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tv   U.S. Investments and Trade With Latin America  CSPAN  June 8, 2018 3:01am-4:28am EDT

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the white house, the supreme court, and public policy events in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider. >> president trump will be attending the g-7 summit in quebec. next, a house panel looking at u.s. trade and investments in latin america. the panel was asked about the impact about the president's tariffs on u.s. trade partners including canada. this house foreign affairs subcommittee is about -- one hour and 20 minutes. >> acorn being present, a subcommittee will now be in order. i would like to recognize myself or opening statements. the western hemisphere possesses tremendous opportunities for further economic growth and u.s. business engagement.
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the united states already has significant economic interest in latin america and the caribbean's. it is the largest single source of foreign investment for many countries. we are also the top trading partner for most countries in the region and have free trade agreements with 11 countries and bilateral investment treaties in international investment agreements with 19 countries in the region. hedging in seeing the region from some countries that don't always play by the rules, which undermines u.s. economic interests. china has significantly increased its outreach to latin american and caribbean, offering less stringent investment conditions and pledging 250 billion in investment over the next decade. however, it accounted for just
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1.1% of foreign direct investment in latin america and caribbean in 2016 compared with the united states investment at 20%. i am interested in the future of u.s. economic engagement with the pacific alliance countries of chile, columbia, numeral -- mexico, and peru. these countries adhere to market oriented policies and taken together, they represent 39% of latin america's gross to mystic product,-- the mystic offering businesses huge opportunities for greater investment and trade. , colombia, and peru are the world's most open economies with no restrictions on foreign economies in the region also implement one regulatory reform in the last year alone, making it easier for u.s. companies to do business.
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argentina, brazil, colombia, and mexico have made serious energy reforms, opening their second is to investors, making it easier to do business. the northern triangle countries have also taken steps to attract foreign investment by creating special economic zones and working to integrate their markets. in the caribbean, the dominican rep public and jamaica took actions last year to improve their business climates, as well. ecuador now has new political leadership, has announced its intention to advance more market oriented policies and address rule of law, press freedom and regulatory framework issues. i think there is potential for change in ecuador, and as
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ecuador, el salvador and panama all use the u.s. dollar, american businesses have obviously some unique investment opportunities in the region. toumbia was recently invited join the organization for economic cooperation and cd, and otheroe latin american countries are interested in joining the oecd as well, which may motivate further reforms. while all these opportunities seem promising for the region, countries face rampant corruption and impunity, high levels of crime and violence, insistent -- inconsistent application of the law with some laws and policies changing from week to week, burdensome regulatory frameworks, unclear lack ofctures, a
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transparency and accountability in government processes, and central banking systems that make u.s. business is -- investment difficult. limited technological innovation, preferences for cash payments, over credit, labor regulations and high levels of unemployment and foreign restrictions and foreign equity ownership also increase u.s. investment challenges. i have heard from multiple u.s. companies who want to expand their presence, create more jobs in the region, which will lower migration to the united states and invest in communities where they operate. however, these investment challenges have made some u.s. businesses think twice about long-term investment. presidential elections in colombia, mexico, and brazil in the coming weeks and months also
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may shift political priorities, presenting additional obstacles to increased u.s. investment in the region and providing tremendous opportunities. i want to close by recalling the 57 point in the lima commitment that countries agreed to at the april,of the americas in to reinforce democratic governments and anticorruption measures. -- u.s. view that basis businesses play a critical role in raising standards in the region, and in my conversation , at theional leaders summit, it was clear to me that countries see the united states as the partner of choice. i believe that our government state department could be doing more to advance u.s. business engagement in the americas, and i look forward to hearing from our witnesses on these issues.
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with that, i will turn to our ranking member for his opening statements. >> thank you, mr. chairman. for holding this important hearing and thank you to all of our witnesses for joining us today. about here to talk opportunities and challenges for american businesses around the western hemisphere. i have long said the u.s. can and should be doing more to enhancing gauge meant with our friends in the western hemisphere. ties isg our economic one of the best ways to improve relations, create jobs, and bring us closer to our neighbors. we should work together to make sure that the united states is the preferred partner of choice of our allies. a large part of that engagement is making sure that all companies invested in the hemisphere are playing by the same rules, ensuring rule of law, consistency and stability is key to having a climate of
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economic growth and create jobs. american businesses can help spread democratic values by promoting best practices for labor rights and environmental standards and transparency in financial management. that is just one of the reasons so many in the region have been working to promote anticorruption. these anticorruption efforts remote transparency and stability, key ingredients to economic development. unfortunately, we see politically motivated attacks against these efforts every day. anticorruption institutions, only to hinder economic growth and prevent job growth. it is this economic growth and security that can also tackle the root causes of migration, preventing families from fleeing their homes in search of a better life. sadly, corruption and security
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issues aren't the only obstacles to enhancing -- advancing u.s. investment in the americas. the rhetoric and decisions made by the trump administration are putting u.s. jobs at risk. alliesng our friends and does nothing but make the u.s. seem like an untrustworthy partner. imposing auditioning tariffs raises the cost of doing business for every american and drives and stability. while china is investing billions and building inroads to all of latin america. the president's busy punishing our friends to play to his political base. practically driving the rest of the world into the arms of the chinese. they blow up, negotiations. this is no way to protect american jobs, families, or interest. i am eager to hear from the witnesses how they feel the administration's recent acts
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impact u.s. businesses abroad. on u.s. businesses abroad. i look forward to hearing what congress can do to promote american investment, and best practices around the region. i yield back balance of my time. you, sir. thank before i recognize you to provide your testimony, i will explain the lighting system in front of you. you have five minutes to present your oral statement. when you begin, the light will turn green. when you have a minute left, the light will turn yellow and when your time is expired, the light will turn red. i ask that you conclude your testimony once the red light comes on. by the way, i used to dream about strange things. now i dream about these lights at night, and i am sure you do too after all the testimonies you have been to. after our witnesses testify, members will have five minutes
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to ask questions. i urge my colleagues to stick to the five-minute rule to ensure that all members get the chance to ask questions. our first witness to testify will be mr. eric farnsworth, the vice president of the consul of the americas. farnsworthis, mr. worked at the u.s. department of state, in the office of the u.s. trade representative and was promoted as senior advisor to the white house special envoy for the americas. our second witness to testify is mr. neil harrington, the senior vice president for the americas at the u.s. chamber of commerce. as harrington also serves executive vice president of the association of american chambers of congress in latin america and the caribbean. the acronym aaccla.
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if you can pronounce that, you get extra points. prior to joining the chamber, mr. harrington worked at the state of california office of trade and investment. the u.s. trade representative and general motors. our last witness to testify will meiman, a managing partner at mclarty associates. worked at the she office of the u.s. trade representative, served as foreign service officer with the u.s. department of state. she is also a member of the andcil of foreign relations the inter-american dialogue. mr. farnsworth, you are now recognized. mr. farnsworth: good afternoon you -- to you and the ranking member.
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on yourngratulate you opening statements. those were powerful and we look forward to responding to the questions you have put out there already. it is a privilege to appear before you again at the subcommittee. the news that the trump administration has moved forward with aluminum and steel tariffs on canada, mexico, and europe ofh the possibility additional tariffs and the cancellation of u.s. participation in the transpacific partnership and to recast nafta, have roiled economic relations. have introduced a significant element of uncertainty into the trade and investment calculus along with the normal and anticipated emerging-market risks in latin america and the caribbean basin and increasing uncertainty is, to be blunt, bad for business. as the united states retrench is, others are quick to fill the void with china in the lead. china would still be a major presence in the americas as it is locally, even under a more
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traditional approach. but washington's actions are accelerating pre-existing trends. we may soon reach an inflection making it possible a return to the status quo. a policy shift, there are none the less any number of things that can be done to advance u.s. commercial interest in the hemisphere to the extent we are inclined to prioritize them. the first is to be present. the vice president has announced monday he will soon travel to the region for the third time in less than a year is good news. effective commercial diplomacy also requires the united states have diplomats and senior officials in place to promote our interests day today, including the assistant secretary of state for the western hemisphere. policy and it is difficult to have effective policy or advocate for u.s. business without strong people in place. second, we should refrain from affirmatively taking steps that would reduce the regional u.s. business presence.
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a perfect example is the effort to excise investor state withinent divisions nafta, which would cause u.s. energy and other investors to reevaluate investment plans going forward. rule of law remains in perfect mexico, as it does across the region and investors will be less likely to commit resources without judicial certainty. mexico's hydrocarbon reserve will remain, thus opening the door wider to great sectorial investment from china, russia, and extra regional actors. the same is true for other things being pushed by the u.s., including dispute resolution, government procurement, and a five-year sunset clause. develops the region alternatives to the united states, we have to contend more actively for regional commerce. competition is fierce and we must as a result compete, but unless washington is willing to engage with the region broadly on the basis of a true partnership, we will lose ground to others with a different approach.
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i believe we need to get a better handle on how our scarce aid resources are spent. we should increase, rather than decrease foreign assistance and use such assistance to prioritize trade facilitation business climate reform. working with latin american partners to address week rule of , inadequate workforce development and deteriorating personal security would help create conditions attractive for greater commercial engagement. finally, the challenge from china and other nations who used to finance more effectively than current authorities allow the united states to do. we need to up our game in the area. tompt passage to the bill act establishing enlarged and enhanced u.s. finance corporation would help address this and there are other good ideas, as well. members, thank you for appearing before you and i look forward to answering your questions. thank you.
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mr. harrington, you are recognized. : thank you for the opportunity to be here. ranking member, i echo the comments that you framed the discussion today well as we move the conversation forward. among the multiple oral -- multiple counsel resolutions, we operate, chamber is a welcome home to the chambers of latin america and the caribbean. improvescuss ways to the economic climate in america is for u.s. investment, it is note that to say aaccla is it space. hosts 20,000 member companies that account for more than 80% of u.s. investment across the region. memberrs, aaccla countries have identified week anger rule of law as a primary challenge. rule of law is key
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to governments ability to increase trade and sustainable economic growth through the region. to bring attention to the importance, five years ago, the chambers developed global business rule of law dashboard. it covers 70 markets around the world. transparency, predictability, stability, accountability, and due process. we have found that where these factors are present -- are present, jobs are created and prosperity follows. conversely, when markets are we paying or absent, corruption thrives, investment dollars flee , and tax revenues plummet. in december, we published the global business rule of law passport and one of its findings was the americas region is lagging behind, earning the lowest average score of any region in the world.
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there are reasons for optimism in spite of this. perhaps because of its sheer audacity and scope has a silver lining. it has galvanized the leaders and citizens on a need for -- need for action. issues of impunity are being addressed as the political class are being held accountable for the first time in memory. as countries carry out elections for new leaders, in 2018, we are seeing hundreds of millions of citizens prioritize rule of law. two months ago at the summits of the americas, the imperative was underscored of adherence to the rule of law by making democratic governance. the chamber was proud to be in them, serving the business dialogue, initiative that seeks to advance a dialogue on economic development. integral to the effort to recommendations, the organization put forth to regional heads of state, them -- demonstrating integrity in
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business dealings throughout the region that included adoption of competence of code of conduct, implementation of good regulatory practices, commitment to supporting best practices certification for public officials. while these are encouraging, these developments are a start. we remain deeply concerned about venezuela, the most tyrannical accountable,ehold as well as the crisis in nicaragua where the ortega regime wants the rule of law. areas like the northern triangle remain violent. when it comes to strengthening hemispheric rule of law, the stakes for the u.s. and all countries in the region are enormous. also imperative is the u.s. promoting a rules-based global trading system in the hemisphere that strengthens rule of law and provides a level playing field for american companies. we should not cede our
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leadership on trade in the region. the stakes are too high. one need look no farther than canada and mexico, which are the two largest markets for u.s. exports and support more than 14 million u.s. jobs together. that is why the status of nafta negotiations is of such great concern to the chamber and we have been vocal about that. beyond the enormity of the relationship, the outcome of nafta affects policy across the americas, home of the 12 of the 20 partner countries that the united states possesses and a destination for close to 45% of exports. in trade policy is key to success. we are facing uncertainty and potential division with allies at the time when certainty and collaboration are required to confront a challenge to u.s. trade later she -- leadership in china. many concerns are shared with china's unfair trade practices
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and policies, but global steel and aluminum tariffs do little to address the real issue of chinese overcapacity. they risk alienating our strongest allies at the moment when a coordinator global strategy to counteract china's policies is needed. the u.s. government needs a strategy to help u.s. companies counter the economic influence in the region. with this, i think you again. chairman, ranking member, i think you for the opportunity to be here today and i look forward to taking your questions. rep. cook: thank you, mr. harrington. are recognized. did i pronounce that correctly? rep. farnsworth: -- ms. hock: in spanish, yes. thank you, distinguished members of the subcommittee allowing me to testify today.
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jobsmically, 14 american depend on trade with canada and mexico. exportre the largest markets for the united states. rather than offshore and to asia, supply chains have remained in north korea -- and america, enhancing our ability to compete. funded inate -- fully commercial diplomacy is a strategic imperative, particularly for small and medium-sized enterprises. u.s. companies from traditional manufacturing to agricultural services to ,igh-tech can access markets are fairly treated, can compete for government contract, and have intellectual property protected our key aspects of commercial diplomacy. has long reinforced the need for transparency and commitment to rule of law and countries desire to attract u.s. investment has often motivated economic reform. membership in the wto, it cheating a free trade agreement has provided further motivation
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to improve investment climate. however, we find ourselves today where u.s. credibility to speak on the importance of compliance with wto and fda commitments is at an all-time low. ally,ng that canada, our creates a national security threat to the united states due to its steel and aluminum sales here, particularly if you consider the united states had -- has a $2 billion surplus on those same items, is nothing short of incredible. the equivalent charge to mexico under 232 is difficult to understand given our collaboration on security, counter narcotics, and terrorism. an initiation of investigation on autos last month further diminishes u.s. standing. this action opens the door for trading partners to limit u.s. exports of virtually anything in the name of national security. global concern over food security leaves u.s. farmers at risk to say nothing of u.s.
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technology companies in an era of digital warfare. instead of successfully modernizing the nafta last week, the united dates initiated a trade war. snatched seems to have the possibility of successful nafta reboot from our grasp for now. mexican and canadian retaliation are en route. factories and farmers depend on exports to canada and mexico and will suffer. beyond the impact on nafta, and her have sent a signal that the united states is no longer a reliable partner. over thear, concern misguided use of section 232 and unilateral trade actions should not be a partisan issue. if these were policies that actually helped the american farmer and worker succeed, you would see overwhelming support from both sides of the aisle. this is not the case. the unitedis that states is damaging its ability to forge commercial agreements and enforce existing ones
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through this behavior. should the president of -- withdraw from nafta, the ability to impact investor climate in the americas will deteriorate further, leaving the field open for chinese and other investors and further damaging u.s. credibility. i would argue forcefully for regaining that credibility with the u.s. congress standing up to the policies leading to a deterioration of u.s. alliances. this is how we can rebuild our ability to defend economic interest. in the meantime, as the chairman noted, we may leverage a session to pursue the hemisphere given the high number of countries pursuing membership. the u.s. should insist applicants meet the oecd's standards prior to granting a session. some opportunities to do so were missed in colombia's case given the haste to issue the oecd invitation. it will be important not to repeat that mistake in the case
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of argentina and peru. i covered priority areas to be evaluated in oecd sessions including tax, customs and policy as well as rule of law considerations. i would highlight that across the region, and as neil noted, we find renewed zeal for tackling corruption. at the same time, overregulation can inadvertently stifle enterprise and destroy the formalizing role of u.s. companies with high compliance standards. central american countries are at a particularly critical moment in this anticorruption battle. i written testimony addresses concerning activities in guatemala despite progress being made there. u.s. and multilateral technical assistance is crucial to ensure collaboration with the private sector to expand formality and bring violators to justice. i would stress the critical role that the u.s. government can and should play to promote a level playing field and rule of law
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throughout the americas. i would urge this committee to take if her missteps to persuade the trump administration to the farmers, ranchers, and workers first, dissuading the administration from taking >> mr. harrington, i don't know if you know, but i used to be involved with the chamber of commerce. appropriate if it's if you want to sell raffle tickets for a copy of this hearing. >> one of the rights on c-span
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going forth? anyways, five minutes. i haveto raise an issue been personally engaged on over the last several months. i've approved our government to resolve the claims of many of my constituents who have invested reform mines, commonly known as landmines. this issue directly impact a large pension plan in san bernardino county. it's my understanding that the government has suggested that it does not have an obligation to pay its debts now because it was issued over 50 years ago by a communist regime, even though the peruvian supreme court authorized sale and transport of these bonds on the secondary market, and ruled in 2001 that
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the government must cut bondholders an amount equal to the current value. [captions copyright national cable satellite corp. 2018] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit] art -- are you aware of any laws that would allow the government to not pay off debt? i am not aware. i take -- i know that there are clear underment obligations free trade with peru. i also understand there are numerous court decisions stating the contrary to the position that the peruvian government has put forward. i would hearken back to my
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testimony, urge that in the consideration of this section for peru, which they are ,nterested in, that this issue as any that involves rule of law and transparency -- is voted for a session has taken place as opposed to after. >> i hope you see where i am coming on this. my opening speech, i talked about how important it is, trade , and overseas investment. contrary. a signal obviously -- sambar named dino county as with my colleagues, this is something that we get questions about and are concerned about. anyone else want to comment on this? no? ok. with that, i'm going to yield my
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time -- has expired. the member is now recognize. >> thank you. thank you, mr. chairman. we have an important election going on. we have some of 20-25 points. more of a nationalist. pointst that is up 20-25 of wife theresult represent -- the rhetoric is coming out of the white house. know, i just think it's not helpful once the election is over. how do you put this back together? it's going to impact both countries. china to me is waiting in the wings.
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foolish to be at this place now, and it's nice to meet a nationalist and beat up the united states, but then you have rhetoric coming from both sides. it's a terrible situation. rep. paul cook: thank you for that important question. first, we have to see the results on july 1. but yes, -- ahead in the polls. potentially, a fundamental relationship between united states and mexico. i will say that many if not most of the citizens would -- vote for the president based on similar things we might vote for, economic positions, their own security conditions. i agree that the rhetoric from north of the border is not helpful in that context. madef the things that has
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nasa so powerful is not just the fact that it borders -- the majority of trade in north america, but it also has created bumpers, which allow certain behaviors and beyond which certain behaviors were not allowed. powerful in the 1990's, when mexico ran into trouble with peso crisis. the political class in mexico would have closed down the economy, which was counterproductive, print -- prevented by nasa. global capital markets, much sooner than during the previous crisis of 1980. toolwing that, nafta is a that one would look to in this anybody elected in mexico who might take a different view of mexico's relationship with united states. the fact that we have nafta
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organizes trade, but also in a general way, the bilateral relationship, a way that channels the conflict into is that can be resolved. not just because it would hurt the united states economically to leave nafta, but it would challenges. -- would challenge of us with mexico. this is absolutely right. we have to look at tools available to us in the united states to help us build that relationship anyway, and not to have nafta in a negative way. crocs a good question. not enough people are talking about it. this presidency point forward is something that
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i think we are watching in terms of what the candidate says in their condition. we are encouraged come i think the words on out to have been moderate. one concern going forward is respect going -- is the respect for mexico. this is deeply invested. this includes energy. we will receive -- pursue a review process for that. we are this, consulting with devices. you're asking an important question, and i want to answer this. in terms of the two governments, u.s. business community and bank -- mexican business community are committed to this relationship. talking about the
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bilateral relationship, failure is not an option. bilateral trade balance. we run the u.s. mexico ceo dialogue. and scenery and texas, companies to try and adjust issues in the by radel -- bilateral relationship that is u.s. mexico trade. crocs thank you. my time is up. >> thank you. i'd like to recognize the gentleman from florida. >> thank you mr. chairman. i would like to ask for your help to ask about an egregious example of hostility for foreign direct investment to guatemala. this is patient -- of the government's desire. resources had 1,000,000,007 for a mine in guatemala.
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court there has decided that the permits it has are invalid to indigenous peoples hostility. panama canal debates years ago. this has had thousands of guatemalans police -- a great number of them laid off. they will terminate 500 more now. thebank of guatemala and general are trying to get the court fact act. i'm going to the court myself next week. the chairman sent a letter to the president, to support -- even gonzalez -- even support the ilo. stable business environment. prevent collect the -- investing. luckily, this is a record. >> thank you so much, congressman. mentioned it briefly in my remarks. definitely a country where we
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challengea repeated with respect to rule of law. goodelieve there are intentions in the guatemalan government church -- to invent, score. i think doubling down on bilateral and multilateral efforts to do tech training and help our allies in the guatemalan government see the benefit to address these challenges, to build those folks up and give them tools they need to be sure u.s. companies are able to operate in the country is important. thank you. >> anybody else have any ideas? you have good ideas. >> -- straighten it out. >> of course. >> ambassador rooney. i'm not sure how to respond. i will confess that are not familiar with america.
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i will be happy to look at it. ideas come forward, happy to share that with you. >> we appreciated. i yield. >> and happy to answer that question. -- i am happy to answer that question. we wrote a letter last year on this issue. ,overing rule of law appreciated the letter sent to the chair, ranking member, also to the president. the convention 159 and implementation, ranking member is what we have been pushing hard for on the guatemalan government. it's important. it's really important within that. obviously, full respect for
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indigenous rights is imperative. robust process that the press secretary is able to participate in. >> thank you. thank you, sir. i will now recognize the gentleman from california. >> thank you. mr. chairman. thank you to our guest for being here. very important issue we are discussing today. colleague that although over the years there have been conflicts with indigenous populations, within latin america, certainly what the land pondsth in peru is just one example of how people were taken advantage of and now, the government is trying to make right. at the same time, our .onstituents were impacted
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i hope that we are able to bring firefighters, the police officers, and truckers iraq rep -- and people that i represent. harrington, because of those conflicts, i have been working , which in congress creates a unique opportunity for american tribes to be able to work with indigenous populations of americas and trade in goods that they each either grow or make with him their communities. what sort of opportunities do you see for native american tribes to invest in latin america? not inologize for
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america -- familiar with the bill. i will say. we are all about investment and commercial promotion through the u.s. and across the region. there's some innovative things initiative into the americas. i'm not a subject matter expert, but we have a native american -- and economic affairs. we would be happy to talk about it. >> i would love to follow-up with you on that issue. been working on. mostly it's a bipartisan bill, has enjoyed bipartisan support. love to see where we could find areas we could work together to help create jobs, in areas where we are seeing the most impact in our
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immigration system, but also in areas of the u.s. where we have seen that there is a lack of opportunities for jobs. achievements together is important. usaid is investing in a lot of these communities. we've seen projects where we are .radicating coca, for example planting chocolate. how do we manage those ,ommunities and south america the mining of silver and copper? how can we manage those communities with our tribes here, the creative environment of manufacturing of goods how do youhis is a,
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see the government of guatemala moving forward from your job perspective -- from your job -- i know it has impacted u.s. companies investing there. companies, how are they able to compete fairly in a place where public corruption is rampant? >> and a real challenge. i would comment into my remarks about u.s. companies hold themselves to a very high ethical standard. a culture in our inherently,or that one our companies invest in foreign markets, guatemala or wherever, typically that does raise the tide in that market from a rule of law transparency
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perspective. one challenge i've seen commander think they're trying to grapple with an guatemala now, being sure that is large -- multinationals are doing business in smaller markets of america, etc., that professionalizing impact that they have is appreciated, and that it is allowed to flourish. often, yes. if you are going to operate in that country, you are going to do partnerships and deals with local players, who sometimes won't be at that same level. as you are u.s. company putting your hand down to raise that level to it would be expected for u.s. multinationals, there needs to be some latitude there come a month enforcement, any sort of ethical flexibility. i think there needs to be a
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construct that allows that to happen without a u.s. company running a risk of getting flamed, if you will. it's something i worry about in the central american context. think doing the work done bilaterally can definitely be addressed. >> thank you. >> thank you. i like to now recognize the gentleman from illinois. >> thank you, mr. chairman. given the tensions in our nation , this is a timely and critical conversations. canada for example, president deal has stated canadians in aluminum, and canada is a national security threat to the united states. i'm concerned. i represent an urban, suburban, and were role district, home to numerous steel nose and farms,
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service industry-based companies, which employ hundreds of thousands of my constituents. i'm concerned about long-term employment and economic implications. there are reports that 10,000 jobs would be lost across agricultural services and manufacturing in the energy sectors. the questions for any of you to address, do you believe that canada poses a national security states, ande united do you agree with president trudeau that president trump starting a trade war is -- >> if i can begin the dialogue here, in part because i'm from .llinois originally >> thank you for the important question. canada is not a national security threat to the united states. candidate is a country with which we have trade disputes, and have for years. our economy is fully integrated with canada.
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what makes the relationship with canada so strong is that we share values, including role of law. when we enter trade disputes, we have a process with which we can resolve them. gone outside of the process, begun to take unilateral actions in a way that from my perspective is unhelpful to the broader relationship. it's one side. the other side you pointed to is what will the impact on -- be on the u.s. economy? porter corporation, all that is one basket. the other, what will it mean for the united states, job creation in the united states? i'm sensitive to the idea that some people in our country are hurting, they have questions about sustainability of jobs, industry. that's an important issue we cannot ignore.
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from my perspective, the way to address that is not to favor one or another sector that will have the implication of disadvantaging other sectors. negative implications will be graded on positive implications. there is sensitive analysis, a balance. we are doing damage. canada is not a threat to the united states. as these bricks in the wall anldup, you begin to have understanding from other countries that are questioning reliability of the united states
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to their partner. they begin to live -- works through the partners in latin america. canada, the whole idea that china would retake the united states for latin america for me is astounding. in my view, accurate, but it's nonetheless something that's happening right now. >> if you guys had comments. think about this. how do you think these impacts -- my defendant already for not the negotiations, the other piece? naftaputs a chill on negotiations. have the 1-2 punch of initiating another 232 national security thestigation, which in history of not just the 232 statute, which comes from this extension, but even going back to this post world war ii time 232 we have never done national security case on a
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completely finished good like auto in the history of the trade desperate policy of the country. to call or good allies, which if you buy into the argument -- that i do not come up that this administration does, $2 billion served us as i said with canada on these items. into itemslate that such as automobiles, which are think clearly, and i will be fascinated to see secretary mattis on this, because he will have to weigh in. point, we aret damaging our credit -- credibility as a negotiating partner. >> ford is my biggest employer. >> you have the chicago assembly plant. in your district. note, perfect segue. oni could quote tom donahue
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232. this is for auto parts, the announcement of this commencement of a study. >> time has expired. theke to recognize gentleman from new jersey. >> thank you. i appreciate you holding this hearing. i'm chairing my own hearing, so i can't stay. with respect to ecuador, i'm concerned american companies have been treated unfairly by the judicial system. example, a u.s. pharmaceutical company. i understand there's a partial award of the tribunal. denied justice in the ecuadorian legal system. could you tell us commit any of our -- witnesses what actions to being taken in ecuador
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assure this is patrolled, the tribunal is respected by the equatorial judicial system, and steps are taken to enforce -- ecuadorian courts. >> yes. >> i'm happy to address that. the legacy of the previous is troubling to say the least. there are few protections for .ule of law certainly, many of our members -- not being one of them, were challenged from the policies of that regime. that we are encouraged frankly, and this is different between staff -- took a trip ecuador last week.
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were encouraged with the steps, the commitment the president -- has made in the areas of investment protection. embraced the fact that one direct investment is a key source of economic development. that's what we are seeing initially. way to he's got a lot of legacy issues to clear up, arbitrations. absolutely essential. they will show progress, show that they are serious about looking at a more attractive destination for investment. >> i appreciate it. works briefly, i concur in text -- the government, we applaud that. think there is room for the united states to live up to bilateral investment treaties
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that ecuador has with the united states, and to live up to any awards under that treaty. think that's something we would oncerage across the region companies enter into arbitration with companies. judgments made need to be respected. >> thank you. >> yield back. >> thank you. underscore smith come i'm going to turn it back to congressman time, i wasome trying to include this through the bell. i recognize -- >> can you just finished, and i will get you your -- question afterwards? " my boss. i better get it right. to talkit's important this ision 232, specific to autos and auto
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parts. announcement that the department would commence a , on applying to 30 22 auto parts. week, this isn't about national security. administration's signaling its true objective, trade negotiations in mexico, canada, japan, south korea. all u.s. auto imports, and are partners. northeastern imports endanger our national security -- >> them from new jersey. i get a lot of pharmaceutical companies in my office. complaining about canada constantly. one of the things i was happy least we are raising the issue that there are
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differences. see, when they negotiate this have to the pharmaceutical industry is there, because it's hurting new jersey? thatresident can include in his negotiations. >> i participated in a number of the nafta rounds. i know it hasn't been around but back when there was the u.s. would try to raise intellectual property, would try to raise market access, and the response i think but back w understandably from mexico and canada was why would we want to talk about intellectual property? that's something that's important to you, united states of america. a you have on the table
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removal of invester state dispute settlement, a government procurement policy hat goes against our interests, all of the poison pill provisions that the united states has had on the table have rally prevented us, our negotiators from getting to those items like intellectual property rights protections. >> two points they do not have standards commensurate with their standards, nor a hub of innovation which it is and its standards kneel to be heightened. i think kelly touched on a lot
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of the core here, that we have these opportunities for offensive interests, along with a few other areas, in the bilateral u.s.-canadian issues, including dairy issues. some folks have issues with the operate their dairy market. but the u.s. has legitimate issues which are frankly being held hostage that operate their market. but these proposals, government procurement, sunset clause, dispute resolution, suite of chapters 19, 20, et cetera. so i would leave it there. the ip chapter is not yet -- hasn't been put on the table because of these issues. >> if you bring the lens out a little further one of the most powerful ways to help the united states address some of the legitimate concerns with
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china on intellectual property is to have a unified north america, and that is what nafta would allow us to do if we could come to agreement on intellectual property as well as the other issues that we have been talking about that would give us a far wider and deeper platform. >> thank you for extra time. >> at this time i would like to recognize the gentleman from florida. >> thank you, mr. president. i apologize for being late. thank you for being here and your testimony. i chair the asia-pacific subcommittee on foreign affairs along with being on this one and i just find our relationships in the western hemisphere, we need to increase and we need to show a strong force coming out of the united states, business, security, all those things. and i know as the chairman here he focuses on the same things we do, we want economics trade national security issues. i think it is imperative that we work through these
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committees to generate policies that make us stronger for our allies and our relationships, and we introduced the bill back which as you know, i heard you talk about opec and how important and valuable that tool is. with the bill back we've expanded the lending capacity $23 billion up to $60 billion. in addition we can partner up with private enterprises and work and leverage that capital that they have along with the expertise they have, and we can lend in foreign currency which we weren't able to do before and we can partner up $23 billi billion. in with foreign countries. how do you feel that we can best utilize a vehicle like that to build projects in these countries? if you want to try to tackle that. >> yes, sir. and i appreciate both the opportunity to respond and also
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your and other leadership on this important act. i think it is a very important recognition that other countries are using tools, particularly in the western hemisphere that we particularly don't have a right to increase our authorities to be able to do that. one of the key areas that latin america and the caribbean needs and where the united states has great expertise is in infrastructure and yet we have been losing this battle to china because china has a tool and that's development finance. they come with the finance to do the projects. opec has been successful but limited. so what the bill back does is expands that, gives us the ability to compete more effectively with the china bag of money, if you want to put it that way. what's important about that aspect is not the commercial aspect. if you talk to many regional leaders and business people they would prefer a relationship, they would prefer the investment from the united states because of management, because of quality, because of
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technology, because of anti-corruption, things that they're not necessarily getting from china. but if china is the only game in town they have to be the partner. not the preferred partner but the only partner. i simply want to acknowledge that and say this could be a very important tool. >> i appreciate that. >> thank you, congressman. the u.s. has been a big supporter of this bill. we have advocated. one of the things we have advocated is for an inclusive all u.s. government approach to supporting our exporters and our company that is do business in the region. what the at this is bill back does, and i commend you and other whose are involved. and it's the best part about this is it's a free service to u.s. taxes, i think to companies. i think that a key issue obviously we're talking about today is chinese influence in
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the region and one of the ways that china is able to successfully insert itself into our region is through basically a state-owned enterprise financing or state financing. our companies can no longer fight with one armed tied behind their back so i thank you for this legislation. >> i appreciate that. >> just to endorse also returning ex-im to full functionality, that's something that we're seeing again and again coming up against chinese development banks. >> and that was the whole purpose because we had something to counter that. if we're not leading or compete there's a vacuum created and that's gets filled by somebody. wetcht to make sure that values what we do and with the western hemisphere we want to make sure that there are people who want to promote democracies and the values.
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so we felt that was a very important issue. we are blessed with an abundance of energy and we are exporting now. we've got bills on the floor to increase the amount of lng. this is something we sfeel very critical to send down to the western hemisphere, to the caribbean basin and have it as an alternative to number two diesel coming out of venezuela. mr. chairman, i am over my time and i yield back. i appreciate it. but that's what we're working on. thank you. >> thank you very much. we're joined by two more members from new york. they were late watching reruns of the mets and the yankees. i understand their priorities. but right now i'm going to recognize the gentleman from ew york.
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>> thank you, chairman. the the world looks different from up here. >> i'm usually down there. the southern part of the emisphere. but thank you for what you have contributed to this debate. i also want to ask so many questions about china and then the secretary of state was here last week and i told them they're eating our candy in latin america and the caribbean. there's some vacuum of leadership there, and of course china has come in and you have begun to see countries break om taiwan, the most recent the dominican republic a couple of weeks ago. and china is coming in to the hemisphere. they're coming the dominican republic in to do projects, roads and bridges and loans and investment, and there's a strong push to
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replace us as a main partner even though they're so far away politically there's a whole different continent. making a strong argument to take over or have a strong influence in the region. so what are the main obstacles? is corruption a real obstacle for u.s. companies to continue to invest? the bite they call it. right? in some countries they say as of course, no country especially since we have very strong anti-corruption laws ere, is that a major problem in investment? >> well, if i could try my hand, congressman, at responding. first, the positive story about china in the region. they buy a lot of products from the region which isn't a bad
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in the essarily recession of 2008-2009 it was actually china that kept latin america from falling into recession. in the recession there's legitimate trade, there's legitimate investment. we should celebrate, because we're not buying those products and latin america should have the ability to sell to other markets. that there's u.s. strategic i want rest and i think we've seen that develop over the last 10-15 years which is the time period that that th has been directly engaged. is it a question fundamentally about corruption? corruption plays a part. china is not subject to fcpa. chinese companies aren't listed on the new york stock exchange. so that is an issue but if you talk to u.s. companies that is not necessarily the first thing that they raise in terms of this their ability to compete. they really do raise the issue of developments finance and the
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abilities of chinese companies to come in financing at below market rates. they raise the issue of china to jurnled bid u.s. companies. they have government support. bidding at be market prices. they might be taking a loss in order to get the contract and investments and move forward that way. there are a myriad number of other bidding at market prices. they might things. one of the other thing that is united etarding the states' ability to move forward ability of n is the the united states to support some of those efforts from a private sector side of the u.s. government. we've been talking about that a little bit to this point. i think the ability to ramp up commercial diplomacy at the very senior levels of the u.s. would really help
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and show that latin america that the united states is not just here on a transactional basis or commercial basis but we are here on a partner basis. that really goes a long way in terms the of the western hemisphere what in some ways we used to do we've gotten away and i would like to see that go forward in a similar way. >> i spoke to a former resident of a latin american country and he said to me well show me real u.s. investment in the hemisphere would really hel and show that latin america, th significant, right now in the last 20 years. even the banks are no longer there. i found -- i began to think and he was absolutely right. i think we need to invest more in the future of latin america and come back to ensure that we continue to be their main partner. so thank you for your testimonies. thank you very much. at this time i would like to recognize another congressman from new york my good friend the gentleman from new york
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congressman nicks. >> thank you, mr. president. i want to kind of pick up thank at where was left off. irst, when i think about cafta and of course nafta at one time to do something in regards to a trade deal with all of the americas. to do some in and even tpp where we had various countries in south -- central and south america that would have been a part of that. tpp being important because it also kind of put a check on china to make sure that they're play big the rules, et cetera. so that's extremely important. can you tell us me you think would have been the negative and positive effects if we had stayed in the tpp and whether cafta is increasing the investments and opportunities
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for american companies, and improving the relationship with those in the hemisphere? >> thank you congressman i think you raise an excellent issue. the the u.s. chamber was the very vocal supporter of the transpacific partnership tpp, and i think you correctly call out a key reason why it was important, which was to establish a transpacific trading system that's rules-based, that where the u.s. exerts its leadership on trade joined by like-minded free-market economies. in the effort to try and encourage the same sort of adoption of policies across asia and other parts of latin america that weren't necessarily involved. the other key thing i think is
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important about tpp is our exporters look to us every day and nafta obviously is their priority but they say to us across -- name your sector. manufacturing, agriculture. they're very focused on asia. why? the year project by 2030 two thirds of the middle class will be in asia. when we talk to the administration following the withdrawal, our question is ok what's your strategy to access these consumers that our exporters will desperately need in the future to continue growing? >> i presume when you're late you don't know what went on prior to o you getting here, but i have now like wise concerns in regards to what is
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taking place with the tariff the president is currently placing on there, and love to get your take on the impact of these newly imposed tariffs will have on american job and businesses, both small and large in our country. and then with the retaliations that some of our allies are talking about, i would like to get your perspective. thank you very much. i think thank you very much. i think that is the key question. it is the framing question for how do you promote u.s. commerce and business in the region. the overall framework is an atmosphere that is royal is the word i used in my oil testimony, by the steel tariffs hat we have seen and voluntary export restraits that brazil and argentina have had to comply with in the steel context. but also in the terms of the very aggressive approach the united states has taken on nafta, which is clear the united states -- isn't clear if
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the united states wants to continue. that is an issue with investors. we could go on perhaps on some other issues. but this is a circumstance where once the united states was the country that was actually creating the conditions for orderly business and commerce in the region, now we've become the primary disrupter. and the problem with that is that if the you're an invester looking long term you can't make decisions based on that. but it also provides the condition that is an outside country like china but others as well can come in and take advantage particularly if the state is behind some of the the investments as we've been talking about the with perspective to china in the region. so this is helpful. despite that there are other issues as well. even as we mentioned previously even if the united states were to change course today and have a policy shift today on trade the damage that's being done is going to take a long time to
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overcome. supply chains once they develop lsewhere cannot just be up wound. if other countries begin to look for partners that don't include the united states whether because of formal trade relationships or just the question of the sustainability with the united states, they begin to develop those relations with other countries. once those are developed they're really tough and expensive to the break. we can be doing these as negotiation issues or perhaps we believe in them, bun none the less there are consequences. the final thing i would say in concurg with my two colleagues is that there are economic consequences to the united states. this will hurt the u.s. economy. from the job creation perspective and ability to grow the economy even after tax reform and other thing that is have been done over the recent months from my perspective this will be a step back. >> thank you.
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>> thank you very much. one further piece of business if there is no objection i the like to enter into congressional record testimony from transparency international. i want to thank pursuant to the committee rule 7 the members of the ske be permitted to submit written statements to be included in the official hearing record. without objection the hearing record will remain open for five business days to allow statements questions extraneous materials for the record subject to the length limitations in the rules. i did want to add, this has been kind of a crazy day. i think everybody knows that. ranking member who is saying we have like a fly-in day people are coming in hot seating it and leaving from one committee. i apologize.
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late because le of votes. it's that time of year. we're going to be in i think the second series of late becau votes at 9:00, 21 00 for all the military folks out there. so i certainly appreciate your flexibility. it's great to have a committee here that is so engaging, and i try to get everybody. and right now just a reminder we have a little meeting with the president of honduras afterwards but once again it was -- i can't thank you enough r being here and there being no further business these guys can get back to their yankee games or new jersey. the ske is adjourned. votes at thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2018]
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>> texas senator ted cruz spoke at the faith and


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