Hearing on US Trade Policy Agenda HEARING

170 Pages·2017·5.12 MB·English

Hearing on U.S. Trade Policy Agenda
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HEARING

BEFORE THE
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS

FIRST SESSION
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JUNE 22, 2017
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Serial No. 115-FC05
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COMMITTEE ON WAYS AND MEANS
KEVIN BRADY, Texas, Chairman
SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts
DEVIN NUNES, California SANDER M. LEVIN, Michigan
PATRICK J. TIBERI, Ohio JOHN LEWIS, Georgia
DAVID G. REICHERT, Washington LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois MIKE THOMPSON, California
VERN BUCHANAN, Florida JOHN B. LARSON, Connecticut
ADRIAN SMITH, Nebraska EARL BLUMENAUER, Oregon
LYNN JENKINS, Kansas RON KIND, Wisconsin
ERIK PAULSEN, Minnesota BILL PASCRELL, JR., New Jersey
KENNY MARCHANT, Texas JOSEPH CROWLEY, New York
DIANE BLACK, Tennessee DANNY DAVIS, Illinois
TOM REED, New York LINDA SÁNCHEZ, California
MIKE KELLY, Pennsylvania BRIAN HIGGINS, New York
JIM RENACCI, Ohio TERRI SEWELL, Alabama
PAT MEEHAN, Pennsylvania SUZAN DELBENE, Washington
KRISTI NOEM, South Dakota JUDY CHU, California
GEORGE HOLDING, North Carolina
JASON SMITH, Missouri
TOM RICE, South Carolina
DAVID SCHWEIKERT, Arizona
JACKIE WALORSKI, Indiana
CARLOS CURBELO, Florida
MIKE BISHOP, Michigan
DAVID STEWART, Staff Director
BRANDON CASEY, Minority Chief Counsel

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_________________________

Hearing on U.S. Trade Policy Agenda

U.S. House of Representatives,
Committee on Ways and Means,
Washington, D.C.
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WITNESS

Honorable Robert E. Lighthizer
Ambassador, United States Trade Representative
Witness Statement

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Hearing on U.S. Trade Policy Agenda

House Ways and Means Chairman Kevin Brady (R-TX) announced today that the Committee
will hold a hearing on the U.S. trade policy agenda with U.S. Trade Representative Robert
Lighthizer. The hearing will take place on Thursday, June 22, 2017 in 1100 Longworth
House Office Building, beginning at 10:00 AM.

In view of the limited time to hear the witness, oral testimony at this hearing will be from the
invited witness only. However, any individual or organization may submit a written statement
for consideration by the Committee and for inclusion in the printed record of the hearing.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit written comments for the
hearing record must follow the appropriate link on the hearing page of the Committee website
and complete the informational forms. From the Committee homepage,
http://waysandmeans.house.gov, select the date on the calendar to see the list of hearings. Select
the hearing for which you would like to make a submission, and click on the link entitled, “Click
here to provide a submission for the record.” Once you have followed the online instructions,
submit all requested information. ATTACH your submission as a Word document, in
compliance with the formatting requirements listed below, by the close of business on
Thursday, July 6, 2017. For questions, or if you encounter technical problems, please call (202)
225-3625.
FORMATTING REQUIREMENTS:
The Committee relies on electronic submissions for printing the official hearing record. As
always, submissions will be included in the record according to the discretion of the Committee.
The Committee will not alter the content of your submission, but we reserve the right to format it
according to our guidelines. Any submission provided to the Committee by a witness, any
materials submitted for the printed record, and any written comments in response to a request for
written comments must conform to the guidelines listed below. Any submission not in
compliance with these guidelines will not be printed, but will be maintained in the Committee
files for review and use by the Committee.
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All submissions and supplementary materials must be submitted in a single document via email,
provided in Word format and must not exceed a total of 10 pages. Witnesses and submitters are
advised that the Committee relies on electronic submissions for printing the official hearing
record.
All submissions must include a list of all clients, persons and/or organizations on whose behalf
the witness appears. The name, company, address, telephone, and fax numbers of each witness
must be included in the body of the email. Please exclude any personal identifiable information
in the attached submission.
Failure to follow the formatting requirements may result in the exclusion of a submission. All
submissions for the record are final.
The Committee seeks to make its facilities accessible to persons with disabilities. If you are in
need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in
advance of the event (four business days notice is requested). Questions with regard to special
accommodation needs in general (including availability of Committee materials in alternative
formats) may be directed to the Committee as noted above.
Note: All Committee advisories and news releases are available at
http://www.waysandmeans.house.gov/

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The committee met, pursuant to call, at 10:05 a.m., in Room 1100, Longworth House
Office Building, Hon. Kevin Brady [chairman of the committee] presiding.
Chairman Brady. The committee will come to order.
Good morning. Today, our committee is honored to welcome United States Trade
Representative Robert Lighthizer to testify on President Trump's trade policy agenda.
Ambassador Lighthizer, thank you for joining us. We look forward to your testimony.
Mr. Ambassador is a former Deputy U.S. Trade Representative under President Reagan,
and as an experienced trade negotiator, you understand that U.S. leadership and
participation in a rules-based trading system is essential to our Nation's
prosperity. America has led the world in global commerce for the better part of the last
100 years. Through our network of strong and forceful trade agreements, we have
expanded economic freedom so that our businesses, our workers, and our consumers can
thrive.
Through strict enforcement of the rules we created and our leadership in the World Trade
Organization, we have held our competitors accountable. And through our steadfast
commitment to the principles of free enterprise, open markets, and rules-based
international commerce, our Nation has set itself apart. The world looks to us, not China,
to lead in setting the standards of global commerce. When we set an example, the world
follows.
Today, American leadership on trade is more important than ever, especially in the
Asia-Pacific region where China's influence is growing every day. It is urgent that we
take charge on trade in the Asia Pacific so that we don't lose ground to China. After all,
to preserve and strengthen America's leadership in global commerce, it is not enough to
simply buy American products and services; we also have to sell American. And we
need strong trade agreements that allow us to do so in Asia and in fast growth markets
throughout the world.
Our trade agreements, including NAFTA, have been tremendously successful. They have
created American jobs, lowered prices for consumers, and helped our businesses compete
and win in all three crucial segments of our economy: agriculture, services, and, yes,
manufacturing.
That said, we have to take action to strengthen our existing agreements to ensure they
continue to benefit the American people. I am pleased that President Trump is taking this
approach with NAFTA. NAFTA was negotiated nearly 25 years ago. It should be
updated to reflect the modern realities of trade on digital commerce, intellectual property,
state-owned enterprises, and customs barriers, among others, following the negotiating
objectives Congress set forth in TPA.
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And as you have committed to us during earlier consultations, Mr. Ambassador, this
modernization must be accomplished in a manner that retains current benefits in a
seamless way that doesn't disrupt the current agreement, ongoing trade, or the millions of
American jobs at stake.
With the administration's commitment to our strong balanced negotiating objectives and
deliberate timetable established by TPA, I am confident we can work together to deliver a
high-quality deal for the American people, one that can serve as a model as you move
forward with other bilateral agreements.
Given that the administration does not support a multilateral approach, we must move
quickly together on an ambitious network of deals that break down barriers and allow us
to sell American all over the world. I am particularly interested in T-TIP once the
European Union can conclude an ambitious and comprehensive deal. Also, I am
interested in trade agreements with Japan and the United Kingdom, when it can come to
the table, as well as the Trade in Services Agreement and the Environmental Goods
Agreement. And we plan to renew GSP and move quickly on our miscellaneous tariff
bill to help U.S. exporters.
I am encouraged to see the President's dedication to strict enforcement of trade
rules. The President has already taken important steps by putting in action many new
enforcement tools passed by Congress last year. If countries fail to uphold their trade
obligations, these powerful tools and our participation in the WTO allow us to challenge
them and, if necessary, push back strongly on behalf of our businesses and our workers.
And when it comes to America's trade deficit, we welcome the President's efforts to
examine the issue. There are, as you know, many factors behind our trade deficit. Some
may be related to trade, but many are not. For example, the dollar status as the world's
reserve currency is a significant factor. Examining the trade balance as black or white
conceals what is really going on. Many exports from, say, Mexico reflect tremendous
U.S. value added through research, development, design, intellectual property, services
support, and manufacturing. To the extent the trade deficit is caused by unfair trading
practices, we must rip down those barriers. And through our powerful enforcement tools,
we can. Another solution is to push for strong trade agreements that open up new
markets worldwide for American products and services.
Through trade agreements that are strictly enforced, we have reduced and even
eliminated trade deficits in manufacturing, agriculture, and services. In many cases, we
have even turned deficits into surpluses. While our first instinct may be to restrict
imports, history shows that the most successful approach is not protectionism; it is
breaking open new markets to American made goods and services. We have some of the
best businesses, workers, and products in the world. If we can reach these customers on a
level playing field, America will usually come out on top.
That is the recommendation I offer as the administration considers whether to restrict
steel and aluminum imports. I agree: We must address market distortions created by
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China. Section 232 authority must be used with careful consideration of consequences to
our economy and trade rules that we wrote and fully expect our trading partners to abide
by. Done improperly, we cut off supply that our companies need to stay
competitive. Done hastily, we raise costs and prove to our partners that we aren't
reliable. Done indiscriminately, we harm countries that trade fairly and send a
protectionist signal to those looking for an excuse to do the same. It will encourage
others to restrict our exports even in unrelated sectors, which only hurts the growth of
jobs and paychecks here at home.
I want to work with the administration to identify a remedy that is balanced, effective,
and protects our national security and economic interests.
America must continue to set the standards of global commerce. With 96 percent of the
world's customers located outside of the United States, we cannot afford to sit on the
sidelines, or worse, lead the world into abandoning the very rules that have served us so
well.
Ambassador Lighthizer, we are eager to work with you and President Trump on a
pro-growth trade agenda that creates jobs, grows paychecks, and improves the lives of all
Americans.
Thank you again, Mr. Ambassador, for being here. We look forward to your
testimony. And I now yield to the distinguished ranking member, Mr. Neal, for the
purposes of an opening statement.
Mr. Neal. Thank you, Mr. Chairman.
Ambassador Lighthizer, I want to welcome you on behalf of the committed
Democrats. Today's hearing is an opportunity for us to hear from you about the
administration's vision for U.S. trade. The administration has certainly been busy on
trade. The headlines these past few months have been filled with stories about
modernizing NAFTA, withdrawing from NAFTA, executive orders, executive memos,
Section 232 national security reviews on steel and aluminum imports, Canada dairy,
Mexican sugar and U.S. China, and a 100-day plan and certainly the issue of currency
manipulation.
What we have been missing in this overall vision, as well as the specifics behind all of it,
is activity. What are the administration's trade policy goals? What priorities are you
trying to serve? How are you going to do it? And I hope this morning you can provide
us with some answers.
On a range of issues, there has been a lack of clarity, consistency, and consultation. For
example, by statute, the administration was required to submit a report on trade policy
and its agenda by March 1st. On that date, the administration instead submitted a
statement and promised to submit a full report after USTR was confirmed and had the
full opportunity to participate in developing the report. The report has still not been
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submitted to this Congress. So I hope you will clarify the administration's position on a
full range of trade issues today, from specific objectives of a NAFTA rewrite to the
administration's position on negotiating T-TIP and an Environmental Goods Agreement
to how the administration will address currency manipulation to the administration's
current thinking in steel and aluminum national security investigations as well.
As you know, House Democrats have the most open mind when it comes to revisiting
and taking new directions in U.S. trade policy. We look forward to working with you to
prioritize the needs of American workers and their families through trade policy, and we
await your testimony.
Thank you, Mr. Ambassador.
Chairman Brady. Thank you.
And, without objection, other members' opening statements will be made a part of the
record.
Today's sole witness is Ambassador Robert E. Lighthizer, United States Trade
Representative.
The committee has received your written statement. It will be made part of the formal
hearing record. You have 5 minutes to deliver your oral remarks. Ambassador
Lighthizer, again, welcome, and you may begin when you are ready.
Ambassador Lighthizer. Thank you, Mr. Chairman. Chairman Brady.
Chairman Brady. Ambassador, can you check that microphone just to make sure we have
got it on? There you go.
Ambassador Lighthizer. Is it better now?
Chairman Brady. Yes, sir.

STATEMENT OF HONORABLE ROBERT E. LIGHTHIZER, AMBASSADOR,
UNITED STATES TRADE REPRESENTATIVE
Ambassador Lighthizer. All right. Chairman Brady, Ranking Member Neal, members of
the Ways and Means Committee. It is an honor to appear before you today. In recent
weeks, it has been a pleasure getting to know the chairman, the ranking member, and
several members of the committee. I look forward to developing these relationships and
to working with each of you. The USTR has a special relationship with this committee,
and I intend to continue that tradition.
I met some of you for the first time on May 16th when I appeared before the House
Advisory Group on Negotiations and the Ways and Means Committee bipartisan
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