[Senate Hearing 115-164]
[From the U.S. Government Publishing Office]
S. Hrg. 115-164
NOMINATION OF ROBERT E. LIGHTHIZER
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
ON THE
NOMINATION OF
ROBERT E. LIGHTHIZER, TO BE UNITED STATES TRADE REPRESENTATIVE, WITH
THE RANK OF AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY, EXECUTIVE
OFFICE OF THE PRESIDENT
__________
MARCH 14, 2017
__________
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COMMITTEE ON FINANCE
ORRIN G. HATCH, Utah, Chairman
CHUCK GRASSLEY, Iowa RON WYDEN, Oregon
MIKE CRAPO, Idaho DEBBIE STABENOW, Michigan
PAT ROBERTS, Kansas MARIA CANTWELL, Washington
MICHAEL B. ENZI, Wyoming BILL NELSON, Florida
JOHN CORNYN, Texas ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina BENJAMIN L. CARDIN, Maryland
JOHNNY ISAKSON, Georgia SHERROD BROWN, Ohio
ROB PORTMAN, Ohio MICHAEL F. BENNET, Colorado
PATRICK J. TOOMEY, Pennsylvania ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada MARK R. WARNER, Virginia
TIM SCOTT, South Carolina CLAIRE McCASKILL, Missouri
BILL CASSIDY, Louisiana
Chris Campbell, Staff Director
Joshua Sheinkman, Democratic Staff Director
(ii)
C O N T E N T S
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OPENING STATEMENTS
Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman,
Committee on Finance........................................... 1
Wyden, Hon. Ron, a U.S. Senator from Oregon...................... 4
Brown, Hon. Sherrod, a U.S. Senator from Ohio.................... 8
Portman, Hon. Rob, a U.S. Senator from Ohio...................... 9
WITNESS
Dole, Hon. Robert, former U.S. Senator from Kansas............... 7
ADMINISTRATION NOMINEE
Lighthizer, Robert E., nominated to be United States Trade
Representative, with the rank of Ambassador Extraordinary and
Plenipotentiary, Executive Office of the President, Washington,
DC............................................................. 11
ALPHABETICAL LISTING AND APPENDIX MATERIAL
Brown, Hon. Sherrod:
Opening statement............................................ 8
Dole, Hon. Robert:
Testimony.................................................... 7
Enzi, Hon. Michael B.:
Prepared statement with attachment........................... 43
Hatch, Hon. Orrin G.:
Opening statement............................................ 1
Prepared statement........................................... 45
Lighthizer, Robert E.:
Testimony.................................................... 11
Prepared statement........................................... 48
Biographical information..................................... 48
Responses to questions from committee members................ 52
Portman, Hon. Rob:
Opening statement............................................ 9
Roberts, Hon. Pat:
Submission for the record.................................... 117
Wyden, Hon. Ron:
Opening statement............................................ 4
Prepared statement with attachments.......................... 118
Communications
International Corporate Accountability Roundtable................ 129
Motion Picture Association of America (MPAA)..................... 132
(iii)
NOMINATION OF ROBERT E. LIGHTHIZER,
TO BE UNITED STATES TRADE REPRESENTATIVE,
WITH THE RANK OF AMBASSADOR EXTRAORDINARY
AND PLENIPOTENTIARY, EXECUTIVE
OFFICE OF THE PRESIDENT
----------
TUESDAY, MARCH 14, 2017
U.S. Senate,
Committee on Finance,
Washington, DC.
The hearing was convened, pursuant to notice, at 2:14 p.m.,
in room SD-215, Dirksen Senate Office Building, Hon. Orrin G.
Hatch (chairman of the committee) presiding.
Present: Senators Grassley, Crapo, Roberts, Cornyn, Thune,
Portman, Toomey, Heller, Scott, Cassidy, Wyden, Stabenow,
Cantwell, Nelson, Menendez, Carper, Cardin, Brown, Bennet, and
Casey.
Also present: Republican Staff: Chris Campbell, Staff
Director; Everett Eissenstat, Chief International Trade
Counsel; Douglas Petersen, International Trade Counsel; Shane
Warren, International Trade Counsel; Tony Coughlan, Tax
Counsel; Rory Heslington, Professional Staff Member; and
Nicholas Wyatt, Tax and Nominations Professional Staff Member.
Democratic Staff: Joshua Sheinkman, Staff Director; Elissa
Alben, Senior Trade and Competitiveness Counsel; Jayme White,
Chief Advisor for International Competitiveness and Innovation;
Michael Evans, General Counsel; Greta Peisch, International
Trade Counsel; and Ian Nicholson, Investigator.
OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM
UTAH, CHAIRMAN, COMMITTEE ON FINANCE
The Chairman. The hearing will come to order.
Welcome, everyone, to this afternoon's hearing. Today we
will consider the nomination of Mr. Robert Lighthizer to be the
U.S. Trade Representative.
The last time this committee considered a nominee for USTR
was in July of 2015. Unfortunately, under the last
administration, failure to promptly nominate appointees to
leadership positions at USTR became the norm. As a result, it
is a sad truth that the office of USTR has not had a fully
confirmed bench of nominees since Ambassador Kirk resigned in
January 2013. That is pathetic. The difficulty USTR had during
the past 4 years in advancing an ambitious pro-growth trade
agenda was in no small part due to the lack of leadership.
As chairman of this committee, I hope that we will be able
to change that starting today. All told, this committee must
consider and report six positions at the Office of the U.S.
Trade Representative. Unfortunately, as with most of President
Trump's nominees, we are off to a slow start. I hope that with
today's hearing we can begin the process of moving these trade
nominees more quickly.
Mr. Lighthizer is indisputably qualified to serve as USTR,
and I believe he has a strong base of bipartisan support. If we
keep this process focused on Mr. Lighthizer and the position he
has been nominated to fill, there is no reason he should not be
approved by this committee and confirmed by the Senate in short
order.
Unfortunately, there have been suggestions that extraneous
issues, issues that are entirely unrelated to Mr. Lighthizer,
might be attached as conditions to the Senate's consideration
of the nominee. Let me address this briefly before returning
the discussion to the nominee's qualifications and the sizeable
agenda and challenges facing the next USTR.
Mr. Lighthizer has spent almost his entire career in public
service, including as staff director for this committee and as
Deputy USTR, and in private practice, fighting against unfair
imports. In 1995, Congress passed an amendment that prohibits
an individual from serving as U.S. Trade Representative or
Deputy U.S. Trade Representative if that person has ``directly
represented, aided, or advised a foreign entity'' in ``any
trade negotiation or trade dispute with the United States.''
While in private practice, Mr. Lighthizer represented a
small number of foreign clients in the late 1980s and early
1990s, well before passage of the 1995 amendment. Because of
this work, some of our Democratic colleagues have argued that
Mr. Lighthizer requires a waiver to serve as USTR.
Mr. Lighthizer does not believe that his work falls within
this statute, nor do I. The Office of Legal Counsel at the
Department of Justice has indicated that they share that
opinion, so it is not at all clear that a waiver under the 1995
statute is necessary in Mr. Lighthizer's case.
This is not the first time the committee has had to deal
with this type of question, and in the past we have always been
able to work through it. In 1997, President Clinton nominated
Deputy U.S. Trade Representative Barshefsky to serve as USTR.
This committee was chaired by Senator Roth, and Chairman Roth
and the Republican majority worked constructively to support
President Clinton's nominee.
Chairman Roth was not certain that this statute applied to
Ms. Barshefsky, but he agreed to work with Senator Moynihan to
consider a waiver so that Ambassador Barshefsky might assume
her position as U.S. Trade Representative without controversy.
As far as the record shows, there were no extraneous
conditions attached to the waiver, and it passed on the floor
by a vote of 98-2.
Similarly, in 2007, President Bush nominated Deanna Tanner
Oakun for the position of Deputy U.S. Trade Representative.
Although neither she nor the General Counsel at USTR believed
that the statute covered her prior work, Chairman Baucus and
Ranking Member Grassley worked in a bipartisan fashion to
advance a waiver through this committee in order to ensure that
all necessary bases were being covered. No extraneous
conditions were demanded in exchange for approving the waiver,
and it was approved by the committee by voice vote.
Today we are faced with very similar circumstances. Once
again, it is not clear that the statute applies to Mr.
Lighthizer's work in the 1980s and 1990s. In fact, we have what
appears to be a well-researched opinion from OLC that it does
not.
Nevertheless, Democratic committee members are asserting
with absolute certainty that Mr. Lighthizer needs a waiver in
order to be confirmed, and at the same time these same members
are refusing to approve a waiver unless the committee also
moves a piece of legislation that is entirely unrelated to Mr.
Lighthizer or the Office of USTR.
Now, this kind of legislative hostage-taking certainly is
not unheard of in the Senate, but in the context of
consideration of a nominee for the Office of U.S. Trade
Representative, it is totally unprecedented. I have stated
publicly that I am willing to work with Ranking Member Wyden
and others on the committee who believe a waiver is necessary,
but I will be honest, at this point it appears that my
colleagues' insistence on the waiver at the committee level has
more to do with their demands for an unrelated ransom than any
concern about the applicability of the statute.
I hope I am wrong about that. Let me be clear what is at
stake here. By statute, the U.S. Trade Representative is the
lead official for developing, coordinating, and implementing
U.S. international trade policy, serving as the principal trade
advisor to the President, leading international trade
negotiations, and serving as the President's primary
spokesperson on international trade. Moreover, the statute
creating the position makes it clear that the Trade
Representative is accountable not only to the President, but
also to Congress.
There is a lot of debate today about the direction of U.S.
trade policy. In fact, the President is currently considering
some of the most significant trade policy decisions in decades,
including whether and how to upgrade the North American Free
Trade Agreement, whether and how to launch additional trade
negotiations with parties to the former Trans-Pacific
Partnership, and whether and how to continue negotiations for a
Trade in Services Agreement, an environmental goods agreement,
and an agreement with the European Union, and he is doing so
without the advice of his chosen USTR, not because the nominee
is unqualified, but because some Democratic Senators see the
nomination as an opportunity to advance a wholly unrelated
legislative priority.
Moreover, at a time when Congress is demanding greater
input into trade policymaking and stronger enforcement, our
principal liaison in the administration is being blocked from
even assuming the office. I do not think anybody has any real
objections to Mr. Lighthizer, so it seems crazy to keep playing
this game.
Once again, this is unprecedented. It is time to move this
nomination. Actually, to be blunt, it is well past time. It has
been more than 50 days since Mr. Lighthizer was nominated by
the President. This is the longest gap between nomination and
committed consideration of a USTR since at least 2001.
Before concluding, let me briefly touch on some trade
priorities I expect the next USTR to address. It will not be
surprising to many of you, but I expect a nominee in this
administration to be a strong advocate for U.S. intellectual
property rights. Intellectual property is the backbone of our
economy. It affects large and small companies across America.
It is a key part of our economic growth. In my home State of
Utah, for example, half a million jobs and 67 percent of our
exports are connected to intellectual property. It must be a
higher priority.
Second, I expect quick and effective use of Trade Promotion
Authority, or TPA. President Trump benefits significantly by
coming into office with TPA already in place. As a country, we
have a unique opportunity to lock in strong trade agreements
that meet the high standards of TPA, but trade negotiations are
long-term endeavors, and, to be successful, we need to begin
soon.
As the administration updates existing agreements and
negotiates new ones, I hope that they will be able to re-
balance the Obama administration trade agreement template. In
my view, President Obama continually sacrificed U.S. commercial
interests at the negotiating table in favor of a liberal social
agenda.
Some of the areas that I believe need higher priority
include the need to reflect a standard of protection for U.S.
intellectual property rights, similar to U.S. law; seek the
elimination of price controls; work for better market access
for our farmers and ranchers, including stronger provisions on
sanitary and phytosanitary measures; include enforceable
provisions ensuring greater transparency and accountability in
government reimbursement regimes; negotiate strong and
enforceable provisions on anti-corruption; provide greater
protection for trade secrets; and include provisions that help
strengthen good governance, transparency, the effective
operation of legal regimes, and the rule of law.
Finally, we must do a better job of holding our trading
partners accountable. More effective monitoring of our trading
partners' existing commitments, along with full implementation
of these commitments, is critical to maintaining political
support for a robust trade agenda here at home.
Mr. Lighthizer, I want to commend you on a stellar career
in international trade. It is my hope that you would use your
expertise to advance a strong U.S. trade agenda that can help
grow our economy and instill faith in the American people in
the ability of international trade and trade agreements to
provide new opportunities for working Americans. I look forward
to hearing your testimony today.
So with that, I will turn to my friend, the ranking member,
Senator Wyden, for his opening statement.
[The prepared statement of Chairman Hatch appears in the
appendix.]
OPENING STATEMENT OF HON. RON WYDEN,
A U.S. SENATOR FROM OREGON
Senator Wyden. Thank you very much, Mr. Chairman. Mr.
Chairman and colleagues, after several weeks, during which the
only insight the public has gotten into Trump trade policy has
come in head-scratching 140-character bursts, today's hearing
gives us a chance to get some specifics. I had a good
conversation with Bob Lighthizer in the office, and I want to
welcome him today as his nomination is considered.
I hope that by the end of this hearing Americans will have
heard more detail about how the Trump administration plans to
meet the extensive promises that were made in the 2016
campaign.
Before digging into policy issues, there is another issue
the committee has to address. As a legal matter, Mr.
Lighthizer's previous work for foreign governments makes him
ineligible to be appointed as the U.S. Trade Representative,
pursuant to the Lobbying Disclosure Act. The facts are clear,
but as was the case with Secretary Mattis, this administration
and others before it has worked with the Congress, when
appropriate, to make exceptions.
Speaking for Democrats, we are willing to work with
Republicans to provide a statutory exception for Mr.
Lighthizer, but we also insist that Republicans work with
Democrats to provide a lifeline to America's hard-working
miners who are now facing the possible loss of health care and
retirement benefits.
Mr. Lighthizer has an understanding about the impact of
unfair trade on America's manufacturers and workers that, in my
view, could be a valuable asset to the country. The country
needs a USTR who is going to stand up for our rights on behalf
of our workers and our businesses at the World Trade
Organization, who is going to partner with U.S. Customs and
Border Protection, the Department of Commerce, and the full
range of agencies that are responsible for trade enforcement,
to crack down on the rip-off artists, the cheats, who hurt our
workers and our businesses here at home.
After a campaign of shouting that the North American Free
Trade Agreement could be the worst deal ever, the President
came into office and said our trade relationship with Canada, a
NAFTA member, only needed, in his words, ``tweaking.'' The
President spent the campaign talking tough about China, but his
administration has largely been quiet on their plans when it
comes to China's flagrantly unfair trade practices.
So when I say that our trade policy needs to deliver
results and not just talk, that is why we need to get into
specifics today. My own view is that the agenda has to start,
particularly in this season of March Madness, with a vigorous,
full-court press for tough trade enforcement.
In my view, there are two prongs to effective trade
enforcement. The first is to fully enforce the trade laws here
at home. Foreign subsidies and dumping that harm American
workers have to be identified quickly and remedied, and that
requires strong enforcement at the border by Customs officials.
Goods made with forced labor have to be barred from entering
our country. Trade in stolen timber and other natural resources
that damage the environment and edge out hard-working Americans
in the forestry sector have to be stopped.
I particularly want to thank a whole host of my colleagues
who are here today who pushed very hard for toughening our
country's trade remedy laws, because now we are in a position
to have trade remedy sanctions that are more responsive to our
American producers who have been besieged by trade cheats.
The second prong of effective trade enforcement is holding
other countries to their commitments under deals that are
already on the books. That means enforcing labor obligations,
protecting the environment, or stopping countries from applying
discriminatory policies that block out our digital goods and
services.
So when it comes to aggressive trade enforcement, the U.S.
Government cannot deploy a full-court press with only half a
team. That is why a number of Senate Democrats have thought
that the hiring freeze was so short-sighted, because it leaves
resources on the sideline and suggests that the tough talk on
trade is not going to be much more than talk. So I hope that
the forthcoming budget does not put more trade enforcers on the
sidelines, because doing that would endanger good-paying
American jobs just to fund more than a $50-billion give-away to
defense contractors.
In order to maximize economic opportunities for our
exporters, our trade policy cannot end with effective
enforcement of existing rules. It also has to reach overseas to
dismantle foreign trade barriers that prevent American goods
and services from competing on a level playing field.
Here are the stakes: 140 million people are joining the
middle class every year, many of them in Asia. The fact of the
matter is, trade jobs in that part of the world provide us an
opportunity to pay better wages. They reflect a higher level of
productivity and value added.
What we say is--and I have heard many of my colleagues here
say it--what we are doing is growing things here, we are making
things here, we are adding value to them here, and then we ship
them somewhere. These opportunities are missed if we stay on
the sidelines while other nations negotiate trade deals that
advantage their exporters over ours.
This is especially true now in the Asia-Pacific region.
That is exactly what happens as we sit here this afternoon. As
we sit here today, Pacific Rim countries meet in Chile to
discuss trade in the region. The question is: where is U.S.
leadership?
With that said, whether it is through re-negotiating NAFTA,
looking to Asia, or working on any other trade deal,
transparency with the public and the Congress is essential. The
previous Congress passed a law that requires critical actions
to ensure that the public and its representatives in Congress
are active partners in efforts to negotiate and implement
future trade agreements.
But with the American people sitting in the dark with
respect to the specific actions the President intends to take
on trade, the first months of this administration leave Mr.
Lighthizer, if confirmed, with a steep hill to climb on
transparency. It is critical that the American people know
whether the President is advocating for trade policies to
create red, white, and blue jobs or, very frankly, to help his
own business interests. That is why I introduced, with a number
of colleagues from both chambers of Congress, the Presidential
Trade Transparency Act. The bottom line is, the administration
has talked mightily when it comes to trade, and so we have now
reached the time for action. That means more transparency, a
full-court press on trade enforcement, and playing offense
every single day in the tough global markets that we are
facing.
Mr. Lighthizer, I look forward to your testimony. I enjoyed
our meeting.
I thank you, Mr. Chairman.
The Chairman. Thank you.
[The prepared statement of Senator Wyden appears in the
appendix.]
The Chairman. Today I am being relieved of the duty to
introduce our nominee, although I think very highly of him.
Instead, we have two current Finance Committee members, both
from the State of Ohio, who will introduce Mr. Lighthizer.
However, before that we will hear from a very distinguished
friend and former chairman of this committee. I want to welcome
our good friend, former Finance Committee Chairman and Senate
Majority Leader, Senator Bob Dole. Good to see you today,
Senator Dole. We are glad to have you here.
[Applause.]
STATEMENT OF HON. ROBERT DOLE,
FORMER U.S. SENATOR FROM KANSAS
Senator Dole. Jiminy, maybe I will take the job, I do not
know. [Laughter.]
Well, 35 years ago I was chairman of this committee when we
passed the 1981 Reagan tax bill, and Bob Lighthizer was by my
side. I would say to my fellow Kansan Ron Wyden, and of course
Pat Roberts, if you need somebody who is aggressive and a
bulldog, he is seated on my right. His name is Robert
Lighthizer from the great State of Ohio, also the State of my
great-grandfather, who was raised on a farm in Montpelier, OH.
But I want to thank the committee for this hearing. I have
had the honor a number of times of introducing people to
various committees, and it has been bipartisan. I remember
introducing Vice President Senator Mondale to be Ambassador to
Japan. We both served on the Finance Committee, and we had
different views, but we were friends. It made a big difference.
So I am particularly honored today to introduce--he does
not need any introduction--someone I have worked with and
someone I know. I have watched his children grow up, and I know
him to be a man of complete honesty and integrity and, as I
said, a bulldog when it comes to getting things done.
He made me look good--hard to do, but he did it--because of
his work as director of this committee's staff in the late
1980s and the early 1990s. We had great success on many
difficult issues, and most of them--I would say 90 percent--
were resolved in a bipartisan way.
Bob Lighthizer did not work for me. No one worked for me;
they worked with me, for the people of our respective States. I
am certain that is the way you consider the outstanding members
of your staff. But this is a singular honor for me. I am older
than the total age of all of the committee. [Laughter.]
So I have been around a while. I have listened to arguments
and debates, and we have political parties, and certainly we
have different views. Neither party has all the wisdom. But I
think in this case, if you are looking for someone who really
understands what he is about to enter into, with your approval,
that is a fellow named Robert Lighthizer. So I thank the
committee for permitting me to be here and to say a good word
about my friend and my staff director.
So I hope that any--I do not understand some of the
problems raised, but I hope they can all be resolved, because
trade is important. I come from a farm State, Kansas, as Pat
Roberts knows, who is seated next to Senator Grassley. I know
all of you--I think most all of you--there are farmers in every
State. I do not care what crop it is, whether it is vegetables,
cotton, or wheat.
We would be lost without a strong advocate for agricultural
trade. Bob Lighthizer has listened to that speech for 40 years,
I think--not quite 40--so he understands the importance, but it
is not only agriculture, it is steel, which is important to the
Ohio delegation, both on the committee here, and other States,
whatever State it is.
Bob was a Deputy USTR, as the chairman has pointed out. He
was very successful. Many times when the Trade Representative
was then Senator Bill Brock from Tennessee, Bob Lighthizer
would attend Cabinet meetings. I have always felt that the
Trade Representative was a little underrated when it came to
the pecking order in the Cabinet, because none of us can say we
do not need trade in our States.
What we need is someone, as Ron Wyden has pointed out and
the chairman pointed out, who will hustle and get things done
and work out the differences. Again, that is my friend Bob
Lighthizer. Thank you.
[Applause.]
The Chairman. Well, thank you, Senator. Thank you, Senator
Dole.
Mr. Lighthizer, you could not have a better person come and
refer to you and support you than Senator Dole. We all love and
respect him.
We will turn to Senator Brown now at this point, then to
Senator Rob Portman.
OPENING STATEMENT OF HON. SHERROD BROWN,
A U.S. SENATOR FROM OHIO
Senator Brown. Thank you, Mr. Chairman.
I am not sure why Rob and I are doing this after the
distinguished Senator Dole did such a good job of introducing
him. Senator Dole, thank you so much. It was a pleasure to get
to hear about Montpelier, OH. Rob and I were both hoping we
would get to mention it first, that your great-grandfather was
born in Montpelier.
I appreciated the comments of the ranking member, and I
want to take a moment, before introducing Mr. Lighthizer, to
acknowledge the coal miners in my State and across the country
who are on the verge of losing their health care and the
retirement they earned over a lifetime of back-breaking work.
What have we done about it in Washington? Pretty much nothing.
Many of these miners were scheduled to be in this room today
until the snowstorm hit. These are the people we work for.
Right now, Congress is failing them. Two and a half months
into this year, this committee has yet to hold so much as a
hearing on this mine worker issue; I know it matters to Senator
Portman, Senator Toomey, Senator Casey, and Senator Warner on
this committee. These miners cannot afford to wait. We must act
sooner rather than later.
Today we are here to consider Robert Lighthizer's
nomination to be a U.S. Trade Representative. Mr. Lighthizer is
eminently qualified, as Senator Dole said, for this job. He has
a long history of fighting on behalf of American manufacturers
and, I would add, American workers. Mr. Lighthizer is a native
of my wife's hometown of Ashtabula, OH. Somehow, Bob Dylan, in
a song, rhymed Ashtabula and Honolulu. [Laughter.] But Bob
Dylan can do things like that, I guess.
Mr. Lighthizer is familiar with the industrial heartland
America; he knows the steel industry, as Senator Dole said,
inside and out. He understands how critical manufacturing is to
our economy. He knows that for too long, failed trade policy
hurt Ohio communities and left too many workers all over this
country behind. I look forward to working with him to chart a
new trade agenda that puts American workers first.
In addition to his time as a staffer on this committee and
for the USTR, Mr. Lighthizer has represented the U.S. steel
sector. He has defended American steel companies and their
workers against unfair trade practices, and I considered it an
honor to work with him on behalf of them over the years.
He understands the kind of trade policy we need, not only
to help our steel companies, but all American manufacturers and
their workers. Steel over-capacity must be a top priority for
the USTR. We note China has the capacity to make about half the
world's steel. It is something the administration has yet to
address; I am confident that Mr. Lighthizer will.
Mr. Lighthizer is the man to do this job, to design a new
trade policy that keeps President Trump's promises to American
manufacturers and American workers. The issue of his waiver
needs to be addressed. I hope this issue is resolved before the
mark-up.
As a fellow Ohioan, I am honored to introduce Robert
Lighthizer to this committee. Bob, thank you.
The Chairman. Well, thank you, Senator Brown.
Last, but not least as a witness, I will call on Senator
Portman, our distinguished colleague on this committee. So,
Senator Portman, if you will proceed.
OPENING STATEMENT OF HON. ROB PORTMAN,
A U.S. SENATOR FROM OHIO
Senator Portman. Thank you, Mr. Chairman. I too join my
colleague, Sherrod Brown, in being very pleased to be
introducing you, Bob, along with the Honorable Senator, Leader,
Chairman Bob Dole. I thought it was particularly fitting that
everybody in the room applauded, Senator Dole, when you said
you thought USTRs were underrated. That is right, you did not
say all of them. [Laughter.]
But as a former USTR, I am delighted that Bob Lighthizer is
willing to step up and take this job. I know we will have to
work out something, it sounds like, but we need him. I actually
think that the ranking member made some good points about the
urgency of this task, so I am glad that you are willing to do
it.
I am glad that we are here. You are a guy--although you are
a Floridian now--who does hail from the Buckeye State, and
Ashtabula is one of those parts in Ohio that has been hit hard
by unfair trade. You stood up, both in your roles in government
and in the private sector.
There are a lot of reasons that you would be good. One is,
you bring the experience that is needed right now. So you have
the Hill experience. You also have the experience at USTR and
the experience of working with the private sector on some of
these tough trade issues.
You are a Georgetown Law graduate, which we will not hold
against you, and you launched yourself into quite a respectable
private-sector career. I know you were at a big law firm here
when Senator Dole called up and said, ``Hey, I am looking for a
young, bright conservative to come join me here on the Hill.''
You have been Deputy U.S. Trade Representative under Ronald
Reagan and USTR Bill Brock, one of the great USTRs. He was
underrated.
In that role, you got the whole view, because at that time
the deputies at USTR really had a broad panoply of
responsibilities, where now it is divided more in geographic
areas; there is a separate deputy for agriculture and so on.
But when you were there, you had to look at all the issues, and
I think that is a great experience.
You have been an advocate for balanced trade--and the
importance of trade exports was talked about today, and that
trade expansion is critical to middle-class jobs in my home
State of Ohio. Twenty-five percent of our factory workers have
export jobs; we want more of them. They are better-paying, 18
percent on average more, with good benefits. But you have also
understood the importance of having balance: in other words,
rigorously enforcing our trade laws and trade enforcement. I
think that is the right balance now. Your work, particularly on
behalf of our steelworkers, I think, gives you that sensitivity
to know that we have the best workers in the world; we can
compete, but it has to be on that level playing field. I think
that experience is critically important right now.
It is a difficult issue, trade; lots of politics around it.
And even around this committee, looking at who is here today,
there is a different point of view represented by every seat
here. Obviously it is an issue that came up during the
campaign. It comes up in every campaign. There is a lot of
misinformation out there, in my view, about trade.
Again, someone who has experience and credibility in
enforcing trade laws and stepping up for people, like those
steelworkers you stepped up for, I think, has some credibility
to be able to promote the right kind of trade policy.
I have also noticed that members of the new administration
have some strong views on trade. Sometimes those views are not
always the same, I have noticed too. Frankly, I think in my
view, they are going to benefit from having someone with your
experience and your perspective to be able to help coordinate
that effort and be a better bridge to Capitol Hill, because
that is a critical part of this job. USTR was created by this
committee, the Ways and Means Committee, and by the Congress.
It has a unique relationship and responsibility to these
committees, including being able to pass trade agreements.
I know you have negotiated a few yourself and have had to
negotiate also, therefore, with Capitol Hill. So Bob is
tenacious, he is creative, he is seasoned, he is knowledgeable,
and I very much look forward to working with him as our next
U.S. Trade Representative.
Thank you, Mr. Chairman.
The Chairman. Well, thank you, Senator.
Welcome, once again, Mr. Lighthizer. Before giving your
opening statement, would you like to introduce any family
members who are here with you today?
Mr. Lighthizer. Well, thank you, Mr. Chairman. I actually
have my daughter and my brother here today.
The Chairman. Well, great. We welcome then.
Mr. Lighthizer. I would say, when I was before this
committee a long time ago to be Deputy USTR, my daughter was
about 18 months old and spent part of the hearing sitting in my
lap. She heard me sitting there and walked up and crawled into
my lap.
Senator Dole. Bob, would you yield?
Mr. Lighthizer. Absolutely.
Senator Dole. Mr. Chairman, I am going to excuse myself,
but put your money on the Jayhawks. [Laughter.]
The Chairman. Senator Dole, it has been a privilege to have
you here, as always. So, God bless you. It has been a blessing
to have Senator Dole once again up here in the Senate. We all
respect him.
Mr. Lighthizer, you can proceed.
STATEMENT OF ROBERT E. LIGHTHIZER, NOMINATED TO BE UNITED
STATES TRADE REPRESENTATIVE, WITH THE RANK OF AMBASSADOR
EXTRAORDINARY AND PLENIPOTENTIARY, EXECUTIVE OFFICE OF THE
PRESIDENT, WASHINGTON, DC
Mr. Lighthizer. Mr. Chairman, Ranking Member Wyden, members
of the committee, it is a great honor for me to appear before
you today as President Trump's nominee to be the U.S. Trade
Representative.
I am particularly pleased to be in this hearing room, where
I have so many fond memories, and to be here with my former
boss. It is fair to say that I had my formation working for
Senator Dole and this committee in the 1970s and 1980s. I was
able to work for truly exemplary U.S. Senators on matters of
great importance.
In addition to trade, I assisted on tax policy, Social
Security reform, budget cuts, welfare bills, and much more. I
would be remiss if, in addition to Senators Dole and Grassley,
I did not mention Senators Long and Moynihan--all truly great
men.
After I left here, I became Deputy U.S. Trade
Representative. I worked for President Reagan and Senator Bill
Brock, another wonderful boss. I have often thought how lucky I
am to have had such mentors and role models.
While at USTR, I worked on agricultural issues, industrial
issues, services, and trade policy. I negotiated several trade
agreements. Yes, mostly they were bilateral. Those also were
exciting times.
For the last many years, I have practiced international
trade law. The vast, vast majority of my work has been
representing U.S. manufacturing companies opposing unfair trade
in this market and opposing the non-economic expansion of
production capacity around the world.
As many of you know, I have written and talked often about
the challenges facing U.S. companies and workers and have
espoused strong enforcement of our trade laws. I have also
worked to preserve U.S. policies at the WTO and the OECD.
I agree with President Trump that we should have an
``America first'' trade policy and that we can do better in
negotiating our trade agreements and be stronger in enforcing
our trade laws.
I further believe we need an international trading system
that functions the way it was negotiated and that the United
States must be ready to work with like-minded trading partners
to ensure fair trade and to encourage market efficiency.
If confirmed, I hope to work with this committee, with the
Ways and Means Committee, others in Congress, President Trump
and those in the administration, and all stakeholders to
develop and implement a policy that increases trade, grows the
economy, and makes trade freer and fairer, but most
importantly, that improves the economic well-being of our
workers, farmers, ranchers, and businesses, large, medium, and
small. If confirmed, I hope in the end to be judged by whether
I aided all of you in accomplishing this goal.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Lighthizer appears in the
appendix.]
The Chairman. Thank you, Mr. Lighthizer. We appreciate your
willingness to take on this really difficult assignment.
Now, I have some obligatory questions that I ask of all
nominees.
First, is there anything that you are aware of in your
background that might present a conflict of interest with the
duties of the office to which you have been nominated?
Mr. Lighthizer. There is not, Mr. Chairman.
The Chairman. Do you know of any reason, personal or
otherwise, that would in any way prevent you from fully and
honorably discharging the responsibilities of the office to
which you have been nominated?
Mr. Lighthizer. I do not, Mr. Chairman.
The Chairman. Do you agree, without reservation, to respond
to any reasonable summons to appear and testify before any duly
constituted committee of Congress, if you are confirmed?
Mr. Lighthizer. I do. I do.
The Chairman. Let me just ask one other question. Finally,
do you commit to provide a prompt response in writing to any
questions addressed to you by any Senator of this committee?
Mr. Lighthizer. I do, sir.
The Chairman. Well, thank you, sir. I appreciate it.
Let me begin the questioning. In the 28 years USTR has
published the Section 301 report, India has received the worst
or
second-worst designation every year. Similarly, the U.S.
Chamber's International IP Index has ranked India worst or
second-worst every year it has been published. Now, what can
you do differently to secure real intellectual property rights
protection in the country of India?
Mr. Lighthizer. Mr. Chairman, let me say first of all that,
if I am confirmed, I promise a very robust protection for
intellectual property rights. I realize this is very important
to the chairman and the members of this committee. I think
anything less stifles innovation and science and really
compromises what is a competitive advantage of the United
States, that is to say, innovation and science. I think we need
a policy that is as aggressive as we can have.
There are a whole lot of areas where we are at risk in
intellectual property protection, including with India: slow
and inefficient patent protection, theft of intellectual
property, short patent protection, insufficient property
protection. I expect to work with the committee in any way I
can with respect to India. Specifically, I would like the
thoughts of the committee and the staff. I realize the
importance of the issue, and I am fully committed to protecting
intellectual property rights.
The Chairman. Well, thank you. I remain disappointed that
under the last administration not a single intellectual
property case was brought under the WTO or our bilateral
agreements, despite well-documented examples of failures by a
number of trading partners to live up to their commitments. If
confirmed, will you commit to finally taking steps to not only
identify, but effectively address these trade violations?
Mr. Lighthizer. I absolutely will. I expect that we are
going to have a very rigorous enforcement policy. I expect to
bring as many actions as are justified, both at the WTO and in
our bilateral agreements. I mean, this will be a point of
emphasis. I think the President asked me to do this job, in
part, because of my enforcement background. I expect to do it
across the board.
The Chairman. Well, thank you. It is well documented that
Canada refuses to enforce intellectual property rights for the
in-transit cargo destined for the United States. In fact, the
USTR's most recent national trade estimate has documented this
issue as well. Do we have your commitment to address this issue
in your discussions with Canada, and will you ensure that other
U.S. departments and agencies are made aware of the importance
of the issue in their engagements with Canada, including the
ongoing discussion between Canada and the Department of
Homeland Security regarding cargo pre-inspection?
Mr. Lighthizer. Absolutely, Mr. Chairman. I am totally
committed. I really do believe that innovation is the central
nervous system of the modern economy, and I am fully committed
to bring every action that is justified across the board. I
will certainly make sure that other departments in this
government realize how committed we are to this area.
The Chairman. Well, thank you.
Senator Wyden?
Senator Wyden. Thank you very much, Mr. Chairman.
Let me start, if I could, with lumber and forestry, Mr.
Lighthizer. As you know, and as we talked about in the office,
this has been the longest-running battle since the Trojan War.
It has gone on for decades and decades. The Canadians have
subsidized their stumpage, they have used special procedures to
force our trade agencies to weaken trade remedy orders on
softwood lumber.
I would like to hear specifically--and 25 Senators, equally
divided between Democrats and Republicans, have joined in
efforts to get the executive branch to be serious about this. I
will tell you, I thought it was unfortunate that the President-
elect missed an opportunity when Prime Minister Trudeau was
here when he said, gee, all we need with Canada is a tweak. How
are you going to get tough with Canada with respect to softwood
lumber and finally ensure that our workers in these key
industries that pay good wages get a fair shake?
Mr. Lighthizer. Well, Senator, first of all, I would say
that I have heard a variety of issues with respect to Canada
that have been raised by Senators as I have gone around and
spoken with them, and certainly this is at the top of the list,
but there have been a variety of things. I think there are a
number of issues we have to address with respect to Canada.
Senator Wyden. I want to make sure I heard that right. Did
you say this would be at the top of your list as it relates to
Canada?
Mr. Lighthizer. That is what I did say.
Senator Wyden. I like that answer. Go ahead, please.
Mr. Lighthizer. Right now, as you say, there is a long
history of this. There is a long history of litigation and
memorandums of understanding and trying to work it out
temporarily. It is a very serious kind of intractable sort of
problem. It has enormous political consequences on both sides
of the border.
Right now we are in the process of litigation, which is at
the Department of Commerce, of course, not at USTR. But I
expect to be involved. I expect to try to work out a solution.
I know the basic parameters of it. I know that quantitative
restraint is what the domestic industry wants, and wants in
both parts of Canada. I certainly will work with the Senator
and with his staff on that. I know the priority, I know the
importance, and I know the history of it.
Obviously, if this litigation goes forward and if we have a
negotiation, another negotiation, on this subject--I do not
want to pre-judge how the negotiation will come out, but I know
in my mind that it is very important and that the last
agreement really did not work the way it was supposed to work,
and that we have to have a new one, either litigation or a new
agreement, that does work.
Senator Wyden. Let me get in one other question. I am going
to be in rural Oregon this weekend having town hall meetings,
and being able to tell them that the person who is being
considered as the nominee for our U.S. Trade Representative has
this at the top of the list makes a difference, and I
appreciate it.
Let me turn to the question of digital trade, because the
Internet sector alone accounts for more than 5 million American
jobs. Here the challenge--and I think we touched on it in the
office--is we have to tackle these foreign efforts to require
American companies to store data where governments want the
data stored, not where it makes sense for the private economy,
not where it makes sense for economic or technological reasons.
I would like to hear your thoughts about how you are going
to help this sector that accounts for 5 million American jobs
get a fair shake in the digital arena overseas. As you know,
these are not just cloud-based services, but a variety of other
services. What are you going to do to make sure that digital
trade, American digital trade, gets a fair shake in global
markets?
Mr. Lighthizer. Well, Senator, first of all I would like to
commend you for your long, long-term commitment in this area. I
talked about innovation being the central nervous system. One
wise U.S. Senator once referred to the Internet as ``the
shipping lane for 21st-century goods and services.'' Does that
sound remotely familiar to you?
Senator Wyden. I know that guy! [Laughter.]
Mr. Lighthizer. I say that by way of emphasizing how
important I think this area is. I think there has been headway
that has been made, and Ambassador Froman gets credit for that.
In terms of the negotiation--and you and your colleagues in
terms of putting pressure on it--it is essential to moving
forward that we have free flow of data and that you can store
the data where it makes sense economically. So I am fully
committed. I expect to use trade agreements to pursue this goal
and the WTO, where appropriate. So I understand. I think it is
very important, and it is the sort of thing that we have to
include in our trade agreements.
When we talk about NAFTA and other agreements that need
updating, this is something that did not even exist when these
agreements were first negotiated. So I really do think this is
important. I commit to you that it will be something that we
will prioritize.
Senator Wyden. Thank you very much.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Stabenow?
Senator Stabenow. Thank you very much, Mr. Chairman.
Mr. Lighthizer, welcome. I enjoyed very much our
conversation in the office. It is good to see you again. I look
forward to seeing your waiver worked out on a bipartisan basis.
I am very appreciative of your work and comments you have made
in the past. We have some important issues on trade to address
that affect our workers.
We talked about Michigan and both making things and growing
things: agriculture, manufacturing, all of our businesses. I
have a saying that, as we talk about trade, we should export
our products, not our jobs. I think that is something that you
would agree with, so I appreciate that very much.
I have to say, though, I think you have a very tough job,
and I want to talk to you about that, because as USTR you are
responsible for coordinating, monitoring, and enforcing trade
issues, existing trade agreements, future trade agreements.
We in Michigan want a level playing field on trade, from
intellectual property rights--as the chairman talked about with
China--or trade barriers with Japan, or currency manipulation,
which you have spoken extensively about in the past.
But here is where I am deeply concerned right now. You are
out, fighting for American workers and businesses, if you are
confirmed. But your future boss, President Trump and his
family, have business interests all over the world.
My constituents and I are very worried about what happens
when the interests of American workers and businesses, in terms
of enforcing our trade laws, are put at odds with the business
interests of our President or his family. I wonder if you might
speak about how you stand up for American workers and
businesses in that kind of a situation.
Mr. Lighthizer. Well, thank you, Senator. First of all, in
all my conversations with the President--I have been honored to
have several--he speaks very strongly on enforcement and
getting the best possible deals for American workers, American
farmers and ranchers. His own business interests are never
remotely referred to. I really do not personally know what they
are. The President is completely committed to the ``America
first'' agenda, which I subscribe to and which I believe the
Senator subscribes to.
So I mean, I am honored to have this President nominate me
for this job, and I think that working together, all of us and
President Trump, we have a reasonable likelihood that we can
change the paradigm and have it be better for all of our
workers and all of our farmers. I have never seen any hint in
any way of anything to the contrary. I think his motivations
are absolutely spectacular.
Senator Stabenow. And I appreciate that very much. Here is
my concern, and it is a very real, sincere concern. The
President said on day one he would label China a currency
manipulator. You have made very strong comments in the past:
China engages in currency manipulation, China is by far our
biggest trade problem. This is an issue that I have been
working on for years, both with China and with Japan and other
countries.
We have seen the President say that the grand champion of
currency manipulation is China. But then we see, on February
24th, Secretary Mnuchin signals the White House is not sure
what they are going to do on currency manipulation. But here is
the concern that I have on that.
Last week, China, after 12 years in court, back and forth
with Donald Trump and his family, has given provisional
approval, in an uncharacteristically swift manner, to 38 new
trademarks for the Donald J. Trump brand to be put on
businesses, construction businesses, all kinds of businesses,
all kinds of products in China, and we hear now that it is not
clear what our administration is going to do about China.
So maybe one has nothing to do with the other, but it is
very concerning to me. We have, in my judgment, a need to be
very tough on China and what they have done. We have lost close
to 5 million jobs in our country as a result of currency
manipulation and related practices.
A good number of those were in my State of Michigan, and
now we have a situation where the President is benefitting by
business deals and new trademarks to put his name on businesses
and products in China. How do you move forward on that? I mean,
how do you make those calculations as to what to do? As you
have said--and I appreciate very much and agree with the
statements you have made in the past about China being a
currency manipulator. So what do we do with this?
Mr. Lighthizer. Well, Senator, first of all, in the past it
is my judgment that China was a substantial currency
manipulator, and I think we have lost a lot of jobs in the
United States because of it. And by the way, it is not just
China. There are other countries that have done it, as you know
well and have experienced through your constituents.
Senator Stabenow. I agree, yes.
Mr. Lighthizer. Whether China is manipulating the currency
right now to weaken it is another question, so that is up to
the Treasury Secretary. So I----
Senator Stabenow. And I understand that. I guess my
question is, as you move forward in a very tough job--and I
believe you are equipped to do that--how do you handle the
situation at this point in time where we have the President,
his family, with business interests in countries where we need
to be tough on that country in order to protect American jobs?
Mr. Lighthizer. Well, Senator, I do not know anything about
the President's businesses or anything about trademarks or
anything like that.
Senator Stabenow. Would it help if you did? I mean, in all
sincerity there are proposals--Senator Wyden has one--that
would require making that known. If you knew that, would it
make it easier to be able to, from your perspective, do your
job and make sure there was not a conflict?
Mr. Lighthizer. Absolutely not. I do not want to know
anything about it. I think, to be honest, with the time I have
spent with the President, any suggestion at all that he would
do anything that is not in the national interest first, middle,
and last, is just not correct.
I would like, if I could, to have you and the ranking
member, whatever things you have to worry about--and my job is
tough; your job is tougher, to be honest. Your job is tougher,
your responsibility is greater. This idea that this President
would do anything untoward is so far out of the realm of
possibility. I say this, and I mean it sincerely: it is an
honor for me. This is a person who is completely committed to
nothing but helping America and the American workers and
farmers and ranchers. It is just----
Senator Stabenow. And I know my time is up, and I respect
and understand. I would just say, he promised on day one that
China would be labeled a currency manipulator. It is after day
one, and that has not happened yet, but other things affecting
his business have, and that is deeply concerning to me.
The Chairman. All right.
Mr. Lighthizer. Let me say--if I could just say, Mr.
Chairman, I believe that if your concern is that the President
would somehow not defend America against China because of
trademarks, I wanted to let you be assured that that is not the
case.
I would also say that I will bet you, you and I will sit
down in your office between now and the time I leave, and you
will say, ``Bob, you were right; he really is going to change
the paradigm on China.'' I believe he is going to change the
paradigm on China. If you look at our problems, China is right
up there. So let me assure the Senator, this is not going to be
a problem.
Senator Stabenow. Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Roberts?
Senator Roberts. Thank you, Bob, for coming in to my office
and having a nice visit. Thank you for the work that you have
done on this committee. Thank you for your good work on behalf
of a Kansas legend, a national legend, Senator Dole.
Last month, members of the Senate Finance Committee met
with Mr. Peter Navarro and Mr. Steven Greenblatt. They are new
members of a new White House Trade Council. They read to us the
administration's marching orders for trade. They had four goals
and 13 policy objectives. Since that meeting, the list has now
grown to 24. On this list of goals, agriculture was listed as
#3. Given the rough patch that we are in today, given a 16-year
low in prices and other considerations, I believe it should be
#1.
Mr. Chairman, before I ask a question, I would like to
submit the administration's list of 24 trade priorities for the
record.
The Chairman. Without objection.
[The list appears in the appendix on p. 117.]
Senator Roberts. I think you have the experience; you know
this. Most trade agreements I have worked on since I have had
the privilege of public service have been over-criticized and
they have been over-sold and somewhere in between, while we
tried to work them out. But on this list of 24, there are
several I could mention, but the one that really stuck out to
me was Country of Origin Labeling.
That is a tough issue in the Agriculture Committee and in
the agriculture issue list. But we have been down this road
before. We fixed the issue of COOL in 2015. We do not need to
go down that road again. We narrowly escaped about $4 billion,
somewhere between $3.5 and $4 billion, in retaliatory tariffs
against the United States.
I do not think that we need a constantly changing list of
key elements of a model trade agreement. That may be a good
thing to talk about if we had time to talk about it. We do not.
What we need is a U.S. Trade Representative confirmed--that is
you--and in place who will embark on a robust trade policy.
That is you. You have the experience, you have the talent, and
you have the commitment.
Now, the U.S. has withdrawn from TPP and the President has
expressed major concerns with NAFTA. The administration stated
it plans to start to negotiate bilateral trade agreements that
you refer to. It seems to me that we need to move very quickly.
I want to make it very clear to you and to the administration:
agriculture must be a key part of these conversations.
When I met with you last January, you assured me that you
would defend agriculture as trade problems arise. I would like
to remind you that I told you, just take it a step further: be
the champion of agriculture from the start so we do not get
into these problems.
Now last month, as chairmen of the Agriculture Committee,
we--Senator Stabenow and myself--chaired a field hearing. We
had 21 witnesses. Every one brought up the issue of trade. Last
year, the U.S. exported over $103 billion in agriculture goods.
In 2016, agriculture exports accounted for approximately 20
percent of the agricultural production. Agriculture had a
global trade surplus of $20 billion.
Understanding the importance that trade has on the
agriculture industry and the rough patch we are in, will you be
a champion for agriculture and get commodities moving on the
global market?
Mr. Lighthizer. Yes, Senator, I will. I have a long history
with agriculture. I worked on it when I was at USTR. As the
Senator knows, I negotiated the Reagan administration grain
agreement with the Soviet Union in 1983. You will also recall
that President Carter cut off grain sales to the Soviet Union,
and President Reagan decided to re-implement those sales, and I
was called on to negotiate that agreement and did do it.
My 30- or 40-year contact with Senator Dole is some
indication--and I had a variety of very memorable meetings with
Senators, and it was a joy to go around and meet so many
Senators and talk to them about the issues that matter to them.
But I heard one very memorable comment that one Senator
made, which was, ``As you go through doing your job, remember
that you do not eat steel.'' That is something that stuck with
me. So I assure you that we will prioritize steel. We will
prioritize agriculture, both in terms of maintaining what we
have and in terms of getting additional market access.
Senator Roberts. I cannot imagine the Senator actually
stating that to you. I just cannot imagine who that might be.
We have grain on the ground out in Kansas. If we do not
sell agriculture commodities over the next several months--we
are at a 16-year low in prices--we will have a problem on our
hands. We all will have a problem on our hands.
If you are confirmed, can you tell us right now what
countries you will be having conversations with to sell not
only what our country makes, but also what we grow?
Mr. Lighthizer. Well, I think that there are a variety of
priorities in terms of what our negotiations are, but it is
clear that agriculture would have been a beneficiary of TPP.
I think that as we move forward and negotiate new
agreements, we have to go to those countries, among others, and
I would list, of course, Japan as being a primary target for a
place where increased access for agriculture is important.
It is hard for me to understand why we tolerate so many
barriers to agriculture trade when America is the number-one
producer of agricultural products. We are the best in the
world. If you believe, really, in trade and market efficiency,
you just have to believe agriculture should be even more of a
positive than it is. It is market distortions that are keeping
that from happening, so I think opening up markets, more
markets for agricultural sales, is a very high priority for us.
Senator Roberts. I appreciate that.
My time has expired, Mr. Chairman.
The Chairman. Thank you, sir.
Senator Menendez, Senator Cardin was here and has agreed to
allow Senator Toomey, who has to leave, to question. Would you
be willing to do that?
Senator Menendez. Yes.
The Chairman. Senator Toomey, then. Thank you. Thank you
for your kindness. I appreciate it.
Senator Toomey. Thank you, Mr. Chairman. I want to thank
the Senators from Maryland and New Jersey for their kindness. I
do appreciate that.
Mr. Lighthizer, welcome, and thank you. I enjoyed our chat
earlier. There is no question, you have a terrific background
for this job and a great deal of expertise and knowledge. I
would like to focus very briefly on a couple of narrow,
specific issues and then on a big macro issue that I think is
important and I am concerned about.
The former are the two primary reasons that I was not able
to support TPP in the form that it had. One was the lack of
protection for intellectual property, especially of biologics,
an incredibly important new field, an area where we need to get
this right. Intellectual property is a form of property that
should not be stolen, like any other kind of property, so I
hope we will do a better job in the future on that.
I would like you to add an item to your list of Canadian
priorities, and that is, as I am sure you know, the Canadians
are very resistant to allowing in American dairy products.
Pennsylvania is a big dairy-producing State, and we could do
quite well selling dairy products to Canada, so I would just
ask you to consider putting that on your list.
The macro thing I would like to address is some worrisome
signals that I perceive from the administration. I think Peter
Navarro, who is the Director of the National Trade Council, has
been pretty clear that one of, if not the primary goal of trade
policy, is going to be to reduce trade deficits.
Now, if you become the U.S. Trade Representative, of course
you will be responsible for negotiating the deals that
accomplish whatever these goals are. I am concerned that this
is the wrong top priority. I am concerned because I do not
believe that trade deficits are inherently a serious problem.
I think if you choose to address reducing deficits by
expanding American exports, that is great, and I am sure that
will be one of your goals. We certainly want to tear down
barriers to American products.
The problem is, we have also gotten very clear indication,
at least from Mr. Navarro, that there will be an effort also to
reduce imports, which is another way to reduce the size of the
trade deficit, and I think that would be a big mistake, for
several reasons.
One is, it would invite retaliation. It would almost
certainly result in retaliation that would diminish American
exports, and that would certainly be very bad for us. Second,
whatever mechanism one uses to reduce imports, whether it is
quotas, tariffs, or bureaucratic hurdles that foreign exporters
cannot get over, the net result is fewer choices for American
consumers--higher costs, fewer choices, fewer options.
Finally, I would just stress that the fact is,
historically, trade deficits do not harm manufacturing, broadly
speaking, and they do not cause unemployment. I have a chart
here that illustrates this point, I think, pretty well.
The red line is the line of U.S. manufacturing output,
adjusted for inflation. And as you can see on the far right,
the red line is back up to its all-time high, which is to say
that the United States of America is manufacturing more today
than we ever have in the history of the Republic.
Now, we do it with fewer people, which is mostly a function
of automation, but manufacturing is at an all-time record high.
What is even more stunning, though, is that there is no
correlation between a reduction in manufacturing and an
increase in the trade deficit. In fact, it is the exact
opposite.
The blue line on this graph, as it descends from the upper
left, reflects increasing deficits. As you can see, it happens
at the same time that manufacturing output is going up. Then
when the blue line reverses and the deficit gets smaller, as
the blue line goes up, the red line of manufacturing output
goes down.
So there is this pretty consistent inverse relationship,
actually, between the size of our trade deficit and
manufacturing output. I think it is probably because when the
economy is strong, we are manufacturing more, and when the
economy is strong we are also buying more products.
The second chart I want to show illustrates a similar point
with respect to unemployment. Again, you notice it is the exact
same blue line. That is the trade deficit line, again, the
deficit getting larger as the line goes downward to the right.
As you can see from the period from 1992 to roughly the
recession around 2001, as the trade deficit was growing, the
unemployment rate was declining. Again, the relationship
continues: when the trade deficit has diminished, as it did
significantly in 2009, unemployment went through the roof. Then
once again, the unemployment rate has declined in recent years
while the trade deficit was roughly level.
So we have learned there is a way to reduce the trade
deficit: have a recession and you will reduce the trade
deficit. I know that is not what you want. I know that you do
want to increase our opportunities to export and sell our
products overseas.
I would just urge you to consider making the higher of the
priorities not the reduction in the deficit, but rather the
mutual elimination of trade barriers, the expansion of trade,
and certainly, of course, opening up foreign markets for our
products.
The Chairman. Thank you, Senator. Your time is up.
Senator Menendez?
Senator Menendez. Thank you, Mr. Chairman. Ambassador
Lighthizer, congratulations on your nomination. Let me ask
you--I am one who believes that we should not compromise our
values in order to get a trade agreement. If anything, we
should be using those agreements to further our values
internationally.
As you may know, when this committee was debating Trade
Promotion Authority legislation 2 years ago, it passed my
amendment that barred fast-track procedures for any trade
agreement with a country on Tier 3 of the State Department's
Trafficking in Persons Report, a group of countries that fail
to take any action to combat sex trafficking and forced labor,
and that was a bipartisan vote on the amendment.
Now, following that amendment, from my view, we saw an
unprecedented politicization of the TIP report, where countries
were upgraded based on unrelated factors, one of those being
trade, in my opinion, instead of their efforts to combat human
trafficking.
Can you commit to us that, if confirmed, you will not take
any action to attempt to influence the Trafficking in Persons
report?
Mr. Lighthizer. Well, I would say first of all, Senator, I
obviously condemn human trafficking. I know that you have been
involved with this. I know that Senator Cardin has also been
involved with it. I believe it will be the strong policy of
this administration--although it is not in my area--to do what
they can to stop human trafficking.
In terms of what priorities I have in negotiating trade
deals, I can guarantee that I will work with you and with
Senator Cardin and other interested members of the committee to
make sure that as we move forward, your specific views on this
issue are reflected in the sorts of things that I----
Senator Menendez. I appreciate that. Let me, since my time
is limited and I have several topics, pose a very narrow
question: will you commit to the committee that you will not
use your position as the U.S. Trade Ambassador to try to affect
the Trafficking in Persons Report?
Mr. Lighthizer. I will make that commitment.
Senator Menendez. All right. Thank you.
Do you believe that the administration will seek to
negotiate trade agreements with a country currently or recently
on Tier 3 of the TIP report?
Mr. Lighthizer. I do not know the answer to that. I will be
guided by the opinions of this committee and the Ways and Means
Committee, as well as the President, on what our targets are
for negotiations.
Senator Menendez. Well, the reason I asked that question is
because the law is clear: we are not supposed to be engaging
with a country that is on Tier 3. So if there is an intention
to do so, it would be in violation of the law, unless again the
report is manipulated to allow a trade agreement to take place,
even in the face of human trafficking going on in that country
to the level of a Tier 3. So I would hope that that would not
be the case.
I know that the chairman raised the issue of India with
you, and I want to echo his concerns. I think that there is a
great opportunity for us to build greater economic ties with
India, but I have a real problem with their lack of protection
of intellectual property rights, and for the United States that
is a critical element, whether in the technology field or in my
home State of New Jersey, which is the medicine cabinet to the
world in terms of a growing biotech and pharmaceutical
industry. So in that regard, on multiple occasions I have
raised the issue of ensuring regulatory protection of biologics
in our trade agreements.
The Trade Promotion Authority requires U.S. trade
negotiators to ensure ``that the provisions of any trade
agreement governing intellectual property rights reflect a
standard of protection similar to that found in the United
States under U.S. law.''
Such a level of protection enjoys strong bipartisan support
from Congress, as our highly innovative biopharmaceutical
industry, as well as the broader high-tech industry, supports
millions of high-quality jobs, including hundreds of thousands
in my State of New Jersey.
Will you ensure that any U.S. free trade agreements meet
this Trade Promotion Authority requirement, raising global
standards to those of the United States?
Mr. Lighthizer. I am familiar with the issue, and that
certainly is my position. I will do everything I can to have
new trade agreements reflect that standard, that objective.
Senator Menendez. I appreciate that answer. Given that the
U.S. law provides for 12 years of data protection for
biologics, would you commit to pursuing an equivalent level of
protection in future trade agreements?
Mr. Lighthizer. I have had conversations with several
members. I know that there is a split on this. I am certainly
with the chairman on this issue, which is to say, yes, that
would be my objective.
Senator Menendez. And I would just simply say that in my
view that is in line with what Trade Promotion Authority says
under the law, to bring it up to a standard under U.S. law,
which is 12 years. So, thank you for your answers.
The Chairman. All right. Let me just see here. I think it
is Senator Cardin next.
Senator Cardin. Thank you, Mr. Chairman.
Mr. Lighthizer, welcome. Mr. Chairman, I have known Mr.
Lighthizer for a long period of time. I have a great deal of
confidence in his ability to negotiate and to stand up for
enforcement of American trade laws. So I thank you for your
willingness to take on this extremely important public service.
I know it is a sacrifice, and we thank you very much for being
willing to do this.
I will comment that we do need a strong USTR to enforce our
antidumping laws and to deal with illegal subsidies. Although
you cannot eat steel, it does provide good jobs. If we had more
steel jobs, our entire economy would be stronger, including the
agricultural sector.
So I thank you for your efforts on behalf of American
steel, and I hope that you will use that talent to deal with a
fair trading system for all of America's producers,
manufacturers, and farmers.
I would also point out in that regard--and I would say one
other thing, if I might, Mr. Chairman, on a personal basis.
Bob's brother Jim is here. Jim Lighthizer is a distinguished
public servant in Maryland. He held the office of county
executive in Anne Arundel County, one of our largest counties,
so it is a family of public service, and it is wonderful to see
his family members here.
The Chairman. Well, we certainly welcome the family, every
member.
Senator Cardin. As Senator Portman pointed out, the USTR
and our trade laws are a delegation by Congress to your office,
and we express ourselves through TPA. And we announce several
principal negotiating objectives, and we expect the USTR to
comply with the delegation and the objectives given to you by
Congress. Let me go over a couple of those.
In the most recent Trade Promotion Authority bill, we put,
as a principal negotiating objective, compliance with anti-
corruption commitments. Of course, we were negotiating TPP. We
were dealing with countries that are not democratic countries,
and we were very concerned about good governance and anti-
corruption.
We now have seen a spread of corruption among many
countries in the world. Do you commit to carry out the Trade
Promotion Authority direction that in trade agreements we will
carry out anti-corruption commitments within the trade
agreement?
Mr. Lighthizer. Absolutely.
Senator Cardin. Thank you.
We also passed, in the Trade Promotion Authority, an
amendment that was offered by Senator Portman and me as it
relates to our European partners. It is called the anti-BDS
provision, which requires the Trade Representative to get
commitments from our trading partners in Europe that they will
not sponsor any boycott, divestment, or sanction efforts
against the state of Israel.
Do you also commit that you will comply with that principal
negotiating objective that was included in the congressional
act?
Mr. Lighthizer. Absolutely, Senator.
Senator Cardin. Thank you for that.
Third--and this has been commented on by many of us--there
is now currently an effort to try to change our tax code so
that we can get a border adjustment which would be fairer to
American manufacturers. We have always included in our Trade
Promotion Authority an effort by the USTR to get border
adjustment comparable to what our trading partners have on
products that enter their market for our products entering
their market. The difficulty, of course, is that we have not
harmonized with the international community in the use of a
consumption tax.
I have introduced a progressive consumption tax that is
patterned after what is accepted internationally as a border-
adjusted tax. It is difficult to see us winning too many cases
in the WTO with something that is an income tax that we call a
consumption tax, so I just urge you in your position to give a
realistic assessment to those of us in Congress as to what is
likely to be border-adjusted so that at long last we can try to
set up a level playing field for American manufacturers and
producers in the international marketplace as it relates to tax
burdens.
Mr. Lighthizer. Right. Thank you, Senator. Yes, I have
spent a lot of time on this issue over the years. I was
involved in DISC and FSC and all these things at various times.
I do not know what the right answer is, but it is a problem, in
my judgment, this disequilibrium between direct and indirect
taxes.
I do not view it as having any real economic or legal
basis. I think it is so serendipitous and unfortunate from the
point of view of the United States, so I would look forward to
working with you.
Senator Cardin. I appreciate that.
The last point I would make, Mr. Chairman, is that we do
not do so well in the World Trade Organization on a lot of
these legal cases. We have not done well on border adjustment
with the manufacturing credit that you referred to, and I do
not know how well we could do on the tax proposal we are
talking about.
I do know, though, on enforcing our antidumping laws, it
would be very helpful if, in the bilateral agreements, we had
specific references to the enforcement of U.S. law in that
bilateral rather than relying on a case within the WTO. So I
would just encourage you, as you do these trade agreements,
knowing your reputation for enforcement, that we include
enforcement sections in these bilateral agreements.
Mr. Lighthizer. I agree completely with you, Senator.
Senator Cardin. Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Grassley?
Senator Grassley. Sorry I missed your opening statement,
because I had to go to the floor to speak about the Supreme
Court justice hearing we are having next week.
So I thank you, Mr. Chairman, for holding this hearing, and
I am glad that we are moving forward with Mr. Lighthizer's
nomination. We need to get him in place at the USTR, because it
is a very important job and a lot of negotiations are coming
up. I have enjoyed working with this agency over the years and
respect their unmatched expertise on trade issues.
As everyone on this committee knows, Congress set
negotiating objectives for trade agreements when we passed TPA
2015. It is a very important piece of legislation for getting
our trade agreements through the Congress, so I have just a few
questions--and I was told that Senator Roberts touched on part
of what I was going to ask.
So with your many years of experience in trade, I have no
doubt that you appreciate the requirements in TPA to keep
Congress informed on negotiations and the need for agreements
to meet negotiating objectives set by Congress that enable
agreements negotiated by this administration to receive a
single up-or-down vote.
Now, following on what Senator Roberts asked you, as you
know, I represent a State that has tremendous agricultural
production. Exports are extremely important to Iowa
agriculture, whether it be corn, soybeans, cattle, or hogs. The
equivalent of one out of every three rows of soybeans, as an
example, will end up being exported to China alone.
Clearly, these exports are very important to the price of
commodities. President Trump and others in his administration
have indicated a desire to modernize and update NAFTA. I am not
opposed to that on the surface, but I do have concerns about
potential outcomes.
Mexico is the number-one market for U.S. corn and soybean
meal. Mexico and Canada represent the number-two and -three
markets respectively for U.S. beef, and finally, pork exports
to Mexico are 12 times larger today than when NAFTA was
implemented.
Could you assure the committee that you and President
Trump's administration fully understand what is at stake for
U.S. agriculture in renegotiating NAFTA?
Mr. Lighthizer. I do, Senator. Yes.
Senator Grassley. I cannot stress enough that there will be
real and immediate economic consequences for farmers if we lose
exports and probably want to emphasize that when we are
retaliated against, often it is done through countries taking
action against our agriculture exports.
The second question: the administration has indicated it
prefers bilateral negotiations for free trade agreements. Will
President Trump's administration be approaching NAFTA
modernization as two new bilateral agreements or an update of
NAFTA which is, by definition, a trilateral agreement?
Mr. Lighthizer. I do not think that decision has been made
at this point, Senator. The administration has not made a
decision whether to update it as a trilateral agreement or to
make it two bilateral agreements. We just do not have a
position on that.
Senator Grassley. All right. I noticed in your testimony
that you spent time representing U.S. manufacturing, opposing
non-
economic expansion of production capacity around the world. I
have heard a great deal from the U.S. steel industry about
China's extreme over-capacity for steel production. What do you
think is the most effective way that the United States can deal
with problems like excess production capacity in any country,
but particularly China?
Mr. Lighthizer. Well, Senator, this is a very difficult and
sort of intractable problem, and it goes beyond steel, right?
It is a model that the Chinese use in a lot of different
industries. To me, the answer is, (1) you have to engage
bilaterally and multilaterally wherever you are, and there are
a variety of forums where you can engage with the Chinese to
try to specifically encourage them to reduce this non-economic
capacity, this state-encouraged capacity. I think there are
several forums, which we can talk about, where that is
appropriate and where progress can be made.
Then the next thing is, you want to make it less economic.
It seems to me, that is ultimately where it has to come down:
it has to be more difficult for them to maintain non-economic
capacity. That means enforcing our trade laws. To me it means
encouraging other countries where they could ship product to
enforce their trade laws, then to try to think of more
imaginative solutions--the WTO and other places where you can
actually bring litigation.
But the overall theme, to me, has to be if a country is
creating capacity--and as I say, it could be aluminum, it could
be semi-
conductors, it could be a lot of things--through their
industrial policy, we have to take it on head-on and go in
every direction we can to make it more and more expensive to
keep non-economic capacity which is having this negative effect
on the global economy.
Senator Grassley. Thank you, and congratulations on your
appointment.
The Chairman. Thank you, Senator.
Let me see. Who is next here? Senator Scott.
Senator Scott. Thank you, Mr. Chairman.
It is good to see you again, Ambassador. Just to continue
in the same vein that you heard from Senator Grassley as it
relates to over-capacity, it will be a part of my questions
specifically as we think about issues of aluminum, steel, and
other issues. But thank you for coming by the office and
spending some time. I think we had a good conversation about
the value of trade and exporting to the South's economy.
We have done a really good job of becoming the home of over
6,000 companies that depend largely on exporting. We have
about, I think it is $2.3 trillion of value that goes through
our port. About half a million jobs in South Carolina are
connected to the port, so about one out of every seven jobs is
connected to the port.
So it is incredibly important that we continue the
conversation that we had around new trade opportunities for our
folks in South Carolina. But specifically, one of the
challenges that we see at home is this conversation about over-
capacity and how we deal with it, specifically the aluminum and
the steel markets. It is suggested that there is over-capacity
because of folks who just are not playing by the rules.
How would you continue the conversation that you started
with Senator Grassley on how we specifically deal with that
issue?
Mr. Lighthizer. Well, thank you, Senator. I also enjoyed
our conversation and look forward to working with you, if I am
confirmed, on this and the other issues that you raised,
because you raised a variety of issues that were very
thoughtful.
To me, the key is to go into--in the case of steel, we have
something called the Global Forum where you can actually sit
down with the Chinese and talk about reducing capacity in the
steel industry. You also have other places where you interact
with them, enforcing our trade laws, getting other people to
enforce their trade laws so that they cannot ship uneconomic
capacity.
I think we have to see if there is some way we can affect
what is called sort of upstream dumping, or third-party
dumping, where they are actually taking non-economic capacity
and putting it into another product and then shipping that
product to us. A good example would be steel.
Senator Scott. If you look at the tools at your disposal,
if you found WTO to be ineffective, are there other tools that
you need, that you would recommend, if you are confirmed as our
Trade Representative?
Mr. Lighthizer. I have some ideas, but they are probably
ideas that I am better off----
Senator Scott. Holding onto?
Mr. Lighthizer [continuing]. Talking to you and talking to
the staff about. It is a very, very serious problem for our
economy.
Senator Scott. Yes.
Mr. Lighthizer. I do not believe that the WTO is set up to
deal effectively with a country like China and their industrial
policy. I just feel it was never really intended to deal with
those kinds of situations. So we have to use the tools we have,
and then I think we have to sit down with members and find a
responsible way to deal with the problem by creating some new
tools.
Senator Scott. Excellent. I look forward to having that
conversation, perhaps after your confirmation. I know that
Senator Wyden mentioned the importance of soft lumber to his
State. It is also very important in the South. I think we are
responsible for almost one out of every four parts of that
trade opportunity.
Specifically, there has been some conversation about our
position where there is a free trade agreement. Some suggest
that we have a surplus, others say that we do not. What is your
position on that?
Mr. Lighthizer. With respect to a surplus with----
Senator Scott. Where we have a free trade agreement in
place.
Mr. Lighthizer. If you analyze the sort of trade deficit
situation with free trade agreements, you have maybe three
categories, I would say. You have surpluses with Canada,
Australia, and Singapore, and then you have a bunch of
countries where it kind of goes up and down and the numbers are
not very large, and then you have Mexico and Korea, and those
two are large deficit countries. So it kind of varies. With
respect to some, it has on that basis been effective; with
respect to others, it has been less effective.
To me, when I look at deficits, I try to ask myself, what
is it telling me about the rules of trade as they pertain to
that country? Because our objective is not just to get the
trade deficit down. Our objective is to get more efficiency in
the market, to get rid of trade barriers everywhere.
Everybody wins, and the United States producers really win
to the extent we can break down trade barriers. So when I look
at FTA deficits, I try to put them into categories, and I say,
``What can I learn from this agreement versus that agreement?''
In some cases, the rules do not seem to be working as well as
with others. That is where I try to learn on that.
Senator Scott. I think my time is about up, but perhaps my
last question will be, if you look at the TPP countries, I know
that the administration has been very clear on staying away
from multilateral agreements, that perhaps we are in a better
position to go forward with bilateral agreements. Would you
envision our country taking a lead in looking for ways to have
bilateral agreements with some of the partners that would have
been a part of the TPP?
Mr. Lighthizer. Absolutely, Senator. That certainly is my
view. I believe it is the view of the administration. Clearly,
we want to have a series of bilateral agreements, and hopefully
ones that take TPP and improve upon what was negotiated, in
some cases, very well by Ambassador Froman.
Senator Scott. I think it would be certainly an important
signal to South Carolina and the many companies that depend on
opportunities to continue trade.
Thank you.
Mr. Lighthizer. Thank you, Senator.
The Chairman. Thank you.
Senators Brown and Carper have allowed Senator Casey to go
next. I should have said Carper and Brown. I apologize.
Senator Casey. Mr. Chairman, thank you. I owe both Senators
Brown and Carper something. I do not know what it is, but I am
grateful that they did that.
I want to just preliminarily make a statement about the
miners' health care and pension legislation. We know now that
we have coal miners across the country, including many in
Pennsylvania, who might be suffering from Black Lung, or
cancer, or diabetes.
They began receiving notices on March 1st that their health
care would be terminated. In Pennsylvania, that is almost 2,000
miners. These miners kept their promise, every promise they
have ever made to the country, to their family, to their
companies. It is time the Federal Government keeps its promise.
What we are saying on this side of the aisle to Republicans
is, just get this Miners Protection Act done, and that of
course involves in this case, from our point of view, making
sure that we can get it done now. That would also, of course,
move forward Mr. Lighthizer's nomination, which I think there
is broad support for.
Coal miners and their families do not need to spend any
additional time--in this case month after month--with the fear
and the uncertainty of not having health care or the pensions
that they earned. So we just hope that the committee, as well
as Majority Leader McConnell and the President, will join us in
this effort to get both done.
Mr. Lighthizer, I am grateful that you are willing to put
yourself forward for service again. We had a good discussion in
my office a couple of weeks ago, and I am grateful for that
discussion.
Just one preliminary question with regard to enforcement.
If you are confirmed, will you work to enforce both labor and
environmental obligations of trading partners as vigorously as
any other obligation?
Mr. Lighthizer. Yes I will, Senator.
Senator Casey. I appreciate that.
I want to spend the remainder of my time on China. Despite
promises from China in their WTO accession, China continues to
exercise significant control over both their state-owned
enterprises and factors of production. This has traditionally
been executed through state subsidization of both manufacturing
and exports like steel and aluminum. Rather than curbing these
activities in response to trade cases, China has expanded their
reach through new practices that run counter to market
principles, for example, hacking or cyber-enabled economic
espionage.
The cyber-theft of intellectual property and trade secrets
can have a significant impact on both U.S. innovators and
manufacturers. Now China, of course, wants market economy
status at the WTO. Both administrations have not agreed to
that. This administration, we are told, has said that it will
continue the stance of the prior administration.
I am concerned, however, that allies of ours like those in
the EU may amend their past position on market economy status.
So, two questions: (1) will you work with the EU and other
allies to defend the view that China is a non-market--non-
market--economy?
Mr. Lighthizer. Absolutely, Senator. I have spent a lot of
time thinking about that, and I completely agree with you.
Senator Casey. I appreciate that.
Also, what other areas do you think you will be able to
work with the EU on with regard to curbing the impact of
China's market-distorting practices?
Mr. Lighthizer. Well, I think we have to engage across the
board with the EU there. They are a potential ally on a whole
variety of areas, particularly in the antidumping and
countervailing duty area. So I hope to, if confirmed, spend a
good deal of time with Europe and with the EU and to enlist
them in support of the kind of program that you are suggesting.
Senator Casey. Great. Thanks very much. I am yielding back
50 seconds.
The Chairman. Thank you, Senator.
Senator Brown?
Senator Brown. Thank you, Mr. Chairman. Thank you, Senator
Carper, too, for your always agreeableness. It is the Ohio
State diploma that got you there, I am sure.
Thank you again, and thank you for the discussion in my
office and discussions in the past on trade issues, and
especially your USTR interview, or whatever we call these
meetings prior to confirmation.
You know about the steel over-capacity issue, as one of the
country's experts in the steel industry and steelworkers. Ohio
has lost 4,900 jobs in iron and steel. Last week, we received
news that the U.S. steel plant in Lorraine, west of where you
grew up on Lake Erie, went permanently idle. It is Number Six,
quench and temper facility.
Our steel industry, our steelworkers, suffer because our
trading partners do not play by the rules. China's state-owned
properties have propped up its steel sector and flooded the
global market, including our country, with unfairly made steel.
The same is true, as you know, in aluminum.
My question is, what does the United States do to get China
to implement a net reduction of its steel and aluminum
capacity, and if China refuses to reduce its net steel and
aluminum capacity, what steps do you take in response?
Mr. Lighthizer. Senator, first of all, let me thank you for
your kind words. I do appreciate that. I am proud to be from
Ohio. I have been to Lorraine, to the Lorraine facility,
absolutely, so I appreciate that.
I am glad that Ashtabula, besides your wife and me, has
Urban Meyer. I am sure there are other people, but they do not
come to mind. My brother; I guess, my brother.
We have talked a little bit about this issue of Chinese
over-
capacity in steel and aluminum, and it is something that is
troubling to me not just because of those products, but because
it is a model for the Chinese industrial policy. To some
extent, we have sort of two models, two economic models: one is
the one that we want and espouse and one is a different one,
which is one of more state control and state involvement. In
many cases, it is non-
economic.
What I have said is, we have to have kind of a
comprehensive approach on this. We have to, one, address, in
the various forums that we have, the Chinese over-capacity
issue and push back on that. Some of those discussions have
possibilities for results. The global forum would be a good
example, although personally I do not think that is going to be
the only answer.
The second thing is really going to be enforcing our own
trade laws. The third thing I suggest is that we get others to
enforce their trade laws, all with an effort to make the
maintaining of uneconomic capacity and the creation of
uneconomic capacity, which is, in the state of the field,
massive. I mean, it is hundreds and hundreds of millions of
tons of excess capacity, many times the United States' total
capacity.
Then third, I think we have to sit down and have private
discussions where we try to think about what other remedies we
have. To me, the objective is to make it uneconomic, to make it
expensive to do something that adds inefficiency in the market
and has such a negative effect on the United States and, quite
frankly, steel producers in other parts of the world.
So it is a multi-faceted approach that I would recommend,
but I think part of it is going to be sitting down and deciding
whether we need new remedies ourselves and what those remedies
would be.
Senator Brown. And we would like to work with you to figure
that out.
I have one other question. Two days after the election, I
called my long-time friend Dan DiMicco, who is sitting here,
but also was heading the President's trade team then for the
transition, and talked about TPP and USTR and trade enforcement
and renegotiating NAFTA, a whole host of issues, and followed
up with a letter asking the administration to make it a
priority to re-set U.S.-China trade relations.
First of all, should that be a priority in this
administration with you as U.S. Trade Representative, and
second, what steps do you take to make the U.S.-China trade
relationship more balanced overall?
Mr. Lighthizer. Well, first of all, the easy answer is
``yes,'' it really should be a priority. If you look at our
trade deficit as an indicator--not the only indicator but as an
indicator--of what is going on in the global economy, China is
a good part of our problem, a substantial part of our problem.
I think we have to engage China and we have to talk to
China, but I think we also have to think about some new
remedies. We have to strongly enforce our trade laws. That
probably means self-initiating cases. We have done a pretty
good job, I think, in the steel industry under Dan and others'
leadership. But I think we have to do it in other products
also, and then I think we have to think of a more systemic
approach.
Some of that may be going to the WTO or taking other
actions to engage. I think this President is very focused on
this issue. I think his views on this subject--I mean, I do not
know his views, but I believe they are very close to yours in
terms of the degree to which this is a problem and how it has
to be addressed.
So, I mean, I am eager to work with this committee and the
Ways and Means Committee to find a responsible way to address
this problem, this chronic imbalance.
Senator Brown. Thank you.
Mr. Chairman, thank you.
The Chairman. All right. Senator Carper?
Senator Carper. Thanks very much.
Welcome. Whenever I pronounce your name, I either want to
call you Lighthowser or Budweiser. I just keep going between
the two. [Laughter.]
Mr. Lighthizer. I will tell you, Senator, you are not the
first person who has had that problem.
Senator Carper. Whatever we should call you, we are glad
you are here. Thanks. It sounds like your voice is not as
strong as it once was, and we are looking for you to have it be
a strong voice to make sure that American exports make their
way into markets all over the world.
Senator Brown mentioned that I was an Ohio State graduate.
I was Navy ROTC there and graduated in 1968, right in the
middle of the Vietnam War. I became a naval flight officer and
headed to Southeast Asia and served about three tours over
there with my compadres before coming home.
I was invited by the President--I actually went back to
Vietnam. About 1991, I went back to Vietnam. I led a
congressional delegation of Vietnam veterans to try to find out
what happened to thousands of our MIAs and to try to get the
truth out of the Vietnamese. The idea was that if they would
provide information, that it would provide closure for
thousands of American families. We moved toward normalized
relations; they did and we did.
The President asked me to go back with him. President Obama
asked me to go back with him last April, and I was honored to
do that. I met with some of the people I actually met with all
those years ago in 1991. The President announced when over
there that we had decided to sell weapons to the Vietnamese so
they would not have to rely just on the Chinese and just on the
Russians.
The Vietnamese, for themselves, said they would like to buy
a lot of our aircraft and they wanted to buy, oh, gosh, $10,
$15 billion worth of aircraft, passenger aircraft, not
weaponry, although they will probably buy some others that are
more defense-related.
We have the opportunity to sell a lot of aircraft. Boeing
has the opportunity to sell a lot of aircraft to another
country with whom we have been at odds, and that country is
Iran, as you know. Boeing has an opportunity to sell anywhere
from--I have seen as little as $8 billion to as much as $15
billion in product to Iran, commercial aircraft to replace
their badly deteriorated civilian airlines.
But also Airbus has the opportunity to sell another $10
billion to Iran, and a lot of the components, as you know, for
Airbus products are made in America. All told, I am told there
are enough aircraft that could be sold, between Boeing and
Airbus, to employ tens of thousands of Americans.
My question of you is, is this something we ought to allow
to happen? My view, quite frankly, as you might tell, is
``yes,'' as long as they continue to abide by the P5+1
agreement that was struck. What is yours? Go ahead. Thanks.
Mr. Lighthizer. I was going to say, my view is that the way
to get rid of trade deficits and move the economy forward is
through exports. I mean, exports, exports, exports. I think
that is what we are hoping for. In terms of specific sales of
airplanes to specific countries, I am not informed enough about
what the administration's policy may be. As a general matter, I
strongly agree with you. I think we have to encourage exports.
Exports are the key to trade. Exports and enforcement, that is
what we have to do.
Senator Carper. All right. Thanks.
Well, my hope is that if you are confirmed--I suspect you
might be--this is one that you will go to school on. I would
urge you to do that. A lot of jobs are involved here, good
jobs, as you know.
The second thing, and you and I were able to talk--and
thanks for visiting me in my office several weeks ago when you
had a stronger voice----
Mr. Lighthizer. I did.
Senator Carper. But one of the things we talked about was,
do we need to renegotiate NAFTA all over again or can we look
at the Trans-Pacific Partnership to see what was done in the
context of TPP to renegotiate NAFTA? My suggestion was, do we
go to school on what Ambassador Froman and his folks worked on,
what they accomplished, and see if maybe we can do a shortcut
on a NAFTA redo? Your thoughts, please.
Mr. Lighthizer. I agree completely with you on that. I
think Ambassador Froman did a remarkable job in a variety of
areas and that we should take advantage of that work. So I am
in total agreement with you on that.
Senator Carper. Good. Thank you.
A lot of people--there is a lot of talk these days about
building a wall along our border with Mexico. A lot of people
think that folks who are coming into the United States are
Mexican. They are not. There are actually more Mexicans, as I
think you know, going back from the U.S. into Mexico than are
coming the other way.
NAFTA worked actually pretty well for the Mexicans, I am
told. They have a more vibrant middle class than they did 20
years ago. I think Mexico is now maybe our top customer for
American poultry in the whole world. Canada maybe is among the
last, among the worst.
They slapped a tariff--I think it is something like a 200-,
250-percent tariff on poultry, and it takes away a lot of
incentive to try Delmarva chicken when you have that kind of
tariff. Your thoughts on fixing that kind of imbalance, if we
have the chance to renegotiate NAFTA?
Mr. Lighthizer. Well, I had not realized they had that high
a tariff. I agree that it is something we should look at. I am
sympathetic to anything that has the potential to lead to more
U.S. exports. So I am in agreement with you, Senator. I think
it is something that, when we sit down with Canada, we should
raise, and a variety of other subjects which have been raised
by various members of the committee during the course of this
process.
Senator Carper. All right. Thanks.
Mr. Chairman, am I done? Is my time expired?
The Chairman. Yes, your time is up.
Senator Carper. Do you want me to ask one more?
The Chairman. I think you have asked quite a bit.
Senator Carper. All right. We will talk some more about
Vietnam, if we could, later on. I have in my pocket some Halls
throat lozenges, and, as I leave here, I am going to leave them
right beside you. If they come of some service, you can always
thank me in the future----
Mr. Lighthizer. Thanks.
Senator Carper [continuing]. When we negotiate on chickens.
Mr. Lighthizer. I appreciate that.
Senator Carper. Thank you.
The Chairman. You had better take him up on that. They do
not give very often, the Democrats, you know. [Laughter.]
I take that back. We have a lot of big spenders on this
committee.
Senator Cassidy?
Senator Cassidy. Thank you, Mr. Chairman.
Mr. Lighthizer, I enjoyed our conversation in my office.
Now, one thing you have mentioned--I think you will know the
numbers; I do not quite know them--is that when we signed
NAFTA, we perhaps had a trade surplus of about $5 billion, and
now it is a negative $60 billion, something along those lines.
I mentioned that to someone--and you spoke of the manufacturing
jobs that have moved to Mexico.
I mentioned that to someone else, and they said the reason
some of those car companies moved to Mexico is that Mexico has
a trade agreement with both the EU and the United States that
allows goods to move back and forth without tariff, and the
United States does not. So for some of these vehicles, if they
were produced in the United States, we could not export them to
Europe because there would be a tariff upon them. Again, there
is not one in Mexico.
So, as we hopefully move manufacturing back to the United
States--which I am a big fan of--nonetheless, it does seem as
if it is trade policy in Mexico that is advantaged relative to
ours which is the driver of that, rather than another factor.
Any thoughts on that?
Mr. Lighthizer. I certainly think that we have to look at
issues like that. I certainly agree with that, Senator. But I
suspect that when we do the analysis, the vast majority of the
cars that are made by American manufacturers in Mexico will end
up right here in the United States.
Senator Cassidy. So the duality of the market is less than
it might seem because the lion's share is coming here?
Mr. Lighthizer. That would be my guess. I have not studied
the issue, but that would have been my guess, that the lion's
share of the automobiles made in Mexico will end up coming to
the United States. I think that is their business plan. But I
say that without having specifically studied that issue.
Senator Cassidy. As you might guess, there is a lot of
existential anxiety among my agricultural producers, and they
are afraid that if we modernize the NAFTA act--or put it this
way: Mexico has made some statements which suggest that they
would retaliate if we attempt to push them too far.
In the one sense, I understand that there is an
international market for commodities, but I gather that
things--products, say for example rice--are somewhat advantaged
under NAFTA, and so it actually benefits them.
So what would you say to my rice farmer who is concerned
that there will be retaliation and that they will now be
competing against Vietnam, which might have a state-owned
enterprise selling rice at a discount relative to what our rice
producers can do?
Mr. Lighthizer. Well, Senator, as we discussed in your
office, I hope and believe we can renegotiate NAFTA in a way
that helps both countries and does not put agriculture in a
precarious position. I realize the anxiety and the concern, and
I understand it, but I think that there is a general consensus
that NAFTA needs revision. It is clearly outdated at this
point. During the course of that negotiation, I think we have
to be very careful not to do something that adversely affects
those who have been winners during the course of that process.
Senator Cassidy. Let me ask this: the energy portfolio or
the energy portion of NAFTA is fairly thin. Back then, there
was not a lot of cross-border energy trade. There is apparently
a lot now, both electrons, gas, and oil. Will we just kind of
leave that alone, do no harm, or do you have any thoughts in
particular about what might be done to work out that to each
country's mutual advantage?
Mr. Lighthizer. Well, I do not have specific thoughts on
that point. I would say that anything that encourages trade is
a good thing, probably for both countries. I would say that at
this point we have fairly balanced trade on petroleum generally
with Mexico specifically, so it is part of the agreement that
we will have to focus on. But I do not have specific ideas on
negotiating that right now.
Senator Cassidy. By the way, I will point out that, in
Louisiana, they are building a lot of LNG export terminals, and
I am struck that there are a lot of refiners from elsewhere
that are building on the Mississippi using low-cost natural gas
to make a value-add which they then export.
So, a quick win for the administration would be just to
expedite the production of those LNG export facilities, with
multiple benefits, including more jobs here at the wellhead, as
well as more construction jobs exporting, and more maritime
jobs transporting, as well as, if they are substituting it for
Chinese coal, it actually helps clean up the atmosphere, just
to point that out.
Lastly, some expressed a concern about--Senator Carper
mentioned that NAFTA has brought a burgeoning kind of Mexican
middle class, which in turn has become a new market if you
will, or developing market, for U.S. goods, including gas,
including oil, including you name it. And there is concern that
if we are not careful how we do this, that middle class would
suffer. The value of the peso, I think, is already falling.
Will they continue to be able to afford to buy the goods that
we are currently sending? Any thoughts on that beyond needing
to be careful that it does not occur?
Mr. Lighthizer. I think we have to be careful it does not.
[Laughter.]
Senator Cassidy. All right. Thank you. I yield back.
The Chairman. Thank you, Senator.
Senator Thune?
Senator Thune. Thank you, Mr. Chairman.
I know it has been said many times, many ways already at
this hearing, and there have been several of my colleagues who
have talked about it, but when it comes to agricultural trade,
I cannot emphasize enough, representing a State where
agriculture is our number-one industry, that agricultural trade
must be at or near the top of your trade agenda.
In terms of today's agricultural climate, we have a lot of
producers that are counting on tariff reductions and expanding
export markets with existing and new trading partners as the
only near-term relief for countering crop and livestock prices
that are below production costs.
There has already been some discussion, including with the
Senator from Louisiana, about the NAFTA agreement, but Canada
and Mexico are very important agricultural trading partners.
I know you did not want to get into specifics, but I would
encourage you if you can to get specific on how you intend to
improve what is in existence under NAFTA. Do you have a time
frame? Do you intend to negotiate separately with each of those
countries, or are they going to be all part of one agreement?
Can you be that specific?
Mr. Lighthizer. Well, Senator, the decision as to whether
it should be trilateral or bilateral really has not been made
at this point. I think the administration is very eager to
engage quickly on this agreement. There are certain time frames
that are required under TPA, and we are in the process of
hopefully doing those consultations. I look forward, if
confirmed, to being involved in that process.
But there is a whole consultation process and a time period
that is layered on top of that, but the administration's stated
objective is to do this as quickly as possible. There is
uncertainty and anxiety, and so minimizing that is in
everyone's interest.
Senator Thune. This has been covered already by Senator
Wyden. He and I teamed up on some digital trade issues, and
they were a top negotiating priority for American diplomats
under the TPP. I hope that that will continue to be a very high
priority.
Coming back to agriculture for a minute, helping our
companies expand their ability to compete and tap into foreign
markets, as I said earlier, is critical. As those companies
make investments in products that can enjoy greater global
consumption, it is essential that our competitors not be
permitted to plant road blocks in the way.
For instance, in the past few years the European Union has
been using its trade agreements to misuse the concept of
geographical indications by erecting de facto non-tariff trade
barriers to U.S. products made in South Dakota, such as
parmesan and asiago cheese.
How do you see yourself shaping the United States' approach
to foreign policies like this that are intentionally aimed at
promoting global rules aimed at choking off competition from
U.S. companies around the world?
Mr. Lighthizer. Well, I am very familiar with the issue. It
seems to me it is an organized effort on behalf of the European
Union, and I think we have to take it head-on. We want to
discourage other countries from agreeing to these geographic
indicators and resist them in the United States.
The issue tends to be more what happens in third-party
markets, so it is a little more complicated to get into it. But
we are aware of it, and it will certainly be something that we
will work on. We realize it is a serious problem.
Senator Thune. We also have seen a disturbing trend in
recent years whereby some of our trading partners have ignored
their international commitments, particularly with respect to
intellectual property protection, either by failing to fully
implement agreements or by flouting the rules in order to give
their businesses an unfair advantage. These decisions are
short-sighted and ultimately discourage innovation, investment,
and job growth.
What can your agency do to ensure that our trading partners
are enforcing existing commitments and to deter countries from
weakening such standards in their own IP regimes?
Mr. Lighthizer. We talked a little bit about intellectual
property protection, and it will be a priority of USTR, if I am
confirmed. We realize--I realize--how important it is, and
intellectual property theft, weak enforcement of patent
protection, and the like are very serious impediments to adding
efficiency and healthy U.S. trade.
Senator Thune. Mr. Chairman, I think that is all I have.
I appreciate your time, Mr. Lighthizer. Again, I cannot
emphasize enough the importance of agriculture. As you start
looking at what we are going to do in the place of TPP and how
you are going to approach NAFTA, I hope you will keep that
issue as a very, very high priority.
Mr. Lighthizer. Thank you. I will.
Senator Thune. Thank you.
The Chairman. Thank you, Senator.
Senator Bennet is next, then Senator Cantwell.
Senator Bennet. Senator Cantwell can go first.
The Chairman. We appreciate you doing that. Senator
Cantwell?
Senator Cantwell. Thank you. Thank you, Senator.
Mr. Lighthizer, thank you for being here. Congratulations
on your nomination. Since I know that you are familiar with
this committee, I would like to throw a lot at you at once, if
I could. So, thank you.
One, I want to know whether you support the Export-Import
Bank and the concept of a credit agency for the United States
and whether the President should immediately appoint people to
get it functioning at the level it should.
Number two, will you be aggressive in getting the Europeans
to stop massively subsidizing Airbus? You know that the WTO has
found in the aerospace sector, $17 billion of illegal
subsidies. That brings the total of illegal European subsidies
to Airbus to about $22 billion, so I want to know if you are
going to be aggressive on that.
Our colleagues here, in the Trade Facilitation and Trade
Enforcement Act, included an authorization for $15 million in
trade enforcement trust funds, and that was for making sure
that we had ample support within USTR to actually fight for
trade enforcement.
I believe in an economy outside of the United States
selling U.S. products. In fact, I was very happy the last
administration had a goal of doubling exports, but I know that
we also need to have the personnel. So do you support the trade
enforcement trust fund, and what should its annual
appropriations be so that we are adequately staffed?
If I could, just one last theoretical question. I have met
Mr. Navarro, I have heard Secretary Ross talk about trade, and
then there is your position. Who is going to be in charge of
trade?
Mr. Lighthizer. Thank you, Senator. That about covers all
my talking points. [Laughter.]
Senator Cantwell. I heard what Senator Dole said, that you
are very talented, so I am sure you are up to the task.
Mr. Lighthizer. Well, he is kind. I would say, first of
all, in terms of--I will just sort of start from the bottom,
perhaps. In terms of the relationship between the White House,
the Commerce Department, and the USTR, I fully expect to have
the full statutory authority that the Congress provides.
I fully expect to work in a collaborative way with
Secretary Ross, whom I admire and I think is very, very
talented in this area, and the White House. Now, the White
House is defined as Pete Navarro and other people; I mean,
there is Gary Cohn and others.
In all my experience with one administration after another,
there are almost always going to be three forces of influence
in the trade policy, and the job of the USTR really is
historically to sort it out. That is why----
Senator Cantwell. So you are the lead in sorting that out,
more or less?
Mr. Lighthizer. Just sort of sorting it out. That is
correct. I mean, historically that is why John Kennedy started
the agency, along with the Senate Finance Committee and the
Ways and Means Committee, in 1962. So I expect it to work the
way it has. I think they are very cooperative. I look forward
to working with all the parties on that, and particularly
working with this committee and with the Ways and Means
Committee.
In terms of the trust fund, yes, I hope that the
appropriations--I hope the $15 million is appropriated. In
terms of resources generally, I am not now in the
administration, so I can say that, yes, we need more resources
for sure.
Senator Cantwell. Thank you.
Mr. Lighthizer. The agenda is substantial.
Senator Cantwell. Some of my colleagues wanted it
mandatory. I just want us to put the money there. I want to
have more people in trade enforcement than are sitting on this
dais, and right now we do not have a lot. So I am glad you are
committing to $15 million. Thank you.
Mr. Lighthizer. Thank you, Senator.
In terms of Airbus subsidies, yes, I will be aggressive. I
realize that is a problem. I have followed the issue for a long
time. I have never really litigated or been involved with it,
but it is a serious problem. It is one that has gone on and on
and on, and it has a real impact on American manufacturing.
In terms of the Export-Import Bank, at this point I am
awaiting instructions. I appreciate the importance of the
Export-Import Bank to Boeing and to other companies in U.S.
exports. Having said that, that is one of those issues that
there are strong views about on both sides, and I expect to do
what the President instructs me to do when he instructs me to
do it.
Senator Cantwell. So you do not think, as part of our trade
agenda, that we can--do you think we can be successful without
an aggressive credit agency approach by the U.S.?
Mr. Lighthizer. I think we have to do everything we can to
encourage exports. Having said that, the Export-Import Bank is
a sensitive issue, and it is not an issue that I have worked on
personally.
Senator Cantwell. Can you just define ``sensitive,'' since
I am running out of time?
Mr. Lighthizer. Well, I think I define sensitive as having
people who are strongly for it and people who are strongly
against it. Normally in those cases, when I am not informed and
realize that the administration will make a policy, I am
probably better off waiting for the administration to make the
call.
Senator Cantwell. I would just say that there is a very
small group who is politically motivated and may be loud, but
when you allow the U.S. Senate to vote on it--both majorities
in the House and Senate have supported it, and majorities of
Republicans have supported it.
So the notion that somehow it does not have major support--
it is more just being held hostage by some political agenda. So
I hope you will be loud about this, the credit agency strategy,
because to me we will lose U.S. manufacturing without it.
If Boeing can put Rolls-Royce engines on a plane and get
credit financing in Europe, how is that helping GE? So while
other agencies on an international basis are going to be
aggressive about this, we need to get the right strategy here.
It can be a discussion about how we make sure that we are
not doing anything to distort the market, but I think the
administration has to get realistic. You cannot go stand in
front of a Boeing plane in South Carolina and then not have a
functioning Export-Import Bank, so I hope we can get there.
The Chairman. Thank you, Senator.
Senator Bennet?
Senator Bennet. Thank you, Mr. Chairman. I thank you and
the ranking member for having this hearing.
Thank you, Mr. Lighthizer. It is nice to see you again. I
just want to underscore what the Senator from Washington ended
with, and I think you will find that her diagnosis or
description of the politics around this is probably dead-on.
I also want to say, Mr. Chairman, I look forward to working
with you and the ranking member to figure out a bipartisan way
through this waiver process that is needed. I want to also
mention--I know you have covered this ground, and I know I am
the last one and I am sure you are ready to be done, so I will
not ask you a question about steel, but I do want to just
observe, as my colleagues have, that over-capacity from
countries like China and others is hurting our industry,
including EVRAZ in Pueblo, CO.
So we talked about this a little bit when you were in my
office. I know what your answer is, and I appreciate it and
look forward to working with you to make real changes that are
going to benefit our steelworkers and our steel industry in
this country.
I want to just get one question in on NAFTA before you go.
As you know and you have talked about today, the administration
throughout the campaign signaled that it intended to
renegotiate NAFTA. This is very important to my State. Mexico
is the second-largest export market for the State of Colorado,
and it is particularly interesting and important to my farmers
and ranchers. Colorado's agricultural community depends heavily
on exports to NAFTA countries. For example, last year Colorado
exported more than $486 million in beef, pork, and lamb to
Canada and Mexico. Canada and Mexico alone accounted for a
third of Colorado's beef exports.
Agricultural producers in Colorado are worried. They are
interested and curious about this re-opening, but they are
worried that opening up NAFTA will lead Mexico and Canada to
impose higher tariffs and that the flow of goods will be
physically stalled by the negotiations. They are also worried
that renegotiating NAFTA will limit important market access
that the United States currently enjoys, notwithstanding the
political conversation that we have had in this country.
I wonder if you could just finish today by responding to
that a little bit, and also talking as you did, or
distinguishing as you did when we met in my office, between
your views and the President's views on the manufacturing side
of things with respect to trade and your views and his views
with respect to the importance of trade for agriculture in this
country.
Mr. Lighthizer. I cannot speak to the President's views.
Senator Bennet. All right. Well then, just speak for
yourself.
Mr. Lighthizer. I think that we have to do something for
manufacturing. We have a huge manufacturing trade deficit, and
I think we have to do something. There are a variety of things
in the NAFTA framework that need updating. I think those things
will tend to help manufacturing.
Then your position, which I think is equally valid, is that
agriculture has done pretty well under NAFTA. That is true for
a variety of different agricultural products. We have to be
careful not to lose what we gained, and that is a balance. I
think something has to be done. I think we can actually
accomplish that.
I think we are very important to Mexico also, and I realize
they have other options, but a huge percentage of their exports
come to the United States. So I think we do have leverage. With
that leverage, I think if we do it properly and rationally, we
can improve NAFTA for both countries and also not hurt
agriculture, and that certainly would be my objective.
I know it is the objective of an awful lot of members of
this committee and a lot of members of the Ways and Means
Committee and others in Congress, so I subscribe to that view.
I do believe it can be done. I am not suggesting that I think
it will be easy, but I do believe it can be done.
The United States and Mexico both need each other
economically a lot, and having an agreement that is 20-some
years out of date--it does not even have a digital chapter in
it, because there was no need for that in those days--I think
that is something that we can do in a way that helps both of us
and does not risk damage to our agricultural sector, which is
also very, very important.
Senator Bennet. I appreciate that answer. I would say that
even in the act of negotiation we are going to have to take
care that the current markets continue to be open the way that
they have been, and I know you appreciate that.
Mr. Chairman, I will yield back the balance of my time.
Thank you for the hearing.
The Chairman. Thank you, Senator.
My partner on the committee has one more question to ask.
Senator Wyden?
Senator Wyden. Let me, if I might, go into this resources
for enforcement issue just a little bit deeper. Mr. Lighthizer,
is cutting enforcement resources not an invitation to
foreigners to cheat our workers and businesses? It seems like a
simple question.
Mr. Lighthizer. It seems like kind of a trap question, does
it not somehow? [Laughter.]
The Chairman. You think? You think? [Laughter.]
Senator Wyden. It relates to the second question.
Mr. Lighthizer. I am just asking myself, if it is a trap, I
should probably think about it. [Laughter.]
Senator Wyden. Well, it is a substantive question, because
it relates to the real world. We keep battling for these
resources. I have already told you, I very much enjoyed our
conversation. I think you have a lot of talent. But I would
like an answer to the question because it relates to what is
ahead.
Mr. Lighthizer. Senator, I think USTR needs more resources.
Senator Wyden. Good. If there are fewer resources for trade
enforcement in the President's budget, which is about to come
out, how do you go about addressing the challenges? We spent
close to 3 hours talking about that.
Mr. Lighthizer. Well, Senator, we are going to do the best
that we can with what we have. I am not in the administration.
I wish I was. If I were in the administration, I would be in
there lobbying right now for more resources for USTR. I am not
in the administration, so I really cannot get into that. My
view, publicly stated, is that we need more resources for USTR
and, with whatever we have, we will do the best job we can do.
Senator Wyden. I think that, again, the point is, these are
questions that bump up against the realities that Senators are
talking about. For example, one of the things I was struck by--
I think we talked about it in the office--was on this question
of finally getting a fair shake for our timber workers and our
mills. We have a situation where the hiring freeze is making it
very hard for them to get all the data they need in the
provinces of Canada. So I am just going to operate under the
assumption that you are going to fight with all of your energy
and considerable talent to make sure you get the resources, and
we will leave that there.
Since it is the end of the hearing, I would just come back
to this point that, in my State, one out of five jobs revolves
around international trade. I think the premiere economic issue
of our time is how we get wages up for people. How do we
increase wages? So many of the trade jobs have that value-added
component. They reflect a higher level of productivity because
we are trying to get the products into tough global markets.
So I think to have you, as you have said today, indicate
you will be part of a full-court press on enforcement and that
you will play offense in terms of creating opportunities for
our companies and our workers overseas, is an appropriate way
to end this.
Mr. Chairman, I have a unanimous consent request to put two
documents in the record with respect to this disclosure issue.
We have a bipartisan disclosure memo on the nominee that has
been prepared by the bipartisan committee staff. Then I would
like to ask unanimous consent to enter into the record an
agreement between Mr. Lighthizer and the Government of Brazil
in which he represented the Sugar and Alcohol Institute.
The Chairman. Without objection.
[The documents appear in the appendix beginning on p. 119.]
Senator Wyden. Thank you.
Mr. Lighthizer, we look forward to continuing the
conversation in the days ahead, and we thank you for your time
today.
Thank you, Mr. Chairman.
The Chairman. Thank you. I just want to thank all my
colleagues who attended today and participated today. Most
especially, I want to thank you, Mr. Lighthizer. You have been
a light around here for many years, and we appreciate all the
work that you did while you were here, working with Senator
Dole and others, and all the work you have done since. But
thank you for your appearance here today, and most of all for
your willingness to again serve our country in this important
position.
I personally think it is terrific for you to be willing to
get into this and to give your life to it. It just means a lot
to me.
Before I adjourn, I just want to note that we will have the
customary quick turn-around time for written questions for
Cabinet-level nominations. I will ask Senators to submit all of
their questions by 6 p.m. tomorrow evening.
With that, the committee will be in recess.
[Whereupon, at 4:34 p.m., the hearing was concluded.]
A P P E N D I X
Additional Material Submitted for the Record
----------
Prepared Statement of Hon. Michael B. Enzi,
a U.S. Senator From Wyoming
Mr. Chairman, during this hearing, a number of my colleagues
referred to health care and pension benefits for miners in the United
Mine Workers of America union. References were specifically made to the
Federal Government keeping its ``promise.'' I feel it necessary to
remind my colleagues that the Congressional Research Service has said
that the Krug-Lewis Agreement is not a Federal promise for health care
or pension benefits. Congress has provided for health-care benefits via
statute in the past; I helped write one of those laws in 2006. However,
the agreement that is often cited by my colleagues as the ``promise''
didn't impose an obligation on the Federal Government to provide health
care or retirement benefits. Because I have heard a lot of
misinformation about this ``promise,'' I asked the nonpartisan
Congressional Research Service to draft a legal review about the
matter. CRS studied the issue and concluded the Krug Lewis Agreement
``does not appear to have imposed an obligation on the Federal
Government to provide such benefits.''
I have included the CRS legal review for the committee record.
I would very much like to continue working with this committee to
address the UMWA's health-care concerns, and I know that issue is
pressing. We can, and should debate this topic. However, I have some
concerns with the Miners Protection Act. Congress should not provide
Federal funding to a private pension plan. There are over 1,200
underfunded multiemployer pension plans. Once one pension plan receives
special treatment, all of the others, including plans comprised of
truckers that we've heard about recently, will come forward asking for
their check from the American taxpayer. Proponents of the Miners
Protection Act also say that they're using interest from the Abandoned
Mine Land trust fund to shore-up the pension plan, but that fund hasn't
covered the cost of the UMWA health-care plans since 2008. In reality
this bill extends Customs user fees, which are supposed to pay for
Customs and Border expenses, and claims that money going into the
Treasury covers the cost of this bill. This is just another case of
robbing Peter to pay Paul.
______
Congressional Research Service
INFORMING THE LEGISLATIVE DEBATE SINCE 1914
MEMORANDUM
August 8, 2016
To: Senate Committee on Health, Education, Labor, and Pensions
Attention: Hon. Michael B. Enzi
From: Jon O. Shimabukuro
Legislative Attorney
American Law Division
Subject: Krug-Lewis Agreement
_______________________________________________________________________
This memorandum responds to your request concerning the so-called
``Krug-Lewis Agreement,'' a 1946 agreement between then Secretary of
the Interior Julius A. Krug and John L. Lewis, then President of the
United Mine Workers of America (``UMWA'').\1\ The Krug-Lewis Agreement
provided for the creation of a mine safety code, required the presence
of a mine safety committee at every mine, and provided for the
establishment of a health and welfare program to benefit mine workers
and their dependents.\2\ You asked whether the federal government has
an obligation to provide either health or retirement benefits to mine
workers based on the Krug-Lewis Agreement. This memorandum examines the
agreement, which was effective between May 22, 1946 and June 30,
1947.\3\
---------------------------------------------------------------------------
\1\ The National Bituminous Wage Agreement, commonly known as the
``Krug-Lewis Agreement,'' was included in a September 25, 1991, hearing
conducted by the Senate Subcommittee on Medicare and Long-Term Care.
See ``Coal Commission Report on Health Benefits of Retired Coal Miners:
Hearing Before the Senate Subcommittee on Medicare and Long-Term
Care,'' 102nd Cong. 80-82 (1991).
\2\ The Krug-Lewis Agreement also preserved the terms and
conditions of employment included in certain specified agreements, such
as the National Bituminous Coal Wage Agreement (dated April 11, 1945).
See Krug-Lewis Agreement Sec. 1, supra note 1.
\3\ See House Committee on Ways and Means, 104th Cong., Development
and Implementation of the Coal Industry Retiree Health Benefit Act of
1992, 119 (Committee Print 1995) (identifying the period of
effectiveness for the Krug-Lewis Agreement as between May 22, 1946 and
June 30, 1947); Lewis v. Jackson and Squire, 86 F. Supp. 354, 356 (W.D.
Ark. 1949) (indicating that the period covered by the Krug-Lewis
Agreement ended on June 30, 1947).
The execution of the Krug-Lewis Agreement followed the seizure of the
nation's coal mines in 1946. In response to existing and threatened
strikes by mine workers, President Truman issued Executive Order 9728,
which directed the Secretary of the Interior to operate the nation's
coal mines.\4\ According to the order, federal control of the mines was
necessary because the production of coal ``was indispensable for the
continued operation of the national economy during the transition from
war to peace[.]'' \5\
---------------------------------------------------------------------------
\4\ Executive Order No. 9728, 11 Fed. Reg. 5593 (May 21, 1946).
\5\ Id.
The Krug-Lewis Agreement was executed eight days after the issuance of
Executive Order 9728. By its own terms, the agreement covered the terms
and conditions of employment for mine workers only ``for the period of
Government possession[.]'' \6\ The health and welfare program
prescribed by the agreement would consist of three parts: (1) a welfare
and retirement fund to be financed by five-cent payments on each ton of
coal produced by mine operators for use or sale; (2) a medical and
hospital fund that would be financed by wage deductions that were
already being made and by any additional deductions authorized by the
UMWA and its members for medical, hospital, and related purposes; and
(3) an effort by the trustees of both funds to cooperate and coordinate
in the development of policies and working agreements necessary for the
effective operation of each fund.\7\ Notably, the agreement did not
provide for federal financial contributions to either the welfare and
retirement fund or the medical and hospital fund.\8\
---------------------------------------------------------------------------
\6\ Krug-Lewis Agreement, supra note 1.
\7\ Id. Trustees of the welfare and retirement fund were to make
coverage and eligibility determinations, and establish benefit amounts
and the methods for providing benefits. Trustees of the medical and
hospital fund were to provide for the availability of medical,
hospital, and related services for mine workers and their dependents.
\8\ Compare Krug-Lewis Agreement, with Tax Relief and Health Care
Act of 2006, div. C, tit. II, subtit. B, Sec. 212, 120 Stat. 2922, 3023
(2006) (authorizing transfer of reclamation fees collected by the
Secretary of the Interior to the United Mine Workers of America
Combined Benefit Fund, the United Mine Workers of America 1992 Benefit
Plan, and the Multiemployer Health Benefit Plan).
In April 1947, the UMWA began negotiations with mine operators in
anticipation of the mines being returned to their owners.\9\ A new
agreement became effective on July 1, 1947, one day after operation of
the mines was returned to the owners.\10\ The National Bituminous Coal
Wage Agreement of 1947 addressed various conditions of employment for
mine workers.\11\ The agreement also established the United Mine
Workers of America Welfare and Retirement Fund (``W&R Fund''), which
was modeled after the funds described in the Krug-Lewis Agreement.\12\
Unlike those funds, however, the W&R Fund was financed by ten-cent
payments per ton of coal produced by mine operators for use or
sale.\13\ The W&R Fund represented a merger of the two funds described
in the Krug-Lewis Agreement by providing for the availability of
medical, as well as retirement, benefits.\14\
---------------------------------------------------------------------------
\9\ Development and Implementation of the Coal Industry Retiree
Health Benefit Act of 1992, supra note 3 at 121.
\10\ The National Bituminous Coal Wage Agreement of 1947 was
included in hearings conducted by the Senate Committee on Banking and
Currency. See ``Economic Power of Labor Organizations: Hearings Before
the Senate Committee on Banking and Currency (Part I),'' 81st Cong.
427-35 (1949).
\11\ National Bituminous Coal Wage Agreement of 1947, supra note
10.
\12\ Id. See also Eastern Enterprises v. Apfel, 524 U.S. 498, 505
(1998) (describing the United Mine Workers of America Welfare and
Retirement Fund as ``modeled after the Krug-Lewis benefit trusts.'')
\13\ National Bituminous Coal Wage Agreement of 1947, supra note
10.
\14\ See Development and Implementation of the Coal Industry
Retiree Health Benefit Act of 1992, supra note 3 at 121 (describing the
United Mine Workers of America Welfare and Retirement Fund as a
``merger of the two Krug-Lewis funds into a single trust.'')
The 1947 agreement indicated that it would supersede all existing and
prior contracts except as incorporated and continued by reference.\15\
The agreement specified that it would carry forward and preserve the
terms and conditions of the Appalachian Joint Wage Agreement, the
Supplemental Six-Day Work Week Agreement, the National Bituminous Coal
Wage Agreement (dated April 11, 1945), and all of the various district
agreements executed between the UMWA and the various mine operators and
coal associations, as they existed on March 31, 1946, subject to the
terms and conditions of the 1947 agreement, and as amended, modified,
or supplemented by the 1947 agreement.\16\
---------------------------------------------------------------------------
\15\ National Bituminous Coal Wage Agreement of 1947, supra note 10
at 433 (``This agreement supersedes all existing and previous contracts
except as incorporated and carried forward herein by reference; and all
local agreements, rules, regulations, and customs heretofore
established in conflict with this agreement are hereby abolished.'')
\16\ National Bituminous Coal Wage Agreement of 1947, supra note 10
at 428.
Because the Krug-Lewis Agreement did not require the federal government
to provide health or retirement benefits to mine workers, and because
the terms of the agreement seemed to expire once mine operators
regained control of the mines, it appears unlikely that the federal
government maintains any obligation to provide such benefits pursuant
to the agreement. Further, even if such an obligation had been included
in the Krug-Lewis Agreement, the failure to specifically identify that
obligation as one that should be carried forward and preserved might
arguably cast doubt on whether the obligation should still exist.\17\
---------------------------------------------------------------------------
\17\ References to the Krug-Lewis Agreement in the National
Bituminous Coal Wage Agreement of 1947 are limited generally to
provisions involving payments made by mine operators to the welfare and
retirement fund, and the transfer of funds to the United Mine Workers
of America Welfare and Retirement Fund. See National Bituminous Coal
Wage Agreement of 1947, supra note 10 at 431-32.
A review of court decisions that have discussed the Krug-Lewis
Agreement has not revealed an obligation on the part of the federal
government to provide health or retirement benefits pursuant to the
agreement.\18\ While the agreement has been recognized as an expression
of the federal government's interest in making medical and other
benefits available to mine workers, it does not appear to have imposed
an obligation on the federal government to provide such benefits.\19\
---------------------------------------------------------------------------
\18\ See, e.g., Davon, Inc. v. Shalala, 75 F.3d 1114 (7th Cir.
1996); Lewis v. Jackson and Squire, 86 F.Supp. 354 (W.D. Ark. 1949).
\19\ See, e.g., Lillian M. Spiess, ``Paying What Was Promised: The
Guarantee of Benefits Under the Coal Industry Retiree Health Benefit
Act of 1992,'' 25 Quinnipiac L. Rev. 73, 76 (2006) (``It should be
noted that the Krug-Lewis Agreement was important not only because it
established a fund for miner pension and welfare benefits, but also
because it exemplified the federal government's continued commitment
and involvement to investigating the availability and standard of
medical programs and services available to miners and their families
and ensured the delivery of these services.'')
______
Prepared Statement of Hon. Orrin G. Hatch,
a U.S. Senator from Utah
WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah)
today delivered the following opening statement at a hearing to
consider the nomination of Robert Lighthizer to be the United States
Trade Representative (USTR):
Today we will consider the nomination of Mr. Robert Lighthizer to
be the United States Trade Representative.
The last time this committee considered a nominee for USTR was in
July of 2015.
Unfortunately, under the last administration, failure to promptly
nominate appointees to leadership positions at USTR became the norm. As
a result, it is a sad truth that the Office of USTR has not had a fully
confirmed bench of nominees since Ambassador Kirk resigned in January
2013. The difficulty USTR had during the past 4 years in advancing an
ambitious, pro-growth trade agenda was in no small part due to this
lack of leadership.
As chairman of this committee, I hope that we will be able to
change that, starting today.
All told, this committee must consider and report six positions at
the Office of the U.S. Trade Representative. Unfortunately, as with
most of President Trump's nominees, we are off to a slow start. I hope
that with today's hearing, we can begin the process of moving these
trade nominees more quickly.
Mr. Lighthizer is indisputably qualified to serve as USTR, and I
believe he has a strong base of bipartisan support. If we keep this
process focused on Mr. Lighthizer and the position he has been
nominated to fill, there is no reason he should not be approved by this
committee and confirmed by the Senate in short order.
Unfortunately, there have been suggestions that extraneous issues--
issues that are entirely unrelated to Mr. Lighthizer--may be attached
as conditions to the Senate's consideration of the nominee. Let me
address this briefly before returning the discussion to the nominee's
qualifications and the sizeable agenda and challenges facing the next
USTR.
Mr. Lighthizer has spent almost his entire career in public
service--including as staff director for this committee and as a Deputy
USTR--and in private practice fighting against unfair imports. In 1995,
Congress passed an amendment that prohibits an individual from serving
as U.S. Trade Representative or Deputy U.S. Trade Representative if
that person has ``directly represented, aided, or advised a foreign
entity'' in ``any trade negotiation, or trade dispute, with the United
States.''
While in private practice, Mr. Lighthizer represented a small
number of foreign clients in the late 1980s and early 1990s, well
before passage of the 1995 amendment. Because of this work, some of our
Democratic colleagues have argued that Mr. Lighthizer requires a waiver
to serve as USTR.
Mr. Lighthizer does not believe that his work falls within this
statute. The Office of Legal Counsel at the Department of Justice has
indicated that they share that opinion. So, it's not at all clear that
a waiver under the 1995 statute is necessary in Mr. Lighthizer's case.
This is not the first time the committee has had to deal with this
type of question. And, in the past, we've always been able to work
through it.
In 1997, President Clinton nominated Deputy U.S. Trade
Representative Barshefsky to serve as USTR. This committee was chaired
by Senator Roth, and Chairman Roth and the Republican majority worked
constructively to support President Clinton's nominee. Chairman Roth
wasn't certain that this statute applied to Ms. Barshefsky, but he
agreed to work with Senator Moynihan to consider a waiver so that
Ambassador Barhsefsky might assume her position as U.S. Trade
Representative without controversy.
As far as the record shows, there were no extraneous conditions
attached to the waiver, and it passed on the floor by a vote of 98 to
2.
Similarly, in 2007, President Bush nominated Deanna Tanner Okun for
the position of Deputy U.S. Trade Representative. Although neither she
nor the General Counsel at USTR believed that the statute covered her
prior work, Chairman Baucus and Ranking Member Grassley worked in a
bipartisan fashion to advance a waiver through the committee in order
to ensure that all necessary bases were being covered.
No extraneous conditions were demanded in exchange for approving
the waiver, and it was approved by the committee by voice vote.
Today, we are faced with very similar circumstances.
Once again, it is not clear that the statute applies to Mr.
Lighthizer's work in the 1980s and 1990s. In fact, we have what appears
to be a well-reasoned opinion from OLC that it does not.
Nevertheless, Democratic committee members are asserting with
absolute certainty that Mr. Lighthizer needs a waiver in order to be
confirmed. And, at the same time, these same members are refusing to
approve a waiver unless the committee also moves a piece of legislation
that is entirely unrelated to Mr. Lighthizer or the Office of USTR.
This kind of legislative hostage-taking certainly is not unheard of
in the Senate, but in the context of consideration of a nominee for the
Office of U.S. Trade Representative, it is totally unprecedented.
I have stated publicly that I am willing to work with Ranking
Member Wyden and others on the committee who believe a waiver is
necessary. But, I'll be honest, at this point, it appears that my
colleagues' insistence on the waiver at the committee level has more to
do with their demands for an unrelated ransom than any concern about
the applicability of the statute. I hope I'm wrong about that.
Let's be clear what is at stake here. By statute, the U.S. Trade
Representative is the lead official for developing, coordinating, and
implementing U.S. international trade policy; serving as the principal
trade advisor to the President; leading international trade
negotiations; and serving as the President's primary spokesperson on
international trade. Moreover, the statute creating the position makes
it clear that the Trade Representative is accountable not only to the
President, but also to Congress.
There is a lot of debate today about the direction of U.S. trade
policy. In fact, the President is currently considering some of the
most significant trade policy decisions in decades, including whether
and how to upgrade the North American Free Trade Agreement, whether and
how to launch additional trade negotiations with parties to the former
Trans-Pacific Partnership, and whether and how to continue negotiations
for a Trade in Services Agreement, an Environmental Goods Agreement,
and an agreement with the European Union. And he is doing so without
the advice of his chosen USTR, not because the nominee is unqualified,
but because some Democratic Senators see the nomination as an
opportunity to advance a wholly unrelated legislative priority.
Moreover, at a time when Congress is demanding greater input into
trade policy-making and stronger enforcement, our principal liaison in
the administration is being blocked from even assuming the office.
Once again, this is unprecedented.
It is time to move this nomination. Actually, to be blunt, it's
well past time.
It has been more than 50 days since Mr. Lighthizer was nominated by
the President. This is the longest gap between nomination and committee
consideration of a USTR since at least 2001.
Before concluding, let me briefly touch on some trade priorities I
expect the next USTR to address.
It will not be surprising to many of you that I expect this nominee
and this administration to be strong advocates for U.S. intellectual
property rights. Intellectual property is the backbone of our economy.
It affects large and small companies across America. It is a key part
of our economic growth. In my home State of Utah, for example, half a
million jobs and 67 percent of our exports are connected to
intellectual property. It must be a higher priority.
Second, I expect quick and effective use of Trade Promotion
Authority, or TPA. President Trump benefits significantly by coming
into office with TPA already in place. As a country, we have a unique
opportunity to lock-in strong trade agreements that meet the high
standards of TPA. But, trade negotiations are long-term endeavors, and,
to be successful, we must begin soon.
As the Administration updates existing agreements and negotiates
new ones, I hope that they will be able to rebalance the Obama
Administration trade agreement template. In my view, President Obama
continually sacrificed U.S. commercial interests at the negotiating
table in favor of a liberal social agenda. Some of the areas that I
believe need higher priority include the need to: reflect a standard of
protection for U.S. intellectual property rights similar to U.S. law;
seek the elimination of price controls; work for better market access
for our farmers and ranchers, including stronger provisions on sanitary
and phytosanitary measures; include enforceable provisions ensuring
greater transparency and accountability in government reimbursement
regimes; negotiate strong and enforceable provisions on anti-
corruption; provide greater protection for trade secrets; and include
provisions that help strengthen good governance, transparency, the
effective operation of legal regimes, and the rule of law.
Finally, we must do a better job of holding our trading partners
accountable. More effective monitoring of our trading partners'
existing commitments, along with full implementation of these
commitments, is critical to maintaining political support for a robust
trade agenda here at home.
Mr. Lighthizer, I commend you on a stellar career in international
trade. It is my hope that you will use your expertise to advance a
strong U.S. trade agenda that can help grow our economy and instill
faith in the American people in the ability of international trade and
trade agreements to provide new opportunities for working Americans.
I look forward to hearing your testimony today.
______
Prepared Statement of Robert E. Lighthizer, Nominated to be United
States Trade Representative, With the Rank of Ambassador Extraordinary
and Plenipotentiary, Executive Office of the President
Chairman Hatch, Ranking Member Wyden, members of the committee, it
is a great honor for me to appear before you today as President Trump's
nominee to be the U.S. Trade Representative.
I am particularly pleased to be in this hearing room where I have
so many fond memories and to be here with my former boss. It is fair to
say that I had my formation working for Senator Dole and this committee
in the late 1970s and early 1980s. I was able to work for truly
exemplary United States Senators on matters of great importance. In
addition to trade I assisted on tax policy, Social Security reform,
budget cuts, welfare bills and much more. I would be remiss if in
addition to Senators Dole and Grassley, I didn't mention Senators Long
and Moynihan. All truly great men.
After I left here, I became Deputy U.S. Trade Representative. I
worked for President Reagan and Senator Bill Brock, another wonderful
boss. I have often thought how lucky I am to have such mentors and role
models.
While at USTR I worked on agricultural issues, industrial issues,
services and trade policy. I negotiated several trade agreements--yes
mostly, they were bi-
lateral. Those also were exciting times.
For the last many years I have practiced international trade law.
The vast, vast majority of my work has been representing U.S.
manufacturing companies opposing unfair trade in this market and
opposing the noneconomic expansion of production capacity around the
world. As many of you know, I have written and talked often about the
challenges facing U.S. companies and workers and have espoused strong
enforcement of our trade laws. I have also worked to preserve U.S.
policies at the WTO and the OECD.
I agree with President Trump that we should have an ``America
first'' trade policy and that we can do better in negotiating our trade
agreements and stronger in enforcing our trade laws. I further believe
we need an international trade system that functions the way it was
negotiated and that the United States must be ready to work with like-
minded trading partners to ensure fair trade and to encourage market
efficiency.
If confirmed, I hope to work with this committee, the Ways and
Means Committee, others in Congress, President Trump and those in the
administration, and all stakeholders to develop and implement a policy
that increases trade, grows the economy, and makes trade freer and
fairer but, most importantly, that improves the economic well-being of
our workers, farmers, ranchers, and businesses large, medium, and
small. If confirmed, I hope in the end to be judged by whether I aided
all of you in accomplishing this goal.
Thank you.
SENATE FINANCE COMMITTEE
STATEMENT OF INFORMATION REQUESTED
OF NOMINEE
A. BIOGRAPHICAL INFORMATION
1. Name (include any former names used): Robert Emmet Lighthizer;
Bob.
2. Position to which nominated: United States Trade Representative.
3. Date of nomination: January 3, 2017.
4. Address (list current residence, office, and mailing addresses):
5. Date and place of birth: October 11, 1947 in Ashtabula County, OH.
6. Marital status (include maiden name of wife or husband's name):
7. Names and ages of children:
8. Education (list secondary and higher education institutions, dates
attended, degree received, and date degree granted): Georgetown
University, 1964-1969, BA; Georgetown University Law Center, 1970-1973,
JD.
9. Employment record (list all jobs held since college, including the
title or description of job, name of employer, location of work, and
dates of employment): JR Garbo Painting Company, Painter, Willoughby
Hills, OH, Summer 1969; U.S. Army National Guard, Active Duty, Fort
Gordon, GA, September 1969-March 1970 and Reserve from March 1970 to
September 1975; JR Garbo Painting Company, Painter, Willoughby Hills,
OH, Summer 1970; Williams and Connolly Law Firm, part-time messenger,
est. June 1970 to July 1971; Squire, Sanders and Dempsey Law Firm,
Summer Associate, Cleveland, OH, Summer 1972; Covington and Burling Law
Firm, Washington, DC, July 1973 to December 1978; U.S. Senate Committee
on Finance, Washington, DC, December 1978 to April 1983; U.S. Trade
Representative, Deputy, Washington, DC, April 1983 to June 1985;
Skadden, Arps, Slate, Meagher, and Flom law firm, partner, June 1985 to
present.
10. Government experience (list any advisory, consultative, honorary,
or other part-time service or positions with Federal, State, or local
governments, other than those listed above): Member of Georgetown
Business Improvement District (Georgetown BID) 2003 to 2012.
11. Business relationships (list all positions held as an officer,
director, trustee, partner, proprietor, agent, representative, or
consultant of any corporation, company, firm, partnership, other
business enterprise, or educational or other institution): Partner of
Skadden, Arps, Slate, Meagher, and Flom LLP; Trustee of Lighthizer
Family Trust 2012.
12. Memberships (list all memberships and offices held in
professional, fraternal, scholarly, civic, business, charitable, and
other organizations): Congressional Country Club; Burning Tree Country
Club (resigned); Metropolitan Club; The Everglades Club Inc.; and Pine
Tree Golf Club.
13. Political affiliations and activities:
a. List all public offices for which you have been a candidate.
None.
b. List all memberships and offices held in and services rendered
to all political parties or election committees during the last 10
years.
None.
c. Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $50 or more for the past 10 years.
------------------------------------------------------------------------
Transaction Date Committee Name Amount
------------------------------------------------------------------------
August 1, 2007 Skadden Arps Political Action $750
Committee
------------------------------------------------------------------------
September 18, 2012 Romney, Mitt/Paul D. Ryan via Romney $2,500
for President, Inc.
------------------------------------------------------------------------
September 9, 2016 Trump Make America Great Again $500
Committee
------------------------------------------------------------------------
September 9, 2016 Trump, Donald J./Michael R. Pence $400
via Donald J. Trump for President,
Inc.
------------------------------------------------------------------------
14. Honors and awards (list all scholarships, fellowships, honorary
degrees, honorary society memberships, military medals, and any other
special recognitions for outstanding service or achievement): National
Defense Medal; Georgetown Law School Paul Dean Award.
15. Published writings (list the titles, publishers, and dates of all
books, articles, reports, or other published materials you have
written):
------------------------------------------------------------------------
Title Publisher Date
------------------------------------------------------------------------
``Taxpayers Starting to Georgetown Law Journal 1973
Sue''
------------------------------------------------------------------------
``What Did Asian Donors The New York Times February 25, 1997
Want?''
------------------------------------------------------------------------
``The Democracy Gap'' The New York Times July 1, 1998
------------------------------------------------------------------------
``With Sunsets Come Trade Legal Times August 24-31, 1998
Dangers''
------------------------------------------------------------------------
``A New Trade Consensus'' The Journal of September 25, 1998
Commerce
------------------------------------------------------------------------
``A Deal We'd Be Likely to The New York Times April 18, 1999
Forget''
------------------------------------------------------------------------
``Conceding Free Trade's The New York Times December 3, 1999
Flaws''
------------------------------------------------------------------------
``Fast Track to Nowhere'' The New York Times January 3, 2002
------------------------------------------------------------------------
``Losing the Trade War--Can The Washington Times January 26, 2007
We Save America's
Manufacturing Base?''
------------------------------------------------------------------------
``Is the WTO Dispute Online Debate Updated February
Settlement System Fair?'', 26, 2007
Council on Foreign
Relations, with D. Ikenson
------------------------------------------------------------------------
``Grand Old Protectionists'' The New York Times March 6, 2008
------------------------------------------------------------------------
16. Speeches (list all formal speeches you have delivered during the
past 5 years which are on topics relevant to the position for which you
have been nominated):
None.
17. Qualifications (state what, in your opinion, qualifies you to
serve in the position to which you have been nominated):
I was responsible for trade issues at the Senate Finance
Committee; I was Deputy USTR; I have practiced international trade law
for 32 years.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections with your present employers,
business firms, associations, or organizations if you are confirmed by
the Senate? If not, provide details.
Yes.
2. Do you have any plans, commitments, or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, provide details.
No.
3. Has any person or entity made a commitment or agreement to employ
your services in any capacity after you leave government service? If
so, provide details.
No.
4. If you are confirmed by the Senate, do you expect to serve out
your full term or until the next presidential election, whichever is
applicable? If not, explain.
Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
None.
2. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated.
None.
3. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat, or modification of any legislation or affecting the
administration and execution of law or public policy. Activities
performed as an employee of the Federal Government need not be listed.
Registered as a lobbyist for United States Steel Corporation from
July 2005 to December 2009; I performed legal research, drafted
memoranda, and met with members of Congress, their staffs, and
government officials representing client interests in effort to
maintain and strengthen U.S. trade laws.
4. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
I am entering into an ethics agreement with the Office of the
United States Trade Representative.
5. Two copies of written opinions should be provided directly to the
committee by the designated agency ethics officer of the agency to
which you have been nominated and by the Office of Government Ethics
concerning potential conflicts of interest or any legal impediments to
your serving in this position.
6. The following information is to be provided only by nominees to
the positions of United States Trade Representative and Deputy United
States Trade Representative: Have you ever represented, advised, or
otherwise aided a foreign government or a foreign political
organization with respect to any international trade matter? If so,
provide the name of the foreign entity, a description of the work
performed (including any work you supervised), the time frame of the
work (e.g., March to December 1995), and the number of hours spent on
the representation.
Mr. Lighthizer represented the Sugar and Alcohol Institute of
Brazil, also known as the ``IAA,'' from October 1985 to February 1986
in an attempt to settle antidumping and countervailing duty cases
pending before the U.S. Department of Commerce that were brought by the
Ad Hoc Committee of Domestic Fuel Ethanol Producers against imports of
certain ethyl alcohol (also known as fuel ethanol) from Brazil. Mr.
Lighthizer spent a total of 190.75 hours on this representation.
D. LEGAL AND OTHER MATTERS
1. Have you ever been the subject of a complaint or been
investigated, disciplined, or otherwise cited for a breach of ethics
for unprofessional conduct before any court, administrative agency,
professional association, disciplinary committee, or other professional
group? If so, provide details.
No.
2. Have you ever been investigated, arrested, charged, or held by any
Federal, State, or other law enforcement authority for a violation of
any Federal, State, county, or municipal law, regulation, or ordinance,
other than a minor traffic offense? If so, provide details.
No.
3. Have you ever been involved as a party in interest in any
administrative agency proceeding or civil litigation? If so, provide
details.
No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, provide details.
No.
5. Please advise the committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
None.
E. TESTIFYING BEFORE CONGRESS
1. If you are confirmed by the Senate, are you willing to appear and
testify before any duly constituted committee of the Congress on such
occasions as you may be reasonably requested to do so?
Yes.
2. If you are confirmed by the Senate, are you willing to provide
such information as is requested by such committees?
Yes.
______
Questions Submitted for the Record to Robert E. Lighthizer
Questions Submitted by Hon. Orrin G. Hatch
Question. In the Trans-Pacific Partnership negotiations, the Obama
administration excluded the financial services sector from the
provision it negotiated on this issue. The omission was very
controversial and cost the agreement significant support. After further
discussions with Congress and the private sector, the administration
agreed that it would seek to protect the financial services sector from
localization requirements in future negotiations.
Mr. Lighthizer, can you assure me that, if you are confirmed, the
administration will treat the financial services sector the same as
every other sector when it negotiates data localization provisions in
trade agreements?
Answer. I am aware of the concerns raised by U.S. financial
services companies regarding the importance of addressing data
localization requirements by foreign governments. I understand that
U.S. financial services companies engaged extensively with the previous
administration to advocate for an approach that differed from the
outcome in the final TPP agreement. If confirmed, I will work to ensure
that trade agreement provisions related to localization requirements
treat the financial services sector the same as every other sector.
Question. Trade Promotion Authority requires U.S. trade negotiators
to ``achieve the elimination of government measures such as price
controls and reference pricing which deny full market access for United
States products'' and ensure ``that the provisions of any trade
agreement governing intellectual property rights . . . reflect a
standard of protection similar to that found in U.S. law.'' These
disciplines are particularly important for the U.S. biopharmaceutical
industry, which relies on strong IP protections and faces onerous price
controls abroad.
Will you ensure that any new U.S. FTAs meet this TPA standard,
raising global standards to those that we use here in the United
States?
Answer. I recognize the importance of this issue and the efforts
that you have made over the years in working to ensure that U.S.
pharmaceutical and biopharmaceutical products receive fair treatment in
overseas markets and under the government regulatory reimbursement
regimes and reference pricing programs of foreign countries. I also
recognize the importance attached by Congress in including this
provision as a Priority Negotiating Objective in the Bipartisan
Congressional Trade Priorities and Accountability Act of 2015 (TPA). If
confirmed, I look forward to working with you to achieve these
objectives in trade negotiations and in ongoing bilateral efforts with
individual countries.
Question. Mr. Lighthizer, I fully support the goal of ensuring that
workers are treated fairly and that trade agreements do not lower labor
standards. However, I am concerned that continued expansion of labor
obligations linked to dispute settlement in trade agreements could lead
to unintended consequences and undermine continued congressional
support for new trade agreements. For example, the International Labor
Organization (ILO) has not hesitated to unjustifiably criticize U.S.
labor policies, particularly U.S. agriculture policies and American
family farms. Expanding labor obligations could create an opportunity
for ILO criticisms to be used as the basis for litigation in trade
agreements.
That is why we must ensure that any labor obligation undertaken in
our trade agreements does not go beyond those strictly and clearly
enshrined in U.S. law. Furthermore, we must ensure that interpretation
of those commitments is based on U.S. law and practice, and that we do
not allow any trade tribunal to use ILO opinions or analysis as a basis
for compliance with our labor obligations.
Mr. Lighthizer, will you commit to me that you will not agree to be
bound by any labor commitment which exceeds U.S. law and that you will
not allow a tribunal to accord deference to ILO opinions or analysis as
a basis for determining compliance with our labor obligations?
Answer. Congress has set out important negotiating objectives
regarding labor protections in TPA. If confirmed, I will act
aggressively to ensure that any interpretation of our labor commitments
is based on U.S. law, rather than international standards. I look
forward to consulting closely with you and other members of Congress
with an interest in these issues to seek to ensure that we negotiate
provisions in our trade agreements that reflect high-standard
protections for workers and are fully consistent with U.S. law.
Question. China's leadership continues to pledge that the market
will play a greater role in China's economy, yet government actions,
including use of China's Anti-Monopoly Law, continue to advance
industrial policies at the expense of U.S. companies.
What will be your strategy for addressing China's use of the Anti-
Monopoly Law as an industrial policy tool and how will you ensure that
China administers its Anti-Monopoly Law in a non-discriminatory and
transparent manner?
Answer. If confirmed, I will undertake efforts, in coordination
with other U.S. Government agencies, to ensure that China applies its
Anti-Monopoly Law in a transparent manner to address legitimate
competition-related concerns, not as a guise for industrial policies.
Question. Mr. Lighthizer, more than once I have expressed my
concern that, despite Russia's serial violations of its WTO
commitments, our government has not brought a single dispute against
Russia in the World Trade Organization.
Will you promise to fully review Russia's WTO commitments and to
take all necessary measures to bring them into compliance, including,
where appropriate, taking Russia to dispute settlement at the WTO?
Answer. If confirmed, I will direct USTR staff to review thoroughly
Russia's implementation of its World Trade Organization (WTO)
obligations and take all necessary measures, including dispute
settlement where? appropriate, to ensure Russia's compliance.
Question. Mr. Lighthizer, it is very important that, pursuant to
TPA negotiating objectives, our trade agreements provide for
transparency and procedural fairness in reimbursement decisions and
that these provisions be subject to dispute settlement. In my view,
these are crucial elements which build public trust in national health-
care systems by assuring the public that decisions are based on merit.
Can you commit to me that you will work to ensure that this TPA
negotiating objective is met, and that these provisions will be subject
to dispute settlement, in our trade agreements?
Answer. I strongly support the inclusion of provisions in U.S.
trade agreements providing for transparency and procedural fairness for
pharmaceuticals and medical devices under government regulatory
reimbursement regimes, and will work to achieve that result. I am aware
of the efforts that you have made over many years to ensure the U.S.
biopharmaceutical products receive fair treatment in overseas markets,
including under foreign government regulatory reimbursement regimes, I
also recognize the importance attached by Congress to these issues as
reflected in TPA. If confirmed, I look forward to working with you on
achieving these objectives in trade negotiations and in ongoing
bilateral efforts with individual countries.
Question. Canada's creation of a heightened standard for patentable
utility for pharmaceutical patents is a serious problem for U.S.
innovators. This heightened standard is inconsistent with other
countries, and has undermined the ability of U.S. innovators to obtain
and enforce patent rights in Canada. It is also inconsistent with
Canada's obligations under the World Trade Organization and under
NAFTA.
What will you do to ensure Canada's patentability standards are in
line with its international obligations?
Answer. If confirmed, I will place a high priority on ensuring
strong intellectual property protection and enforcement by our trading
partners. This is necessary for future innovation, and it protects a
competitive advantage of the United States in the global market. I look
forward to working with you to address your concerns about patent
protection in Canada and how best to use all appropriate trade tools to
address those concerns.
Question. As you know, the Generalized System of Preferences (GSP)
program expires this year. This program provides tariff reductions for
developing countries and supports manufacturing in the United States. I
support renewal of this program, and hope you will as well. At the same
time, I do not believe that prior administrations have adequately
examined the eligibility criteria to ensure that only countries that
comply with the eligibility criteria receive benefits. Your commitment
that you will fully review all potentially eligible countries to ensure
compliance with the program's criteria would send a strong signal to
Congress that, should the program be renewed, you will use it
effectively.
Can you commit to fully reviewing GSP countries to ensure their
full compliance with the programs criteria?
Answer. If confirmed as the USTR, I will commit to work with you
and the committee, as well as the interagency and stakeholders, to
ensure that GSP countries are fully meeting the GSP statutory
eligibility criteria.
Question. Technological protection measures, which allow creators
to control and manage access to copyrighted works, have enabled
creators to offer new and secure streaming and other services that
consumers have come to expect. But today, more and more illicit
business models are built around circumventing these controls in order
to steal this content. Despite international and bilateral trade
obligations to prevent the circumvention of such controls, a number of
countries fail to provide such protections, whether due to non-existent
or inadequate laws or ineffective enforcement.
If confirmed as USTR, how will you help ensure that U.S. trading
partners live up to their obligations to prevent such harm to U.S.
creators?
Answer. If confirmed, I will place a high priority on ensuring
strong intellectual property protection and enforcement by our trading
partners. I will use all appropriate trade tools to obtain strong
protection for new and emerging technologies and new methods of
transmitting and distributing creative content and products embodying
intellectual property, including in a manner that facilitates
legitimate digital trade.
Question. Many industries in the United States are increasingly
concerned about a number of activities sponsored by international
organizations such as the United Nations and the World Health
Organization that propose the use of government action that undermine
core U.S. economic interests and appear to raise trade barriers. Last
year's U.N. High-Level Panel on Access to Medicines is one regrettable
example.
Under your leadership, how would USTR work with other agencies to
protect U.S. interests and values at the U.N., and push back against
trade-distorting initiatives that undermine U.S. competitiveness?
Answer. If confirmed, I will ensure that USTR works closely with
other agencies to stand up for U.S. trade interests in the United
Nations, World Health Organization, and other relevant forums,
including with respect to the U.N. High-Level Panel on Access to
Medicines report.
Question. Last month, the WTO Trade Facilitation Agreement entered
into force. Its full implementation will bring commercially meaningful
benefits for participants and promote good governance that will reduce
government corruption at the border. Manufacturers in the United States
that rely on export markets, as well as access to global inputs, will
notice reduced bureaucratic hurdles and more transparency when their
goods cross borders.
As USTR, how will you support the full implementation of this
agreement and encourage our trading partners to improve their customs
and trade facilitation practices?
Answer. The WTO Trade Facilitation Agreement (TFA) provides new,
enforceable rules governing how U.S. goods will be treated as they move
through our trading partners' border agencies, reducing trade costs and
delays and allowing American goods to compete on a more level playing
field. If confirmed as USTR, I will work to ensure that the TFA is
implemented by all WTO Members under the timelines in the Agreement,
press those WTO Members that have yet to ratify the TFA to do so
expediently, and use the TFA Committee to promote full implementation
of the Agreement. Further, I will undertake efforts to raise awareness
of the TFA within the U.S. Government and among U.S. producers and
manufacturers, and will engage with our trading partners on U.S. best
practices for achieving full implementation of the Agreement.
Question. Mr. Lighthizer, we have seen an increasing number of
countries seeking ``cultural exceptions'' in their trade agreements
that would have the effect of barring U.S. audio-visual providers from
accessing these markets. At the same time, the U.S. audio visual market
is one of the most open in the world.
As USTR considers its trade agreement priorities, if confirmed, how
will you help level the playing field for the U.S. audio visual
industry?
Answer. Audio-visual services are an important U.S. export and an
important source of U.S. jobs. Consumers around the world demand access
to U.S. films, video programming, and music delivered to an ever-
evolving array of platforms, from cinemas to smart phones. The U.S.
market is open to foreign services suppliers and investors in these
areas. If confirmed, I look forward to working with the Congress and
relevant stakeholders to ensure that our trading partners maintain open
markets for U.S. audio-visual services.
Question. Concerns have been raised by the U.S. auto industry
regarding efforts by the European Union to promote its auto standards
abroad at the expense of U.S. auto standards. The core concern is the
degree to which the EU supports promotion at international forums,
including the United Nations Working Party 29 (WP.29), which operates
under the auspices of the United Nations Economic Commission for Europe
(UNECE) 1958 agreement. According to industry, the WP.29 forum seeks to
develop globally harmonized regulations for motor vehicles, as
contemplated by the 1958 agreement, to which the United States is not a
party, and the 1998 agreement, which sought to develop Global Technical
Regulations (GTRs) for motor vehicles worldwide.
The 1958 agreement, which provides for mutual recognition of auto
standards, is largely the means used by the EU to promote its auto
standards globally. The 1998 agreement was developed, in part, to allow
all other auto-producing economies, like the United States, to
participate in the WP.29 activities. Unfortunately, according to
industry, the 1998 agreement has fallen well short of expectations--due
in large part to the lack of support by the United States.
Development and promotion of U.S. industry standards can be a key
tool to help U.S. industry develop markets overseas and expand U.S.
exports. For the auto industry the U.S. Department of Transportation
National Highway Traffic Safety Administration (NHTSA) International
Policy and Harmonization Division and the Environmental Protection
Agency's Office of International Activities are key.
Should you be confirmed, can you ensure through your role as the
lead official for developing, coordinating, and implementing U.S.
international trade policy, that promotion of U.S. standards abroad,
including auto standards, will be a priority for your agency?
Answer. I am aware of these concerns and, if confirmed, this set of
issues will be an important priority. Increasing the global acceptance
of standards used by U.S. manufacturers is important for improving the
ability to manufacture products in, and export them from, the United
States--and this is especially true for sectors that require large
economies of scale, such as the U.S. automotive industry. If confirmed,
I look forward to working with U.S. stakeholders to better understand
the issue. I will also work with other agencies and use all appropriate
tools to promote the acceptance by our trading partners of U.S.
automotive standards, and other standards used by U.S. manufacturers.
Question. Mr. Lighthizer, WTO procurement rules and the equivalent
rules in NAFTA and our other free trade agreements establish reciprocal
market access in government procurement and guarantee that U.S.
companies have a fair, open, and transparent opportunity to bid on
contracts issued by foreign governments. It is important for U.S.
companies to be able to compete for these contracts, which are
potentially worth billions of dollars each year.
Can you assure me that, if you are confirmed, the administration
will ensure that our trade agreements include strong chapters on
government procurement?
Answer. Thank you for the question, Mr. Chairman. I take note of
the importance of ensuring that American companies maintain access to
the government procurement markets of our trading partners. During
negotiations I will intend to seek as favorable treatment for U.S.
companies as that accorded to domestic and other foreign goods,
services, and suppliers. If confirmed, I commit to work with you on
this issue.
Question. I am concerned that many American companies are being
subject to antitrust investigations that lack due process protections
in an effort to transfer U.S. patented technology to their domestic
companies, or to insulate their domestic companies from U.S.-based
competition. In particular, foreign governments are using their
antitrust authority to diminish U.S. intellectual property rights,
including patent licensing. Concerns have been raised in particular
about Korean and Chinese antitrust investigations. The use of antitrust
as a tool of industrial policy undermines U.S. patent rights,
suppresses innovation, and puts U.S. competitiveness in the industry at
risk.
Many U.S. trade agreements include important IP and due process
protections. If you are confirmed, how will ensure that our trading
partners are living up to their end of the bargain to treat our
companies fairly, including in competition proceedings?
Answer. Due process protections are critical to ensuring that
parties to an investigation have access to the record evidence and can
present and respond to relevant arguments. These protections are no
less important in relation to competition or intellectual property
rights proceedings. If confirmed, I will examine very closely concerns
raised in these and other contexts to address any shortcomings with
respect to foreign practices and would welcome further engagement with
you and others in the coming months.
Question. In reauthorizing Trade Promotion Authority in 2015,
Congress made clear that a major objective of U.S. trade negotiations
should be ``preventing or eliminating discrimination with respect to
matters affecting the availability, acquisition, scope, maintenance,
use, and enforcement of intellectual property rights.'' Many foreign
antitrust investigations by China and Korea are directed at forcing
U.S. companies to license their U.S. patents on terms favorable to
their domestic companies, essentially weakening the value of U.S.
patents. The U.S. patent system has been central to U.S. leadership in
the global innovation economy, and many innovative companies rely on
patent licensing to disseminate and commercialize their inventions.
Can U.S. companies count on the administration, and your office in
particular, if you are confirmed, to ensure that U.S. patent rights are
respected abroad?
Answer. Intellectual property-intensive industries make a very
substantial contribution to the U.S. economy and U.S. competitiveness,
supporting millions of U.S. jobs and a large portion of U.S.
merchandise exports. Accordingly, I am concerned by any attempt by
foreign countries to weaken the protection and enforcement of
intellectual property rights held by U.S. companies. No law should be
diverted from its proper focus and used to pursue unrelated industrial
policy goals. The concern you raise is one of many that, if confirmed,
I will monitor very closely and address through appropriate channels.
Question. Over the past several years, there has been an increase
in burdensome international regulations which have increased costs for
U.S. companies selling in these markets and limited access to growing
export markets around the world. These technical barriers have taken
the form of testing regulations, certification requirements, local
content requirements, inspection procedures and safety standards that
are different from international norms in one way or another but have
not led to ``safer'' or more ``environmentally friendly'' products sold
in their respective markets. In fact, often times these technical
barriers are put in place with the intent to protect domestic markets
from U.S. competition. USTR has proven to be an invaluable resource for
U.S. companies to fight these international regulatory burdens and has
had many successes at the WTO Technical Barriers to Trade Committee
highlighting one of the many valuable roles the WTO plays for U.S.
companies.
If confirmed, how would you go about addressing these international
regulatory burdens for U.S. companies? What are your thoughts about
using WTO to pursue these objectives?
Answer. I am committed to reducing regulatory and other technical
barriers, such as discriminatory standards and unnecessary or
duplicative testing requirements, in order to increase exports of U.S.
manufactured and agricultural goods. If confirmed, I look forward to
working with U.S. stakeholders to resolve concerns regarding trade-
restrictive or unduly burdensome measures, including through engagement
with foreign governments bilaterally, at regional levels, and at the
WTO Technical Barriers to Trade Committee.
Question. Mr. Lighthizer, a number of U.S. international airlines
are concerned about an un-level playing field in the global market for
international air transport, due to actions by certain foreign airlines
that are owned by their governments.
What can your agency do to ensure that our U.S. international
airlines have a fair and equal opportunity to compete in providing
international air transport services?
Answer. I understand the importance of this issue, and of ensuring
that our international airlines compete on a level playing field across
the globe. If confirmed, I will look into this matter and work closely
with other involved agencies, such as the State Department and
Department of Transportation, to do everything we can to ensure that
our international carriers have a fair and equal opportunity to
compete.
Question. Mr. Lighthizer, the European standardization
organizations have been very active in lobbying foreign governments to
adopt European standards as international standards, often to the
exclusion of American standards.
The European Commission officially endorses this policy, stating on
its website: ``Each European standard adopted as an international
standard represents a possible competitive advantage for European
industry.''
As you may know, American products are often manufactured to meet
an American standard, not a European standard. This means that when
foreign countries outside of Europe adopt a European standard, American
companies are effectively blocked from accessing those markets.
Can you assure me that, if you are confirmed, the administration
will address the EU's policy of promoting European standards as a
barrier to market access for American products?
Answer. I believe that increasing the global acceptance of
standards used by U.S. manufacturers is important for improving the
ability to manufacture products in, and export them from, the United
States. If confirmed, I look forward to working with U.S. stakeholders
to address this issue with our trading partners. I would plan to use
bilateral and multilateral engagement mechanisms to promote the
acceptance by our trading partners of standards used by U.S.
manufacturers.
Question. Mr. Lighthizer, to give you a concrete example of the
barriers to market access that arise when a foreign country adopts only
European standards, recently the European standardization organizations
have been successful in lobbying certain Middle Eastern countries to
adopt a European safety standard for footwear. These countries no
longer recognize the American safety standard as an acceptable
international standard, even though American-made products have been
sold in the Middle East for decades.
If you are confirmed, can you assure me that the administration
will take all steps necessary to regain U.S. market access under
circumstances such as these?
Answer. I am aware of the concerns facing the footwear industry in
the Middle East. If confirmed, I look forward to working with these
countries to promote their adoption of standards policies that
facilitate trade with the United States. I would plan to use bilateral
and multilateral engagement mechanisms to promote the acceptance of
standards used by U.S. manufacturers, including those used by the
American footwear industry.
Question. Investor-state dispute settlement (ISDS) provides crucial
protections for U.S. companies that invest overseas to enable them to
receive just compensation from expropriation. In the Bipartisan
Congressional Trade Priorities and Accountability Act of 2015,
protection for U.S. investors is a Principal Negotiating Objective of
the United States. This has been a critical part of most U.S. Free
Trade Agreements, and has been a part of U.S. international economic
policy through Bilateral Investment Treaties for decades.
As USTR, can you affirm that in any negotiations or renegotiations
of trade agreements of bilateral investment treaties, that you will
reduce or eliminate artificial or trade distorting barriers to foreign
investment, and secure for U.S. investors overseas rights that are
comparable to those that would be available under U.S. legal principle
and practice?
Answer. If confirmed, I will look forward to working closely with
the Congress on trade and investment agreements that advance the
negotiating objectives set forth in TPA, including the principal
negotiating objectives to reduce or eliminate artificial or trade
distorting barriers to foreign investment and to secure for U.S.
investors rights comparable to those that would be available under U.S.
legal principles and practice.
______
Questions Submitted by Hon. Pat Roberts
Question. Our farmers and ranchers depend on strong trade
relationships around the world. Expanding market access and ensuring
that our producers remain competitive is critical to our economy. USTR
and USDA have a history of working hand in hand to make sure that U.S.
agriculture has a seat at the trade table. As the new administration
takes shape, I have been concerned that there are too many cooks in the
kitchen when it comes to trade, yet few of them are familiar with the
main ingredients. In addition to USTR, the President recently
established a new National Trade Council at the White House, as well as
increased the trade responsibilities under the Department of Commerce.
As the lead trade negotiator for the United States, how will you
work with other agencies, specifically USDA, to make sure that
agriculture is a top priority?
Answer. Food and agriculture exports are critical to farm income,
and the food processing and beverage manufacturing industries are a top
source for U.S. manufacturing jobs in the United States. As I stated at
my confirmation hearing, I have a long history working on agriculture
issues, and I am committed to prioritize work to expand agricultural
exports. USTR historically has worked very closely with trade and
technical experts at USDA and other agencies to resolve the full range
of agricultural trade issues. If confirmed, I intend to maintain and
strengthen that relationship and will work closely with the Secretary
of Agriculture to expand agricultural exports as a top priority for
this administration and the United States.
Question. China is one of the United States' top agricultural
markets. However, Kansas wheat farmers championed the recent cases
announced by USTR on Chinese subsidies and tariff rate quotas (TRQs),
as wheat growers are especially impacted by the seeming failure of
China to adhere to their commitments in the WTO.
Kansas ranks as the third highest U.S. State exporter of beef to
the global market. Since 2003, the U.S. beef industry has tried to
regain access into China. I was pleased that China publicly stated
their intentions to lift its ban on U.S. beef, but there is still work
needed to hold China to that commitment and restore true access. This
access to the Chinese market is critical for my cattlemen back home.
These are just two of the challenges we face in one of our most
important export markets. A strong trade policy is clearly about more
than free trade agreements.
How will you lead USTR to work with other countries to ensure that
barriers to trade are reduced and eliminated?
Answer. I fully understand the importance of enhancing market
access around the world for farmers and ranchers in Kansas and all
other States. U.S. food and agricultural exports face a number of
unwarranted barriers and trade distortive policies in other countries,
including China. For example, I understand that USTR is pursuing
dispute settlement procedures on China's domestic support for wheat,
corn and rice. Ensuring that our trading partners meet international
trade obligations, especially those of the World Trade Organization, is
a core foundation for fairer and freer trade. If confirmed, I am
committed to the expansion of U.S. agricultural exports through
negotiations that create enhanced export opportunities for our farmers
and ranchers. Where countries fail to do so, I will aggressively
utilize, in cooperation with the Secretary of Agriculture and
Administration and congressional colleagues, all available tools in the
WTO, bilateral engagement, and other mechanisms.
Question. Agricultural trade is essential to American farmers and
ranchers, but expanding market access for our products through new
trade agreements is just one piece of the puzzle. The enforcement of
existing agreements will ensure that our trading partners are playing
by the rules they have agreed to, and that our producers have a level
playing field.
Whether dealing with steel in China, dairy products in Canada, or
other products, if confirmed as the lead Trade Representative for the
United States, how will you approach enforcement of our agreements with
other countries?
Answer. If I am confirmed, I will commit to use all the resources
available to USTR, and seek to draw on the significant expertise in
other agencies, to enforce fully existing U.S. trade agreements to
ensure that our trading partners comply with their international
obligations. To compete in an international market, we must ensure that
U.S. exports, including agricultural exports, get the same access
abroad that we allow imports here in the United States. I would also
work to protect U.S. trade remedies laws so that when other countries
engage in unfair trade, we have the tools to provide U.S. producers
with an effective remedy.
Question. Science is important. Basic facts and data should inform
policy decisions at home and around the globe. Decisions based on
reputable science offer predictability and provide certainty. But,
everyone doesn't seem to share this perspective. For example, across
the world, international organizations and various individual countries
have made policy recommendations and passed laws regarding certain
types of foods they view as unhealthy. For instance, the World Health
Organization has proposed a tax on sugary drinks and their research
agency, the International Agency for Research on Cancer, classified red
and processed meat as probably carcinogenic and carcinogenic,
respectively.
How can the U.S. Government agencies work with USTR and how can
USTR work with foreign and international entities to ensure that policy
recommendations and laws be science-based?
Answer. If confirmed, I am committed to working with U.S.
Government agencies to strengthen the process by which the U.S.
Government engages with international organizations and to develop U.S.
positions that support sound science and U.S. interests. I am further
committed to stand up against proposals that are not based on science
and that threaten to harm the interests of U.S. farmers, ranchers and
food manufacturers and to ensure that international organizations
respect the boundaries of their respective missions, particularly where
public health organizations may become involved with fiscal or trade
policy in ways that may harm U.S. interests. In support of these
principles, I intend to engage with foreign governments bilaterally,
regionally, and in international organizations to ensure that the
resources of international organizations are utilized to best meet
their scope and mandate, and that policy recommendations and laws are
based on sound scientific principles and international standards.
Question. Historically, trade agreements have achieved strong
support from most in the agriculture industry. Last year, as
negotiations were taking place on the Transatlantic Trade and
Investment Partnership (T-TIP), there was concern that in an attempt to
conclude the negotiations, a final agreement might not include a strong
framework for agriculture. I, along with 25 other Senators, sent the
previous administration a letter urging the prioritization of
agriculture in a final agreement. Similar concerns have surfaced as the
United States turns towards negotiated bilateral agreements with
countries like Japan that have historically been protective of their
agriculture sectors. Farmers and ranchers are witnessing their third
year of low commodity prices and need to avail themselves to a free and
open marketplace to stay in business and provide jobs in rural America.
Leaving agriculture out of a bilateral agreement with Japan, or any
other country, would set a dangerous precedent and would be a
disservice to rural America.
Can you assure me that the agriculture sector will be a consulted
partner and fully included in any efforts to forge a bilateral trade
agreement with Japan or any other country?
Answer. I agree that agriculture is a critically important part of
our trade agenda and that strong support from the agricultural sector
has always been an essential element of a successful negotiation. If
confirmed, an ambitious outcome for agriculture will be a central
objective in any negotiation we undertake. I am committed to consulting
closely with U.S. agricultural stakeholders and agricultural trade
advisors, along with this committee, House Ways and Means and the
Senate and House Agriculture Committees, and other interested members
of Congress to ensure that the interests of farmers and ranchers are
fully included in our bilateral trade agenda, including any potential
negotiation with Japan and other countries of key export interest to
U.S. farmers and ranchers.
Question. Since 2001, Canada and Mexico have ranked in the top 3
destinations for U.S. agricultural exports. In 2016, the two countries
accounted for nearly 30 percent of the value of total U.S. agricultural
exports. Additionally, Canada and Mexico have continuously been ranked
in the top five destinations for U.S. agricultural exports since NAFTA
was signed into law in 1993.
As the administration moves to potentially renegotiate NAFTA, how
will you ensure that we are building upon what is working well within
the agreement, and not making changes that could negatively impact
these critical markets?
Answer. For most agricultural sectors, the North American Free
Trade Agreement has provided important and growing trade opportunities
that benefit America's farmers and ranchers. I fully appreciate the
importance of exports, including exports to Canada and Mexico, to
support rural income and jobs in the U.S. food and agriculture
industry. I also fully appreciate the importance of preserving exports
and expanding upon the gains from our current trade agreements. If
confirmed, I will strengthen American agriculture through negotiations
that create enhanced export opportunities for American farmers and
ranchers, while we maintain the current markets that we already have.
If confirmed, I will be sure to consult closely with you and other
members of Congress as required by Trade Promotion Authority.
Question. Agriculture and food exports rely on science-based food,
food production, and food safety standards of the Codex Alimentarius--
an inter-governmental organization sponsored by the Food and
Agriculture Organization and the World Health Organization, and the
International Plant Protection Convention (IPPC), both recognized by
the World Trade Organization (WTO) as the international food safety
standard and plant health setting bodies, respectively. For instance,
some WTO member countries block U.S. meat and poultry exports with
protectionist measures, even though those products meet Codex
standards. When member countries block products meeting both these sets
of standards, they seemingly create Sanitary and Phytosanitary (SPS)
non-tariff trade barriers.
If confirmed, how will you hold our trading partners in the WTO
accountable to their commitment to both the Codex Alimentarius and the
IPPC and resolve SPS non-tariff trade barriers in these international
markets?
Answer. If confirmed, I am committed to ensuring that our trading
partners live up to their international obligations, including their
WTO obligation to base their SPS measures on scientific principles, and
to base measures on international standards established by Codex, IPPC
and the World Organization for Animal Health (OIE), as appropriate. I
am committed to hold accountable countries that establish non-science
based measures that are inconsistent with international standards and
that block imports of safe U.S. agricultural products.
Question. Despite efforts to engage with the prior administration,
it failed to fully implement a key expansion of the Generalized System
of Preferences passed in 2015 that made certain travel goods eligible
to apply for duty-free status from all GSP countries. Even with a
positive review from the interagency review process, the last
administration declined to issue a proclamation fixing this issue
before leaving office. These products are no longer made domestically.
By only allowing imports from least developed countries and Africa,
China has continued to dominate almost 90 percent of the market by
quantity and U.S. companies have not been able to expand their
sourcing. Maintaining import tariffs on luggage, handbags, backpacks
and sports bags from most GSP countries has severely inhibited the
ability of companies to utilize this program to lower costs and create
American jobs. Additionally, U.S. companies are not able to move
sophisticated, high-end packs and sports bags to countries that are not
able to make them. U.S. companies need duty-free access from countries
such as Indonesia, the Philippines, Thailand, and Sri Lanka.
Will you agree to advise the President that all travel good lines
contained in the bipartisan legislation be given duty free from all GSP
countries and recommend the issuance of a Presidential proclamation in
a timely manner?
Answer. I understand there is a great deal of interest by some
members of this committee, and travel goods importers, in extending
duty-free treatment to the more economically advanced GSP countries for
travel goods. If confirmed, I commit to review this issue carefully,
consult with this committee and the Ways and Means Committee, and
advise the President accordingly.
Question. The United States for decades has shared a strong
economic relationship with Taiwan. Last year, Taiwan was the United
States' 10th largest trading partner.
If confirmed, are you committed to strengthening our engagement and
economic cooperation with Taiwan?
Answer. As you point out, the United States and Taiwan have a
longstanding and important trade and investment relationship. If
confirmed, I intend to work to strengthen further those trade and
investment ties. Recognizing that foreign investment from Taiwan and
elsewhere can create more jobs in the United States and increase U.S.
economic growth and competitiveness, and increased trade can benefit
U.S. agricultural, goods and services trade, I intend to develop a
trade and investment policy that promotes a stronger bilateral
relationship with Taiwan and examine the prospects of additional
negotiations with Taiwan, as well as to address longstanding problems
such as market access for beef and pork.
______
Questions Submitted by Hon. Michael B. Enzi
Question. The U.S. soda ash industry is a shining example of U.S.
competitiveness in manufacturing. The industry is the most competitive
and environmentally friendly in the world due to a unique natural
deposit of soda ash material, trona, in Green River, Wyoming. The
industry exports over $1 billion annually, over half of its total
output. There were two major developments in 2016 of importance to the
U.S. soda ash industry.
First, China's State Council officially recognized that its soda
ash industry is in a state of overcapacity. And second, at the November
2016 U.S.-China Joint Commission on Commerce and Trade (JCCT), in the
context of discussions on industrial excess capacity, China agreed to
exchange information on soda ash. China's overcapacity in soda ash
directly harms the U.S. natural soda ash industry in its struggles to
compete in key export markets against low-priced Chinese synthetic soda
ash. As USTR, will you plan to hold China to its JCCT commitment to
exchange information on its soda ash excess capacity?
Answer. I understand that U.S. soda ash producers are among the
cleanest and most efficient producers of this important industrial
input, an important U.S. exporting industry, and that they compete
head-to-head with Chinese soda ash exports in many third-country
markets. If confirmed, I fully intend to hold China to its commitment,
at the November 2016 U.S.-China Joint Commission on Commerce and Trade
(JCCT), to exchange information on the soda ash industry.
Question. What specific steps will you pursue to ensure that China
remedies its industrial excess capacity in soda ash?
Answer. If confirmed, I will work to develop effective ways to
ensure that China addresses its excess industrial capacity, both as a
systemic issue and in relation to specific industries like soda ash.
These steps will include working with the soda ash industry to identify
and address non-market industrial policies and unfair trade practices
that may contribute to excess capacity.
Question. Increasing our access for beef into Japan and other
Southeast Asian countries is critical. President Trump has withdrawn
from the Trans-Pacific Partnership (TPP) and has announced his focus
will likely be on bilateral trade agreements with each of those
nations. In particular, a bilateral trade deal with Japan is sorely
needed as the U.S. beef exports to Japan currently face a 38.5% tariff
in the Japanese market for both fresh and frozen beef. Australian
frozen beef exports to Japan meanwhile currently face tariffs of 27.5%,
which will decline to 19.5% over the next 15 years. Australian fresh
beef exports currently face tariffs of 30.5% which will decline to
23.5% over the next 12 years. Australian exporters clearly have an
advantage over U.S. exporters in the Japanese beef market. Can you give
us a better understanding of how the Trump administration will pursue
opportunities for American beef producers in such bilateral agreements?
Answer. If confirmed, I am committed to the expansion of U.S. beef
exports through negotiations that remove tariffs and other barriers
that restrict the trade of beef products. I am also committed to
ensuring that U.S. trading partners meet international trade
obligations, including those of the WTO SPS Agreement, by having
regulatory measures based on science and international standards,
including for beef.
______
Questions Submitted by Hon. John Cornyn
Question. As you know, the U.S. is the world's largest exporter of
agricultural and food products. In fact, based on a recent study by
Texas A&M University, included in the record, agriculture exports now
account for 35 percent of U.S. farm income. Mexico is a key market for
these goods.
If confirmed, will you ensure that U.S. agricultural trade will
remain globally competitive and secure, particularly with Mexico?
In addition, will expanding agriculture exports be a priority for
USTR and this administration? If so, what trade liberalization goals
will you strive for and with whom?
Answer. If confirmed, I will maintain a strong focus on U.S.
agricultural exports and work to expand exports of all U.S.
agricultural products, including to Mexico, to generate increased
economic opportunities for America's farmers and ranchers. If
confirmed, I will be sure to consult with you and other members of
Congress as the administration pursues the trade agenda.
Question. During the confirmation hearing, you testified that
aspects of NAFTA have been beneficial to certain sectors of the U.S.
economy and in any renegotiation you would work to ensure those
American exports and sales are not lost and those agricultural and
other American jobs not be put at risk. Today, significant amounts of
Texas cotton as well as U.S. fabrics (also made with Texas cotton),
fasteners, threads, and other components are exported to Mexico for
final assembly and then imported back into the United States as
finished garments. Moreover, American companies design, market, and
sell these products and employ American workers across the country.
These American farm, manufacturing, and brand jobs depend on a stable
and vibrant NAFTA textiles and apparel supply chain.
Will you commit to work with the committee and our NAFTA trading
partners to ensure that this supply chain and the American jobs that
depend on it will not be disrupted by a NAFTA renegotiation?
Answer. American farmers and businesses play an important role in
the North American textile and apparel supply chain. If confirmed, I
will work with the committee and all stakeholders to maximize the U.S.
economic benefits and American jobs connected with this supply chain.
Question. As part of the last GSP renewal, we also expanded the
list of eligible products to travel goods for the first time since the
program's creation in 1974. Unfortunately, the Obama administration
failed to follow congressional intent and extend travel goods GSP
product eligibility to all GSP-eligible countries. We understand that
Ambassador Froman left a recommendation to his successor recommending
that based on further analysis by USTR, GSP travel goods eligibility
should be extended to all GSP-eligible countries.
If confirmed, will you commit to granting GSP travel goods
eligibility to all GSP-eligible products?
Answer. I understand there is a great deal of interest by you and
other members of this committee, along with stakeholders such as travel
goods importers, and foreign countries, in extending duty-free
treatment to the more economically advanced GSP countries for travel
goods. If confirmed, I commit to carefully review this issue, consult
with you and advise the President accordingly.
Question. Trade Promotion Authority (TPA) requires U.S. trade
negotiators to ``achieve the elimination of government measures such as
price controls and reference pricing which deny full market access for
United States products'' and ensure ``that the provisions of any trade
agreement governing IP rights . . . reflect a standard of protection
similar to that found in United States law.''
Will you ensure that any new U.S. FTAs meet this TPA standard,
raising global standards to those that we use here in the United
States?
Answer. I believe that innovation is the central nervous system of
the U.S. economy and the key to our comparative advantage in many
sectors. If confirmed, I will seek to use all appropriate trade tools
to ensure that U.S. rights holders have a full and fair opportunity to
use and profit from their intellectual property rights, and to make
sure that the administration is implementing fully the provisions of
TPA. Ensuring strong intellectual property protection and enforcement
by our trading partners will be a top trade priority.
Question. Transparency and procedural fairness provisions have been
crucial to a number of U.S. bilateral agreements. These provisions
provide transparency to the process by which the national health-care
authorities set reimbursement for medical devices. Even though
bilateral agreements include transparency and procedural fairness
provisions, U.S. companies have signaled a lack of compliance by
certain nations when setting reimbursement rates.
Will the administration work to ensure that provisions such as
transparency and procedural fairness that are included in existing
bilateral agreements are enforced?
Answer. Vigorous enforcement of all trade agreement provisions is
critical to vindicating the rights of American workers and firms and to
maintaining public and congressional support for free and fair trade. I
am committed to strong enforcement, including with respect to the
transparency and due process provisions that relate to health care
reimbursement systems of some of our trading partners.
______
Questions Submitted by Hon. Richard Burr
Question. The President has stated it is a priority to negotiate
bilateral free trade agreements. One of America's greatest allies is
the United Kingdom, and the UK is also one of North Carolina's top
trading partners. There are many benefits to be had for North Carolina
farmers, businesses, and workers by further increasing trade with the
UK. As soon as possible, will you make negotiating a free trade
agreement with the UK a priority?
Answer. I appreciate your highlighting that North Carolina, like
many other States, enjoys a substantial trade relationship with the UK.
As you know, until the UK leaves the EU it cannot sign a comprehensive
trade agreement and may be limited in the extent to which it can
formally conduct trade negotiations. When UK Prime Minister May visited
in January, however, she and President Trump expressed an interest in
pursuing discussions on how to deepen bilateral trade. If confirmed, I
look forward to working with Congress and other stakeholders on our
future trade relation with the UK after it withdraws from the EU.
Question. Various countries have actively manipulated the values of
their currencies to make their exports more competitive and imports
into their country more expensive. This has resulted in the loss of
thousands of jobs in the United States by making imports from these
countries into the United States artificially cheap. In the Bipartisan
Congressional Trade Priorities and Accountability Act of 2015, which
extended new trade promotion authority, Congress identified currency
manipulation as a subject that should be addressed in future trade
agreements. Will you commit as USTR to addressing currency manipulation
in any future trade agreements or negotiations?
Answer. I understand the importance of this issue and the emphasis
Congress has placed on it, including in the TPA negotiating objectives.
If confirmed, I will ensure that USTR makes progress, in any trade
negotiation, in meeting this objective.
Question. As you know, exports are critically important to
agriculture. According to the United States Department of Agriculture,
North Carolina's agricultural exports in commodities including pork,
tobacco, poultry and soybeans exceeded $4.1 billion in 2014, which is
an over 200% increase from 2005. What is your plan to expand
agriculture exports?
Answer. If confirmed, I am committed to the expansion of U.S.
agricultural exports through negotiations that create enhanced export
opportunities for our farmers and ranchers. I will also be committed to
ensuring that trading partners meet international trade obligations,
including those of the WTO SPS Agreement. When they fail to do so, I
will aggressively utilize, in cooperation with administration and
congressional colleagues, all available tools in the WTO and through
other mechanisms.
Question. During TPP negotiations, USTR sought to include a
provision in the TPP agreement that singled out a particular
agricultural export, tobacco, for different treatment under the
agreement. Doing so would have set a harmful precedent for future trade
agreements and the treatment of other American agricultural exports. If
confirmed, can you assure me that you will work to promote all American
agriculture exports and not work to undermine certain ones?
Answer. If confirmed, I am committed to treating all U.S.
agricultural products equally with respect to any foreign barriers.
Question. Last year I joined Senators Hatch, Wyden, Portman,
Toomey, and McCaskill in passing legislation to reform the
Miscellaneous Tariff Bill process. The process enables companies to
receive duty relief when importing items from abroad that are not
manufactured in the United States. This is critical for the North
Carolina textile industry, biotech industry, as well as other
industries. Many of the items imported are inputs that are used in the
U.S. manufacturing process, which is why this process boosts U.S.
manufacturing and jobs. At times in the past USTR has raised concerns
with certain petitions based on supposed negotiating leverage concerns.
Will you commit to work with this committee and the ITC in support of
the MTB process in keeping with the legislation as it was enacted by
Congress?
Answer. I recognize the importance of the Miscellaneous Tariff Bill
process (MTB) for U.S. manufacturers and producers, and I understand
that the American Manufacturing Competitiveness Act of 2016 established
new procedures for the submission and review of petitions for temporary
duty relief. If confirmed, I look forward to working with Congress and
the U.S. International Trade Commission as this year's MTB process
advances.
______
Questions Submitted by Hon. Johnny Isakson
Question. Georgia is home to the Port of Savannah, the fourth-
largest container port in the country and second largest on the east
coast, and international trade and commerce is crucial to our economy.
Will you commit to working with me as USTR to ensure that trade
policies will support the growth and development of industries whose
goods pass through the Port of Savannah?
Answer. The Port of Savannah is a key hub for trade in agriculture
and industrial goods, and, if confirmed, I look forward to working with
you to expand opportunities for the continued growth of trade in the
region and through the port.
Question. Would you agree that NAFTA has been a success for
American farmers and ranchers?
Will you commit to strengthening American agriculture though any
renegotiation or reworking of NAFTA so our farmers and ranchers can
continue to sell more to Canada and Mexico?
Will you also work with us to tackle longstanding agricultural
policies concerns in Canada and Mexico that inhibit the exports of
American farmers?
Answer. I agree that for most agricultural sectors, the North
American Free Trade Agreement (NAFTA) has provided important and
growing trade opportunities that benefit America's farmers and
ranchers. If confirmed, I will strengthen American agriculture through
the renegotiations of the NAFTA and work to create enhanced export
opportunities to Mexico and Canada for our farmers and ranchers, while
we maintain the current markets that we already have.
Question. I think it is important to include services as well as
goods in our discussion about trade and trade deficits. Would you
agree?
The U.S. services trade surplus with Canada was $27.1 billion in
2015. U.S. exports of services to Canada were an estimated $57.3
billion in 2015, 6.6% ($4.0 billion) less than 2014, but 74.8% greater
than 2005 levels. It was up roughly 237% from 1993 (pre-NAFTA).
The U.S. services trade surplus with Mexico was $9.2 billion in
2015. U.S. exports of services to Mexico were an estimated $30.8
billion in 2015, 2.7% ($807 million) more than 2014, and 36.7% greater
than 2005 levels. It was up roughly 196% from 1993 (pre-NAFTA).
What steps will the administration take to build on this record of
success for U.S. services companies and workers through a renegotiation
of NAFTA?
Do you agree that a thriving services economy in the United States
also strengthens U.S. manufacturing and agriculture?
Answer. The U.S. services sector is a key driver of the U.S.
economy and also plays a key role in supporting and strengthening U.S.
manufacturing and agriculture. The data cited in your question
underscores this vital point. Maintaining a vibrant U.S. services
sector and expanding U.S. services exports is vital to a healthy
economy and a key objective of U.S. trade policy. If confirmed, I look
forward to working with you to pursue our services trade priorities.
Question. As you may know, Georgia is number three in the country
for film production, and films are some of our more high-profile
exports. Are you aware of the 2012 U.S.-China Film Agreement that
followed our winning a case at the WTO?
Will you commit to making full compliance of this agreement one of
your priorities if confirmed, and ensure that all film exporters'
interests--from large studios to independent film makers--are
protected?
Answer. Yes, I am well aware of the 2012 U.S.-China Memorandum of
Understanding on films. Under this MOU, the United States and China
reached an alternative solution with regard to certain rulings relating
to the importation and distribution of theatrical films in a WTO
dispute that the United States won. Significantly more U.S. films have
been imported and distributed in China since the signing of the MOU,
and the revenue received by U.S. film producers has increased
substantially. If I am confirmed, I will work to advance the interests
of all U.S. film exporters by ensuring China's compliance with the 2012
MOU and by negotiating further meaningful compensation for the United
States in this area.
Question. How will you prioritize individual sectors when dealing
with specific trade issues related to China?
Answer. There is a series of important issues and sectors in our
trade relationship with China. Each issue arises in its own context.
Similarly, each presents particular challenges and occasionally
opportunities for resolution. I intend to approach each in the manner
and using the tools of engagement most likely to yield an effective
resolution for American interests. In that regard, I look forward to
working with Congress and relevant U.S. industries and stakeholders to
address each of these issues.
Question. I know we have spent a lot of time focusing on
renegotiating NAFTA and doing vigorous enforcement of our existing
trade agreements. While I agree with enforcing our current trade
agreements and updating them as appropriate, I also believe that the
United States should be outward facing and aggressive in cultivating
trading relationships and pursuing trade agreements with new trading
partners. Ninety-five percent of the world's market is outside of the
United States, and we must try to gain ground that we have basically
ceded to others by not having trade agreements. It is one of the
reasons why I was so involved in the reauthorization of the African
Growth and Opportunity Act. Part of that bill requires the USTR to
assess the feasibility of entering into mutually beneficial trade
relationships with sub-Saharan African countries.
If confirmed, will you work with me to assess the feasibility of
using every trade policy tool we have to grow U.S. market share across
the globe?
Answer. If confirmed, I would welcome this opportunity. Georgia is
a leading exporting State, with nearly $36 billion worth of export
sales in 2016, including almost $33 billion worth of manufactured
goods, supporting tens of thousands of jobs. It is a large agricultural
producer. It is a center of IP and technology, among other things as
the generator of over 2,500 patents per year and the home of world-
recognized university research centers. It is also a global hub for air
and maritime cargo, with the logistics industry employment and
agricultural exports these industries support. I would hope to work
closely with you to design agreements and enforcement priorities that
maximize the benefit Georgians draw from these assets worldwide,
including in current FTA partners, sub-Saharan African markets, and new
markets in other regions.
Question. Last month, Rwanda, Chad, Jordan, and Oman ratified the
WTO's Trade Facilitation Agreement (TFA), bringing it into force. TFA,
the first successful multilateral agreement of the Doha Round, contains
provisions for expediting the movement, release, and clearance of
goods, and it encourages cooperation between WTO members on trade
facilitation and customs compliance issues. It also sets the stage for
greater investment in trade capacity building in the developing world.
As USTR, what would you do to implement TFA and to encourage U.S.
leadership on trade facilitation and trade capacity building issues
generally?
Answer. The WTO FTA provides new, enforceable rules governing how
U.S. goods will be treated as they move through our trading partner's
border agencies, reducing trade costs and delays and allowing American
goods to compete on a more level playing field. If confirmed as USTR, I
will work to ensure that the TFA is implemented by all WTO Members
under the timelines in the Agreement, press those WTO Members that have
yet to ratify the TFA to do so expediently, and use the TFA Committee
to promote full implementation of the Agreement.
Question. How can USTR work with other U.S. agencies, such as U.S.
Agency for International Development, the Overseas Private Investment
Corporation and the U.S. Trade and Development Agency, to ensure a
whole-of-government approach to strengthen trade facilitation and build
trade capacity?
Answer. If confirmed as USTR, I will undertake efforts to raise
awareness of the TFA within the U.S. Government and among U.S.
producers and manufacturers, and will engage with our trading partners
on U.S. best practices for achieving full implementation of the
Agreement, including coordinating U.S. Government efforts through the
U.S. National Trade Facilitation Committee.
Question. As a Senator from a State that is home to one of our
major international airlines, I am quite concerned about unfair
practices by state-owned airlines. Over the last decade, the
Governments of Qatar and the UAE have granted billions of dollars in
subsidies to these airlines, helping them to expand their aircraft
fleets and take business from U.S. airlines and airlines in other
countries. I am also concerned that these subsidies violate our Open
Skies agreements and put thousands of well-paying U.S. jobs at risk.
If confirmed, will you assure that you will work to support the
interagency process to remedy these unfair practices and restore a
level playing field for U.S. airlines?
Answer. I understand the importance of this issue, and of ensuring
that our international airlines compete on a level playing field across
the globe. If confirmed, I will look into this matter and work closely
with other involved agencies, such as the State Department and
Department of Transportation, to do everything we can to ensure that
our international carriers have a fair and equal opportunity to
compete.
______
Questions Submitted By Hon. Patrick J. Toomey
Question. U.S. dairy exporters face significant tariff barriers
from Canada and other countries. They also face major non-tariff
barriers such as geographical indication (GI) regulations that prevent
U.S. exporters from using common food names and threaten intellectual
property rights. Do you agree that foreign GI regulations are
problematic for U.S. exporters and will you address these regulations
in future trade negotiations?
Answer. I understand the importance of this issue to Congress. If
confirmed, I will continue to raise strong concerns regarding the
impact of the EU's GI policies on market access for U.S. owners of
trademarks and U.S. producers and traders using common food names. I
would also direct my staff to continue to press the EU to expand market
access for U.S. producers into the EU and also work to safeguard third
country markets, such as Canada, including through the removal of
barriers such as overly broad GI protection for EU products.
Question. India has a myriad of non-tariff barriers that infringe
upon the intellectual property rights of American firms that do
business there. This is particularly true for pharmaceutical companies.
Will you examine strengthening intellectual property protections for
U.S. companies in India?
Answer. India's protection and enforcement of U.S. Intellectual
Property Rights (IPR), including with respect to the pharmaceutical
sector, are areas of substantial concern. If confirmed, I intend to
address and work closely with the committee on these issues.
Question. For years, I have heard from constituents that Colombia
has erected a series of arbitrary regulations designed to limit imports
of American heavy duty trucks. Will you monitor Colombia's regulations
on imported trucks and take action if they continue to unfairly block
U.S. exports?
Answer. I share your concerns about Colombia's restrictive measures
with respect to imported trucks, in particular the so-called scrappage
requirements. If confirmed, I assure you that I will engage with U.S.
stakeholders to address the issues more fully, monitor closely
Colombia's actions affecting imported trucks, and engage further with
Colombia.
Question. Sugar is a vital input for many Pennsylvania food
manufacturers. The previous administration severely limited sugar
imports from Mexico through a suspension agreement, which harmed a
number of manufacturers. Will you make it a priority in future
negotiations to undo this damage and allow greater sugar imports from
Mexico?
Answer. USTR has no formal role in the administration of the sugar
Suspension Agreements. If confirmed, I will consult with the
Secretaries of Commerce and Agriculture, as well as members of Congress
and the range of perspectives in our private sector, including sugar
growers, refiners and confectionary producers.
______
Questions Submitted by Hon. Dean Heller
Question. International travel and tourism are major economic
drivers in Nevada. Travel and tourism supports more than 368,000 jobs
in Southern Nevada alone. Reno, Lake Tahoe, and Las Vegas are world-
renowned destinations that continue to see growth from international
travelers. Will you make travel and tourism to the United States a top
trade priority if you are confirmed?
Answer. Tourism and travel services are among the most dynamic
services sectors in the U.S. economy and also serve to support other
major segments of our economy. If confirmed, I look forward to working
with you to ensure that promoting tourism and travel-related services
is an integral part of the U.S. trade agenda.
Question. Many visitors to Nevada come from China, Canada, and
Mexico--all countries this administration plans to have new trade
negotiations with. How will you work to ensure that international
travel polices to the U.S. are not adversely affected as you discuss
other trade issues with those countries?
Answer. As noted above, tourism and travel services are among the
most dynamic sectors in the U.S. economy and also serve to support
other major segments of our economy. If confirmed, I look forward to
working with you to ensure that promoting tourism and travel-related
services is an integral part of the U.S. trade agenda.
Question. Foreign direct investment in Nevada based projects has
grown significantly in recent years. Panasonic in partnership with
Tesla are manufacturing commercial high density batteries outside of
Reno, Nevada at the new gigafactory. Faraday Future, a new electric car
manufacturer with overseas financing, has also committed to building a
manufacturing plant in North Las Vegas. How will you ensure that U.S.
trade policies will continue to promote foreign direct investments in
Nevada?
Answer. Inward and outward investment are critical drivers of U.S.
jobs and U.S. economic growth. The United States is the most attractive
place in the world to invest. I look forward to working with you and
other members of Congress to use trade and investment policies to
promote foreign investment in the United States that creates American
jobs and increases U.S. economic growth and competitiveness.
Question. Nevada was one of the hardest hit States during the
recession. I would like to know what specific trade policies will you
be advocating for that will directly help create jobs and increase
economic growth in Nevada?
Answer. Nevada is a strong exporting State with nearly $10 billion
worth of exports in 2016, including $9.3 billion worth of manufactured
goods, supporting tens of thousands of jobs; it is a large agricultural
producer; and it is a center for IP and scientific research as the
generator of over 700 patents per year. I would hope to work closely
with you to design agreements and establish enforcement priorities that
maximize the benefit Nevadans draw from these assets, by identifying
opportunities to grow exports, enforcing IP and other rights, taking
advantage of value-added agricultural exports to world markets,
fighting unfair trading practices abroad, and so contributing to
Nevada's growth and ability to support high-wage jobs.
______
Questions Submitted by Hon. Bill Cassidy
Question. Do you agree that as a result of the 21st Amendment to
the U.S. Constitution, matters dealing with alcohol policy, and
specifically the regulation of the manufacturing, distribution,
transportation and selling of alcohol products, lies within the
authority of the States as opposed to the USTR? In keeping with this
well-established principle, will you work to ensure that the USTR does
not act in a way that weakens the authority of the States with regard
to their constitutional rights to regulate alcohol within respective
State borders?
Answer. If confirmed, I will ensure that USTR does not take
positions that undermine the authority of U.S. States to regulate
alcohol.
Question. Duty drawbacks can occur when goods that were imported
into the United States, and had a duty collected, are later exported.
Duty drawbacks was one of the first laws passed by Congress and one of
the few WTO sanctioned incentives left to encourage exporting.
Current NAFTA rules significantly diminish the benefits provided by
duty deferral programs and drawback regulations for a large category of
goods exported to Mexico or Canada. NAFTA rules often lead to an
additional duty payment in the United States that would not apply to
identical shipments made outside of the NAFTA territory.
Answer. I am aware of the concerns about NAFTA's provisions on duty
drawback. If confirmed, I will examine this issue and will be
interested in further hearing your perspectives.
Question. The United States and Taiwan have a strong and important
bilateral trade and investment relationship. Taiwan is currently our
9th largest goods trading partner with $67 billion in total traded
goods in the 2015 calendar year, our 7th largest importer of U.S.
agricultural goods, and an important player in the global IT industry.
Given recent events, how will your views specifically influence the One
China Policy and what can the United States do to grow economic
relations with Taiwan? Do you believe that a free trade agreement with
Taiwan or Taiwan's participation in a future trade agreement are viable
options?
There are currently 4,338 jobs in Louisiana supported by Taiwan. Do
you have any plans to incentivize Taiwan to further invest in the
United States?
Answer. As the President stated last month following his phone call
with China's President Xi Jinping, the administration will honor the
United States' longstanding One China Policy.
As you point out, the United States and Taiwan have a longstanding
and important trade and investment relationship. If confirmed, I intend
to work to strengthen further those trade and investment ties.
Recognizing that foreign investment from Taiwan and elsewhere can
create more jobs in the United States and increase U.S. economic growth
and competitiveness, I intend to develop a trade and investment policy
that promotes foreign investment into the United States that advances
these objectives. If confirmed, I will examine the prospects of
additional negotiations with Taiwan.
Question. You may recall when we met that we discussed the Seafood
Import Monitoring Program finalized by NOAA last year. When we met, the
rule was still under review by the previous administration. When
finalized, my staff was told that USTR expressed concerns over national
treatment of the domestic aquaculture shrimp industry, resulting in an
indefinite stay for the implementation of shrimp in to this program.
Shrimp was to encompass two-thirds of the volume and value of the
seafood identified in the program. Protecting U.S. interests is
important to me and my State.
How do you plan to assist Gulf Coast industries comprised of small
and medium sized business that are harmed by unfair trade, like the
shrimp, crawfish and crab industries?
Answer. Improving the competitiveness of small and medium-sized
businesses, including domestic seafood producers, is a key priority of
this administration. If confirmed, I will pursue all avenues to support
this objective, including through trade negotiations, enforcement of
our existing trade agreements, and application of our trade remedy
laws. I look forward to consulting closely with Congress and industry
on these important issues.
Question. How will your trade office work with other government
agencies such as U.S. Customs and FDA to ensure that we are not
adversely impacting these industries by not enforcing our own health
and safety standards on imported goods?
Answer. If confirmed, I will work to ensure the competitiveness of
U.S. industries, including through trade negotiations, enforcement of
our existing trade agreements, and application of our trade remedy
laws. I will work closely with other U.S. agencies to support the
implementation and enforcement of U.S. laws and regulations, including
U.S. health and safety standards, governing the import of fish and
fisheries products in order to ensure a level playing field for our
fishing sector.
Question. How will you address WTO threats or challenges from
countries that import seafood to the United States such as China,
Vietnam or Chile?
Answer. If confirmed, I will aggressively defend U.S. regulations
at the WTO and through our bilateral or regional engagements, including
FTAs.
Question. As you likely know, the Jones Act, among other things,
requires U.S. domestic waterborne commerce to be carried on vessels
that are built and registered in the United States. The Jones Act also
requires such vessels to be predominantly owned and crewed by U.S.
citizens. USTR, in its role to expand market access for American goods
and services, must, at times, engage on issues involving the Jones Act.
According to a study done a few years ago, Louisiana has more than
54,000 jobs connected to the maritime industry, contributing more than
$11 billion to the State's economy. The study also showed our State
ranked first in maritime jobs per capita and is one of top States for
shipbuilding.
Because of the importance of the Jones Act to Louisiana's maritime
industry, can you please share what your position is on the Jones Act
and how that statute will influence trade agreements the United States
enters?
Answer. I understand the importance that you and other members of
Congress place on this issue. I agree that the Jones Act is crucial to
ensuring the retention and growth of a robust U.S. maritime industry,
which is critical to the national security of the United States. If
confirmed, I intend to consult closely with Congress on any Jones Act-
related issues and ensure that our position in trade negotiations does
not undermine our ability to enforce the statute.
______
Questions Submitted by Hon. Ron Wyden
trade enforcement
Question. This committee has been focused on trade enforcement in
recent years. In the last Congress, we passed a robust package of new
trade enforcement tools, including the ENFORCE Act, which created a new
process requiring Customs and Border Protection to take swift action on
allegations that duties on unfairly traded goods are being evaded.
In addition, we enacted new directives requiring USTR to focus on
fighting foreign trade barriers that have the greatest impact on U.S.
jobs and growth. The law contains new requirements for congressional
consultations and reporting to ensure that USTR takes Congress's views
into account when it sets enforcement priorities and follows through on
those priorities with action. You will be the first USTR to implement
these new tools.
Do you commit to follow the law and provide Congress with robust
consultations and reporting--within the timeframes specified by law--to
ensure that enforcement efforts are directed at the most critical
problems facing U.S. workers, businesses, and farmers?
Answer. The 2015 Act that contained the ENFORCE Act provided
important new tools to USTR, Customs and Border Patrol and Commerce to
improve the enforcement of Antidumping and Countervailing Duties and
other measures. I am aware of the months and years of effort it took to
pass that law and believe that it will provide important benefits to
American workers, farmers, ranchers, and businesses, particularly those
that rely on effective administration of border measures. If confirmed,
I look forward to working with the other agencies to implement the law
fully and vigorously and to following all the requirements set out in
the law regarding stronger and better consultations with Congress
concerning enforcement priorities. The input, ideas, and advice of the
Senate Finance and House Ways and Means Committees, as well as others,
will be critical in developing the enforcement priorities of my office.
Question. According to the President's Trade Policy Agenda released
earlier this month, one of the administration's key trade policy
objectives is ``strictly enforcing U.S. trade laws to prevent the U.S.
market from being distorted by dumped and/or subsidized imports that
harm domestic industries and workers.'' We need a proactive government
response to dumped and subsidized imports--only by tackling the issue
of unfairly traded imports will many U.S. industries be able to
recover. How can USTR work together with other agencies and the
governments of other countries to strengthen enforcement of trade
remedy laws and compliance with antidumping and countervailing duty
orders?
Answer. I have spent much of my professional life working to ensure
the strong and effective implementation of American trade remedy laws
and am strongly committed to their vigorous enforcement in the years
ahead. As your question states, effective enforcement of these laws is
an essential and indispensable element of a strong and effective trade
policy for all Americans. If confirmed, I plan to coordinate closely
with other government agencies in the strongest possible defense of
U.S. law in the WTO, and to strengthen our collaboration with other
like-minded WTO Members.
Question. You have said in the past that there are insufficient
resources dedicated to trade enforcement in the U.S. Government. Many
members have sought to substantially increase trade enforcement
resources including at USTR. Yet the President announced a hiring
freeze that appears to apply to trade enforcers at a range of agencies,
including the Department of Commerce, USTR, U.S. Customs and Border
Protection, the Department of Interior's Fish and Wildlife Service, and
the Department of Labor. I am particularly concerned about the timing
of the freeze because several of these agencies are implementing new
enforcement tools included in the Trade Facilitation and Trade
Enforcement Act of 2015, and as a result have been tasked with even
more extensive trade enforcement responsibilities.
Do you think that USTR currently has sufficient resources for trade
enforcement? If confirmed, how would you strengthen resources dedicated
to trade enforcement in light of the hiring freeze?
Answer. The President has made clear that trade policy negotiations
and litigation are a top priority of the administration. Trade policy
plays a critical part in every aspect of the economy and is essential
to fulfilling the administration's goal of accelerating economic growth
and improving U.S. standards of living. USTR's previous budget requests
were based on the old status quo. Instead, President Trump places trade
execution and enforcement at the top of his ``America first'' trade
policy.
I'm not in the administration and thus cannot speak on its behalf,
but, in my personal view, we need more resources for USTR and with
whatever we have we'll do the best job we can do.
USTR's capabilities must grow to execute the President's new
strategy. Increased resources are necessary to reinforce USTR's
statutory obligations to (1) monitor compliance by foreign governments
with trade policy commitments to the United States, detect violations
as quickly as possible and take swift and successful actions to enforce
U.S. rights and at the same time, (2) vigorously and successfully
defend the ability of the United States to exercise its rights to
ensure fair trade in the U.S. market, and, (3) take action under U.S.
law to advance U.S. economic interests. If confirmed, I will work to
ensure that USTR has the resources it needs to fulfill its mission.
Sufficient resources are vital to a robust trade enforcement
strategy. Many of the problems faced by U.S. exporters in foreign
markets are hard to address due to lack of transparency or because they
are legally or factually complex, requiring significant attorney,
investigatory, analytical, or translation resources. If confirmed, I
will commit to use all the resources available to USTR, and seek to
draw on the significant expertise in other agencies, to enforce U.S.
trading rights fully and ensure that our trading partners comply with
their international obligations.
global overcapacity
Question. Foreign government subsidies and other market-distorting
policies have led to global overcapacity in a range of products,
including aluminum, solar, and steel. The OECD has been trying to
address this issue in the steel sector and has formed a ``Global
Forum'' on excess capacity. Yet, to date, results have been
disappointing. What specific steps should the United States take to
obtain concrete results in the reduction of global steel, aluminum, and
solar capacity?
Answer. If confirmed, I will conduct a review of all available
tools to address serious overcapacity problems in steel and other
sectors, work to address the root causes of those problems, and
continue to work closely with other leading steel producing countries
in the Global Forum on Steel Excess Capacity and other contexts. Those
tools include our trade remedy laws, WTO litigation, negotiations, and
other mechanisms under U.S. law.
If confirmed, I also will examine how we might use our existing
bilateral dialogues to press China to fix its unfair trade practices
and vast excess capacity problem in many industrial sectors. I will
vigorously enforce and defend our trade remedy laws, and aggressively
utilize all available tools in the WTO and other mechanisms to combat
distortive trade practices.
market economy status
Question. China claims that its protocol of accession to the WTO
requires all countries to treat it as a market economy in antidumping
investigations. The previous administration concluded that the United
States is under no such obligation. Under the criteria applied by the
Commerce Department, China is clearly not a market economy. Will you
continue the position of the previous administration and defend the
right of the United States to treat China as a non market economy? What
specific steps would you take to ensure that our major trading
partners, including the EU and Canada, support the position of the
United States at the WTO regarding the interpretation of our
international obligations?
Answer. I disagree with China's claim that the change in its
Protocol of Accession requires WTO Members to treat China as a market
economy in antidumping proceedings. If confirmed, I can assure you that
USTR will vigorously defend the right of WTO Members to use the
strongest tools possible to counteract injurious Chinese dumping. This
includes building a coalition of allies to defend this fundamental
position at the WTO. I look forward to discussing with you the best way
to work with the EU and other like-minded countries to defend the plain
and clear language of China's Protocol of Accession.
hardwood plywood
Question. For the hardwood industry, exports are extremely
important to a significant number of companies that create jobs in
rural areas. Approximately 40% of all hardwood lumber production is now
exported, totaling $2.4 billion in 2016. The United States also enjoys
a healthy trade surplus of $1.3 billion in hardwood lumber, up from
$1.1 billion in 2015. At the same time, the hardwood engineered
flooring and plywood veneer industry has been harmed by subsidized
imports, particularly from China, that compete unfairly with U.S.
products. How will you advise the administration to ensure that trade
policies both support exports while at the same time addressing unfair
trade practices?
Answer. I appreciate the importance of hardwood production in the
United States, as well as the success of U.S. producers in developing
important and growing export markets. If confirmed, I will work with
our industry and you to expand overseas market access for American
hardwood and plywood exports, address unfair trading practices such as
subsidization, and work with industry and other stakeholders to
identify effective ways to address unfair trade practices in the U.S.
market, including by use of our trade remedy laws.
wine
Question. USTR initiated a WTO case with Canada on January 18th
over measures affecting the sale of wine in grocery stores in British
Columbia. The U.S. wine industry is facing a host of discriminatory
measures in Canada that adversely affect exports and job opportunities
in the United States. If confirmed, and if Canada fails to eliminate
the WTO inconsistent measures, will you proceed expeditiously to
litigate the WTO case? And will you work to address other trade-
distorting policies in Canadian provinces that make U.S. wines more
difficult to obtain and more expensive than Canadian-made products?
Answer. I am aware that the United States requested consultations
with Canada on its facially discriminatory distribution and sales
measure that discriminates against our wine producers and exports. If
confirmed, I will seek an immediate briefing by USTR staff on the
content of the consultations that were held with Canada last month and
what the most effective next steps are to address this problem. I look
forward to looking carefully at other provincial measures that may be
harming our wine exports. I have long believed that the United States
should vigorously enforce our trade agreements. If confirmed, I will
work to address these unfair barriers to U.S. exports, including these
facially discriminatory restrictions on exports of U.S. wine to Canada.
solar
Question. The U.S. solar manufacturing industry, like the steel and
aluminum industries, has been plagued by massive subsidies provided by
China to its industry, which have contributed to significant
overcapacity, as well as dumping by foreign producers. As a result, the
U.S. solar industry has been repeatedly injured by dumped and
subsidized imports. The industry brought two sets of antidumping and
countervailing duty cases in 2011-2012 and in 2014-2015. Despite
victories in these cases, dozens of U.S. producers were forced to
close, declare bankruptcy, or lay off workers. USTR was engaged in an
effort to resolve the solar dispute, as well as China's retaliatory
cases on U.S. imports of polysilicon. If confirmed, will you commit to
continuing to work for a favorable outcome for the U.S. solar
manufacturing industry and its workers? If negotiations prove
unsuccessful, what specific steps should the United States take to
address China's distortive and harmful trade practices?
Answer. I am aware of the longstanding complaint of the U.S. solar
panel industry, validated repeatedly by the determinations of the U.S.
Department of Commerce and the U.S. International Trade Commission
(ITC), that China has been dumping and selling subsidized solar panels
into the U.S. market, causing injury to our industry and workers. This
unfair trade practice was targeted at an important and growing U.S.
industry. Worse even, once the United States acted to apply its WTO-
consistent remedy, China retaliated by bringing its own antidumping
duty case of questionable merit against producers of U.S. polysilicon.
I can assure you that, if I am confirmed, USTR will reinvigorate its
efforts with our industry in all areas to address the trade challenges
that we face in the solar sector.
aluminum
Question. I have raised serious concerns about efforts by China to
undermine American aluminum producers through massive subsidies that
distort world market prices, circumvention of trade remedies decisions,
and acquisitions of U.S. producers that raise national security
concerns. The United States has brought a case before the WTO, arguing
that Chinese government support of the aluminum industry has caused
serious prejudice to the United States. This is one of the most
effective ways of responding to broad-based efforts by foreign
governments to tilt the competitive field in favor of their companies.
If confirmed, will you expeditiously move this case forward at the
WTO, and be willing to bring similar cases for other industries where
the facts warrant it?
Answer. I am aware of the complaint filed that was filed in the WTO
on Chinese aluminum subsidies. Broad-based efforts, such as this one by
the Chinese government to tilt the competitive field in favor of its
companies using artificial, non-
market mechanisms to advantage its producers is a serious problem that
hurts U.S. workers and businesses. If confirmed, I will seek to attack
unfair trade practices such as these as effectively as possible, using
all appropriate tools.
wheat
Question. In Oregon and across the country, wheatgrowers depend on
access to international markets to export product overseas and create
job opportunities in rural communities. The previous administration
brought several important WTO cases related to agriculture, including
two cases against China for its provision of market support for
products including wheat in excess of its WTO commitments and its
failure to implement its commitments with respect to tariff rate
quotas. If confirmed, would you continue to prioritize these disputes?
Answer. I am aware of the pending matters that the United States
has brought to the WTO involving the massive amounts by which China has
exceeded its Aggregate Measure of Support and its WTO-inconsistent
administration of its Tariff-Rate Quota for wheat, rice and corn. If I
am confirmed, enforcement of fundamental U.S. rights such as these with
respect to agricultural exports will remain a priority. I understand
the serious concerns at issue with respect to these disputes, and look
forward to discussing them further with you and the staff at USTR.
peru forestry
Question. For years, I have been raising serious concerns regarding
Peru's implementation of commitments in the Forestry Annex to the U.S.-
Peru trade agreement and massive shipments of illegally harvested
timber destined for the United States. To address this challenge, USTR
initiated a first-ever verification using special procedures in that
agreement, which identified several shortcomings in Peru's forest
management system that have contributed to trade in illegally harvested
timber. Despite these steps, in recent months, Peru has appeared no
closer to addressing the serious concerns identified than it was before
the verification began. What specific steps will you take to ensure
that Peru adheres to its obligations in the trade agreement and that
trade in illegally harvested timber is stopped?
Answer. I am aware of your longstanding interest in and efforts to
advance implementation and then enforcement of the forestry commitments
that Peru undertook in its free trade agreement with the United States.
These commitments are important and far-reaching and have taken great
effort over a number of years to pursue. If confirmed, I am fully
committed to ensuring that Peru implements fully its obligations under
the Forestry Annex. I look forward to working with you and other
members, as well as our stakeholders, to ensure that we achieve that
goal and to determine the most appropriate next steps.
transparency
Question. Getting more transparency in our trade policy has been a
top priority for me. Ordinary Americans need to know what our trade
policymakers are up to, so that they can ask informed questions at town
halls and help ensure that their interests are represented by America's
trade agenda. Transparency is critical both in trade enforcement as
well as negotiations for new agreements. The trade bills Congress
passed last year include a host of new requirements to raise the bar
when it comes to transparency. If confirmed, I expect you to consult
closely with Congress and follow to the letter the new transparency and
consultations requirements Congress established as part of the Trade
Promotion Authority bill we passed in 2015 and the enforcement bill in
2016. Will you commit to do that?
What specific steps will you take to improve transparency and
consultations with the public? In addition, will you allow cleared
advisors to have timely access to the proposals made by our trading
partners during negotiations to ensure that you are getting the best
possible advice?
Answer. One of the most important areas in which we need to do
better is in reaching out to, listening to and communicating with the
full range of stakeholders in the United States.
I understand the importance that you and Congress place on these
issues. If confirmed, I will ensure that USTR follows the TPA
requirements related to transparency in any potential trade agreement
negotiation. I will also look forward to discussing with you ways to
ensure that USTR fully understands and takes into account the views of
a broad cross-section of stakeholders, including labor, environmental
organizations, and public health groups, during the course of any trade
negotiation. My view is that we can do more in this area to ensure that
as we formulate and execute our trade policy, we receive fulsome input
and have a broad and vigorous dialogue with the full range of
stakeholders in our country.
digital trade
Question. The last administration made significant strides in
addressing barriers to trade in services, particularly services that
are reliant on digital trade. It pushed for new, 21st-century
disciplines both in TPP and in negotiations for a plurilateral Trade in
Services Agreement (TiSA). Those new disciplines include obligations
that prevent our trading partners from requiring data to be stored in
their country and restricting cross-border data flows, as well as
commitments on related services, such as electronic payments. Such
restrictions break the Internet into country-sized pieces, inhibiting
the free-flow of information as well as commerce. Do you view
addressing data localization and cross-border data flows for the United
States as a priority? Will you commit to continuing the policy of
pursuing strong commitments on all services, including digital trade in
U.S. trade negotiations?
Answer. The U.S. services sector is highly innovative and a key
driver of the U.S. economy. Maintaining a vibrant U.S. services sector
and expanding U.S. services exports, including in those areas of core
U.S. strength, such as the Internet sector, is vital to a healthy
economy and a key objective of U.S. trade policy. Addressing barriers
to digital trade, such as restrictions on cross-border data flows and
other data localization requirements by foreign governments, can help
achieve those objectives. If confirmed, I look forward to working with
you to pursue our services and digital trade priorities.
Question. The United States leads the world in the Internet
economy--and that is in part due to the United States having some of
the most innovation-friendly laws and policies in the world. For
example, Congress enacted core protections like section 230 of the
Communications Act (enabling Internet platforms to serve as commercial
marketplaces), and pursued strong and balanced copyright policy like
the Digital Millennium Copyright Act and fair use, and promoted open
data policies. Many U.S. services are now under threat overseas due to
market access barriers and protectionist and less innovation-friendly
legal and regulatory frameworks. In 2014, 9 out of the top 10 global
Internet properties were made in the USA. Today, only 6 of those
leading brands are U.S.-based, and they are engaged in fierce
competition with China and other countries for access to nearly 200
markets and 3.4 billion Internet users across the world.
How do you plan to stop other countries from blocking or
discriminating against U.S. services and adopting policies that inhibit
innovative Internet businesses to ensure that the United States
continues to lead the world in this sector?
Answer. Maintaining a vibrant U.S. services sector and expanding
U.S. services exports, including in those areas of core U.S. strength,
such as the Internet sector, is vital to a healthy economy and a key
objective of U.S. trade policy. Addressing barriers to digital trade,
including policies that discriminate against U.S. digital services, can
help achieve that objective. If confirmed, I look forward to working
with you to pursue this objective.
Question. I am deeply concerned that U.S. companies face the most
uneven of playing fields in China. Increasingly, Chinese regulation is
making it difficult or even impossible for U.S. cloud services
companies to operate in China. Meanwhile, Chinese cloud service
providers can operate in the United States today without similar
regulatory restrictions. U.S. cloud service providers are strong
catalysts for economic and jobs growth, and it is unacceptable to think
that they could be locked out of China entirely. Can you promise that
you will prioritize this issue in your discussions with Chinese
officials and underscore that China must stop discriminating against
U.S. cloud service providers?
Answer. I recognize that U.S. leadership in the technology sector,
particularly in cloud computing, is a national strength and a source of
our international competitiveness. I agree that our trade policy should
work to ensure that U.S. companies in this sector can thrive globally,
including in China, where I recognize that barriers have been severe
and contrast sharply with the open market in the United States. If
confirmed, I will look forward to working with you on these issues, and
I will make seeking progress in reducing barriers to U.S. companies in
this sector, including in China, a priority.
Question. The Obama administration requested that the U.S.
International Trade Commission conduct three investigations under
section 332(g) of the Tariff Act of 1930 regarding the value of new
digital technologies for U.S. firms and the impact of barriers to
digital trade on U.S. firms' competitiveness in international markets.
It is critical that the United States have a full understanding of the
digital trade landscape to inform its position in trade negotiations
and to identify major trade barriers in the digital sector that impact
manufacturers as well as the services sector and small businesses. Will
you commit to making these reports public so that policymakers and the
public can use them to inform views and priorities in the new economy?
Answer. I agree that the Internet is ``the shipping lane for 21st-
century goods and services'' and the digital economy is critical to the
ability of the United States to compete in the 21st-century global
economy. I support the request made to the ITC to conduct the three
investigations relating to digital trade. If confirmed, I will work
closely with you and other Senators and members to set priorities
concerning the digital trade and investment matters, and discussing
with you, if I am confirmed, ways to share to the maximum extent
possible the three ITC studies requested.
trade and environment
Question. You have said that climate legislation, such as a carbon
tax with a border adjustment that ensures neutral and equal application
of regulatory requirements to imports, could be enacted consistently
with our WTO obligations. Do you continue to hold that view?
Answer. If I am confirmed as USTR, I will not have responsibility
for climate policy. That will be a question for the Congress and
appropriate administration officials. However, I do believe that our
WTO obligations do not preclude us from achieving our environmental
policy goals in a manner consistent with true market-based competition.
trade and labor
Question. You have mentioned the importance of labor commitments in
trade agreements and the need for tougher enforcement of those
commitments. The Obama administration obtained enforceable labor
standards in TPP as well as enforceable implementation plans, setting
out specific requirements that countries must meet in order to comply
with their TPP obligations. Those implementation plans were an
important tool to ensure that trading partners made the changes to
their domestic law necessary to fulfill their commitments.
If confirmed, and should you pursue new negotiations with the
parties to TPP, would you seek both enforceable labor standards as well
as enforceable action plans to address shortcomings in our trading
partners' labor regimes?
Answer. Labor protections are important negotiating objectives that
Congress has set out in TPA. If confirmed, I look forward to consulting
closely with you and other members of Congress and stakeholders with an
interest in these issues as we seek to negotiate trade agreements that
reflect high-standard protections for our workers and to ensure a level
playing field for American workers and businesses.
ustr role
Question. There are a number of people at the White House who have
been given responsibility for trade policy, including the President's
advisor for international negotiations and the new National Trade
Council. In addition, the President has at times suggested that the
Secretary of Commerce will have lead responsibility for renegotiating
NAFTA.
Could you please explain the role that each of these individuals
would play in trade negotiations, mindful of the statutory
responsibility of the USTR to have primary responsibility for
developing United States trade policy and to serve as the principal
spokesperson on trade?
Answer. As I stated during my testimony, if confirmed as USTR, I
fully expect to have the full statutory authority over trade policy,
including serving as the President's principal spokesperson on trade,
as intended by Congress.
In my experience with previous administrations, there are almost
always, several sources of influence over trade policy, and it is the
Trade Representative's job to balance these interests and sort it out.
I have a very good relationship with Secretary Ross and others in the
White House and expect to enjoy a fully collaborative relationship with
each.
currency
Question. The President repeatedly stated on the campaign trail
that he would instruct his Treasury Secretary to name China a currency
manipulator on ``Day 1'', but has yet to do so. Do you share the
President's view that China should be named a currency manipulator? As
the USTR, what advice would you give the President on the implications
of naming China a currency manipulator today?
Answer. If confirmed, I will work with other administration
officials, including at the Department of the Treasury, to develop an
effective approach for addressing the problem of currency manipulation.
In the past, it has been my judgment that China was a substantial
currency manipulator. I think we've lost a lot of jobs in the United
States because of it. And, it's not just China. There are other
countries that have done it. As for today, the lead responsibility for
determining whether China is a currency manipulator falls to the
Department of the Treasury.
Question. Currency manipulation by U.S. trading partners is a
serious trade barrier facing our manufacturers, and this committee has
spent a lot of time grappling with the problem. Last Congress, two
bills--the Bipartisan Congressional Trade Priorities and Accountability
Act of 2015 (TPA 2015) and the Trade Facilitation and Trade Enforcement
Act of 2015--that contained provisions addressing currency manipulation
were signed into law. In TPA 2015, Congress identified currency
manipulation as a subject that should be addressed in future trade
agreements.
Will you commit as USTR to addressing currency manipulation as a
part of any future trade agreements, including any renegotiation of
NAFTA?
Answer. I understand the importance that you and Congress place on
this issue. I have also been long concerned about the potential for
currency manipulation and misaligned currency to affect international
trade flows. If confirmed, I will make every effort to satisfy the TPA
priority negotiating objective and will work with you and Congress to
determine the best means to address this longstanding issue.
nafta
Question. When Secretary Mnuchin was before this committee for his
confirmation hearing, he indicated that the outcomes in TPP would be a
starting point for a NAFTA renegotiation. Do you share that view? Are
the benefits in TPP a floor for what the administration should seek to
achieve in the new negotiations it contemplates with Canada and Mexico?
What specific improvements over TPP do you think the administration
should seek in any NAFTA renegotiation discussions?
Answer. I believe that in negotiating a new trade agreement we
should learn from, and build on, earlier negotiated trade agreements.
In the case of NAFTA and TPP, there is much in TPP that goes well
beyond NAFTA. So, in a renegotiation of NAFTA, we should consider
incorporating those provisions as well as improving areas where we may
be able to go beyond TPP. In determining what those areas are and what
to prioritize, I look forward to working with you, other members of
Congress, and stakeholders.
Question. Canadian subsidies to softwood lumber have been a top
concern for me for years and are the subject of new trade cases before
Commerce and the International Trade Commission. Canada has in the past
used special procedures included in Chapter 19 of NAFTA to force U.S.
trade agencies to weaken trade remedies decisions on softwood lumber.
The Trump administration seems to want to renegotiate NAFTA, but have
also suggested that they merely intend to ``tweak'' the agreement as to
Canada.
What are your views on NAFTA Chapter 19? If confirmed, and if the
administration initiates negotiations with Canada with respect to
NAFTA, will you commit to working to address longstanding concerns with
Chapter 19?
Answer. The review of disputes pursuant to trade remedy laws
contained in Chapter 19 of NAFTA is an area that has raised concerns
among members of Congress and U.S. industry. Should I be confirmed, I
certainly would want to work with you and U.S. industry regarding your
concerns on Chapter 19.
Question. I have long said that NAFTA is in need of an upgrade. The
Trump administration has indicated that it would like to renegotiate
NAFTA. In doing so it is important to address longstanding concerns
with Canada, including those affecting U.S. dairy producers, but also
important to ensure that benefits for American workers and farmers are
not lost. Can you assure me that any NAFTA discussions will not move
backward in terms of our existing opportunities for exports to those
countries, including for dairy products? How do you plan to use these
discussions to tackle deeply entrenched areas where there are in fact
serious concerns--such as with the various types of barriers our dairy
exports to Canada continue to face?
Answer. I understand that Canada maintains strict limits on imports
of dairy products, through its supply management program and other non-
tariff barriers. If confirmed, I will consult with you on the most
appropriate way to address this matter. If confirmed, I will work to
achieve the expansion of U.S. agricultural exports, including dairy
products, through negotiations with our trading partners that create
enhanced export opportunities while we maintain the current markets
that we already have.
Question. Canada and Mexico made new commitments on digital trade
in the TPP, these commitments are significant because the free flow of
information across borders is important not only to brick and U.S.
technology firms, but increasingly to businesses of all sizes and
types. Another aspect of the digital revolution we are experiencing is
the power it has unleashed for very small businesses. If you have an
Internet connection, you can now find customers abroad and become an
exporter--a prospect that was unthinkable for small businesses 15 or 20
years ago. We need to encourage this commerce that is becoming a larger
share of U.S. exports. One barrier is the red tape that other countries
impose on imports, that make it hard for very small businesses to
efficiently export. In the United States, we have a $800 de minimis
threshold to exempt imports from duties and many formalities of
importation. Canada's threshold is 20 Canadian dollars. This is a huge
barrier for our small businesses.
Will you demand that Canada increase its de minimis threshold as
part of any NAFTA renegotiation, and will you use any other opportunity
to raise this with them?
Answer. If confirmed, I will consult with Congress and domestic
stakeholders to develop a strategy that seeks to address concerns with
Canada's low de minimis level. I believe that increasing Canada's de
minimis level could be a significant issue in our overall bilateral
trade engagement with Canada, as well as in our engagement with Canada
in multilateral trade forums.
asia-pacific
Question. The Trump administration withdrew from the proposed
Trans-Pacific Partnership agreement negotiated by the Obama
administration. Several countries in the Asia-Pacific that were party
to that agreement are now considering ways to deepen trade ties in the
absence of U.S. engagement in the region. In the absence of TPP, what
specific steps will you take to ensure that U.S. workers, farmers, and
manufacturers have the same opportunity to compete in countries such as
Japan and Vietnam as workers, farmers, and manufacturers in Europe,
Australia, Canada, and other countries that have concluded or are in
the process of negotiating trade agreements with those countries?
Answer. The Trump administration intends to play a strong
leadership role in the Asia-Pacific, including through the active
negotiation of bilateral trade agreements and other trade initiatives
aimed at ensuring that U.S. workers, farmers, ranchers and businesses
have a fair opportunity to compete in these markets. If confirmed, I
look forward to working closely with you and Congress to increase U.S.
economic growth, foster job creation in the United States, promote
reciprocity with our trading partners, and enhance U.S. competitiveness
in the Asia-Pacific region and globally.
t-tip
Question. The European Union is the top export market for the
United States. At the same time, U.S. businesses and farmers face
significant barriers to the EU market. The Obama administration had
launched T-TIP negotiations with the EU to those barriers our
exporters--where I believe we could be even more successful.
Do you support continuing those negotiations? What alternative
would you suggest to address trade barriers in the EU?
Answer. I agree with you about the importance of the EU as an
export market for the United States. I understand that the T-TIP
negotiations sought to reduce or eliminate barriers to U.S. exports in
the EU, and that, while the United States made progress toward that
goal, a number of difficult issues could not be resolved. I would look
forward, if I am confirmed, to consulting with you and with other
members of the committee on whether, when, and how to proceed with a
trade agreement with Europe. It is our impression, though, that
upcoming elections in France, Germany, and other EU member states will,
in any case, make it difficult for the EU to resume comprehensive trade
negotiations until at least the end of this year. In the meantime, we
would be open to exploring ways to address barriers to U.S. exports and
to expand trade with the EU and its member states. As I said during my
confirmation hearing, we also want to look for opportunities to
strengthen cooperation with the European Commission and with EU member
state governments on global trade issues of common concern, including
the non-economic expansion of production capacity around the world in
critical sectors such as steel, aluminum, and solar panels.
border-adjustable tax
Question. When you testified before the Ways and Means Subcommittee
on Trade in 2007 you spoke at length about the unfairness of the tax
rebates that countries are granting under their VAT systems of
taxation. You said that you would tell those countries that if the
inequity is not corrected by an agreement within 18 months, than the
United States would ``start countervailing against people who rebate
their taxes when they ship to the United States.'' The Ways and Means
Committee Republicans recently proposed that the United States adopt a
border adjustment of its own, with a rebate on exports. If we were to
do so, is it your view that our exports would be countervailable by
other countries?
Answer. The WTO rules for indirect taxes and direct taxes differ
greatly. This raises fundamental issues for WTO Members that may rely
more on direct taxes rather than indirect taxes for revenue. For
decades, Congress has identified correcting this imbalance as a
negotiating objective of the United States. If the imbalance were to be
fixed, rebate of direct taxes would not be countervailable under WTO
rules. I am very much aware of the issue and take it very seriously. If
confirmed, I look forward to working with you as to the most
appropriate approach to address this issue.
services
Question. Services accounted for 30 percent of U.S. exports in
2014, supporting 4.6 million jobs. We are by far the largest services
exporter in the world, with exports of $710 billion dollars in 2014 and
a trade surplus in services of $233 billion. And, our robust service
sector is critical to supporting the manufacturing sector and small
businesses. This success comes despite the fact that there are many
barriers in overseas markets; we could be doing even more. Negotiations
for the Trade in Services Agreement have made significant progress to
pull down these barriers. Do you agree that pursuing Trade in Services
Agreement (TiSA) negotiations at the WTO would serve U.S. interests in
lowering barriers in trade in services? What plans do you have to
capitalize on U.S. leadership in services and make sure that markets
are open to services exports?
Answer. The U.S. services sector is highly innovative and a key
driver of the U.S. economy. Maintaining a vibrant U.S. services sector
and expanding U.S. services exports is vital to a healthy economy and a
key objective of U.S. trade policy. If confirmed, I look forward to
working with you to pursue our services trade priorities.
geographical indications
Question. There is a growing set of strategies that our competitors
use to shut us out of foreign markets. For example, the EU is very
aggressive in pursuing the misuse of geographical indications in third
countries to impede competition from the United States. They do this
through international forums, as well as in their trade agreements and
other arrangements with countries around the world, hoping to lock U.S.
food products out of those markets. The last administration made it a
point to work to aggressively combat these types of threats created by
government policy to U.S. exports. If confirmed, how will you work to
create a level playing field for our companies so that their food
products can reach consumers around the world?
Answer. I understand that the United States and the EU have long-
standing differences over the scope and level of intellectual property
rights protection for geographical indications (GIs). If confirmed, I
will continue to raise strong concerns regarding the impact of the EU's
GI policies on market access for U.S. owners of trademarks and U.S.
producers and traders using common food names. I would also direct my
staff to continue to press the EU to expand market access for U.S.
producers into the EU and also work to safeguard third country markets,
including through the removal of barriers such as overly broad GI
protection for EU products.
israel
Question. The Trade Facilitation and Trade Enforcement Act of 2015
tasked negotiators of proposed trade agreements with other countries
regarding commercial partnerships with discouraging actions by those
countries that prejudice or discourage commercial activity solely
between the United States and Israel; discouraging politically
motivated boycotts of, divestments from, and sanctions against, Israel
and seeking the elimination of politically motivated nontariff trade
barriers; and seeking the elimination of state-sponsored unsanctioned
foreign boycotts of Israel, or compliance with the Arab League Boycott
of Israel. Do you commit to pursuing the goals set out by Congress in
this provision in the conduct of trade negotiations?
Answer. If I am confirmed, I will follow the position of the
administration to oppose strongly and actively boycotts or similar
efforts targeted against the State of Israel, and I will ensure that
USTR follows the guidance provided by Congress, including the principle
negotiating objective contained in TPA, in any potential trade
negotiation.
generalized system of preferences (gsp)
Question. Last year, Chairman Hatch and I, along with many
colleagues on both sides of the aisle, wrote Ambassador Froman urging
him to follow congressional intent and request the President designate
travel goods as duty-free for all GSP eligible countries. The Obama
administration deferred a final decision on this matter, and it will
now be up to the current administration to make the designation. As
USTR, will you recommend to the President that the GSP program, with
appropriate consideration due to domestic production, should allow for
duty-free imports of designated travel goods from all GSP eligible
countries?
Answer. I understand there is a great deal of interest by some
members of this committee, and travel goods importers, in extending
duty-free treatment to the more economically advanced GSP countries for
travel goods. If confirmed, I commit to carefully review this issue,
consult with you and with the committee and the Ways and Means
Committee, and advise the President accordingly.
Question. The Government of Tanzania is currently engaging in
actions that appear to violate the rights of U.S. investors and impede
U.S. trade and investment in that country. If you are confirmed, will
USTR take steps to impose consequences on Tanzania and other countries
that engage in similar activities? For example, would you be open to
considering whether Tanzania's actions provide a basis for suspending
its eligibility under the Generalized System of Preferences?
Answer. If confirmed, I will commit to work with you and the
committee, as well as the interagency and stakeholders, to ensure that
foreign governments treat the United States, U.S. investors, and U.S.
exports fairly and comply with their legal obligations. As part of this
commitment, I look forward to working to ensure that GSP and AGOA
beneficiary countries are meeting the GSP and AGOA statutory
eligibility criteria.
______
Questions Submitted by Hon. Debbie Stabenow
Question. China and other countries like Japan have a long history
of manipulating their currencies, hurting American workers and
manufacturers. Some reports indicate as many as 5 million jobs, many of
which are manufacturing jobs, have been lost due to currency
manipulation and other unfair barriers and practices.
How will you successfully deal with countries such as China and
Japan that have a long history of manipulating their currencies?
What tools would you use to stop our trading partners from
subsidizing their exports and violating their agreements?
Answer. If confirmed, I will work with other administration
officials to develop effective approaches to address the problem of
currency manipulation. I will also support strict enforcement of our
trade remedy laws to deal with unfair trade.
Question. I have called for prioritizing currency manipulation in
our trade negotiations. I have already spoken to Secretary Mnuchin
about this, and he said he supports the inclusion of strong enforcement
provisions in our trade agreements.
Will you commit to supporting and negotiating the inclusion of
strong and enforceable currency provisions in future trade agreements?
Will you commit to including currency provisions in a future NAFTA
renegotiation?
Answer. As indicated in my response to the above question, I am
committed to developing effective approaches to address the problem of
currency manipulation. If confirmed, I will work with other
administration officials, including Secretary Mnuchin, to develop the
best possible enforcement tools.
Question. Agriculture is Michigan's second-largest industry, and
agricultural exports support about 24,000 jobs in my State. As this
administration considers reopening discussions around NAFTA, I'm
concerned that the aspects of the agreement which have largely been
working well--which includes agriculture--may be targeted in order to
make changes in other areas. Additionally, certain agricultural
industries are still facing some challenges with our NAFTA trading
partners, including longstanding trade barriers with Canada for our
dairy producers and market access issues in Mexico for our potato
growers.
Will you commit to working with me to ensure that any renegotiation
of NAFTA works for our farmers--both in preserving the gains
agriculture has seen under the agreement and in addressing some of
these ongoing trade barriers?
Answer. If confirmed, I will strengthen American agriculture
through negotiations that create enhanced export opportunities for our
farmers and ranchers, while we maintain the current markets that we
already have. If confirmed, I will also work with you and other members
of Congress to resolve barriers to U.S. agricultural exports and to
ensure that trading partners meet international trade obligations.
Question. In December 2015, in the face of threats of trade
retaliation from Canada and Mexico, Congress repealed Country of Origin
Labeling (COOL) for certain beef and pork products. Congress did this
to comply with a conclusive WTO ruling against COOL and therefore to
remove the threat of trade retaliation. Even so, Canada and Mexico have
not officially withdrawn the case, leaving American producers and
businesses wondering when they can move on from this difficult, hard-
fought dispute.
Will you commit to raising this issue with Canada and Mexico and
bringing the case to a close?
Answer. If confirmed, I will be committed to working with Canada
and Mexico to formally terminate this dispute.
Question. Until 2002, the U.S. was a net exporter of cherries. Now,
over 40% of our tart cherry consumption is made up of imports,
primarily from Turkey, Poland, and Hungary. In particular, subsidized
production and exports from Turkey are threatening to put our domestic
cherry producers out of business.
Will you commit to working with me and meeting with farmer and
industry representatives to discuss this issue and pursue options to
address their concerns?
Answer. If confirmed, I look forward to working with you, cherry
producers and industry representatives on this issue.
Question. Japan's auto market is the world's third largest after
China and the United States. However, Japan's auto market is also the
most closed among developed countries. Imports from the United States
and around the world only account for a fraction of Japan's passenger
car market. At the same time, Japanese domestic automakers export
millions of vehicles to open markets around the world, including the
United States.
How do you see USTR's role in the U.S.-Japan economic dialogue and
what do you see as the main U.S. priorities?
Answer. I share your serious concern with respect to the large
imbalance in our auto trade with Japan. If confirmed, I will utilize
all opportunities to address barriers to U.S. autos as well as barriers
to other U.S. goods and services exports to Japan, and look forward to
working closely with you and others in Congress to aggressively address
priority U.S. market access concerns.
Question. How will you secure policy reforms that will remove
Japan's non-tariff barriers and achieve access to Japan's closed auto
market?
Answer. Removing non-tariff barriers facing U.S. auto exports to
the Japanese market requires comprehensive, sustained engagement. If
confirmed, I pledge to work closely with you and with U.S. stakeholders
by placing a high priority on our engagement with Japan to identify and
remove the multiple barriers and enable U.S. manufacturers finally to
have the opportunity to compete on a level playing field.
Question. Given our long-standing trade problems with China, I do
not believe they deserve market economy status at the WTO and I have
serious concerns about China's pursuit to change this designation. I am
also concerned the EU will consider changing its previous position on
China's market economy status.
Will you work with the EU and our other allies to maintain China's
non-market economy status?
Answer. Many WTO Members, including the European Union (EU),
currently apply a non-market economy methodology to China in
antidumping proceedings. If confirmed, I commit to doing everything I
can to persuade these Members to work with the United States in
strongly defending our right to continue to apply a non-market economy
methodology to China at the WTO.
Question. The steel industry is a critical economic driver in
Michigan, employing more than 7,000 jobs and supporting nearly 50,000
additional jobs. As you know, the steel industry is facing a crisis
because of global overcapacity.
How can we press China and other countries on the problem of steel
overcapacity?
How can we work with our allies to combat this serious problem?
Answer. If confirmed, I will conduct a review of all the available
tools to address the serious overcapacity problems in steel and other
sectors, work to address also the root causes of those problems, and
continue to work closely with other leading steel producing countries
in the Global Forum on Steel Excess Capacity and other contexts.
I also will examine how we might use our existing bilateral
dialogues to press China to fix its unfair trade practices and vast
excess capacity problem in many industrial sectors.
Meanwhile, if confirmed I will vigorously defend our trade remedy
laws, and aggressively utilize all available tools in the WTO and under
other mechanisms to deter and address Chinese government subsidies and
other forms of industrial policy and government support that provide
artificial, non-market advantages to Chinese firms, including state-
owned enterprises, in the steel sector.
Question. You have spent many years fighting for strong action
against foreign subsidies in the steel sector and their harm on
American workers and businesses. Aviation workers in Michigan and
across the country are currently facing a related issue. The U.S. is
party to over 100 ``Open Skies'' agreements. However some countries in
the Middle East provide subsidies to their state-owned airlines,
creating competitiveness concerns that put our U.S. aviation jobs at
risk.
If you are confirmed, will you actively work to remedy these
subsidies and level the playing field?
Answer. I understand the importance of this issue, and of ensuring
that our international airlines compete on a level playing field across
the globe. If confirmed, I will look into this matter and work closely
with other involved agencies, such as the State Department and
Department of Transportation, to do everything we can to ensure that
our international carriers have a fair and equal opportunity to
compete.
Question. I am very concerned about the offshoring of U.S. jobs.
NAFTA's weak and unenforceable labor and environmental side agreement
has contributed to this offshoring.
Will you commit to negotiating stronger labor and environmental
standards in a NAFTA renegotiation?
If yes, will you commit to including these commitments in the main
text of the agreement?
Answer. I share your concern about the enforcement of labor and
environmental laws by trading partners, which is important to ensure a
level playing field for U.S. workers, ranchers, farmers and businesses.
NAFTA does not incorporate advances made in later agreements and
addresses labor and environment issues only in side agreements. If
confirmed, I commit to work closely with you, other members of Congress
and stakeholders to ensure that NAFTA is updated in ways that comply
with TPA objectives for labor and environment, including by placing
enforceable labor and environment commitments in the main text of the
agreement.
Question. I am concerned about transparency in our trade
negotiations, particularly the inability for the public and public
interest groups to provide input on negotiated texts that are often
kept hidden.
Are you satisfied with the current advisory system for our trade
agreements?
Would you support including public interest groups such as labor,
environmental, and public health groups to assist in advising and
helping shape U.S. proposals and rules under negotiation?
Answer. One of the most important areas in which we need to do
better is in reaching out to, listening to and communicating with the
full range of stakeholders in the United States.
I understand the importance that you and Congress place on these
issues. If confirmed, I will ensure that USTR follows the TPA
requirements related to transparency in any potential trade agreement
negotiation. I will also look forward to discussing with you ways to
ensure that USTR fully understands and takes into account the views of
a broad cross-section of stakeholders, including labor, environmental
organizations, and public health groups, during the course of any trade
negotiation. My view is that we can do more in this area to ensure that
as we formulate and execute our trade policy, we receive fulsome input
and have a broad and vigorous dialogue with the full range of
stakeholders in our country.
Question. The American film and television industry supports over 2
million jobs across the country. In Michigan, the industry supports
more than 31,000 jobs and 2,450 small businesses. A big part of the
industry's trade surplus is revenue from online distribution that
depends on copyright protections.
What will you do as USTR to protect U.S. copyrights?
Answer. If confirmed, I would seek to use all appropriate trade
tools to ensure that U.S. rights holders have a full and fair
opportunity to use and profit from their intellectual property rights.
Ensuring strong intellectual property protection and enforcement by our
trading partners would be a top trade priority.
______
Questions Submitted by Hon. Maria Cantwell
patents/innovation/ip
Question. America leads the world in biomedical research and
discovery. But weak intellectual property protections and a growing
array of localization barriers abroad are threatening innovative
medicine exports and the many jobs they support here at home. China has
never lived up to the intellectual property commitments it made to the
United States and other WTO members 15 years ago. Despite free trade
agreements, U.S. inventors can't get and keep patents in Australia,
Canada, Colombia and other countries. India and Indonesia enjoy one-way
duty-free access to our market under GSP, but don't provide a level
playing field for products made in the USA.
If confirmed, what will you do to ensure American innovations and
jobs are valued and protected in overseas markets?
Answer. I agree that we need to do more to enforce the IPR
provisions of our trade agreements. If confirmed, I will seek to use
all appropriate trade tools to ensure that U.S. rights holders have a
full and fair opportunity to use and profit from their intellectual
property rights. Ensuring strong intellectual property protection and
enforcement by our trading partners will be a top trade priority.
Question. Intellectual property is crucial to the well-being of our
economy. More money is spent on R&D in the United States than in any
other country in the world. In fact, 30% of the American workforce is
employed directly or indirectly in IP-
intensive industries. But in order to continue accelerating the pace of
innovation in our economy, our trading partners must all play by the
same rules with respect to market access and protecting intellectual
property.
How can the United States use new and existing trade agreements,
including enforcement tools, to ensure U.S. businesses benefit from
strong intellectual property protections and greater access to global
markets?
Answer. I believe that innovation is the central nervous system of
the U.S. economy and the key to our comparative advantage in many
sectors. If confirmed, I will seek to use all appropriate trade tools
to ensure that U.S. rights holders have a full and fair opportunity to
use and profit from their intellectual property rights. Ensuring strong
intellectual property protection and enforcement by our trading
partners will be a top trade priority.
Question. We have seen a disturbing trend in recent years whereby
some of our trading partners have ignored their international
commitments, particularly with respect to intellectual property
protection, either by failing to fully implement agreements or by
flouting the rules in order to give their businesses an unfair
advantage. These decisions are short-sighted and ultimately discourage
innovation, investment and job growth.
What can your agency do to ensure our trading partners are
enforcing existing commitments and deter countries from weakening such
standards in their own IP regimes?
Answer. I believe that innovation is the central nervous system of
the U.S. economy. If confirmed, I will seek to use all appropriate
trade tools to ensure that U.S. rights holders have a full and fair
opportunity to use and profit from their intellectual property rights.
Ensuring strong intellectual property protection and enforcement by our
trading partners will be a top trade priority.
Question. IP and innovation drive productivity, employment, and
economic growth, particularly for industries like U.S.
biopharmaceutical industry, which supports approximately 4 million U.S.
jobs.
In your view, how does the monitoring and enforcement of trade
agreements impact the sustainability and growth of IP-intensive
industries such as the biopharmaceutical sector?
Answer. If confirmed, I will seek to use all appropriate trade
tools to ensure that U.S. rights holders have a full and fair
opportunity to use and profit from their intellectual property rights.
As the global trading system expands, monitoring and enforcement
becomes increasingly important, especially with respect to IP-intensive
industries. American intellectual property must be respected and
monitoring and enforcement of our existing trade agreements are key to
this effort. Ensuring strong intellectual property protection and
enforcement by our trading partners will be a top trade priority.
Question. What should the administration be doing to stand up for
free and fair trade and strong protections for the intellectual
property rights that drive U.S. economic growth and a U.S. comparative
advantage in global trade?
Answer. If confirmed, I will seek to use all appropriate trade
tools to ensure that U.S. rights holders have a full and fair
opportunity to use and profit from their intellectual property rights.
Ensuring strong intellectual property protection and enforcement by our
trading partners will be a top trade priority.
Question. Thanks to U.S. ingenuity and stewardship, the Internet
has powered U.S. trade, opened up new foreign market opportunities for
U.S. small and medium-sized businesses, spread American values, and
spurred U.S. innovation in all sectors. At home, the Internet is a
crucial U.S. industry as online services are a fundamental enabler of
the economy, generating 6% of GDP.
Online services and ongoing U.S. innovation rely on the balanced
approach to copyright enshrined in U.S. law--including both strong
copyright protections and robust copyright limitations and exceptions
like fair use and safe harbors. These core U.S. concepts are critical
to U.S. Internet innovation and enable machine learning, artificial
intelligence, e-commerce platforms, consumer electronics, and many
other technologies.
How will you make sure that the U.S. approach to copyright in trade
agreements is serving all U.S. stakeholders and U.S. interests?
Answer. I understand the importance that Congress places on this
issue. If confirmed, I will ensure that USTR makes progress, in any
trade negotiation, in advancing U.S. priorities in this area. I look
forward to working with you and all interested stakeholders to address
these specific issues.
lumber/timber
Question. The forestry sector represents a vital part of our
economy in Washington State. The sector supports some 30,000 jobs and
almost $2 billion of annual payroll in many communities that depend on
this industry for their survival. The U.S. forestry industry is highly
competitive, but it cannot compete, survive, or grow under the constant
barrage of unfairly traded and subsidized Canadian softwood lumber.
Can you assure me that you will work closely with my office and the
U.S. industry to bring about an effective and sustainable new Softwood
Lumber Agreement?
Answer. Ensuring that U.S. softwood lumber producers can compete on
a level playing field against the negative effects of subsidized
Canadian softwood lumber imports is an important priority for the Trump
administration. If confirmed, I will direct USTR to continue its close
engagement with this important industry that provides good jobs across
America.
Question. Do you agree that such an agreement must remain purely a
bilateral agreement, and cannot be thrown into the mix of a NAFTA re-
negotiation?
Answer. I understand that there can be no softwood lumber agreement
without the participation of our softwood lumber industry. If
confirmed, I commit to working with your office, our softwood lumber
industry, and other stakeholders should U.S. producers seek a new
agreement. I understand the importance of both the content and the form
of any such agreement and will also work closely with you and U.S.
industry to address those concerns.
tech/digital trade
Question. Members of the Finance Committee from both sides of the
aisle are champions of advancing a digital agenda in U.S. trade policy,
particularly as part of the services agenda. It was clear by the
addition of objectives in the new trade promotion authority legislation
on data flows and combating barriers like data localization in the 2015
TPA objectives. I am interested in understanding how you are going to
drive this part of the agenda for U.S. interests, particularly given
the challenges of digital protectionism that we are facing around the
world from China to the EU.
Answer. I recognize the importance of the digital economy to
American jobs, prosperity and security, and U.S. companies' unique
competitive advantages in this area. If confirmed, I look forward to
working closely with the Congress on fulfilling objectives set out in
TPA, including with respect to digital trade.
Question. I was heartened to hear from Secretary Ross, in his
response to a question for the record asked at his confirmation
hearing, that this administration recognizes the importance of the
digital economy to American jobs, prosperity and security.
One of the principal negotiating objectives of the United States
laid down in the bipartisan Trade Promotion Act is ``to ensure that
governments refrain from implementing trade-related measures that
impede digital trade in goods and services, [or] restrict cross-border
data flows.''
Mr. Lighthizer, as U.S. Trade Representative, what steps will you
take to achieve the TPA's digital trade goals?
Answer. Like Secretary Ross, I recognize the importance of the
digital economy to American jobs, prosperity and security, and U.S.
companies' unique competitive advantages in this area. If confirmed, I
look forward to working closely with the Congress on fulfilling
objectives set out in TPA, including with respect to digital trade.
Question. The United States has always been a leader in promoting a
rules-based system, and there was good work done in the FTAs and the
TPP on digital issues which have been important building blocks for
agreements. Now, however, it seems that the new administration is
sending signals that we want to abdicate that leadership.
How do you intend to pursue these issues given the opportunities
that are already available as the WTO prepares for the December
ministerial and looks to add ecommerce to its agenda, or in APEC, where
Vietnam has signaled digital trade will be a centerpiece of its year,
or as others work to fill the vacuum that is evident in the Trade in
Services Agreement negotiations that were underway in Geneva at the end
of the last administration?
Answer. I do not believe that it is correct to characterize the
administration as abdicating leadership in this space. The President
has made it very clear that he intends to promote American leadership
in the Asia-Pacific through many channels, including by pursuing
bilateral FTA's with our key TPP partners. I support that approach. If
confirmed, I look forward to working with the Congress to find ways to
strengthen the rules-based trade system as it applies to digital issues
in all relevant fora.
Question. I want to encourage you to use every opportunity,
particularly when it comes to writing new rules for 21st-century trade.
We must not cede the field to China or the EU. The United States needs
to guide these multilateral and plurilateral efforts to forge consensus
on this important issue, it is central to our competitiveness, and will
have a bearing on our bilateral successes as well.
For Washington State, services are a huge part of the economy
employing 2.4 million people and accounting for $26.1 billion in
exports in 2014. Services sector activity in my State covers everything
from information communication technology services, to logistics,
distribution to professional services. Services are critical enablers
for other parts of the economy as well making a significant
contribution to manufacturing and ensuring that our agricultural
products remain competitive in global markets. Data flows are part of
the digital infrastructure our farmers, manufacturers, and ranchers all
need.
The TPA bill recognized the importance of digital trade to the U.S.
economy by designating ``digital trade in goods and services and cross-
border data flows'' as a principal trade negotiating objective. This
section of TPA directs U.S. trade negotiators to ensure our trade
agreements prevent countries from taking actions that ``impede digital
trade in goods and services, restrict cross-border data flows, or
require local storage or processing of data.'' Congress made this a
principal trade negotiating objective since cross-border trade in data
has become central to the U.S. economy. Countless American companies,
whether they are selling a digital good or service, or managing
customer or employee data, need to transfer data across borders to do
business in foreign markets and through that create jobs at home. Yet
we continue to see many foreign markets--from Europe, to Asia to Latin
American--imposing data localization and other barriers to digital
trade that unfairly harm U.S. companies.
Can you assure us that, consistent with TPA, addressing digital
trade barriers will be a top priority for USTR in negotiations for new
agreements, or updates to existing ones?
Answer. Yes. Digital trade provides enormous value to the U.S.
economy, and U.S. companies face significant challenges when foreign
governments impose restrictions on digital trade. If confirmed, I look
forward to working closely with the Congress on fulfilling objectives
set out in TPA, including with respect to digital trade.
Question. The United States has had great success in the Internet
economy--and that is in part due to the U.S. having some of the most
innovation-friendly laws and policies in the world. For example,
Congress enacted core protections like section 230 of Communications
Act (enabling Internet platforms to serve as commercial marketplaces),
and pursued strong and balanced copyright policy like the Digital
Millennium Copyright Act and fair use, and promoted open data policies.
But now, many U.S. services are under threat overseas, due to
market access barriers and less innovation-friendly regulatory
frameworks. In 2014, 9 out of the top 10 global Internet properties
were made in the USA. Today, only six of those leading brands are U.S.-
based, and they are engaged in fierce competition with China and other
countries for access to nearly 200 markets and 3.4 billion Internet
users across the world.
How would you use trade policies to stop other countries from
blocking or discriminating against U.S. services, and ensure that the
United States continues to lead the world in innovation?
Answer. The U.S. services sector is highly innovative and a key
driver of the U.S. economy. Maintaining a vibrant U.S. services sector
and expanding U.S. services exports, including in those areas of core
U.S. strength, such as the Internet economy, is vital to a healthy
economy and a key objective of U.S. trade policy. If confirmed, I look
forward to working with you to pursue our services trade priorities.
Question. The digital economy is critical to powering U.S. exports
in virtually every industry--from manufacturing to agriculture--and has
also enabled U.S. small and medium-sized businesses to grow by selling
to new markets that were out of reach in the past. And in Trade
Promotion Authority, the Congress recognized the importance of digital
economy to U.S. trade, and identified cross-border data flows and anti-
data-localization as core negotiating objectives. The U.S. currently
has a $159 billion trade surplus when it comes to digitally deliverable
services.
What steps would you to take to preserve and grow that digital
trade surplus?
Answer. If confirmed, I would consider a range of actions to
support this key area of U.S. competitiveness. For example, I would
look to enforce existing rules that apply to the digital economy; and
where such rules need to be strengthened or extended, I look forward to
working with Congress to find ways to strengthen the rules-based trade
system as it applies to digital issues, including as set out in TPA.
Question. What would you do to promote open digital trade policies
globally, and to support the TPA objectives on data flows and local
server prohibitions?
Answer. If confirmed, I would look forward to working with Congress
to identify ways to promote open digital trade policies globally,
including through implementation of the relevant negotiating objectives
set out in TPA as we negotiate new FTAs.
free trade agreements/tpp/nafta
Question. Transparency has been a significant impediment to
Congress and stakeholders having a real voice in our trade negotiations
and providing the input that's envisioned under the law.
What specific steps will you take to improve transparency and
consultations?
Answer. I am aware of the importance of the issue of transparency
in U.S. trade negotiations to you, others on the Finance Committee, and
many others in Congress, and of the way in which that issue arose in
the drafting and passage of TPA. As a foundation for understanding
current and future trade negotiations, I believe it is important to
communicate clearly to the American public, to Congress, and to
stakeholders the impact of U.S. trade agreements so that each can make
an informed judgment about the strengths and shortcomings of any
agreement. Furthermore, we should communicate clearly the specific
objectives of the administration with respect to all aspects of U.S.
trade policy, negotiations, and enforcement. If confirmed, I will work
with Congress and stakeholders to improve the transparency of the trade
negotiating process further.
Question. Will you allow cleared advisors to have timely access to
the proposals made by our trading partners during negotiations to
ensure that you are getting the best possible advice?
Answer. I believe that transparency and inclusiveness in trade
negotiations is important to achieve the best possible deal. If
confirmed, I will ensure that USTR follows the TPA requirements related
to transparency in any potential trade agreement negotiation. I also
look forward to discussing with Congress ways to ensure that USTR fully
understands, and takes into account, the views of all stakeholders
during the course of a trade negotiation.
Question. Past administrations, both Republican and Democratic,
have been less than robust in their efforts to enforce labor
obligations in U.S. FTAs.
What is your estimation of U.S. successes and failures in this area
and what would be your priorities in this area?
Answer. In my opinion, previous administrations, of both parties,
have not adequately enforced obligations in U.S. FTAs on several
issues. This is not a problem specific to labor obligations. Yet there
are serious consequences. When trading partners fail to enforce labor
laws and do not uphold high-standard protections for workers, it can
create a competitive disadvantage for U.S. workers, farmers, ranchers,
and businesses. If confirmed, I will work closely with you, other
members of Congress, and stakeholders with an interest in working to
ensure that trading partners are acting consistently with their labor
obligations in U.S. FTAs.
Question. I am fully on board with the President's assessment that
trade agreements need to do much better at strengthening manufacturing
and agriculture. Strength in both is indispensable to our economic
health future. At the same time, services now account for fully 70
percent of our economy and we are exceptionally competitive in a broad
range of services from banking and insurance, to hospitality and
express delivery to software and data analytics.
What do you think are the key elements of a 21st-century trade
agreement, and what elements are missing from our current agreements?
Answer. When designing these agreements, I fully intend to take
advantage of USTR's statutory role to balance varying interests from
across the economy, government, and public. But each agreement requires
its own approach. For example, in the renegotiation of NAFTA, it will
be important, in my opinion, to add a chapter on digital trade. If
confirmed, I look forward to engaging with you on these issues and
others.
Question. Since 1974, U.S. trade negotiators have used a system of
official trade ``advisors'' to influence the content of trade deals.
According to the Washington Post, approximately 85 percent of these
more than 500 advisors explicitly represent corporations. The mostly
corporate advisors get privileged access to U.S. trade proposals and
are invited to suggest changes before they are proposed by U.S. trade
negotiators while the public is barred from seeing, much less
commenting on, proposed trade rules.
Do you agree that it is problematic for a select group of primarily
corporate elites to have special access to shape U.S. trade proposals
that are not generally available to American workers and those impacted
by our flawed trade deals?
Answer. It is important that USTR's Trade Advisory Committees
represent all types of stakeholders to ensure that USTR benefits fully
from a diverse set of viewpoints in considering the positions it takes
in negotiations. If confirmed, I will work to ensure that USTR's Trade
Advisory Committees are appropriately constituted in order to achieve
this goal.
Question. If so, would you work to replace that advisory system
with a new process that invites the American public to help shape U.S.
proposals for trade agreements and give input on negotiated texts?
Answer. In 2015 Congress passed TPA and reaffirmed the importance
of the advisory system. By direction of Congress, the committees must
broadly represent the American economy. I agree with the approach of
Congress and if confirmed, I look forward to discussing additional
means for ensuring public input into U.S. trade negotiations.
Question. Not only is our trade negotiation process dominated by
corporations, but proposals for trade deals and negotiated texts are
kept hidden from the public. The proposals and negotiated texts for the
TPP, for example, were kept secret for over 7 years of negotiations.
This forced labor unions, public health groups, environmental
organizations, and the public to rely on leaked texts in order to have
an idea of the trade rules under negotiation.
Would you support having all proposals and negotiated texts
published online in a timely fashion so the workers and the broader
public that will be impacted by these agreements have a full
understanding of what is being negotiated?
Answer. I believe that transparency and inclusiveness in trade
negotiations are important to achieve the best possible deal. If
confirmed, I will ensure that USTR follows the TPA requirements related
to transparency in any potential trade agreement negotiation. I also
look forward to discussing with Congress ways to ensure that USTR fully
understands and takes into account the views of all stakeholders during
the course of a trade negotiation.
Question. Would you condition the participation of the United
States in future trade negotiations on agreement by all involved
countries to that same standard?
Answer. I believe that transparency and inclusiveness in trade
negotiations is important to achieve the best possible deal. If
confirmed, I will seek to ensure that our negotiating partners agree to
provide opportunities for public engagement and transparency in the
course of negotiations.
Question. There are several trade negotiations underway that follow
the same flawed model of the now defunct TPP. These include the Trade
in Services Agreement, or TiSA, the Transatlantic Trade and Investment
Partnership, or T-TIP, and the U.S. China Bilateral Investment Treaty.
Each of these agreements would serve to enrich multinational
corporations at the expense of working people and the environment.
If confirmed as USTR, would you commit to cease negotiations on
each of these three corporate trade agreements?
Answer. If confirmed, I will carefully review all previous
negotiations, and look forward to consulting with you and other members
of the committee on how best to proceed. With respect to T-TIP at
least, it appears that upcoming elections in France, Germany, and other
EU member states will, in any case, make it difficult for the EU to
resume comprehensive trade negotiations until at least the end of this
year. In the meantime, we would be open to exploring ways to address
barriers to U.S. exports and to expand trade with the EU and its member
states.
Question. Section 301 of the Trade Act of 1974 gives USTR broad
powers to take action against foreign countries if they deny the United
States the benefit of trade agreements or have policies or practices
that restrict or burden U.S. commerce. However, in recent years USTR
has been reluctant to use this authority.
What are your views on the proper use of section 301?
Answer. If confirmed, I am committed to using all available tools,
including section 301, where appropriate, to address unfair foreign
trade practices and to open markets for U.S. exports.
Question. Will you use section 301 to respond to the actions,
policies, and practices of foreign countries that negatively affect the
economy of the United States?
Answer. As noted in response to the prior question, if confirmed, I
am committed to using all available tools, including section 301, where
appropriate, to address unfair foreign trade practices and to open
markets for U.S. exports.
Question. Other countries are increasingly using safeguards
measures against imports, but the United States has not imposed relief
under section 201 in more than 15 years.
Do you support greater use of safeguards cases to address global
surges of imports that are causing serious injury to U.S. industries?
Answer. If confirmed, I will work with USTR staff and with other
agencies to evaluate the most suitable response, including the use of
section 201 where appropriate, for addressing each particular situation
where imports are harming U.S. workers and businesses.
Question. Will you advise the President to use his authority to
``self-initiate'' cases under section 201 where you have information
showing that import surges are causing serious injury to a domestic
industry?
Answer. If confirmed, I will work with USTR staff and with other
agencies to evaluate the most suitable response, including the use of
section 201 where appropriate, for addressing each particular situation
where imports are harming U.S. workers and businesses. If self-
initiation is appropriate, I will recommend its use.
Question. President Trump has pointed out that, whenever the United
States concludes a trade agreement, we always seem to end up seeing
more imports come in, and more jobs go out. Part of the problem is that
the United States is willing to remove all of our barriers, while
asking other countries to dismantle only some of theirs. For example,
we give their imports duty-free treatment, but they are still allowed
to impose tariffs on imports from the United States.
Do you agree that true reciprocity should be a requirement for all
concessions in trade agreements, so that what we receive is at least as
much as what we give up?
Answer. I agree that reciprocity is a key goal for our trade
agreements, and that we should be negotiating agreements in which the
United States gets at least as much as we concede.
Question. Past administrations, both Republican and Democratic,
have been less than robust in their efforts to enforce labor
obligations in U.S. FTAs.
What is your estimation of U.S. successes and failures in this area
and what would be your priorities in this area?
Answer. When trading partners fail to enforce labor laws and do not
uphold high-standard protections for workers, it can create a
competitive disadvantage for U.S. workers, farmers, ranchers and
businesses. If confirmed, I will work closely with you, other members
of Congress and stakeholders with an interest in directing our
enforcement efforts to ensure that trading partners live up to their
labor obligations in U.S. FTAs.
Question. Mr. Lighthizer, the President has made it clear he
prefers to pursue bilateral trade deals with individual countries over
multilateral agreements, such as the Trans-Pacific Partnership. The
President decided to withdraw from the TPP agreement, but my
constituents in Washington State still have great interest in
developing a trade relationship with many of the countries that were
party to that agreement. With that in mind:
Can you tell me whether there are current plans to prioritize
negotiations with any of those TPP countries?
Answer. If confirmed, I will work with the Department of Commerce,
the White House and other interested agencies to review carefully the
best way to proceed with respect to trade negotiations with TPP
countries, and look forward to consulting with you and other members of
the committee on how best to proceed.
Question. Have you developed any overall criteria for deciding
which countries the administration does plan to pursue negotiations
with?
Answer. If confirmed, I will work with the Department of Commerce,
the White House and other interested agencies to review carefully the
best way to proceed with respect to trade negotiations with TPP
countries, and look forward to consulting with you and other members of
the committee on how best to proceed.
Question. Has the administration already developed a priority list
of countries that it would like to open up negotiations with first?
Answer. If confirmed, I will work with the Department of Commerce,
the White House and other interested agencies to review carefully the
best way to proceed with respect to trade negotiations with TPP
countries, and look forward to consulting with you and other members of
the committee on how best to proceed.
Question. Mexico is the number one export market for Washington
apples and pears. It is generally around a 10 million box market for
apples valued at $150-$180 million per year. In the 2015/2016 season,
more than 9.7 million boxes of apples, representing 8 percent of the
total crop and nearly 30 percent of exports, were sent to Mexico. For
pears, more than 2.4 million boxes, representing more than 56 percent
of exports and 13 percent of the total crop, went to Mexico.
Under your leadership, what assurance can you provide that USTR
will protect the current NAFTA duty-free access for apples and pears
and reassure Washington State tree-fruit growers that the NAFTA
benefits obtained to this most important market will be maintained?
Answer. If confirmed, I am committed to not only maintaining U.S.
agricultural exports, but also expanding exports of all U.S.
agricultural product, including apples and pears to Mexico, to generate
increased economic opportunities for America's farmers and ranchers.
nafta renegotiation
Question. The Trump administration has committed to renegotiate
NAFTA. I would like you to answer ``yes'' or ``no'' to the following
questions on NAFTA renegotiation.
NAFTA's investor-state dispute settlement (ISDS) system has
empowered multinational corporations like ExxonMobil to bypass domestic
courts, turn to private tribunals, and demand taxpayer compensation for
policies that affect the value of their investment. The policies that
they have challenged include bans on toxic chemicals, court rulings
that support access to affordable medicines, and protections for our
climate. Corporations have used NAFTA's investment rules to extract
more than $370 million from governments in such cases. Pending NAFTA
claims total more than $35 billion.
If confirmed as USTR, would you eliminate broad investment rules
and the
investor-state dispute settlement system from NAFTA? ``Yes'' or ``No.''
Answer. I look forward to working with the Congress on the
investment-related elements to be pursued in future U.S. trade
agreements, consistent with the negotiating objectives set forth in the
2015 Trade Promotion Authority legislation.
Question. NAFTA's weak and unenforceable environmental and labor
side agreements facilitated the offshoring of jobs so that corporations
could exploit lower environmental and labor standards in another
country. If confirmed as USTR, would you renegotiate NAFTA to require
each participating country to adopt, maintain, and implement policies
to fulfill important international environmental and labor agreements,
including the Paris climate agreement and core ILO conventions? ``Yes''
or ``No.''
Would you ensure these commitments are included in the core text of
the agreement and made enforceable via an independent dispute
settlement process in which trade sanctions are used to correct
violations?
Answer. If confirmed, I commit to work closely with you, other
members of Congress, and stakeholders to ensure that the NAFTA is
updated in ways that comply with TPA objectives for labor and
environment, including by placing enforceable labor and environment
commitments in the main text of the agreement.
Question. NAFTA limits Canada's ability to restrict production of
fossil fuels and allows regulations to promote renewable energy to be
challenged.
If confirmed as USTR, would you eliminate NAFTA's energy chapter
and narrow rules that can be used against clean energy policies?
``Yes'' or ``no.''
Answer. NAFTA was negotiated in the early 1990s and certain
provisions may need to be updated. If confirmed, I will conduct a
review of the NAFTA provisions pertaining to all aspects of energy
goods, services, and investment.
Question. NAFTA allows corporations to shift production to a
country with lower climate standards, which can spur job offshoring and
``carbon leakage.'' To prevent this race to the bottom, and encourage
greater climate action from high-emissions trading partners, each
country could be required to impose a border tax on imported goods made
with significant climate pollution.
If confirmed as USTR, would you renegotiate NAFTA to penalize
imported goods made with high climate emissions? ``Yes'' or ``no.''
Answer. If confirmed, I look forward to working with you, other
members of Congress, and stakeholders as we update and improve the
NAFTA to meet the environmental objectives in TPA.
Question. NAFTA's procurement rules limit governments' ability to
prioritize job creation, labor rights, or environmental standards in
purchasing decisions. For example, these rules threaten the use of
``green purchasing'' requirements that ensure government contracts
support renewable energy, energy efficiency, and sustainable goods.
If confirmed as USTR, would you eliminate the existing procurement
chapter and consider new rules that would require signatory governments
to include a preference for goods and services with low environmental
impacts in procurement decisions? ``Yes'' or ``no.''
Answer. I recognize the importance of procurement policy in
promoting the conservation of natural resources and the protection of
the environment. If confirmed, I commit to work with you on these
issues.
foreign countries
Question. In the 1980s when you were deputy USTR, much of trade
policy was focused on Japan, and breaking open that market, and
developing new trade rules in key areas like intellectual property and
services. Today, some of the most challenging barriers are created
through stifling regulations. These include policies around security
and privacy and cross border data flows, and may others.
What do you see as the biggest foreign regulatory polices today
that impede American exports, and what do you plan to do to eliminate
them?
Answer. Trade and investment policy provide important tools to
address foreign regulatory practices that impede U.S. exports. I agree
that U.S. companies face significant challenges when foreign
governments impose restrictions on digital trade, including in the
areas you have cited. Given our companies' global leadership in these
areas, addressing barriers such as restrictions on cross-border data
flows and other data localization requirements by foreign governments
will be a priority and will benefit the U.S. economy. If confirmed, I
would look to enforce existing rules that apply to the digital economy;
and where such rules need to be strengthened or extended, I would look
forward to working with Congress to find ways to strengthen the global
trading system as it applies to digital issues, including as set out in
TPA.
Question. The Peru free trade agreement was the first ever U.S.
agreement to have an environment chapter subject to the same
enforcement mechanism as the commercial terms of the pact. This
enforcement mechanism applied to an ``Annex on Forest Sector
Governance'' that included detailed obligations that Peru must
undertake to stop illegal logging and the illegal timber trade. Despite
these rules, the government of Peru in 2014 found that 78 percent of
Peru's wood slated for export was harvested illegally. In October 2015,
Peru's forestry oversight agency found that wood slated for export had
been logged illegally in 94 percent of 144 surveyed logging operations.
For years, there has been clear evidence that Peru is consistently
violating its commitments in this agreement, yet USTR has never sought
to enforce the deal by initiating a dispute against Peru, despite
requests from environmental organizations to do so.
Given the widely documented evidence of systematic illegal logging
in violation of rules in the forest sector annex of the U.S. Peru free
trade agreement, would you initiate a dispute against Peru within your
first 6 months if confirmed as the next USTR?
Answer. If confirmed, I am fully committed to ensuring that Peru
lives up to its commitments under the Peru FTA, including the Forest
Sector Annex to the FTA, and that our other trading partners live up to
their obligations under our existing agreements. I look forward to
working with you and other members, as well as other stakeholders, to
determine appropriate next steps with respect to Peru.
Question. The United States has used the WTO to challenge the solar
policies of India, which has prompted India to launch a similar WTO
challenge against parallel renewable energy policies in eight U.S.
States. At issue are the buy local policies that the United States,
India, and many other countries use to create local clean energy jobs.
Outdated trade rules should not be used against these policy tools that
help us transition to renewable energy while creating jobs.
Moreover, the United States has more to lose than to gain in these
two WTO challenges. The U.S. renewable energy programs challenged by
India are worth more than $150 million while U.S. solar exports to
India total less than $10 million. Indeed, India's buy local policies
primarily hurt solar firms in China, not U.S. firms, which account for
less than 1 percent of India's solar imports. If we lose this case at
the WTO, which trade experts have deemed likely, we stand to lose far
more jobs than we stand to gain via India losing its case.
Given the need to create local clean energy jobs, and the fact that
these dueling WTO cases threaten a net loss of U.S. jobs, would you
work to reach a settlement with India to drop both cases?
Answer. I share your interest in creating manufacturing jobs,
including in the solar sector. If confirmed, I will work to ensure that
our solar manufacturers, and companies in the supply chain, can compete
and win on a more level playing field in this important and growing
market.
Question. As you know, there was some good work that was done in
the TPP context that I hope we don't lose, specifically with respect to
improvements in Vietnam. For the first time, in the context of the TPP
negotiations, Vietnam committed to adopt and maintain in its laws,
regulations, and practices the rights stated in the International
Labour Organization's (ILO) 998 Declaration on Fundamental Principles
and Rights at Work, including freedom of association, the right to
organize and collective bargaining, and elimination of forced labor,
child labor, and workplace discrimination. This was a major
accomplishment due in large measure to the United States being a key
leader in the TPP talks.
Can you commit to work with me and others to prioritize a bilateral
agreement with Vietnam that ensures these achievements are not lost?
Answer. If confirmed, I will work closely with you, other members
of Congress and stakeholders with an interest in promoting high-
standard labor protections in Vietnam, and other key trading partners
in the region.
china
Question. I think that for too long our trade policies have focused
too much on rules and commitments, and not enough on results. I was
taught that end of the day results are what count. As an example, we
have had a series of commitments from China to open its markets,
protect intellectual property, and end discriminatory policies. Yet
these problems persist.
What will you do to focus our China policy on results and not just
promises?
Answer. I agree that China should respect its commitments to the
United States. If confirmed, I will work with other administration
officials and Congress to review U.S. trade policy toward China, and
ensure that the commitments China makes actually have real results that
secure significantly increased market access for U.S. firms and fully
protect U.S. intellectual property.
Question. I know that you share my concern that U.S. companies face
the most uneven of playing fields in China. Increasingly, Chinese
regulation is making it difficult or even impossible for U.S. cloud
services companies to operate in China--likely in violation of World
Trade Organization (WTO) commitments. Meanwhile, Chinese cloud service
providers can operate in the United States today without similar
regulatory restrictions. U.S. cloud service providers are strong
catalysts for economic and jobs growth around the world, and it is
unacceptable to think that they could be locked out of China entirely.
Can you promise that you will prioritize this issue in your
discussions with Chinese officials and underscore that China must live
up to its international commitments and stop discriminating against
U.S. cloud service providers?
Answer. I recognize that U.S. leadership in the technology sector,
particularly in cloud computing, is a national strength and a source of
our international competitiveness. I agree that our trade policy should
work to ensure that U.S. companies in this sector can thrive globally,
including in China, where I recognize that barriers have been severe
and contrast sharply with the open market in the United States. If
confirmed, I will make seeking progress in reducing barriers to U.S.
companies in this sector, including in China, a priority.
Question. China claims that its protocol of accession to the WTO
requires all countries to treat it as a market economy in antidumping
investigations. The U.S. Government has concluded that the United
States is under no such obligation. Under the criteria applied by the
Commerce Department, China is clearly not a market economy. As you are
well aware, this is one of the most important issues facing American
manufacturing, as well as the manufacturing sectors of the EU, Canada,
and Mexico, among others.
Will you oppose market economy status for China?
Answer. I share your views about the importance of this issue and
disagree with China's claim that the change in its Accession Protocol
requires the United States and other WTO Members to treat China as a
market economy in antidumping proceedings. If confirmed, I can assure
you that USTR will vigorously defend the right of the United States to
use the strongest tools possible to counteract injurious Chinese
dumping.
Question. With China now challenging the U.S. position on this
issue at the WTO, what will you do to defend our Nation's right to
continue to treat China as a non-market economy?
Answer. If I am confirmed, USTR will vigorously defend our right to
use the strongest tools possible to counteract injurious Chinese
dumping, including by treating China as a non-market economy in
antidumping proceedings.
Question. What can USTR do to persuade our major trading partners,
including the EU and Canada, to also oppose the grant of market economy
status to China and to join us in the WTO case?
Answer. Many WTO Members continue to treat China as a non-market
economy in antidumping proceedings. If confirmed, I commit to doing
everything I can to persuade these Members to join the United States in
defending all WTO Members' right to continue to apply a non-market
economy methodology to China at the WTO.
Question. At the time China joined the WTO in 2001, the assumption
was that it would become a full-fledged market economy, and that the
government's role in the economy would shrink significantly. Instead,
exactly the opposite has happened. The government continues to own or
control a substantial part of the economy, and to intervene to help
specific industries and companies. This has given Chinese products a
huge, and unfair, advantage in international trade. Simply put, China
is not playing by the rules that underlie the international trading
system.
Will you commit to using your authority under section 301 or other
provisions of law to respond to the unfair advantages the Chinese
government has given Chinese companies and products in international
trade?
Answer. If confirmed, I am committed to using all available tools,
including section 301, where appropriate, to address China's unfair
foreign trade practices.
Question. Would you be willing to consider a broad-based WTO
challenge to China's distortive trade practices on the grounds that
China has not complied with its WTO obligations, including the
obligations to allow the market to set prices and to operate state-
owned enterprises on a commercial basis?
Answer. Distortive Chinese trade practices across multiple sectors
and deriving from the lack of market disciplines in much of China's
economy are a significant concern. If confirmed, I will seek to combat
these practices as effectively as possible, using all appropriate
instruments.
Question. China claims that its protocol of accession to the WTO
requires all countries to treat it as a market economy in antidumping
investigations. The U.S. government has concluded that the United
States is under no such obligation. Under the criteria applied by the
Commerce Department, China is clearly not a market economy. As you are
well aware, this is one of the most important issues facing American
manufacturing, as well as the manufacturing sectors of the EU, Canada,
and Mexico, among others.
Will you oppose market economy status for China?
Answer. I share your views about the importance of this issue and
disagree with China's claim that the change in its Accession Protocol
requires the United States to treat China as a market economy in
antidumping proceedings. If confirmed, I can assure you that USTR will
vigorously defend the plain and clear right of the United States to use
the strongest tools possible to counteract injurious Chinese dumping.
Question. With China now challenging the U.S. position on this
issue at the WTO, what will you do to defend our Nation's right to
continue to treat China as a non-market economy?
Answer. If I am confirmed, USTR will vigorously defend our right to
use the strongest tools possible to counteract injurious Chinese
dumping, including by treating China as a non-market economy in
antidumping proceedings as provided for in China's Protocol of
Accession to the WTO.
Question. What can USTR do to persuade our major trading partners,
including the EU and Canada, to also oppose the grant of market economy
status to China and to join us in the WTO case?
Answer. Many WTO Members continue to treat China as a non-market
economy in antidumping proceedings. If confirmed, I commit to doing
everything I can to persuade these Members to join the United States in
defending all WTO Members' right to continue to apply a non-market
economy methodology to China at the WTO.
agriculture
Question. The markets in Asia are critically important to
Washington State growers of apples, cherries, and pears. For example,
in 2016, 66 percent of cherry export shipments went to countries in the
Asia Pacific region of the world. Our tree-fruit growers could benefit
from free trade agreements with Vietnam, Japan, Thailand, and China.
President Trump has indicated that under his administration the
U.S. will negotiate bilateral trade agreements rather than multilateral
ones.
How will you make decisions regarding the countries to prioritize
for bilateral negotiations and are Vietnam, Japan, and Thailand on the
list of priorities?
Answer. If confirmed, I will work with the Department of Commerce,
the White House and other interested agencies to review carefully the
best way to proceed with respect to trade negotiations with TPP
countries, and look forward to consulting with you and other members of
the committee on how best to proceed.
Question. In 2016 fry exports to Japan were over $200 million. The
tariff under TPP of 8.5% would have been eliminated.
The U.S. had brokered a deal with Japan to remove millions of
dollars of tariffs, unnecessary trade quotas, and phytosanitary
barriers on a wide variety of agricultural export goods including
grains, apples, beef, dairy products, and potatoes to just name a few
from my State. I understand and appreciate your past knowledge of how
trade agreements are formed and that not every agreement can have the
best desirable outcome. But the window of prosperity is closing for
Washington farms and the United States needs an aggressive trade
agenda.
With a flurry of news reports indicating farm families might be
short-changed regarding the administrations trade agenda.
How will you work to assure rural voters that bilateral trade with
Japan will focus on ``good deals'' and will not damage existing trade
relations, but to enhance all agricultural trade. When can we expect
the administration to formally begin bilateral trade negotiations with
Japan?
Answer. I am committed to the expansion of U.S. agricultural
exports through negotiations that create enhanced export opportunities
for our farmers and ranchers. If confirmed, I will be sure to consult
with you and other members of Congress, as required by TPA, to pursue a
robust bilateral trade agenda, including with respect to any potential
negotiation with Japan.
Question. Global markets are critical for Washington State--this is
the case for all major sectors of my State's economy, including
agriculture. But Washington's companies also have a deep interest in
ensuring that our trading partners play by the rules as well.
How do we both preserve existing sales to key markets, such as the
large and vitally important dairy export market in Mexico, while also
fixing trade situations that have proven over the years to be deeply
entrenched?
Answer. If confirmed, I am committed to the expansion of U.S. dairy
exports through negotiations that create enhanced export opportunities
for our farmers and ranchers, while we maintain the current markets
that we already have. I will also be committed to working to resolve
barriers to U.S. agricultural exports and to ensure that trading
partners meet international trade obligations.
Question. An example of the latter that will harm both bilateral
trade and global milk powder trade is Canada's new Class 7 dairy
pricing program introduced last month. How do you plan to use NAFTA and
bilateral enforcement discussions to tackle problems like we have with
Canada on dairy?
Answer. I understand that Canada's supply management program for
dairy is of high concern to you, other Members of Congress, and the
U.S. dairy industry. If confirmed, I will examine the details of the
issue and consult with you on the most appropriate way to address this
matter.
aerospace/airbus
Question. I want to ensure that you are aware of an ongoing dispute
between the United States and the European Union (EU) regarding illegal
aircraft subsidies. Last September the World Trade Organization (WTO)
ruled that European governments had not removed the harm caused to
America's aerospace sector by $17 billion of illegal subsidies and
found that the Europeans have dispensed and additional $5 billion in
illegal subsidies for the development of the Airbus A350 wide body
aircraft. That brings the total of illegal European subsidies for
Airbus to $22 billion.
In fact, the original WTO panel concluded: ``It is in our view
clear that Airbus would have been unable to bring to the market the
Large Commercial Aircraft (LCA) that it launched but for the specific
subsidies it received from the European Communities and the governments
of France, Germany, Spain, and the United Kingdom.'' This company--that
the WTO found would not have existed but for these huge government
subsidies--drove McDonnell Douglas and Lockheed out of the commercial
aircraft business, taking with them thousands of American jobs.
Government subsidies to Airbus continue to destroy American jobs.
As you may know, Boeing manufacturers the vast majority of its
commercial aircraft in my home State of Washington. And, the export of
these aircraft support high-skilled jobs in Washington State and
throughout the country.
According to the Commerce Department: ``In 2015, the U.S. aerospace
industry contributed $144.1 billion in export sales to the U.S.
economy. The industry's positive trade balance of $82.5 billion that
year was the largest trade surplus of any manufacturing industry,
supporting high-wage jobs for hundreds of thousands of American
workers.''
It is imperative that U.S. companies compete with overseas rivals
on a level playing field. If confirmed, will you press the Europeans to
stop massively subsidizing Airbus aircraft?
Answer. If confirmed, I will make the elimination of European
subsidies to Airbus and ensuring a level playing field for Boeing and
U.S. aircraft industry jobs and suppliers a top priority.
apparel industry/tariffs
Question. Innovative, highly technical apparel footwear and
equipment are often grouped together with more ready-made, mass-market
products in the Harmonized Tariff Schedule (HTS). This can be
particularly problematic when you negotiate rules of origin and duty
phase-outs in free trade agreements (FTAs) at the 8-digit level of the
Harmonized Tariff Schedule. As a result, import sensitive and non-
import sensitive products can be lumped together despite the fact that
there could be vast differences in construction, design, and end use.
For this reason, in the past FTA negotiations, outdoor companies
urged the administration to negotiate ``breakouts'' for innovative
outdoor products like apparel and footwear. USTR has been inconsistent
in its approach to negotiating at the 8-digit versus 10-digit level. In
textiles and apparel USTR has often negotiated provisions at the 10-
digit or even creating breakouts at the sub-10-digit level to address
market issues when the classification system is imperfect. This was
done in TPP. Yet, USTR continually refused to create breakouts to
accommodate disparate products that by chance are classified in the
same HTS sub-heading. Failure to differentiate between import sensitive
and non-import sensitive products is a tremendous lost opportunity at
best, and harmful to U.S. companies at worst.
As the administration pursues bilateral FTAs, will you support
measures like ``breakouts'' to differentiate between import sensitive
and non-import sensitive products?
Answer. If confirmed, I look forward to consulting extensively with
Congress and interested stakeholders on U.S. objectives for free trade
agreement negotiations, and I would be open to considering any proposed
approaches that maximize benefits for U.S. companies.
Question. The outdoor recreation economy generates $646 billion in
consumer spending nationwide and supports 6.1 million American jobs. In
my home State of Washington alone, the outdoor industry generates $22.5
billion and supports 226,600 jobs.
I understand the administration is committed to incentivizing
domestic manufacturing and the re-shoring of American jobs. And there
is a growing enthusiasm for ``Made in the USA'' products in the outdoor
industry. Yet, many outdoor products--most apparel, footwear and soft-
goods equipment--are import dependent and face import tariffs on
average of about 14 percent and as high as 40 percent. That is not
going to change. Simply put, the infrastructure, training, and
personnel to produce the innovative, highly-technical outdoor products
outdoor consumers expect exists abroad, particularly in the countries
of Asia and the South-Pacific region. These supply chains have been
developed over decades and cannot easily be changed.
How will the administration address import tariffs on products
where there is no viable domestic production and no certainty that
these supply chains will return to the United States?
Answer. As the administration considers policies to strengthen U.S.
competitiveness, support more jobs, and promote U.S. manufacturing, I
expect that it will take into account the circumstances that have led
to the internationalization of the supply chains for some products.
Question. The Miscellaneous Tariff Bill (MTB) is an important tool
initiated by Congress to provide duty relief to companies that import
products not produced in the United States. The last MTB expired on
December 31, 2012 and included many finished products including
specific footwear. You may not realize it, but, the United States
imports almost 99% of its footwear, while the research, design,
marketing, and some of the high-tech component manufacturing is done
without our borders. In 2016, $25.7 billion worth of footwear was
imported into the country, with U.S. companies paying $2.8 to get it
across the border, making the averages duty rate 11%. This compares to
an average consumer good is only taxed at 1.3%.
Footwear companies face up to a 67.5% with most outdoor footwear
dutiable at 37.5%. In the past, the footwear industry had tremendous
success from the 17 previously enacted duty suspensions, saving more
than $51 million total during the 6 years the MTB provisions were in
place. Duty savings allow companies to innovate and provide better,
more cost-effective products to consumers.
Answer. I recognize the importance of Miscellaneous Tariff Bill for
U.S. manufacturers, producers, and importers. I understand that the
American Manufacturing Competitiveness Act of 2016 established new
procedures for the submission and review of petitions for temporary
duty relief, and the administration has been working diligently under
those new procedures.
Question. Can you confirm that the administration supports the
Miscellaneous Tariff Bill, and understands the importance of including
certain footwear?
Answer. I recognize the importance of Miscellaneous Tariff Bills
for U.S. manufacturers, producers, and importers. I understand that the
American Manufacturing Competitiveness Act of 2016 established new
procedures for the submission and review of petitions for temporary
duty relief, and the administration has been working diligently under
those new procedures.
disputes
Question. U.S. trade agreements commonly include broad rights for
multinational corporations and rules that empower these firms to
directly sue governments, in private trade tribunals, over policies to
protect our environment, our workers, the health of our communities,
and more.
This system has empowered multinational investors to launch more
than 700 challenges against the policies of more than 100 sovereign
governments in unaccountable tribunals. While many policies are at risk
from this system, environmental policies are particularly threatened.
In fact, about one of every four new ISDS cases in the last 5 years has
targeted policies affecting oil and gas extraction, mining, or fossil
fuel power generation.
Do you agree that this system of corporate tribunals has no place
in our trade agreements?
Answer. Investor-state dispute settlement is a mechanism in many
U.S. trade and investment agreements that permits qualifying investors
to pursue arbitration against a government to obtain monetary
compensation to remedy the breach of certain legal obligations. The
administration will be undertaking a review of the dispute settlement
and other enforcement tools in U.S. trade and investment agreements,
including Investor-State dispute settlement. If confirmed, I will look
forward to consulting with the Congress on these issues and proceeding
in a manner that is consistent with the negotiating objectives set
forth in the 2015 Trade Promotion Authority legislation.
Question. If so, then would you commit to renegotiate existing
trade agreements to remove broad investor rights, including investor-
state dispute settlement, and to not include any system in future trade
agreements in which corporations can directly challenge government
policies in private trade tribunals?
Answer. If confirmed, I look forward to working with Congress on
the investment-related elements to be pursued in U.S. trade agreements,
consistent with the negotiating objectives set forth in the TPA.
trade trust fund
Question. Last Congress, Congress passed H.R. 644, the Trade
Facilitation and Trade Enforcement Act of 2015, which included a Trade
Enforcement Trust Fund I authored to be used exclusively for the
enforcement of our existing and pending Free Trade Agreements. The
United States Trade Representative will administer this funding, in
consultation with the other relevant agencies responsible for enforcing
our trade agreements. In addition to enforcing our agreements, this
funding can be used for capacity building efforts in FTA partner
countries to help them meet their commitments, both before and those
agreement enter into force, as well as respond to petitions under
section 302 of the Trade Act of 1974.
As trade agreements have evolved to more accurately reflect
international commerce, they've become more complex. This complexity
limits our ability to simultaneously oversee, implement, and enforce
these agreements. For example, in 2014, the Government Accountability
Office was asked to audit the implementation and enforcement of the
labor provisions of our Free Trade Agreements. This audit found that
since 2008, the Department of Labor had resolved only a single
complaint out of five that had been filed, and that the relevant
agencies responsible for enforcing these provisions suffered from
consistent staffing and resource constraints.
Unfortunately, Congress has not yet appropriated any funding for
this trust fund.
Do you believe the resources we currently provide to trade
enforcement are adequate to the scope of our mission?
Answer. I'm not in the administration. In my personal view, we need
more resources for USTR and with whatever we have we'll do the best job
we can do.
The President has made clear that trade policy negotiations and
litigation are a top priority of the administration. Trade policy plays
a critical part in every aspect of the economy and is essential to
fulfilling the administration's goal of accelerating economic growth
and improving U.S. standards of living. USTR's previous budget requests
were based on the old status quo. Instead, President Trump places trade
execution and enforcement at the top of his ``America first'' trade
policy.
USTR's capabilities must grow to execute the President's new
strategy. Increased resources are necessary to reinforce USTR's
statutory obligations to (1) monitor compliance by foreign governments
with trade policy commitments to the United States, detect violations
as quickly as possible and take swift and successful actions to enforce
U.S. rights and at the same time, (2) vigorously and successfully
defend the ability of the United States to exercise its rights to
ensure fair trade in the U.S. market, and, (3) take action under U.S.
law to advance U.S. economic interests. If confirmed, I will work to
ensure that USTR has the resources it needs to fulfill its mission.
Sufficient resources are vital to a robust trade enforcement
strategy. Many of the problems faced by U.S. exporters in foreign
markets are hard to address due to a lack of transparency or because
they are legally or factually complex, requiring significant attorney,
investigatory, analytical, or translation resources. If confirmed, I
will commit to use all the resources available to USTR, and seek to
draw on the significant expertise in other agencies, to enforce U.S.
trading rights fully and ensure that our trading partners comply with
their international obligations.
Question. Would you support full funding for the Trade Enforcement
Trust Fund?
Answer. The Trade Enforcement Trust Fund is an important tool that
USTR can use to ensure that our trade agreements are adequately
enforced across the globe. I support having adequate resources for this
trust fund.
Question. What priorities would this funding be used for?
Answer. If I am confirmed, robust enforcement of WTO and FTA
obligations will be a top priority. To compete in an international
market, we must ensure that U.S. exports have the same access and
ability to compete on a level playing field abroad that we allow
imports here in the United States. Many of the problems faced by U.S.
exporters in foreign markets are hard to address due to lack of
transparency or because the obstacles and foreign practices are legally
or factually complex, requiring significant attorney, forensic and
investigatory, analytical, or translation resources. Under these
circumstances, the fund could be used to support ever more complex
litigation preparation that USTR has had to undertake in recent years
in order to take on the most difficult and important foreign barriers
and marshal the evidence to prevail. The fund could also be used to
support USTR's work protecting U.S. trade remedies from international
challenges so that when other countries engage in unfair trade, we have
the tools to ensure that U.S. workers and producers can achieve
effective redress from those unfair and injurious trade practices.
Question. Should this funding be mandatory or subject to annual
appropriations?
Answer. This is a subject that, if confirmed, I will look forward
to discussing with you and with colleagues in the administration.
steel
Question. As you know, there is currently a global glut in
steelmaking capacity. Foreign government subsidies and other market-
distorting policies have led to this overcapacity, estimated by the
Organization for Economic Cooperation and Development (OECD) to be more
than seven times the U.S. raw steel production. The world simply has
too much capacity for the amount of steel it needs. The same is true of
a number of other products as well, including aluminum and solar
panels. The OECD has been trying to address this issue in the steel
sector and has formed a ``Global Forum'' on excess capacity. But, so
far all the dialogues, commissions, consultations, and rounds of talks
have led to very little action, with no tangible results.
What can the United States do to obtain concrete results in the
reduction of global steel, aluminum, and solar capacity? What steps
will you take to bring the country's most responsible for the
overcapacity to the negotiating table?
Answer. If confirmed, I will conduct a review of all available
tools to address serious overcapacity problems in steel industry and
other sectors, work to address the root causes of those problems, and
continue to work closely with other leading steel producing countries
in the Global Forum on Steel Excess Capacity and other contexts.
If confirmed, I also will examine how we might use our existing
bilateral dialogues to press China to fix its unfair trade practices
and vast excess capacity problem in many industrial sectors.
Question. If China is unwilling to reduce capacity voluntarily,
what steps would you take in response?
Answer. If confirmed, I will work to find effective solutions to
reduce excess capacity through dialogue, negotiations, vigorous
enforcement of WTO rights and U.S. trade remedies, and any other
effective means. I also will work with the Department of Commerce,
Customs and Border Protection, and other agencies to ensure that we
enforce our trade remedy laws and measures effectively at the U.S.
border, and I will actively defend our trade remedies against
challenges by China and other WTO Members.
state-owned enterprises
Question. The increasing role of state-owned enterprises (``SOEs'')
in global commerce is a serious concern for U.S. manufacturers and
exporters. These SOEs are subsidized by their home governments and
often do not operate based on market principles, which introduces
market distortions that harm workers and private companies competing in
those markets. Many of these SOEs are looking to invest in the U.S.
market. Such inbound SOE investment could harm U.S. economic
competitiveness and national security if left unaddressed.
What steps should the U.S. Government, and USTR in particular, take
to address the potential market-distorting effects of SOE investment in
global markets, including the U.S. market?
Answer. I understand that the investment activities of foreign SOEs
have raised many concerns for U.S. businesses. If confirmed, I will
work with Congress and stakeholders to ensure that future trade
agreements include strong rules to address concerns associated with SOE
investment.
Question. Would you support international negotiations with the aim
of ensuring rules regarding SOEs?
Answer. I agree that disciplines on SOEs are important to ensure a
level playing field with our trading partners. If confirmed, I will
work with Congress and stakeholders to ensure that future trade
agreements include strong rules that address unfair competition from
SOEs.
Question. Are there additional regulatory tools that we should
consider to ensure that SOE investment in the United States is
conducted on a commercial basis and does not cause market distortions?
Answer. If confirmed, I will work with the Congress, stakeholders,
and other U.S. Government agencies to consider all appropriate ways of
addressing concerns about SOE investment in the United States.
______
Questions Submitted by Hon. Bill Nelson
Question. For some time now, Mexico has been flooding the United
States with subsidized agriculture, including bell peppers, tomatoes,
strawberries, blueberries, and sugar. It's particularly harmful to
growers in Florida, because for a lot of these items, Florida is the
only place in the U.S. that can grow them during the winter. Our trade
laws don't generally account for seasonal differences in trade
practices, making it hard for Florida growers to file a trade case.
What are some specific ways you could renegotiate the North American
Free Trade Agreement (NAFTA) to make it work better for our growers and
account for seasonal differences in agricultural markets?
Answer. I recognize the unique seasonality and perishability of
fresh fruits and vegetables. As we look to modernize the North American
Free Trade Agreement, TPA specifies several negotiating objectives to
address practices that adversely affect trade and to improve import
relief mechanisms for seasonal products, such as fresh fruits and
vegetables. If confirmed, I will consult with you, other members of
Congress, and Florida growers to address these objectives and the
concerns you have raised.
Question. If confirmed, would you commit to meet with Florida
growers as soon as possible to work on a long-term solution to the
problem of subsidized dumping of agriculture from Mexico?
Answer. I certainly know the importance of Florida's fruit and
vegetable industry. If confirmed, I will consult with you, other
members of Congress, and Florida growers on your concerns.
Question. In many ways, when a country exploits its workers or
environment to gain a trade advantage, it is just as unfair as if it
had manipulated its currency--only more harmful to the people and areas
being exploited. What are your thoughts on using our trade agreements
to make sure countries don't try to gain a competitive edge by putting
vulnerable people, endangered species, or sensitive ecosystems at risk?
Answer. Labor and environment protections are important negotiating
objectives that Congress has set out in TPA. If confirmed, I look
forward to consulting closely with you and other members of Congress
with an interest in using our trade agreements and enforcement efforts
to promote high-standard protections for workers and the environment to
ensure a level playing field for American workers and businesses
consistent with TPA objectives.
Question. If confirmed, would you commit to push for trade
agreements that include provisions to combat unsafe working conditions,
unsanctioned logging and wildlife trafficking, and the mistreatment of
marine life--including sharks and sea turtles?
Answer. Labor and environment protections are important negotiating
objectives that Congress has set out in TPA. If confirmed, I look
forward to consulting closely with you and other members of Congress
with an interest in these issues as we seek to negotiate trade
agreements that reflect high-standard protections for our workers and
our environment to ensure a level playing field for American workers
and businesses consistent with TPA objectives.
Question. What are some specific ways you would like to change the
World Trade Organization (WTO)?
Answer. The baseline of WTO rules remains important to the
effective functioning of the rules-based multilateral trading system,
and the WTO standing committee system does important work to ensure
full implementation of these rules. However, I have serious concerns
with the over-reach of the WTO dispute settlement system and would like
to confer with Congress on ideas for changes in that area. With the
notable exception of the Trade Facilitation Agreement, we have also
seen a paralysis in the negotiating arm of the WTO. If confirmed, I
look forward to working with Congress on ways in which we can ensure
negotiations mandate at the WTO that best promote U.S. exports and
creates American jobs.
Question. Were you involved in developing the General Agreement on
Tariffs and Trade (GATT), which is now the WTO? If so, what lessons did
you learn from the development of the GATT?
Answer. The General Agreement on Tariffs and Trade has been in
place since 1947 and has served as the baseline for the rules of global
trade since that time. Both during my time at the Senate Finance
Committee and as a Deputy United States Trade Representative during the
Reagan administration, I have been committed to ensuring that this
rules based trading system serves American interests. I look forward to
applying lessons learned over the decades to working with Congress and
moving U.S. trade policy in a direction that positively affects U.S.
manufacturers, farmers, service providers, and workers.
Question. What sort of exceptions to copyright protection would you
allow for in a trade agreement? Would the exceptions be enumerated in
the agreement, or would you give our trade partners broad discretion to
determine appropriate exceptions?
Answer. I understand the importance that Congress places on this
issue. If confirmed, I will ensure that USTR makes progress, in any
trade negotiation, in meeting all of the objectives outlined in TPA. I
look forward to working with you and all interested stakeholders to
address these specific issues.
Question. If confirmed, what would you do to improve copyright
standards globally, and particularly in Asia?
Answer. If confirmed, I will use all available trade tools to
ensure that our trading partners, including our partners in Asia,
adequately and effectively enforce copyright protection, to ensure that
U.S. rights holders have a full and fair opportunity to use and profit
from their intellectual property rights.
Question. How would you bring more transparency to U.S. trade
negotiations?
Answer. I am aware of the importance of the issue of transparency
in U.S. trade negotiations to you, others on the Finance Committee, and
many others in Congress, and of the way in which that issue arose in
the drafting and passage of TPA. As a foundation for understanding
current and future trade negotiations, I believe it is important to
communicate clearly to the American public, to Congress, and to
stakeholders the impact of U.S. trade agreements so that each can make
an informed judgment about the strengths and shortcomings of any
agreement. Furthermore, we should communicate clearly the specific
objectives of the administration with respect to all aspects of U.S.
trade policy, negotiations, and enforcement. If confirmed, I will work
with Congress and stakeholders to improve the transparency of the trade
negotiating process further.
Question. If confirmed, before beginning negotiations on NAFTA, or
any other trade agreement, would you commit to publicly releasing the
U.S.'s official position on each chapter of the agreement? Would you
also brief members of the Senate Finance Committee or Senate Advisory
Group on Negotiations (SAGON) on the administration's specific
objectives for each chapter of the agreement?
Answer. If confirmed, I look forward to working with this
committee, the House Ways and Means Committee, members of Congress, and
the Senate and House Advisory Groups on Negotiations--SAGON and HAGON--
as established under TPA to consult closely on other trade agreement
negotiations. I would also welcome a further discussion of the question
of public release of the U.S. position on each proposed chapter.
Question. Do you believe the United States should negotiate free
trade agreements with developing nations, or should we only negotiate
with advanced economies with similar traditions and standards? If so,
why? If not, why not?
Answer. We intend to work closely with you to decide on appropriate
trade agreement partner countries. The United States should be open to
any negotiation that meets core U.S. goals such as expanding economic
opportunity for Americans and creating a more level international
playing field. Countries joining the United States in FTAs, at whatever
level of development, should be expected to comply with the high
standards that Congress and the President have set out for such
agreements.
______
Questions Submitted by Hon. Robert Menendez
cuba
Question. I've been an outspoken opponent of the new policy toward
Cuba initiated by President Obama, and I remained concerned that that
policy will remain in place under President Trump. Opening up further
trade with Cuba is likely to enrich the military and Castro allies at
the expense of the Cuban people. Since the announcement of the change
in American policy toward Cuba 2 years ago, the Castro regime has only
grown stronger. It has continued its policies of repression, has
continued to jail the Ladies in White, has continued to suppress the
freedom of expression, and the promotion of anything resembling
democracy.
What are your thoughts on Cuba, and do you anticipate any
liberalization of our trade relationship with Cuba?
Answer. The President has stated publicly that he has directed a
review of U.S. policy toward Cuba, including with respect to issues of
human rights and economic and political liberalization. If confirmed, I
look forward to working with you and other members, as well as our
stakeholders, to determine appropriate next steps with respect to Cuba
in the context of that policy review.
Question. You were a critic of liberalizing trade with China. You
rightly pointed out that increasing trade with China was unlikely to
result in its government behaving in a more democratic, rules-based
fashion.
Why should we expect a different result from Cuba?
Answer. The President has stated publicly that he has directed a
review of U.S. policy toward Cuba, including with respect to issues of
human rights and economic and political liberalization. If confirmed, I
look forward to working with you and other members, as well as our
stakeholders, to determine appropriate next steps with respect to Cuba
in the context of that policy review.
president's conflicts of interest
Question. If confirmed, you will be handling international trade
negotiations that will impact every facet of our economy, and in doing
so, you will have to balance an range of different, and often
competing, interests including those of workers, manufacturers,
farmers, and innovators. The deals you negotiate may impact these
groups differently--some will gain, some might not be affected, and
yes, some might lose. But as this administration begins its trade
negotiations, I am very concerned about possible conflicts of interest
with our trade policy that may arise from our President's overseas
business arrangements. We know that the President owns assets in
several countries. We also suspect that he has taken loans from foreign
entities. But because he hasn't released his tax returns, we still
don't know the full extent of his holdings and the details of any
foreign loans. The recent news about the Trump Organization receiving
new trademarks in China only underscores this point. One could imagine
a situation where you, if confirmed, are negotiating an agreement on
intellectual property with a country in which the President's business
is trying to obtain trademarks, potentially presenting a conflict
between what is in the financial interest of the President versus the
economic interests of the American people at large.
Without a public disclosure of the President's business
relationships, how can you and the American people know that your
negotiations with other countries will not benefit the President at the
expense of ordinary Americans?
Answer. The President has spoken very clearly that we need the
strongest possible trade agreements, and stronger ones than we have
negotiated in the past, to stand up for Americans in every area of
trade. From my experience, the President is completely committed to the
America First agenda, and working together, we have a reasonable
likelihood that we can change the paradigm and make things better for
all Americans. I've never seen any hint in any way to the contrary.
Question. And without a full public disclosure, how can you be sure
that the person you're negotiating with doesn't know more about the
President's business dealings than you do?
Answer. The President has spoken very clearly that we need the
strongest possible trade agreements, and stronger ones than we have
negotiated in the past, to stand up for Americans in every area of
trade. From my experience, the President is completely committed to the
America First agenda, and working together, we have a reasonable
likelihood that we can change the paradigm and make things better for
all Americans. I've never seen any hint in any way to the contrary.
mexico
Question. NAFTA renegotiation could present an important
opportunity to strengthen labor standards, defend U.S. intellectual
property, protect the environment, and raise wages across the
continent. But if done poorly, it could catastrophically disrupt
businesses in New Jersey and across the country. As you know, our
economic integration is deep and mutually beneficial. Canada and Mexico
are our first- and second-largest export markets, and our three
countries share important cultural, economic, and security ties.
Maintaining strong, productive relationships with these countries is
critical to our national interest. I hope you will keep these aspects
in mind as you begin to renegotiate the deal, and that you, the
President, and the entire administration conduct the negotiations in a
way that minimizes collateral economic and political damage.
What will the administration seek to achieve in these negotiations?
Will those objectives be made public?
How will you address the concerns of companies that have built
complex value chains based on the assumption that NAFTA will remain
intact?
Answer. I understand that a renegotiation of NAFTA being considered
by the President would be conducted pursuant to Trade Promotion
Authority (TPA). TPA outlines a number of objectives that the United
States should seek in any new trade negotiations, as well as
requirements for consultations with Congress, with the private sector,
and with other U.S. stakeholders and the public on those objectives and
throughout the negotiating process.
Regarding current trade flows, NAFTA has been in place for more
than two decades and many of our workers, farmers, ranchers and
businesses have expanded exports to Canada and Mexico under the
agreement, as well as formed supply chains and other business
relationships. If confirmed, I am committed to maintaining U.S. exports
of goods and services, and will use the opportunity of renegotiating
NAFTA as a way to seek changes that will expand U.S. exports to Mexico
and Canada and generate increased economic opportunities for the United
States.
Question. Mexico has made some progress towards improving its labor
law regime--though the states need to ratify the constitutional changes
made. Still, even if the labor law reforms are eventually put into
practice, they may not raise wages in a meaningful way for quite some
time. In fact, the wage gap between the United States and Mexico is
wider now than pre-NAFTA. Do you view this as a trade problem and do
you have plans to address this issue within the administration?
Answer. I am aware that Mexico is pursuing significant labor
reforms. If those reforms are successfully implemented, they could lead
to better working conditions for many Mexican workers. If confirmed, I
will work with you and other members of Congress as we renegotiate and
modernize NAFTA, and closely monitor Mexico's efforts to enhance its
system of labor protections, as part of our examination of all aspects
of the U.S. trade relationship with Mexico.
labor provisions in trade agreements
Question. President Trump made trade enforcement a major component
of his campaign. As you know, the Department of Labor has primary
responsibility in enforcing the labor provisions of our free trade
agreements. In early January, DOL found that Colombia was out of
compliance with the terms of the U.S.-Colombia Trade Promotion
Agreement and decided to initiate consultations with the Colombian
government. I've been a strong supporter of increased U.S. engagement
with Colombia, but at the same time I remain concerned about the lack
of progress in Colombia's labor environment and the persistent violence
against trade unionists in that country.
How will you prioritize the enforcement of labor provisions of our
trade agreements and what will you do differently from past
administrations to ensure that other countries live up to their
obligations so that American workers aren't undercut by unjust
dilutions of labor rights?
On Colombia specifically, do you support the Obama administration's
decision to enter into consultations with Colombia under the terms
specified in our free trade agreement?
One of the major problems with enforcement of labor provisions is
that often these kinds of consultations drag out without any
improvement in the underlying situation. At what point would you
recommend moving toward dispute settlement to resolve the dispute with
Colombia?
Answer. I appreciate your longstanding interest in and involvement
in promoting our bilateral relationship with Colombia. Labor
protections are important negotiating objectives that Congress has set
out in TPA. If confirmed, I look forward to consulting closely with you
and other members of Congress with an interest in using our trade
agreements and enforcement efforts to promote high-standard protections
for workers in Colombia and other key trading partners as a way to
ensure a level playing field for American workers and businesses.
Question. Ambassador Lighthizer, you and other administration
officials have written and spoken about how China undermines American
manufacturing through its lax labor and environmental standards.
Are improved and enforceable environmental and labor standards
going to be a priority for the administration in the NAFTA
renegotiation and future trade deals?
What specific provisions are you looking to include? Will they go
beyond what was in TPP?
Answer. If confirmed, I look forward to working with you, other
members of Congress, and stakeholders as we renegotiate and modernize
NAFTA, as well as in our negotiation of other future trade deals. In
particular, if confirmed, I look forward to discussing ways in which we
can strengthen labor and environmental provisions to meet the
objectives in TPA and improve our efforts to seek to ensure that our
trading partners adopt and maintain labor and environmental standards
in ways that also help level the playing field for American workers and
businesses.
trade enforcement
Question. Ambassador Lighthizer, one of my longstanding concerns
when it comes to trade is that once the deals are negotiated, many of
the provisions are not thoroughly enforced. As you know from a letter
many of us sent to the President, the Federal hiring freeze will
compound the resource constraints faced by USTR and Customs and Border
Protection when it comes to trade enforcement.
What actions can we expect in the near future that will prove that
this administration is serious about holding our trading partners
accountable for their trade obligations?
Answer. If confirmed, I will be a strong advocate for resources at
USTR and, as I have been throughout my professional career, a strong
advocate for enforcing U.S. trade laws and trade agreements. Sufficient
resources are vital to a robust trade enforcement strategy. Many of the
problems faced by U.S. exporters in foreign markets are hard to address
due to lack of transparency or because they are legally or factually
complex, requiring significant attorney, forensic investigatory,
analytical, or translation resources. If confirmed, I will commit to
use all the resources available to USTR, and seek to draw on the
significant expertise in other agencies, to enforce fully U.S. trading
rights and ensure that our trading partners comply with their
international obligations.
Question. Counterfeit imports from China has been a major concern
for me and my constituents. What will you do to ensure that trade
enforcement specialists are thoroughly investigating this issue and
catching counterfeit goods before they enter our market?
Answer. Counterfeit imports not only harm the commercial viability
and goodwill of U.S. companies, but mislead and pose health and safety
risks to consumers. If confirmed, I will draw on all relevant trade
policy tools, including the Special 301 report, to engage with
countries that fail to effectively combat counterfeit operations. If
confirmed, I will also make monitoring and enforcement of trade
obligations related to intellectual property a priority. In particular,
I will work more closely than ever before with CBP and Commerce to
develop and execute strategies to enforce U.S. law at our borders and
ports of entry.
china--currency and bilateral investment treaty
Question. China has had a decades-long pattern of manipulating
their currency, stealing our intellectual property, dumping products
onto world markets, and systematically skirting their trade
obligations. Leveling the playing field for American workers by taking
aggressive action to stop China from gaming the international trading
regime was a key theme of the President's campaign, and I hope the
administration will follow through on that promise. And I'm sure that
we all remember President Trump saying countless times that he would
label China a currency manipulator on day one.
If confirmed, what are you as USTR going to do to ensure that
countries stop manipulating their currency? In my opinion, just
labeling countries a currency manipulator isn't enough--we need to
consider measures that raise the costs of engaging in currency
manipulation in the first place.
Is the administration going to continue the bilateral investment
treaty negotiations with China? Will you pursue another type of trade
agreement with China?
Answer. The administration places a high priority on utilizing a
broad range of tools to ensure that China treats the United States,
U.S. exports, and U.S. companies fairly with respect to trade and
investment. We will be reviewing the full range of potential tools,
including the U.S.-China bilateral investment treaty negotiations, to
assess the best path for the administration to achieve this objective.
If confirmed, I look forward to consulting with Congress on these
priority issues.
china--market economy status
Question. China wants market economy status at the WTO. Given the
continued trade-related problems we have with China, I don't think they
deserve that status and I know President Trump has said he agrees.
However, I'm concerned that the EU is considering changing its past
position and is considering supporting granting market economy status.
What are your thoughts on granting China market economy status?
How will you work with the EU and other allies to defend the view
that China is a non-market economy?
How else do you think we can work with the EU to push back on some
of China's market-distorting policies?
Answer. I disagree with China's claim that the change in its
Protocol of Accession requires WTO Members to treat China as a market
economy in antidumping proceedings. If confirmed, I can assure you that
USTR will do everything it can to defend the right of the WTO Members
to use the strongest tools possible to counteract injurious Chinese
dumping. This includes building a coalition of allies to defend our
position at the WTO. I look forward to discussing with you the best way
to work with the EU to defend the U.S. position on the Protocol and on
China's continued intervention in its market, a practice which is
harming producers both in the United States and the EU.
trade deficits
Question. You and several other administration officials have said
that reducing bilateral trade deficits will be one of the main
objectives of any new trade agreement.
Do you believe we should institute a test that any new trade
agreement must lead to an increase in a certain number of jobs, or a
certain amount of GDP or wage growth? And if not, the United States
should retain the right to withdraw from the agreement?
Answer. The aim of trade agreements is to achieve benefits for the
United States, including boosting economic growth, increasing more
productive, higher paying jobs (typical of the export industries), and
raising family living standards. If confirmed, I look forward to
working closely with members of Congress to ensure these benefits for
workers, farmers and ranchers, and businesses of all sizes. The United
States, as a sovereign nation, retains the right to withdraw from any
agreement, trade or otherwise.
taiwan
Question. The United States for decades has benefitted from a
strong economic relationship with Taiwan. Taiwan is currently our 10th
largest trading partner, 7th largest importer of U.S. agricultural
goods, and an important player in the global IT industry. The
Government of Taiwan has expressed a strong interest to increase its
economic and trade ties with the United States through a mutually
beneficial bilateral trade agreement, or some other method of economic
integration.
Are you committed to strengthening our engagement with Taiwan and
deepening our bilateral economic cooperation?
Would you consider prioritizing negotiations with Taiwan to create
a better environment for investment and trade?
Answer. As you point out, the United States and Taiwan have a
longstanding and important trade and investment relationship. If
confirmed, I intend to work to strengthen further those trade and
investment ties. Recognizing that foreign investment from Taiwan and
elsewhere can create more jobs in the United States and increase U.S.
economic growth and competitiveness, and increased trade can benefit
U.S. agricultural, goods, and services trade, I intend to develop a
trade and investment policy that promotes a stronger bilateral
relationship with Taiwan and examine the prospects of additional
negotiations with Taiwan, as well as addressing longstanding trade
concerns such as market access for beef and pork.
soda ash
Question. The U.S. soda ash industry is a shining example of U.S.
competitiveness in manufacturing. The industry is the most competitive
in the world due to unique deposits of the soda ash material, trona, in
the United States. The industry exports over $1 billion annually, over
half of its total output. However, like with the steel and aluminum
industries, overcapacity and export incentives in China have undercut
U.S. soda ash producers competing in key export markets.
As USTR, will you plan to hold China to its JCCT commitment to
exchange information on its soda ash excess capacity?
Answer. I understand that U.S. soda ash producers are among the
cleanest and most efficient producers of this important industrial
input, an important U.S. exporting industry, and that they compete
head-to-head with Chinese soda ash exports in many third-country
markets. If confirmed, I fully intend to hold China to its commitment,
at the November 2016 U.S.-China Joint Commission on Commerce and Trade
(JCCT), to exchange information on the soda ash industry.
Question. What specific steps might you pursue to ensure that China
remedies its industrial excess capacity in sectors beyond the steel and
aluminum industries, including soda ash?
Answer. If confirmed, I will work to develop effective ways to
ensure that China addresses its excess industrial capacity, both as a
systemic issue and in relation to specific industries. This will
include working with the soda ash industry to identify and address
unfair trade practices that may contribute to excess capacity.
intellectual property--international organizations
Question. The United States has long promoted a fair, stable, and
rules-based international system through organizations such as the
United Nations and its sub-agencies, to promote U.S. national and
economic interests and values around the world. Yet, manufacturers in
the United States are seeing a rising tide of activities sponsored by
these organizations--such as the disappointing findings with regard to
intellectual property found in last year's U.N. High-Level Panel on
Access to Medicines--that undermine core U.S. economic interests,
values, and leadership. Such recommendations and related activities
matter, particularly when they are adopted by national governments to
the detriment of companies and workers here in the United States.
How would you address this issue in dialogue with international
organizations like the United Nations and World Health Organization?
Answer. If confirmed, USTR will work closely with other agencies to
stand up for U.S. trade interests in the United Nations, World Health
Organization, and other relevant fora, including with respect to the
U.N. High-Level Panel on Access to Medicines report.
australia-u.s. free trade agreement
Question. Ambassador Lighthizer, as you are well aware, Australia
is an important trading partner of the United States. Although the
AUSFTA has been in place since 2005, various American companies and
investors are finding the investment stability afforded by the treaty
eroding. For example, a constituent has contacted me about regarding a
concerning action in New South Wales which the Australia government has
failed to address. As a result, U.S. investors in an Australian natural
resources company have incurred losses without any recourse, which
undermines the spirit of economic goodwill between the two countries.
Legislation authorizing an expropriation indemnified all of those
involved and specifically denied compensation for any innocent party.
Mr. Lighthizer, will you commit to pressing the Australian
government to resolve this matter so investors like my constituents
will have a fair and transparent opportunity to make the case for
restitution?
Answer. Thank you for bringing this matter to my attention. If
confirmed, I will direct my staff to look closely into this case as
part of our ongoing review of investment issues.
nafta investor-state dispute settlement
Question. Ambassador Lighthizer, as you know from your experience
advancing the interests of U.S. corporations abroad, where a U.S.
investor in Canada is denied ``fair and equitable treatment'' under
NAFTA, the recourse for the U.S. investor is to file a claim with an
international arbitration panel. In certain cases, after a NAFTA
arbitration panel decides in favor of a U.S. investor against Canada,
the Canadian Government has resorted to its own domestic courts to
strike down the decision. In one example, Bilcon, an aggregates company
owned by the Clayton Group of New Jersey, won its case before a NAFTA
arbitration panel, and now must fight the Canadian Government in the
Canadian courts to preserve its victory.
Mr. Lighthizer, as USTR, would you commit to work with me and your
Canadian counterparts to find a just resolution of this issue?
Answer. If confirmed, I will look forward to looking into this
matter and, more generally, to working with you to ensure that foreign
governments treat the United States, U.S. investors, and U.S. exports
fairly with respect to trade and investment, and that these governments
comply with their obligations under U.S. trade and investment
agreements.
Question. How will you seek to improve upon the arbitration
provisions of NAFTA?
Answer. If confirmed, I will look forward to working with the
Congress on the
investment-related elements to be pursued in U.S. trade agreements,
consistent with the negotiating objectives set forth in the 2015 Trade
Promotion Authority legislation. I will bear in mind the TPA
objectives' specific guidance on potential improvements in key areas,
such as enhancing transparency and eliminating frivolous claims.
______
Questions Submitted by Hon. Thomas R. Carper
Question. I was a big supporter of the Trans-Pacific Partnership
(TPP). I was, however, disappointed that the TPP agreement excluded the
financial services sector from the prohibition on data localization
requirements. That exclusion was contrary to the direction that
Congress gave the administration in our trade promotion authority
legislation.
Can you assure me and the other members of the committee that, if
you are confirmed, you will follow the requirements of TPA by ensuring
that the financial services sector is treated the same as every other
sector when it negotiates future provisions on this issue?
Answer. I am aware of the concerns raised by U.S. financial
services companies regarding the importance of addressing data
localization requirements by foreign governments. I understand that
U.S. financial services companies engaged extensively with the previous
administration to advocate for an approach that differed from the
outcome in the final TPP agreement. If confirmed, I look forward to
working with this committee on this matter.
Question. I understand the State Bank of Vietnam is considering a
proposal that would put U.S. payments companies at a competitive
disadvantage relative to Vietnam-based competitors. This proposal goes
directly against the commitment Vietnam made with regard to electronic
payments in TPP. How will you ensure our former TPP partners like
Vietnam follow through on the constructive commitments they made as
part of the TPP negotiations?
More broadly, can you tell us how the administration intends to
prevent TPP countries from backing away from commitments that create
valuable export opportunities for American businesses?
Answer. If confirmed, I will direct my staff to review the proposal
by the State Bank of Vietnam closely. Regarding how the administration
intends to ensure export opportunities for U.S. companies in TPP
countries, including the constructive commitments they made as part of
that agreement, in withdrawing from TPP the administration expressed a
desire consider pursuing bilateral FTAs with them. As I stated during
my testimony, the TPP included several policies that I believe would be
relevant to subsequent negotiations. If confirmed, as we develop our
agenda for engaging with TPP countries, I will work closely with you
and your staff to ensure that we approach those engagements in a
productive manner.
Question. I know that you share my concern that U.S. companies face
a very uneven playing field in China. Increasingly, Chinese regulation
is making it difficult or even impossible for U.S. cloud services
companies to operate in China--likely in violation of World Trade
Organization (WTO) commitments. Meanwhile, Chinese cloud service
providers can operate in the United States today without similar
regulatory restrictions.
The U.S. cloud service industry supports thousands of American jobs
and is growing strongly, and it is very troubling to think that they
could be locked out of China entirely. Will you raise this issue in
your discussions with Chinese officials and underscore that China must
live up to its international commitments and stop discriminating
against U.S. cloud service providers?
Answer. I recognize that U.S. leadership in the technology sector,
particularly in cloud computing, is a national strength and a source of
our international competitiveness. I agree that our trade policy should
work to ensure that U.S. companies in this sector can thrive globally,
including in China, where I recognize that barriers have been severe
and contrast sharply with the open market in the United States. If
confirmed, I will make seeking progress in reducing barriers to U.S.
companies in this sector, including in China, a priority.
Question. A great deal of progress was made on core obligations and
sector-specific issues in the multi-country Trade in Services Agreement
(TiSA) negotiations, and TiSA participants are looking to the United
States to continue that progress and produce a high standard agreement.
If confirmed, what are your plans to ensure that the TiSA negotiations
do not fall by the wayside?
Answer. The U.S. services sector is highly innovative and a key
driver of the U.S. economy. Maintaining a vibrant U.S. services sector
and expanding U.S. services exports is vital to a healthy economy and a
key objective of U.S. trade policy. If confirmed, I look forward to
working with you to pursue this objective.
______
Questions Submitted by Hon. Sherrod Brown
Question. A recent report published by the Alliance for American
Manufacturing found that the WTO ruled against U.S. trade remedy laws
38 times since 1995. That's five times the number of these decisions as
against any other member. Do you agree that the WTO has overreached its
authority by striking down provisions of U.S. trade laws?
Answer. Yes, I am concerned with the problem of WTO overreach. I
believe that it is critical that WTO panels and the Appellate Body
apply WTO rules as written and not ``add to or diminish the rights and
obligations'' of the United States or other WTO Members. I am concerned
that certain cases involve over-reaching by the WTO panels and the
Appellate Body. If confirmed, I look forward to consulting closely with
the committee on ideas for ensuring that the WTO dispute settlement
system operates as intended.
Question. In your testimony, you mentioned that we need to sit down
with other WTO member countries to find new tools at the WTO to deal
with a country like China and its industrial policies. What are some of
the changes you think we should make to the WTO dispute settlement
process or the new tools the WTO should establish so the body more
effectively targets unfair trade practices instead of legitimate U.S.
trade laws?
Answer. U.S. trade laws, which are expressly sanctioned by the WTO
agreements, are typically used in response to unfair trade practices by
other countries. A key question is how we can respond most effectively
to those practices so that they are less likely to cause the harm and
dislocation that they do, while also preserving fully the ability of
U.S. workers and businesses to use WTO-sanctioned trade remedy laws to
address the consequences of those unfair trade practices. If confirmed,
I look forward to working closely with the committee and the Ways and
Means Committee on these issues, and continue to work with like-minded
WTO Members.
Question. In your testimony you stated that you believe we need to
make it less economical for China to violate its trade obligations.
What specific steps would you take to make it less economically viable
for China's state-owned enterprises in both the steel and aluminum
sector to continue to operate independent of market considerations?
Are you committed to addressing the problem of aluminum
overcapacity across the supply chain through all available means,
including WTO litigation?
Answer. If confirmed, I will vigorously enforce and defend our
trade remedy laws, and aggressively utilize all available tools in the
WTO and other mechanisms to deter Chinese government subsidies and
other support that artificially lower costs to Chinese firms, including
State-Owned Enterprises (SOEs), in the steel, aluminum, and other
sectors. I will also engage China bilaterally and work with other
economies to encourage China to move away from policies that contribute
to excess capacity and distort markets including subsidies and raw
material export restrictions.
Question. In your testimony you stated that the United States
should bring more cases at the WTO. Would you consider bringing a broad
case against China for its distortive trade practices across multiple
sectors?
Answer. Distortive trade practices across multiple sectors is a
significant concern. If confirmed, I will seek to combat distortive
trade practices as effectively as possible, using all appropriate
instruments.
Question. Would you consider renegotiating China's WTO Accession
Protocol if China continues to violate its WTO commitments and other
efforts to get China to live up to its obligations are unsuccessful?
Answer. I understand the importance of working on difficult trade
issues to get trading partners to live up to their trade obligations.
If confirmed, I intend to make China's compliance with all of its WTO
obligations, including those in China's Protocol of Accession, a top
priority, as I stated during my confirmation hearing. Where China fails
to do so, I will also aggressively utilize, in cooperation with others
in the administration, and in consultation with members of Congress,
all available tools in the WTO and other mechanisms.
Question. Will you advise President Trump to take unilateral trade
action against our trading partners if that is needed to give U.S.
companies and their workers a level playing field? Specifically, will
you commit to using your authority under section 301 or other
provisions of law to respond to the unfair advantages the Chinese
government has given Chinese companies and products in international
trade?
Answer. If confirmed, I am committed to using all available tools,
including section 301 where appropriate, to address unfair foreign
trade practices of the Government of China.
Question. What do you believe should be the objectives of auto
rules of origin in our trade agreements? Will you commit to discussing
improvements to the NAFTA auto rules of origin during the NAFTA
renegotiations?
Answer. I believe the objectives of rules of origin for automotive
goods are to provide incentives for producers to source goods and
materials here in the United States. These rules should support good
jobs in the United States, rather than provide benefits for producers
to outsource production and send jobs to other countries. If confirmed,
I look forward to examining this issue closely to see where and how we
can better meet these objectives.
Question. If you undertake bilateral trade negotiations, do you
expect to use the TPP agreement as a template?
Answer. As I noted during my testimony, I would hope that we could
take TPP and improve upon what was negotiated there. If confirmed, I
look forward to working with Congress and other stakeholders to
identify those areas where the TPP outcomes can be improved.
Question. Do you believe strong and enforceable currency provisions
should be included in FTAs? If so, do you believe they should be
subject to dispute settlement mechanisms in the agreements?
Answer. I have also long been concerned about the problem of
currency manipulation. If confirmed, I will work with you and other
members of Congress, as well as with other administration officials, to
determine the best means to address this important issue.
Question. I strongly supported the inclusion of state-owned
enterprises disciplines in the Trans-Pacific Partnership.
Unfortunately, those provisions were drafted in a way to exclude many
SOEs that should be subject to these disciplines, for example state-
controlled enterprises that are not majority-owned by the state. Will
you commit to including provisions on state-owned enterprises in any
trade agreements that you negotiate? And will you commit to working
with the committee to ensure such disciplines are meaningful tools?
Answer. I agree that disciplines on SOEs are important to ensure a
level playing field with our trading partners. If confirmed, I commit
to working with Congress and stakeholders to ensure that future trade
agreements include strong rules that address unfair competition from
SOEs.
Question. You have made public comments about the need to address
the U.S. trade deficit. One way to reduce the U.S. trade deficit is to
prevent U.S.-based production from moving overseas. Corporations often
point to lower labor and environmental costs in U.S. trading partner
countries as reasons for moving production offshore. Will you commit to
strengthening labor and environmental standards in NAFTA to prevent
more U.S. factories from offshoring to Mexico? Specifically, will you
commit to negotiating improvements to Mexico's labor laws, including
its laws protecting the right to organize and bargaining collectively,
as part of the NAFTA renegotiations?
Answer. If confirmed, I look forward to working with you, other
members of Congress, and stakeholders as we update and improve NAFTA.
In particular I look forward to discussing ways in which we can
strengthen labor and environmental provisions to meet the objectives in
TPA and to seek to ensure our trading partners adopt and maintain labor
and environmental standards in ways that also help level the playing
field for American workers and businesses.
Question. Enforcement of labor obligations in U.S. FTAs has been
inadequate. USTR has brought only one labor enforcement case, against
Guatemala in 2008, and 9 years later it is still unresolved. What would
be your priorities for demonstrating improved compliance by trading
partners and more effective oversight and enforcement by the U.S.
Government in this area?
Answer. When trading partners fail to enforce labor laws and do not
uphold high-standard protections for workers, it can create a
competitive disadvantage for U.S. workers, farmers, ranchers, and
businesses. If confirmed, I will work closely with you, other members
of Congress, and stakeholders with an interest in directing our
enforcement efforts to ensure that trading partners live up to their
labor obligations in U.S. FTAs.
Question. The practice of systemic illegal logging has been well-
documented in Peru, yet USTR has not initiated a dispute for these
violations. Will you commit to fully enforcing the environmental
obligations of the Peru FTA, including bringing a dispute against Peru?
Answer. If confirmed, I am fully committed to ensuring that Peru
and our other trading partners live up to their obligations under our
existing agreements. I look forward to working with you and other
members, as well as other stakeholders, to determine appropriate next
steps with respect to Peru.
Question. Investment provisions in FTAs have provided legal
protections for corporations to move productions offshore. What
suggestions do you have for reforming trade and investment rules to
prevent further offshoring?
Answer. The United States is the most attractive place in the world
to invest. The administration is committed to creating conditions that
make it even more attractive for companies to establish and maintain
production activity in the United States. If confirmed, I will ensure
USTR staff reviews provisions of U.S. FTAs that can help to advance
this goal, in line with the negotiating objectives established in TPA.
Question. Do you believe the United States should negotiate
investment treaties with countries, even if they have persistently
violated their existing trade obligations?
Answer. The administration places a high priority on utilizing a
broad range of tools to ensure that foreign governments treat the
United States, U.S. exports, and U.S. companies fairly with respect to
trade and investment, and that foreign governments comply with existing
trade obligations. If confirmed, I will work closely with you and your
staff to determine with which countries to negotiate. I look forward to
your input on this issue.
Question. Commercial aviation traffic rights have traditionally
been negotiated through bilateral Air Transport, or ``Open Skies''
Agreements, which are jointly overseen by subject-matter experts at the
Departments of State and Transportation. This Open Skies system has
been successful in liberalizing international aviation markets in a way
that increases competition and promotes growth opportunities for U.S.
airlines, while protecting labor rights. In recent years, however,
there has been steady pressure from foreign negotiators to include
aviation services in FTAs. Including aviation services in FTAs would be
unprecedented and is unnecessary.
Will you oppose efforts by the EU or other foreign entities to
include aviation services as part of broader trade negotiations?
Answer. Aviation traffic rights have traditionally been covered by
Open Skies agreements, not trade agreements. I am aware of the
sensitivity around this issue and, if confirmed, USTR will remain in
close communication with Congress should our trading partners seek to
include the negotiation of these rights as part of broader trade
negotiations with this administration.
Question. How will you work to make U.S. trade negotiations more
transparent and inclusive?
Answer. I believe that transparency and inclusiveness in trade
negotiations is important to get the best possible deal. If confirmed,
I will ensure that USTR follows the TPA requirements related to
transparency in any potential trade agreement negotiation. I also look
forward to discussing with Congress ways to ensure that USTR
understands fully, and takes into account, the views of all
stakeholders during the course of a trade negotiation.
Question. Will you commit to making all U.S. tabled FTA proposals
public? Will you commit to releasing to the public draft, consolidated
FTA text after negotiating rounds?
Answer. If confirmed, I look forward to discussing with Congress
the best way to ensure that USTR obtains public input during the course
of a trade negotiation.
Question. According to the Washington Post, approximately 85
percent of the official trade advisors represent corporations. How will
you ensure the Trade Advisory Committees members are not
disproportionately representative of corporations and more
representative of the U.S. public?
Answer. It is important that USTR's Trade Advisory Committees
represent all types of stakeholders to ensure that USTR fully benefits
from a diverse set of viewpoints in considering the positions it takes
in negotiations. If confirmed, I will work to ensure that USTR's Trade
Advisory Committees are appropriately constituted in order to achieve
this goal.
Question. The GAO recently published a report titled ``Government
Procurement: United States Reported Opening More Opportunities to
Foreign Firms Than Other Countries, but Better Data Are Needed'' (GAO-
17-168), which concluded that the U.S. opened up more of its domestic
government procurement opportunities to foreign competition than the
next five largest trade agreement partners combined. Given the report's
findings, will you commit to reevaluating U.S. procurement obligations
under the Agreement on Government Procurement and any new trade
agreements you negotiate?
Answer. Thank you for this question. I hear your concerns about the
recently released GAO report on government procurement that raises many
important questions ranging from the gaps in U.S. and international
procurement statistics to the comparative value of procurement market
access in our trade agreements. I understand the importance of this
issue, and if confirmed, I commit to working with you as we prepare a
trade agenda that expands trade opportunities for U.S. suppliers.
______
Questions Submitted by Hon. Michael F. Bennet
Question. In November 2015, the Department of Treasury and 11
countries adopted a Declaration to address unfair currency practices.
This Declaration aimed to address the principal negotiating objectives
on currency included in the Trade Priorities and Accountability Act of
2015. This Declaration was intended to stand beside the Trans-Pacific
Partnership Agreement (TPP).
Does the Trump administration support the terms of that
Declaration?
How does withdrawal from TPP affect commitments made by the U.S.
Government?
Will the Trump administration adhere to the transparency and
reporting commitments made in the Declaration?
Answer. I understand the importance that you and Congress as a
whole place on the issue of unfair currency practices. I have also long
been concerned about the potential for currency manipulation and
misaligned currency to affect international trade flows. If confirmed,
I will work with you and Congress, along with the Treasury Department
and others in the administration, to determine the best means to
address this longstanding issue.
______
Questions Submitted by Hon. Robert P. Casey, Jr.
Question. Mr. Lighthizer, do you agree that adopting or maintaining
lax labor and environmental standards is not a legitimate way for
governments to manufacture a competitive advantage for their exporters?
Answer. Labor and environment protections are important negotiating
objectives that Congress has set out in TPA. If confirmed, I look
forward to consulting closely with you and other members of Congress
with an interest in using our trade agreements and enforcement efforts
to promote high-standard protections for workers and the environment to
ensure a level playing field for American workers and businesses.
Question. According to the American Iron and Steel Institute, the
steel industry employs about 19,000 people in Pennsylvania, and is one
of Pennsylvania's biggest economic drivers.\1\ The steel and aluminum
industries are facing a crisis because of global overcapacity, stemming
from China. This glut in supply has cost American jobs and driven
prices down. The steel industry is bringing trade cases, but more
aggressive enforcement of U.S. trade laws is necessary to curb these
practices. Countries that don't make things don't last for very long.
To that end, preservation of our manufacturing base is not just an
economic imperative; it is vital to our national security. We must take
definitive steps to address the market failures, and unfair trade
practices that put our domestic producers at a significant disadvantage
in the global marketplace.
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\1\ https://www.steel.org//media/Files/AISI/Public%20Policy/
Member%20Map/2016/Pennsylvania.pdf?la=en.
Can you please share what actions you intend to take to press China
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and other countries on overcapacity?
Please discuss how you will work with our allies, including the EU,
on taking collective action on this issue.
Answer. If confirmed, I will conduct a review of all available
tools to address serious overcapacity problems in the steel industry
and other sectors, work to address the root causes of those problems,
and continue to work closely with other leading steel producing
countries in the Global Forum on Steel Excess Capacity and other
contexts. I will also examine how we might use our existing bilateral
dialogues to press China to fix its unfair trade practices and vast
excess capacity problem in many industrial sectors.
Question. What initial steps do you intend to take to address
Mexico's lax enforcement of labor and environmental standards?
Answer. When trading partners fail to enforce labor and
environmental laws, it can create a competitive disadvantage for U.S.
workers, farmers, ranchers and businesses. If confirmed, I will work
closely with you, other members of Congress and stakeholders to ensure
that trading partners like Mexico live up to their obligations to
effectively enforce their labor and environmental laws. I also look
forward to working with you, other members of Congress, and
stakeholders as we update and improve on NAFTA. That process provides
an opportunity to improve our trading partners' labor and environmental
standards in ways that also help level the playing field for American
businesses.
Question. With respect to labor standards in our trade agreements,
where do you think we have executed appropriate enforcement of labor
obligations? What are your priorities in this area of enforcement?
Answer. When trading partners fail to enforce labor laws and do not
uphold high-standard protections for workers, it can create a
competitive disadvantage for U.S. workers, farmers, ranchers, and
businesses. If confirmed, I will work closely with you, other members
of Congress, and stakeholders with an interest in targeting our
enforcement efforts to ensure that trading partners are acting
consistently with their labor obligations in U.S. FTAs.
Question. With respect to uncompetitive market concentration of
products or production, please discuss how you hope to work with the
Department of Justice's antitrust division to evaluate the impact on
prices in the United States, and where appropriate, develop remedies.
Answer. If confirmed, look forward to discussing with you what
appropriate role USTR may have in this area.
Question. In your opinion, are the current funding and staffing
levels at USTR sufficient to execute a robust trade and enforcement
agenda that helps American businesses grow and gain market access?
Answer. I'm not in the administration. In my personal view, we need
more resources for USTR and with whatever we have we'll do the best job
we can do.
The President has made clear that trade policy negotiations and
litigation are a top priority of the administration. Trade policy plays
a critical part in every aspect of the economy and is essential to
fulfilling the administration's goal of accelerating economic growth
and improving U.S. standards of living. USTR's previous budget requests
were based on the old status quo. Instead, President Trump places trade
execution and enforcement at the top of his ``America first'' trade
policy.
USTR's capabilities must grow to execute the President's new
strategy. Increased resources are necessary to reinforce USTR's
statutory obligations to (1) monitor compliance by foreign governments
with trade policy commitments to the United States, detect violations
as quickly as possible and take swift and successful actions to enforce
U.S. rights and at the same time, (2) vigorously and successfully
defend the ability of the United States to exercise its rights to
ensure fair trade in the U.S. market, and, (3) take action under U.S.
law to advance U.S. economic interests. If confirmed, I will work to
ensure that USTR has the resources it needs to fulfill its mission.
Sufficient resources are vital to a robust trade enforcement
strategy. Many of the problems faced by U.S. exporters in foreign
markets are hard to address due to lack of transparency or because they
are legally or factually complex, requiring significant attorney,
investigatory, analytical, or translation resources. If confirmed, I
will commit to use all the resources available to USTR, and seek to
draw on the significant expertise in other agencies, to enforce U.S.
trading rights fully and ensure that our trading partners comply with
their international obligations.
Question. Do you intend to self-initiate trade cases when the
situation calls for it? If so, do you believe the current funding and
staffing levels at USTR are sufficient to execute this agenda?
Answer. If confirmed, I am committed to using all available
statutory authorities, including possible self-initiation, where
appropriate, to address unfair foreign trade practices and to open
markets for U.S. exports.
Question. On February 10th, I wrote a letter to the President
discussing key areas where American workers have been disadvantaged by
trade agreements, this includes investor-state dispute settlement
(ISDS) provisions. In practice, ISDS has provided some foreign
companies greater legal protection than U.S. employers.
Do you support the inclusion of Investor State Dispute Settlement
(ISDS) in its current form in future trade agreements?
Answer. If confirmed, I will look forward to working with Congress
on the investment-related elements to be pursued in future U.S. trade
agreements, consistent with the negotiating objectives set forth in the
2015 Trade Promotion Authority legislation.
Question. How would you amend ISDS to ensure no special legal
protection is afforded to offshoring jobs?
Answer. If confirmed, in negotiating trade agreements I will bear
closely in mind the negotiating objectives established on this point by
Congress in the 2015 Trade Promotion Authority legislation.
Question. What steps do you intend to build on, and initiate, to
protect U.S. intellectual property from both coercive appropriation,
and conventional and cyber-
enabled economic espionage?
Answer. If confirmed, I will seek to use all appropriate trade
tools to ensure that U.S. rights holders have a full and fair
opportunity to use and profit from their intellectual property rights.
Ensuring strong intellectual property protection, including against
coercive appropriation and cyber-enabled economic espionage, and
enforcement by our trading partners of their intellectual property
obligations will be a top trade priority.
Question. Please describe where you see the WTO dispute settlement
process as deficient and outline how you would work to make the process
fairer.
Answer. USTR actively enforces WTO rules to ensure that U.S.
producers, workers, ranchers, and farmers are able to achieve the
market access to which they are entitled. USTR uses dispute settlement,
as necessary, among other tools to achieve that goal. But to maintain
U.S. confidence in the WTO, it is critical that WTO panels and the
Appellate Body apply WTO rules as written and do not ``add to or
diminish the rights and obligations'' of the United States or other WTO
Members. If confirmed, I look forward to consulting closely with you,
this committee and the Ways and Means Committee, on ideas to ensure the
WTO dispute settlement system operates as intended, and as approved by
Congress in 1994.
Question. Trade is critically important to the agricultural
economy. Canada and Mexico are major export markets for the U.S. diary
sector, which is a significant industry in my State. I am concerned
about recent changes in Canadian policies that are displacing U.S.
exports to that country. I am equally concerned with recent press
reports that Mexico, which takes nearly a third of U.S. dairy exports,
has stepped up trade talks with the European Union and New Zealand.
How will you ensure that Canada abides by the terms of NAFTA with
respect to dairy trade?
What will you do to ensure that U.S. dairy producers continue to
have strong access to the Mexican market?
Should the administration initiate a NAFTA renegotiation, will
dairy access be a priority?
Answer. I understand that Canada's supply management program for
dairy is of high concern to you, other members of Congress, and the
U.S. dairy industry. If confirmed, I will examine the details of the
issue and consult with you on the most appropriate way to address this
matter. If confirmed, I will be committed to the expansion of U.S.
dairy exports through negotiations that create enhanced export
opportunities for our dairy producers, while we maintain the current
markets that we already have.
Question. If confirmed, will you leverage the eligibility criteria
found in AGOA to promote human rights and discourage anti-LGBT policies
in sub-Saharan Africa, as the Obama administration did?
Answer. If confirmed, I will commit to work with you to ensure that
AGOA beneficiary countries adhere to all of AGOA's eligibility
criteria, including with respect to human rights.
Question. The USTR monitors and reports on whether trading partners
adhere to eligibility criteria consistent with their receipt of trade
preferences. This is an opportunity to promote cooperation in combating
terrorism and terrorist finance, an area where both interagency and
international collaboration is critical.
How do you view your role within our national security apparatus in
aiding efforts to combat terrorism, terrorist finance and trade based-
money laundering?
Will you ensure that countries are closely evaluated to promote
adherence to the statutory eligibility requirements found in trade
preference programs or other obligations they may have taken on?
There are well-documented links between the sale of counterfeits
and illegally taken resources (such as wildlife and timber) to
transnational criminal organizations and designated terrorist
organizations. If USTR identifies trade or trafficking in counterfeits
and illegally taken resources, will you be sure it alerts other
appropriate agencies and encourages them to take appropriate actions to
fully enforce U.S. law and advance U.S. interests?
Answer. Fighting terrorism is a key priority of this
administration. Our trade preferences programs such as AGOA, GSP, and
the Nepal Preference Program can play an important role by requiring
the beneficiary countries to support the U.S. effort in combating
terrorism. If confirmed, I commit to work with you and the committee,
along with the Ways and Means Committee, as well as other agencies and
stakeholders, to ensure that beneficiary countries continue to meet the
statutory eligibility criteria of these programs, including the
criteria related to combating terrorism and adequate and effective
protection of intellectual property rights. If confirmed, I also commit
to coordinating with other agencies, as appropriate, on issues related
to counterfeits and illegally taken natural resources.
Question. Since the President has refused to disclose his taxes, we
have no way of knowing where he has business interests or to whom he
owes debts. However, it appears he has advocated for the elimination of
a provision within the tax code from which he could directly benefit,
to the tune of over $30 million, for one past tax-year, alone. Further,
Mr. Trump did not disclose, nor does anyone have the information to
ascertain, how he would currently benefit when he asserted his support
for the elimination of this particular provision.
Do you think it is appropriate for the President to sign an
affidavit affirming he has no financial interests in a trade agreement
prior to negotiations being initiated?
How would you respond to and evaluate a direct request from the
President concerning specific provisions within a trade agreement?
Answer. In all my conversations with the President, he speaks very
strongly on enforcement and getting the best possible deals for
American workers, farmers, ranchers, and businesses. The President is
completely committed to the America First agenda, and working together,
we have a reasonable likelihood that we can change the paradigm and
make things better for all of our workers and farmers. I've never seen
any hint in any way to the contrary.
Question. Counterfeits and theft of intellectual property not only
threaten U.S. economic competitiveness, they can be a threat to
consumer health and safety and to national security. The Pennsylvania
defense industrial base helps ensure that our warfighters have the most
innovative, most effective equipment and technology to ensure that they
are never in a fair fight, as General Odierno used to say. I am
concerned about the impact that counterfeiting has on the defense
supply chain. China accounts for the lion's share of counterfeits
seizures--with 52 percent by value coming from the Chinese mainland and
35 percent by value from Hong Kong. U.S. agencies continue to take
steps to curb counterfeits from entering the United States, including
through Custom's Operation Chain Reaction, which addressed counterfeit
circuits made in China.
How do you hope to work with Customs, the Department of Defense,
and the State Department to combat counterfeits and identify
vulnerabilities in our supply chain?
Answer. I am deeply concerned about the issues of counterfeiting
and piracy in China, including as to integrated circuits and the
impacts of these practices on the U.S. economy, U.S. jobs, and the
threats that these practices pose to health and safety and national
security. If confirmed, I will use all relevant trade policy tools,
including the Special 301 report and the new procedures provided under
the Trade Facilitation and Trade Enforcement Act of 2016 to spotlight
and address this continuing problem. I look forward to engaging with
other agencies in the government and to consulting with members of
Congress on this important issue going forward.
Question. How will you respond to countries that show themselves to
habitually foster counterfeiters?
Answer. The President has spoken very clearly that we need the
strongest possible trade agreements, and stronger ones than we have
negotiated in the past, to stand up for Americans in every area of
trade. From my experience, the President is completely committed to the
America First agenda, and working together, we have a reasonable
likelihood that we can change the paradigm and make things better for
all Americans . I've never seen any hint in any way to the contrary.
______
Questions Submitted by Hon. Mark R. Warner
Question. Two of the three largest export markets for Virginia are
America's immediate neighbors to the north and south. So I have a few
questions for you with respect to NAFTA.
The administration has announced its intent to focus on bilateral,
rather than multilateral, trade agreements. The President has also
called for renegotiating NAFTA. How does the intention to focus on
bilateral agreements affect a renegotiation of NAFTA, which is
multilateral?
Answer. As you note, Canada and Mexico are our largest export
markets, and NAFTA is one of our oldest agreements, two reasons the
President has made a renegotiation of NAFTA a priority. However, while
I am not currently in the administration, I understand the
administration has taken no decision on the structure of a renegotiated
agreement. Should I be confirmed, I look forward to consulting with you
on that topic.
Question. You have stated that the United States has ``chronic
deficits'' with Mexico--in 2016, Virginia had a $300 million trade
surplus with Mexico and a $1 billion trade surplus with Canada. Can you
assure me that any renegotiation of NAFTA will not worsen any
individual State's net trade, or specifically, my State's net trade
position? How will you do so?
Answer. In updating NAFTA, we will seek to improve our trade
relationship with Canada and Mexico in order to secure the greatest
possible benefits for U.S. workers farmers, ranchers, and businesses.
If confirmed, I look forward to working with you on how best to meet
the needs of your State as we renegotiate NAFTA.
Question. As the administration formulates a plan for renegotiating
NAFTA, what priority will it place on intellectual property protection,
including in the pharmaceutical space, where 28 U.S. drug patents have
been invalidated by Canada in recent years?
Answer. If confirmed, I will place a high priority on ensuring
strong intellectual property protection and enforcement by our trading
partners. This is necessary for future innovation, and it preserves a
competitive advantage of the United States in the global market. I look
forward to working with you to address your concerns about patent
protection in Canada and how to best use all appropriate trade tools to
address those concerns.
Question. When he was campaigning, Mr. Trump espoused vile rhetoric
towards Mexico and Mexicans. He also pledged to build a wall, and even
threatened to send troops to Mexico recently. All of that rhetoric has
consequences, including for Americans. You must be aware that the
Mexican peso has dropped 20% since Mr. Trump's election in November.
This makes U.S. exports to Mexico 20% more expensive, harming U.S.
manufacturers and workers. As U.S. Trade Representative, will you work
to ratchet down the racist and offensive rhetoric from the
administration towards our ally Mexico?
Answer. Mexico is our third-largest trading partner. I look forward
to working with the Government of Mexico to renegotiate and bring NAFTA
into the 21st century. Furthermore, I look forward to working with
Mexico to achieve shared goals with respect to ensuring a level playing
field for products and services made in the United States and Mexico,
respectively.
Question. Currency manipulation is a real issue, but we need to be
careful to use real facts, rather than the alternative facts that the
administration is so fond of. The President campaigned on a promise to
designate China as a currency manipulator. The Treasury Department,
however, has not done so, probably because the data currently shows--
and has shown for a while--China is not artificially holding down its
currency. Making false designations based on the President's prejudices
may set off a global trade war that will harm our economy. To the
extent that you are consulted by Treasury on currency manipulator
designations, will you support an objective analysis?
Answer. If confirmed, I will work with other administration
officials, including at the Department of the Treasury, to develop an
effective approach for addressing the problem of currency manipulation.
Question. Last month, the Wall Street Journal reported that ``Trump
officials have asked employees at the Commerce Department and Office of
the U.S. Trade Representative to calculate U.S. trade flows in a way
that exaggerates the overall U.S. trade deficit, overstates deficits
with countries like Mexico, and even creates the illusion of deficits
where none exist.'' I don't know whether to call this ``alternative
facts,'' or just making stuff up, but it is concerning. Will you pledge
to this committee that, if confirmed, you will not manipulate trade
statistics, or engage in what the Wall Street Journal called ``fuzzy
math?''
Answer. If confirmed, I will ensure that USTR relies on data
related to flows of exports, imports, and other matters from the United
States' professional statistical agencies, including Census, Bureau of
Economic Analysis, and others, that provide the most complete and
accurate picture of these matters.
Question. As you know, China offers extensive state support for
domestic industries. For example, China has announced more than $150
billion in government projects to create a domestic semiconductor
market, which distorts global markets and results in oversupply,
imperiling American manufacturers. As U.S. Trade Representative, what
tools will you use to address this concern?
Answer. Semiconductors are one of the top five U.S. export sectors,
and they are critical to advancing innovation in virtually all sectors
of the U.S. economy, from automobiles to cell phones to medical
devices. The Chinese government has launched an initiative to develop
an indigenous, self-contained semiconductor industry--an initiative
calling for government-directed funding in the tens of billions of
dollars, with some estimates of over $150 billion, as your question
notes. If confirmed, I will work to address this challenge and to
identify and implement the most effective policies to combat the
market-distorting impacts of China's semiconductor fund.
Question. Similarly, China employs other trade barriers that make
it difficult for U.S. cloud services companies to operate in China,
likely in violation of WTO commitments. Meanwhile, Chinese cloud
service providers can operate in the United States today without
similar regulatory restrictions. This imbalance is inherently unfair
and threatens to jeopardize one of America's critical areas of growth
in the technology sector. Will you pledge to this committee that, if
confirmed, you will make this a priority in your discussions with
Chinese officials?
Answer. I recognize that U.S. leadership in the technology sector,
particularly in cloud computing, is a national strength and a source of
our international competitiveness. I agree that our trade policy should
work to ensure that U.S. companies in this sector can thrive globally,
including in China, where I recognize that barriers have been severe
and contrast sharply with the open market in the United States. If
confirmed, I will make seeking progress in reducing barriers to U.S.
companies in this sector, including in China, a priority.
Question. One of the key reasons I supported President Obama's
pivot towards Asia and his pursuit of TPP was because strengthening
economic integration leads to stronger national security relationships,
increases our ability to improve human rights and labor and
environmental standards, and boosts American ``soft power.'' Now that
this administration has abrogated TPP, China's economic might in East
and Southeast Asia will grow. How will you, as USTR, address that to
benefit American workers and exporters?
Answer. The administration intends to maintain its leadership in
the region through active engagement with countries in the Asia
Pacific. The administration has also indicated it is considering
pursuing bilateral FTAs with those countries. If confirmed, I will work
to press China to provide a level playing field for U.S. exporters In
addition, I will consult closely with you and other members of Congress
on how best to maintain U.S. leadership in the region.
Question. American farmers often face major barriers in attempting
to export products to foreign markets. Prominent examples have included
bone-in-beef to South Korea and Japan, or poultry to China, under
spurious sanitary or phytosanitary conditions. Will you continue the
fight that previous U.S. trade representatives engaged in to break down
those trade restrictions for U.S. agricultural products?
Answer. If confirmed, I am committed to tear down unwarranted
sanitary and phytosanitary barriers to U.S. agriculture exports,
including for U.S. beef and poultry. Ensuring that countries have
regulations that are based on scientific principles and international
standards is critical to the expansion of agricultural exports and the
improvement of rural incomes.
Question. How can the United States use new and existing trade
agreements, including enforcement tools, to ensure U.S. businesses
benefit from strong intellectual property protections and greater
access to global markets?
Answer. If confirmed, I would seek to use all appropriate trade
tools to ensure that U.S. rights holders have a full and fair
opportunity to use and profit from their intellectual property rights.
Ensuring strong intellectual property protection and enforcement by our
trading partners will be a top trade priority.
Question. There has not been a successful sustained safeguard
action that has not run afoul of the World Trade Organization (WTO).
Knowing that WTO Safeguard actions provided for in the GATT article XIX
(19) are available to the United States, how will USTR approach
safeguard actions if deemed necessary and how will you ensure the
United States sustains a case at the WTO?
Answer. If confirmed, I will work with USTR staff and with other
agencies to evaluate the most suitable response, including the use of
our safeguard laws where appropriate, for addressing each particular
situation where imports are harming U.S. workers and businesses. I will
also take all possible steps to defend any safeguard action at the WTO.
______
Questions Submitted by Hon. Claire McCaskill
Question. Missouri is a major State exporter, with nearly $14
billion in exports in 2016. More than 60 percent of Missouri's exports
were to the State's top two trading partners, Canada and Mexico. The
administration has announced that it will soon renegotiate NAFTA. What
specific steps will you take as the U.S. Trade Ambassador to improve
this trade agreement without putting the manufacturers and farmers in
Missouri at risk of losing market access with these trading partners?
Answer. I understand that NAFTA has been in place for a long time
and that many of our workers, farmers, and firms have expanded exports
to Canada and Mexico under the agreement. If confirmed, I am committed
to maintaining U.S. exports of goods and services from Missouri and our
other States, and will use the opportunity of renegotiating NAFTA as a
way to seek changes that will expand U.S. exports to Mexico and Canada
and generate increased economic opportunities for America's workers,
farmers, ranchers, and businesses.
Question. China's state-owned enterprises invested $45 billion in
the United States during 2016. Are you willing to use regulatory tools
to ensure that SOE investment in the United States does not distort our
markets or threaten our economic security?
Answer. If confirmed, I will look forward to working with the
Congress, stakeholders and other U.S. Government agencies to consider
appropriate ways of addressing concerns about Chinese SOE investment in
the United States.
Question. China negotiated 14 Free Trade Agreements since 2002, and
is closing in on the completion of the Regional Comprehensive Economic
Partnership, a 16-country agreement that includes India and Japan. What
is the administration's plan to expand our market access in the Pacific
Rim and how does the administration intend to combat the influence of
China in that region?
Answer. The Trump administration intends to play a strong
leadership role in the Asia-Pacific, including through the active
negotiation of bilateral free trade agreements and other trade
initiatives aimed at ensuring that U.S. workers, farmers, and
manufacturers have a fair opportunity to compete in these markets. If
confirmed, I look forward to working closely with Congress to increase
U.S. economic growth, foster job creation in the United States, promote
reciprocity with our trading partners, and enhance U.S. competitiveness
in the Asia-Pacific region and globally.
Question. There is a global glut in steelmaking capacity caused by
foreign government subsidies and other market-distorting policies.
China's surplus capacity for steel production is greater than the
entire steel production of the United States, the EU and Japan
combined. The OECD has attempted to address this challenge through a
global forum, however, there has been little action or results. What
steps will you take to address the need to reduce global steel
capacity?
Answer. If confirmed, I will conduct a review of all available
tools to address serious overcapacity problems in steel and other
sectors, work to address the root causes of those problems, and
continue to work closely with other leading steel producing countries
in the Global Forum on Steel Excess Capacity and other contexts.
If confirmed, I also will examine how we might use our existing
bilateral dialogues to press China to fix its unfair trade practices
and vast excess capacity problem in many industrial sectors. I will
vigorously enforce and defend our trade remedy laws, and aggressively
utilize all available tools in the WTO and other mechanisms to combat
distortive trade practices.
Question. Do you think the computable general equilibrium model
used by the International Trade Commission provides the most accurate
prediction of all the possible risks and benefits of new trade deals?
Do you support making changes to the model to better account for
investment, wage, and regulatory impact?
Answer. Computable general equilibrium (CGE) models are one of many
tools widely used to assess trade agreements. Other tools include
econometric models, partial equilibrium models, as well as qualitative
assessments. CGE and other models can and should be improved over time,
consistent with maintaining the greatest possible confidence in the
outcomes, as the model becomes able to incorporate additional features
of trade agreements such as services, investment, rules of origin, and
logistical efficiency. If confirmed, I will ask USTR's office of Trade
Policy and Economics to work with the ITC to ensure that the models it
is using to assess new trade deals and in other contexts are as strong
as possible.
Question. The Trade Promotion Authority includes the protection of
cross-border data flows and opposition to data localization laws as
core negotiating objectives for future U.S. free trade agreements. As
the U.S. Trade Representative, what will you do to support these
congressional objectives for data flows and local server prohibitions?
Answer. Digital trade provides enormous value to the U.S. economy,
and U.S. companies are uniquely competitive in this area. I recognize
the significant challenges for U.S. firms when foreign governments
impose restrictions on the ability to transfer data across borders or
require data to be stored locally. If confirmed, I will look forward to
working with the Congress to identify ways to promote open digital
trade policies globally, including through implementation of specific
objectives set out in TPA.
______
Submitted by Hon. Pat Roberts, a U.S. Senator From Kansas
key elements of a model trade agreement
1. Rules of Origin Percentages and Loopholes
2. Trade Deficit Reduction
3. Dumping, Diversionary Dumping, and Evasion of AD/CVD Duties
4. Currency Manipulation
5. Strict Environmental and Labor Standards
6. Intellectual Property Protection
7. Restrictions on State-owned and State-financed Enterprises
8. Investor-State Dispute Resolution
9. Chapter 19
10. Non-Tariff Barriers
11. Government Procurement
12. Joint Cooperation on Issues Related to the WTO
13. Enforcement, Monitoring, and Compliance
14. Corruption
15. Country of Origin Labeling
16. Evasion of Antidumping and Countervailing Duties
17. Forced technology transfer
18. Geographical indications to restrict trade
19. Quotas
20. Phytosanitary standards
21. Processed foods
22. Stumpage
23. Tax rebates on exports
24. Technology transfers
______
Prepared Statement of Hon. Ron Wyden,
a U.S. Senator From Oregon
After several weeks during which the only insight the public has
gotten into this administration's trade policy has come in head-
scratching 140-character bursts, today's hearing may finally provide
some real specifics. I want to thank Mr. Lighthizer for being here
today as the committee considers his nomination to be the U.S. Trade
Representative. And I hope that at the end of this hearing, Americans
will have heard more detail about how the administration plans to meet
the extensive promises then-candidate Trump made in the 2016 campaign.
Before diving into policy, however, there's another issue this
committee must address as it considers this nomination. As a legal
matter, Mr. Lighthizer's previous work for foreign governments makes
him ineligible to be appointed as the United States Trade
Representative, pursuant to the Lobbying Disclosure Act. The facts are
clear, but as with Secretary Mattis, this administration and others
before it have worked with Congress when appropriate to make
exceptions.
Speaking for Democrats, we are willing to work with Republicans to
provide a statutory exception for Mr. Lighthizer, but we also insist
that Republicans work with Democrats to provide a lifeline to America's
hardworking mineworkers who face losing their health care and
retirement benefits.
Mr. Lighthizer has an understanding about the impact of unfair
trade on America's manufacturers and workers that could be a valuable
asset for our country. The country needs a USTR that will stand up for
our rights on behalf of American workers and businesses at the WTO, and
that will partner with Customs and Border Protection, the Department of
Commerce, and the full range of agencies responsible for trade
enforcement to crack down on trade cheats hurting workers and
businesses here at home.
After a campaign of shouting that NAFTA could be the worst trade
deal ever, the President got into office and said our trade
relationship with Canada--a NAFTA member--only needed ``tweaking.'' He
spent the campaign talking tough about China, but his administration
has largely been quiet about their plans when it comes to China's
unfair trade practices. So what I say is that our trade policy needs to
deliver results, not just talk.
That starts with applying a full court press on trade enforcement.
In my view, there are two prongs to effective trade enforcement. The
first is to fully enforce U.S. trade laws here at home. Foreign
subsidies and dumping that harms American workers must be quickly
identified and remedied, and that requires strong enforcement at the
border by U.S. Customs officials. Goods made with forced labor must be
barred from entering our country. Trade in stolen timber and other
natural resources that damage the environment and edge out hard working
Americans in the forestry sector must be stopped. Thanks to the work of
this committee, especially by Senators Brown, Casey and Stabenow, our
country's trade remedy laws are now more responsive to American
producers besieged by foreign trade cheats.
The second prong of effective trade enforcement is holding other
countries to their commitments under deals that are already on the
books, whether that means enforcement of labor obligations, the
protection of the environment, or stopping countries from applying
discriminatory policies to block our digital goods and services.
Now when it comes to aggressive trade enforcement, the U.S.
Government can't deploy a full court press with only half a team.
That's why many Democrats like myself thought the President's hiring
freeze was so short-sighted--because it leaves resources on the
sideline, and it suggests that the tough talk on trade is really
nothing more than talk. I hope that the President's forthcoming budget
doesn't take even more trade enforcers out of the game, endangering
good-paying American jobs, just to fund a $54 billion giveaway to
defense contractors.
In order to maximize economic opportunities for American exporters,
our trade policy cannot end with effective enforcement of existing
rules. It also must reach overseas to dismantle foreign trade barriers
that prevent American goods and services from competing on a level
playing field.
The fact is that around 140 million people are joining the middle
class every year, most of them in Asia. I've always said that our goal
should be to make things here, add value to them here, and ship them
around the world. These opportunities will be missed if the United
States remains on the sidelines while other nations negotiate trade
deals that advantage their exporters over ours.
This is particularly true in the Asia-Pacific region. And that is
exactly what is happening as we sit here today--Pacific Rim countries
are meeting in Chile to discuss trade in the region and U.S. leadership
is nowhere to be found.
With that said, whether it's through renegotiating NAFTA, looking
to Asia, or working on any other trade deal, transparency with the
public and with Congress will be absolutely essential. The previous
Congress passed a law that requires critical actions to ensure that the
public and its representatives in Congress are active partners in
efforts to negotiate and implement future trade agreements. But with
the American people sitting in the dark with respect to the specific
actions the President intends to take on trade, the first months of
this administration leave Mr. Lighthizer, if confirmed, with a steep
hill to climb on transparency.
In my view it's also critical that the American public knows
whether the President is advocating for trade policies to create red-
white-and-blue jobs or to help his own business interests. That's why I
introduced the Presidential Trade Transparency Act with several dozen
members from both chambers of Congress.
The bottom line is that the administration has talked a big game
when it comes to trade, but now it's time to act. That means more
transparency, a full court press on trade enforcement, and being on the
offense in overseas markets. Mr. Lighthizer, I look forward to your
testimony.
______
MEMORANDUM FOR FINANCE COMMITTEE MEMBERS
From: Senate Finance Committee Bipartisan Staff
Date: March 13, 2017
RE: Nomination of Robert Lighthizer (USTR)
_______________________________________________________________________
This memo describes the Senate Finance Committee bipartisan staff
review of the nomination of Mr. Robert Lighthizer to be United States
Trade Representative (USTR). As background, Mr. Lighthizer has been a
partner at the law firm Skadden Arps Slate Meagher and Flom (Skadden)
since 1985.
Background
Finance Committee staff conducted a review of Mr. Lighthizer's
Committee Questionnaire, tax returns for 2013, 2014, and 2015,
financial disclosure statement (OGE Form 278e), and Ethics Agreement
certified by the Office of Government Ethics (OGE). As part of this
review, a due diligence meeting was held with the nominee and his legal
representation on Friday, March 3, 2017. His accountant participated
via telephone for tax-related questions. Prior to the due diligence
meeting, staff submitted multiple rounds of written questions to the
nominee.
Committee staff received Mr. Lighthizer's tax returns on January
9th, followed by his questionnaire on January 17th, which was
subsequently revised January 27th. The nominee's OGE Form 278e and
Ethics Agreement were submitted January 31st; the nominee later amended
his 278 form on February 17th after conversations with the designated
agency ethics official (DAEO) at USTR.
At the conclusion of this process, three issues have been
identified and deemed appropriate to bring to the attention of
Committee Members in advance of the hearing.
Representation of Foreign Entities
In the Finance Committee questionnaire, Part C, Potential Conflicts
of Interest, Question 6 asks nominees for the positions of U.S. Trade
Representative and Deputy U.S. Trade Representative:
``Have you ever represented, advised, or otherwise aided a foreign
government or a foreign political organization with respect to any
international trade matter? If so, provide the name of the foreign
entity, a description of the work performed, the time frame of the
work, and the number of hours spent on the representation.''
Federal law prohibits appointment as USTR or Deputy USTR if a
person has directly represented a foreign entity in a trade negotiation
or trade dispute with the United States government. These restrictions
are contained in the Trade Act of 1974. In particular, Section 141(b)
of the Act (19 U.S.C. Sec. 2171(b)) prohibits the President from
appointing as USTR or Deputy USTR ``[a] person who has directly
represented, aided, or advised a foreign entity (as defined by section
207 (f)(3) of title 18) in any trade negotiation, or trade dispute,
with the United States.'' 19 U.S.C. Sec. 2141(b). This provision was
included in the Trade Act of 1974 as part of the Lobbying Disclosure
Act of 1995.
A foreign entity is defined in section 207(f)(3) as ``the
government of a foreign country as defined in section 1(e) of the
Foreign Agents Registration Act of 1938, as amended, or a foreign
political party as defined in section 1(f) of that Act.'' The Foreign
Agents Registration Act (FARA) defines government to include ``any
group or agency to which [] sovereign de facto or de jure authority or
functions are directly or indirectly delegated.'' 22 U.S.C. Sec. 611.
Mr. Lighthizer's response to Part C, Question 6 (Have you ever
represented, advised, or otherwise aided a foreign government or a
foreign political organization with respect to a trade matter?) on his
initial questionnaire was ``None.'' He later revised his questionnaire
on January 27th to include representation between October 1985 and
February 1986 of the Sugar and Alcohol Institute of Brazil (IAA). No
other representations of a foreign government or foreign political
organization with respect to an international trade matter were
reported in the amended questionnaire.
Following discussions with Committee staff on February 1st and
responding to the written question--``For each matter you worked on for
a client that was a foreign entity (whether you regard them to be a
government entity or a non-government entity) during your employment at
Skadden, please provide [information and supporting documentation]''--
submitted February 2nd, Mr. Lighthizer prepared a summary of the work
he performed for all of his clients that were a foreign government,
foreign business, or non-governmental organization with foreign
ownership during his employment at Skadden. After review, Committee
staff determined one instance in which Mr. Lighthizer's work may
constitute representation of a foreign government in a trade
negotiation or trade dispute with the United States, within the meaning
of Section 141(b). To be clear, while staff wishes to bring this
representation to your attention, it is not the position of Republican
Committee staff that the following representation clearly constitutes a
representation of a foreign entity in a trade dispute or trade
negotiation with the United States within the meaning of 19 U.S.C.
Sec. 2141(b). Mr. Lighthizer maintains that this matter does not fall
within Section 141(b).
Sugar and Alcohol Institute of Brazil. As described in his
amended questionnaire, Mr. Lighthizer represented the Sugar and Alcohol
Institute of Brazil (at the time, part of Brazil's Ministry of Industry
and Commerce) between October 1985 and February 1986 in negotiations
concerning resolution of antidumping and countervailing duty
investigations regarding Brazilian ethyl alcohol. As part of this
representation, Mr. Lighthizer conferred with U.S. officials in
Congress and the U.S. Department of Commerce with respect to the
potential for a settlement. Mr. Lighthizer stated during discussions
with Committee staff on February 1st that these efforts included one
meeting at Commerce concerning a possible suspension agreement.
In addition, Democratic staff determined an additional instance in
which Mr. Lighthizer's work may constitute representation of a foreign
government within the meaning of Section 141(b). To be clear, while
staff wishes to bring this representation to your attention, it is not
the position of Republican Committee staff that the following
representation clearly constitutes a representation of a foreign entity
in a trade dispute or trade negotiation with the United States within
the meaning of 19 U.S.C. Sec. 2141(b). Mr. Lighthizer maintains that
this matter does not fall within Section 141(b).
China Chamber of Commerce for Machinery and Electronics
Products. As described in his written summary of work performed for
foreign entities, between March and November 1991, Mr. Lighthizer
assisted another partner with respect to the injury phase of U.S.
antidumping litigation regarding electric fans from China. Democratic
staff review found that the Chamber of Commerce's articles of
association from 2009 lists 10 areas of its business scope, including
``To perform other duties entrusted or assigned by the government or by
the member enterprises and in accordance with the fellow trade
agreements.'' The Chinese government has taken the position in U.S.
courts that it exercises ``plenary'' authority over other chambers of
commerce.
Representations in Pending Trade Matters
In both written responses and in-person meetings with Committee
staff, Mr. Lighthizer addressed matters involving other representations
through his work at Skadden.
For example, Part C., Potential Conflicts of Interest, Question 2
of the Committee questionnaire states: ``Describe any business
relationship, dealing or financial transaction which you have had
during the last 10 years, whether for yourself, on behalf of a client,
or acting as an agent, that could in any way constitute or result in a
possible conflict of interest in the position to which you have been
nominated.'' OGE Form 278e, Section 4 requires nominees to report
sources of compensation exceeding $5,000 in a year during the reporting
period (in this case two calendar years preceding the filing date).
In written follow-up responses to question C.2 from the
questionnaire, Lighthizer listed United States Steel Corporation (U.S.
Steel), Tensar International Corporation (Tensar), Cummins Allison
Corporation and Dun and Bradstreet, Inc. The cases of U.S. Steel and
Tensar drew particular attention.
With respect to U.S. Steel, the nominee's February 6th response
indicated ``I have an ethics agreement with the Office of Government
Ethics which covers possible conflicts of interest.'' Regarding Tensar,
Mr. Lighthizer noted ``I did no legal work for Tensar at any time and
never billed any time to them.''
With respect to the nominee's OGE 278 form, Mr. Lighthizer
identified two sources of income exceeding $5,000 during any year of
the reporting period: U.S. Steel and Skadden. However, public records
available at the U.S. International Trade Commission (USITC) indicated
the nominee represented Tensar in two cases since September 2016. In
response, Mr. Lighthizer noted ``Tensar's billing did exceed $5,000 in
the last year, but I performed no work for it. I also did not perform
work on U.S. Steel Corporation during the 2 years prior, but I listed
it because I have done work for it for many years in the past.''
After subsequent conversations with the USTR ethics official, Mr.
Lighthizer amended his OGE 278 form on February 17th and removed U.S.
Steel from Section 4: ``. . . because I did not bill for any work for
United States Steel Corporation in calendar years 2015, 2016, or 2017,
this line item should not have been included on my report.'' Mr.
Lighthizer's stated position throughout the process has been that the
recusal paragraph of the Ethics Agreement would apply to U.S. Steel.
Public Docket Information
The nominee has explained to the Committee he was not representing
parties in pending trade cases. He has repeatedly stated that he
performed no legal work for Tensar International Corporation ``at any
time,'' nor did he perform any legal work for U.S. Steel during the
past 2 years. However, public records in these proceedings identify him
as counsel for two parties in those proceedings.
Due diligence review by Committee staff of dockets before the
International Trade Administration at the Commerce Department,\1\ the
U.S. International Trade Commission (USITC),\2\ and the U.S. Court of
International Trade \3\ found dozens of proceedings in which Mr.
Lighthizer and his firm represented to these agencies--and to parties
in ongoing proceedings--that he served as counsel for these two
companies. Among the hundreds of filings in these proceedings, he
personally signed several dozen applications for access to confidential
business information subject to an administrative protective order
(APO) in these cases, two as recently as December 19, 2016 on behalf of
U.S. Steel.\4\ With regard to Tensar, he is identified as counsel in
his firm's submission to the USITC of Tensar's Post-Hearing Brief as
recently as December 30, 2016, a date after he was aware that he was
under active consideration for the USTR position.\5\
---------------------------------------------------------------------------
\1\ A Trade Administration docket search shows that during the past
2 years, Mr. Lighthizer and his firm represented in some 192 filings to
that agency and to parties in some 52 proceedings that he was counsel
for either U.S. Steel or Tensar. These filings include some 46 filings
in which he signed documents related to access to proprietary
information (APOs).
\2\ A USITC docket search shows that during the past year, Mr.
Lighthizer and his firm represented to the USITC and to parties in an
ongoing proceeding--Certain Biaxial Integral Geogrid Products from
China--that he was counsel for Tensar Corporation in 14 filings in
2016. The search also shows that during the past 2 years, Mr.
Lighthizer and his firm represented in some 57 filings to the USITC and
to parties in 9 different proceedings that he was counsel for the U.S.
Steel Corporation. In five of those filings pertaining to access to
protected proprietary information (APOs), he signed those applications.
\3\ A docket search of the U.S. Court of International Trade shows
that during the past 2 years, Mr. Lighthizer was identified as counsel
for U.S. Steel in some 18 cases pending before the Court.
\4\ On December 19, 2016, Mr. Lighthizer personally signed two
different APO applications on behalf of U.S. Steel--Certain Oil Country
Tubular Goods from the Republic of Korea (Case No.: A-580-870) and
Certain Oil Country Tubular Goods from India (Case No.: C-533-858).
\5\ Mr. Lighthizer confirmed this in his interview. His nomination
was formally announced on January 3, 2017.
Mr. Lighthizer's explanation for these representations is that, (1)
with respect to briefs, it was standard procedure for his firm to list
all partners in the trade practice on filings in trade cases until they
resign; and (2) with respect to requests for access to APO information,
the firm included a broad cross-section of employees to avoid breaching
the APO, even those unlikely to work on a particular case. During his
due diligence interview on March 3rd, he explained with respect to
briefs that ``Skadden lists all their partners on these documents. . .
. My name is on the pleadings until I resign. That is how Skadden does
it.'' Regarding APO applications, he stated, ``You fill these out in
case something comes across your desk. . . . Unless someone is very
junior and not involved, you have them sign the APO.'' Mr. Lighthizer
also reiterated that he did not participate in his firm's work on these
proceedings in any way, nor did he supervise the other attorneys
working on these cases. He further stated that his compensation from
the firm during this period was not tied to the firm's representation
---------------------------------------------------------------------------
of Tensar or U.S. Steel.
On March 8th, the nominee clarified additional points. With respect
to Skadden's policy of signing legal documents, he wrote ``. . . it is
the general practice of the International Trade Group to list the names
of senior members of the group on pleadings. I understand that this is
not a standard litigation practice at Skadden. We generally require all
lawyers in the International Trade Group to sign APO papers for all
cases subject to an APO. This is a prophylactic measure to prevent an
unintended violation of an order.''
With respect to U.S. Steel during 2015-2017, ``I again spoke to my
colleagues about the timing of conversations I may have had with U.S.
Steel. . . . On reflection I may have had conversations with company
officials about billing or other matters. I do not recall specific
conversations and, as I previously noted, I did not bill the client for
any such conversations.'' Furthermore, Mr. Lighthizer emphasized that
both U.S. Steel and Tensar, for purposes of recusal, are covered in the
fourth paragraph of his Ethics Agreement, which states: ``I will not
participate personally and substantially in any particular matter
involving specific parties in which I know a former client of mine is a
party or represents a party for a period of one year after I last
provided service to that client. . . .'' The nominee confirmed that his
position and that of his Designated Agency Ethics Official is that ``by
having my name on pleadings for U.S. Steel and Tensar I provided a
service to them within the meaning of that word in paragraph four,
sentence two of my Ethics Agreement. Thus my involvement with these two
companies is subject to those constraints.''
Taxes--Employee Documentation
Committee staff received copies of Mr. Lighthizer's 2013, 2014, and
2015 federal tax returns on January 9, 2017, and submitted an initial
round of written questions on February 1, 2017. Mr. Lighthizer
responded on February 7, 2017. After the due diligence meeting with
staff, an additional round of written questions was submitted on March
3, 2017.
Employers are required to complete Form I-9 for each of their
employees to verify their identity and employment authorization. This
form is not submitted to U.S. Customs and Immigration Service but is to
be retained by the employer.
On Schedule H of his 2013, 2014, and 2015 tax returns, Mr.
Lighthizer retained a household employee. However, when Committee staff
requested a Form I-9, Mr. Lighthizer responded that one could not be
located. He stated that he had verified the employee's identity and
employment authorization by examining her passport upon initially
hiring the employee in 1998, but could not locate a Form I-9. Mr.
Lighthizer then completed a new Form I-9 and submitted it to Committee
staff on March 7, 2017.
_____
[GRAPHIC] [TIFF OMITTED] T31417.001
[GRAPHIC] [TIFF OMITTED] T31417.002
[GRAPHIC] [TIFF OMITTED] T31417.003
[GRAPHIC] [TIFF OMITTED] T31417.004
Skadden, Arps, Slate, Meagher, and Flom
919 Eighteenth Street, NW
Washington, DC 20006
(202) 453-8700
November 14, 1985
Willes Martins Banks Leite, Director
Exports Department
Sugar and Alcohol Institute
Largo do Paco, #42, 4th Floor
Rio de Janeiro, Brazil 20010
Dear Mr. Banks:
This document, when signed by you, will be a letter Agreement
between the Government of Brazil through the Sugar and Alcohol
Institute (the ``IAA'') and Skadden, Arps, Slate, Meagher, and Flom,
(the ``Firm''), for legal services.
The Firm agrees to work for the IAA, part of the Brazilian Ministry
of Industry and Commerce, in a broader effort to resolve disputes
between Brazil and the United States involving ethanol trade. This work
will include general legal services related to this litigation and
specifically those related to an attempt to settle the cases. The Firm
will participate in the efforts to persuade the administration,
particularly the Department of Commerce, the U.S. domestic ethanol
producers, U.S. agriculture producers and the Congress of the
desirability of Brazil and the United States resolving outstanding
difficulties concerning ethanol on a friendly and equitable basis. The
Firm will also participate in any legislative efforts that might be
related to a settlement.
It is understood that the lawyers from Willkie, Farr, and
Gallagher, previously with the firm Wald, Harkrader, and Ross, will
continue representing the Government of Brazil and the producers in the
above mentioned pending antidumping and countervailing duty cases, and
that we shall assist them to the extent possible in the defense of such
cases.
This matter will involve the concentrated efforts of at least two
of the Firm's partners and two associates over the next several weeks.
Other Firm lawyers will also be needed from time to time. The matter
will involve legal interpretations and advice, the drafting of legal
documents and briefs, strategy sessions, as well as numerous meetings
with administration, congressional and U.S. business interests.
The IAA agrees to pay the firm for all legal services and out-of-
pocket expenses incurred in this representation. The legal services
fees will be based on time spent on this matter by Firm attorneys.
Partners' time will be billed at approximately $200 per hour and
associates' time at approximately $100 per hour. (These rates may vary
slightly depending on the level of expertise of the attorneys. Mr.
Lighthizer's time will be billed at $200 per hour.) The IAA agrees to
pay out-of-
pocket expenses on a monthly basis.
The IAA further agrees to pay the firm a minimuml retainer fee of
$125,000 within one week following signature of this agreement. Fees
for legal services will be credited against this amount until the
$125,000 is used up. After the retainer is used up, periodic bills for
such services will be presented and paid by IAA. If the fee for actual
legal services is less than $125,000, no refund will be due. Out-of-
pocket expenses will be paid separately and will not be credited
against this payment. The remittance of the retainer fee, as well as
the refund of out-of-pocket expenses and fees will be paid under the
rules and authorization of Bacen-Banco Central Do Brasil.
You may terminate our services at any time upon 48 hours telex
notice subject to payment of any time actually spent, if in excess of
the $125,000 retainer and all expenses actually incurred to that date.
This agreement will have retroactive application to October 13,
1985. This is the day before Mr. Lighthizer travelled to Brazil for
preliminary meetings on this matter.
In order to execute this agreement, please sign two copies, return
one to us, and retain one for your files.
For Skadden, Arps, Slate, Meagher, and Flom
Robert E. Lighthizer
For The Alcohol and Sugar Institute
Jose Ribeiro Toledo Filho
______
Communications
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International Corporate Accountability Roundtable
1612 K Street, NW, Suite 1400
Washington, DC 20006
February 2, 2017
The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510
The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510
SUBJECT: Hearing to Consider the Nomination of Robert Lighthizer, of
Florida, to be United States Trade Representative, with the rank of
Ambassador Extraordinary and Plenipotentiary, Tuesday, March 14, 2017.
Dear Chairman Hatch, Ranking Member Wyden, and members of the Committee
on Finance,
We, the undersigned organizations, write to you concerning the
nomination of Robert E. Lighthizer as the United States Trade
Representative (USTR). We urge you to use the confirmation hearings to
clarify Mr. Lighthizer's commitment to promoting a U.S. trade policy
that benefits all Americans by protecting and promoting labor,
environmental, and human rights worldwide.
International trade has long been an integral part of the U.S. economic
system, but U.S. trade policy has not consistently benefited all
Americans. Nor has it succeeded in uplifting many of the developing
countries it claims to serve. Instead, U.S. trade deals have created an
environment where companies have sought to lower costs by doing
business in countries with the lowest labor, environmental, and human
rights standards, thus perpetuating misery in developing countries and
simultaneously driving Americans out of work. As such, opposition to
these trade deals, such as the North America Free Trade Agreement
(NAFTA) and the Trans Pacific Partnership Agreement (TPP), that place
corporate profit over people and the environment, took center stage in
both the Republican and Democratic primaries as well as the general
election.
In his inaugural address, President Trump promised that ``[e]very
decision on trade . . . will be made to benefit American workers and
American families.'' \1\ U.S. trade policy should be aimed toward
raising labor, environmental, and human rights standards worldwide and
enforcing such standards consistently. This will ensure that American
workers are not ``priced out'' by foreign workers who are deprived of
basic labor and human rights, and U.S. companies that follow the law do
not have to unfairly compete with those that do not.
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\1\ Inaugural address: Trump's full speech, CNN (January 21, 2017),
http://www.cnn.com/2017/01/20/politics/trump-inaugural-address.
Mr. Lighthizer has recognized the need to use U.S. trade policy to
raise and enforce standards in this way. In a 2010 New York Times op-
ed, he wrote, ``[f]oreign companies often benefit from relatively weak
labor and environmental rules that enable them to operate with
significantly lower costs than their U.S. competitors. This leaves
American manufacturers with three options: lose market share, cut
profit margins or move abroad. . . . If we want an efficient global
market, we should be more serious about making sure companies in all
nations play by the same rules.'' \2\
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\2\ Robert E. Lighthizer, ``Stifling the Economy, One Argument at a
Time,'' New York Times (March 21, 2010), http://www.nytimes.com/2010/
03/22/opinion/22lighthizer.html.
The next USTR will play a critical role in determining what rules the
world plays by. Americans across the political spectrum are counting on
the USTR to ensure that these rules promote, not erode, the
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international standards for labor, environmental, and human rights.
As such, we urge you to use the confirmation process to clarify Mr.
Lighthizer's views and commitments to the following:
1. Should NAFTA and other trade agreements be re-negotiated, as
President Trump has indicated,\3\ will Mr. Lighthizer support improved
labor, land, and environmental provisions being added to the agreements
and ensure that such provisions are enforceable, for example, through
trade sanctions? Will he support including such provisions in new trade
deals?
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\3\ Megan Cassella and Jason Huffman, ``Trump orders imminent to
renegotiate NAFTA, back out of TPP,'' Politico (January 23, 2017),
http://www.politico.com/story/2017/01/nafta-tpp-trade-deals-trump-
234031.
2. Investor-state dispute settlement (ISDS) allows foreign
corporations to bypass domestic courts by suing the government before a
panel of three private attorneys when such corporations claim that a
particular law, regulation, or court decision amounts to direct or
indirect expropriation, a violation of the vague ``fair and equitable
treatment'' standard, or violations of other investor rights. ISDS
threatens national sovereignty and American labor, environmental, and
health standards, and can have a chilling effect on regulation. The
United States has been sued at least 20 times by Canadian investors
under NAFTA's ISDS provision, with many of the challenges attempting to
undermine U.S. environmental protections.\4\ What is Mr. Lighthizer's
opinion on ISDS? Would he support removing ISDS provisions from
treaties the administration is seeking to re-negotiate, such as NAFTA?
Would he oppose the inclusion of ISDS provisions in future trade
agreements?
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\4\ ``Table of Foreign Investor-State Cases and Claims Under NAFTA
and Other U.S. `Trade' Deals,'' Public Citizen, 2-12, (October 2016),
http://www.citizen.org/documents/investor-state-chart.pdf.
3. Transparency in trade negotiations is an important method for
ensuring that trade deals benefit all Americans. Without transparency
to the negotiation process, including the text of the agreement, it is
impossible for the public to accurately assess the impact of the
agreement. As a result, such decisions are left in the hands of very
few people, who could not comprehensively consider the concerns of all
stakeholders. Does Mr. Lighthizer support greater transparency in trade
negotiations? How would he make the negotiations process more
transparent for the public? How does he propose to include the
perspective of a broad range of stakeholders in the negotiation
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process?
4. The Office of the USTR plays a substantial role in enforcing
anti-dumping and countervailing duty provisions to protect the U.S.
from foreign exporters that receive unfair subsidies from their
governments and dump cheap goods in the U.S. market.\5\ Mr. Lighthizer
has called for rigorous enforcement of such laws.\6\ He has also called
for the United States to ensure that companies in all nations play by
the same labor and environmental rules. Governments' failure to enforce
international standards on labor, the environment, and human rights
against corporations may be seen as a form of unfair government subsidy
under the concept of ``social dumping.'' Will Mr. Lighthizer support
the use of anti-dumping and countervailing duty provisions to ensure
that U.S. manufacturers do not have to unfairly compete with foreign
companies that import cheap goods produced in violation of labor,
environmental, and human rights laws?
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\5\ Peter D. Ehrenhaft, Remedies Against ``Unfair'' International
Trade Practices, SN056 ALI-ABA 131 at 159.
\6\ Robert E. Lighthizer, ``Testimony Before the U.S.-China
Economic Security Review Commission: Evaluating China's Role in the
World Trade Organization Over the Past Decade,'' 29 (June 9, 2010),
http://www.uscc.gov/sites/default/files/6.9.10Lighthizer.pdf.
5. The U.S. Generalized System of Preferences Program (GSP)
provides preferential duty-free treatment for 3,500 products from
designated beneficiary countries (BDCs) in the developing world.\7\ One
of the criteria for GSP eligibility is that the BOC needs to take steps
to ``afford workers . . . internationally recognized worker rights.''
\8\ Other USTR-administered preference programs contain similar
conditions.\9\ Yet, in the past, USTR has reinstated GSP eligibility to
multiple countries with rampant labor rights violations. One example is
Burma, which Human Rights Watch says continues to allow forced
labor.\10\ The Department of State made similar findings: it downgraded
Burma to Tier 3 in its 2016 Trafficking in Persons report because of a
lack of progress in areas such as forced labor.\11\ What is Mr.
Lighthizer's opinion on Burma's reinstatement to GSP? What is his
opinion on the GSP petitions pending against Uzbekistan for forced
labor in the cotton sector and Thailand for forced labor in the fish
and shrimp industry? How will Mr. Lighthizer use GSP and other trade
preference programs to improve and enforce human rights standards
worldwide?
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\7\ U.S. Generalized System of Preferences Guidebook, U.S. Trade
Representative, 3 (September 2016), https://ustr.gov/sites/default/
files/GSP-Guidebook-September-16-2016.pdf.
\8\ 19 U.S.C. Sec. 2462(c)(7).
\9\ For the relevant provision in the Caribbean Basin Economic
Recovery Act, see 19 U.S.C. Sec. 2702(c)(8). For the same in the
African Growth and Opportunity Act, see 19 U.S.C. Sec. 3703(1)(F).
\10\ World Report 2017: Burma, Human Rights Watch, https://
www.hrw.org/world-report/2017/country-chapters/burma.
\11\ Trafficking in Persons Report 2016, U.S. State Department, 112
(June 2016), https://www.state.gov/documents/organization/258876.pdf.
6. The United States has recognized the fight against human
trafficking as a foreign policy goal and trade priority. The Trade
Promotion Authority was amended in June 2015 to exclude any country
designated Tier 3 in the Trafficking in Persons Report from ``fast-
track'' status in trade agreements signed with the United States.\12\
In July 2015, the Department of State upgraded Malaysia, a participant
in TPP negotiations, from Tier 3 to Tier 2 Watch List,\13\ even though
Malaysia's ``record on stopping trafficking is far from sufficient to
justify this upgrade by Washington,'' according to Human Rights
Watch.\14\ Does Mr. Lighthizer agree that such action may compromise
the integrity of the Trafficking in Persons Report and undermines
USTR's authority to develop trade agreements that protect the interests
of the American people by promoting labor and human rights abroad? Will
Mr. Lighthizer continue to fulfill the U.S. commitment against human
trafficking by including provisions barring states with rampant human
trafficking from future trade deals? Will he work with the Department
of State to ensure that potential parties to such deals are accurately
assessed for their compliance with such provisions?
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\12\ David Dayen, ``Blocked From Trade Pact By Its Failure on
Slavery, Malaysia Suddenly Gets a Passing Grade,'' The Intercept (July
27, 2015), https://theintercept.com/2015/07/27/blocked-trade-pact-
failure-trafficking-malaysia-suddenly-gets-passing-grade.
\13\ Vicki Needham, ``U.S. boosts Malaysia's human rights status,''
The Hill (July 27, 2015), http://thehill.com/policy/finance/trade/
249249-us-boosts-malaysias-human-rights-status.
\14\ Vicki Needham, ``Feds face blowback over Malaysia human
trafficking upgrade,'' The Hill (July 17, 2015), http://thehill.com/
policy/finance/trade/249321-feds-face-blowback-over-malaysia-
trafficking-upgrade.
We are thankful for your consideration, and look to you to ensure that
U.S. trade policy uplifts the American people by ensuring
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accountability for human rights worldwide.
Sincerely,
AFL-CIO
Amazon Watch
EG Justice
FIDH-International Federation for Human Rights
Human Rights Watch (HRW)
International Corporate Accountability Roundtable (ICAR)
International Labor Rights Forum (ILRF)
International Rights Advocates
Northwest Coalition for Responsible Investment
______
Motion Picture Association of America (MPAA)
Statement of Chairman and CEO Senator Chris Dodd
in Support of Robert E. Lighthizer for USTR
March 21, 2017
WASHINGTON--The following is a statement from Senator Chris Dodd,
Chairman and CEO of the Motion Picture Association of America, in
support of President Donald Trump's appointment of Robert E. Lighthizer
for United States Trade Representative (USTR).
``The MPAA supports the nomination of Robert E. Lighthizer to serve as
the next USTR. The American film and television industry is a key
driver of the U.S. economy, and effective trade policies are crucial to
its continued success. Our sector employs 2 million American workers,
while generating $17.8 billion in exports and registering a positive
trade balance with nearly every country around the world.
``The USTR plays a critical role in fostering America's creative
industries by negotiating and enforcing trade agreements that protect
U.S. intellectual property rights and expand access to foreign markets.
Mr. Lighthizer's extensive experience--which includes working for the
Senate Finance Committee under Senator Bob Dole, serving as Deputy USTR
in the Reagan administration, and representing the economic interests
of numerous American industries in the private sector--will enable him
to be immediately engaged on the numerous issues facing USTR and makes
him well-qualified to work with Congress and other key government
agencies on trade policies that benefit consumers, creators, and the
national economy.''
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