On Wednesday, Sen. Ron Wyden (D-OR) chaired a Senate Finance Committee on the Biden Administration's trade policy in 2024.
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NewsTranscript
00:00:00 discuss the President's 2024 trade agenda, I'm going to start by touching on some of the ways
00:00:06 in which the Congress and the Biden administration can work together to build a trade agenda that
00:00:13 will supercharge America's diverse economic base and create good-paying and innovative jobs across
00:00:20 Oregon and the nation. And I'll start with trade enforcement, because without trade enforcement,
00:00:26 our trade laws aren't worth the paper they're written on. India's wheat subsidies, for example,
00:00:32 distort prices and make it harder for Oregon farmers to compete in the Asian market. Mexico's
00:00:38 illegal fishing practices are hurting the environment and its harmful energy regulations
00:00:42 are undermining our clean energy suppliers. China has a rap sheet of unfair subsidies and practices
00:00:50 so long that if I were to go through it, we would be here until dinner time. So I'm going to spare
00:00:56 everyone that filibuster. Every single one of these unfair practices by foreign countries is
00:01:01 directly hurting workers and companies in America, including in my home state. There's a lot more
00:01:08 USTR can be doing, in my view, with the tools it has, and we want to work together to raise
00:01:15 issues directly with trading partners, starting dispute settlement or opening 301 investigations
00:01:20 into unfair trade practices. In my view, that's the only way to hold trade sheets accountable
00:01:26 and level the playing field for American workers and businesses. Second issue, trade barriers.
00:01:34 Our economy thrives when our workers can make stuff in America and grow stuff in America and
00:01:40 add value to it in America and then ship it all over the world. But you just can't do it with
00:01:46 all these barriers. In my home state, one out of four jobs relies on exports. We have world-renowned
00:01:53 exports from wheat to potatoes to wine to high-tech electronics, everything in between.
00:01:57 But the success of Oregon's farmers and workers depends on the administration's knocking down
00:02:02 barriers to help them compete in the global market and get their products on shelves.
00:02:07 That's why, in addition to enforcing the rules on the books to hold trade sheets accountable,
00:02:11 I want working closely with the administration and USTR to play offense. It's not enough to
00:02:18 sell domestically. The United States has to expand opportunities in the global market for
00:02:22 American exporters across all our industries. The negotiations with Taiwan, Kenya, Indo-Pacific
00:02:29 countries could net big wins for our exporters in agriculture and manufacturing. But we're going to
00:02:34 have to work with the administration to push even harder to crack down on tactics like unfair
00:02:39 labeling, duplicative testing requirements, and ag regulations that aren't supported by science
00:02:44 and are designed to put American workers, farmers, and ranchers at a disadvantage.
00:02:48 Before I wrap up, I also want to note, particularly in my state, how important it is that we have a
00:02:54 standard for high-tech, innovative industries. The United States needs to be a leader in setting
00:03:00 the rules of the road for digital trade so our creators and innovators get a fair shake
00:03:04 in foreign markets. And we're not going to take a backseat to anybody in the process when it
00:03:09 comes to privacy, security, and antitrust enforcement. While lawmakers look to domestic
00:03:14 tech regulation, we must also push for digital trade rules that are going to protect a free and
00:03:20 open internet, help small businesses, and push back on the China model of digital surveillance
00:03:26 and censorship. I'm very pleased to see that the White House is taking charge of this issue,
00:03:31 working closely with all in the administration, and vowing to work with the Congress on this
00:03:37 issue. There are diverse stakeholders and agencies. I think the White House position of a
00:03:42 whole-of-government approach is a wise one. I look forward to working on a digital trade
00:03:47 position that reflects the need of American workers, businesses, and consumers. The American
00:03:51 people finally deserve to know what the government's priorities are with regard to trade
00:03:57 policy. I am concerned, and I've made this point to the administration, a number of people in the
00:04:03 administration. I think that the administration needs to do more to work with the Congress and
00:04:08 make sure the American people aren't kept in the dark. To this end, I want to make sure that the
00:04:14 USTR and other parts of the Biden administration are clear and straightforward with Congress and
00:04:20 the public. When you take meetings with foreign officials, it isn't enough to say, "Well, there
00:04:24 was a range of bilateral concerns raised." That doesn't tell my constituents a whole lot about
00:04:31 trade. We need to be told what trade barriers the USTR and other parts of the administration
00:04:37 are trying to break down, how it's going to help American workers and businesses. If
00:04:42 negotiators are meeting with the Japanese, tell us if you're pushing to get Oregon potatoes on
00:04:49 shelves in Japan. When officials engage with Indonesia, tell us if you're pushing against
00:04:54 unfair licensing requirements that hurt Oregon dairy farmers. If they're in negotiations with
00:04:59 Kenya, tell us how you'll push them to improve their environmental and labor laws or bring down
00:05:03 barriers to biotech products. Fishermen in Newport and ranchers in Prineville, they're asking me,
00:05:10 "Tell me exactly how the administration and this trade office is helping their businesses thrive
00:05:17 in the global market." So we need more light shed on trade policy in America, and we are going to
00:05:25 pursue that diligently. Enforcing laws in the books and making our government's trade policies
00:05:30 clear is a good place to start finally in leveling the playing field. I look forward to today's
00:05:36 discussion and working closely with the administration and all our colleagues on
00:05:40 both sides of the aisle on this committee on trade matters. Senator Crapo. Thank you very
00:05:45 much, Mr. Chairman, and welcome, Ambassador Tai. I, first of all, want to say I agree wholeheartedly
00:05:52 with the chairman's opening statement and his comments. As a matter of fact, Senator Wyden's
00:05:58 first two issues that he raised are the first two issues in my first paragraph. I read the
00:06:03 president's trade agenda carefully. If we measured wisdom by word count alone, President Biden's
00:06:08 trade policy agenda would be very wise. If we measured it in terms of creating meaningful
00:06:14 opportunity for Americans, it is profoundly misguided, particularly in terms of enforcement
00:06:20 approach and negotiating ambitions. This administration's enforcement record is the
00:06:26 weakest of any administration in 25 years. Although the administration highlights regularly
00:06:32 using the USMCA rapid response labor mechanism to help Mexican workers, that mechanism cannot
00:06:38 supplant bringing cases to increase market openings for American workers. Such cases are
00:06:45 sorely lacking. The USTR has yet to self-initiate a single enforcement action against China,
00:06:53 period. Whether at the WTO or under Section 301 or under the Phase 1 deal, nothing.
00:07:00 Today's announcement accepting a Section 301 shipbuilding petition, which could take a full
00:07:06 year to complete, does not make up for over three years of inaction on China. When it comes to
00:07:12 discriminatory treatment, our trading partners now expect USTR to simply note that it is considering
00:07:19 all options, as it did with Canada's decision to move forward with its discriminatory digital
00:07:25 services taxes, and further expect that USTR's consideration of all options is likely to be
00:07:32 indefinite. For example, USTR has not advanced our case against Mexico's discriminatory energy
00:07:40 policies for nearly two years now. Administration plans for negotiations fare no better than they
00:07:46 do for enforcement. For the fourth year in a row, the administration's trade agenda provides
00:07:53 no plan for real negotiations to improve market access. Instead, the administration lauds the
00:08:01 Inflation Reduction Act, asserting that our workers need to be shielded, subsidized,
00:08:06 and micromanaged through industrial policy, even if it entails massively expanding our national debt.
00:08:12 That is not only misguided, but as former Joint Chiefs of Staff Chairman Michael Mullen noted,
00:08:19 our debt is, in fact, one of the top national security threats to the United States.
00:08:24 What we need is market access. I recently traveled to Asia, the United Kingdom,
00:08:31 and to other partners. Our partners want to make real deals with high standards.
00:08:38 They want to trade with us rather than China, and they want to do it now.
00:08:42 We should want that too, because each day we wait is another day that Americans fall back
00:08:50 further behind our competitors, including China. Make no mistake, tariffs matter,
00:08:57 particularly for small businesses like our farmers. Australia and New Zealand each negotiated free
00:09:04 trade agreements with Thailand, and since then, demand for premium U.S. beef fell by 30 percent,
00:09:10 because our cattlemen face a 50 percent tariff while those two partners face none.
00:09:16 Whether it be Idaho potatoes and dairy or Iowa soybeans and pork or South Dakota wheat or Texas
00:09:23 cotton and beef or Washington State apples, our farmers are the best in the world.
00:09:29 That is precisely why a large number of farm groups wrote to you, Ambassador Tai, on Monday,
00:09:36 asking for a real trade agenda and advancing dispute settlement reform so that we can open
00:09:42 markets for them. The United States' manufacturing, innovation, creative, and tech industries are
00:09:49 second to none. If the administration will not negotiate tariffs, it should at least help workers
00:09:55 in these industries by negotiating critical rules on technical barriers to trade, intellectual
00:10:01 property, and key digital provisions such as non-discrimination and free data flows.
00:10:06 Thus far, USTR has failed to do so in any of the so-called framework negotiations,
00:10:15 and the trade agenda indicates this will continue. This benefits China, which is aggressively
00:10:22 participating in international standard-setting bodies, pushing technology transfer, and
00:10:27 supporting data localization by countries, which could require our companies to store data on
00:10:33 servers that are produced by Chinese companies such as Huawei rather than on ones we host in
00:10:40 the United States. The proposals the Trump administration crafted in coordination with
00:10:45 this committee for USMCA, for technical barriers to trade, for intellectual property, and for
00:10:52 digital trade ensured that we could regulate and also rise to China's challenge. Simply
00:10:59 abandoning coordinated and reasoned proposals without consulting Congress is a profound mistake.
00:11:06 I urge my colleagues to remember that when this administration told us that comprehensive,
00:11:10 congressionally approved trade agreements are a 20th century tool, its vision of the future
00:11:17 is piecemeal through frameworks done as executive agreements, devoid of any real enforcement
00:11:24 mechanisms. Ambassador Tai, the members of this committee know that attempts to bypass Congress
00:11:30 are neither new nor groundbreaking, and they also know that such efforts are not sufficient
00:11:36 or truly effective in creating the types of opportunities our citizens deserve. It is well
00:11:43 past time this administration begin working with Congress to meaningfully expand market access
00:11:50 opportunities. Thank you, Mr. Chairman. I thank my colleagues. So, Ambassador, you can already
00:11:56 tell 15 minutes into the discussion today that a Democratic chair and a Republican ranking member
00:12:04 are going to work in a bipartisan way on these issues, and we're interested in doing it with
00:12:09 the administration. So, please proceed. We'll make your prepared remarks a part of the record
00:12:13 in their entirety. Welcome. Chairman Wyden, Ranking Member Crapo, and members of this fine
00:12:20 committee, good morning, and I appreciate the opportunity to discuss with you the President's
00:12:25 trade policy agenda. The Biden-Harris administration believes strongly that our
00:12:30 economic policies should work to strengthen our middle class. In order to give all Americans a
00:12:36 fair shot, we need to ensure broad-based access to economic opportunity, and our trade policy
00:12:43 should be a tool that works together with our other economic policy tools to reach that goal.
00:12:50 This is important because trade policy hasn't always worked that way. To respond to the many
00:12:56 changes occurring in the modern economy, the world economy, and the world in general,
00:13:02 we must bring a more open mind and be willing to innovate in the way that we approach trade policy
00:13:08 by questioning and testing old assumptions, revisiting norms, and thinking both creatively
00:13:15 and strategically. In this new era, we increasingly measure success and progress by the degree to
00:13:23 which we are delivering real benefits to more Americans across our society, no matter where
00:13:28 you live or whether you have a college degree. Our approach is one that addresses and advances
00:13:35 the interests of all parts of our economy and does not pit Americans against Americans.
00:13:42 So let me give you some examples of what middle-out, bottom-up trade policy looks like.
00:13:48 First, we are using trade to empower workers because we know that they are the backbone of
00:13:53 our economy. Their success is quite literally our success. This is about building our middle
00:14:01 classes together with other countries and not pitting them against each other. This is why we
00:14:08 have prioritized strong labor commitments in our ongoing trade initiatives, including in our
00:14:14 negotiations with Kenya and Taiwan. This is also why we have been so focused on utilizing the USMCA's
00:14:21 rapid response mechanism, a key worker-focused feature of the modernized and reformed North
00:14:27 American Free Trade Agreement that has garnered robust bipartisan support. Since 2021, we have
00:14:34 used the RRM 22 times at facilities that span various industries, from automotive and garments
00:14:42 to mining and services. These cases have directly benefited 30,000 workers through new independent
00:14:50 unions, new collective bargaining agreements, higher wages, back pay, and reinstatement for
00:14:58 wrongful termination. Advancing workers' rights abroad is what strengthens and empowers workers
00:15:06 here at home, because only then can our workers compete fairly and thrive in this competitive
00:15:13 global economy. Our enforcement efforts are also motivated by the principle of inclusivity, that is
00:15:19 ensuring that all Americans enjoy the benefits of trade. With respect to the producers and the
00:15:26 workers in our steel industry, last year we secured a victory at the WTO that determined
00:15:32 the illegality of the retaliatory tariffs that the PRC and Turkey imposed in response to the US
00:15:39 Section 232 national security actions on steel and aluminum. Separately, through the USMCA, we are
00:15:45 actively championing the interests of our farmers and agricultural producers. We have pursued two
00:15:51 cases now against Canada's dairy tariff rate quota allocation measures, and we are currently
00:15:56 challenging Mexico's restrictive measures on biotech corn before a panel. We are also opening
00:16:04 markets for hard-working American families and communities, especially our rural communities.
00:16:10 Through negotiations, our administration has secured over $21 billion in new agricultural
00:16:17 market access in the last three years. For example, after the US and India terminated
00:16:23 seven WTO disputes, India agreed to remove retaliatory tariffs on several US products.
00:16:29 This means improved access for chickpeas, lentils, almonds, walnuts, and apples,
00:16:35 benefiting farmers across our country, including in Michigan, Oregon, California, and Washington.
00:16:41 This means more market access for turkey, duck, blueberries, and cranberries, benefiting the
00:16:47 farmers in North Carolina, Pennsylvania, Virginia, Massachusetts, and Minnesota.
00:16:52 Trade should work for all Americans. Our goal is to stop pitting Americans against each other in
00:16:59 our trade policy. This is why we are taking unprecedented steps to incorporate more voices
00:17:06 into trade policymaking. Just as you stay connected with your constituents in your states,
00:17:13 I've made a point of traveling the United States to hear from workers, farmers, and small businesses,
00:17:18 and tribal leaders directly to better understand their hopes and aspirations and learn how our
00:17:24 trade policy can address them. I am also meeting with civil society and labor leaders in addition
00:17:32 to the big corporations and trade associations that have always had access to USTR. My job is
00:17:38 to represent the entirety of the United States economy, not just those that can afford the
00:17:45 Washington lobbyists. Our vision for a fairer future also applies to the international arena
00:17:52 because it turns out that we all want to grow our economies from the middle out and the bottom up.
00:17:57 This is what drives our work at the WTO and in our ongoing negotiations with Taiwan, Kenya,
00:18:04 and the Indo-Pacific. We are focused on economic engagement and collaboration efforts to drive
00:18:10 durable economic growth and build our middle classes together instead of always pitting them
00:18:17 against each other. Over the course of the last several years, it has become clear that domestically
00:18:22 and internationally, we need an economy that is more resilient. That means supply chains that
00:18:28 can adapt and rebound more quickly and easily from shocks and crises. Developing the tools
00:18:35 to reduce dependencies and vulnerabilities and to incentivize stronger supply chains
00:18:41 is a major priority for USTR, especially this year. We are gathering public input and will
00:18:49 hold several public hearings on this. This effort will allow us to draw upon a comprehensive set of
00:18:55 perspectives and experiences to help us identify more trade policy solutions. Part of this exercise
00:19:02 includes developing more effective countermeasures to the PRC's unfair practices and the negative
00:19:09 effects of those practices on our economy and workers. And I want to end on this note.
00:19:14 For many years now, we have seen how the PRC's non-market policies and practices,
00:19:20 left unchecked, have devastated many working communities and industries across our country,
00:19:26 including many in your states. Steel, aluminum, solar panels, batteries, electric vehicles,
00:19:34 and critical minerals, just to name a few sectors. As the president said during his
00:19:39 State of the Union address, this administration will continue to stand up to the PRC.
00:19:46 And we are prepared to use our trade tools in this effort, including through new Section 301
00:19:51 actions and our four-year review of the China Section 301 tariffs, which assesses ways to
00:19:57 deploy tariff measures to more effectively and more strategically address the harms from China's
00:20:04 forced technology transfer policies, such as cyber theft and cyber hacking and related imbalances and
00:20:12 inequities in the U.S.-China trade relationship. This is also why, after close review of the
00:20:18 Section 301 petition I received from five national labor unions, I have now initiated a full and
00:20:25 thorough investigation of the PRC's longstanding efforts to dominate the maritime logistics and
00:20:32 shipbuilding sectors. The union's petition raises serious concerns about harms to U.S. workers,
00:20:38 the shipbuilding industry, and U.S. resilience. This administration is fighting every single day
00:20:46 to put working families first, to rebuild American manufacturing, and to strengthen our supply
00:20:52 chains. We're using trade to give everyone a fair shot while working with our allies and partners.
00:21:00 I want to especially thank my USTR team serving in Washington, D.C., and around the world for their
00:21:07 unwavering devotion and determination to serve all of America. Thank you.
00:21:13 MR. BUSH: Thank you very much. I'm going to pick up lots to cover on this China issue that you
00:21:19 touched on at the end. Obviously, China is just throwing money at everything from solar panels
00:21:24 to semiconductors, doing everything they can to drive American competitors out of business with
00:21:30 a flood of cheap imports. So my own view is I think it was a good thing that you and the President
00:21:36 opened the 301 investigation into the unfair trade practices in China's shipbuilding industry,
00:21:42 with the formal petition from the steelworkers, AFL-CIO, and others obviously being very,
00:21:51 very important in this issue. My question on 301 is Congress gave you all the power to self-initiate
00:22:01 301 investigations into unfair trade practices. And my question to you is, Ambassador, how can you
00:22:09 all use 301 more proactively to investigate and take action against China's unfair subsidies in
00:22:16 some of these areas that I mentioned, the semiconductors, EVs, batteries, and solar?
00:22:22 So it's good what you and the President did here just recently in opening the shipbuilding one,
00:22:28 but I want to see more proactive work from USTR because Congress gave you all the power to do that.
00:22:36 What can be done there? Senator Wyden, as you know very well, Section 301 is perhaps the most
00:22:46 important enforcement tool at USTR. When we encounter challenges throughout the world,
00:22:55 whether we advance them through negotiations, through enforcement actions under our FTAs, or
00:23:02 separately outside of our trade agreements through Section 301 action, this is one of the most
00:23:09 important tools that we have to bring and to bear. So I can assure you that we value this tool very
00:23:19 much. We also look to appropriate tools for resolving the problems that face us. In this
00:23:31 particular case, with respect to shipbuilding, this has been a longstanding concern in the U.S.
00:23:38 economy. If you look at the petition, since 1975, U.S. shipbuilding capabilities have eroded
00:23:48 not just significantly, but entirely eroded. We are eager to take up this investigation,
00:23:57 to follow the rules of Section 301, and to work on determining first whether or not there have
00:24:06 been harms to the U.S. economy. I can assure you that with respect to China especially,
00:24:14 given the scope and scale of the challenge that we have with respect to China's non-market policies
00:24:19 and practices, that Section 301 remains very much at the forefront of our minds and in the
00:24:26 development of our – Let me see if I can get a couple more questions. We want to follow that up
00:24:32 with you, because I want this used in the maximum fashion possible, particularly with you all
00:24:38 initiating, because that's why we gave you the power. As you know, up here we're very proud of
00:24:44 the Brown-Wyden part of the USMCA. I understand that you all have initiated 22 cases using the
00:24:52 rapid response mechanism to enforce the rights of our small businesses and our workers. And yet,
00:24:58 at some point, this expanding number reflects a systemic failure of Mexico to enforce the labor
00:25:04 laws and USMCA. Have you all considered moving beyond rapid response and looking for more
00:25:10 compliance through a state-to-state USMCA dispute on labor enforcement? Well, Senator Wyden, before
00:25:19 we started regularly calling this mechanism the rapid response mechanism, as you would call
00:25:24 we – our shorthand name for this was the Brown-Wyden mechanism. So I'm delighted that
00:25:32 you are following the developments in our implementation and in our active use of this tool
00:25:38 very closely, because you should absolutely see this as very much your contribution to
00:25:46 modern trade policy. There are multiple tools in the USMCA. There is the rapid response mechanism.
00:25:55 As you also know, there is an independent Mexican labor expert board that assesses the state of the
00:26:04 overall Mexican labor reform on a regular basis, providing expert assessment. As you also well
00:26:12 know, the Mexican labor reform that came together with the USMCA coming into effect
00:26:22 was always an ambitious project. That was even before COVID became part of our world.
00:26:29 We remain very, very plugged into the progress that Mexico is making, but also the continued
00:26:38 challenges in their implementation. And so, yes, we have many tools under the USMCA,
00:26:43 including regular reports from USTR to the Congress. So yes, all of the tools are available
00:26:51 and are ones that we consider using. I'm really out of my time, but I just want to get one other
00:26:55 matter in very quickly, because Democrats and Republicans are very much united on this,
00:27:00 and that's dealing with Mexico's discriminatory licensing processes in the energy field. I mean,
00:27:06 we really are getting ripped off by Mexico. You all have started consultations with respect to
00:27:12 these discriminatory actions, but when do you anticipate taking the next step and bringing
00:27:17 a formal case over Mexico's protection through these discriminatory licensing practices and
00:27:23 harming our workers, and particularly the ability to make sure that we tap the full potential of
00:27:29 the Clean Energy for America effort, which was written essentially in this room?
00:27:34 Senator Wyden, we look at that actively every single day. The focus is on how to be most
00:27:40 effective in resolving the challenges for our companies. We remain in close conversation with
00:27:47 our companies, and in terms of our decision-making and our timing, let me assure you that it also
00:27:54 reflects the appetite of our companies in terms of when and how to move forward.
00:28:02 Senator Crapo.
00:28:02 Thank you, Mr. Chair. And by the way, I also agree with your questions,
00:28:10 as well as your opening statement. I'd like to talk about Section 301, the 301 investigation,
00:28:17 not the petition that you just accepted. This investigation has now been going on for two years,
00:28:24 and it's my understanding that President Biden has recommended that there be a tripling of our
00:28:31 tariffs on steel and aluminum for China, but that there may be some kind of an interagency
00:28:38 disagreement between the USTR and Treasury about tariffs. And the question I have is,
00:28:46 when are we going to get an answer? When will this investigation end and a decision be made?
00:28:53 Senator Crapo, I appreciate this question as well, because obviously this is something we've
00:28:59 been working very hard on. Just a couple of corrections. I think that what you are talking
00:29:04 about is the review of the existing tariffs that we kicked off in the fall of 2022. So we're calling
00:29:11 it shorthand the four-year review. It's an unfortunate shorthand because it's a review
00:29:15 that starts at year four, not a review that lasts for four years, first of all.
00:29:19 Understood.
00:29:20 To your point about two years, it's really been about a year and a half. But given the President's
00:29:28 calling on USTR to consider specifically the tariff adjustments on steel and aluminum trade
00:29:37 with China, I think that you should take that as an indication that we are in very,
00:29:42 very advanced stages of our interagency work, and that I expect that we will come
00:29:47 to a conclusion very soon. All right. I appreciate that. I hope that means very soon.
00:29:54 Next, as you know, the National Potato Council expressed disappointment with how Japan's ban
00:29:59 on US potatoes appeared in the national trade estimate because it didn't capture the full
00:30:04 extent of the problem. A number of your stakeholders also took issue with this year's NTE
00:30:09 because of your decision to cut out a number of trade partners by seeing if they were in our
00:30:16 trading partners' -- their barriers, by seeing if those barriers were in their public interest.
00:30:23 Did you take the opportunity to discuss the ban of US potatoes in your recent
00:30:30 conversations with Japan?
00:30:32 Senator Crapo, now, this is an area of shared interest and dedication with respect to potatoes
00:30:40 and Idaho in particular. So, yes, absolutely. USTR has raised market access for table stock
00:30:47 potatoes in all four meetings of the US-Japan partnership on trade, most recently in December
00:30:53 of 2023. We will continue to press Japan to advance the request in a timely and science-based
00:30:59 manner. And I also want to let you know that in the person of our very dynamic ambassador to Japan,
00:31:06 Ambassador Emanuel, USTR has the strongest and most active of partners in advancing this
00:31:14 particular issue. All right. Thank you. I'm betting that Oregon potato growers agree with that.
00:31:20 And we urge you to continue to raise this issue. I want to move on to digital services taxes.
00:31:25 Recently, when you were asked about discrimination against US technology companies, you said,
00:31:30 how many of these American companies are actually really American companies,
00:31:34 because they are actually paying taxes there as opposed to paying taxes here?
00:31:39 Actually, those companies pay billions of dollars of taxes here, but they are paying more
00:31:46 overseas because of digital discriminatory tax services, or DSTs. If you feel that it's
00:31:54 problematic that US companies are paying more taxes overseas, will you then commit to this
00:31:59 committee that you will actually take action against DSTs rather than just consider it?
00:32:05 And if countries continue to move forward on implementation of their DSTs, will you take
00:32:11 action? Senator Crapo, with respect to these tax issues, this is one of those areas where I've
00:32:18 always gotten to acknowledge the jurisdiction of the Treasury Department, although Senate Finance
00:32:25 gets jurisdiction over both tax and trade. I think one of the challenges, as I understand it,
00:32:32 working this issue is reflected in that Pillar 1, Pillar 2 negotiation that Secretary Yellen has led
00:32:39 to address that arbitrage over international minimum taxes to try to level the playing field.
00:32:47 So I know that this is part of a larger conversation. With respect to USTR, our role
00:32:53 in the digital services taxes partnership with Treasury is really triggered around the architecture
00:33:00 of a lot of these DSTs, where USTR has run Section 301s, assessed discriminatory impacts of these DSTs,
00:33:09 and moved forward with respect to articulating possible sanctions. Those sanctions remain
00:33:20 suspended. They remain part of our toolkit, and we remain in very close touch with our Treasury
00:33:28 Department colleagues in monitoring what is happening in these jurisdictions. So just to
00:33:35 assure you that we are looking at this very carefully, and we value our tools with respect
00:33:41 to the leverage that they give us in leveling the playing field for our companies. Are you
00:33:44 telling me that Secretary Yellen is the one I should be asking this question to?
00:33:49 What I'm telling you is that with respect to DSTs, it is an issue where USTR and Treasury
00:33:56 authorities are both implicated. I think I understood you to say you're still looking at it.
00:34:01 We are prepared to use the tools that we have. I hope you do. Thank you. Senator Stabenow and
00:34:10 Senator Stabenow will go next, and then Senator Grassley will go after Senator Stabenow.
00:34:15 Well, good morning. It's wonderful to see you again and to have you with us and to talk about
00:34:23 such important issues, both in terms of markets but also fairness and what needs to happen for
00:34:31 American workers, businesses, farmers, and so on. I appreciate your efforts and the President's
00:34:36 leadership as we work to support our trade laws, both trade enforcement and leveling the playing
00:34:44 field for our farmers. We just heard about potato growers. We have other issues, as you know, with
00:34:49 our farmers that need to be addressed as well, as well as our manufacturers. I just want to lend my
00:34:55 voice to the fact that the four-year review of Section 301 tariffs on Chinese products needs to
00:35:04 be concluded as quickly as possible in favor of both either extending or increasing tariffs on
00:35:12 Chinese goods while we at the same time focusing on the interests of American workers. I want to
00:35:18 speak to something very specific and important to us in the auto manufacturing sector right now,
00:35:24 because in Michigan we know just how critical it is to level the playing field. Our state has,
00:35:30 as you know, put the world on wheels. We're very proud of that. We've got the best auto workers in
00:35:35 the world, and they're ready to build, and they are building the vehicles of the future right here
00:35:40 in America. And there's no doubt in my mind that we can out-compete anybody in the world as long
00:35:47 as the rules are enforced and there's a level playing field. But the Chinese government's
00:35:52 unfair trade practices, including heavy, heavy subsidies for Chinese automakers, pose a
00:36:00 significant threat to our American manufacturing capacity and to our consumers and to our
00:36:07 national security interests, I would add. Allowing artificially low-priced Chinese EVs to flood the
00:36:15 U.S. market would cost thousands of jobs and endanger our shared goal of ensuring that the
00:36:22 electric vehicle transition is led by American workers. Imposing Chinese EVs, importing them,
00:36:31 many of which are equipped with highly connected electronic components and autonomous driving
00:36:36 technologies, would also create an unacceptable national security risk. It's essential that we
00:36:43 protect our consumers, American businesses, our workers, our critical infrastructure from being
00:36:53 exploited by Chinese state actors, as we know. And so how does that fit in to the President's
00:37:01 trade agenda? Senator Stabenow, it's wonderful to see you. I think that your state is actually
00:37:11 one of the best examples of why we are advancing a different kind of trade policy. Michigan's a
00:37:18 great agricultural producing state and also a great state with an industrial contribution
00:37:26 to America and the world. The specific challenge of EVs is actually a part of a larger pattern
00:37:41 that we have seen over and over and over again. First it was steel and aluminum, then it was
00:37:46 solar panels again where I think in both Michigan and Oregon and other places in the U.S. we had a
00:37:53 growing innovative industry in the early 2000s that got washed out by exactly these same
00:38:02 anti-competitive practices. Enormous amounts of state support, fostering, overproduction,
00:38:10 and overcapacity that brought world prices down so far that no one could compete or survive.
00:38:19 So we know that we are facing this again on autos and EVs. We have to take action.
00:38:30 Leaving these types of policies unchecked, we already know what's going to happen.
00:38:34 We're going to lose the capacity to produce and compete. As we lose that capacity, it is so hard
00:38:42 to rebuild that capability. So we have to take early action, decisive action, and we have to be
00:38:49 really clear about why we're taking the action. We are looking for a level playing field because
00:38:54 the current playing field is not level. For all the talk about free trade being the ideal,
00:39:02 it is a beautiful concept. It is also a beautiful dream because the world economy is not
00:39:09 characterized by free trade, in particular when you look at the practices that are leading to
00:39:14 the dynamics we're seeing on autos and EVs. So Senator Stabenow, this is a significant
00:39:21 animating principle for us as we look at our tools at USTR, how we support American manufacturing
00:39:27 industries, American manufacturing workers, how we can continue to innovate. And it is also an
00:39:32 animating principle in how we look at how we can partner with other countries and economies who
00:39:38 share our structures, share our values, both politically and economically.
00:39:43 Let me just say as I close two things. One, we are right now competing, and this has happened
00:39:49 in other areas, but it's the Chinese government. It's not Chinese businesses. It's Chinese
00:39:54 government against American businesses and American workers. And so it is absolutely critical.
00:39:59 And with my Ag hat, I won't go into questions, but just I know there are a number of agricultural
00:40:04 stakeholders that sent you a letter earlier this week urging you to commit to an aggressive
00:40:10 agriculture trade agenda. So important that we have those markets. Senator Vilsack,
00:40:14 at the request of Senator Bozeman and I, has added a robust funding to marketing
00:40:21 of our agricultural products. And we need those markets and we need the trade agreement. So
00:40:29 appreciate your focus on that. We're always glad to have our Ag champion in the house.
00:40:34 And another senator who cares deeply about agriculture, Senator Grassley.
00:40:38 Welcome, Ambassador. I'd like to discuss a prime example of this administration's
00:40:44 abdication of leadership on trade. There's been a bipartisan agreement on this committee
00:40:50 on critical issues such as free cross-border data flow, data localization, open markets,
00:40:58 and intellectual property protection. However, this has been undermined by actions of this
00:41:04 administration. So other countries then end up setting the rules on digital trade.
00:41:10 These bipartisan principles are the foundation of the digital economy and U.S. companies enjoy a
00:41:18 significant competitive advantage relative to foreign competitors. Our competitors repeatedly
00:41:24 seek to discriminate against U.S. companies and impede access to their markets. Yet the Biden
00:41:31 administration has pulled back from negotiations on digital service trades and rejected long-term,
00:41:38 long-held bipartisan principles against discriminatory practices of our partners.
00:41:45 USTR has abdicated its leadership role in this important issue. So why is USTR allowing other
00:41:54 countries to set the rules that will put American companies at a disadvantage? This can't be
00:42:01 consistent with USTR's mission. Senator Grassley, it's good to see you. Thank you for the question.
00:42:08 And thank you for the opportunity to address this concern that you have. I've heard it quite a bit,
00:42:15 and I welcome every opportunity to explain USTR's approach. You are right with respect to
00:42:23 ongoing negotiations around data flows provisions, data localization provisions,
00:42:30 and source code provisions. We have pulled back these longstanding proposals that we have made
00:42:37 in those negotiations to make adjustments, in large part because we are connecting the dots.
00:42:43 And I would like to encourage all of us to connect the dots, because in addition to being
00:42:49 a Senate Finance Committee leader, you've also been a longtime leader on the Senate Judiciary
00:42:54 Committee. And I know, for instance, that you are a co-sponsor of the American Innovation and Choice
00:42:59 Online Act, ICOA, which the administration has expressed support for. I also know that you are
00:43:05 a co-sponsor, along with many of your colleagues on both sides of the aisle here on Senate Finance,
00:43:10 of the Kids Online Safety Act, which addresses data security for children's data in the digital
00:43:18 economy and in the digital sphere. What I wanted to reflect to you is, when you look at those
00:43:26 long-term developed proposals in the digital trade negotiations on data, that those provisions are
00:43:35 still largely based on an understanding that what we're dealing with is data as a facilitator of
00:43:43 traditional trade transactions, goods transactions, data as a facilitator of e-commerce,
00:43:49 data traveling along with the information that has to be traded in order for goods to move across
00:43:56 borders. And that was certainly the case 20 years ago. But today, in 2024, what we have seen is that
00:44:04 data has become the commodity itself, that data has become the powerful thing that has value,
00:44:13 that enables more innovation, that it enables, when you accumulate enormous amounts of it,
00:44:18 technological innovation like generative AI. The issue is who can have access to that data. And
00:44:26 also, where does the data come from? It comes from ordinary Americans. It comes from you,
00:44:30 comes from me, comes from your constituents. It comes from our kids. And so, with respect to the
00:44:35 security of that data, the attempts that we see up here on the Hill to assert the rights of ordinary
00:44:43 Americans with respect to that data as a trade matter -- >> Can you fill in in writing? Because
00:44:48 I've got to ask one more question. >> All right. Can I just finish -- I'll just finish my sentence.
00:44:52 We feel very strongly that our provisions in our trade negotiations should reflect the
00:45:00 debates that are happening here and the legislative efforts that you all are making.
00:45:05 >> Yeah. The last time you appeared before this committee, I urged you to negotiate lower tariffs
00:45:10 on ethanol with Brazil. Well, I understand that you are currently negotiating this matter. The
00:45:15 results have been lackluster. Brazil increased its duty on ethanol this year from 16 to 18 percent
00:45:23 and continue to enjoy importing its ethanol tariffs free. This ethanol competes with homegrown
00:45:31 ethanol in California's low-carbon fuel standard, but also in sustainable aviation fuel. What is
00:45:39 the administration doing to press Brazil to lower its tariffs, and what concrete measures are the
00:45:47 administration considering in the negotiations? >> Senator Grassley, your position on ethanol
00:45:56 has been crystal clear from day one. This is a high priority for the administration as well.
00:46:02 I'm currently also extremely concerned about Brazilian market access restrictions.
00:46:10 We are in coordination with USDA, including at political levels, actively engaging with
00:46:17 our counterparts in Brazil on market access barriers to U.S. ethanol, including those
00:46:21 tariffs and regulatory barriers that you're talking about. Our objective is to ensure that
00:46:26 U.S. ethanol can once again compete on a level playing field with domestically produced ethanol
00:46:32 in Brazil. My latest engagement with my Brazilian counterpart, which happened
00:46:37 about a month and a half ago, the Brazilians indicated to us that they understood at all
00:46:43 levels, including from the White House, the prioritization of this issue with them,
00:46:49 how important it is to us and our economy, and their desire to find a way to accommodate this
00:46:56 priority. So we are actively working on it, and the strength of your voice on this matter
00:47:00 is an asset to us. >> Time of my colleagues expired.
00:47:04 Senator Cornyn is next. >> You can ask about big oil.
00:47:08 >> Senator Cornyn. >> Ambassador Tye, I had to do a double take
00:47:18 on the title of this hearing. The title says the President's 2024 Trade Policy Agenda.
00:47:26 I really think it would be more accurate to say the President's 2024 non-trade policy
00:47:34 agenda. The reason I say that is because the administration is not currently negotiating
00:47:40 any free trade agreements, are you? >> Not in the traditional sense,
00:47:46 Senator Cornyn. We are negotiating new types of trade agreements.
00:47:50 >> So the way you are negotiating these so-called frameworks lack the tools for any
00:47:59 market access that a trade agreement would provide, along with enforcement
00:48:04 actions that could be taken to enforce that access, correct?
00:48:08 >> Senator Cornyn, this is an opportunity for me to explain again.
00:48:13 >> No, you don't need to explain it again. You need to answer my question.
00:48:16 >> The traditional FTAs that we negotiate continue to pit Americans against Americans
00:48:21 and sectors against sectors in a way that is entirely unsustainable, as we've seen in our
00:48:25 recent experience. >> I know you filibustered
00:48:28 Senator Grassley, but you're not going to filibuster now. The point is that absent trade
00:48:34 agreements, there is no enforcement mechanism to make sure that American farmers, businesses,
00:48:40 and workers aren't harmed by denial of market access to these countries that are denying that
00:48:46 access for imposing huge subsidies to prefer their products as opposed to ours. There is no
00:48:53 mechanism for enforcement, is there? >> Senator Cornyn, the point is in securing
00:48:59 market access, to secure the market access, and we've done that with negotiations that are not
00:49:04 FTAs. They have moved faster. With India, for instance, we've opened up 12 different categories,
00:49:11 gotten lowered tariffs. New product from America is going to India, $21 billion in new market
00:49:18 access over the last three years. We see results --
00:49:21 >> Let's talk about China for a minute. >> Including for farmers in Texas.
00:49:24 >> Has the administration taken any enforcement actions against China?
00:49:28 >> The administration absolutely has moved forward with an aggressive set of policies
00:49:35 against China across the administration. >> Have you taken enforcement actions?
00:49:38 >> I suppose it depends on what you mean by enforcement actions, but certainly --
00:49:42 >> I mean enforcement actions. >> With respect to export controls
00:49:45 on semiconductors, you've seen that. There's enforcement there.
00:49:47 >> I'm not just talking about talk. I'm talking about actual enforcement actions against China.
00:49:52 >> I think those actions have certainly moved markets.
00:49:55 >> If you'll wait for my question, they are accessing the World Trade Organization,
00:50:00 seeking to dispute provisions of the Inflation Reduction Act. Meanwhile,
00:50:05 China continues to subsidize and prefer their products by spending a lot of money, making it
00:50:12 much harder for American businesses to compete. Has the administration taken any sort of
00:50:18 enforcement actions against China? >> Today --
00:50:20 >> The World Trade Organization or anywhere else to go after them?
00:50:24 They are taking advantage of that access in the World Trade Organization against us,
00:50:29 but are we doing it against them? >> We have in the past taken lots
00:50:34 of actions against China. >> When was the last time you did it?
00:50:37 >> Well, let me put it this way. Let me answer your original question.
00:50:38 >> When did you do it? >> Well, it's been ineffective,
00:50:41 Senator Cornyn, which is why we no longer do the things that aren't effective.
00:50:46 >> Well, you talked them into it or what? >> We initiated an enforcement action today
00:50:52 under Section 301 on Chinese non-market policies and practices affecting the maritime industry
00:50:57 and shipbuilding industries. So, yes, we have this morning.
00:51:00 >> Let me ask you about Texas is a major -- or the most -- the largest trade exporting
00:51:12 state in the nation, yet in recent years,
00:51:16 corn exports, for example, are down $500 million to $12.8 billion.
00:51:26 Livestock, poultry and dairy exports are forecast to decrease by $1.3 billion.
00:51:32 Pork exports are down $300 million. Soybean exports are projected down $500 million.
00:51:40 And wheat exports are forecast down $800 million. What explains this robust trade agenda that
00:51:48 you say the Biden administration has and the fact that market share for American agricultural
00:51:55 products is down across the board? >> Well, Senator Cornyn, I'd have to look
00:51:59 at the sources of your statistics to understand better what basis the forecasts are made on.
00:52:06 But the last three years, we have set records for American ag exports.
00:52:11 >> You've set records, but it's a record decrease, not increase.
00:52:15 >> No, no, no. Record -- record -- record -- high record exports for the last three years.
00:52:22 And I'm happy to get those numbers to you. >> I'll be happy to share my records with you.
00:52:26 >> Thank you, Mr. Chairman. >> Thank my colleague, Senator Cortez Mastow,
00:52:30 is next. >> Thank you, Mr. Chair.
00:52:32 Ambassador Tai, it's great to see you. Thank you for visiting with me last week.
00:52:37 One of the things we talked about were titanium sponge tariffs.
00:52:41 So let me ask you this. As you well know, the United States currently imports 100%
00:52:49 of its titanium sponge, a critical material that is domestically manufactured into parts for
00:52:55 fighter jets, for military satellites and other defense technologies.
00:52:58 Over 90% of these imports come from Japan, our key ally and security partner.
00:53:04 This trade supports American jobs, workers, and national defense, yet the U.S. is applying a 15%
00:53:10 tariff to all titanium sponge imports. This is a tax that manufacturers in Russia
00:53:16 and China do not pay, and our American companies such as Timet in Henderson, Nevada,
00:53:22 are trying to compete with companies in these countries.
00:53:25 I'm pleased that Senators Blackburn and Tillis on this committee, as well as Senators Capito
00:53:30 and Manchin have joined my effort to remove this tariff and support American security and jobs.
00:53:35 Ambassador, my question to you is, do you support the removal of this counterproductive tariff,
00:53:39 and what can you do? >> Senator Cortez Mastow,
00:53:44 I just want to reinforce how strongly we as an administration, certainly at USTR,
00:53:51 feel about enabling American manufacturing and American manufacturers.
00:53:57 It can be a complex question, because we do live in an interconnected world with respect to
00:54:03 inputs and access to inputs. So I think what I would say to you is that
00:54:12 the issue that you raise and have been so much of a champion for,
00:54:19 certainly merits are looking at through a very strategic lens.
00:54:23 >> Thank you. I hope you do, and I look forward to that
00:54:26 quick review. Thank you. We also talked a little bit about AGOA,
00:54:31 the African Growth and Opportunity Act. I've been hearing from many Nevada businesses
00:54:35 about the importance of AGOA, and it's set to expire next year.
00:54:39 I support the need to reauthorize AGOA, but I also think there's a chance to improve the program.
00:54:45 As we look to reduce reliance on China for critical minerals, I think AGOA is an opportunity
00:54:51 to create closer ties to Africa in this space. I also think there's a need to create more economic
00:54:57 opportunity for women and girls as we can leverage these trade tools for this purpose as well.
00:55:03 So Ambassador Tai, what are your views as we look towards the need to reauthorize the program?
00:55:09 >> Well, I think, Senator Cortes-Masto, that this upcoming opportunity to reauthorize
00:55:16 is also a tremendous opportunity to revisit and enhance. AGOA as a program, like so many of our
00:55:23 trade programs, has been around now for two decades, more than two decades. By the time it
00:55:28 expires, I think it will have been a quarter of a century. A lot has changed. A lot has changed
00:55:33 here in the world, and most importantly, on the African continent. And so I think that we should
00:55:38 be looking at how do we improve utilization rates. AGOA is our foundational program with
00:55:44 Sub-Saharan Africa. Utilization rates on average are low. How do we improve that? Secondly,
00:55:51 as some of the countries in Africa really do develop and hit that middle income level,
00:55:59 they become ready to graduate the program as it stands. How do we continue to build on the
00:56:04 program so that we have a forward vision for the next stage of development and how the United States
00:56:10 can be there as a partner with these countries in Africa? Another change in the last few years
00:56:18 is the coming into being of the African Continental Free Trade Area, the AFCFTA,
00:56:24 which is the effort of the African countries themselves to integrate as a continent.
00:56:32 So another question that's presented to us is an opportunity to examine how AGOA can enable
00:56:38 U.S. partnership with the countries in Africa in a way that can help to reinforce that integrative
00:56:45 effort. And I also have some thoughts as we continue to go through those eligibility reviews
00:56:51 every year about how we can sharpen the tools in AGOA, how we can make them more flexible,
00:56:57 how we can, once a country falls out of AGOA, how we could develop tools to acknowledge progress
00:57:05 along the way to encourage that constant incentivization to come back into the program
00:57:12 as opposed to just leaving a country out in the cold. So I think that there's a lot of room for
00:57:18 enhancement. I know how much senators and members of the House care about this, and I think that
00:57:24 now is the right time to be working on it. I couldn't agree more. Thank you very much.
00:57:27 My colleague, we've worked often with Senator Thune on trade issues over the years. Senator
00:57:33 Thune. Thank you, Ms. Chairman. Ambassador Tai, welcome. And I would echo what my colleague,
00:57:37 Senator Grassley, said about digital trade, and that's something I've worked with the chairman
00:57:40 on a lot. And it seems like we have abdicated our role as a leader when it comes to digital trade
00:57:46 and very quickly allowing China to step into the gap. But I want to focus specifically
00:57:52 on ag trade. That's been referenced already this morning as well, and you had indicated
00:57:59 that one of the reasons we have a trade deficit in agriculture is because of the strong dollar.
00:58:06 And I don't deny that there are macroeconomic effects that impact trade, but USDA also
00:58:13 acknowledged that one of the reasons we're running trade deficits is because of market access.
00:58:19 And I can't honestly see anything the administration is doing on market access.
00:58:24 I talk to agricultural organizations all the time. And by the way,
00:58:29 we do have -- we're running the largest trade deficit this year, ever. 17 billion this year,
00:58:36 they're saying could be 30 billion this coming year. And net farm income was down $30 billion
00:58:42 last year, will be down, they say, $39 billion this year. So thanks to inflation, input costs
00:58:50 are going up, commodity prices are going down. One of the things that affects commodity prices
00:58:56 is demand. And the way you create demand is to open markets. And I can't tell that the
00:59:03 administration is doing anything on that. Now, you say we've got a different approach to trade.
00:59:08 And I understand that approach is grounded in things other than market access. But market
00:59:14 access is what our farmers and ranchers are looking for to open up the markets so they can
00:59:19 sell their products and get the trade deficit back to trade surplus and get this net farm income
00:59:26 back in the positive column. I just -- it defies explanation. And you talk about working with our
00:59:33 allies. We have some low-hanging fruit. UK, EU, I'm on a bill that would create a free trade
00:59:40 agreement with United Kingdom. They're one of our longest and closest allies. And there isn't a
00:59:45 single free trade agreement that this administration has entered into. So I want to know what specific
00:59:50 actions the Biden administration plans to take to increase U.S. agricultural exports in 2024.
00:59:56 >> Senator Thune, there is so much that we have already done. As I noted earlier,
01:00:02 $21 billion in market access over the last three years. That's, for example, the safeguard
01:00:08 agreement that we renewed with Japan that has allowed for high-quality U.S. beef from your state
01:00:14 to increase access to a growing Japanese market. That includes the 12 tariff categories with India,
01:00:24 a growing market, growing opportunity for U.S. exporters. So I think we have to acknowledge that
01:00:34 market access can come more quickly, more effectively, in more agile ways if we are
01:00:40 looking for those opportunities to score what we like to call singles and doubles, to rack up the
01:00:45 score that way, as opposed to tying up opportunities over the course of many, many years in FTA
01:00:50 negotiations that sometimes don't ever come into being. >> How about the easy FTAs? How about the
01:00:58 U.K.? >> I think there are no easy FTAs. I don't know if you followed, but the U.K. and Canada
01:01:02 have been negotiating an FTA that they stopped negotiating because the U.K. won't talk ag market
01:01:08 access. And in fact, in the last years of the Trump administration, in those negotiations,
01:01:16 the U.K. had refused to put ag market access on the table. Ag market access is also something that
01:01:22 has traditionally really frustrated our efforts at large FTA-like exercises with the European Union.
01:01:30 So we are absolutely committed, and Senator Thune, I want to let you know, I think our farmers are
01:01:37 the savviest business people that I talk to and work with in trade. They know their businesses.
01:01:43 They know trade. With respect to the deficit, we're concerned about the deficit, absolutely.
01:01:48 And I think your concern is well placed. I just wish that our ag champions were as concerned about
01:01:55 the industrial trade deficit as they are with ag trade, because it can absolutely indicate
01:02:00 need for concern. Secretary Vilsack and I know, along with our farmers, that we need to be able
01:02:06 to diversify our export opportunities, because we are at a lot of risk. We are working very,
01:02:12 very hard to do that. But in addition to a strong U.S. dollar, one of the other challenges we have
01:02:18 is a really, really strong economy, a strong consumer economy here in the United States
01:02:23 that is actually fueling our economic recovery. Take, for example, China, where they are in an
01:02:32 economic downturn that they don't have the domestic demand to be able to help them recover,
01:02:39 which is why they're relying on an export-led recovery program that's going to cause serious,
01:02:44 serious problems for all the rest of us unless we do something. So I want to start on first
01:02:50 principles, reinforce how much we care about our ag producers. We want to make sure that they
01:02:57 continue to win. And we are working hard every single day to score wins for them.
01:03:03 Well, my time has expired, Mr. Chairman, but I would just say I think that ag always ends up
01:03:09 being at the end of the line. And honestly, I mean, and convince me so I can convince some of
01:03:17 the agriculture organizations. I just met with all of them in my state last Friday. This is an issue.
01:03:22 I mean, they don't think the administration gets it that we've got to be opening up more markets,
01:03:27 that the issue is market access, it's tariff and non-tariff barriers. You focus on all these
01:03:31 peripheral issues, none of which are at the core of why we can't get access to some of these
01:03:36 markets around the world. And those are tariff and non-tariff barriers. Thank you, Mr. Chairman.
01:03:39 Thank you. Thank my colleague. Senator Hassen is next.
01:03:42 Thank you, Mr. Chair and Ranking Member Crapo for this hearing. And thank you, Ambassador Tai,
01:03:49 for coming before the committee. Dependable U.S. trade policies reinforce American global
01:03:55 leadership, reassure that our partners and allies are working together, and help drive down costs
01:04:02 for American businesses and consumers. So let me start with a question about LogInc, which I
01:04:09 understand you just made an announcement about. The Chinese government controls a global logistics
01:04:15 management platform called LogInc. Chinese companies that use LogInc interact with ports
01:04:21 around the world, including our allies' ports that are important to our economic and national
01:04:25 security. Through these interactions, the Chinese government can predict trends or access early
01:04:32 information on U.S. logistics and manipulate information to harm our interests. In past
01:04:37 discussions with you, I've raised concerns that through this platform, the Chinese government
01:04:42 could harvest sensitive national security information or commercial data that it could
01:04:46 use to undermine competition from U.S. companies. So I'm really pleased that USTR is taking action.
01:04:52 This is an urgent threat that I've obviously been following, as you know, for a long time.
01:04:58 What are the immediate next steps that USTR is taking to address the threat that LogInc poses
01:05:03 to our national economic security? And what's the timeline for this investigation?
01:05:08 Thank you, Senator Hassen. The immediate step that we are taking with respect to this investigation
01:05:14 is first, a federal register notice goes out today to solicit public comment. The deadline
01:05:21 closes for public comment on May 22nd. On May 29th, we will hold a public hearing. And again,
01:05:27 the intention is to gather as much and as high-quality information as we can from
01:05:34 all the participants in our economy. In the meantime, I will be requesting consultations
01:05:40 with China as required under the statute. From there, we have up to a year under the statute to
01:05:47 run our investigation. But I agree with you. I think that these challenges and the allegations
01:05:53 made in the petition are highly concerning and that we would do best by ourselves to
01:06:02 accelerate our work. Well, I appreciate that very much. And
01:06:07 will you commit to me – to briefing me and my staff on this issue as it develops so
01:06:13 we can really work together to address this economic and national security risk?
01:06:17 Absolutely. Thank you.
01:06:18 Second question. Recently, the U.S. and U.K. imposed new sanctions on Russian nickel,
01:06:26 copper, and aluminum as a result of Putin's war of aggression against Ukraine.
01:06:31 In addition to imposing sanctions on Russia, we need to support Ukraine's wartime economy.
01:06:37 Ukraine has abundant critical mineral reserves. Facilitating trade of critical minerals with
01:06:42 Ukraine would support their fight against Putin, and it would increase our access to
01:06:46 materials needed for defense applications, renewable energy, and electronics.
01:06:52 How is USTR working with Ukraine and our European partners on establishing strong
01:07:00 trade relationships to help Ukraine's economy and to provide more alternatives
01:07:05 to Russian critical minerals?
01:07:06 Thank you, Senator Hassen. The challenges presented by Russia's invasion of Ukraine
01:07:12 have activated an all-of administration effort. We are all bringing our tools to bear. With
01:07:20 respect to the sanctions, those are primarily in the Treasury and Commerce Department,
01:07:25 bailiwicks, on those we work to support. Your question is specifically on what USTR is doing
01:07:31 to help and to support Ukraine. Here, I wanted to let you know that we are negotiating a set
01:07:39 of protocols with Ukraine right now on things like trade facilitation, basically good practices
01:07:50 in trade so that we can prepare Ukraine for a robust recovery. We're also talking critical
01:07:59 minerals with Ukraine as well. All of it is to gauge the engagement that Ukraine can provide
01:08:08 now with a view to a future where Ukraine can fully take advantage of recovery opportunities.
01:08:18 Excellent. I have other additional questions on some of the other agreements on critical
01:08:24 minerals that you guys are working on. We will submit those for the record. Thank you, Mr. Chair.
01:08:30 Thank my colleague for her courtesy. This is going to be a hectic day. Senator Bennett, you're next.
01:08:34 Chairman, I appreciate the opportunity to ask some questions today. Ambassador Tai,
01:08:40 thank you very much for being here. I guess I wanted to start and maybe spend most of my time
01:08:49 on the Americas Act, which Senator Cassidy and I have now introduced as a recognition of
01:08:56 the importance for us to work with our hemisphere on a whole range of issues. It's not just about
01:09:03 trade. It's about migration. It's about economic development. I think Bill and I have found a way
01:09:12 in a divided Congress to remind everybody that we do have a set of values here that are pretty
01:09:20 shared. I think in the hemisphere, we have a set of values that are pretty shared. When I'm at home
01:09:25 in Colorado and people there are saying to me, how are we going to compete with China? They've got
01:09:32 1.3 billion people and they get to do whatever Chairman Xi wants them to do. We're a messy
01:09:42 democracy and we're 330 million people. My answer to them is, well, we've got really good trading
01:09:52 partners in Canada and in Mexico. We've got the benefit of what I think almost everybody on this
01:09:59 panel agrees is a 21st century trade agreement in USMCA. Is there a way to begin to think about
01:10:08 how to build that out in the hemisphere? That is what has led Bill and me to introduce the bill
01:10:16 that we have. I know you've noticed it because we've talked about it, but could you talk a little
01:10:22 bit about how the administration is seeing the hemisphere? I'd be happy to hear anything you've
01:10:30 got to say about our bill, but really what I want to do is understand what our strategy is here.
01:10:36 Thank you so much for your leadership on this particular issue, Senator Bennett. I remember
01:10:41 seeing you at the city summit of the Americas that was held in Denver last year. That was a very
01:10:49 visible representation of the connectivity of the western hemisphere economies through the
01:10:56 lens of cities and Colorado and Denver's place in that connectivity especially. Here I just start
01:11:02 with saying that this particular effort that's embodied in the Americas Act is very much
01:11:10 consistent with the values of the administration and the efforts of the administration that's
01:11:16 embodied in the Americas Partnership for Economic Prosperity. I think that through both efforts,
01:11:22 we are looking at ways to frankly become more regionally integrated, to have more of a coherent
01:11:31 regional economic identity. I think that the opportunities here are in, for example,
01:11:39 the Americas Partnership, I think of the 12 countries, so that's 11 other than us, we have
01:11:46 FTA relationships with eight of them already. Now they might be bilateral, they might be in
01:11:51 groups like USMCA or the CAFTA, but there's already a strong architecture with respect to
01:11:58 the kinds of trade disciplines we've established between ourselves. I think the real opportunity
01:12:02 there, and I think that this is maybe an interpretation of your comment about USMCA,
01:12:08 I think the opportunity there is one, USMCA is right now our gold standard. How can we upgrade
01:12:17 a lot of the rules in these other relationships and bring them up to today? And the second one
01:12:22 goes to supply chains, and that's the economic integration piece of it. And I think that,
01:12:30 you know, again, in terms of our new more strategic approach to trade, we'll want to look at this
01:12:35 sectorally, and this is part of the work that we're doing, the Americas Partnership, but I think
01:12:40 that this is also consistent with the spirit of the Americas Act. I would say, I mean, it's our job
01:12:45 obviously to convince Chairman Wyden and the ranking member, Senator Crapo, that this is
01:12:53 something that merits the attention of this committee and the Congress, but I do think the
01:12:58 benefit of it is that then it will last from administration to administration, which is the
01:13:05 kind of predictability that our partners need, and I think, frankly, Colorado's producers need too.
01:13:11 So I'm grateful for the work the administration is doing on it. I'm hopeful that we can get to a
01:13:16 place where we persuade our colleagues that figuring out how to institutionalize it is
01:13:22 important. I mean, you think about it, in the last 20 years or so, China trade in this region,
01:13:28 in Latin America, has gone from $12.5 billion to $480 billion. That's a 4,000 percent increase
01:13:39 in our region with our neighbors, and that's to say nothing of the infrastructure that they're
01:13:45 building and the debt traps that they're creating. I just think there is a huge opportunity for us.
01:13:50 I'm out of time. I look forward to working with the chairman and the ranking member on this,
01:13:54 and Senator Cassidy has been an amazing partner and you to see if we can advance the ball as far
01:14:01 as we can between now and the election. Thank you, Mr. Chairman. I thank my colleague. We'll
01:14:05 follow up with you and Senator Cassidy. Let's see, the next is Senator Tillis.
01:14:10 Thank you, Mr. Chairman, Ambassador. Thank you for being here. Are you aware of a bill that
01:14:17 we put together working with Senator Stabenow and Casey on the Fighting Trade Cheats Act? Also,
01:14:27 Senator Brown? Yes, I am. Have you all taken a position on this yet? As an administration,
01:14:36 I don't believe we have. I'll check with my team, although I think we've not yet, but I think we're
01:14:42 always prepared to provide technical assistance in the meantime. I think it will be helpful. The
01:14:48 whole concept behind this, I had a lot of Republicans looking at me and saying, what are
01:14:53 you doing creating a private right of action? Not all private rights of action are bad. When you're
01:14:58 able to leverage the corporate attorneys who would go after trade cheats, mostly from China,
01:15:06 it becomes a force multiplier for an agency that just doesn't have the capacity today.
01:15:11 So what we're really talking about are being able to bring more cases forward that the department
01:15:16 right now is not going to be able to do on their own. So hopefully, I think that we've crafted it
01:15:21 properly. I think that it would be a great tool, and it would be a complement to getting to a
01:15:28 backlog you're simply not going to be able to. China does this remarkable job of laundering
01:15:34 products and getting to a point where it's virtually impossible to go after all the
01:15:39 examples of cheating. So it came out of a suggestion that I had with a company in Charlotte
01:15:45 called Charlotte Pipe, where the intellectual property theft and use cases for Charlotte
01:15:54 Pipe are extraordinary. There is a facility in China that looks like the old Charlotte Pipe
01:16:03 Foundry in downtown Charlotte. I mean, just theft. And they came up with a good idea. I know
01:16:11 their industry supports it. I hope we can. And I believe that it could be used maybe as a tool for
01:16:16 the administration for really going after these trade cheats. So that's my shameless commercial
01:16:21 for what I think is very sound policy that has good, strong bipartisan support. So we'd like to
01:16:26 get an official position, if we may, because I think it'd be helpful in getting it passed.
01:16:31 I wanted to talk a little bit about trade in general. But before I do,
01:16:41 we've got an issue. I've had this discussion with Senator Coons on the TRIPS waiver. I'm assuming
01:16:49 that you all, and I've chaired and now I'm ranking member on the intellectual property subcommittee
01:16:56 with Senator Coons, we both think TRIPS waivers are really bad. I think the administration still
01:17:02 thinks they're good. So instead of asking you whether you think in hindsight some of the TRIPS
01:17:07 waiver decisions that were made in COVID era were a good idea, tell me your case for why you thought
01:17:15 whether it was a good or bad idea. I'm assuming you still think it's a good idea. Tell me why
01:17:19 you think it's a good idea. Senator Tillis, on the TRIPS exercises at the WTO, the reason why
01:17:30 we think it is a good idea to continue to have these conversations at the WTO is because
01:17:38 the public's access, the access of ordinary people, whether they're Americans or they are
01:17:46 people in other advanced economies or in developing countries, to the miraculous life-saving
01:17:54 medicines that are developed many years ago is a really important topic. The only thing more
01:18:01 important than access is the actual creation of these very promising vaccines and cures.
01:18:07 And if you don't get it right, if you take a look at what we did with Project Warp Speed and how
01:18:14 this country in historic record time produced a vaccine, nobody disputes that, it only happened
01:18:21 because the whole of government came together and produced this, but the biotech industry took
01:18:27 certain risks. There weren't all winners. There were some failed projects out there. If you send
01:18:31 the message that the next, and it won't probably be 100 years, the next time you want to do a
01:18:37 Project Warp Speed, that for all the work that you could put into it, you could have your intellectual
01:18:42 property time horizon collapse and not be able to recover your investment, I don't know that people
01:18:48 will line up and necessarily marshal the resources the way that we saw it during COVID. Intellectual
01:18:54 property protection, I get access to drugs, but that doesn't necessarily mean publishing or
01:19:02 providing, sharing vital proprietary intellectual property. And if we don't get this right, it will
01:19:08 have a chilling effect, not only in terms of biotechnology, but I think across all sectors,
01:19:14 it will destroy our, I think, our position right now as the world's innovator. Senator Tillis,
01:19:21 if I can just respond very, very quickly. I'm going to say I agree with you that the question
01:19:24 is about getting it right. That also innovating and creating all of these incredible medicines
01:19:30 and having them out of reach for the patients who need them is also not the right place to be.
01:19:36 I agree, but I think it's about where we need to be. I agree, but you'd be hard pressed to find an
01:19:41 absence or no access, if I may, because she responded to a point that I think is very important.
01:19:46 There were no vaccine deserts. The vaccines were out there. The TRIPS waivers were not necessary
01:19:54 to provide more COVID vaccines. So that would not be a good example, in my opinion, particularly
01:20:02 against the risk of failing to innovate in this country. Thank you, Mr. Chair. Sorry.
01:20:06 Thank you, Mr. Chairman. Ambassador Tai, welcome. We are glad that you're here. I want to talk to
01:20:14 you about enforcement actions against China, because I hear a lot about this in Tennessee.
01:20:21 Theft of intellectual property, the genocide, the crimes against the Uyghurs,
01:20:28 what all is happening in Xinjiang, the military aggression against Taiwan, and of course,
01:20:35 you've got TikTok and what we're seeing there. So I know you've just announced the 301 on ship
01:20:43 building. What other enforcement actions have you taken against China?
01:20:49 So the action from this morning, and thank you for keeping up with the breaking news. We wanted
01:20:57 to make sure that there's an opportunity to talk to Senate Finance today. Any others that you have
01:21:02 done? Anything to hold China to account? Every single day, what we do, whether it's directly
01:21:09 vis-a-vis China or it's work that we are doing with other partners and allies. Okay, but no new
01:21:16 cases against China at the WTO on your watch? I mean, cases against China at the WTO have not
01:21:22 netted us structural change in China. Okay, so you're not going after them and you fail to use
01:21:30 the dispute settlement mechanisms under the phase one agreement, correct? The phase one agreement
01:21:36 enforcement, we absolutely are advancing in terms of raising the issues with China. We have done
01:21:43 that. Right now, I think probably the most important aspect of China enforcement set aside
01:21:50 301 that we just started today on ship building, it comes to the review of the existing tariffs
01:21:56 and how we can make them more effective and strategic. Okay, then let's talk about agriculture.
01:22:00 We hear so much from our Tennessee farmers on this, and we know that China is not living up
01:22:09 to their purchase commitments that they made under the last administration and under President
01:22:16 Trump's phase one deal. So, what are you doing to hold China to account for those purchase
01:22:23 commitments? I think that we are staying very, very strong on not giving them more space. Over
01:22:31 the course of the last three years, we have faced a lot of calls to release the tariffs on China,
01:22:37 and the point that we have made over and over again is that we do not see action from China
01:22:42 that would merit us going easier on them. So, what are you doing about that? See, this is our
01:22:46 point of frustration, is that there are purchase commitments that they made, but they are not
01:22:55 keeping up with those. So, we have cotton and soybean producers that are saying, "Hey, wait a
01:23:00 minute. Who is going to stand up for us?" And unfortunately, when they look at USTR and this
01:23:08 administration, they don't see people that are going to bat for them because you have had no new
01:23:17 actions. There are no new cases that y'all have brought against China. I think that's a narrow
01:23:24 way of looking at it. We've also not brought more retaliation on our farmers because that is a really
01:23:32 important part of our trade policy, which is to continue to improve the export opportunities for
01:23:40 our farmers. One of the challenges we have with China is an over-reliance on China as a customer.
01:23:45 They're not a monopoly here, but they're a consumer that is dominating our demand.
01:23:50 Yes. Countries would expect us to keep our commitment if we had made them. China is not
01:23:56 keeping their commitment. Before my time runs out, I do want to talk with you about digital trade,
01:24:01 and I thank you for the response to my letter on small business impact and of the digital trade
01:24:10 rules. I disagree with you on that because I think the change in digital trade policy
01:24:17 is not one that has been welcome. The Biden administration might think the change is going
01:24:27 after big tech, but what you're doing is really hurting countless small businesses. You made a
01:24:35 comment in your opening that you were slow walking the changes. You brought up the work we were doing
01:24:43 in Judiciary Committee on Privacy, and you brought up COSA as a justification for not doing something
01:24:52 on digital trade provisions. I would remind you that
01:24:58 international agreements on digital trade do not preclude countries from passing privacy laws.
01:25:11 You can look at the EU. You can look at GDPR. You can look at New Zealand. You can look at Canada.
01:25:17 You can look at Australia. So that is an excuse and not an accuracy. I see my time is over, Mr.
01:25:24 Chairman. Thank you. I thank my colleague Senator Cassidy is up. I note that Senator Casey has been
01:25:30 so patient as well. Everyone is trying to help him, and we'll stay within the rules. Senator
01:25:35 Cassidy, you're next. I will defer to the legislature. All right. That makes Senator,
01:25:41 in order of appearance, Senator Langford. Thank you, Mr. Chairman. Thank you, Senator Cassidy.
01:25:45 Thank you for that as well coming in. Thanks for the work and for the task that you're taking on
01:25:50 on this. Obviously, all of us have questions. We've continued to be able to press on free
01:25:54 trade agreements, and it has been the frustration of this committee and been the frustration of
01:25:58 many of our ag producers in my state about there is no ongoing FTAs that seem to be moving
01:26:04 at all. Has that changed? Are there any free trade agreements that are currently being negotiated?
01:26:08 For your ag producers, I just want to make the case that and reassert,
01:26:14 we are working for them every single day. We are scoring wins for them without having to do
01:26:19 the long negotiations in a free trade agreement. The short answer to be responsive to you is,
01:26:24 no, we're not doing the big comprehensive agreements that are really great for ag and
01:26:27 terrible for our industries, but we are nevertheless securing wins, $21 billion for our
01:26:33 over the last three years. The challenge of that is when it's not an FTA, there's no certainty on
01:26:38 it. That executive agreements come and go with administrations, an FTA has some semblance of
01:26:44 certainty on it where we at least know what the plan is and what the long-term relationships on
01:26:48 that are. I know Senator Blackburn had mentioned about China and the WTO that we've not initiated
01:26:54 any new cases on that. I heard from you saying, hey, we're not going to win anything anyway,
01:26:58 and so we're just not going to do it and not spend time on that. There is a messaging portion of that
01:27:02 that I think is significant as well to be able to go through the existing tariff review that's
01:27:07 been ongoing for two years. I know you mentioned Senator Crapo, that's only been a year and a half
01:27:12 as I'm counting time on that. I think it started in May of 2022, and so it's been,
01:27:17 that sounds like two years to me on that. So two years of that process on it. Do you know when that
01:27:22 review is going to conclude? So Senator Lankford, just to be really precise, the review started in
01:27:30 September of 2022, and so I don't want to argue with you over six months, but soon, very, very
01:27:36 soon. I have a high degree of confidence that we conclude it soon. So the reason I ask you that is
01:27:41 because I know President Biden has asked for consideration, it hasn't started yet, for
01:27:46 consideration on a 25 percent tariff on China on steel, 10 percent on aluminum. Wall Street Journal
01:27:53 reported, and we're still waiting on the details in this, Wall Street Journal report on today,
01:27:56 it'd be 0.6 percent of the steel coming in the United States is what this particular tariff,
01:28:01 I don't know if that's an accurate number or not that was reported today, so I'd be interested to
01:28:04 know if it ends up being 0.6 percent of the steel coming in the United States, or that's even close.
01:28:10 My question to you though is, if we're at the point where the 7.5 percent review from the
01:28:17 previous administration, we're a year and a half into it, the 25 percent review, how long will that
01:28:23 take until a decision is made since that consideration started today? I think that the
01:28:29 language was he called on USTR to consider, I wouldn't take that as a starting, I wouldn't
01:28:35 consider that a starting point. As I just want to give you the best information and the most
01:28:42 holistic response, it has been a comprehensive review of the existing tariffs. You're right,
01:28:48 it's taken 19 months now, but I have a high degree of confidence that we are coming to a conclusion
01:28:54 and we'll be able to finalize it soon. Okay, so for the this next group, for the 25 percent and
01:28:59 10 percent tariff, steel and aluminum on that, how long until a decision is made on that one?
01:29:05 The entire, so what I'm trying to tell you is that the review on the tariffs takes place in
01:29:10 its entirety, so that when we conclude the process, you should see an entire package.
01:29:17 So all of that would be included together at some point. The Wall Street Journal reporting today
01:29:23 that it would affect about an additional 0.6 percent of the steel, is that accurate, not
01:29:26 accurate, or where do you think that number came from? They quoted just an administrative source
01:29:30 or an administration source on that, but I don't know who that would be, obviously.
01:29:35 I've not seen the article, Senator Lankford, but I will take a look and I'd be happy to respond
01:29:39 to you after I've taken a look. Okay, that'd be helpful, thank you. As far as new markets for
01:29:45 on the ag side of things, I know you're working through some of that trying to be able to help
01:29:48 existing agreements. Are there other new markets on the ag side that are pending?
01:29:53 Yes, so there's the work that we've done with India across 12 tariff areas where we've opened
01:30:01 up opportunities for tree nuts, cranberries, this is a little bit of a test for me, I think it was
01:30:08 blueberries, turkey, duck. We'd also worked on pork earlier. With Japan, we've opened up with
01:30:17 the beef safeguard. We've got ethanol, more ethanol going to Japan now too. Jordan just
01:30:21 dropped tariffs on eggs. Colombia, they just changed course. They've reopened to our poultry
01:30:27 exports. Bangladesh dropped cotton fumigation barriers which will allow us to ship more
01:30:33 cotton. Ghana has opened up access to meat and poultry as well. And this is just kind of a top
01:30:39 level. I've seen some of that on the tree nut side. The chairman and I have had this conversation
01:30:44 before talking through different aspects of how do we actually help individual companies make
01:30:49 complaints, especially against China. We have companies in my state that know that steel or
01:30:54 other products are being dumped into the market. For them to be able to initiate the challenge on
01:30:59 that has been burdensome. As you know, they've got to get with a foreign entity to get them to
01:31:03 show their paperwork as well. It's very difficult. It's an area that we need to be able to work
01:31:08 together as a committee. The chairman and I have talked about this and we need to be able to get
01:31:11 some solutions for those companies to get a solution. The time of the gentleman's expired.
01:31:14 There has been an awful lot of collegiality here in the last few minutes and I want to see
01:31:20 if it would be acceptable, Senator Brown, we'll let Senator Casey go next. And if we could,
01:31:27 among colleagues, say Senator Casey, Senator Brown and Senator Cassidy. Is that acceptable?
01:31:33 Great. Senator Casey, thank my colleagues on both sides for all the patience. Senator Casey.
01:31:38 Mr. Chairman, I want to thank you for that. My colleagues also want to add Senator Whitehouse
01:31:42 to that. Yes. That chorus of charity here. Yes. But Ambassador Tai, I'll keep within my time
01:31:49 on a start by thanking you for your public service and your focus in leading the trade office
01:31:57 on a worker-centered approach to trade. I'm grateful for that. Just want to get one thing
01:32:02 on the record before I get into a broad question. I want to thank you for your continued commitment
01:32:08 to securing the full set of dairy export benefits that we worked so hard to establish in USMCA.
01:32:15 I encourage you to continue to exhaust all avenues to get China to fix how they are
01:32:21 administrating USMCA dairy tariff rate quotas, so-called TROs, in order to see the export gains
01:32:31 the agreement was clearly designed to deliver for our dairy industry. The status quo with
01:32:36 Canada on this front is simply unacceptable and I stand ready to support USTR's work
01:32:42 in securing fairness for Pennsylvania dairy farmers. So you and I have talked about this.
01:32:46 Just wanted to put that on the record. But here's the broader question. It's about Nippon Steel and
01:32:52 the potential acquisition of US Steel. My principal focus there is the high likelihood of loss of
01:33:02 union steelworker jobs in the Mound Valley of southwestern Pennsylvania to nonunion states.
01:33:08 But I also have a major concern, of course, about national security. In Pennsylvania,
01:33:14 workers in industry are all too familiar with how foreign actors seem to game the system with regard
01:33:21 to national or industrial subsidies, state-owned enterprises, the use of forced labor and more
01:33:26 to sell their products in the US market at unfairly low prices. Another way of saying all that is
01:33:32 China. China, China. Unfair trade practices like dumping have put far too many Americans out of
01:33:38 work. The practice serves to diminish the capacity of our industrial base. In the case of my home
01:33:43 state of Pennsylvania, Pennsylvania Steel risks our ability to adequately supply our infrastructure
01:33:50 and defense needs. Nippon's potential acquisition, the big concern among many, are its ties to China.
01:33:58 Senator Brown made reference to a recent report that is entitled "Forge Friendship, Nippon China
01:34:05 Industrial-Based Risk." I won't go into that, but Horizon Advisory was the one who put out that
01:34:12 report. We've already seen early indications of how these external influences in China can impact
01:34:20 robust trade enforcement here in the US. So I'd ask you about the dangers of that, of letting
01:34:25 a foreign entity, a foreign country, in this case China, determine the outcome of trade investment
01:34:32 or trade enforcement in the US. Senator Casey, thank you for raising this very,
01:34:38 very important subject. Now, I know that there is a CFIUS process that is ongoing and you haven't
01:34:43 asked me specifically about it, but I do want to be careful how I talk about this as well.
01:34:47 Just to note that, you know, I'm not going to talk about the CFIUS process subject to the
01:34:53 confidentiality rules. Nevertheless, I did want to really reflect to you that I hear what you're
01:34:59 saying overall in terms of, again, we've been to this rodeo before. And, you know, just maybe
01:35:07 taking a couple steps back and looking at it more broadly, I was talking to our chief agriculture
01:35:12 negotiator, Ambassador Doug McCaleb, who's sitting behind me, who grew up on a farm in western
01:35:18 Pennsylvania. And he was telling us about his uncles who were factory workers in the same
01:35:24 community and how their factory was bought by a foreign company. I didn't even bother to ask
01:35:34 which country, but just a foreign company. And that what happened to them, something that they
01:35:41 had happened to their neighbors and their friends as well, which is that after the acquisition,
01:35:48 the company moved the factory somewhere else and that that factory shut down and fundamentally
01:35:55 affected the landscape of that community, but also bit by bit the strength of our manufacturing
01:36:03 capability. So just keeping it at a higher level, I just want to acknowledge that these types of
01:36:11 transactions are actually things that we have seen for a long time and continue to live with
01:36:18 the consequences. And I think that that is something that we at USTR are very thoughtful
01:36:24 about. Ambassador, thanks very much. Mr. Chairman, thank you. Thank my colleague. And again, I thank
01:36:29 everybody for the collegiality. Senator Brown. Thank you. And thank you, Mr. Chairman. And good
01:36:34 to see you again, Ambassador. Thanks for serving our country so well. Communities like mine, I have
01:36:40 many of the same issues that Senator Casey does, especially sort of central Pennsylvania, west end
01:36:46 Ohio, of closed factories and jobs leaving town because of bad trade agreements and American
01:36:53 workers know how to compete. And I want to take off a little on what Senator Casey said about Nippon
01:36:57 and trade enforcement, the ITC decision, more and more people are saying could have come out
01:37:04 differently if US Steel had been part of a seamless, if you will, in steel industry in our
01:37:11 country, but they weren't. And that may have made that decision go the wrong way. That's why I'm
01:37:17 particularly concerned about that merger. I know Senator Casey's talked to the White House, so have
01:37:21 I talked to the economic advisors, talked to you about that. And we're counting on this administration.
01:37:26 I know the president's in Senator Casey's state today. At the USW, we know how Nippon didn't bring
01:37:33 workers to the table. Cleveland Cliffs, I'm not advertising for one company to buy. It's not my
01:37:38 choice, not my decision, but I'm advertising to one company not buy this iconic US Steel company.
01:37:46 So, but thank you for that. I want to talk about, if I could, and again, thanks Senator Casey.
01:37:52 Go ahead if you need to. I want to talk about what Mexico's doing with steel. In 2019, Mexico
01:37:59 signed a joint agreement with the United States promising to keep imports to historic levels. The
01:38:05 United States lifted the 232 tariffs. Mexico isn't sticking to their side of their agreement.
01:38:10 Steel products like conduit are surging. I'm hearing from Ohio companies about the demand
01:38:16 damage it's causing. I'm introducing a bill with Senator Cotton, Stop Mexican Steel Surge Act to
01:38:22 reimpose 232 and allow the administration to use quotas. Will you commit to holding Mexico
01:38:28 accountable to protect American steel workers? Senator Brown, my team and I are absolutely
01:38:34 working on this and this is something easy for me to commit to every single day. Thank you.
01:38:40 One last question. Now is not the time to let up on countries like Mexico and China. The
01:38:46 administration must keep the 301 tariffs in place and increase them where necessary in areas like
01:38:54 solar products and steel to address China's unfair trade practices and attempts to undermine
01:38:59 national security. I may be the only state that has major steel production and we have, for sure,
01:39:05 the only state with the largest solar manufacturer in the country in northwest Ohio, a different part
01:39:10 of the state. China's consistently demonstrated they will not play by the global rules of trade.
01:39:15 We're concerned about dumping electric vehicles. I know you are too. I know the chairman is. We're
01:39:20 concerned about steel. We're concerned about their cheating and circumventing and manipulating to get
01:39:25 ahead, targeting our manufacturing base. Just sort of an open-ended question, what do you plan to do
01:39:31 at USTR, Ambassador, to stand up to China and protect American jobs, especially in industries
01:39:37 like solar and steel? Senator Brown, thank you for your leadership on these issues and for being such
01:39:48 a clear and strong champion for our critical industries and their need to be able to survive
01:39:58 before they can thrive. At USTR, we have a lot of tools, obviously, section 301. We have a lot of
01:40:08 tariffs deployed. We are in the process of and final stages of a process for assessing how those
01:40:16 tariffs can be more effectively and strategically deployed with the goal in mind of more effectively
01:40:23 and strategically creating countermeasures with respect to the unfair practices that harm our
01:40:29 industries and our workers. On solar as well, I know that we have authorities under section 201.
01:40:37 We have been looking at all of our authorities and looking at how we can bring them to bear
01:40:45 to address this challenge of revitalizing an industry that we are on the path to having and
01:40:51 growing that we lost because of the inability to compete with unfair advantages from the Chinese
01:41:00 marketplace. Coupled with our climate needs, how do we reestablish American leadership in this field?
01:41:15 So we are looking at all of our tools. Senator Brown, I know you are one of the foremost leaders
01:41:21 in developing new tools as well. I know that you have bills out there, too. This is an area where
01:41:28 I commit as well to continuing to work with you to develop those tools that are fit for
01:41:35 the challenges of today. Most of our tools date back to the 1970s and the 1980s.
01:41:41 >> Thank you, Mr. Chairman. >> I thank my colleague.
01:41:43 Earlier, Ambassador Tai said that they have used the Brown-Wyden concept 22 times and we talked
01:41:51 about ways in which they could apply it to other areas as well. Thank you for all your leadership
01:41:57 and wonderful to partner with you. Senator Cassidy. >> Thank you, Ambassador Tai. I would
01:42:01 like to continue the conversation we had regarding shrimp a couple of days ago.
01:42:06 Just for table setting, a whistleblower has found unsanitary positions and rampant labor
01:42:13 abuses in the Indian shrimp industry. The Department of Commerce has put on countervailing
01:42:20 duties with rates of 3.89 to 4.72%. Now, I understand that CBP has a role in enforcing
01:42:27 forced labor designations, and we recognize that the USTR has put out the CVD.
01:42:36 My shrimpers are saying, my gosh, if I got to go to court to make this happen,
01:42:39 I'm going to be out of business before there's actually relief.
01:42:42 So if you were channeling, if you were speaking directly to my shrimpers
01:42:48 who are being put out of business by labor abuses and subsidies,
01:42:52 what can we, how do you reassure them, my gosh, this issue is going to be taken care of and you
01:42:58 don't have to spend millions on lawsuits? >> Well, I begin by pointing to you, Senator
01:43:03 Cassidy, and the fact that you and I have been talking about this has been literally one of your
01:43:07 highest priorities since the day we have sat in this formation. So you did share with me the report
01:43:17 on the abuses in this particular industry in India. USTR is part of the forced labor
01:43:24 enforcement task force that was created as part of the USMCA implementing bill, but it goes more
01:43:28 broadly. We sit on that alongside the Department of Labor as well as CBP. We can prioritize,
01:43:38 continue to prioritize the addressing of this particular issue. I think that with respect to
01:43:43 our relationship with India as well, that has been evolving in very important ways. I do raise
01:43:51 this issue with my Indian counterpart. It's not an easy conversation. We will continue to champion
01:43:59 this particular issue because I take your point, and I think that with respect to the logic of the
01:44:04 trade policy that we are advancing, it is to ensure that we can champion the survivability
01:44:12 and the opportunity to thrive for all of our industries and that no one is asked to sacrifice
01:44:17 themselves for someone else. So if the person, the shrimper watching right now, would say,
01:44:23 "Okay, out of all that, is there something in particular that we think will have an immediate
01:44:29 effect or will it be more lawsuits and more kind of cajoling, but it's hard to have something hard
01:44:36 and fast?" Senator Cassidy, it occurs to me that what we could do, hopefully fairly quickly,
01:44:43 certainly something we could do at USTR, is to try to convene with our partners at CBP
01:44:50 and also with yourself and have a session where we can really probe what our options are
01:44:59 in the very near term. I'd appreciate that. Because there's also a concern that WTO will
01:45:05 push the US to have a so-called pass-through consideration, that if the upstream is getting
01:45:12 the subsidy and selling to the downstream processor who has to freeze it to ship it,
01:45:16 that that kind of subsidy that they're giving gets buried within that transaction. But that seems,
01:45:27 if we're decreasing the price for the downstream guy to freeze and ship, it's still a subsidy
01:45:32 affecting our shrimpers, if you will. Let me take that one back with my team
01:45:38 and drill down on it a bit more. We are very, very vigilant when it comes to the WTO negotiations and
01:45:49 I appreciate the flag for you and I promise you follow-up. There's also a concern for my rice
01:45:53 people that they say that if it were not for Indian subsidies of rice that they would have
01:45:58 like roughly $850 million more in export. So if we can add that to the agenda, I'd appreciate that.
01:46:04 100%. That issue I know very well. Going back to steel and aluminum, we've spoken about
01:46:11 our proposal for a foreign pollution fee, which I've introduced with Senator Lindsey Graham and
01:46:16 I know that Senator Whitehouse has something similar on his side, in which we would put a
01:46:22 tariff relative to the avoided cost of environmental compliance with international environmental norms,
01:46:29 which would principally apply to China but also to other countries. Just your general thoughts
01:46:36 about that, because it's a little bit different than what you're negotiating with the Europeans,
01:46:40 but I think ours is more robust. I think the most important thing is it's consistent and I
01:46:45 think that progress you are making will help us with progress that we are trying to make
01:46:49 and I hope that vice versa can help too, that this can be a virtuous cycle. So we do know about your
01:46:55 legislation, we're very encouraged by it and want to continue this conversation with you.
01:47:00 I appreciate it, I yield.
01:47:01 Colleague, next in order of appearance would be Senator Menendez.
01:47:05 That'd be wonderful. I mean we've got colleagues all coming in and I think we better stick to the
01:47:16 order of appearance or we're just never going to get out of here. Senator Menendez will be next.
01:47:23 Okay and we only have a few other senators so I think we can get this done pretty quickly,
01:47:28 but Senator Whitehouse has been Mr. collegiality. So Senator Menendez.
01:47:32 Okay, Ambassador, I've continued to hear from many New Jersey businesses about the importance of GSP,
01:47:39 which Congress has unfortunately failed to renew since it expired in 2020.
01:47:45 That has cost importers in New Jersey alone over 182 million dollars and beyond the direct monetary
01:47:51 effects allowing GSP to lapse has undermined other parts of our trade policy. So Ambassador,
01:47:57 how does the lapse of GSP hamper our efforts to combat China's malign trade practices?
01:48:02 Well I suppose what I would say here is, you know, recalling that GSP is our foundational trade and
01:48:11 development program. GSP provides us with an ongoing program to support development of our
01:48:20 developing country partners and those are partners who almost all of them have very vibrant, strong
01:48:26 and growing relationships in trade with China as well. I would note that I spent some time with the
01:48:33 Ways and Means Committee yesterday and there was a lot of focus on GSP because they are marking up
01:48:38 a GSP bill today. The administration's position is to support GSP reauthorization of course with
01:48:44 appropriate updates on anti-corruption, human rights, rule of law, labor and environment and
01:48:52 also encourage Congress and the two committees to look at other lapse programs that are relevant
01:48:56 here too like TAA. Well I appreciate that. I look forward to seeing them do that and
01:49:03 for us to have an opportunity. In New Jersey, 94 percent of GSP tariffs paid since expiration were
01:49:09 for products that face section 301 tariffs when imported from China. That means allowing the GSP
01:49:17 to lapse, we've weakened the effects of our section 301 program. It's also cost us leverage in my view
01:49:23 in negotiating with our trade partners. So I see it as a key component of our trade policy and I'm
01:49:31 glad to hear that the House is moving. I look forward to being able to do that as well. Earlier
01:49:36 today we had a hearing in the Senate Foreign Relations Committee about the Indo-Pacific,
01:49:41 our challenges with China. And I think that having heard a whole host of hearings and
01:49:47 experts in this regard, there is a, I would say, a nearly universal consensus that as part of our
01:49:54 meeting the China challenge, we cannot do so unless we have robust trade agreements in the
01:50:02 Indo-Pacific. In trade agreements that ultimately need not just to uniformity of process and
01:50:10 certain standards but that create market access. If in fact that part of our China challenge,
01:50:17 which this Congress in a bipartisan way seems to be focused on trying to meet,
01:50:21 access to markets is a key part of it, when will the administration get to moving in that direction?
01:50:31 So Senator Menendez, I'll begin with what I wholeheartedly agree with, which is that
01:50:35 we should have vibrant trade negotiations and trade programs with our partners, our strategic
01:50:43 partners, and that those trade agreements should reflect our values. Now with respect to the
01:50:48 Indo-Pacific, I think that one of the challenges is particularly pronounced because of geography,
01:50:54 which is that so many of the existing supply chains have links in and through China. And that
01:51:02 for us, in order to bring an economic engagement program to the region that adds value for us and
01:51:11 adds value for our partners is really about supply chain diversification, as opposed to all of us
01:51:18 through these trade agreements further entangling ourselves into existing Chinese supply chains. So
01:51:26 I think that the key to how we do that is how do we develop programs within our trade agreements,
01:51:33 including on tariffs, that will help us to diversify and create parallel supply chains
01:51:39 that don't actually worsen the challenge that we all have. But we could do that through trade
01:51:44 agreements as well. We don't need to do it exclusive of trade agreements. All I'm saying
01:51:48 is that without market access, you have China, an economic behemoth right next door and neighbors
01:51:53 to all these countries. They will act in their self-interest, and their self-interest is an
01:51:58 economic one as well as a security one. And right now we only have one dimension that we seem to be
01:52:03 offering them in part. So I commend that to your attention. Finally, your 2024 trade policy agenda
01:52:10 states that the Chinese Communist Party's use of state-sponsored forced labor is, quote, "not just
01:52:16 an extreme form of unfair competition but a moral stain." I certainly agree with your characterization.
01:52:22 But closer to home, I want to remind you and my colleagues that the Cuban government
01:52:26 also uses forced labor to advance its political and economic objectives. I raise the Cuban
01:52:32 regime's forced labor practices in the context of Article 23.3 of USMCA, which requires parties to
01:52:39 eliminate all forms of forced or compulsory labor. It was reported last year that Mexican President
01:52:45 Lopez Obrador has been importing doctors from Cuba and financing the regime. These doctors are not
01:52:51 going voluntarily. They're sent by the regime, and our own State Department has listed it as forced
01:52:56 labor. Have you reviewed the applicability of USMCA's forced labor statutes on Mexico's decision
01:53:03 to host Cuban forced labor? Briefly, Ambassador. Yes, Senator Menendez. I think it's a trafficking
01:53:10 challenge as opposed to that forced labor import ban, which is about the products of forced labor.
01:53:16 But this is an important issue, and I'm happy to follow up with you on it. Next in order of
01:53:21 appearance would be Senator Carper. Mr. President, I just sat down. I'm going to yield maybe to
01:53:29 whoever's next in line. Next in order of appearance would be Senator Daines. Senator Whitehouse has
01:53:38 been wonderfully patient, but Senator Daines would be next. Right. Mr. Chairman, thank you.
01:53:44 Ambassador Tai, good to have you here this morning. I want to talk about agriculture for a moment.
01:53:49 It is our lifeblood of our economy in Montana. And then we also realize 95 percent of the world's
01:53:54 consumers live outside the United States. So our farmers and ranchers know very well that the access
01:54:00 to trade is absolutely essential to provide a future for Montana agriculture. The USTR is
01:54:10 charged with opening markets and creating new opportunities for American producers to compete
01:54:15 on a level playing field around the world. But frankly, as it relates to agriculture,
01:54:20 that's not happening. I'm concerned by this administration's unambitious trade agenda
01:54:27 and the growing decline in US ag exports. I'd urge you and your team to prioritize action to reverse
01:54:36 this very troubling trend. Ambassador Tai, in fact, in the last fiscal year, ag exports declined
01:54:44 by more than $17 billion and are forecast to continue to drop to a record low in the coming
01:54:53 year. That is unacceptable. Just met with some of my ranchers this morning from Montana,
01:55:01 and they're talking about the soaring prices, the rise in input costs, the same time commodity
01:55:09 prices remaining volatile. Our Montana farmers and ranchers need expanded access to these critical
01:55:15 foreign markets just to stay afloat. The current trade deficit is unsustainable, and corrective
01:55:22 action is necessary. My question, Ambassador, is what specific actions does the administration
01:55:29 plan to take to reverse this widening ag trade deficit? So, Senator Daines, I actually wanted
01:55:39 to start by saying to you that we actually have something to celebrate, which is in my confirmation
01:55:46 hearing, you impressed upon me how important pulse crops and the pulse crop producers are in your
01:55:54 state. And just in the last year, we've been able to achieve improved market access for lentils and
01:55:59 chickpeas to the Indian market, a market that's been very, very challenging for us. So, I wanted
01:56:05 to begin there with a positive and to acknowledge that every one of these conversations makes a
01:56:10 strong impression on me, that it is a strong and important part of the work that we do at USTR.
01:56:15 Yeah, and I, you know, and thank you for that progress in pulse. We're one of the leading,
01:56:20 we've been the leading pulse crop producer in the United States, and access to India is very
01:56:25 important for them. Thank you. Super. So, from there, you know, I want to address your points
01:56:31 on the ag trade deficit. We have run deficits before in the past, in the recent past. It happens
01:56:36 from time to time. Part of the factor is a strong US dollar, but also really, really strong consumer
01:56:42 demand here in the United States. That said, you and I have absolutely a shared priority in terms
01:56:48 of the work that we want to do to continue to boost US ag exports. In fact, even with the
01:56:56 downturn last year, 2021, 2022, and 2023 were record-setting years for US ag exports at 173,
01:57:06 197, and then 179 billion dollars. And I think that the drop even for 2023 reflects growth from
01:57:15 2021 numbers. And again, I know we've been through a pandemic, so everything about the global economy
01:57:20 is a bit more volatile than we would like. That said, you know, for your state as well,
01:57:25 we have opened up Japan for more beef by expanding that safeguard. Japan, we also
01:57:34 have allowed for US producers to capture up to 100 percent, that's the entirety of
01:57:39 the Japanese ethanol market. We've just gotten Jordan to drop tariffs on eggs, Colombia for
01:57:45 poultry, Bangladesh for cotton across the board. Our focus is to score those singles and doubles
01:57:51 that we can do with more agility, faster, with more effective results for our farmers and producers.
01:57:58 And again, I know that we're going to have differences of opinion, but I just want to
01:58:02 reinforce how important our farmers are to us, from the large farmers all the way down to the
01:58:07 small family farmers. Thanks for the answer. I wanted, before we wrap up here, my time,
01:58:13 talk about TPP for a moment. I've called on our presidents, both parties, Republican or Democrats,
01:58:19 to re-engage on the Trans-Pacific Partnership to boost the American economy through fair trade
01:58:25 with partners. I think a very strategic part of figuring out what to do about China in the
01:58:31 Indo-Pacific. This should be a priority as China advances alternative agreements in the region,
01:58:36 now without the United States. Here's my question. Does the administration have any plan
01:58:42 to prioritize market access agreements and enforce existing agreements in the Indo-Pacific?
01:58:47 Let me put it this way again. This builds off my answer to Senator Menendez, but this is my
01:58:52 answer to you, which is where we do agree. I do agree that it is important for us to have a robust
01:58:58 trade and economic relationship with the countries in the Asia and Indo-Pacific.
01:59:02 The focus, I think, whether it's market access or other rules aspects of trade agreements, is
01:59:09 how do we bring a program to our partners that will help us diversify our supply chains and make
01:59:14 each other more resilient? I think that that is the key question for how we develop a program
01:59:20 that necessarily will look different from TPP, especially around those tariffs, but how important
01:59:26 it is for us to do that. Thank you. The time of the gentleman has expired. Senator Carper is next.
01:59:30 Thanks. Welcome. It's great to see you. Thank you. You have a hard job, and you knew that when you
01:59:41 signed up for it, but thank you for taking it on, and our thanks to the folks sitting behind you
01:59:46 who are part of your team. As you know, the pandemic highlighted the fragility of global
01:59:54 supply chains and the importance of medical innovation for our national security.
01:59:58 I applaud our President's recent efforts to shore up supply chains across industries,
02:00:05 and the U.S. trade reps request for public comments to inform new actions on supply chain
02:00:12 resiliency. Strong and diverse supply chains with our allies are vital to ensuring that
02:00:19 medical supply chains are resilient in the future and ensuring that Americans have access to the
02:00:26 products that they need when they need them. I was pleased to see that your office will explore
02:00:31 tariff and non-tariff negotiations with the European Union and the United Kingdom as part of
02:00:37 its work plan in 2024. Europe has been a historically important partner, as you know, for
02:00:45 medical supply chains, and it is clear that there's more work to be done to strengthen
02:00:49 those relationships with our allies. My question, do you agree that initiatives focused on
02:00:56 eliminating tariff and non-tariff barriers to goods like medical products should be one tool
02:01:02 in our toolbox to promote supply chain resiliency with our allies around the world?
02:01:10 Senator Carper, was your question, I'm sorry, I missed it the entirety. Do I agree that tariffs
02:01:15 can be an important tool in enhancing supply chain resilience for medical products?
02:01:22 Let me just repeat it verbatim, Lorraine. Do you agree that initiatives focused on eliminating
02:01:29 tariff and non-tariff barriers to goods like medical products should be one tool,
02:01:37 one tool in our toolbox to promote supply chain resiliency with our allies around the world?
02:01:43 I think it could be, absolutely, and we are looking forward to hearing from our stakeholders
02:01:51 on that specific question with respect to the Federal Register notice exercise.
02:01:55 Second question. In February this year, the American Civil Liberties Union, along with
02:02:01 Freedom House and a number of others, advocacy groups as well as academics, sent a letter
02:02:08 expressing concern with the United States decision to withdraw from the key digital
02:02:14 commitments at the World Trade Organization. That letter outlines the impact of digital trade
02:02:20 across sectors and the importance of ensuring that the United States has a seat at the table in order
02:02:25 to help write the rules of the road, both for creators and small and medium-sized businesses
02:02:31 that must adapt to the changing digital landscape. Here's my question. As you work with our friends
02:02:38 in the White House and other agencies to develop the United States position on digital trade,
02:02:44 can you commit to us to working with a broad group of stakeholders as well as U.S. creators
02:02:50 across industries to build out the United States posture on digital trade commitments?
02:02:56 Absolutely, Senator Carper, and it's something that we are already doing. But yes, I know that
02:03:03 commitment is very consistent with our approach, which is to ensure that what we are calling
02:03:08 digital trade policies on data in particular, data flows, localization, storage, source code,
02:03:17 reflect the perspectives and the equities of all of the American economy. So clearly,
02:03:25 the biggest of the big, big, big companies, but also smaller ones that might still be big
02:03:30 companies, smaller companies that are struggling with access to data, computing power, are citizens
02:03:37 who many of you are championing in terms of asserting and creating rights for them
02:03:44 on their data privacy, on securing where their data ends up, what rights they have,
02:03:52 their intellectual property rights as well. So I think this is an opportunity for me to assure you.
02:03:58 I also am looking for robust engagement with the technologists out there, the people who are
02:04:05 actually innovating and who are actually making use of the data and understanding what's happening,
02:04:12 including with data brokers. I know that the chairman has been lead sponsor on a data broker
02:04:20 bill that addresses people and women's health data in particular. Those are all aspects we
02:04:27 want to make sure are informing our approach to the development of trade proposals.
02:04:32 Yeah. Last thing. It's not a question, but I'm going to ask you to answer here. But I'm going
02:04:37 to ask you for the record to describe how the administration is working to appropriately use
02:04:42 trade tools and work with our trading partners to address climate crisis in ways that foster
02:04:47 job creation. I'll ask that for the record. Thank you. And thanks so much for your service.
02:04:51 Thank you for being here today. Thank you for your testimony. Thank you.
02:04:53 I thank my colleague. I just want to recognize all the remaining members. Just
02:05:00 on this point with respect to digital, I feel strongly that keeping these markets for digital
02:05:07 free and open and fighting these sleazy data brokers are not mutually exclusive. We can do both.
02:05:13 Senator Young. Thank you, Chairman. Ambassador Tai, it's good to have you before the committee.
02:05:19 I'm going to continue to pull on the thread that Senators Carper and Wyden have as they've
02:05:26 emphasized the importance of digital trade to our country, to our national security, to our people.
02:05:33 I think not everyone associates the state of Indiana and the industrial Midwest with
02:05:38 digital trade and the importance of digital trade, but they should.
02:05:41 This is a potential opportunity for countless Hoosiers to lower costs, especially something
02:05:50 top of mind at a time of inflation concerns. This creates new opportunities for consumers
02:05:58 and workers alike. It's an opportunity for us to advance our global competitiveness.
02:06:03 Increasingly, service industries and IT-related industries are an important part of Indiana's
02:06:13 economy and much of the rest of the country's economy. I happen to believe, and I think our
02:06:19 committee has demonstrated on a broadly bipartisan basis, that digital trade is increasingly
02:06:25 important to our country. At this moment in history, however, our government has not
02:06:32 acted as though it's as important as this committee seems to believe.
02:06:37 Under your leadership, USTR is diminishing our role in defending open digital trade rules,
02:06:45 to put it pointedly. Can you elaborate, Ambassador, on whether there was consultation
02:06:52 with the International Trade Commission, the White House Council on Economic Advisers,
02:06:58 the National Economic Council, or other national security agencies before deciding to scale back
02:07:04 our advocacy for open digital trade rules? Senator Young, good to see you. I agree with
02:07:11 you that digital touches all of us and is critical to all of our lives. That's why it's so important
02:07:19 to connect the conversation that we've been having in digital trade with everything else. Yes,
02:07:24 there is a lot of consultation that happens in this administration. We consult with each other
02:07:30 all the time. With respect to these provisions on digital trade, which are of such importance
02:07:37 and focus of this committee relating to data flows, data localization, storage, and source code,
02:07:44 yes, robust interagency conversations began or really heightened in the early parts of last year.
02:07:52 So what was the rationale provided by these national security bodies since they were consulted?
02:07:57 Were they supportive of this decision to scale back US advocacy for open digital trade rules?
02:08:07 So I'm going to quibble with you on your characterization of what we did because I
02:08:12 certainly don't see it as scaling back. I see it as upgrading and advancing our conversation about
02:08:18 what digital trade means. When we talk about digital trade, it's really an extension of
02:08:24 talking about e-commerce, which is how we thought about these issues 20 years ago.
02:08:29 The world is vastly different. The level of sophistication in the world of technology,
02:08:36 and frankly, in the public policy debate, is completely different now. If you look at the
02:08:42 provisions that are in question relating data flows and data localization, let's just start
02:08:46 right there. They're good signaling language around free flows of data and prohibitions on
02:08:55 data localization. The challenge is that it's kind of defining where the companies and the
02:09:03 private sector can have free reign, and it really cabins governmental action, regulatory action,
02:09:09 into the confines of some exceptions. One of the serious concerns we have at USTR is because we're
02:09:16 also trade negotiators. We're also the trade litigators. We bring cases. We also have to
02:09:20 defend. Those exceptions make us extremely nervous given the kinds of debate up here,
02:09:26 which are asserting the interests of Americans into this framework, which is not reflected in
02:09:31 the proposals. And I give you plenty of time to reframe this conversation. You're a negotiator,
02:09:39 in part. So what success can you point to that you have had in persuading your counterparties
02:09:46 to adopt rules and to accept those rules in strengthening our digital trade ties, and thus
02:09:56 giving influence to the United States of America in this digital economy of the present,
02:10:02 but especially of the future? Well, an important part of negotiations is also
02:10:07 talking and listening. And in our negotiations with the Europeans through the Trade and Technology
02:10:15 Council, certainly with the Japanese and the bilateral and other formations that we have,
02:10:21 including in the Indo-Pacific and those partners, what we see is that all of our friends and allies
02:10:28 are all in the process of struggling with the same types of questions we are having today around
02:10:33 privacy, around where you set the limits for who can do what with people's data. And so the progress
02:10:40 that we are making is in advancing towards more updated proposals. And you're right. Our proposals
02:10:48 might not be the same as the Europeans, but we're all facing the same challenges. So we don't have,
02:10:53 I think it's fair to say, I'll close here knowing that my time has already expired.
02:10:57 We don't have any outcomes yet. I understand that can be the case. Talking and listening has been
02:11:05 the outcome. I know that sometimes I would regard that as part of the process before you get an
02:11:10 outcome. We're almost at the end of the administration. You've been years in office,
02:11:16 and I would hope that we would have had an outcome. It's not always realistic. I think
02:11:20 that's a fair way to end it. I look forward to working with you. Yes, thanks.
02:11:24 Time, gentlemen, has expired. Senator Whitehouse.
02:11:26 Thanks very much. Welcome, Ambassador Tai. I think we're in a happier situation with respect to the
02:11:32 CBAM than we have been in past conversations. So I'm very pleased about that. And I would like to
02:11:41 ask, first of all, if you read John Podesta's remarks to Columbia University.
02:11:47 I did have a chance to see those before he delivered them.
02:11:50 Are you a part of that Whitehouse Climate and Trade Task Force?
02:11:53 I asked Mr. Podesta the same question, and the answer is yes.
02:11:57 Do you know who else is? I do not know that yet. I haven't seen the list.
02:12:02 Can you take a question for the record to fill me in on the status of that task force and who's on
02:12:08 it? I would be delighted to. I appreciate that. Any idea when I might get that answer?
02:12:13 QFRs, I think, are due soon. Very good.
02:12:16 I'm very interested in finding out where we are and where it's going. I thought that the
02:12:24 speech that John gave was very positive, and I think it reflects, first of all, the firm
02:12:35 response of the EU, joined by the UK, that they are not going to accept weak alternatives from
02:12:42 the U.S., which is something that I think is terrific, because that helps improve our
02:12:46 negotiations here in Congress. And I want to thank particularly Senator Cassidy for his
02:12:52 very productive work with Senator Graham on a Republican counterpart to my border tariff bill.
02:12:57 They don't align yet, but you start with your position and then you work together. So
02:13:03 I'm very appreciative of what they have done, and I'm very appreciative that the position of the
02:13:09 White House seems to have moved in this direction. So I'll make that statement.
02:13:14 The other thing I wanted to talk with you about is the loathsome ISDS process.
02:13:23 We are not putting ISDS provisions into any new treaties, but they exist as hangovers from past
02:13:33 treaties. I'm told that it's actually possible to remove ISDS from existing free trade and bilateral
02:13:42 investment agreements, and that you are looking at the best way to go about doing that.
02:13:49 Can you give me a progress report on that? But let me just elaborate for a moment
02:13:58 that I really think that there's something very evil about the entire ISDS mechanism,
02:14:03 and it's perhaps best embodied by the attack through the ISDS mechanism of the tobacco industry
02:14:10 on the little country of Togo. Togo had the nerve to try to control the packaging of cigarettes with
02:14:17 warnings about tobacco's known health effects, and they were sued by the World Tobacco Industry,
02:14:25 which has enormous resources at its disposal. Togo is a country of about 8 million people.
02:14:31 It has less than 5,000 miles of roads. Its annual budget is about 1.2 billion. It is in no position
02:14:40 to take on an international industry like that that can use it to, first of all, bully Togo into
02:14:48 submission, and then take that and leverage against other countries. In fact, the tobacco
02:14:53 industry even ultimately went up against Australia and got themselves tangled up in the complexity of
02:14:57 their effort, but that shows how evil this is. So the quicker we can get rid of that as a vehicle
02:15:03 for putting private interest over public interest and putting size and weight over virtue, the better
02:15:09 off we will be, and I'd ask for your thoughts on how we can remove ISDS from those existing
02:15:15 agreements and treaties. Well, I think we have a number of tools with respect to ISDS
02:15:21 that, you know, whether they're in bilateral investment treaties or they are standalone or
02:15:26 they're incorporated into FTAs, we're looking at this question actively right now with respect to
02:15:31 existing ISDS provisions. So you have no report on how they can be improved, but, you know, again,
02:15:36 this is one of those things where we're very, very interested in the views of members of Congress,
02:15:41 especially those who sit on the Judiciary Committee and are lawyers. Indeed. We,
02:15:49 the U.S. was responsible for pushing a lot of this ISDS nonsense into those treaties in the
02:15:53 first place, correct? I think that's absolutely correct. Yeah, okay. Well, Godspeed. Stay in
02:16:00 touch with us on the conclusions that you draw. I would add to my existing QFR request for any
02:16:08 further information you have on this that would be -- belabor the time of the committee but might
02:16:13 be useful to me and my team as we look to try to rid our trade agreements of this really noxious
02:16:19 agreement. Thank you very much and thank you, Chairman. Oh, and Senator Warren is arriving,
02:16:24 who's the champion of cleaning up the foul, toxic, noxious, and evil ISDS arrangements.
02:16:33 All right. We are heading into the home stretch here. And Senator Barrasso, Senator Cardin,
02:16:41 and Senator Warren. Thanks so much, Mr. Chairman. Great to see you again. Thanks for being here
02:16:46 today. You know, last November, the U.S. Department of Agriculture finalized a rule allowing fresh
02:16:52 beef imports from Paraguay. Serious concerns I have with this new rule. Given that Paraguay
02:16:59 has a history of foot and mouth disease, the last outbreak, 2012. Here in the U.S., we haven't had
02:17:05 a foot and mouth disease since 1929. You know, a hundred years. An outbreak would be catastrophic
02:17:13 to American cattle producers. The Biden administration has stressed the importance
02:17:17 of Paraguay as an ally. I'm just worried about placing one of our largest agriculture industries
02:17:24 at unnecessary risk. Number one cash crop in Wyoming, beef. U.S. Department of Agriculture's
02:17:31 approval process for Paraguayan beef was, I believe, questionable. Specifically, the Department's
02:17:36 Animal Plant Health Inspection Service relied on site visits from 2008 and 2014. So we're making a
02:17:44 decision based on a site visit, most recently 10 years ago. This means there are no recent in-country
02:17:50 site visits to confirm Paraguay's animal health claims. So, as U.S. Trade Rep, you know, how are
02:17:56 you ensuring that the U.S. promotes science-based trade with our allies and relies on the latest,
02:18:02 most accurate information prior to granting market access? Senator Barasso, thank you so much for
02:18:08 raising this particular issue. It's something that we are tracking very closely and
02:18:13 tuning in with respect to the latest events here in the Senate, tracking what may happen in the
02:18:20 House and are in conversation with USDA. To your question, I get a lot of flack for not negotiating
02:18:29 traditional big FTAs. Nevertheless, it is really important for me to impress upon senators like you
02:18:36 from great agricultural-producing states that we value our farmers, big and small, and our ranchers
02:18:43 across the board. And what I want to highlight is in every single one of our active, ongoing
02:18:53 negotiations, whether it's in the Indo-Pacific, with Kenya, with Taiwan, we are actively
02:18:59 negotiating agriculture chapters that address this particular issue, especially around
02:19:07 science-based approaches to regulating food trade and agricultural trade. So, that's been a very,
02:19:15 very high priority for us. We're making very, very good progress with all of these partners. And even
02:19:22 outside of those types of negotiations, the commitment to science-based, transparent,
02:19:27 risk-based regulation is something we deeply believe in. Well, and I appreciate the concern
02:19:34 and the value that you place on our farmers and ranchers. I mean, my concern is science-based,
02:19:39 as you talk about how critically important it is. There hasn't been an on-site visit in 10 years,
02:19:44 and I would just hope that you would consider that as you move forward with that area. I want
02:19:49 to move on to the next, which is, you know, July of 2023, I sent to you a bipartisan letter,
02:19:55 bipartisan, bicameral, regarding Mexico's discriminatory policies toward American
02:20:01 energy producers. We urge you to pursue full enforcement action against Mexico. Mexico's
02:20:07 policies have violated the historic U.S.-Mexico-Canada agreement. Mexico continues to favor
02:20:13 their state-owned utility and oil and gas companies. These actions threaten more than $10
02:20:18 billion in U.S. energy investment. Regarding this issue, the 2024 trade policy agenda report says,
02:20:25 as of December 2023, the parties continue to consult on this matter. You're well aware of that.
02:20:32 So what concrete steps have you taken to resolve issues with Mexico's energy
02:20:36 policies that would protect American producers? So we went through a period of intensive
02:20:43 consultations and engagements with Mexico. I know the word consultation sounds polite.
02:20:49 They can be pretty heavy-hitting conversations that we have. I think maybe the most important
02:20:55 aspect of the work that we are doing on this right now, today, is with respect to our own companies.
02:21:02 We want to make sure that steps that we take are well supported by our companies, are coordinated
02:21:09 with them. And I think that just for purposes of this conversation, I'm happy to follow up with
02:21:14 you as well. I'll just put the emphasis there that we remain very, very engaged with our companies
02:21:19 around our strategy here. I guess final question, Mr. Chairman, just so we know the timing.
02:21:24 Why has the U.S. not requested a dispute settlement panel with relation to this?
02:21:28 It is one of the options that we have, and again,
02:21:32 something that we are talking to our stakeholders about. Thank you, Mr. Chairman.
02:21:36 I thank my colleague, Senator Cardin. Thank you, Mr. Chairman. Ambassador Tice, good to see you.
02:21:42 On March 26, the third busiest port in the United States was closed. A tragic
02:21:50 event causing six people to lose their lives and the destruction of the Key Bridge.
02:21:57 The Port of Baltimore was closed. It handles $80 billion of foreign commerce every year.
02:22:07 1.2 million containers, number one in roll off, roll on, whether it is auto or farm or
02:22:15 construction equipment, affecting the supply chains in this nation and globally. President
02:22:22 Biden committed the whole government approach to help Baltimore in getting the bridge replaced,
02:22:28 getting the harbor opened and taking care of the challenges. So my question to you, I'll be
02:22:34 meeting with our port administrator tomorrow. What can you do to help in regards to this tragedy,
02:22:42 in regards to supply chain, in regards to the return of the Port of Baltimore to full strength?
02:22:47 Tell me how you can help us. Senator Cardin, I'd like to begin first and foremost with
02:22:55 expressing condolences. Our thoughts are with the families and the loved ones of the workers who
02:22:59 lost their lives, the first order tragedy. Second, we are so incredibly, incredibly grateful for the
02:23:06 brave first responders who were on the scene and rescuers who helped to contain the immediate
02:23:13 aftermath. And we stand with the people of Baltimore and all those affected by this accident.
02:23:20 To your specific question about what USTR can do, let me say a little bit about what USTR has been
02:23:26 doing. Immediately, and again, I want to acknowledge the contributions of my fearless and
02:23:32 vigilant chief agriculture negotiator, Ambassador Doug McKaylip, who's sitting behind me. He leapt
02:23:38 to action immediately, especially with thoughts around how this tragedy would be affecting the
02:23:44 trade and agriculture trade specifically. And he's been the conduit for engaging with our
02:23:53 stakeholders and connecting them to the effort that's being driven by the NEC.
02:23:59 Second, USTR has been engaged throughout the interagency process being convened by the NEC.
02:24:07 The process has been, I'm glad to say, holistic, communicative, and timely. We remain in close
02:24:14 contact on a daily basis with relevant government authorities to ensure there's as little disruption
02:24:21 to the supply chains as possible. And we'll continue to stand ready to use additional USTR
02:24:27 tools when we're called upon to do so. And I want to just acknowledge President Biden's
02:24:31 been incredible here, including helping us preserve the contracts with the Port of Baltimore.
02:24:37 We recognize there's going to be some diversions as a result of the port not being open. We hope
02:24:42 it'll be open to about 75 percent of capacity by the end of the month and 100 percent by the end
02:24:47 of May. But there is a need to have the understanding of some of our international
02:24:53 players. And it seems to me that the USTR can play a role in making that a reality,
02:24:58 carrying out the President's commitment to help the people of Baltimore. So
02:25:02 we may be calling on you to do a few more things.
02:25:05 Senator Cardin, all of us are prepared to help you on the Baltimore issue and what you're dealing
02:25:12 with. And certainly the Finance Committee will be there. I appreciate that, Mr. Chairman.
02:25:17 It has been incredibly difficult. And I agree that our prayers are with the families of the
02:25:23 victims and the workers who have been dislocated as a result of the closing of the port. Twenty
02:25:30 thousand jobs, about $15 million a day, every day, the delay of opening up the port. But I want to
02:25:37 give a big shout out to the Coast Guard, the Army Corps of Engineers, President Biden. The
02:25:42 Unified Command has really been a unified command. I've never seen the cooperation that we've gotten
02:25:48 there and the progress that's been made. It is a nightmare to try to clear out the port.
02:25:53 The steel and concrete is mingled on the bottom of a 50-foot channel, and the engineers are
02:26:02 performing miraculous work. So I thank you for that. We've had tremendous outpouring.
02:26:07 And we'll be calling upon all of you.
02:26:11 Count on it. Senator Warren.
02:26:12 Thank you, Mr. Chairman. So corporations have long used secretive trade negotiations as a
02:26:20 backdoor cheat to try to undermine regulations and to trigger a global race to the bottom.
02:26:27 Now big tech is running this play. And one of the demands is blanket protections for the, quote,
02:26:36 "free flow of data," which they want to guarantee big tech companies' right to sell Americans'
02:26:43 personal information anywhere in the world. In other words, big tech wants to keep auctioning
02:26:49 off your data to the highest bidder, even when that means that your data makes it to the Chinese
02:26:56 or Russian government. Now, Ambassador Tai, as US Trade Rep, you have stood up to big tech's trade
02:27:03 agenda and to China's digital authoritarianism. Tech lobbyists would have us believe that their
02:27:10 data flows language will persuade China to abandon its surveillance state and to tear down the great
02:27:19 firewall. Back when China joined the World Trade Organization, supporters made exactly the same
02:27:26 claim, arguing that trade would transform China into a liberal democracy. Ambassador Tai, remind
02:27:34 me, did that happen? What has been China's track record on meeting its WTO commitments that it
02:27:42 made at the time and moving toward a liberal democracy? Senator Warren, this is one of the
02:27:49 greatest disappointments, I think, in trade policy over the course of the last 25 years.
02:27:54 I've had a lot of conversations with members of Congress on both sides of the aisle around
02:28:00 China's accession to the WTO, and their descriptions of how disappointed they are
02:28:07 in terms of their expectations is very deep. All right. So now big tech is making the same
02:28:14 claim that if we will just let big tech sell off our data wherever they want, China will become
02:28:21 a more open democratic country. You know, President Biden has not been fooled by this. In February,
02:28:27 he issued an executive order to prevent big tech companies from transferring huge swaths
02:28:34 of Americans' financial, health, and other data to China and other countries of concern.
02:28:41 Ambassador Tai, how would the president's data security executive order square with big tech's
02:28:49 demand for free data flows in all situations? And let me just ask, is this why you rejected
02:28:58 big tech's demands so that the U.S. government can take actions like the president's order
02:29:04 to protect Americans' data from adversaries? Senator Warren, the short answer is yes.
02:29:12 Both with respect to the administration's executive order safeguarding the security
02:29:18 of Americans' bulk data from all flowing into China and never coming back out,
02:29:24 but also with respect to all of the activity that's happening up here in the Congress. We saw
02:29:30 a data brokers bill move through the House and pass on a 414 to zero basis. We see the data
02:29:38 broker bill that has been introduced by the chairman and Senator Hirono, as well as a lot of
02:29:46 the other legislative efforts up here, again, to define the rights that Americans have with respect
02:29:53 to their data, as well as being concerned with the onward flow of that data to places that make it
02:30:01 unsafe for us. Yeah, and I very much appreciate your making sure that trade policy is not a way
02:30:09 to block appropriate regulations that Congress and the president are trying to put in place.
02:30:16 I want to hit one more issue, and that is the USTR's annual report listing foreign barriers to
02:30:23 U.S. trade and investment. Up until now, corporate interests have stacked this report with kind of a
02:30:30 laundry list of any other policy from any other country that they think somehow nips into their
02:30:39 own profits. But not you. You haven't fallen for this. This year, you refused to label common sense
02:30:47 tech policies from the EU, from Canada, and from other allies as trade barriers. And by the way,
02:30:54 those are policies that look a lot like the ones we're actively working on here in the United
02:30:59 States. Now, big tech is screaming that you aren't protecting them from these dangerous foreign
02:31:06 adversaries like Canada. Ambassador Tai, did you remove China's abusive data and intellectual
02:31:14 property policies from the trade barrier report? We did not. You did not. So you're still taking on
02:31:22 China's abusive digital policies. But big tech is throwing a tantrum, even though there is a clear
02:31:29 difference between our allies' good faith efforts to regulate and China's digital authoritarianism.
02:31:38 Look, big tech doesn't want to be regulated, period, and it hopes that it can use trade
02:31:43 policy to help insulate them from any regulation. I am glad to see that you and President Biden are
02:31:50 giving big tech's digital trade agenda the boot and instead fighting for the protection and
02:31:57 security of Americans' data. Thank you. Thank you, my colleague. Just to wrap up, and we'll
02:32:03 liberate you here momentarily, Ambassador, just on this question of technology policy.
02:32:10 I showed up in the United States Senate when only one senator knew how to use a computer.
02:32:17 That was Pat Leahy. And I decided then, it was one of the areas that I wanted to go in on,
02:32:25 and my horse was small business. Small business. And I put on this kind of prism that a big guy's
02:32:34 going to be able to take care of themselves. My interest is small business. So I'm very glad that
02:32:39 the White House is now working with everybody on this, the whole government approach. And
02:32:45 just so everybody knows, I'm going to be pushing hard that these policies like forced localization
02:32:53 are just poison for small businesses. There's just no way they can move ahead if they're going to
02:33:00 be paying for servers and all the rest. So we can have this discussion another time. You've been
02:33:04 very patient. We got a lot to do. And, you know, Ambassador, I think we started close to three
02:33:11 hours ago. Obviously, we feel very strongly about enforcement issues, trade barriers, and the like.
02:33:19 This is a challenge, obviously, to strike a balance on a lot of these, you know, issues. We
02:33:25 very much appreciate the shipbuilding 301 investigation. I get your point on how it all
02:33:31 worked and all the rest. Let's just play more offense. Let's just play more offense. That's
02:33:36 what you heard from the committee. After TPP, and you and I have talked about this many times,
02:33:43 Senator Brown and I reached out to pretty much the entire Senate and said, "How can we do two
02:33:49 things? How can we be fair and protect our workers and our businesses? And how can we open markets?"
02:33:56 That's why you heard all of us, you know, talking up here. So let's find some ways to advance this
02:34:02 kind of agenda. For Senators, questions for the record are due April 24th. Senator Cuepo,
02:34:09 do you have anything you want to add? With that, we're adjourned.
02:34:14 Thank you.
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