The committee will cut the committee will come to order. Today, we welcome ambassador , including or negotiations with china, japan, and u. S. He u. K. Participation in wto. We are pleased to welcome you back. Have been eager to consult with you and it has taken a while to get this hearing on the books. To the members of the committee and american public, the democrats are already engaged with you and and allows us to further the engagement. I commit to you as a half the past many months, continue working with you on nafta in good faith based on facts and a desire to make responsible policy. The opportunity we have to ove nafta we can ensure that there are protections respected and Affordable Access to medicines is for now and the future. All of this is too important to rush. Im not the only person making this point. It is consistent from the. Usiness roundtable i believe from working with you, wef a lot in common have a lot in common. With respect to a larger trade agreement agenda, a lot of activity. We have negotiated and renegotiated a trade agreement u. K. Hina, japan and the we are also hearing interest from switzerland and the republic of georgia and bilateral trade agreement opportunities for the on dates. Seeking toe. Egotiate reform outcomes administration also threatened to impose 5 caps on mexico. Quite concerned that these threats continue to be dangled over mexico and, u. S. Trade policy is an abuse of power and something i do not support. I commend you for trying to tackle some longstanding trade issues with china, any gains to the agendaect will be eroded. Most importantly, i think the administration is to think broadly and be honest about its policies and how they impact American Workers. We are supportive of your fromts to secure change china to level the Playing Field and investment. At the same time, we see tax policies, education policies, worker policies and border policies that undercut American Workers and make it more difficult for middleclass families. The committee is ready to stand with you for the benefit of all americans and now let me recognize the Ranking Member for an opening statement. For testifying. America has regained the title of the most competitive economy in the world, growing faster than experts predicted, wages are grown for the first time in a decade and American Manufacturing is back and for the first time in modern history , more direct investment is blowing into the u. S. Been is leaving. To grow the economy further, we need more customers. That is what free and fair trade can do. Present from has worked tirelessly to bring trade relationships into the 21st century and most important among them is the u. S. Embassy. It sets a High Standard in many crucial areas for america and additional trade customs, producing strong winds wrong to strong wins and make sure america receives the full benefits. Congress must approve the agreement to unlock these benefits. Every day it is delayed, america suffers. By fixing its shortcomings, they will grow americas economy, american jobs and higher wages. The longer it takes, our country will lose out on more jobs, or customers in a stronger economy. I look forward to working with you closely and achieving strong support for us quickly as possible without delay, strengthening our north American Economy will build momentum or other trade negotiations and first among these is china. Theres bipartisan agreement that chinas predatory trade theftces from technology is unacceptable. President trump is the first president to take china had on head on. The president is right to insist on a new trading relationship to fair, measurable and enforceable. China does not live up to the commitments, we must have a consequential response. I may not like terrorists everyonebut i and knows that china has been cheating for far too long. President trump is right to challenge them and insist on real change. While the tariffs are in place, need give relief to American Companies. Republicans are committed to working with need you and contio do so to resolve these longstanding issues. We are at a rare moment of time can have. S. And china trade that benefits all. China, we must allow for as many markets as possible for American Goods and services. They include japan, the eu, u. K. And potential new partners. We must also reform the wto to address nonmarket economies in meaningful ways to fix the overreach and ambitious negotiations with the countries that are ready to address the world changing climate. Technology, on the reduce Carbon Emissions around the planet and we expect you accordinglt with us to the requirements of the trade act of 1974. Let me conclude by noting on the path to another year of 3 growth, it is possible to achieve the goal. For workers finally seeing paychecks grow after years of stagnation, mainstream who feeds, farmers their families, lets move forward on our ambitious trade withoutnning with further delay. You. Ank all Opening Statements will be made part of the record. The committee has received a written statement and have five minutes to deliver oral remarks. Chairman,ou, mr. Ranking member and members of the committee, a pleasure to. Ppear before you today begin by noting that the American Economy is doing well. We are growing substantially faster than any other g7 country. Sinceed 5. 8 million jobs the 2016 election, notably 500,000 of those jobs are in manufacturing. Lowest in nearly half a century and has been for nearly 15 consecutive months. Hears,y to what one exports are growing. In 2018, it was the highest year in our history where exports on both goods of services and services. In 2018 were up over 2017 and 2016. Im pleased to present the trading policy report of the committee. Outlinedment recently the administrations trade president isthe troubled by huge and persistent trade deficits that the United States has with many countries. They are the result of many factors, faster Economic Growth and current his violations and some extent, tax policy, but they also partially result of tradable that are often times. Nfair to americans we are very much focused on changing these rules when they are unfair to American Workers and businesses. Renegotiatingded nafta and also have been ruling gs the eligibility around the world, actively engaging in talks with many countries, reviewing the roles and functions of the wto. They have been in active enforcing the existing trading partners and brought many wto cases. Have work with members on proposals to improve compliance with existing rules and engaged directly with trading partners under existing agreements. For example, we have resolved concerns with peru after requesting the first consultation in the trade promotion agreement. In addition, we have used section 3012 investigate unfair trade practices in china and believe it has been unbalanced and grossly on their to American Workers. After an exhaustive process, we put tariffs on certain products and prepared to put more in place of certain issues are not resolved satisfactorily. Finally, please to testify on the negotiation of the [indiscernible] many of the improvements have reflected republican and democratic members thoughts. It is the strongest trade agreement in u. S. History. It is the Gold Standard on the it will helpmy and to stop the outsourcing and manufacturing and return many jobs to the United States. Farreaching ever negotiated in a trade agreement. The agriculture chapter will will eliminate unfair trading practices. This is truly a great agreement and i look forward to working with members to make it even better. With that, i will stop. Forward to your questions. We will now move to questioning under the live minute rule. First. Down, recognized i was surprised when the president announced his intention to impose 5 tariffs immigrationer issues, particularly when you on the same day of the president s announcement. What is the legal policy rationale for imposing such tariffs and you think the president s threat undermines efforts to pass the new nafta . That would be yes, yes and no. Do i support it . Absolutely. Do i think it is more difficult to pass . No reason in my judgment why should. [no audio] i support the president entirely on that. We could use National Security based on the border issue with mexico . Im not an expert on that, but the answer in my judgment is yes. If you declared a national emergency, you could use it for that purpose. The phase and the consultation process must be driven by substance and not arbitrary deadlines. Assurances that you will give us the space and time to work out these complex issues. It is important that we get this right once and for all. Care to comment . All, i have worked with republicans and democrats from day one. 90 of members, ive had personal conversations with. By no means, a partisan approach and so that would be the first thing i would say. Speaker agree the i would say the bill has been public and we have been in negotiation for nine months, so i dontinto that, believe waiting nine months is rushing anything. I think we are in a position where the members know what they want. I know what the members want. It is a question of sitting down and deciding where the lines are. That is what i have been getting to for some time. Im very grateful for that. Asi said, all respect treated the process fairly and not surprisingly, has done this ok, bey eager to say able to say here, i will do this. You just have to get to that stage. I guess the final thing or say is getting this done sooner rather than later is in everybodys interest. It avoids the possibility of having something unrelated and there are tens of millions of jobs. Improvement in getting it over the finish line is important to the American People. Thank you. Shamefulk it is congress has turned a blind eye. Real people are suffering and it is Shameful Congress has time for congress p and take care of those kids. I think we can have Strong Border relationships, securing with mexico and pleased to see the white house negotiated improvements to security and now our job in congress to pass trade relationship. Let me start with china. Where are we with china . What are your expectations for President Trumps meetings and do you expect talks from which there is great substance. Top to start . Hose as you say, we had negotiations with china for this is extremely important. We have a very unbalanced relationship with china and one that risks the jobs of the future of america, so it is important we get the relationship right and do not go the way they have gone on, escalating and getting worse. Had negotiations for months and i think we were making good headway. At that point, negotiations stopped. I think it is in the interests of both china and the United States to have a successful agreement. The president says he wants an agreement if he can get one for america. He had a phone call yesterday and sent out a tweet that we would Work Together. I had a conversation with my counterpart on the telephone the next day and a half and i expect osaka and i him in expect the president to have the meeting. Are talking and going to meet. Objective thate you and the other members have and that is if we can resolve the issues in a way that improves this relationship, preserves the at a disadvantage, we have an obligation to do that. South china comes back, you are ready to engage . So if china comes back, you are ready to engage . We are certainly willing to engage. Issue, you to the have negotiated one of the most farreaching chapters that includes a number of labor provisions for decades and never achieved. This agreement is transforming the labor environment in mexico. It is truly transformational. What is the most important part about enforcement that this committee needs to know where. Hina is doing what is mexico the most important issue here that shows mexico are taking them . And will enforce say first, we have to acknowledge the fact that what mexico did is historic. And there is a sense that this is a normal thing to do. Bold, strong, labor reform. What they precise agreed to do. It is the view of labor and certainly our view that they implemented those things. The question for us is to make sure they actually follow through. I think theres every expectation that they will, but some procedures will make sure that in the years ahead we continue to follow the rules because the Current Administration will not be there forever. Dispute state to state settlement and standards they must meet. Having a mechanism in place is a good idea and eager to sit down with members with how we do that. Let me recognize the gentleman from texas. Lets thank you and like thank you and i thank you thank you. [no audio] are very familiar with the issues i have raised with you over a year and a half. At the top of the list is ensuring that nothing in this agreement handcuffs or limits congress in any way from addressing the problem of prescription price gouging. I believe in what you have told me personally and what you said yesterday in the Senate Finance committee, you share the objective of ensuring the agreement does not limit the power of congress, but to address drug prices. Is that correct . I want to get it loud and clear. This is the first time i have testified before congress so i keep forgetting to turn among microphone. The answer is yes, i completely agree with that. It is very important that congress have what they want to isand i believe that something i can satisfy you and other members on. Indicated thato you want an agreement with reference to working conditions that are fully enforceable that you have made and it is more than just in name, but in practice. Is that correct . Yes. I tried to convince members this is an important part of the president s legacy and also an important part of my personal legacy. We have no interest at all doing something that we think is extremely important and transformative not just for mexico, but a huge effect on the United States and the last thing that either of us want is to yearshis disappear in six when we walk out the door. This to be something in perpetuity. , with regard to those issues concerning the environmental provisions and not wanting to see less protection that is afforded under the agreement, that was included with the these and, all of what a think other colleagues are seeking is truly enforceable provisions. Environmental enforcement like we had under the original nafta is not what we are looking for and reopening that aeement selfexecuting amendment signed by all three countries makes it clear this has the same status as the original agreement. And this echoes with the chairman has said about mexico. One of the strongest advocates i know of nafta from san antonio, a chamber leader, contacted me with a message, hold out until the administration commits no tariffs outside of the trade agreements. Usmca or nafta meaning nothing if we dont get an agreement. I know that what has been done , 25he administration percent tax on texans and americans generally is not necessarily a policy that you initiated, but it does undermine our attempt to reach an agreement on this. China, i know not within your direct way ibility, while huawei and millions imprisoned in china as indicated in a recent wall street journal study, those issues of forced lawr contrary to american is troubling and broader discussions that you are responsible for, they are issues that are raised with the chinese. We need a stable policy that considers all of these issues. Thank you. Congratulations ambassador, especially on the labor provisions. I think this is quite an accompaniment a congressman. An accomplishment. I have a question related to agriculture. In the new agreement, what can you say to those were concerned that the Enforcement Mechanisms are not going to be effective . Say we have the best agriculture we have ever negotiated. Members talk about it did ahe got asked, so we whole lot of fantastic stuff. Enforceables fully in the same way other things are. You have the normal state to state process. You have one where we can bring against canada or mexico if theres any violation, so it is fully enforceable. , theing from california number one agriculture state that a lot of people dont realize, but also a high tech theor, you negotiate premier hightech area in terms of agreements with protecting private property in technological patents. Do you want to talk any about that . What is new versus what we have seen before . Number one, there is no digital chapter in the current nafta. I remember those days better we did not have a clue about any of the stuff going on. I would say it is where theicans technology is in parade. He digital we think of that at as one side of the industry, but really something that goes across the entire economy. This is the most farreaching agreement. It has prohibitions on source code, algorithms, data flow provisions, electronic authorization provisions, access to public at a provisions. It has an enormous number which. Ad a pretty good chapter what everya, this is other trade agreement will be measured against. That andtulations on just to remind everyone, the time that nafta was first wasemented, the internet brandnew. I want to switch to china and you may find that china may be the only thing you get bipartisan agreement. None of us on the republican side like the tariffs, but we are well aware of the nationalistic or the threat that china poses to not only the united eight, but our allies and like you said, i just want to as it relates to how we are dealing with the administration dealing with make surei want to you dont get a deal with china just to get a deal. Like vietnam, other asian countries, especially you have been working on, i would like to see us focus on that and only theywith the chinese if are really going to stop their aggressive behavior. I really want to thank the members, republicans and democrats for their support for the president and for me. Winningerence between and losing is absolutely essential to the extent that it is viewed international and i think it says a lot about our political system. Thank you. Ambassador, thank you for being here today. As a member of the working group, i look forward to working with you and committed to negotiating in good eight. Which of the collaboratively towards the best possible outcome on a trade agreement that protects consumers and creates jobs. I hope you will continue to work with democrats and not rush through a bill. Strong labor laws in the show are good for American Workers and create a level Playing Field. Mexico has passed landmark labor reform, but will take years before real change to take place. Im interested in how you will judge progress in both . Hortterm and longterm first of all, i made the point that whatever the that what they did was absolutely historic. What mexico has agreed to do is have secret ballot votes on all collective bargaining agreements of which there are 700,000. There is an enormous undertaking that they have agreed to do. Negotiations and really we have negotiated this not only with democrats and republicans on the committee, but also organized labor, we have decided recentr years was a [indiscernible] they have to have a series of votes in four years. That requires allocation of resources and Capacity Building which we should be part. In various areas, you will have actual benchmarks. Pass umc a andto the effect would be dramatic and negative. But, actual and smarts like getting the votes on that. Number two, i expect to have a level of monarch king monitoring and i want to work on what those levels will be. I dont think we should start with the proposition that leadership in mexico does not want to enforce it. I have to assume they want to do the right thing and the final it isi would say reasonable to say we have a process where outside people have an obligation and in this labor to organized come in and say heres a problem and we see it through this or that facility and something has to be done. I think there are real ways to make sure. It is tough. Help withou for your regard to one placement one placement can you tell me what steps canada has taken or planning to take to apply with the agreement and as you know, the Wine Community has taken a terrific tariffs on of the china. Can you tommy me what the administration is doing to bring this dispute to a successful conclusion . We are at a disadvantage when competitors are paying 0 . Number one, we have specific industry andom our we resolve them. Are they complying . They dont have to comply until we passed this law. Law,inute we passed this this is like a false promise. We will go in september. Theres Nothing Better than napa wine in july. It is just perfect. In any event, i fully expect to you know in the course of the British Columbia thing, wto with respect to china, i understand they have retaliated and those are things worked out if we get a deal. If we dont get one, then we have to figure thank you, mr. Ambassador. I want to remind members i want to make sure everybody has a chance to inquire before votes are scheduled at 1 00. We need to be fast eddie is in observing the fiveminute rule. Buchanan thank you, mr. Chairman and mr. Ambassador. Thank you for your outreach to both sides. I want to talk about the cost delay. Everybody thinks this needs to get done. The longer it drags on, the chances are more difficult. The u. S. International trade commission found, in a recent would addt usmca 167,000 170 6000 new american jobs and increase american wages, and concluded new labor commitments would increase wages of unionized workers in mexico by 17. 2 . Cost of delay, one impact what impact does that have . Do we have a timeline . If you dont have a timeline, you dont get anything done. You mentioned it has been nine months. Slow of my colleagues say, down, go and our pace, and i understand that but i think we need to have a timeline and the cost of delay, i would be interested in your comments. Would you please turn on your microphone, mr. Ambassador . Ambassador lighthizer the itc report showed the strongest result of any trade agreement we have are of we have ever entered into, and the midpoint was. 35 of gdp, and that didnt include some of the advantages which they thought were difficult to calculate. The highend of their approach, and they have language in the report which says they expect it would be close to the highend, is 550,000 jobs in more than 1 of gdp. This is a massive, massive effect on the economy and is it literally and it is literally in abeyance while we sit and talk, so it is having a real effect on real jobs and real wages and is something that is my top priority. I will do anything anytime, any member wants to meet on this. We other thing i would say, have had a level of uncertainty in our economic relationship with mexico and canada over several months, and that uncertainty has people stopping investment, there is a lot of real consequences to Business Uncertainty and i think it is costing people jobs and costing us Economic Growth. It is not a situation where there is no cost. Representative buchanan i want to focus on florida, specialty crops, fruits and vegetables, i have to go on the record, and our area at one point, the largest tomato growing county that i represent with seven packinghouses, we are down to 3. 5. There is a general feeling of unfair trade practices dumping. Every democrat and every republican, we are together in terms of our 29 members in the state of florida. Wet is your thought on where are and what we might be able to work aerms of having it little bit more fair for our farmers in florida . We haveor lighthizer an important issue in this area. Is either our first or secondbest agriculture export market, but we have a trade deficit in agriculture with mexico. We dont have a trade surplus. There is this view that the reason we dont is because of the seasonal fruits and vegetables you are worried about. I proposed a change in the agreement. It was not something in the final analysis that mexico could but i think there are ways to modify the current laws around and unfair around unfair trade. The current problem is that the current laws are not set up for seasonal products, it is the way the laws work, you have to have, you have to prove injury over time. I think we have to find some way to help those people, there is no question they are hurting. On the other hand, for mexico this is also a really important a 2, they would say billion industry. I think we have to find that sweet spot. It will be outside the context of the agreement, but clearly this is a legitimate concern. Cannon its ab big concern for farmers in florida and they create millions of jobs. Let me recognize the gentleman from connecticut, mr. Larson. Thank youtive larson for the ongoing nature of your work, mr. Ambassador. Question deals with nafta, or the mexico and canada agreement, and it seems to me from an environmental provision that some of the montreal protocols, most notably that of Climate Change, were left out. Can you comment on that . Many of us on thiscan you commee the need to address Climate Changes vitally appropriate vitally important to that ongoing relationship between canada and mexico. Ambassador lighthizer Climate Change is not dealt with in this agreement. The montreal protocol of course is, and we would say, directly or indirectly, all the multilateral environmental. Greements are covered the second thing i would say is that from an environmental point of view, this is the furthestreaching agreement ever negotiated by the United States government. Provisions on wildlife, ocean later, but youth ocean litter, it is by far the most farreaching trade agreement ever negotiated. And i think the combination of these provisions are going to have a real impact in this area. We are very proud of the fact we went out on a limb and did what we thought was the furthest you could possibly push in this area. Butbut as you say, climate chan, the president has a different opinion on Climate Change. Climate change is not something normally considered in a trade agreement and it is not covered here. Representative larson we just heard from representative thompson, and having the opportunity to visit his district and see the devastation that occurred from the wildfires that swept through california and a number of areas in this country, it seems in this day and age to still be in denial about Climate Change is quite remarkable. I will commend the administration and yourself for making sure the environmental would not be a sidebar agreement, but are part of the process. I think you articulated that pretty well. That there is no further opportunity to bring nafta more in line with the montreal protocols . Ambassador lighthizer the montreal protocols are specifically mentioned in the agreement. That is not a problem. Whichhe authority under we operate, says specifically we cannot take new obligations in the admissions area. Thehat is precluded by operating Authority Congress has given to me, so we are not going to do Something Like the Paris Climate Accord or something. It is specifically prohibited under the agreement. To make sure members are sufficiently happy that we are going to actually enforce, after i am gone, if everybody is comfortable, it will happen while i am here, but after i am gone, all of these environmental provisions is a legitimate concern and one that i specifically forward specifically look forward to working with you and colleagues on either side of you to make sure members are comfortable with that. That is a legitimate position and i endorse it. Representative larson we look forward to working with you, especially on the enforcement side, which has had gaps over the year. Thank you for your testimony. Ambassador lighthizer i have spent a good part of my career complaining about lack of enforcement in trade agreements. Let me gentle let me recognize the gentleman from nebraska, mr. Smith. Smith ntative ambassador, thank you for your presence here today, these topics are very important and engagement on the trade issues is vital. Let me begin by thanking the president for bringing down the 232 steel and aluminum tariffs on canada and mexico. I advocated for that. s mate u. S. Tr g. R. Is making that a reality. Been substantial progress in moving the usmca mexico. In canada and we cannot underestimate how important our trade agreements with our neighbors are for wrenching communities and consumers as well. No trade agreement is ever going to be perfect in the eyes of everyone, however, usmca is a needed modification of nafta. I encourage ratification in a timely fashion. The costs of delay are significant. Markets lost are not easily regained. Mers and ranchers lead ranchers need markets. I cannot emphasize enough to you how real the pain is in parts of our economy. I know you realize that. We all understand china is a bad economic actor and i am pleased to the president plans to meet with the chinese president next week. Engaging with china is a step in the right direction. Thank you for engaging with japan on how best to reach a successful trade agreement, and even while those talks continue, livestock producers face declining market share due to competition from nations which have preferential trading terms already with the japanese. We need to level that Playing Field. The current struggles of our bag producers are very real. Timely,work toward principled and Productive Solutions and sustainable, robust markets. Couldwondering if you reflect on the current progress of talks with japan . With allr lighthizer the issues in agriculture, and there are substantial ones, most of which predated this administration, but that we are trying to deal with, farm income has been a problem for a number of years, and you dump on top of it a million tons of rain and all of a sudden you go through really bad situation, to a crisis. The president is very concerned about this. I literally never have a meeting when he doesnt bring it up and i meet with him a lot, so it is on his mind and awful lot. The japan thing you mentioned, japan has been a good market for the United States in a number of products. It could be much better. They still have a state organized Agricultural Sector fairly higho have tariffs, but we have a fair amount of access, particularly in beef and other areas. Into tpphey entered and a secretary and a separate agreement with europe, we are going to be in a position where we are treated worse than our competitors, and europe but also mexico, canada and new zealand. So it is a big, big problem and one we have to take care of in a swift manner. The president has instructed me to get on this. I have had meetings, i expect to have another meeting with my japanese counterpart on the outskirts of the g20 next week. I had a meeting with him here last week and our staffs have met more or less continuously. We understand the nature of this problem and we have to resolve it, because if we dont, these farmers are going to lose that market because of nothing they did, just because japan gave more access to somebody else, and they may never get those markets back. And the japanese understand our position and im hopeful we will in themething resolved weeks and months ahead. There is in and norma cement of urgency and we agree with your assessment. Youesentative smith as look at 40 tariffs plus on u. S. Beef heading to japan, to reduce that is good for producers here but it is great for japanese consumers as well. If all countries would just keep consumers in mind, i think we would be in a better place. I know that is what you are working toward and i thank you for your time. Let me recognize the trade subcommittee chairman, mr. Blumenauer. Blumenauer i think the tone and nature of this conversation is encouraging. You have been involved in more meetings with members of this Committee End of congress probably then you can count or care to probably than you can count or care to. A variety of theories have been identified where we will move forward. The speaker and chairman are committed to being able to agreement, nafta 2. 0, so we can move with dispatch. Im hopeful the working group she established can start working with you within the week so we can drill down on specific things you mentioned. Our committee has been clear about four priorities we feel need to be strengthened. It is time to get down to cases. I welcome this overall view of the trade agenda because we cant just deal with nafta to point to. We have referenced what is going on with china, the european union, the enforcement of ongoing agreements and concerns about the wto. We can concentrate on strengthening existing relationships of people who are our partners, who in consultation with a number of us on the committee were confused. The canadians really dont think they are a National Security threat to the United States, and there have been some opportunities that have been people who share our values and concern who are our friends to be enlisted to help us, for example with concerns we have with china. You referenced farreaching provisions, i find it encouraging, i agree, some environmental elements in the nafta 2. 0, building on progress in the tpp end trying to strengthen it, offer something Going Forward. But as you mentioned, just dealing with what is going on with mexico, i believe they want to enact these reforms themselves but they have challenges. You mentioned 700,000 agreements that have to be renegotiated, plus no ones Going Forward ones Going Forward. Im hopeful one of the things where we can make processes helping mexico with implementation, and something not just based on who happens to be the trade ambassador at the moment, to give the sort of confidence that American Workers, unions and i think this committee want. I have appreciated your commitment to enforcement. You mentioned the environmental environmental consultation with peru, a deep concern of mine. Your predecessor caused me no small consternation that we seemingly did not move to stop illegal logging in peru, which withxplicitly prohibited mechanisms we negotiated in the peru freetrade agreement. With the night toward enforcement of environmental provisions in the future, can you comment about the significance of the environmental consultation and what that is going to portend in the foreseeable future . Thank you lighthizer for your comments and your leadership and those of your colleagues on this issue. The peru situation is a good study in why we have to negotiate our agreements, why we have to enforce our agreements. We brought two different action against them on illegal dumping, and they were going to renew reorganization they were going to reorganize their government. Insisting on our rights under that agreement, we had two or three significant victories. I dont want to criticize my predecessors, but i can assure you that this administration is going to move forward on all those kinds of things. You mentioned the big areas in the reel america, usmca. I can sit down with members i need to on the labor provision and come up with a decision the same day. I dont need weeks or months. In terms of coming to an agreement with members, i could sit down in half a day and work out labor provisions, work out the environmental provisions in half a day. We all know what they are. Im not on the other side, im on the same side. Representative blumenauer and i appreciate you working with dispatch. Let me recognize the gentleman from texas. Representative thank you, ambassador, for the hard work you have done on usmca. I would like to thank the group sitting behind you, staff from your office and staff from the white house, for their continued work on that. Cant remember an issue where there has been this level of involvement on a daytoday basis from that group. My district would also like to thank you for your renewed interest and reengagement with the chinese on that. My district relies on trade very much. Say a fewso like to president hanks to the and the country of mexico in their recent agreement that they had to settle this previous , and thank the government of mexico for its renewed efforts in trying to solve the crisis on the border. I think all of us see the Mexican Government is very serious about that, and it shows they are very serious about this trade agreement does well. As i travel throughout the world and meet with countries that are two tariffd in these agreements, we find a lot of countries that would like to sit down and begin to work out trade agreements with us, and one of those that i just recently visited with this sweatsuit visited with is switzerland. Onould like you to comment what the possibility would be for switzerland in countries like switzerland who see this as an opportunity for us to step forward and do something. I know President Trump met with the swiss president in the oval office not too long ago to talk about that. What is your assessment and the president s assessment of the possibility of that trade agreement . Ambassador lighthizer thank you for your comments about my staff. One of the real blessings of being the United States trade thats theives is, United States trade representative is, i have a group of people that are really, really good people, a small group that worked aroundtheclock on this reel , theya, on this usmca did the same thing on japan, they did the same thing on china, they did the same thing on your read the political people we brought in are really topnotch and the professional people who are there are every bit as good, and indeed when we announced the usmca, standing behind the president in that famous picture, famous for us, at least, and the announcement are mostly professional people, and they get on normas amount of credit. I have had people who literally sleep in the office at night when we are in the middle of these negotiations, and its remarkable for Public Servants to do that. Im pleased you brought that up. Otherare a number of countries where we have talked. Bout ftas it is a tpa process that will require consultation, letters, a lot of formality involved, and we are in the process of on alting with members variety of countries we have talked about. I think at some point we have to country,ta with a africa would be a model and then it would spread. We talked about tpp countries and that, so there are a lot of options. One country that also met with me is switzerland, it is something we are exploring. This, im asked about say to myself, tell me what more we are going to sell to you . I want to know why this is going to make somebody somewhere in america, some worker, some farmer, just a little bit richer. If it doesnt work that, if it doesnt do that, it is not worth my time because i have a lot of things to work on. Its something im working on right now. If you look at dairy, do you think you are going to sell a lot of dairy there . There are clearly people who want to do this, it may make sense, but im trying to decide who in america, what workers going to be better off if we do it right now. thanks for your efforts in lifting the 232 as it related to canada and mexico. That is helpful. Thanks for the progress you made on class seven dairy as it affects canada, significant as far as moving forward. Let me report back from wisconsin that the president s trade war he has decided to engage versus everyone, virtually around the grove around the globe, is having a damaging effect on folks back home, the loss of 50 of our exports and 50 of our market share going into china last year alone. Wisconsin,ry days in to celebrate our family farmers in the dairy industry. Every weekend i go home and talk to these farmers, and the fear i hear in their voices, the fear i see in their eyes israel. They are getting wiped out. We had record bankruptcies last year, to a day, three a day this year. The trade war doesnt have everything to do with it, but it is certainly piling on right now. And the efforts you are making with china right now, speed is of the essence. Many are hanging on by their fingernails. If the president is hoping to carry wisconsin next year, this is the worst way to go about doing it. They are losing confidence in him because of how they are being wiped out individually, in the state. I know you have ongoing negotiations with china, you also have it with japan. The unaware is a member of trade committee of any serious consultation of where those negotiations are going with members of congress. Is it your opinion that you and the administration dont need to consult with us on negotiations with china and japan . Ambassador lighthizer im surprised by that. I view myself as talking to members a good part of everyday, including you, congressman. Im happy to sit down or talk on the phone about these things in detail. Representative you are talking about oneoff conversations. There are requirements under tpa. If there is any change in our behavior, responsibility, relationships with china or japan, do you need to bring that back to congress for our approval . Ambassador lighthizer with respect to china, no. I dont think i will use tpa at all with china. I know you are concerned for the farmers, i understand that, the president has the same concerns and so do i, they are in a very bad way and it is something we have to deal with as soon as we can. I appreciate your comments and your work with me on usmca, and how passing usmca will be better and quicker for all those farmers in wisconsin. Representative let me move on. Ambassador lighthizer this agreement does more for wisconsin farmers than any trade agreement in history. Representative it seems we are stuck and each side is waiting for the other to make a move. What would be helpful coming from you and the administration, is a set of proposals to address concerns and feedback you are getting right now and the implementation of labor reforms in mexico, how far is that going to go . Something were detail from you would be helpful in moving the process along. The resolution with enforcement provisions in it, how do we ensure there isnt panel blocking as we move forward under this agreement, and that you are not resorting to 301, which would not go over well with members of congress . The tenyear exclusivity for biologics, how do you plan to address that . Especially in helping mexico with the limitation of resources and expertise in implementing labor reforms right now, Capacity Building that we could be in a unique position to help them with, a more detailed proposal from you and the administration of what that would look like and how we could feel more confident that this is actually going to get done, in light of the fact that mexico, with limited resources, are diverting a lot of time and attention to immigration resources now as opposed to how they can best implement the labor forms that they passed legislatively, but have a long ways to go to implement. Ilab, theissues, Agency Charged with enforcing labor agreements. The administration reduces their budget by over 80 . If this is a way to engender confidence from us that labor provisions will be monitored and will be enforced, it is sending all the wrong signals. Can you give us any assurance you will back the powers that be to get a commitment get back to the powers that be to get a commitment to properly staff can enforcet they trade agreements moving forward . Dontador lighthizer i know much about budgeting at the Labor Department. They have a Different Group that worries about that. I would say it is legitimate that we have to enforce this law and have the resources to do it. I look forward to working with the group the speaker put together to make sure that is the case, and with respect to usmca and labor, we have to make sure we have the right resources. Thank you for all your work during the negotiations. Kelly iative cant imagine the hours you and your staff put income and they are deeply appreciated. The entire committee feels that way. Its all was good to see you. , youur opening remarks talked about creation of jobs and regaining of jobs and what this is all about, because it is about america regaining market share. There is a saying that you cant forfeit the game and then cry because you lost. We have had 40 years of losing market share and sitting back, i wish these other countries would quit stealing our economy from us. The efforts you are putting forth right now really good. We all have different concerns based on districts we represent. Is thecern i have implementation of candidas homeshopping obligation that allowhat that will more Shopping Networks like qvc, a major employer in the district represent,ict i and im asking this question because our experience in the past has shown implementation and enforcement are not always perfect after trade deals are ratified by the parties. I have the privilege of representing so many different people, and the hardwood lumber people are concerned about their market. People are going to get a real visual display of this in a couple of weeks, the fireworks people. One of the oldest Fireworks Companies in the country is based there, and almost everything they use make these fireworks comes out of china. We are watching to see what we can do. One of the good things about this job is you get a chance to go around your district and talk to other members about their concerns. Man named with a bruce kinney who operates a company in new castle, pennsylvania, called blair strips steel. Blair strips steel goes back to the 1800s. Mr. Kinney and i were talking and i said, what is going on . What is being proposed with fair trade and balanced trade, give me your opinion. And he said, im going to tell you something. One thing i would change in all this, if i could, i wish we elected this guy 40 years ago, because we have been moved been losing market share for so long. And you knowing campaigns of her but he talks about what they are going to do for American Workers and how they are going to bring the economy back to life and we are going to take act our market share, and once you lose market share, you dont get it back, whats lost is lost. The years you put into fighting this fight is appreciated, but if you can a little bit expand on any of those things we can do when it comes to qvc and the ability to make sure we are getting fair treatment from homea when it comes to shopping network, and the fireworks, the lumber we represent, i know you are getting barraged, anything we can tell those folks back home what is going to happen . We atador lighthizer ustr and the president believes that we have a bad, unsustainable trade situation in the United States, over 800 billion in trade deficits, and it is not a result of economic forces for the most part. It is a result of subsidies and closed markets and high tariffs and people taking our technology, and for too long we have not done anything about it in the president says, no more, this is going to stop, and everything he directs me to do is to do that. Everything is designed to do exactly that. We want the United States to compete in a way that efficiency, hard work, innovation dictate results, not taking your technology, forking people take forcing people to give you this or that in order to work there, tariffs that were cooked in 70 years ago when developing countries are now billiondollar economies. There has to be a reset. The president wants to do a reset end is going to do a reset and we are going to keep working on it. On homeshopping, you worked with hasery closely and usmca provisions, we are going to enforce them. Your constituents will tell you they are not being forced not being enforced, you are going to call me, i will call my counterpart and say we will get this enforced. I have every confidence. Issues with china are complicated, it will take a while to work that out. There are people that have products like that, like fireworks, most of which come from china. I realize there are issues, but we have an exclusion process to work this thing out. Pasquarell mr. Ambassador, thank you for being here today. We have worked closely together and i would say without apology, you are one of the best negotiators since i have been 20 some odd years, to represent the United States of america. You are not the problem. Heres the problem. Key, as has been mentioned, and everything we do. And there is article one, section eight. Respect the role of congress in terms of commerce. Article one section eight is pretty darn clear. I know the white house is eager to finish a new nafta, trying to drive this thing across the finish line 100 miles per hour. But they werent last summer, by the way. The rightal deal in deal for America Needs to come under the speed limit. Overngress cant look every inch, we are not giving the green light. The president hen prematurely sent us the draft statement of administrative action for the new nafta, i almost got whiplash when he tried to implement tariffs about 15 minutes later. This erratic behavior does not help build trust. And i am not in the Behavioral Sciences right now, we will leave that for another time, but i worried the president will tried to jam us with an implementing bill the first chance he gets. We have yet to see this bill. I have a number of questions. To build trust, will you commit to coming back to our committee before you send us the draft of the implementing bill . Will you commit to do that . Ambassador lighthizer no. Representative pascrell without enforcement, an agreement isnt worth the paper it is written on. I have heard you say that yourself. A broken dispute settlement lingers like a fog, the congress cannot and will not be fooled again by fake promises. Promises fromt of the first nafta, they go from one side of the room to the other side. I e new nafta is proved is approved, it will last beyond the administration. We need a dispute settlement process that can be sustained for generations. That is one reason why i am skeptical of trusting the proposal to use section 301. I was dissatisfied with the response in february about declining to use section 301 to hold china accountable for labor or environmental issues. That is the main reason of outsourcing of jobs in america, it has been proved over and over again, there is a litany of data which shows that if we dont approach that problem, if we dont reverse that problem, these jobs will continue to move. We are fighting ourselves, mr. Ambassador. If you wont act there, what else will this administration . Urn a blind eye to yesterday, you told senator whiting you would do whatever it takes to address core enforcement concerns held by many members. Does this mean you are open to changing the text of the agreement . Mr. Ambassador . I dont i dontor lighthizer think its necessary to change the text of the agreement to meet the legitimate needs of the members, which i agree with. It as a general matter have a process, the speaker gave me a process, i will work with members the speaker has instructed me to work with and i will come up with a conclusion and that conclusion will be what it is, and im going to satisfy those members and do what is necessary to satisfy those members on things i think are legitimate, which, by the way, 99 i agree with them on walking into the room, as you know. Witho appreciate working you this year and last year on this process, congressman. Holden itive agree there are a lot of trade issues on the table. I want to agree with my colleagues who have given the ambassador prays for his ability and for his aptlynamed lighthizer big grade lighthizer brigade who is behind him, for their performance on these issues. You have a number of countries that want to engage with us. And i like the standard that you are setting. It is only worth your time if they can present a scenario where it will create more wealth and opportunity in the United States, for us to engage in a freetrade agreement. A couple on the horizon that i believe are worth your time is the United Kingdom, first and fourth most first and foremost. The president had an outstanding and successful visit to the United Kingdom a couple of weeks ago. I talked to a number of my counterparts there and they were all pleased with the meeting, the whole state visit went, and out of that state visit the president sent a clear message that we are ready and willing to do a freetrade agreement with the United Kingdom. Are progressing and developing on the political spectrum in the United Kingdom, it looks more likely there will be an opportunity late in the fall where they exit the eu without some sort of agreement that binds them to different standards and trade agreements with the eu that will preclude them from doing a complete agreement with us. Andpe that is on your radar there are sufficient members of the lighthizer brigade working on that, so we will be able to strike while the iron is hot by the end of the year to keep things rolling and perhaps, perhaps be able to effectuate an agreement before the end of this president s term. You can just nod in agreement. Ambassador lighthizer let the record reflect i am nodding in agreement. we haveative holding great opportunities with india. India is becoming a more important partner with the United States on the military front, there are trade opportunities, the president is going to have the opportunity to att with Prime Minister modi the g20 summit, and i believe before that secretary pompeo will be in india meeting with the Prime Minister before the g20. I hope you see that there are opportunities there and are prepared to extend the resources and time to talk through the difficulties we have. There are trade controversies, but there are great trade opportunities there. Maybe you can expand on what you see there as an opportunity. Ambassador lighthizer we have spent a lot of time worrying about india. It is a massive economy and is only going to get bigger and is a great opportunity for a lot of American Farmers and businesses. Having said that, we have a series of problems with them, things we have raised over months. We did a review of gsp and the president decided to take gsp away because we made literally no headway on the issues over months and months and months. And we are looking at a variety of other unfair actions that may provoke us to take some other kind, some additional action. Having said that, they have a new government, obviously the same leader but a new government. I have a new counterpart and i will talk to him in the next few days, and hope we can jumpstart and make some headway. But india has about the highest tariffs of any country you can imagine in the world. They have an economy that is very heavily regulated. They have created problems in the Digital Space, the agricultural space and regular manufacturing, in retail, just across the board. With theative Holding Election of a new Prime Minister, i believe he has more of a mandate and stronger hand to negotiate with us, a stronger hand trying to address problems he knows he has in his country. Aty are all coming on you one moment, and the lighthizer brigade is spread thin, but i believe there is a commitment with the new government to address some of the under address some of the problems they understand that they have. Davis iative certainly agree with the andlexity of these issues the negotiations, but overall, in real terms, the average, annual mexican wages are down downnd the minimum wage is 14 from prenafta levels, according to data transmitted by the Mexican Government to the oecd. By bank ofo analysis americamerrill lynch, manufacturing wage in mexico has stagnated since 2003 and is now. 0 lower than in china mexican nafta, automobile wages were five times lower than in the United States. Today, even as u. S. Wages stagnated, mexican auto wages are nine times lower. You mentioned secret ballot buts on existing contracts, what else do we see in the revised nafta that would reverse this trend . Confidence that the raise wages would in mexico . And if not, what would be required to raise wages . Raising wages in mexico is clearly essential to stopping the race to the bottom that has caused so much damage and so Much Movement of work opportunities, especially in manufacturing in the United States. Ambassador lighthizer thank you for that question. It goes to one of the most important aspects of renegotiating this agreement on why the president puts so much time on it, that is the outsourcing effect on our losing american jobs. What happened is exactly what you said. We entered into nafta in 1994, thee passed it in 1994, expectation was mexican wages were going to come up and they were googling they were going to become a Great Customer for the United States, and none of that happened. 25 years later, there wages were essentially the same or slightly down. A couple of things took place, in my judgment. There was massive devaluation of their currency and my guess is, if anybody here that devaluation would have happened, they never would have passed nafta. Never. It changed the whole nature of the agreement when there was a devaluation. Therecond thing is, developed in mexico a system of protection contracts, where basically a businessperson shows up, says im going to start a factory, sits down with a union would not recognize these as union leaders, but technically a union leader, they work out a contract, no workers involved, and 20 years later they are working under that contract with workers who have never said anything about it, no input at all, it was knows that it was negotiated before there were even any workers the system is called protection contracts at it has been very bad for mexico. For somebably good mexican businesses, and some american businesses, to be honest, but very bad for workers and very bad for our workers by extension. So what we have done in this agreement is, there is a variety of provisions to address this. This is not stuff we draft up. The previous Mexican Government put it in a constitutional amendment on the current government is vociferous about enforcing it. But you have labor courts now, the used to be a system where you couldnt even get an arbitration on how you were treated badly if you are a there is a whole system of government set up and it is one of the things members are talking about, lighthizer, make sure this happens, and that is legitimate, but you have a secret ballot vote on getting a union, getting rid of the union, collective bargaining agreements , existing and new ones, and if you do that i think over time the workers are going to assert themselves, and as long as we insist on enforcement of that, we will have the needed effect, we will get the promise and we will help to stop outsourcing. There are a lot of other provisions. I wont go on about stopping outsourcing here. The reason i ran my sonsress was graduated from college and it was apparent in 2012 that they did not have the same opportunities i had when i graduated from college. Do something i can about that, maybe i can help. I was worried america was no longer competitive in the world, that we sat on our hands for 30 years and watched our jobs go overseas, and the american middle class did not get a raise, whether on the vine, smaller, makes less money than it did 30 years before. All that has changed in the last couple of years. We are headed in the right direction. Wead this menu of things needed to do to make our country competitive again that i got from an economist at harvard named michael porter, and the top thing was tax reform, that our tax code was uncompetitive in the world and we had to fix that if we expected businesses in america to be able to compete. The next thing was regulatory reform. We have undertaken a lot of that. Two years ago we were told we would never see 3 gdp and now we have 3, 3, 3, 3 percent gdp, 3 unemployment, 3 wage growth, magical thing that hasnt happened in a long time. This economy is doing great. Finally the middleclass is getting a raise. But we can sit on our hands. Other countries are going to continue to compete with us. The next item on mr. Porters list was balanced trade agreements. Mr. Porter said 30 years ago we were so far ahead of the rest of the world that we could afford and balanced trade agreements, but we cant anymore, and i have told you over and over that one of the things that gives me the most confidence about this administration is the fact you have agreed to help us rebalance these trade agreements so that the American Worker at least has a fair shake. I think if the American Worker has a fair shake, he can compete with anybody on a level Playing Field. After that on his menu is infrastructure and mayorbased immigration, what other countries use, they use their immigration system to make themselves more competitive rather than chain migration that we have right now. All these are things we need work on. We had bipartisan consensus on this. To, even i have spoken democratic witnesses before this panel, have said this agreement is far superior to the existing nafta. Today, it would pass today. The question is politics and whether the speaker will allow vote to givellow a mr. Trump a victory before the election. I hope we choose the benefit of the American Worker over politics. Mr. Ambassador, i want you to take a message to President Trump from me. Tell him i very much applaud his competent, put hardnosed negotiators like you in charge of rebalancing our trade so that the American Worker has a fair shake. In thean get usmca done china agreement done, we can expect to have the 3, 3, 3, 4 the foreseeable future. For the foreseeable future. Tell the president South Carolina is behind him, we are rooting for him, keep charging. Sanchez the key to any trade agreement is enforcement, and unfortunately our track record is incredibly poor, particularly with regard to labor provisions. I was in congress for the negotiation of our agreements with Central American countries, colombia and peru, and the countries made strong promises about labor reforms they were going to make, and often made significant changes to their laws, and they call them sweeping, the best ever, the strongest ever. I cant tell you how glowing the terms were about how great their labor laws were going to be, and they even passed some of these great labor laws, but 10 years later the situation for workers in those countries remains dangerous and unchanged. Im deeply concerned we appear to be in the same position today with mexico. We justertion that if give secret ballot protections to workers that suddenly all the labor problems are going to magically correct themselves as a little pollyannaish. Appearedst past what to be at a historic reform of their labor and justice system, but Committee Staff just returned from a Factfinding Mission to investigate what implementation would look like in the coming years, and while there is some reason to be , reforming their labor system is a massive undertaking that is going to require years to implement, significant resources and Technical Expertise from outside experts. The new naftarned repeats the same mistake we keep making in our trade agreements. Necessary enforcement tools to ensure our trading partners are living up to the promises that they made before the agreement enters into force. Instead of repeating the same mistakes, we need new, creative monitoring and enforcement tools that provide the west with the leverage to ensure compliance ,ive and 10 years down the road because without enforcement the trade agreements are not worth the paper they are written on. So i am curious to know if you will commit to working with House Democrats on a monitoring and enforcement mechanism that we can write into that agreement. Mr. Lighthizer thank you, congresswoman. First of all, i have been called a lot of things, but i have never been called pollyannaish before. I just did it. I stand by it. Mr. Lighthizer i understand that. I am sure it was meant in the best possible way. No disrespect. On how hard you work on negotiating this. But clearly, just giving people access to the ballot for Union Elections doesnt cure threats of murder, threats of intimidation. These are common practices that go on. Mr. Lighthizer there are a variety of other provisions in here. Specific provisions against violence, which you just mentioned. Rep. Sanchez they are not ironclad. The question is we are greeted to have never existed in a trade agreement before. Rep. Sanchez but can we agree that there is no mechanism for enforcement yet . Mr. Lighthizer i dont agree place. At in the first in the second place, i am willing to sit down and work with members consistent with the way the members have asked me to do it, and also to push for enforcement. I agree with that, i think it requires it. It always requires changes in u. S. Law. Rep. Sanchez i will take that as a yes but you are willing to work with us on monitoring and Enforcement Mechanisms. I have several other questions. I have significant concerns regarding your stance on cba 230 , a provision which gives broad immunity to Technology Platforms from the harms caused by thirdparty content the distributed and profit from has become increasingly controversial. Last year, congress amended the law for the first time to exclude sextrafficking claims. Policymakers have been talking ,o other amendment to that law regarding either go oh. Sales, civil rights claims, or discrimination against certain political viewpoints. For over two decades, there was 230, and to get cda im wondering whether has been a shift. I fail to see how it is a trade issue. General concepts of civil liability are not discriminatory , and u. S. Companies are usually the dominant Service Provider in markets that dont have cda230. So i dont know how you can assert some Market Access reason and am wondering if you can provide me with some parity on that. As lighthizer i will do it briefly as i can. Number one, there was no effort to put 238 trade agreements for the past two decades because it did not exist in the past two decades. This is u. S. Law. I didnt write. It. The congress did it was signed by congress, number one. Number two, there are nearly know the we put in specific language to make sure there were no problems. The third thing i would say is very briefly, there is a whole updated digital trade chapter that takes care of all these issues and tries to reflect what is in the laws of the United States. This is thought to be a way that small Internet Companies can grow and use their advantages. Rep. Sanchez i thank the chairman, and i yield back. Chairman neal thank you, gentlelady. We will proceed to a recognition of committee members. A couple of things, just tried to go through a couple of these things quickly. Still getting, inbound concerns from arizona entrepreneurs and businesses on feeling that the are being put at a disadvantage because mexican businesses, canadian businesses would have access to our court systems. What can i say to them to make them feel better about the changes in the law . Mr. Lighthizer i guess i dont understand the nature of the problem. If there is in nature, if there , theyenial of treatment would get the benefit of ists. One of the biggest advantages the u. S. Has in the country is the legal system. If they want the benefit of the u. S. System, it is very simple, all they have to do is invest in the United States. So the responses dont invest here. Ico, invest mr. Lighthizer i am saying that when you invest in a country, one of the considerations you have is the political stability in the country. So we made a policy decision to roll back of the protections to encourage you not to do that kind of Capital Investment south of the border . Mr. Lighthizer know, the opposite. We made a decision not to have people not outsource their business is to mexico. Rep. Schewikert so forced him to go through the mexican system . Mr. Lighthizer if they are making their decision to put their investment in mexico, i am just saying that they ought to consider back. I dont believe it is helpful for being a border state, but it is what it is. Ustoms act as you know, i have a great inimus. T in de m do you think we need to do something in updating the customs act, or will u. S. M. C. A. Proxy . N as a mr. Lighthizer i dont know processing what you are referring to. I find it ridiculous that we muse these tiny de minium standards between canada and mexico. We negotiated, and i think it is ridiculous to me that would let them bring things in at 800, and we get to bringing things for 50 or 60 to their country. It strikes me as a crazy imbalance and i think it adds to the trade deficit. Rep. Schweikert i think republicans and democrats on that one were absolutely in support. Another thing that might be more in common with staff, there are a number of us who have had conversations about how in the future, how do we build a working group, or some mechanism to help you on a vision that would fix the inequities in the wto mechanisms, the timelines, and for smiths, is there a way that the u. S. Congress can bilateralxing these trade Enforcement Mechanisms . Mr. Lighthizer thank you for that issue. The wto is in my judgment, and in the president judging judgment, need of reform. I have worked with a number of members on that, i continue to. O that if the chairman wants to organize a group in the committee, i am happy to do that. I think it is really an important issue. It is extremely complicated. Schweikert mr. Chairman, on the that particular, that map it were the side project. That might be a worthy side project. Seasonality, regions of the United States fussing at each other. I know that some regions may been much larger, but please take into consideration a small state population like arizona, we also have california and ,exas, that seasonality particularly on tomatoes and things of that nature, as has been reported would actually hurt our industry well benefitin while benefiting othe. It makes a lot of our growers very nervous. Mr. Lighthizer i appreciate that. I am aware of that and ive heard from all members. Rep. Schweikert the last thing and this may be part of the thought experiment i know that we may start to build some open agreement with an african in parts of please, that consideration and thought i knew you have made a great tradeent earlier that agreement should be about maximizing Economic Vitality for the United States. I agree. But we have a country like tunisia, even though it is technically in north africa, they were the tip of the sps on shall we say tape of the spear, on shall we say, the revolution, the only country in the arab spring to develop a constitution. As a small country, i think that should be rewarded. , represented sure kurt. Thank you, mr. Chairman. It is a population of 327 million people. Canada is a population of 37 2lion people, almost a trillion economy which the United States and canada share, they are both mixed economies. Highly integrated. A high level of respect for worker wages, labor standards, and the environment. Mexico is a population of 130 million people, a 2. 5 trillion nafta, mexicans economy grew by a little more than 1 a year. The poverty rate is still the same after 25 years. And the minimum wage in mexico is five dollars a day, a little less than . 63 an hour, assuming workday. Hour as has been sent here before, trade agreements are worthless unless they are explicit and enforceable. Reading the best leaving the thef. T. A. Agreement, primary goal was integration of mexico with a highly developed high wage economy like the United States and canada. North American Free trade agreement was referred to as wage convergence. You are familiar with the maquiladora factory concepts, which was accelerated under n. A. F. T. A. , factories that do assembly and export owned by u. S. , japanese and european companies. They employ one million mexican workers. Significant to a increase in pollution and environmental damage along the northern border of mexico and the southern border of the United States, costing tens of billions of dollars each year to both governments. What if anything in the new agreement to replace n. A. F. T. A. To reform the maqu iladora factories, and the low wages the paid there, and the Environmental Standards that are not being enforcedthe re . Mr. Lighthizer certainly, i agree with your analysis. That would have a problem that we have not been, we did not see the premises that were made it n. A. F. T. A. Fulfilled, and we did not see them in a whole variety of areas. Adora process i believe was an attempt by mexico several years ago to try to industrialize and develop effectuating by taking advantage of nafta. I would suggest later that they tried to do the same thing 10 years ago, a similar kind of thing. What is being done to correct these problems, i would come back to what i said before, there are a lot of very specific labor provisions in this agreement. To me, the reason, the principal reason the mexican labor has not benefited from n. A. F. T. A. And thus had the effect of the less of benefiting has note benefited from n. A. F. T. A. And thus had the effect of benefiting us, is the contracts is companies entered into with these maquiladoras. Not with real progressive unions like we are used to. This law changes that system. When we talk about the 700,000 contracts that had to be voted on, many of them will be in those factories. And for the first time in their these workers will have to know what their benefits are, what their working conditions are, and vote on their contracts. So i am hopeful, and so are reformers in mexico, that this will have a real positive in fact. Rep. Higgins additionally, there is language in n. A. F. T. A. Called trade adjustment assistance. Most people believe that was inadequately funded. It was basically to save the American Worker, to tell them that there will be disruption through the trade agreements, that they will require reemployment and retraining. Is there anything in the and you agreement to bolster the level of funding under trade adjustment assistance . Mr. Lighthizer this is a general matter something i would like to talk about. I dont have complete control of that area of that trade adjustment assistance. I once had a Labor Union Leader told me years ago about trade adjustment assistance. He said, we dont want a longer welfare line, we want jobs. Always thought of trade adjustment assistance in that concept even back in the 1970s 1980s. Chairman neal thank you, gentlemen. Let me recognize the gentlelady from alabama. Thank you, mr. Chairman. And welcome, mr. Ambassador. Fromnstituents are hurting many of this administrations trade policies. That economic pillars of alabamas seventh district are agriculture, forestry, and manufacturing. My farmers are suffering from the trade war with china, the autoworkers in my district are terrified of potential tariffs on automobiles and auto parts. Autoe way, the section 232 report is still being kept a secret from congress and the american public. I think we should all know what is in the report. I think the autoworkers in my whether deserve to know Trump Administration is laboring their jobs as a National Security threat. Hopefully i can followup with you after this hearing to discuss these issues, but today, i would like to focus on enforcement. I am a true believer in trade. I believe it can with fair and reasonable to workers and management, what we have be a way to enforce the trade policies. Last year, alabama exporter 23 billion in goods, accounted for 10 of my states gdp. 21 of those exports went to mexico and canada. Increased Market Access was a big economic boost to my district. However, the enforcement provisions in the old n. A. F. T. A. Were totally inadequate. Fortunately, there is a broad the partisan consensus around strengthening enforcement in the americanment to ensure workers, farmers and manufacturers are treated fairly. Not only do we need a level Playing Field for all workers, but the American People deserve to know that disputes with our allies can be adjudicated through a structured process that is both equitable and transparent. The older n. A. F. T. A. Agreement failed to me to this standard. To your crim credit, some improvement have been made, however, serious issues remain with the state to state dispute mechanism. What is even more concerning to me is that your proposed solution in this flaw in the new agreement i will tell you right now that the unilateral section 301 tariffs are not a substitute for a smal strong enforcement mechanism. Look at the section 301 tariffs being used against china. They have yet to produce any tangible results, and have thrust many workers, manufacturers, farmers and consumers in a trade war with no end in sight. I know that you want a deal that will outlast this administration nba landmark this administration and the landmark for years to come. Should we really be leaving enforcement up to this discretion of future administrations have the opportunity right now to strengthen enforcement in the basis of the agreement . Would you agree with that . Mr. Lighthizer let me say first of all, thank you for your comments. In terms of the manufacturing in alabama, i would just note that there is going to be new investments, Major Investments announced by mercedes, hyundai, toyota, and mazda in alabama. The autoworkers there ought to be very happy. Rep. Sewell they are happy, sir, but they really are concerned about the section 232 using them, considering what they do to be considered as a National Security threat. On uncertain ground without. Where is this administration with respect to auto tariffs . Mr. Lighthizer my suggestion to you . Mr. Lighthizer is that one of the principal reasons we have some of this investment is going to alabama is because the fear of the 232 auto tariffs. Rep. Sewell how can that be, if that will increase the price of consumers . Mr. Lighthizer i could not be happier to hear your comments about how bad n. A. F. T. A. Has been for alabama because i agree with that completely, and i think everything in here will make it better for your constituents. I am happy that we will be working together because i realize now more than even before how important you realize that getting rid of n. A. F. T. A. And getting the u. S. M. C. A. Through is. I completely agree on the issue of enforcement. I am looking forward to working with you, to help you resolve the issue. I could not disagree more on the 301 effect on china. Sewell all we are seeing is a war on pricing. Low income consumers really are hurting the worst. Thank you. Chairman neal let me recognize the gentlelady from indiana. Thank you, mr. Chairman. A message or lighthizer, great to see you. I have a lot of ground to cover in a short amount of time so i apologize for my speed this morning. Thank you for your hard work on the u. S. M. C. A. The agreement goes a long way to drive exports for farmers and manufacturers in the Second District of indiana, and sets a strong standard for innovators who call the Hoosier State home, and levels of Playing Field for workers. With the steel and aluminum tariffs lifted on mexico and canada, a think it is time for congress to act and vote on the u. S. M. C. A. I want to ask you get a must consent to insert into a record a letter from over 600 companies and associations urging a deal with china. This is number one. Mr. Chairman . Neal yes. Further other letters would like to have inserted as well . Rep. Walorski that is it. Chairman neal so ordered. Rep. Walorski thank you. Mr. Chairman, i also want to pine as low as senators langford and senator kunz who assisted us with this letters. I appreciate being given to get these in. Ambassador, the letter i just mentioned noted the exclusions from risk number one and two that are expiring soon. Would you commit to rent those exclusions that were granted and that have not experienced a change in their circumstances. It seems it could be a simple act that could save ustrs limited Staff Resources and allow you more time in your quest. On. Have to put your mic mr. Lighthizer no, i will not. Rep. Walorski i want ustr excluded from the, a bump, including things like medical devices. Whove heard from companies thought they had escaped the tariffs and now are distressed to have to go through this whole process all over again. It seems like it was of time for them and time for your staff too, who have to reevaluate these petitions. Where were these lists put back on the list 4 . 4 containszer list everything that we trade with the u. S. And china. That is what were looking at. Rep. Walorski when will the list. 3 exclusioni process from of it begin . Mr. Lighthizer the electronic process at the end of the month. Rep. Walorski is the list if tariffs, go into effect, would you commit to doing an exclusion process like the one you have done with list 2 an id 3. 1 and list 2 tariffs only to receive notification that they will be covered under the list 4 tariffs. Will this factor into your analysis . Mr. Lighthizer no. Rep. Walorski one more question, mr. Ambassador. I appreciate you being here. As you know, congress raised the u. S. The mammoth level de minimus level. Rather than lowering our level, shouldnt we continue to engage in canada and mexico to raise their own . Mr. Lighthizer is that the end, yes. The engage quite a bit on it. Retailnately, there are lobbyists who are stronger than apparently our retail lobbyists. After months and months, it was of the last items that they made it small move in our direction, but not nearly as sufficient. The imbalance, to me, is very problematic. When you say engage with them, engage with somehow . One way to engage with them is to say, you get the same thing in the u. S. That we get there. Otherwise, idaho to engage with them call them on the please, i haday, a year of doing that. Their retail lobbyists are just very strong. Rep. Delauro skate thank you. Mr. Chairman, i yield back. In chair now recognizes the gentleman the gentleman from washington. Thank you, madam chair and thank you for being with us today, mr. Ambassador. I would like to reiterat the concerns for my colleagues on the impact of tariffs in our farmers. They have been struggling for a long time and it is critical that we address this issue so they continue to have access to the market. It will be hard for them to get those back again if these issues are not addressed. I want to make sure that is a top priority for you. Speaking of china, early this year, we discussed reforms to chinas digital regime. You told me you are optimistic about securing commitments from china on crowd restrictions. Crowd restrictions. Is this one of the area that china backtracked before talks broke down . Also, cloud issues, what is your realistic assessment of the commitment he will be able to secure from china in the digital trade space . And is this a priority for the president when he talks to president xi jinping at the g20 . Mr. Lighthizer first of all, i appreciate your comments on agriculture and the effect on agriculture from the retaliatory trevor is. The president retaliatory tariffs. Lighthizer i should note that 960 agricultural groups have come out and endorsed passing as soon as possible, the u. S. M. C. A. , so i think there clearly is in the Agricultural Community is strong view that this is something that should be done and done quickly. On the area of digital cloud services, we will see. I cannot in this hearing talk much about it, though i am happy to have a private conversation with you about her. , the Digital Space was an area where there was a lot of backtracking, for sure. The actual details of it, i would have to talk to you about it privately. Rep. Rep. Delbene ok. A look forward to discussing that. On u. S. Put the 332 tariffs steel and aluminum. I think we all agree that chinese overcapacity is a real significant problem. That you made any progress on securing specific commitments from china to do on this issue . Are you talking about numerical targets . Also, have there been any discussion about updating legacy laws to reduce industrial updating bankruptcy laws . Mr. Lighthizer industrial overcapacity is a huge problem in china, nowhere is it as great. S in the Steel Industry although there are other industries where they have created the similar problems. At this point, there clearly is a recognition by the people who we deal with in china that there is a problem, so we are trying ways to dealfic with that. They realize it is in their interest to deal with it and they are trying to come up with ways to deal with. In addition, we have the steel forum which has had a modest effect on actual steel overcapacity. But this is something we are talking about as far as these negotiations, and something of which i am hopeful that if we get an agreementm which is a big ifm that we will make headway on. They agree with you that we have to deal with this in china. Elbene and aluminum overcapacity. Our dear reformers are essentially shutout of the Chinese Market because of her territory tariffs. You talked a little bit about japan. How quickly do you think we can reach an agreement with japan . Mr. Lighthizer that is a high priority, as i have indicated. I think you were sitting there patiently during my saying that we meetings next week on this issue. Our staff have worked. More or less continuously. It is a complicated issue. They have a very statist, protectionist agricultural industry. Dairy is among the worst in agriculture in terms of protection. I am hopeful we will come to an agreement in the next several weeks. That is probably as close as i can come. But it is a highpriority. We are working hard on it. Rep. Delbene thank you, mr. Ambassador. I yield back. That chairman recognizes mr. Hsu from california. Ambassador california, i am concerned about im a sitter lighthizer, i am concerned about 332 tariffs on my economy. I know it is hurting many businesses in my district. One of those businesses is. Robot in pasadena they are the only americanowned consumer robotics company. They employ 675 fulltime employees in the u. S. In highpaying research and develop government jobs. But they manufacture the roomba in china. They managed to absorb the cost of the 10 tariffs, but now, with the tariffs being raised to 25 , they will be affected in multiple ways. So i urge you to reach a deal soon and reversed the tariffs list,and at the very allow businesses to apply for an exemption. I would like to submit this testimony for the record in support of their application for exclusion. In terms of features, will ustar for it would to meet its june 30 the beginning of the waiver process for a list three of the exclusionary tariffs. And are you planning to hire more members to ensure a timely resolution of applications . Mr. Lighthizer i am hopeful that the june 30 deadline, i am hopeful on it. We are hiring more people. Were also burrowing people from other agencies. We are trying to put together a group of people we need to be able to review these quickly. As we have noted before, we are , small agency and we are doing we are borrowing a bunch of people on a temporary basis and also hiring up. We also have these temporary contracts where certain jobs can be done with some people. We are trying very hard. We realize there is a substantial impact on businesses, particularly Small Businesses. Just the cash flow, aside from the cost, that is something we are also concerned about. Recentu the most tariffs augustana include recent on most tariffs on china, include tariffs on professional books, many of which are created in the u. S. By american authors and illustrators but are printed on unique paper exclusively made in china. I understand that under the International Emergency economic powers act, the information materials are exempt from these types of restrictions. So how is this tariff justified . Lighthizer in the first place, we are not using aiva, for the Legal Authority to put these tariffs in place, we are using section 301. Under section 301, we are permitted to put these duties in place, there is no exclusion for paper. Iam not an expert on aipa, dont know it very well. In terms of the last group of products, as you know, we have hearings starting monday and going till next tuesday. A lot of people are submitting , and 300 some witnesses a lot of others making submissions. We will take that all into account before the president makes a final decision as to whether or not to put tariffs on , what level, and the like. Rep. Chu thank you. I recognize you have taken the labor provisions of the they,c. A. Further than have been taken before but i couldnt need to be concerned about the enforceability of those provisions. Mexico will face many challenges in these reforms through. To what extent is ustr is engaged with the department of labor to ensure they are ready to provide assistance to mexico . Amb. Lighthizer i have you to do that. The secretary is also ready to do it. It is an important part of what were trying to do their. The labor provisions in the dust. C. A. Are not in the when of the problems so many members have with n. A. F. T. A. , was at all these labor were just letters that were not really enforceable. These are part of the agreement, and i certainly will work on with the Labor Department on that. The chair recognizes mr. Smith from missouri for five minutes. Rep. Smith . The, thank you for being here. We know you have a busy schedule advancing the president s trade agenda, which is wide ranging and very ambitious. We appreciate the update you have provided to there. I want to thank you and the president for your hard work on the u. S. M. C. A. It is a strong trade agreement that will benefit every american. Im hopeful that we will be able to vote on the agreement very soon in the house of representatives. Every day that we delay. , american consumers, American Farmers, and american businesses lose out on the many benefits of this agreement. We have seen the icc reports, we know that u. S. M. C. A. Will be great for our economy. We know it will create thousands of new american jobs. We also know it will bring in key improvements over n. A. F. T. A. When need to increase american agriculture exports with two of our top trading partners. The agreement also breaks new ground, including some of the strongest labor and environment provisions of any previous agreement, something i think we can all recognize is a great achievement. But we dont get those benefits and to the agreement is in fact in place. There is much work to be done on multiple trait fronts. I look forward to working with you to expand the american Market Access all over the world. That this agreement is currently signed and waiting. The American People are ready. Or this vote canada and mexico are moving forward, but they will follow our lead when congress acts. Congress needs to act. I know you are as anxious as any of us to see u. S. M. C. A. Move forward but some members seem to be stuck right now. Democrat members dont seem to accept that mexico will enforce to. Labor laws it agreed in fact, we hearing another hearing next week to discuss the labor reforms of mexico recently signed into law. The u. S. President negotiated a strong agreement on labor for workers. At what point do you think we have to allow mexico, with proper oversight from the United States to make good on its word and implement the laws it already passed . Amb. Lighthizer so, fortunately, mexico has moved forward, they have passed the law. They have an appropriation process that they will go through in the fall. It is my hope that we can use the process of the speaker has outlined to come up with a list of enforcement items and put them in the implementing bill and get a vote as soon as possible. We hear a lot of this comment that, well, the list of obligations is meaningless without enforcement, and that is, of course, true. But the whole exercise is meaningless without enactment. I think that is also true. I certainly agree with you that delaying the process unduly costs jobs and costs wealth, and costs farmers their income. Rep. Smith thank you, ambassador. I have a couple of questions. With regard to china, there is concern among farmers and producers i represent about lost market share while we work toward an agreement with china. Is regaining Market Access part china . Negotiations with amb. Lighthizer getting rid of the retaliatory tariffs and also, new purchases by the chinese is something we are working on. Rep. Smith something else, after promising to open the market for rice in 2001, the u. S. Has yet to ship one kernel of rice to china next to trade barriers. China has put in place. China is the largest importer of rice in the world. Offer any indication that the u. S. Rice farmers will have access to a market they were promised nearly 20 years ago in these trade negotiations. Amb. Lighthizer it is certainly something we are working on. It is one of the principal issues. I would also say that when the chinese were here in december, they said they were going to buy additional rice, and those purchases never happened. Not because of anything that happened in negotiation, they just never happened. Keep fighting for the u. S. Rice producers. I know that you and the president are. We know india provides the mastech support for the u. S. Con industry in violation of the world trade organization. We have discussed this before in the past. Took stepsthe u. S. To counter that support. What has indias response been, and what are our next steps . Amb. Lighthizer i will be brief. I completely remember our conversation, you are completely right. We did notify to the w. T. O. The think, not we would permitted subsidies in india. We have a new government in india, same Prime Minister, but a new government, and this is something that i expect to engage on with venue trade minister pretty soon. The gentleman yields back in the chair recognizes mr. Kennedy from michigan. , thank you ambassador lighthizer for being here, it is always great to have you here. I represent think, michigan, a committee that gave birth to the helped build the middle class and has gone through pretty significant changes, many of those changes traceable to changes in the economy in part as a result of globalization and very much exacerbated by as we have all agreed, the failures that we experienced under n. A. F. T. A. The difficulty that we have is that at the time n. A. F. T. A. Was enacted, there were promises made that things were change, that things would change for mexican labor conditions, mexican workers would be lifted up, that the American Worker would be protected because of that. And of course, we know that the history did not bear that out. The reason i mention that is that for many of us, this is not a question of being sold on the idea that this is a better deal. You can read the language and see that it is clearly better. Let having more comfort on this very important point you were just addressing that there will be the rigorous enforcement. While mexico changes its law, there are a lot of questions about whether they will fully fund the new regime that will be required to implement and enforce this agreement. I am interested in the notion that there would be some additional overlays, independent monitoring, for example, of the mexican labor conditions. There are a lot of details that need to be worked out. I dont want to ask you to respond on a specific one, but i wonder if you might, if you are willing to commit to work with myself and others who are interested in this area, to ensure that enforcement will be done in such a way that it will not hurt the auto workers that everpresent, who feel like they are just getting their feet and are them as they are trying to rebuild a stronger u. S. Auto industry . Absolutelyizer i commit to that. I have enjoyed working with you very much on this. As you know, the effect of this on auto workers one of our principle motivators. He have to turn it around. I have enjoyed working with you on that. You are a strong spokesman for that point of view. I completely agree with you. , bothk the auto workers those in michigan and also on , where then frontier acting chairs are from, they are the single biggest beneficiaries of this agreement. And there were the ones who were hurt the most by the existing n. A. F. T. A. Agreement. It is a binary choice. To go with this whole agreement that everyone does is horrible, or you go with the agreement that is either spectacular or other really, really good. Chairman neal. Our issues murad river it is the best in a retrace them have. Binary the best our issue is, making sure that it is the best binary choice we have. This relates to the magnitude of the problem, with the Mexican Government act to commit the resources, the Financial Resources it will take for implementation . And i have another question i would like to pose. Me, i thinkzer to four years is aggressive. It is something we insisted on at the request and advocacy of organized labor. It was the american unions who wanted that. They wanted six years, we took four years, because you are going along with organized labor. It is aggressive, and doable. Kildee and changing gears, i wonder if you could comment quickly on china. As you and i have discussed, we need to address chinas blocking silicon coming from the u. S. To support manufacturers of it and getting access to the Chinese Market. And know it is one issue that is really important to the people i represent. Could you comment on that . Can we be more forceful in dealing with china on this issue of poly silicon . Amb. Lighthizer it is at issue would certainly talked to them about. An unfair trade case was brought against our polity silicone industry, we believe it was an unfair case. This is clearly an issue that is within the case of these negotiations, that we will continue to raise. Thank you. Lemmie meeal recognize the gentlelady from wisconsin. Thank you so much, chairman and mr. Ambassador. Thank you for your indulgence. I have had a lot of other responsibilities, so tha forgive me if i ask a lot of questions on material you have already covered. In terms of n. A. F. T. A. 2. 0, i am protectingbout capital versus worker, the allegations that this agreement does not move for enough in the direction moved far enough in the direction of creating additional incentives for firms to move their operations to mexico and take advantage of their low wages and permissive regulations. Amb. Lighthizer i am not going to say that it is perfect, but this was among our principal objectives. We did a whole variety of things stop this outsourcing of jobs down to mexico. I think we have made enormous amount of progress in the area. Rep. Moore well, obviously, that is the case. Loophole,alk about a where u. S. Oil and gas, for example, in this particular can still contractually sue the Mexican Government directly under those rules. Incentive, or no efforts to really close that particular loophole for the industry. Was there a reason why we are retaining loopholes for Certain Industries . Amb. Lighthizer so on this issue of isds, it is a difficult one on which a variety of members have very strong views. Was aught that isds source of outsourcing, and there are other issues that we thought needed to be corrected. I think that we struck a good balance. We improved the situation from your perspective, but probably go. As far as you want to if you say, how would i distinguish the oil and gas industry from other industries, i would say, it is allowingisds, that would incentivize i would say that allowing isds that would incentivize moving a factory to mexico bed. To thedoes not apply Natural Resource weather industry has to go there. Rep. Moore a messenger, let me move on here. Increase inbout the of gnp and the lowering unemployment, and how wonderful the things are taking a long ticking along, but many economists say that these things are shortterm, temporary, and unsustainable for the longterm. That we can always talk about how weve had an increase in gmp. Benefit justat goes to the wealthiest and not really to workers. Any increase in wages is marginal. What say to that . Amb. Lighthizer i would say that those economists are crazy. Rep. Moore comey crazy, but it is 4 of these last tax cuts went to the 1 . Amb. Lighthizer this trade agreement is different. ,ep. Moore can i ask question i brought this up with you before, about juvenile furniture made in china. Why we parents, i wonder that, i excluding want to put that in the record, call article. Chairman neal so ordered. Rep. Moore i would like you to lean into looking at juvenile furniture is one of the things we really need to prevent certain infant sudden infant death syndrome, keeping children safe. And right now, the costeffective way to do that is to make sure that there are not but will interfere with the trust tradition of those products. Amb. Lighthizer i am not much of an expert on child care safety. But, first of all, we will certainly look at that solution, i think we have a process to do that. Also, juvenile chairs can be made in a variety of areas. Chairman neal i recognize the german from illinois to inquire. Thank you, mr. Chairman and thank you, ambassador lighthizer for being here. Thank you for your response. Here in congress your responsiveness and your attention both in a bipartisan way, with immigrants and republicans, and your entire team. You have been great to work with. When we think about the u. S. M. C. A. In getting this clock started, that is what we are waiting on. You have been looking at this for the last year and working on it. Frankly, it concerns me that we have not started the clock yet. That Speaker Pelosi has not brought this fourth yes. I worry every week that goes by that we are losing time, and frankly, i am losing patience with not getting this going. If you put politics aside and look at the u. S. M. C. A. , this is good for workers, good for jobs, and good for the longterm economy of this country. So i am hopeful that all the goodwill you have a great with you have engaged with, that the speaker and the democrat along. Ll get thank you for being a really good negotiator and really being a is a lot for america when it zealoto china being a for america. You have been superb in that manner. Frankly, when i look at where things are with china, i want to ask specific questions on that. I will initially said, i am not generally a fan of tariffs, to me, they are taxes on consumers and businesses. I have an. Ag district, that is the largest ag hth largest district in the country. They dont like the tariffs, but they dont like the fact that china has been ripping us off for 25 years. We look at where we are at with china right now and where this administration is, an at a applaud you on being tough with china because longterm, when we look at ship elegy, and you have said this before when we look at technology, technology is the future of the world. We lead the world in technology and china is doing Everything Possible to beat us. When i look at our trade stance with china, as we look at what happened with the breakdown of negotiations, it appeared to me and many of us we were making progress in your negotiations with liu ha, and secretary mnuchin, and then it broke down. It appears the chinese may be reneged on some of their promises, came back with a lot of edits and promises that cause things to go back south. I was wondering if you could comment on what went wrong in negotiations. Secondly, does that change our negotiating policy moving forward, and are those faultlines repairable . Amb. Lighthizer first of all, thank you very much, congressman, for your kind statements about me and my team, and the president s trade policy. As i said before. , who have a bad situation and the president will just not tolerated. ,o we are going to make changes and a thing the president has board. At across the to the shock of all the members, the president will say to me every now and then, bob, we have to do something, we are not doing anything in trade. And i say, ok, mr. President. Happened, it is more or less speculation right now. My speculation is that some portions of china decided negotiators had gone too far, went out beyond their mandate. I do know whether that is true or not, i am just speculating. First of all, i have trust and good faith in the people i am dealing with. They are tough negotiators. They are professional, i didnt have any question that they are doing what they believe their mandate is. Notissues have changed, the are the same issues. That have to be resolved. The president will never agree to any agreement that doesnt deal with the issues of Technology Transfer and ip protection, agriculture, and other issues. My hope is that we can get back on track. I think it is in their interest and on our interest. Hopefully the politics there will line up in a way that allows this to happen. Rep. Lahood to follow up, what are your expectations for the g20 summit next week, and secondly, what is your plan for tariffs if talks continue to stall . Amb. Lighthizer if they stall, we have a process ongoing. We will have the Legal Authority in a couple of weeks. The president will make a decision as to whether he wants to put them in place. Will keep everyone informed and also decide on specific products. We are looking at. 25 . In terms of the g20, we are hopeful. Chairman neal thank you. I recognize mr. Boyle from pennsylvania. Rep. Boyle thank you, mr. Chairman. I want to echo the comments my colleague made about you and in my five minutes i am allotted, i will hit three different issues around the world. Please bear with me. The first is, overall approach. We are under 5 of the worlds population. One economye number in the world, we need to trade. That trading needs to be done on fair terms. To give you an idea of where im coming from and where my constituents are coming from, in philadelphia, for more than 50 years, we had a very famous nabisco plant on roosevelt boulevard. It was in a largely residential area. It was the only multistory building. It made all sorts of nabisco products you would be familiar with. You could smell the cookies from miles away. This plant importantly was profitable. It was not a company that had to go out of business. Highly Profitable Company owned later by monday less. They decided to close that plant, lay off 325 workers including neighbors of mine, who had good family sustaining jobs. They shipped those jobs to a brandnew plant they built in mexico. To theirthe same thing plant in chicago. At the time, kennedy trump picked up on that. I talked about it on the house floor, railed against it. Unfortunately, to no avail. Closed andlants are you have those jobs in mexico where they pay approximately 2. 35 an hour. Is there anything in the new nafta to point out 2. 0 that will discourage companies from making that sort of behavior . Try to be say, i will as brief as i can to respect your time. These are the kinds of cases that drive us crazy, that have driven the president crazy since 30 years before he ran for president. Interns in terms of this happening again, there are a number of things in here. This is the cutting edge of what we have to discourage. About, in some sectors, the rules have a big impact. Labor provisions will have a big impact because it will change the nature of the relationship between labor and employment down there. This issue of i sts which we just talked about was a subsidy for people to move down there. Provisionsmental will have a discouraging effect. Objective. Primary it was a consideration in every single part of this that we discussed. Segue intoa perfect a conversation on enforcement. When i was first elected to the state legislature over a decade ago, i thought i had an agreement with someone and a wise 30 year veteran let me know, theres a difference between a promise and an agreement. That difference is the extent to which it can be a forced enforce. Could you explain why the administration seems to still be skeptical about having a binding dispute settlement mechanism . All, i will say what i said many times. I want to work this out. I think i could do it in an the groups that the speaker has identified. We believe the thing has to be enforceable, for sure. What you are talking about is panel blocking. The question is, do you want to have the right in a rare circumstance where someone challenges something of a particular importance to you, do you want to have the right to block that panel . If you have another way to enforce your own rights. That is what we were trying to find, that balance. What is the risk that, for example, you will have a problem with a challenge to the trade laws . We have a challenge under the wto. They are fundamental to all these workers we are talking about, thats the balance im trying to strike here. I want to work it out with the members. I want members to be happy. If they say no, i will consider that. Im out of time. The other two, i will follow up. Thank you. Thank you. We all want the members to be happy. Let me recognize the gentleman from virginia. Thank you very much. Thank you for working diligently to come to good trade agreements. I can fence i have been extraordinarily frustrated by this president ial approach to tariffs. Look at what happened to steal. Production went up 5 last year. The Steel Industry created 200 new jobs. Production their with electric furnaces that employ very few workers. Still Companies Made greater profits. The impact on American Workers is negligible. You said the president gets frustrated with unfair trade practices around the world. It drives him crazy. So we has a temper tantrum and reacts with tariffs that hurts us more than the people we are trying to punish. Startsso frustrated he destroying his own toys because he doesnt know what else to do. Or involved in his decision to let five the antirefugee tariffs on mexican products . Disagree with almost everything you just said. But all. T surprise you i have never seen the president have a temper tantrum or anything remotely like that. The steel aluminum program has been wildly successful. Jobs andthousands of created thousands of additional jobs. I dont agree with you in any of that. I think tariffs are a tool which can be very useful. In many cases, they have been successful. I think they change the nature of our relationship to china which was heading right down the rathole. Now we have an opportunity to turn that around. Of the president s decision to put tariffs on there, in the case that isnt a solution to the immigration problem, thats not specifically in my area of expertise. Im not an immigration person. Shouldnt we as a committee find it disconcerting that a u. S. Trade representative didnt have them put into those decisions . I was certainly involved in the meeting. Im just not an immigration person. I dont know enough about that. I do know that if you are sitting here as the president and you think theres a legitimate National Security problem,heres a huge you know the numbers better than i do. If you see that, you have to do something. It worked out. I dont know why people are so upset. Is there anything in the new constrain those authorities or limit the president to oppose nontrade related tariffs on one of our closest trading partners . Just a yes or no answer. It cannot be quite yes or no. You can always take National Security actions in every trade agreement. Everybody reserves that. Nobody will be in a position where they say, is my National Security is that threat, i will let my trade agreement overrule my interests. As a general matter, there is a restraint on what you can do with respect to tariffs and regulations and a lot of other things, all of which are in this agreement. I hope that answers your question. Not really. I can expound on it. When allies come to talk to was about usmca, they say the best part of it is the benefit of certainty. When idc did its report, they said the lion share of benefits come from certainty. Rule ofresident has a imposing those broad punitive nontrade related tariffs on mexico, which would be devastating for the economies, it might lead to increases in migration, what is the point of a new nafta . Certainty if any he can come right back with these tariffs . There is this National Security exclusion which we talked about. Am impressed with people who are worried with certainty in business. We signed nafta nine months ago. Have a vote, come to conclusions, sit down with members. I agree completely with your sense that we need absolute certainty. This is the best way to get certainty. Past the thing as soon as possible. Let me recognize the gentleman from ohio. Thank you. I appreciate it. Weve heard a lot of talk about enforcement of labor agreements. Inseems to me the first step that is what you have already tried to do, agree to it. Have it signed. As opposedthe usmca to a side agreement. You have taken the first step. I want to applaud you. Your willingness to talk to this committee and to the panel to come up with ways to enhance enforcement. I think it is important. In my mind, you have taken the first step. Thank you for that. I want to echo some of the things, concern for farmers. I have that in a while. Ohio. One of the questions i have is, to what extent do you think the usmca will relieve some of the burdens they are facing right now . Ofwe get this taken care with canada and mexico, how much advantage will that give to relieve the burdens right now . I think you will have a heat it will have a huge effect. Canada are number one and two in our agricultural export markets. Is, 36 the number billion worth of agricultural sales. We have the report which supports what i say. We have taken the steps to get rid of the steel and aluminum tariffs on mexico and canada. We have gotten rid of the retaliatory tariffs. We need certainty so farmers can move forward on this. I couldnt agree with you more. I like this talk. Theu engaged difference between dealing with mexico and canada and dealing with china. It is a completely different situation in my opinion from a National Security standpoint. We have certain tools in our chest, diplomacy, military, what we can do economically. What we have been seeing from china over the past several years with their expansion around the world. They are doing it on our dime. They have been able to do a tremendous amount of things, look at what is going on in the south china sea. How they are trying to engage in africa, surrounding countries, dangling shiny objects. I think they are doing that on our dime. We have to be tough on them in the long term. It is more than just getting a good trade agreement. Its our National Security as well. I would like for you to comment on that. I agree with that. We are all going to benefit by passing usmca and getting back to all these great provisions that are going to lead to more jobs and agricultural sales in the United States. They are going to help mexico and canada and that is great for north america. China is different. We do have other considerations. Trade are concerned about , trade deficits, which i am, an enormous part of that problem is china. It is not basic economics. It is not economics. Its all these unfair trade practices. What we are really looking at is what kind of a future we are giving to our kids. In the case of canada and mexico, we have that on course and that is great. China, it isto literally a question of what kind of an economy we are going to give our kids. Where is our place in the world . Do you see any opportunities for other countries to step up where china has been dominant . ,aybe in other areas of trade either from taiwan or the philippines or even vietnam. Can they fill some of the gaps if china is starting to struggle . You have seen a lot of that, im sure. That is something the chinese are following more closely than we are. There are a variety of other countries that have been the beneficiaries of plants moving out of china because of this uncertainty. I would say this, i think this is important. Another beneficiary of that is mexico. Mexico is a great spot to put those plants. That is why this is going to be good for mexico. It is far more likely to be good for us. I think you are seeing that happening, there are a variety of beneficiaries. One of them is mexico. Thank you for expounding on that. Let me recognize the gentleman from illinois. Thank you. Ambassador, thank you again for joining us today and for your work in reaching out to us and your openness and candor. Here, ie you were shared a specific example of a company in my district that was having firsthand experience with trade practices. I asked what reforms you are pursuing. Later, same question. I havent seen progress. For many of these companies, the situation has gotten worse. The president continues to issue tariffs by tweets, creating massive uncertainty. That uncertainty is creating challenges for u. S. Businesses. Its a challenging environment for businesses to plan or grow. I would like to submit for the record an article in yesterdays new york times. Global Economic Growth is already slowing, the u. S. Trade war is making it worse. This, theerence from , the cost from tariffs has exceeded the benefits of the 2017 Corporate Tax cut. He says, the tariffs in place are significant burdens on u. S. Businesses and farms. To say, dataoes on suggests trade tensions are weighing on economic confidence. I would like to submit this. We have this titfortat trade war with china causing pain to american businesses began small. Let me be clear, the pain that is incurred is passed on to the american consumer. The president will occasionally acknowledge the tariffs are hurting people, that is why he proposed 16 billion to aid farmers struggling. He definitely would not a knowledge it who is paying the price. In his recent interview he said, out of the billions of dollars that china is paying, i am taking 16 billion out to give farmers because that is what they have lost because of china. Of the tariffst on collecting. Do you know what the president is referring to . The cost of terrorists tariffs paid by china or u. S. Consumers . Let me make some comments on the things you have said so they dont stand. Second believe for a that what we are doing with china is having a negative effect on Economic Growth. The u. S. Is growing faster, almost by two times, than any other g7 country. The economy in a lot of countries is slowing down. It doesnt have anything to do with what we are doing. The question we have with china, are you willing to do with what we are doing or take the status quo . We had that for 20 years. That and the trade deficit went up and up. We lost more and more technology. Thing for thest United States. We could not continue to go down in that direction. If you have a different view, this all looks different. Ill be clear. China is a bad actor. We need to hold them to account. Is, is china playing the tariffs or is it u. S. Businesses and consumers . First of all, its accommodated question. It depends on what products you pick. Products,ct to some the chinese are paying and not u. S. Consumers. If china devalues their currency, which they havent, they are making a decision to pay those tariffs and spread it across. In many cases, they absorb the tariffs specifically to maintain market share. In many cases, they end up subsidizing the sales in the United States for a whole variety of economic reasons. In which case, china pays for those. It is far more complicated. Other countries come in and substitute for china. , theich case, the products price of the products dont go up. I dont buy this idea. I realize these economists have this that u. S. Consumers pay for this. I would like to reclaim my time. We can continue the debate. I want to submit, one of my concerns is that the administrations policies towards israel, they have not granted an exemption to israel, one of our strongest allies. I hope we can make progress to do that and continue to talk about usmca. I will call you on the israeli thing. Let me recognize mr. Swazi. Thank you so much for being here today. I want to reiterate my support for your efforts. China is cheating. China has a plan for World Domination economically, technologically, in space, militarily. They treat their own people awfully. Buddhists, then protest we see in hong kong. I want to reiterate my support for what you are doing. I focus today is about the usmca, the new nafta. About enforcement. Wages, wages. Weve heard a lot of talk about the improving economy. The economy in america has improved dramatically since the 1980s. The dow jones has gone up 1200 . The gdp has gone up 600 . Peoples wages have not gone up. Wages have gone up less than 20 . As one of my colleagues said earlier, the middle class needs a raise. We want people in america to make more money. We have a lot of things we want in america and we are competing against countries where they dont have those things. There are things in this agreement to try to get mexico to do a better job. They have had some labor reforms. They passed legislation that require them to overhaul their currently per system, replacing the structurally biased arbitration boards with labor courts, requiring agreements to be subject to personal vote by , forrs to fix the system Union Elections which are a subject of prolonged delays. The problem is enforcement. How do we know they are going to do these Different Things . This administration has said that in order to try to enforce these agreements, not by correcting some of the flaws from the first nafta, but they want to rely on the executive authorities under section 301 of the trade act. I find it hard to believe that after negotiating this monumental agreement, after going through all these efforts, making an agreement with other nations, we will open up an agreement because someone is violating a labor rule in a particular company. I dont think thats realistic. I think we need to have more stringent labor enforcement requirements. You said you could negotiate this in a half hour. Halfday. Ok. The Labor Advisory Committee who work with you from different representatives have indicated there could be specific such asent provisions an independent secretary who bring labor cases to courts. Certification requirements that would ensure that the rules are abided by. Do you think that is a good idea . I dont have that in front of me. There are labor courts in mexico. That is part of their reform. He did pass that. The idea of creating an independent secretary who would bring labor cases the courts. I dont think that makes any sense at all. There is a proposal that would increase enforcement personnel to join initiatives to recognize labor rights in america and allow the u. S. And Mexican Governments to Work Together to audit facilities for compliance and deny preferential tariff treatment for companies when they are in violation. Do you like that idea . That the complicated proposal. I talked to them about it. There are a lot of things i like about it. They will be discussed with the leadership group. Are you open to reopening the agreement to include these Enforcement Mechanisms . We dont want to reopen the agreement. Do you think there are mechanisms in place or that could be put in place that would say, we see this company is violating labor rules that we think our standards, we see that they are breaking the rules. Could we stop the goods at the border if we wanted to stop them . It depends on what role. Forced labor, yes, we have laws that could deal with that. If there is we heard earlier about violence, people trying to break up elections by violence. How can we stop the goods at the border if the company is doing that . There are two things to think about. Them theyou denying benefit of nafta . The second question is, are you stopping the product from coming into the border . Those are very different ideas. The idea of stopping them at the border has not been talked about. Laborthan in the forced context. What we are talking about is denying the benefit of nafta. The question is, how do you determine whether theres a violation . Some things are black and white and some things arent. Im not only referring to that, but anything you would support to block goods as a vehicle to enforce. Let me recognize the gentleman from kansas. Thank you. Thank you for being here today and for all the work you have been doing over the last few years. General, having good trade. Of therepresentative bread basket of america, trade is really important in kansas. Better . Talkmany states, kansass to trading partners are mexico and canada. Trade with canada and mexico is roughly 4. 9 billion and supports 110,000 jobs in our state. That underscores how important nafta is for our company our country. Hopefully this will help a little bit. Usmca has a major focus on how we make from make sure ufacturing wages and prove improve, new axis for american new intellectual property provisions. Every day we delay on the usmca, our country loses jobs and Economic Growth. Unfortunately, we are behind the curve. Xo and canada have started that process. To my colleagues on the committee and in congress itself to join the Bipartisan Group of ranchers and farmers and workers and manufacturers who are urging us to ratify usmca. Mentioned already, i understand the need to make sure that usmca is enforceable, not just on environmental and labor provisions but on all the provisions. Believe that the usmca can work as a strong standard for trade negotiations moving forward, just adding to the importance of making sure that we get this agreement done. I look forward to making sure that any trade deals open up more targets for kansas farmers , that willturers benefit our economy and american jobs in the future. As i mentioned, usmca is one trade area that the administration is focusing on. I recognize that mexico and canada arkansas is to biggest trading partners. The third one is close behind in japan. And you talk about how a japanese trade deal would be been a full for u. S. Agriculture . I would be happy to. Japan is a pretty good market right now for the United States. It ought to be much better. They import a lot of products from places other than the United States. If you look at their trade balance, they basically have a surplus with the world about equal to what their surplus is with the United States. Thats another way of saying all their deficits with the world are basically offset by trade with the United States. Case, we aree their best customer. If you are their best customer, you cannot treat your best customer worse than you treat people from all these other countries. Europe and all the other tbb countries. That is the argument we have made. The principal thing we are trying to do on a fasttrack is to get agricultural access equal to what the japanese have given to the tpp, the other 10 countries they have their antieurope. There and to europe. There are huge benefits for dairy products. Theres a lot of stuff in there that we are working our way through. Im hopeful that we will make headway on that. We realize how important it is. Now, we aredo it going to move backwards. We are going to be worse off because we will lose market share to these other people. Thank you. We have talked some about the Digital Services tax and some of the things that countries like france are looking at. Deskis complementing contemplating to work with some of these other countries. Can you comment briefly . I think we have to take action against the digital tax. That is one persons view. Let me call upon the gentleman from pennsylvania to inquire. Thank you. As you know, im all about finding out which tools in the toolbox we can use to fight poverty. Trade is an important tool that i will call the poverty buster. Trade needs to fight poverty by creating economic in my home city of philadelphia, trade supports over 185,000 jobs, generating 8. 2 . That being said, i believe it is important any trade agreement the u. S. Takes firmly protects our priorities and citizens in the global market. You for the, how do policies that have been laid out in the trade policy agenda, protects the protect the ability for trade to continue for the United States . First of all, i agree with you completely. Is that if we have fair trade, we do not have these embedded unfair tariffs we have , that to around the world we are going to see an enormous explosion in the u. S. Economy and more manufacturing, more agriculture. Personally, in terms of busting iserty, i think it manufacturing jobs more than anything that has the most direct effect, where the rubber meets the road. If you look at what has happened since the last election, we have created 5. 8 million jobs. We have created half a Million Manufacturing jobs. These are the jobs that take people from high school to the middle class. Saythat is what, when you trade being poverty busting, that is what that means. Taking people out of high school and putting them in a manufacturing job where they are making 20 an hour or more. It changes their life. Their kids and family are different. And when you see the opposite side, where is poverty come from, you lose the manufacturing jobs. You have hollowed out cities and towns, which we never had before. Crack cocaine, sentinel fentanyl. A good part of this is losing those basic jobs. Were not lost because of economics. If you get those jobs back, you will turn that cycle around. That is one of the most motivations we have. I am vice chair of the Small Business committee. Trade is critically important to provide growth. In your testimony, you mentioned securing new market. Elaborate on what this Market Access looks like . Amb. Lighthizer one of the most important things we do is improve the in digital trade. There is an enormous amount of benefit in digital trade from retail sellers, small companies, they can now reach 10 times the amount of customers than they could before. This is something we have stressed all over the world. A wto process we are going through to put new plate new rules in place. The u. S. Has a real economic advantage in this area. We have the best technology and companies in this area. This is an area that is very helpful. In most trade agreements we have these small enterprise provisions where we go through. They are not always binding, they are ways to try to encourage other economies, as well as our own, to make sure we are not discriminating against small and mediumsized enterprises. Number one, if we , moreess fair trade exports, it is going to help everyone, in particular Small Business. Recognize the gentleman from california. Thank you, mr. Chairman. Thank you for being here, as you have consistently been here for my term in congress. I find you a pleasant presence on the hill and i hope you continue to be, especially working through these issues. Obviously, as you have heard, you are some issues that need to be addressed. I think both sides want to work through them and get to yes when it comes to usmca. In my area, on the Central Coast of california, it is all about agriculture. That is why nafta has benefited my fresh fruits and vegetables producers. We are on the west coast, and trade with canada and mexico. And it is investments. Taking money they have earned and putting it back in our area. So nafta has been a big benefit. I appreciate the improvements that have been made. Sanitary measures, using science to treat biotechnologies, ending discrimination on certain wine products in canada. But i think the usmca could provide certainty to our farmers who have been taken taking it in missions lately taking it in the shins lately. The tariffs imposed have hurt people in agriculture. There have also been pretty good labor and environmental chapters imposed and usmca, the mexican annex, and it has led to positive change in labor laws. But the issue is about enforcement. , we had a representative talk about certain recommendations, such as having an independent labor accessible, more pretension s, protections for recruited migrant workers. They help our agricultural industry. You you said earlier, talked with the congressman. Thataid you do not believe changing the text of the agreement is necessary and that you would work with the working group you mentioned and come up with a conclusion of how to proceed. Moving beyond that, should those changes be requested that require additional commitments from our trading partners and not just our domestic implementation of legislation, are you willing to take those proposals to canada and mexico, update the labor annex, or possibly do a side deal . How do you want to go about it after something is agreed to hear . Here . Amb. Lighthizer thank you for your comments, i appreciate that. I think we have clearly made an enormous improvement in this talk, i every time i think, at some point you are going to have to decide that this agreement you think is so bad you have campaigned against school, and all of this improvement, i say to myself, at some point you have got to say, ok, fine, i am going to vote for the improvement and not say we can make it better. So that is a little bit of venting on your time. I apologize. When we come to a final with the with respect speakers group, we will figure out a way to do it. I think the vast majority of the stuff can be dealt with u. S. Law. Ive always had the view you are far better off changing positive u. S. Law to enforce this. For example, if you change u. S. Law and say you have to come forward, somebody comes forward with a complaint that there is an obligation to take that panel, and ifhe you dont, you have to explain what you did not the ways and means can. There were things like that that can be done. But the final analysis, enforcement is about people and if you have people who do not want enforcement and the ways and Means Committee does not want does not force the people to enforce it, it is not going to be good for us. I yield back. I recognize the gentleman from texas, mr. Arrington. Thank you for your patience and persistence. I can appreciate your venting. We have had seven months to look the deal over. It is never going to be a perfect deal, but this deal is substantially better in every way from the 170,000 jobs to the Overall Economic impact, to the worker not only in the u. S. But also in our partner nations, including not including mexico. What happens if we do not respect what happens if we do not pass this in respect to the did labor provisions that are not just a side deal like it was in nafta, but actually part of the core of the usmca agreement . If we do not pass this, for heaven sake, what happens to all of the provisions that the labor union reps who lined the panel spoke with glowing sentiment about, even praised you for your great work in substantially improving the position of the worker . What happens to those if we fail to pass usmca . Amb. Lighthizer i think that is just so important. That is the fundamental question. It would be great to have perfection. We would not even agree on what perfection was, by the way. But right now, we are going to have a catastrophe if this does not pass. You are not going to have labor enforcement. You will have economic, i mean there are tens of millions of jobs at stake. Up, it, so i can shut will have a bad effect with respect to our relations with china and everybody else if we are in a position where we literally cannot pass this agreement. What does it say about our resolve to have a fair trade existence . My colleagues have expressed concern on behalf of the farmer and i do not this to be misunderstood as bragging because i am from texas where bragging is a sport. But we do produce and trade more agriculture product out of texas. Texas, 250,000 farms in three times more than the next state on the list. I think i have a pretty good pulse on the farmer. The farmer has legitimate concerns. Times are tough. They have stiff headwind. The last several years, they have seen a reduction in 50 of their income. You know and sympathize, as does our president , the current fight of the farmer and all they are having to endure. Lets be clear. The farmer knows exactly what is going on and how china has taken us for a ride for decades. Nobody has experienced the adverse effects of that like our farmers. Our farmers are fair and tough and strong. And they want somebody fair, tough, and strong to negotiate for them like this president , and like you, mr. Lighthizer. And they understand that there is never going to be a good time to renegotiate a deal with china, to hit reset and hold them accountable for all of their unscrupulous behavior. America is the only country that can do that. We know that. Greatestare one of the existential threats to the future of this country and the world. That this knows president is fighting for them and for this great country, and they know there will be some pain between here and there. By i continue to be vexed the question of, what is the endgame . Equitablee is a fair, balanced trade deal with a partner we can trust. And that is exactly what this president understands. It is what he is doggedly committed to. That,appreciate the fact for such a time as this, such an issue is this, we have a president like donald trump. I think i can speak for my farmers, we appreciate, they are also gracious people. And they want to say thank you to the president for the trade assistance, the tariff mitigation, the mfp coming mr. , mr. Part two perdues agency. Give the president enough runway to get to a real deal. I yield back. Murphy,e recognize ms. The gentle from florida. Our country has benefited from fair trade as an never ending tariffs imposed by the Trump Administration are causing significant damage to our economy. Despite the constant claims to the contrary, u. S. Companies and consumers are paying taxes on imports. The tariff list is long. Threat of auto tariffs, retaliatory tariffs, 25 tariff on billions of chinese imports, goodse retaliations, including toys, computers, school supplies. When their prices increase, it will be noticed back at home. The negotiations seems to have stalled but our constituents are still paying the price for the trade war. Mexico a couple of weeks ago, the president threatens to impose tariffs on one of our closest allies for something unrelated to trade, putting u. S. Jobs at risk. When will this stop . I want to enter into record a letter highlighting the negative impacts of tariffs on the country. None of the cases has the administration consulted in a meaningful way with Congress Prior to imposing tariffs and in many cases the actions have been opposed by members of congress on a bipartisan basis. This week i will introduce legislation to enhance the rule of congress for National Security reasons. To ensure that this congress and future congresses have a say in trade policy decisions that affect Small Businesses, farmers, and families. My first comment is related to the new nafta. I appreciate the out reach you have been doing but i want to say that mexicos unfair practices have harmed our fruit and vegetable sectors in florida. I look forward to working with you to find a solution to ensure all seasonable producers in florida have access to effective enforcement tools that my friends in the western states have. The last time you were here, i told you about the plight of david, who owns an Electronic Firm in orlando. He was hit with 10 tariffs and in response you said the stronger dollar would offset the cost. Now the products are facing a 25 tariff and he is not a farmer, so he is not receiving these subsidies. He does not know whether his company will be able to survive this. What should i tell him . Amb. Lighthizer i guess i do not know precisely which has or what the tariff situation on it is. I do not know enough about his business. I would say first of all, we have an exclusion process and an obligation to try to do the most we can to reduce the effect of these actions on david and others in opposition. Withne has to start whether or not we have a problem. If you do not believe we have a problem with china, dont think i dont believe anyone disagrees with you that there is a problem with china. The problem for david is that we have entered into this trade war and for him there is no end in sight. And you know for businesses, predictability is key to their inlity to continue to work our community. It does not look like this negotiation is progressing forward. How long does he have to hang on . Why is it that some industries get assistance to hold on and others dont . My point is that as you move forward, if we are moving forward with these negotiations, that you understand the human and Economic Cost in every district of this policy. Everybody is just hoping and praying we get to an end at some point. But that does not help them in the daytoday management of their businesses. In yesterdays senate hearing, you said you still believed it was the right decision to withdraw from tpp. But in this hearing earlier today, you pointed to japan being in tpp with other countries as the reason why the u. S. Is disadvantaged. How you square that . Amb. Lighthizer that is easy and will take more than eight seconds. Why was tpp about idea . Car at you could make a 65 in chinaetnam, and bring it into the u. S. What effect will that have on the u. S. Auto industry . It did not deal with currency stuff. From top to bottom, it was just plain a bad agreement. With the agriculture advantages, yes, there were some. And what we want to do is obtain those in the negotiations with japan. Does that square that . Thank you for your inquiry and response. We recognize the gentleman from nevada. Thank you. I will get right to it. Thank you mr. Lighthizer for being back with us. I want to echo my colleagues sentiments expressing the need that many of us are trying to get to yes. I am a little concerned with todays hearing and the town by some of my colleagues on the other that are making this more partisan than it needs to be. Every time you have spoken to us, you have sent that this needs to be nonpartisan. And it needs to be about the workers and american businesses, not an individual or partisan agenda. And i hope that we can work toward that goal. I want to bring up three points. One is on the trump tariff taxes, which, in a nevada, 39,000 jobs are dependent on exports, over 37 million of the trade taxes on mexican good and products would cost nevada consumers and businesses an additional 37 million from everything from vegetables to alcohol. I want to ask you specifically how i respond to my constituents about why we are even going down this route. I am glad to see the president has stepped back from that, but why are we even bringing those proposals forward . Secondly, i want to ask about the Digital Services tax. It would disproportionally affect u. S. Technology exporters and could potentially be double taxation. Third, i want to ask about the trade adjustment assistance program. I asked you about this in the caucus meeting when you briefed us and indicated your team would get us information. There is no provision in usmca regarding taa, and this is the program that directly supports workers. I would like to know what the plan is. And finally, i am concerned about the sunset clause. And the fact that it has an automatic renewal provisions that could go around Congressional Authority and approval. Can you speak to those points . Amb. Lighthizer sure. Thank you. First of all, on the issue of and theand mexico immigration policy, my hope is that those issues are resolved. There was a serious problem and i am hoping we are in a good place on that. I have every expectation that we tax, i agreegital with you completely. I think it is a tax that is geared toward hitting American Companies disproportionally. The u. S. Has to take strong action and i am happy to continue to work with you and others on that. It is something on which we have to have some debate within the administration. As you know, there was talk eu wideing it on and basis and that could still happen. It looks like the french are close to putting in place such tax and i such a believe the u. S. Should respond strongly to that, and i believe the president will. Taa, as you say, it is a separate program. All of these issues are related and have a broader perspective. Before you comment were not in the room. I am sympathetic to the objectives of taa. Obviously people who are disadvantaged because of a trade agreement, you need payment. They used to be more payment. I can remember being told in the past what we really have to do is figure out a way to get these people jobs, not trade adjustments. I come out of workforce developments. It is about skills, not jobs. We know before they get this place that they need better skills and we need investment in the taa to achieve that. For us to not included include it in trade agreements is an oversight. Amb. Lighthizer ok. And on the issue of sunset, i did not quite understand the point. We have a sunset provision, most trade agreements for reasons that do not make sense to me, our eternal. This one is temporal. Although it is complicated how it works. Usurpation of any congressional per golf prerogatives in trade agreements , i would suggest it would be in all the others, and less in this one. Clarify, you will come back for approval with any sunset clause . It does not take the congressional oversight and accountability on the approval process . There will be no coming back. That is how trade agreements work. It is kind of crazy, but they are eternal. We passed these things and then they go on forever. What this one does is it has a process which every six years you have a review to see whether or not this is something you want to extend. If it isnt, it will expire at a certain time after nafta. Anould suggest this is like extremely important idea, exactly consistent with where you are coming from and and innovative way to do exactly what you want to do. Thank you you, mr. Ambassador. I recognize the gentleman from georgia. Ambassador, thank you for your time and hard work on this issue. There was a comment one of my colleagues made earlier about hoping you would take into account the human and Economic Impact of decisions regarding tariffs and trade. I want to thank you for doing just that. Recognizing them for a Community Like mine that lost tens of thousands of jobs following the nafta agreement that for for to long had seen for far too long had seen job cuts. I want to thank you for recognizing that and fighting to make sure the men and women in our communities have opportunities in great careers in manufacturing jobs that are so vitally important to our small towns and communities. I want to thank you for that and for creating this sense of urgency that we all share. I agree with my colleagues from nevada that this should be something we view as good for america. Every single District Across the country is impacted by this trade agreement and getting this across the finish line sooner is important. All the goals we want as america wayadvanced in a meaningful by advancing this more quickly. Thank you for helping to create a sense of urgency, because we would like to get this agreement into consideration as soon as possible. Likef the areas i really in this agreement are the stronger intellectual Property Protections. I think that is something that is very positive for this area, in one particular conversation we have had many times is on Prescription Drug pricing. One of the things i would like you to address is to talk about how this agreement does not create any change to u. S. Law, it simply brings the mexican and canadian laws and alignment without with hours, or close to where hours are. Are. Rs you forhthizer thank your comments about me and my staff and your point about when we worry about tariffs, we really have to think about the effect on peoples lives that are destroyed because they lost their jobs, not because they were told for a hundred years that they had stupid bosses and they were fired and the reality people are these just victims of bad economic and trade policy in the u. S. And reversing that by itself is worthwhile, so i just think that is so important. There are a lot more people that have lost their jobs because of unfair activity by china and be then because of anything having to do with tariffs. Protectionue of data and ip protection for pharmaceuticals, i think the crucial thing to remember is what you said, that we do not change u. S. Law. Congress changes u. S. Law. We are not changing u. S. Law. Congress decided you should have 12 years for biologics and they were only eight years in this agreement. Congress set up what the intellectual Property Protection is Chemical Pharmaceuticals as well as in biologics. What we are trying to do and what we were asked to do under the tpa is to get the rest of the world to adopt our standards. That is what we have tried to do. That is all we do. There is nothing inherent that its going to have any negative impact on drug prices in the United States. Are makingssador, we one of the arguments we are making for better trade agreements with china. Intellectual property theft. Mca, fail to adopt u. S. Would we have concerns about loss of intellectual property under the current agreement or with the lack of protections that we have . . If we do not pass this digitalt, all of these economy and intellectual property and agriculture and all of them are going to disappear. People tend to focus on the and databiologics protection, but there are a whole lot of other things as next engine of the copyright term. There is full National Treatment for related kinds of issues. There is a 15 year protection for industrial designs. There is a criminal and civil. Enalties for stealing theres a lot of real serious issues that are out here that also address, all of which will disappear. Thank you, gentlemen. Thehat may call upon gentleman from california, mr. Gomez. Thank you for meeting with me last week. You have been more engaging than i think anybody in this administration has been on a particular issue. You set up a meeting with me not even knowing i would be one of the eight individuals selected by the speaker to negotiate on this trade deal, so i want to say thank you for the engagement. It has been impressive. I also want to emphasize a point on the timing. I heard some frustration from you on your part that you have been negotiating with congress for over nine months, but i do not think that tells the whole story because in the nine months since the democrats won, we had over 100 brandnew members of congress who got sworn in in january. And one of the things when i got ine as a freshman in 2017 july, people would tell me we voted on this before and i would have to remind them you voted on it before. You do not speak for me and you do not speak for the constituents that i ended up getting elected by to represent. Theow you guys administration wants to work on this immediately. I think we are moving fast ahead. I want to share some statistics. You probably already know this. To minute i got assigned this committee or this working group, you have to know where tes are. We have 134 members who have no recorded vote on fta. That includes myself. 134 members with no recorded vote. You have 16 who voted for all the previous ftas in the past, but you have 45 that have voted for less than 50 of the fta in the past, so we needed to have a lot more outreach. That is what i want to emphasize is that these members have not been given the time to think about some of the stuff when it comes to the u. S. Mca because we had the longest shutdown in u. S. History of government shutdowns that put everything behind. Committee assignments, staffing up. You name the Different Things when it comes to building up members offices. They have had a lot. I would not say it is any of their phone. April 19 was the date when i received the u. S. Itc report on usmcas. As you know, that is an itortant access to assesses the impact of the agreement. Says 28,000. There is some discrepancy in that. I want to figure that out. We can discuss that. Mexico, you are right. The agreement that mexico made on some of these labor reforms could be huge. Could be. That depends on if it is an forcible and if it is verifiable and if we can make sure they are living up to their commitment. You. T to say that we hear there is an emergency but theres a lot of members that have need to be conversations with so they are brought along. And i know that no one here, including myself or the chairman or the speaker, is going to slow walk this agreement. We are going to be working diligently to make sure that we address all the issues. And before i run out of time, i want to turn your attention to a separate matter that was brought up brought forward. Once people found out i was working on trade issues but one issue that cannot be overlooked is the 52 billion in subsidies received by Middle East Airlines and air italy. The administration signed agreements with the uae and qatar over a year ago to force them to be more transparent, and play by the rules of engagement. This is a bipartisan issue. Mr. Ambassador, can you remind the president the bipartisanship we want to see, the full enforcement of our open skies agreements . And then at the same time, we have also seen that it has been having an impact not only across lax, which ibut in cover and which i actually fly out of. I would love for you to remind the president to lets enforce our open skies agreement. The answer is yes. Ok, i will tell the president. Good. Thank you. Easy. Most engaging representative in this administration. I look forward to having this conversation. I just wanted to emphasize that we do have some work to do but i think we can get there if it is an understanding that it cannot be rushed because if it is rest, it can follow rushed, it can fall apart. The only thing i will say on the other side is, at some point and this is what scares so many people at some point, you will get into funny season. People will not be voting based on the merits anymore. That is what scares people. Thank you. Thank you. I do look forward to working with you, not just on this, but in the years ahead. Thank you so much. Mr. Ambassador, let me thank you for joining me today. Members have two weeks to submit questions. They will be made part of the formal hearing record. With that, the committee stands adjourned. [gavel bang] [chatter] [chatter] [indiscernible] [chatter] [chatter] thank you. [chatter] coming up on cspan, Jerome Powell announces that Interest Rates will remain unchanged at a press conference in washington, d. C. Federal transportation policy officials testify on capitol hill about safety issues and proposed legislation, extending National Service transportation programs beyond 2020. After that, nancy pelosi discusses the legislative agenda with reporters at a Christian Science monitor breakfast in washington. Cspans washington journal, every day with news and policy issues that impact you. Coming up thursday morning, we will talk about the epas repeal of obama era clean water plans lawrence who joins us to discuss the debate over federal spending. An effort to avoid another government shut down this fall. Be sure to watch cspans at 7 00on journal, live eastern thursday morning. Join the discussion. Jerome powell announced the federal funds rate would remain unchanged at a press conference in washington. He added the open Market Committee would continue to monitor the indicators closely and make any corrective changes as warranted in it next meeting. Following his remarks, he took questions from reporters. This is about 45 minutes. [captions Copyright National cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] good afternoon. Unwelcome. My colleagues and i have one overarching goal, to stand the economic expansion with a stable job market and prices to benefit the American People. At the fomc meeting that concluded today we made maintain our policy Interest Rate but made some significant changes to our s