recognized. >> thank you mr. chairman and mr. ambassador. along the same lines with respect to section 232 with regards to aluminum tariffs, perhaps as it is seen through the eyes of people downstream who are impacted. i represent a district that yields many manufacturers including the command general
dynamics and people who will be impacted and have grave concerns about the impending tariffs one such manufacturer in my district makes compressor and turbine blades for jet engines and they were asking me this recently about what can they expect and here is the question. i couldn't agree more about your candor and going through a number of these issues but from their perspective not only is it and i appreciate the national security interest when you talk about what is the criteria for accepting countries, but what is the timeline for exempting the countries and what type of alternative arrangements are you seeking from those countries and
i say that in this perspective because do you plan on making these decisions by the time the terrace goes into effect if i understand it correctly will be friday so you can imagine the intensified concern that creates about that large supply-chain documents and of course the manufacturers themselves in general and i wondered if you'd likyoumight give more clarity o. >> first of all these matters are valid in terms of the consumer impact and the people in the administration have tried to balance in terms of the aluminum generally it is a clear case that it's under assault and is really close to being completely destroyed, 90% is
coming to these ports and it's a very serious problem, but that is not in any way to minimize the effect of having on consumers. succumb in terms of what the president tried to do in terms of balancing the effect combining the timeline from our hope is to get these things resolved by the end of april. >> so i am to assume from that event with respect to making decisions on all exemptions by the time they go into effect on friday would be the case, but shooting for a full? -- april? >> there will be two categories of countries come and setting aside -- they may have an issuee so setting aside he's doing whatever he's going to do and he may very well not have a problem on that. ..
during the process of this negotiation and trying to decide whether they are going to get out of this and i should say get out meaning they can't be in a position where they get out and take advantage of the benefit. there ought to be some limitation but presumably not one that is a problem. during the course of that process with respect to certain countries the tariffs will not going to effect. that's how i envision it and whether this happens is up to the president. i envision it during the course of this negotiation between now and the end of april that those
countries do not see the tariffs go into effect to their other countries that think they should be excluded and they will go into effect on friday and further people will be more red disruption. in terms of access for your constituent i don't think you are going to see an enormous shortage of aluminum. we are economists and we can all make your own guesses but you are going to have a variety of countries in the case of aluminum and the fact that you negotiated with canada come its enormous because they are such an important supplier. and the other countries they also mention to those countries will not seen increases i believe this will work out but with respect the others you will see a 10% tariff as of friday. >> thank you ambassador. >> your time is export. mr. b. cannon you are recognized. >> thank you ambassador for being here today and i'm excited to see get some of your team put
together. it's been a while so it's great to have that. like many of us i have situations in our district, and like to have you give some thought to in terms of nafta one bad but i kind of like the chairman whatever we do pro-growth for the united states in jobs. one is the company as tropicana founded in my district in manatee bradenton area and creates over 1000 jobs once acquired by pepsico but in terms of nafta it's been good for them and good for their industry in terms of eliminating tariffs so that's one thing i'd like to have you talk about a little bit bit, tropicana and basically as you know the orange juice business you can imagine florida without orange juice. let me say also under a second scenario we have pretty much the same growing communities as mexico does so in terms of the
second situation unfair trade practices. a lot of people feel in florida it relates to tomato strawberries and peppers. a cost that business about $2 billion a year. one to $3 billion in terms of unfair trade practices so i like to have you take a minute and address both of those as quickly as you can because i've got one other question. >> i'm not very good at the quick part. first of all there's a big advantage and one of the principle advantages is the reduction in those tariffs. i'm not sure exactly which tariff we are talking talking about and what the numbers are but the reality is if we end up with a successful agreement the tariffs will be preserved so i think that will help them saying we wanted get nafta through. that's up position i'm aware of.
the seasonality and provision isn't as important as the controversial provision. i'll start with the proposition that with all the great things in mexico of agriculture products whatever there is 18 or 19 billion in sales by the united states and mexico with agricultural products, the reality is we have a deficit with mexico. a good part of that are exactly the ones that you are very familiar with. the idea is that these producers the victims of unfair trade can't take advantage of the trade laws because they really weren't constructed to deal with products that are perishable. the idea is to put in place some kind of a provision which shrinks the amount of time you'll get in terms of calculating margins and injury so these products which if you
spread out over a year are always going to lose. that is the nature of the proposal. it's extremely controversial with respect to. >> we will take some time a little bit later to talk more about that. let me get to some of your new team on ttip. it was a lot of work and some work was being done by the last administration in terms of europe and the thought is there we have a lot of the same values and a lot of the same back rounds. seems like it makes a lot of sense and it's a real opportunity for america especially as you look at wages and benefits. there are a lot of comparable things of united states. overall it's been. fair both ways but maybe could comment on that now that you have more of your team in place. >> thank you.
something we have looked at clearly making headway with europe is a top priority. we have with the european union in and 150 billion-dollar trade deficit. china is literally her biggest problem is basically italy 30 in france 50 and everyone else basically more or less in balance. we are making headway in the area and it's a little bit in flux right now but i think making headway it's a high priority in something the president wants to deal with. your point is one that we completely endorse and we have to make headway on that and i believe we will make headway. >> thank you and i yield back. >> mr. kind you are recognized. >> thank you mr. speaker my ambassador thank you for your time here.
word of advice when it comes to courts renegotiation it's much better to have congress rather than just the landing. there've been many businesses in my district that benefit under that agreement that are getting nervous of bout the way these talks are going and secondly i'm all for a nap the modernization. the global economy is change for them all for aggressive enforcement of our trade agreements. what i have a problem with and what i hesitate about is this go it alone attitude of the sequestration trying to promote a trade agenda and further isolating ourselves. it america first is not mean america alone. it's huge benefit to having friends and allies around the globe that we can work with in order to establish a trading system that works for all of us at the end of the day. this president and this administration is conveniently forgotten or maybe never learned the lesson of our preeminence as
the second world. not only our military strength but her willingness to take the lead in shaping a rules-based global trading system with countries around the globe was shared values. by isolating us and by demonizing many of our friends and allies with a broad scope of retaliatory action i think makes our trade a gender that much more complicated. i'm worried about the potential for retaliation when it comes to steel and aluminum tariffs. i think the approach that was ill-considered and it was chaotic and confusing. we are going on a business by business exemption basis. now we will allow some of our friends to apply for exemptions without criteria. i hope this administration is thinking about what plan b is going to look like if there is retaliatory action taken against us because back home in my state of wisconsin dairy farmers backs are up against the wall.
if they lose market share and mexico could destroy their dairy industry overnight. it's the number one export market being taken away from us and that could cause a lot of problems in the heartland of our country. dealing with steel and aluminum for every job in steel and aluminum producing there are two other jobs involving consuming this material. as we learn from the 2002 case which was quickly rollback under the bush of administration the unintended consequence can be pretty severe for many workers at businesses and industries throughout our country. i ask you to consider that as we move forward including the 301 to pressure china and what kind of action they can take against us. what troubles me perhaps more than anything today sitting here is this love affair that our president seems to have with vladimir putin. i come to a very fearful conclusion that the president of
russia owns the president of the united states and that manifested itself in a telephone call yesterday when the president called to congratulate vladimir putin on a completely fraudulent election and then failed to raise the issue of the chemical weapons attack on one of our allies soil, great written and failed to raise the issue of russia's direct meddling in our democratic process as a nation. so it leaves us scratching our heads as to what is going on. this president and this administration and our relationship with russia. enhanced sanctions almost unanimously through the house and the senate. that was problematic and very troubling as well. right now i couldn't think
vladimir putin having a better strawman occupying the oval office given all the missed opportunities that this president has passed up when it comes to standing up to defending our values and our strategic interest around the globe against russia who is not our friend and they are not our ally. somehow the president misses this important ingredient. i was just wondering whether you are part of the economic team involved in the application of sanctions against russia but was passed almost on a unanimous basis last year by this congress and why it took so long before any action was taken on it. >> thank you. i only have 18 seconds and i will say with respect to trade yes we don't want to go to log and i completely disagree with every single thing you said. c real part of that decision is part of the application of sanctions? >> on the u.s. trade representative. i don't do sanctions.
has nothing to do with me at all all. but i appreciate you bringing it up. senate the gentleman time has expired to mr. smith you are recognized. >> thank you mr. chairman thank you ambassador for your time here today for very important discussions whether it's nafta, whether it's the various trade issues we know are important to american producers particularly in nebraska. ag producers are my focus that we know consumers live in everyone of our districts and we have always wanted to be mindful of that. as it does relate to agriculture and certainly i've expressed to you and i've expressed to the president as well that as we modernize our trade agreements and certainly i appreciate that. we could obviously do no harm to those areas we have done particularly well with namely agriculture. energy has been discussed as well. 45% of nebraska's agriculture
exports go to canada and mexico so again it's no surprise that nafta is important as we do move forward and i continue to strongly urge you to keep this in mind on how important these exports are especially as i can appreciate the need to close the gap and that trade gaps that do exist. one thing agriculture exports do is help us on narrowing those gaps and i hope that we can continue to expand our international reach and expand international agriculture. briefly the president touched on the possibility of freeing gauging the country ntpp. i have two questions. one of them if you could elaborate perhaps or reflect on the potential in engaging tpp that as you know has moved
forward without the united states and then also the president has touched on the bilateral trade agreements that he would like to pursue perhaps and if you could also reflect on that and how we might be able to utilize that moving forward whether it's with japan or other countries that we would like to see you more exports of u.s. products heading in those directions. >> thank you congressman. first of all we appreciate your intervention on this issue of a the importance of agriculture and we completely agree with it. not only have erased it repeatedly here but in all their contacts and it's very important to us both in terms of the consequences of our action on agriculture but more importantly probably using the trade agenda to promote agriculture. we sit back and we talked about
the fact that we have whatever it is, $140 billion in agriculture sales. most of the markets we going do we could sell vastly more and we are facing protectionism. china is a good example. there is an enormous opportunity in a lot of things we are designing with that in mind. agriculture is important. it's crazy to sit back and be defensive because the reality is we are being stopped and a lot of places from local political pressure creating protectionism. on the issue of tpp i would say the following. it's complicated to renegotiate that but if you analyze tpp with respect to six of them right now we have a free trade agreements of the idea in getting those were you think of what you want is fine but with respect to the
other five by far the most important is agriculture printed on the what the total amount of japan is. i'll bet all the rest of them will be around 1 trillion. a nexis malaysia malaysia which is just over 300 billion and vietnam after that. of the five you have an agreement with japan you have essentially solve the whole problem. if you have gone to vietnam or malaysia taken care of 95% of what's outside of the u.s. right now that is in the tpp sphere. i think when people think about tpp is they think of this something that we are not a part of. not to say that they can be improved but the way i am you have a problem because you want to work it out with japan because they are by far the
biggest in the economy in the world and somebody has to sit down and decide do we allocate resources to malaysia or allocate resources to vietnam. there are reasons for that. you can argue all of them and our view is that that is the job of deputy has to do. japan clear for the next year. >> thank you. the gentleman time has expired to mr. pascrell just as a reminder after your question we will go -- after your questioning we can balance this out. you are recognized. >> thank you mr. chairman thank you mr. chairman and thank you mr. ambassador. i think it's clear after montréal and mexico city and thank you for your indulgences
up there, that we are approaching culminating part of the negotiations. that's my judgment. we have a lot of tough issues to address. and i quickly went through the documents that we were supposed to talk about today. part of it is nafta. some of your nafta proposals have really challenge the status quo of u.s. trade policies and i think have been created in trying to make the agreement work for the many not just the few. i have confidence still that you were working to assure the waiver chap or of nafta is fully enforceable.
going on the strength of may 10 agreement as a floor and not a ceiling. i want you to interrupt me if i say something that is not in place. please feel free to do that. enforceable labor standards alone will not entirely solve the key driver of outsourcing under nafta. we all know that. for 25 years mexico has engaged in a purposeful strategy of labor and wage suppression in order to attract investments at the expense of the u.s. and the expense of canadian workers. in ways that have expanded poverty for mexican families the record is clear on this, the numbers are clear. building a middle class market for u.s. exports. you identified in the trade agenda report, you identified,
you said this. since nafta went into effect the gap in mexican wages and labor productivity with the united states has widened. the oecd, the organization that we know about for many years reports that the average annual wage in mexico fell from 16,000 in 1994 to 15,000 and 2016 unquote. i met with the workers and mexico city just a few weeks ago because reading about it in the statistics are very different than hearing and it totals stories about actual situations that are tangible. no democrat and no republican --
they are in the auto parts that jury many of them and were making less than 1 dollar an hour. no options to bargain for better treatment. both the labor rules that nafta and mexico, mexico's own labor law and prior to his must be upgraded to make real changes for workers. do you agree that mexico has failed to live up to its obligations with respect to nafta's labor side agreement? yes or no? >> yes. >> so please explain how u.s. cr is working to solve the problem of low wages and so-called protection unions which you identified yourself, not i, you,
in mexico and agree with you wholeheartedly. how are we working to get this done, explain. >> i would say first of all while wages have been stagnant and that was not our expectation at all when we enter into this agreement. it was clearly sold as selling a lot more stuff that is not happen. it has created a lot of jobs though in our opinion. a lot of those have been in the auto industry and i would suggest many of those at the expense of ustr. >> that's important isn't it understanding the relationship between low wages is and i'm putting a simple as possible and mexico to affect jobs and can i at least finish what i'm saying? >> i'm sorry mr. pascrell your time has expired. maybe another member can yield
to them. >> i don't want anyone to yield. i'm asking to finish my question. >> i'm sorry mr. pascrell. thank you. ms. jenkins you are recognized. >> thank you mr. chair and thank you ambassador for being here but i want to reiterate my support for protections and nafta and i have grown concerned about reports to weaken or remove or make rejections optional. i'm sure investors benefit from the same process as foreign investors enjoy under our constitution. that sounds a lot like the reciprocity and trade deals that this administration wants. foreign investment by u.s. companies also create and support u.s. jobs. for example the army -- family farm and ranch operation to depend on exporting their products to mexico utilizing the
rover to provide that final link to reach these crucial markets. this cross-border of the structure would not be possible without the $4.5 billion kansas city invested in mexico over the past 20 years. additionally the house and the senate passed trade promotion authority established negotiating object is so not including isds in that with a direct rebuke to congress explicit direction and could undermine lacking such protections. ambassador lighthizer i urge you to reconsider your position on isds including it makes good policy and political sense. i can't overstate the importance of nafta for the armors ranchers
and manufacturers in my district district. in fact two dozen county farm bureau members from eastern kansas were just in my office yesterday to hammer their point home. they depend and rely on being able to sell to mexico and canada so their livelihood depends upon it because they do. the message i received is the need for certainty that nafta benefits which has allowed kansas exports to surge remain in place. this certainty is paramount to providing desperately needed assurance to all aspects. the small towns across my districts that make up american agriculture in the heartland are depending on the administrations getting this right and moving on to expanding into the markets and joining new trade deals. i strongly support nafta and i encourage this administration to follow through on its promise of
doing no harm. with that mr. chairman i yield back. >> thank you. >> thank you mr. chairman and thank you mr. ambassador for being here and also for your work in progress on the nafta renegotiations particularly in the area for guitar practices anti-corruption issues and digital trade. it's essential not only to protecting american innovation but also access to markets through the e-commerce that many american products and services are sold from. i've got to tell you the president's decision to invoke a little used 1962 law to oppose these broad tariffs is creating a lot of uncertainty and it seems like every time i talk to a minnesota company they have a lot of questions.
we usually begin the conversation by talking about the real economic benefits we are seeing from the tax cuts and the jobs act to make tell me how they are investing more in new equipment and reinvesting in their employees and that's a good thing. they also will talk about some of the bad news regarding the new tariffs. there was one fortune 500 company minnesota that reduces engines and generators who said half of their economic benefit made by tax reform will be wiped out by the aluminum and steel tariffs. it's not just large employers that are being impacted that are putting these projects on hold to on hold. we have small businesses like r&m manufacturing the share their thoughts directly that there goes to the steel and aluminum tariffs saying it would be disastrous for them as well as other small metalforming companies because raising their prices means they will no longer
be competitive. they are going to get clobbered. i support the president's objective in your objective for fighting for the american worker who needs support in helping employers at u.s. steel companies that some of those gains are going to be swamped by the larger losses that could be felt by much larger losses in metal consuming companies if we have those retaliation tariffs. economists now are saying with trade harker ship for instance the study says the united states would lose five jobs for every job created in steel and aluminum savings and that's without retaliatory tariffs but if you take the retaliation could be a net loss of 18 jobs. it's 470,000 jobs and most of those jobs are production. they are exactly the type of jobs that i think you and the president are intent on protecting peer-to-peer and pans and needles with the upcoming announcement later to see because retailers in minnesota
are concerned about the outcome thing -- upcoming pre-one terrace. i'm all for holding them accountable but let's be targeted in what we change and let's go after that. consumer electronics don't have domestic production and i hope we won't be seeing tariffs imposed on products and a lot of american families and consumers and small businesses that purchase every day. it wouldn't make sense to raise a couple hundred dollars per computer in a small business. i would ask how is that going to change the chinese -- we have 800,000 jobs now that roland trade is one of the reasons we weather the economic storm a lot better than most states. we have a lot of high-value manufacturing and those pay a lot higher than average salaries. let's not shoot ourselves in the foot. i don't believe in a a country winds a trade war. i think all countries lose in mr. ambassador every one of the companies i highlighted they
share the exact same goal that you have two change china's behavior. i want to ask some folks sitting down and continued to work together and solutions that will be effective. and i have more follow-up targeted questions that are more specific in the written record mr. ambassador. >> there is a lot there. first of all with respect to the trade partnership study i have looked at those in the past and the accuracy of them is so slow i wouldn't let it keep me awake at night. the basic point is with the talents of the effects and we understand that. nobody winds from a trade war. on the other hand you have to ask yourself can we go on with an 800 and growing billion-dollar trade deficit.
we have to do something and the people who are benefiting from the status quo are always going to begin stay. we understand that. we have to balance their interest but the reality is if you are on a a course that is unsustainable you have to figure out a way to change. am i willing to sit down? i'm happy to do that in i do it every day. we have had an enormous amount of contact with people. it's part of what we do. >> the gentleman's time has expired. >> thank you mr. chairman. ambassador lighthizer what is your trade elation ship with canada? do with the. deficit or a trade --. >> one of the great questions of all times. so this is something on which i have spoken about for years.
here is the situation. the numbers are all confusing and when i'm finished it will be appropriate to ask if you are not confused than you are not paying attention. >> family have five minutes. i will give you the shortest version of it. the fact is if you look at goods on a constant basis you have the 17 billion-dollar deficit with canada. if you look at customs verses what does canada say the surpluses turns out to be $97 billion. they have a $97 billion surplus with us. what is the cause? the cause is a lot of things but the biggest one is the products it commits the united states goaded canada and we count them
in many cases is a u.s. export even though they are not u.s. exports. the canadians would look upon us as an appropriate country. if you look at it on a balance of payment aces then the numbers are different. if you look at it on a custom spaces people sometimes will say what is the surplus because we have the services surplus but you have to take a servicemember from another dataset and if you do that and do use their numbers and we have a small surplus if we use their number we still have an enormous deficit. >> has the strong-arm tactic of the president as it relates to terrorist threats come have they helped or hurt in the negotiations? >> i don't buy your premise. i don't think there has been in the strong-arm tack ticks.
>> specifically am referring to terror threats. in other words present is publish reports that stated that he's issuing terror threats against china, or against canada and mexico as leverage to get a better deal in nafta negotiations. he it's pretty simple. to make you are seeing this at 232 affect the negotiations? >> know i am saying the president threatening terror threats her or help the negotiations? it very simple questioning. >> the answer is i say no strong-arm tactics. >> okay. 93% of the heroin seized by the united states drug enforcement agency came from canada. or for mexico. 81 metric tons of heroin today.
the president has demanded that mexico do more to prevent drugs from entering the united states as a condition for lift things deal and aluminum tariffs. is that something that has found its way into the negotiations? >> well, in the first place there's a lot going on between the united states and mexico to deal with the heroin problem. it is a legitimate problem. there is a lot of stuff going on and it's not something that i've been the slightest bit involved with. there's a lot of important stuff and i think it will make a significant difference. >> i have a final question because this is important. what in your opinion optimally and realistically will be in a renewed nafta discussion
outcome, final agreement? what will it look like as it relates death benefits to the united states. specifically named three net new provisions that will benefit american workers. >> well i mean there are so many some of which would be controversial so i won't mention them but clearly an enormous increase in benefits united states. the auto provisions are going to be an enormous unarguable benefits united states. improvements will be made in digital trade which will be extremely important united states and i can literally go down -- we have 33 chapters and out of all those chapters i personally don't think there's a single one that won't be a significant improvement for the united states. i would say the members who would agree that 90% of them are huge improvements to the united
states. but yes i think it's a very powerful very important group in a whole variety of areas. >> the gentleman time has expired. >> thank you mr. chairman. thank you for being here today ambassador. my district is in texas, north texas. it's the home of the dallas-fort worth airport, so our area basically is involved more in the administration, distribution and marketing, storage of nafta goods and services more than the production of the actual product product. that has created just the boomtown type economy in dallas. and so since we gained 90,000 jobs last year, it has put a lot
of pressure on our home-building and/or apartment building and are building industry. their concern because of the tariffs they are involved in lumber mainly with canada i think and they have provided me with charts that show the lumber prices they have escalated 40 to 60% in just the last year. i would like to just have a discussion with you about maybe just the purpose of the tariffs. are they serving the purpose? is there some relief in sight? is the nafta agreement going to address these tariffs and just general information for my homebuilders back home. >> thank you congressman. if we are talking about the
lumber tariffs between the united states and canada those are the results talking as if they are some kind of administration policy. there's no of policy other than the policy which is the gap in pay. you have affected u.s. companies companies. they go through and prove the level and they go in they prove that they been injured and then they get orders put into effect. that's the process that has gone on and it will go on. in the past and to some extent ongoing there's an effort to try to get the u.s. industry to give up their license in exchange for package for something that will smooth things out. that's a process which goes on every now and then.
right now i would say there's probably not much going on in terms of those negotiations. are they part of nafta that? not as far as i'm concerned. as far as i'm concerned this is a function of the trade was working the way congress wants them to work and when this happens sometimes prices go up and sometimes it's unfair. the fact is they were just taking advantage of an unfair situation and making money and lower prices. i don't know which it is in this case that they could both be a factor. to me it's unlikely i think that i'm going to end up solving this issue are trying to resolve this issue. right now the positions are detectable and the people that drop the litigation have rights just like anyone else and have
the right to get the benefit of the lawsuit. >> i appreciate it, thank you. >> thank you mr. chairman thank ambassador for being here today. my district and my state of tennessee has benefited greatly from nafta because this helps bring some of the large-scale manufacturing on a milk bill to the state of tennessee. these operations are tremendously important to our communities especially one in the middle of tennessee which is the home of the nissan plant that produces more than 150,000 automobiles in that plant annually so it's a big issue for the middle tennessee area. there has been considerable press with regard to our auto rule of origin proposal which appears to be holy unworkable for the industry and have
perverse effects which is a real concern for us in middle tennessee particularly. understand canada presented a framework of ideas and a council proposal during round six in montréal. canada's proposal could result in less regional content than we have now. can you update us on whether canada has to be able to provide additional details regarding their proposal or whether mexico has provided a proposal because it is really critical for communities and we need to get it right. >> thank you ms. black. i would say first of all the auto plants particularly what we used to call transplants coming to tennessee and other places has been important. i think we have to acknowledge that. number two the rules of origin
will have no effect on cars made in tenneseans open united states but they are irrelevant to that whole equation and will have no effect at all. what nissan is worried about his nissan would say i the plants and mexico that also wants to sell in the u.s. and that plant has very little u.s. content. that plan has a problem but it will have no effect on anybody who works in tennessee for the nissan plant for any cars sold in the united states. i wanted to make that point the code is sometimes they conflate those two things and they are completely separate. in terms of working with the industry very closely on rules of origin. we want to be in a position where more of these jobs in mexico right now come back to
the united states in the basic model is a smart model. they want to lure companies to come to mexico to make cars and sell them to the united states to take advantage of their low wages that take advantage of other things too like subsidies and drawbacks and the like. that is the strategy. it's not necessarily a strategy so our objective is to have more content, u.s. content but even really canadian content. the ideas it shouldn't just be a model where you copy and you are subsidized. that's not a very good model. our object is to try to find a line where we encourage them to move some of those parts back to united states. we are in the process of trying
to do that. our hope is that we get something that some of the large manufactures would find useful but with respect to others i would expect them to be in a position where any change is going to move them to the point where they pay the 2.5% tariff. none of those will be manufactured will involve companies in tennessee or the united states. if we are going to improve the situation at nafta we have to get more jobs back to united states. will they all come back? not a chance but a lot of them can come back and that's our object. the canadians have a similar tactic. they have a similar objective where they have to balance. but we are trying to work our way through that. >> thank you. i yield back.
>> the gentlelady yields back. >> thank you mr. chairman welcome mr. ambassador. thank you for joining us. i want to spend my limited time focusing on the current u.s. south korea trade agreement renegotiations. as you know auto manufacturing is critical in alabama's economy. i have a humvee plant in my district that employs 3000 workers and provides many of my constituents with high-paying jobs. therefore the u.s. korean relationship is very important to this congressional district that i understand the they have has concerns about the implementation of the original agreement and i can appreciate those concerns. i like many of my colleagues who have spoken earlier really just want to re-emphasize the importance of transparency. i share with my colleagues to concerns about lack of transparency in the renegotiation process. my question really is as i
understand it the reason i assume you are invoking tpa for nafta but not doing so for the poorest agreement you stated was because they are all me minor amendments. i guess i'm questioning the unilateral decision that the executive branch can make as to keeping the legislative branch and members of congress out of the loop. can you talk a little bit about your ability to not come before us and before tpa? >> that's an excellent question. the bottom line is that tpa creates a process that's has a number of steps and congress is involved. it takes more than a year
realistically. it's actually probably a lot more than a year. in negotiation like we have with chorus where there is a real price in waiting for the negotiations to go forward. >> i appreciate that it takes a lot of time to go to the tpa process. i was questioning the ability of any executive to make that decision verses coming before congress and asking for our blessings on this renegotiation. c there is an amendment process and to the extent you follow the amendment process there are certain things you can do in certain things you can't do. things that require changes in the law for example that's why you would in that circumstance have to say fine we are going to go to pda.
there are number of things you can change. there are whole body of things you can do and i would suggest congress when they pass a law is is. it was contemplated that this process could be used for certain things and not further things. >> i'm running out of time. i wanted to reclaim my time credits is really wanted to reiterate what you offered from lots of my colleagues that this agreement is a course renegotiation just as important as nafta and there were lots of members of congress directly impacted by these changes in the rhee like my district. we obviously would want to be kept abreast as to the changes that are going to be made. and ask her consideration as to how will affect their districts. the other one i want to express is that the administration has shown a link between national security and trade.
i also sit on the intelligence committee and i see the thread basically every day. i have so have seen how commerce can foster international cooperation in boost national security. i agree that trade and national security are links to president trump alluded to the possibility of pulling out american troops out of south korea. south korea doesn't demand korean negotiations. i just want to make sure and want to know your thoughts about how it threatens strategic allies in the process of this renegotiation. there's a balance that must be maintained when we are renegotiating with their strategic allies. your thoughts about that. >> we are in the process of doing a lot of things and i certainly agree with you that
south korea is a very important ally and right now we are there's a great deal of older ability. with my counterpart on the korean-u.s. agreement troops and the like have nothing to do with what i'm talking about. i don't get with involved with it all. they are the people who would say in other parts of the strategic relationship i know there's a whole world of stuff that's very important somebody has to sort it out. >> ambassador i apologize. mr. kelly you are recognized. >> mr. ambassador thanks for being here. i know you have been working but i'm going to go through the cisco as i can because they are others in need to talk.
steel and aluminum were big part of that area and now wish towns are decimated. the presidents talking about putting tariffs on aluminum and steel has been a big boost for folks who live there. there are so many years people talked about it and what is the trade imbalance or now because people talked about getting into a trade war and the analysis is $800 billion. >> 800 billion dollars is a good number. goods and services numbers like 565. >> we are in a real battle right now to maintain our jobs. you are leaving the country exemption process and it's been reported there will be roughly five criteria related blocking
the market participating in the global forum on capacity and supporting antidumping and countervailing by the wto. one of the things i want to bring up one of the companies i represent is called ml mk. they have 600 people that work at the plant another 150. i think they are three much on board with what's going on with the tariffs but they are a russian owned company and i know this disturb so many people. every time the word russia comes on up they go running around their hair on fire. any of these terror should be applied to cut countries that have been manipulating steel for years. one of the men who represents the steelworkers terry date has said let's go after the people that have been the bad actors.
they reheated and they make coils with it. i think some people put everybody in the same category so i just want to make sure when we go after these folks and these exclusions are granted there are some people that have models in place. they have not been taking it damage of a bad trade situation but have work to get through it. these are by the way american workers that are producing this product. if you can just give me an idea on how the country exemption discussions are proceeding at this point and how would a company like mlk, we have a lot of forging companies looking at this. how that would work out and what they are would they not be included in the exclusions and how would it work?
>> let me save first of all there are two levels. their product to exclusions and i don't know when their case. there will be a number of countries. i've been around this before. there is asa process and unique product. there is that. with respect to countries i would say there's a cognizance on our part that are bigger can chew here than others. a number of people believe that russia is in the above countries that are contributors. if you look at when this was originally set up you had an option which is 25% across-the-board in option two would spit out 12 countries and those countries would have gotten them and others would have not.
that's option number one. with respect to option number 21 of the countries viewed to be exaggerated to the problem was russia. i'm not exact they sure people would say they are operating with clean hands. that's not to say in your situation it's necessary or -- necessarily reflective of that. an imported product from china and exported united states with costa rica the presumption was they were taken from china or replacing it to the united states. i would suggest that russia in the opinion of some people is a problem. there are a number of others that i could go through. i would say their efforts made
to separate out these things but i don't think you will see a lot of exclusions done. i would say this, to the extent exclusion star offered it does have a dampening effect on prices of the product which would have a dampening effect on the negative consequences down the road. >> your time has expired. mr. renacci you are recognized. >> thank you mr. chairman. ambassador lighthizer thank you for being here. thank you for your testimony. like to tell you about to ohio farmers have recently spoken to. jerry and his son farmed 900 acres in ohio. he's a third generation to farmed the land and hopes his grandson steps up to be the fifth generation from the land. they started back in the 19 thirds and through hard work and
dedication the farm or to its current size. the main crop soybeans. jerry's friend lives in wayne county which is in my district and also farmed soybeans. they groped dairy farm but didn't really care for milking cows as much as his older brother. he wanted to farmland and wanted to own his land so he made it happen. eventually per celeb and hundred eight or said he farms with his son. his current opuses on building the farm of bit further before he passes it along to his son. i tell you but dave and jerry because both of these men personally identify with the american dream that many farmers in ohio can relate to but i'm also telling you about them so you are aware of their concerns. as you know usa been farmers are very concerned about recent suggestions from china that if targeted soybeans in trade disputes. given the u.s. is one of the world's largest exporters of soil and china's one of the largest their concerns are valid
valid. so my questions for you ambassador are threefold. first in your conversations with other countries how are you addressing the devastating effect that these types of retaliatory measures could have on u.s. farmers and also what steps might the u.s. take to prevent the potential issue from becoming a real problem and finally is there any message you would like to relay to all the concerned soybean farmers back in ohio? ..
one of the first things they always talk about and we think about is $14 billion worth of soybean sales by far the biggest market and if you look at the import it is like 14 and then the next .-full-stop about 1.5 billion with an enormous spike it is important as a vulnerability and i would say also that even without any of this going on right now, the chinese are cutting back and limiting their imports and it has nothing to do with any of this. they are doing it for their own reasons because they find they have their own bureaucracy doing whatever it's going to do, so it is a major concern and something that we worry about. i'm focusing on soybeans because you brought it up they are all vulnerable in this kind of circumstance. so it's something we are very
cognizant of as we take these steps. i don't think it is a sufficient for either party are not going to stand up for the american intellectual property to do the kind of things we have to do that wbutwe are trying to do evg in a measured and appropriate way. and if there is retaliation, then the united states has to take action because we cannot be in a position where we do something that isn't crazy or radical that is necessary to keep the united states economy going we can't have a 375 billion-dollar trade deficit and not do anything to defend ourselves. it's extremely important that we are aware of it and we have to be prepared working with congress and others to take countermeasures if it turns out they are working unfairly with respect to retaliating and with respect to soybeans but other agricultural products and others also got to focus on agricultu
agriculture. >> thank you mr. ambassador. >> of a gentle land yield back. you are recognized. >> thank you mr. chair and mr. ambassador for joining us today. digital trade is an important part of our trade agenda and should be a major focus area as we look to modernize our trade agreements. digital trade is also making it work for americans across the country. we know that many small sellers, constituents in my district and across the country are harnessing the power of the internet to reach customers a broad in ways that were impossible a decade ago. in 2015 the u.s. led an effort to expand the information technology agreement and in 53 countries including china agreed to remove the terrorist on information and communications technologies products like
next-generation semi conductors that are manufactured in america and used in products around the world, so your trade agenda acknowledges the importance of digital trade however the foundation of a strong and vibrant digital economy is including access to affordable ict products such as smartphones and tablet. the biggest beneficiaries of these low tariffs are the students, entrepreneurs and small businesses who use these devices to innovate and so their goods and services around the world, on recent press reports as we discussed today indicate the administration is considering a terrorist package on consumer products including from china.
always make it easier for our businesses and entrepreneurs around the world to compete in a global economy. the assault on the u.s. information technology industry, so we have an issue that china has a policy of forcing the transfer in the investment and number two, forcing companies to license technology of les is len the economic value, three, states subsidizing interdicting massive amount and some of these sectors it is $300 billion worth of investments to take over the u.s. technology firms and the absolute best of technology so
those are the kind of premises and the reason we've launched the 301. now the question is if you go through this and you decide that there is a serious problem than the issue is what do you do. one of the things he would do is impose tariffs. the way you would impose the terrorist is there are certain technology products you have to give consideration to whether or not you would put th a target on those products. another issue is create an algorithm that would maximize the pressure on china and minimize the pressure on u.s. consumers and the combination of those would be the way that you get to the amount so you come up with a economist study and say here's a measured amount of what it should be and then you try to find the system that allows you to impose it in a way that is
most rational, and if the president makes the decision to do this is adamant that they will come to the decision that is the way we will approach if so how does the u.s. technology view this whole system vastly because it protects their intellectual property which is the very heart of what they are. >> before we run out of time, are you saying then that you are taking into account any enforcement action that you take the impact it would have on consumers and the impact it would have on the small sellers across the country and innovation and entrepreneurs across the country? >> we certainly have a laundry list that tries to minimize the negative effects on us and maximize the effects on them. it's kind of thing that you would expect us to do, and if we
do this, that is the kind of thing for sure. >> thank you. i was yield back the. >> thank you mr. chairman and mr. whitehouse for being here today and for all of your continued work in this space. i want to for the record have an opportunity to express an issue i know we talked about it, but i represent a district in which it broadcasts around the country and is able to take advantage of the sales of goods. canada presents the broadcast pt from going across the borders using something called a cultural exemption, and it isn't clear to me that the basis upon which they claim the culture exemption would apply to something like this.
it looks more like a way in which they are effectively preventing what we would hope would be the fair competition working to the distinct disadvantage of qvc. i know you have a lot of big issues with nafta but i hope that when we get to crossing the t.'s and eyes, something important like this is an issue that is already on the negotiating table, that and the idea and products. there is a cost associated with moving goods into canada for the small producer, somebody in the same way might have a knickknack that they are selling in canada but there are exclusions on getting things in there and i hope those things will be part of the negotiations, let me just switch this over and i appreciate the work you are doing holding china accountable for what they are doing dumping steel on the global stage.
what concerns me and i'm hoping with the language about flexibility that there is a recognition and that there are countries out there who are going to be impacted by the terroristterrace. the eu can speak and we've done things with mexico and canada. i do a lot of work with brazil in the sense of the responsibilities here on the one committee and to studying their circumstances i look at that as the kind of country with a trade surplus and the united states has a trade surplus with them. this question about the transshipment we have a parallel trade in the sense that a lot
goes to brazil in order to be used as a semi finished product so there's a lot of characteristics, which are i think speaking to the idea that even though people have been identified, these are the kind of considerations i would hope would qualify for exclusions. i know you said there was going to be flexibility in that, so i'm asking if you believe that those are the kind of criteria that will be relevant in the determinations about whether or not there is a basis for extension for countries like brazil. >> mr. ambassador, if you could hit the microphone. >> on the cultural exemption it is very often just cultural protectionism and you noted
another example when we talk about people limiting standards and warning label and the like i think of all of these things there is a legitimate case for some cultural exceptions, but it's not this kind of thing. it's another example in the case of brazil there's a lot of things that would make brazil an unusual circumstance as we talked about before, you and i yesterday in the fact that they are a huge producer and a love of their production is basically a model of a semi finished deal to the related companies in the united states so there are things that are unique about their situation but at least we
know will be taken into consideration that is to say that they would be successful at getting a remedy and that will be a question for the president but there are factors there that are important. >> thank you mr. chairman and mr. ambassador for being here today. i represent the state of south dakota, in this time of year there is a lot of smoke and it's cold. we watch a lot of basketball games. my son plays basketball so that is what we end up giving my love of winter evenings when i happen to be back in the states. i was at one of those games and i have something happened that has been all too often recently a local farmer came up and sat beside me and said you know what the administration is thinking of trade right now it seems like every time they take a position, soybeans dropped 40 cents a bushel, and we can hardly pay
our bills to pay. it happens over and over again where a lot of the farmers and ranchers are concerned on positions of what can happen to their commodity markets. it's because 73% of the commodities that are grown in south dakota o that were exportd to mexico or canada and times are hard in farm country. they end with a 45% drop in net income the last three years and the only indication is that it's going to get worse, so they are very worried that the administration they supported is going to lose them a deal over provisions that may be widely unpopular. the perfect example might be the sunset provision which requires the deal to be renewed every five years. in my opinion, trade deals are meant to foster trust and
eliminate uncertainty to create more opportunities to sell our goods overseas and the sunset provision undermines a trade deals ability to develop necessary certainty to encourage businesses to invest, so i'm curious if you woul he would aca final trade deal trade agreement without the provision and it. >> i'm not going to sit here and negotiate with you, that's not going to happen. i don't think that the sunset provision has a negative effect at all. >> you don't think that it creates every [inaudible] >> i think exactly the opposite. i think when you get close to that fifth year what you are going to see is what you saw this year with korea that is to say another billion dollars worth of sales so what we did is the presiden president created s so-called uncertainty and you saw a billion dollars of additional sales of products
because they want to do is get the deficit down and in my opinion what you're going to see as you approach that is additional sales, so i think these are the people that say that and they are exactly wrong. >> do you have other examples besides that one because it would be incredibly important that we have a background in historical examples of where because all indications historically is when there is uncertainty in the trade provision you have commodity prices fluctuating and many producers are in a year in advance or they may have to hang onto it and uncertainty causes the name of hartford. is that the one instance you can point to to where i you to whers advantageous or was there more we've onl only be negotiated ate two agreements. we are in the process of course so it is a fairly small universe. clearly, there is a desire on behalf of people when you are
going to look at the trade deficit. that's number one. number two, i don't see it as an enormous amount of uncertainty. the idea is to have you back at an agreement after five years and determine whether or not it is in the interest of the united states. if it is going to be as unpopular as everyone says it is going to become and it is going to be as great for farmers as everyone says, why would we get rid of the agreement? >> as far as that clarity on how important the sunset provision is, you don't want to be more specific if you were signed an agreement or to finalize an agreement that did not have? >> it is important to me and i'm not going to negotiate with you here on this or any other. >> you are recognized. >> i know you want to close the nafta negotiations soon but the
chapter stole as many outstanding issues that would harm the u.s. economy. i represent a los angeles area and i'm the cochair of the creative rights caucus so the strong protections are important to me and to the u.s.. when they are consumed around the glob globe the royalties are objected back into the u.s. economy and in fact ... reckitt is as a leader for the creative industries and the intensive industries into these particular account for 1.6 trillion added in 38% of the u.s. gdp and a
separate 45.5 million jobs. unfortunately, canada and mexico don't place the same value particularly on the protections as the u.s. does. since the discussions have been renamed now what assurances can you give me that they are working to ensure mexico and canada protect u.s. intellectual property in their markets? >> first i would say with respect to the progress that has gone on until now, there's been an enormous amount of time spent going back and forth so we understand each other. this is one of those issues that never results until the end of the negotiation. and i'm sure you know. the reality is exactly as you say. canada and mexico are takers in the intellectual property. those people are not surprised about that with respect to
mexico, but it is with respect to canada tha but has third word intellectual property and getting them to accept the first world is not easy. however, the speed with which we close back to nafta still wouldn't have been passed without will not have any effect on where we come out of this. it is a very important issue. i believe there are forces in canada who at some point have to become a fully developed country on this issue because they had a wealth of potential so there are people that should be on this side of the issue, but i can't give assurances in the position that we would want to have a strong protection of intellectual property we think is not only important for the united states but all these
other countries it is in their interest to do it. >> host: >> this is one of them that might be saved for the west but can you show me the provisions to start with but technically free trade agreements that will not be negotiated away in the final hours after the negotiations? >> it certainly is not my intention to do that, but i cannot negotiate with you it wouldn't be fair but it's a very important issue for us. we are completely in your camp. on another subject, one of the keys to ensuring the trade agreement is particularly with the labor obligations. now, we have agreements with colombia, dominica the dominican
republic, peru and honduras. there've been labor violations that have been filed in each one of these countries. in fact there are numerous violations that include violence against the unionists and enforcement actions and so forth. and yet, in most of the cases there hasn't been an update from the administration. what are you going to do to enforce these labor agreement? >> we have provisions in these agreements with people that have labor provision, and we are in the process of following the process that we have to file for the settlement in those cases. it's something brought to their attention and is a very troubling trend.
it's not just of these countries it is a lot of other countries in that part of the world so we are prosecuting the cases set up in the agreement. >> think you. >> mr. smith, you are recogniz recognized. >> thank you mr. ambassador for taking the time to say that folks in southeast are optimistic about the future. if you look at the past year under the leadership, we testify to 5 trillion-dollar tax cut for american farmers and small businesses and we repealed hundreds of regulations and created over 1.6 million new jobs. speaking of new jobs, as of just the day after the president did this still announcing 450 new jobs so these are changes and
aspects affecting people that have not always been on the right side of victory. the next step for us is to go out and negotiate the best possible deals so that american farmers, businesses and workers went around the world. we couldn't have a better person leading the way. the president wrote a book on these agreements. in the book he quoted the worst thing you can possibly do in a village is to seem desperate. the best thing you can do leverage is the best strength you can have. the president knows where our strengths are, they are in our hard-working people, superior drug and world leading services. you know this as well and attack before nafta and other bills is not an easy one.
while those are the hot topics i want to talk about unfair trading practices. i want to applaud you and the president for the world trade organization like i mentioned before america is ready to compete as long as the playing field is level but the practice is disadvantage american farmers. to ignore a violation of the bye trade agreement doesn't strengthen free-trade in fact it's weekends free-trade. this has been a mounting evidence that certain countries are ignoring the wto obligations by providing support to farmers well above the commitments that they agreed to. the results in the surplus production that ends up in the world market is placing themselves at u.s. farmers it is not conservative to allow the breach of contract.
in what ways is this administration leaning into the wto to ensure that the countries play by the rules? >> i agree with everything that you said. >> then i must be right. that's great. >> some people disagree. i completely agree you are absolutely right we are seeing a proliferation of agriculture subsidies. in the last round i ended up hanging out the ground or the negotiations because people wanted to, their idea of the negotiation was wearing countries could have more subsidies rather than fewer. they called its food programs but the reality is what it was going to do was nothing but
encourage more subsidies in agriculture, so we've got all this to try to get ourselves into a market environment and we said we are not going to get into position to change that and it was india very much a new sensitizer. >> [inaudible] >> you ar >> you are exactly right. they were in favor of the negotiation about increasing subsidies so we said no, we are not going to do that. every time we find a situation, we bring the wto case it isn't the greatest for these kind of actions and it's always a problem if somebody does sound subsidies in the market we have tools to deal with that if they are hurting us because they are doing nothing and the result of subsidies in their market worth a third market for tools are not that good we have to go to the wto and it is a cumbersome far
from flawless for him so we are aggressively bringing these cases and completely agree with you we are using the tools we have at hand and hopefully we can improve them and make a difference. >> thank you mr. chairman and an ambassador for being here today. i have told you publicly and privately that your presence in the administration are the two reasons i have so much faith in this administration. i appreciate a man of your experience taking on this job, and it's so important for the american worker. i'm a bii am a big believer in n competitiveness. the tax code went a bought of the way to helping us be competitive in the world and trade is very important
obviously also infrastructure. a lot of the things the president or immigration, the president is trying to work on these things if we get two or three more of those our economy will be well poised. with respect to the tariffs, my opinion is as you said nobody wins in the trade for. nobody disagrees that there are people that are bad actors in the world of china particularly that we have ignored for too long at the destruction of the american middle class and so we just cannot accept that any more. we've got to respond and it needs to be targeted. i appreciate your efforts in that regard. i want to talk a little bit more about nafta. i've been to montréal, i into mexico city met with mexican officials and regulatory people and business people in the
chambers of commerce, in canada the same and i haven't met anybody who doesn't think that nasa doesn't need to be continued and that it doesn't need to be modernized. and thinto things a phrase todae rules of origin that anonymous rules and all these things come as it sounds likso it sounds lig great progress and i'm just comforted having been in both of those places that everybody recognizes this modernization process is a good thing and needs to be pursued. but i want to zero in on one question was aske that was askeu at the american chamber of commerce in canada, i love your response to it and want to ask so you can respond publicly to everybody, watch what you see as a win in nafta of what is your goal but you're shooting for
when you are trying to renegotiate this? can you explain that to the public? >> can you give me a hint of what i might have said? if it was such a good answer i don't want to change it. [laughter] from our point of view, first of all, we have to have in agreement that is good for all countries. we have to have that. second, we want an agreement that is going to end up getting the trade deficits down, and it has to move more jobs in the united states and create better jobs not only more jobs and higher paying jobs. the things we need is a little bit of wage inflation, so i want to do something and in the first place i think it has to be in everyone's interest to you won't get an agreement that i wanted to be in the trade deficit something that creates jobs, that move some of the shops all in all coming back. we understand, but the notion
that none of them are coming back has been proven wrong by all of you because you see what happens after the tax bill it has moved jobs back. second jobs and wages are what the president is focused on and that's what i'm focused on coming and i think this agreement will lead to efficiency and more jobs in the united states. that is pretty much the same answer that you gave in canada that you said one of the things you want to eliminate these offshore. all of those are great objectives. i want to point out one anecdotal thing when we were in canada having lunch with the canadian american business council and tax consultant from canada said where we have clients that have positions in america and canada we are advising them to ramp down because the tax reform bill it seems we lost our competitive advantage and under my breath i say yes.
i appreciate very much your efforts to left the american class. i think ta tax refund and your efforts will change that. >> thank you very much. and i would get back to some of the credit on the use of the trade deficit went down and i'm not going to giv get any creditn that happened with regards to the trade policy. >> we know how that works, mr. ambassador. mr. blumenauer, you are recognized. >> thank you mr. chairman. mr. ambassador, appreciate your patience here for the last three hours dealing with our questions and comments. i must say i appreciate the role that ustr has assumed on an area that i have been working on for the last ten years dealing with the illegal logging and what's going on in peru. it's been sort of a struggle. i thought it was harder than it
should have been in the last administration, but i appreciate the work that you and your team have done. as you know, it isn't just an issue of enforcing trade obligations, illegal logging and images to the environment, it undercuts the rule of law in the developing countries and it has negative impacts on americans who play by the rules and i just want to say how much i appreciate that. and i do want to identify myself with comments of my friends mr. thompson and mr. doggett mentioned earlier. i don't take my time or yours but i am concerned about having the american wine industry particularly at the pacific northwest level playing field and i am concerned about american interference with the ability of others to protect the health of their citizens and i appreciate there are nuances there, but historically i think we could have done more to be more open. i think it is a larger issue and
i hope that we can collectively focus on this because i think it is very significant. i listened to my friend from missouri veterans the art of the deal or such t were such some pn by the president. i think there's a pretty significant difference when you are negotiating in real estate and when you can as he states in his book exaggerate as you can go bankrupt and leave other people holding the bag when things collapse and move on to the next project. we are talking about the american economy and our role in the world. i think for example exaggerating or making things up in a discussion with the head of the state of an ally and admitting it publicly doesn't help us on the world stage, and i identify with some of my colleagues who
say we feel more comfortable knowing you are in the role that you are in, you have broad experience and i think understand some of these dynamics. it's in that context i would like to raise one point with you and that deals with some of the impacts of the imposition of tariffs with china particularly as it affects retail trade, and we have some involvement with companies that are involved with the apparel and footwear and we've been looking for a long time to see if we can have some more rational policy as it relates to the terrorists. as you well know, tariffs are not just magically imposed on somebody else. it's the cost of doing business and affects what happens with american manufacturers and retail, and they are ultimately paid by the consumer. we have a system now that is
tilted against low and moderate income people when you look at clothing and footwear, the percentage that is paid at the lower end is really quite outrageous, and i'm hopeful that we don't rush into something like china that ends up actually making adverse. so, i am hopeful that this is an area that can be ende can't be a greater sensitivity and i would request unanimous consent to enter into the record of correspondence addressed to the white house but also to the ambassador and the committee that speaks to this in terms of the understanding of the dynamic and i wondered if you have any observations if you could offer any observations that might make some of my constituents feel better. >> i would say first of all when you talked about the growth of the deal always thinking is i hope i don't look desperate, so i had a different take on it than you did.
we understand, and i kind of went through this if there are terroristterrifs, we picked thet it maximizes the effect on china and minimizes the effect on u.s. consumers and if you think about the products on a graph, you have kind of a line over here of products where they are minimally a problem and you can't always follow that that is one of the big factors and we are aware of that if we end up doing this it won't be perfect but you will see a methodology. >> mr. ambassador, first a quick
comment on th a global basis and particularly given some of your newer staff long-term is a fascination of life worldwide tradtrade can do particularly considering the demographic issues as a country as we are getting much older we are going to need populations of folks in the prime consumer ages to sell stuff to, so tha that it's alwas been is always in along-term ths about trade that may help us with some of our demographics that we are facing and it's just math. >> i want to thank you on the de minimis, the last time we had an opportunity to talk about it, and you will only go if he were amazing advocate particularly% of the other countries that were presently negotiating and are listening to this hearing right
now there is many of us on the committee that are just fixated on the de minimis value with mexico and canada into the inequities that creates. do you think you are hearing that part of the discussion? >> i certainly hope so. it's one of those issues where anybody that starts focusing on it comes in more important because it affects a lot of the product and the more you study at thit the more it is bothersod the fact that most of the online sellers are more than in canada and we can't go in that direction essentially at all. it is something that is very important to us.
everybody knows the right answer is to be above $20, there is no other. it has to go up. >> arizona we are trying to set up the hu hub in the inland pors and yet if you look at the current de minimis particularly with mexico it is all going to be inbound because the ability for the small retailers and high-tech commerce just because time is so precious, im one of those communities because being the deser desert southwest has e concern just because if you actually sort of gain. create distortions an and congratulations on the distortions and if you start thinking about when certain crops come in it ends up becoming very ugly and particularly for those of us who
do a lot of cash crop growing because arizona provides the winter lettuce crop for the country and if you are doing seasonal terrifs, it ends up creating some price distortions particularly for consumers on both sides of the border. cynics or you're against the proposal . it absolutely livid. >> an enormous number of products and subsidies tha subse from mexico through arizona -- and so it's basically the interest of importers in that state and i just want to make sure -- i've heard the argument. >> it gets more complicated. the cash crops and you've just had a seasonal terrifs that benefited part of the country than it falls off and all of a sudden you're on the pricing falsified so it's just if you
think of the constant moving of the bell curve. lasting -- look, you've spoken about this elegantly, though i substantially disagree with some of the characterization, and i know so often rhetorically we have speakers that will say its sovereignty. but if you walk through the mechanisms, it absolutely is n not. it is to that issue it does not rewrite the law. it's not a precedent for the next case. ultimately, think of it more like a if we were to ever lose, which we have not, you would have to have compensation, but it doesn't rewrite the sovereign
statute so when people use the sovereignty quote i think it's an absolute distortion of how it actually works. thank you mr. ambassador. >> ambassadors, good to see you. i want to talk about 232, just a couple of clarifications. it's my understanding and i just want you to confirm this you are considering participating in the forum of the consideration fax >> lead to participate and one of the things we ask people and most of these countries do by the way. >> the base and global portal on the excess capacity held the first meeting last november but you were not out there correct? >> i had no deputies in place at that time, so i was staying here.
>> at that meeting i think there were three ministers about 30 countries didn't send them in about three dead it was basically around the corner they don't have competence in the area but it was good to be the there. you are the ambassador that is going to go forth and all of these rules and i want you to do as best as you can for the nation into my district and that is my concern and i believe that
you can edit at will. i want to switch gears to this issue of retaliation in my district with the second-largest concentration of manufacturing jobs in the country as a whole host of agriculture that i'm concerned about dairy, pork, poultry, beef, eggs, tomatoes and the list goes on. half the soybeans grown are exported to china. they go on to boeing airplanes, china is threatening retaliation and in fact today the state-run global times ran an article alleging that the u.s. is dumping soybeans and china and calling for stronger restrictive measures. they are both on the retaliation list. there's an incredible amount of anxiety over this threat of retaliation and that is shared regardless of industry because manufacturers, suppliers and workers will be affected. are you considering the
devastating effects of the totalitarian measures could have especially on the small business and family farms that absolutely do not have the resources to absorb the losses? >> yes. >> in what they? >> we are figuring out the retaliation in kind of things you would do. we can to be in a position where we take no action because of the threats of retaliation. that's how you end up having an 800 billion-dollar trade deficit which costs literally millions and millions of jobs in america. and as i said a few times today and many times in the past, agriculture is always on the front lines of retaliation. everything that happens is going to figure if we can get a news
on agriculture said it is an unfair situation but it's one we have to come to grips with and you have to think about counter retaliation and programs for farmers who were in this situation. there's a lot of things outside of my realm that have to be considered that it is a problem we are very aware of. >> thank you mr. chairman. i yield back. >> thank you. ms. sanchez, you are recognized. >> thank you mr. chairman and mr. ambassador for joining us today to talk about the trump administration trade agenda. for many years now when democrats have been talking about the impact of trade agreements have on american workers and we lament the fact that they've got countless good paying jobs shipped overseas most notably in the manufacturing sector and those jobs are the bedrock of the american middle class and are critical to the economy.
those jobs have been lost to countries whose labor standards are impossible for our workers to compete with on a level playing field. so i think a lot of us were hopeful when the president talked about bringing american manufacturing jobs back and creating new jobs through renegotiated existing trade deal. this administration time and time again said they want a level playing field for the american workers that i have yet to hear the administration laid oulayout a clear vision for howu plan to achieve this goal. it's no secret h we met with secretary ross last year and when i pressed him on that issue what is your strategy for bringing back american jobs or maintaining american jobs here are the only answer that he provided us was they are going to renegotiate the rule of origin. that was his single idea or plan for bringing back manufacturing
jobs. if we are going to create the kind of jobs we want to ensure american workers and industries are not on and on level playing field for us all and second of all, in a race to the bottom for the wages and working conditio conditions. workers in mexico earned a pittance of what the u.s. workers make and is it any wonder we are losing jobs to mexico and i think canada as well as a vested interest because their standards are similar to ours. through the renegotiating of trade deal what piece of nafta specifically are you negotiating that you think is going to deliver on that promise? >> first of all the most important thing has been done to test the tax. >> i'm not talking about the tax bill.
i'm talking about the renegotiation of nafta. i want to know specifically what parts would you renegotiate to ensure that the u.s. jobs stay in this country or that we bring back the stuff we have lost? >> the regulatory improvements have made also. >> can we stick to the subject matter please? what pieces can we renegotiated to ensure that we keep the u.s. jobs here and bring back manufacturing jobs that we brought the rules of origin. aside from the rules of origin what is the plan.
about the labor standards? if i did, i misspoke. we are doing nothing about that. >> i'm just asking -- >> the answer is we are dealing with the mexican labor standards. >> okay so it's fair to say that you are trying to raise the standards of the trading partners to comparable with that of the united states is that what i am hearing? >> know i am trying to raise the standards in mexico. >> but not to the u.s. standards? not that high? >> it isn't my point. while i'what i'm focusing on ise basic element of what you would expect in the basic labor law that's what i'm talking about. i'm not talking about u.s. standards. >> the conventions of the labor law? law? >> the time is expired. mr. chairman, if i could simply just make the request that we have received the answer to the
left question of writing. thank you and i will yield back mr. chairman. >> western ambassador, iac significant wins for the u.s. and energy agriculture, telecommunications, digital trade services, technology, manufacturing and we appreciate the work. you are recognized. >> thank you mr. chairman and have welcomed ambassador. i first want to say i was thrilled to hear earlier your statements regarding engagement with argentina and brazil. i think that our country in many ways has been absent in our own neighborhood over the last few decades, and i think in bot bote countries wofthe countries we ay positive development. this is very exciting for south florida as you could imagine we are poised to grow and benefit from further engagement in the region specifically with
countries like brazil and argentina. on a couple issues that have been discussed extensively, i want to associate myself with the comments made. that by the way isn't just american companies investments abroad, but the investment invef canadian and mexican companies in the united states. certainly not always to have the
threat of a potential expirati expiration. another issue i wanted to bring up is the effect that they have on the farmers of my south florida district. many people not from south florida would be prodded to know that my county is one of the largest in the state. we have avocados, mangoes, tomatoes and hundreds of specialty crops and because it is warmer than even some cool parts of the state, crops can be grown year-round. for example it is not snowing in south florida today, something that we are very pleased with. succumb as we renegotiate nafta, i am concerned with how the deal will affect the farmers across florida, but specifically how it will impact the agricultural community. i'm honored to represent and i know the administration has been advancing a seasonal and perishable proposal to help provide relief to the growers from mexican dumping by making it easier to prove entry. can you give us a brief update
on where we are and what the nature of the administration's commitment with this provision is at this time? >> is a provision that is very important and not without its controversy. at the point i tried to make is why we have a lot of agricultural sales in mexico we have an agricultural sales deficit of about $5 billion, so we are not on the positive side of the agricultural sales with mexico. the area that is most affected negatively are seasonal and perishable fruits and vegetables as you suggest. so, we have a provision that we have to sign that allows those people only in cases where there's unfair trade to take advantage of the unfair trade statutes until now they are concluded by the nature of the statutes taken up, so we've put forth this proposal that hasn't
been popular with trading partners i would say in all can at this point but it's an important provision and one that we are in addition getting on right now. >> thank you ambassador and i would encourage you to do the best you can in this area. we know that the specific proposal you put forward may not be able to make it, but i think anything that improves the status quo for these farmers which has been decimated quite frankly, would be something that we would welcome. and i'm more concerned with fairness and less concerned with this deficit issue. i always tell people i have a deficit, my family has a trade deficit in the supermarket and we want to keep it that way. we are not interested in changing that. i think the key question is is it fair, and are the american companies in this case american farmers being given the same opportunities to compete as mexican farmers and canadian farmers and i think in this area
sees all products are certainly not the case, so i appreciate your commitment to this provision and your commitment to the farmers of south florida which are counting on us to improve the status quo. >> the gentle man yields back mr. bishop you are recognized. >> thank you mr. tremaine and mr. ambassador for being here today and for your time and efforts. i know this is a long hearing. nafta is important to the state of michigan a as the state eithr present. it's important to the economy into the u.s. automakers. i want to applaud your efforts for the way that you conducted yourself and i had the opportunity to attend the last round in montréal. it is evident to me and all of us that you have been a spectacular job of representing the united states and preserving to the extent you can do great
relationship we have with canada and mexico. i also want to thank you for your efforts to update and improve nafta so that that better represents the 21st century global economy. i would like to continue if i can do subject that has been raised that will see him here but important -- it has to do with the rules of origin and the concern i have specifically on behalf of the u.s. automakers is that there are substantial concerns that the proposed rules would jeopardize the global competitive position. ..
>> a modified version of their proposal and word you elaborate on that and also whether or not mexico has his own proposal regarding rules of origin. >> thank you congressman and for your kind remarks. it is extremely important our objective but we think the direction we are moving or have that effect if the united states had a proposal canada had a proposal. and then when we try to
converge with the u.s. industry. and then to work out the details of this type of agreement. and then to stop the hemorrhage of jobs from the united states. so we sell 900,000 cars and in the case of mexico 2.3 million so basically these are industries that are designed to sell cars to say if you do that we should have rules.
and actually to work with trucks we have leverage but with cars it is 2.5% that is $900 per car. if you're going to save $900 it isn't unreasonable to say some of that should come back to the united states and at some point you are right. that is not our objective but to find that sweet hot. we are the market it isn't like they are going north and south except in small numbers. >> i appreciate your sharing that information with us. i agree 100% the goal is to get back to the united states would like to hear that in michigan we appreciate your
efforts and attention to this i am glad to hear your team has been in detroit. i yield back. >> you are recognize. >> thank you ambassador lighthizer for your service to our country. my district is the eighth largest in the country with cornyn soybean production with some of the most fertile farmland in the entire world there is concern when farmers and agriculture full with the administration's position on nafta and withdrawal. a couple of statistics that are important, 98% of the corn that mexico imports comes from the united states and much from the midwest but one third of the products produced in illinois go to canada or mexico at 35000 jobs are tied directly to nafta that is never one industry in the
state of illinois is agriculture so when i hear about withdrawal the groups that i work with the national pork producers council cattlemen's beef association national corn growers the corn refiners the american soybean association, americans for farmers and families they all agreed to withdrawal is not an option. so i guess my question is do you know any ag groups that think withdrawal is the right approac approach? >> our objective is not to withdraw but to get an improved agreement. i don't know if anybody wants to withdrawal maybe there are some out there but that is not our objective it is to get the best agreement we can we
always say it is $1 trillion worth of trade $1.141.2 trillion is an enormous amount so our objective is to figure out a way to be more beneficial to the united states and that means american agriculture. >> i appreciate those comments and for the record i will submit a record from farm week to save nafta is the farmers lifeline to talk about u.s. quits on nafta it quits on its farmers. another president recently tweeted nafta is a bad joke. do you agree? >> i don't know about that quot quote. >> it was a tweet. >> i did not see that. >> but that causes concern mr. ambassador when farmers, and by the way the farmers in my district overwhelmingly
support to the president and continue to support him with the things we have talked about today but i cannot emphasize enough the concern with farmers in rural america when it comes to nafta. but let me switch subjects. rules of origin has been talked about a lot and when we talk about those constituencies can you name one that agrees with your position on rules of origi origin? like the chamber of commerce national federation of business, heritage foundation. >> afl-cio? for mac that's fair. any business groups? >> listen. there are people all over the place i don't know who they are on rules of origin. >> can you submit those for the record? >> know i can't. i will have those resources at the chairman wants me to find
why businesses on rules of origin i will do it but otherwise i won't. >> look at those trade agreements we have in place sunset provisions, they all appear to be unorthodox and unconventional as we negotiate nafta with other trade agreements so there is real concern mr. ambassador with the position we have with the trade policy and with that i want to mention that last year going through your senate confirmation the administration quoted you will be shocked by the speed bilateral trade agreements will begin to materialize. i am a supporter of bilateral trade agreements we are 15 months into the administration and have not seen a template or a model for bilateral trade agreements. i understand people have not been in place i am cognizant of that that if we look at if there is a model or a mechanism, particularly with your position of sunset and
rules of origin. >> i can comment on all of that but not 92nd. >> of course we will have different policies in the chamber of commerce those would have gotten us $800 billion with of trade deficits of course they will be unconventional policies to have a different result if we do exactly the same thing nothing will change. this is unsustainable change we have a $560 billion goods and services trade deficit we have a deficit with china that cannot go on we will do things differently absolutely. i personally believe these people who voted for the president voted for him because they didn't want him to be like those groups wanted him to be of course that will be different but i'm out of time. >> way out of time. >> you are recognize. >> it is a pleasure to have you here today mr. ambassador.
the unconventional nature of what this is ministration is doing is something that i applied. that i have stood with it and i agree we just cannot maintain the status quo because to your point this policy is unsustainable but we do want the same outcome and i think that is why we have broad agreement to the issues before us today. i would be remiss not to go on the record to raise issues of berry and wine coming from western new york the industry is blossoming in the access to the dairy farmers and access to canada and i share this with you is critical to our future. so i put that on the record that i want to ask questions that maybe have not been covered but when i am concerned about as my entire tenure is currency manipulation and state owned enterprises. i so appreciate with my
understanding of your negotiations with canada and mexico that those are being discussed potentially put on the table in regards to updating nafta and do you agree there are issues of currency manipulation with other trade partners such as china, japan, european union members and if that is the case, how do you see the present negotiations being a tool to put us in a position to take on truly one of the unfair practices that is out there over the last decades? >> i completely agree. one of the fundamental problems is the issue of currency manipulation and if you go to auto bill say it is japan at seven or eight or 9% we we are right about 2.5% on
the auto tariffs the currency manipulation is 6% it is also an issue with korea. so the administration is dealing with this on a variety of areas but i sit down with the professionals who do this my people who do this for last 30 years and i say what you do the last time you had this conversation with the treasury department with current semen epilation? they say we have never had a serious conversation with the treasury department before. secretary nugent is completely engaged in this my career people we have never had a conversation like this where people have to come to grips with the issue of currency manipulation it is in the context of nafta even that we realize they really are not current semen if you later spent they are not tackling the problem where do we go? we will see clearly a huge
factor is transparency we start off with a position we don't even know what they are doing and devaluation is unacceptable. it is a complicated issue is something we are involved with but it is treasury more than ours and we have treasury officials besides the secretary mall pass and they will absolutely get on that but i don't thank you can overstate how important it is and it will be more important in ten years than it is now if we don't do something about it. >> i agree i look forward to working with you and raising this issue with prior secretaries in the other issue to highlight that as we deal with intellectual property and it has been touched on a little bit here but coming from an area with interests
that have been a bright spot with the development of technology, what is your commitment or thoughts on how we can best protect intellectual and property with the next generation of the economy and opportunities coming down the pipeline. >> you understand the importance of intellectual property in your district because it is important it is important to the whole economy. we are completely committed in nafta where i talk about our provisions until now really a movement away from intellectual property with the last administration there is a movement away from intellectual property but now we are we centering that in our opinion but even more importantly the protection
with china is the absolute front line. >> i yield back. >> you are recognize. >> ambassador thank you for being here you missed the incredible want her -- winter wonderland today. regarding the tariffs on steel i encourage you to move expeditiously to determine which trading partners are exempt from the new tariffs these are countries that are routinely engaged in unfair trading practices but others that are undeniable allies to the eighth not only economically that for national security and we have talked before about the special relationship the united states has with the united kingdom to discuss the tremendous opportunity presented to the united states as united kingdom exit the european
union and they have a long-standing relationship certainly one of our closest allies. as you get through the exclusion process for specific countries i hope united kingdom is quickly identified by your office as being exempt and i assure that you are also aware there was a draft agreement between united kingdom and the eu for another step forward to finalize their exit and in my opinion and a number of my colleagues this is the time we need to be encouraging the united kingdom. they defense partner and a nato partner that would not step in the right direction not to. with the free trade agreement they are good at services but to say that only a trading
partner but how we have aligned with them with capitalism very few countries out there promoted the same way promotion of free markets and perhaps most importantly of all is entrepreneurism. that is alive and well in the united states and in the united kingdom are not really in our sense of the world in other places around the world. i would encourage you to work on that as expeditiously as possible. i know liam fox was here last week i'm sure you all had several meetings i will just give you one minute if you want to recap anything to say about those meetings or the thoughts on the bilateral trade agreement. >> first of all it is exactly as you have said i have met
many times with dr. fox and found them all to be informative and enjoyable we have an enormous amount in common probably we should at the appropriate time meet with the u.k. that is up to them in the meantime we are trying to do things that the comments like certifications of professionals a lot of things we can do we have a working group we started one year ago with a number of meetings and getting a lot of the work done that would have to be done in advance so we can move quickly. the issue of the u.k. and 232 is complicated so that is
something that has yet to be worked out but clearly other examples of working together is very high on our priority list and i see no impediments to moving in that direction at the appropriate time. >> i believe the bilateral agreement is a signature accomplishment of this administration and the first time we have encapsulated in writing what the special relationship means. it is a great opportunity for this administration to leave a lasting mark not just politics but also trade policy. thank you mr. ambassador. >> thank you for being our witness today. clearly there is strong bipartisan support the best way to lower the trade deficit
is to sell more we are confident in your ability to renegotiate those agreements for our level playing field for businesses because when you do we win no doubt there is strong support if you take an aggressive stance to modernize nafta that is why 103 republicans are republicans are your strongest supporters are encouraging and urging you to include a strong accountability provisions because we want your strong new trade agreement for america to be accountable and supportive hearing congress we look forward to be your partner going forward and please advise members of the committee have two weeks to submit written questions they will remain part of the formal record and thank you again we