Transcripts For CSPAN Senate Finance Hearing On United States-Mexico-Canada Trade Agreement 20240714

The Committee Welcomes order. Witnesses. Me the we are here to have testimony from a range of industries that tell us about the importance of the United States, mexico, Canada Agreement and we prefer that to usmca. Fromok forward to hearing witnesses about the significance of the agreement to American Business both small and large, the workers and farmers we all represent. Thank you for being here. Canada, and mexico, our countrys most important trading partners. Americasone third of merchandising went to mexico and canada. Nearly half 1 trillion in American Goods the year. The foundation of our strong praise relationship with mexico and canada has been thus far nafta. The United States negotiated and agreement between 1990 1993 and at the time it was a Gold Standard of trade agreements. It enabled American Businesses, workers, farmers and ranchers is andanges without tariffs nontariff barriers and for decades, burdened our ability to compete in those two countries. Andourse, the u. S. Economy global trade have changed. Ramatically since 1993 the time for modernizing nafta usmcame and that is what is all about. Its that the new standard for trade agreements. Once enacted, the agreement will be the first freetrade chapters with robust on digital trade, antiaction and small and medium enterprises. It will set a new benchmark in other areas as well such as free transfer of data across borders, strong bulls on state owned enterprises, north American Continent requirements for preferential treatment, food safety and biotechnology standards, customs and trade facilitations, intellectual Property Rights and protection and enforcement labor protection and environment. Rights ines workers mexico and already has resulted overhaul of mexicos labor laws. The labor and Environmental Standards in the agreement are the most rigorous in any u. S. Trade deal and unlike with nafta, there is the core of the agreement and fully enforceable. It squarely addresses longstanding u. S. Concerns in the Canadian Market such as weekian policies on grading, retail sale of wine, supply management and distribution of u. S. Television programs. These are substantial improvements from nafta. They represent benefits and new opportunities for americans across the board according to the International Trade commission, it will increase that is by 60 million not to say that every provision is perfect. Trade agreements always need balance the preferences of industries, elected leaders and stakeholders. Some of my democratic colleagues have sent their attention on outcomes that they view imperfect. Consider one could nobodyo be better and should dismiss the importance of half trillion dollar market for u. S. Agriculture products. From a meeting i had with Speaker Pelosi that was very positive as i heard her words and attitude towards usmca. People want to push and push, but i think we must be patient as she works through this and i have confidence. Supported the ongoing work with ambassador lighthizer. Consider open mind to possible improvements in the agreement. [no audio] will not required to any changes in u. S. Law and at the same time, every day that passes is another day that benefits usmca gone realized, trying to reopen the whole agreement could risk unraveling the deal together. I therefore urge the house representative and ambassador lighthizer to focus on their specific concerns and propose solutions in short order so we usmca. S doing so will provide certainty farmers and enhance it i lookty forward to working closely with you on all of these issues. Discussed what needs to happen for nafta to porno to deliver better results for American Workers, farmers, ranchers and in particularly, american families. Marks by giving to missgan shout out Paula Barnett, not only because she is an oregonian, but as an entrepreneur, she is perfect example of why the original nafta needs a bold upgrade. He is an artisan forve been in that area townhall meetings and the 1800 people. About she sells jewelry on line primarily to etsy around the world. She also sources from abroad. Getting that kind of business off the ground would have been a lot harder just a few short decades ago when nafta was created. According etsy, the total opposite sellers based in oregon is more than 125 million and that is just one of the many on line platforms that businesses use to growth. Oregons many Success Stories also include based in bend a producer of gear for very good dogs all over the United States and in other countries. Updating nafta means addressing the challenges facing new businesses that operate on line. It also means confronting the other areas for older trade agreements continue to this day to fall short. Fighting to protect labor rights preventing a race to the bottom when it comes to the environment, making sure there is vigorous enforcement enforcement of art. The agreement so that other countries cannot treat this deal says empty documents to give them time and opportunity to rip off american jobs. Want to particularly emphasized the trade enforcement issue. My colleague senator cantwell and i come from the Pacific Northwest incredibly period sensitive. One out of five jobs in the state of oregon revolves around International Trade. The period jobs pay better than the nontrade jobs in many cases because there is a valueadded component and in my home state one of the first things anybody asks about when trade topics are brought up in his hey ron what are you guys in washington, d. C. Doing to better enforce the period laws that are on the books. Understand you need to upgrade these policies but they want to make clear that the new day has to involve tough enforceable period was that have real teeth in them. The administration released its nafta 2. 0 agreement and is consulting on what comes next. As i they wrap up pretty quickly i want to make some points on that process. There is important work left to be done on key issues. I mention enforcement because they knew nafta enforces the old nafta. Its not good enough for American Workers particularly on labor rights. Senator brown and i have proposed some additional tools to address specific challenges in mexico and i hope there will be progress on that front. Additionally one of the bigger challenges we confront is identifying the hundreds of thousands of sham labor contracts in mexico that of exploited workers therein harms workers here. Mexico must remain on track to get those contracts were negotiated on behalf of of the workers interests. During the overhaul the original nafta remains in place. Workers farmers and ranchers and businesses shouldnt have to fear that Economic Uncertainty will cost them their livelihood. Its a problem in a problem when the president acts out and makes threats regarding our period relationship. American farmers, American Workers have been heard by some of these president ial impulses and more will get hurt if the president continues to offer chaos and possibly the sense of causing congress to accept a bad deal on nafta. Having a trade deal allows this president to unilaterally change the rules and around the entire industry would be a dangerous mistake that promotes uncertainty. When i talk to businesses more than anything they constantly combat certainty impeccability. Dont get. I then writes with all of this uncertainty in based on that i have some real concerns pay powell was the administration wants nothing to point out to be implemented. Thats a we are talking about today and i know my colleagues on both that the ice the aisle feel deeply on. Trade. If i could close my comments where he began, so glad youre here. Think you are the face of what much of the period policies about. We welcome you. How can i do better than he did in introducing new pressfield thing i would have from my notes is that you singlehandedly run your business selling jewelry buyers all across the world though we are definitely concerned about trade agreements and trade generally so thank you for being here. Next, i would like to welcome pat blunt presents of the policy counsel. Governor blunt was governor of missouri serving his state as chief executive from 2005 to 2000 hes been president of the American Automotive policy counsel since 2011. In that role he represents the common policy interest of americas largest automotive manufacturers ford, General Motors and chrysler. We welcome new governor blunt. And we have mr. James collins cheap exec four conagrascience. Mr. Collins leads the only Science Company completely dedicated to agriculture previous work in the industry began 35 years ago when he joined dupont in 1984. He worked his way up the ladder and mr. Collins became chief operating officer of the Agriculture Division of dow dupont before becoming ceo of a agriculturendalone Science Company. Congratulations on your new position. Then we welcome derek leathers , president and ceo Porter Enterprises founded in 1966. Werner moved its headquarters from counsel bluffs, iowa to omaha which is still close across the river. Now you are still a proud iowan i hope. I dont agree if the move but i wont fault you for personally making a mistake. Werner is now one of americas Largest Logistics Company put a network of over seven thousand 800 trucks and extensive experience in shipping and distributing goods to canada and mexico. Prior to joining werner enterprise mr. Leathers was one of the first Board Members of mexicos Trucking Association and was based out of mexico city for several years. Thank you. Now i have the pleasure of introducing iowas former governor and former secretary of agriculture for the u. S. Department of agriculture. Tom vilsack is now president and chief executive officer of the u. S. Export counsel. He was elected i was 40thgovernor in 98, served eight years there in eight years as secretary of agriculture. Now he is the leader of the dairy counsel and represents one of Dairy Experts so thank you for coming mr. Secretary. Finally welcome Michael Wessel president of wessel threw up and cheer to labor as a counsel for trade negotiations in trade policy. As the staff chair mr. Wessel helps direct Committee Responsibility for sizing and consulting secretary of labor and period representative regarding policy on labor and trade negotiations. He worked as a congressional aide for over 20 years and also a commander of the u. S. China Economic Security review commission. Thank you, mr. Wessels. Now we will start with ms. Barnett and we will go the same way across the table as i introduce to you. Good morning. My name is Paula Barnett and i live in brownsville oregon with my 9yearold daughter, carrla. Thank you chairman grassley Ranking Member wyden and members of the committee for inviting me to speak to you today about my creative business. I spent six years studying art and architecture history will it affect the crew options are extremely limited. After failing to find a job in my field like conducted Market Research and decided to become a jeweler. Ive always been a maker once i decided on the path i taught myself how to make jewelry with equipment. I wiped to launch my business in 2015 on etsy in on line marketplace for handmade goods. Within a couple of months i had earned enough to cover my investment of tools and supplies today im a fulltime goldsmith. I make custom engagement in wedding bands. Ive come a long way from making shaped like mountains to setting diamonds and gold. My work is 100 made by me in my home studio in oregon. Im also a single mother and my business allows me to be there for my daughter carrla. Im home when she gets off the school bus and my flexible schedule allows im very blessed in this regard. Carrla watch may exert myself in my business. I am proud of my story but is not unique. Willfully i produce over 2. 2 million creative entrepreneurs like me and 80 of those sellers are women. Nearly all of them are the only ones working out of their home. We are microbusinesses yet we have a Significant Impact on heir communities and the broader economy. In 2018 alone the u. S. Contributed 5. 37 billion to the u. S. Economy created over 1. 52 million jobs. Our impact is especially big in Rural Communities like mine. For example 27 are in rural mentees compared to 17 of Business Owners nationwide. Individually they may be small together we are supporting her families in revitalizing communities across the nation. Perhaps its surprising to find someone with a business as small as mine about multilateral trade agreements. About 20 of my field is international. Like many sellers and make Tickets Available to International Buyers from the moment i opened my on line shop. 52 of all etsy sellers of export their goods. Unfortunately the u. S. Is the only one of etsys core market where they majority of sellers do not ship their goods to other countries. For example 90 obtain a scholarship internationally. Trade agreements has a huge potential to help exporters like made for our International Business in particular meeting this threshold Education Resources targeted at Small Businesses could help me increase my exports. You are doing great. Thank you. My business depends on my packages being delivered. Unfortunately many of my customers must pay extra taxes and fees on the pieces i export. Often unexpectedly. Ive had many packages get stuck in customs and they must travel in person to pay a higher fee before collecting their item. In some cases the cost can nearly double the price of the item. This is a hindrance to sharing my work with the world. A few customers ever fuse packages due to extra taxes and duties and in most cases i find myself having to recent item including the shipping cost or risk a negative review which could make or break an ecommerce business like mine. Customs exemptions are the single thing businesses can help to export their goods. Enable my packages to move quickly a supporter which is especially important as customers expect faster shipping time. With plenty of customers in canada and mexico im encouraged to see increasing the de minimis threshold of these partners. In addition to exporting my goods i also import many of my supplies. For example i supply and mexico. Digital trade provision eating around the world. Thank you for your early ongoing leadership in this area. I cant overemphasize how important the internet is to my business and family. My entire business is on mine. We would be without work without the internet. Doing something you are passionate about is something open entirely. And dont need to think about this. Data processing and transfer, Electronic Payments or the intermediary liability protections. Im honored to share my story with all of you today. Continue alongside my daughter. Im hopeful ecommerce policy through agreements in the provisions can and ultimately will be a force to ensure the internet continues for millions of migrant businesses like mine. I want to note, hes also been a leader in this bipartisan effort in this trade. For the bipartisan support. Thank you for this opportunity to testify today on usmca. Of the American Automotive policy which represents the common public interest. Our emphasis is on international [no audio] it will bring muchneeded predictability and also serve as a blueprint for future u. S. Trade agreements that allows it whenrs to drive negotiations for canada and they have for properties. First, maintain access to the canadian and mexican auto market. Second, include provisions to prevent currently manipulation rules for vehicles and parts throughout america. Will preserve access to two of the largest Vehicle Market in the world. Markets where we have been incredibly successful. They have secured 27 of the market. The markets are expected to grow steadily in the future. In fact, our three Member Companies have announced signaling dollars in new investments which we are doing in part by the new role of origin departments. We agree that these new rules will strongly incentivize investment in United States and more u. S. Investment means more american jobs. They have negotiated to andndbreaking provisions provisions to prevent currency manipulation. These are the strongest provisions included and we believe these provisions should be included in every investment. In short, we have given our full support cannot only help the u. S. Auto industry or main competitive, but the drinks certainly and stability. Decision was a Crucial Development for automakers as well as many lawmakers on both side of the aisle. We also understand that conversations have been we hope theyand can resolve any remaining issues and allow full potential for nationsmakers for the economy to be realized. Again, i want to thank you again thank you again for holding support. Before jim collins speaks, i he has been a. Errific leader for many years he also serves on a lot of at the university of Delaware Museum and has been a scout leader for many years. Have 12 children. Or it seems like 12. They are not adults but children we be proud of. Thank you. I appreciate that introduction, two proud young boys. Only two. Thank you members of the finance committee to be here. Thank you for the opportunity to be here today to testify. Im the ceo and as the senator stated, its more than 300 years of combined experience. Im honored to share our views of our employees with the over 400,000 customers. Farmers and ranchers. Im here to address the agreement. Market access, production of innovation and modernized mechanisms to ensure our future competitiveness. American jobs depend on trade with canada and mexico. The largest export market for the u. S. It support 39 million jobs across america and 12 million from trade from mexico and canada. It indicates usmca would increase u. S. Food imports by up to 2 billion. Farmers under the access to canada and mexican markets map the boosted exports to north america by over 3150 over the life of that agreement. Canada and mexico by nearly 45 billion of products making them our first and second largest export markets. In all of our conversations with farmers, they stress the trade is one of the key elements of success. Let me tell me about to farmers. They saw an opportunity to begin former farming with the demand from exports from china. Because of the challenges between u. S. And china, they were forced to search for new markets. They sold their entire crop last year to buyers in canada. This will ensure new farmers like them can continue to survive. He stated so well in junes hearing, we need to secure strong agreements so we can restore a level Playing Field. He can innovate and help u. S. Agriculture become stronger. Of manufacturing jobs so its clear when farmers went, x ago in canada, the two largest exports represent 600 million in annual seed exports. Thats one third of the total. Varieties can cross as many as Six International borders because it becomes commercialized. They offer the world class regulatory disciplines that prevent rejected or delayed seed shipments that can cause dissatisfied customers. The production products represent decades of research and development. They are excited about the biotech productions also afforded us under mca. Last, agricultures future is dependent upon passage of usmca. The only u. S. Based seed protection and Digital Company has a substantial presence in iowa, indiana and delaware with offices and employees all across the country disputes our government established deep relationships among our officials. These discussions were worth their weight in gold. They will build upon that foundation. [no audio] the disciplines that reject delayed seed shipments that cause market disruptions and dissatisfied customers. The seed and Crop Protection theuct represent intellectual Property Rights protection is also. We are a Global Company as well and about half of our sales are outside of United States good we need trade agreements to solve problems before they become disputes. For nafta, north america became the more became more integrated and our government established broad relationships and the discussions between officials are worth their weight in gold and we are built upon the foundation. To did this exercise forward in other trade negotiations. Studies are clear. The private industry has found and it expands markets Companies Like court to. Thank you for the opportunity to and illhe committee be pleased to answer an of the questions later. Ranking member, thank you for the opportunity to testify today on behalf of the associations and discussed the importance of usmca. I am the president and ceo of this trucking enterprise. Its grown from one truck operation to a Global Company with 13000 associates and professional drivers worldwide. We continue to grow our business at home and internationally. Our significant Significant Growth is due to the success of north american trade. Warner is one of the top five 8600 load carriers with crossborder movements in 2018. As we celebrated our 20th Year Anniversary in mexico, Ground Transportation to and from mexico. Last year, we crossed 11,504,000 shipments. Warner house protein, is based in oregon. I spent 25 years in trucking. I saw firsthand how it transformed north america into the most competitive trading block in the world. 76 of all crossborder is transported by truck. When trucks arent, the other mode still depend on trucks for final delivery. Every day, there are 33000 truck entries across the borders holding 2 billion worth of goods. 12. 2 million truck crossings moved 72 billion of goods across the borders last year alone. The best way to truly grasp this is to see it firsthand. I invite you to visit our terminal in texas. Why we have expanded that location twice in the last three years. Visit us on the interior and mexico and we would be happy to host you. Technological advances have redefined the trade environment to such a degree that it is outdated. It is timely and necessary update. 25 years ago, traded not need to accommodate industry. Crossborder trade but truck has 190 . Sed so much so there are countless examples of products across our southern borders multiple times. Congress must celebrate the policies into the 21st century. A major has become cornerstone between our economy. It supports a livelihood of 90000 people including 60000 Truck Drivers to move trucks to and from orders. And retirement plans in 2018. Trade is crucial for the bluecollar workers in the trucking industries. In the past, they would have negative impact on Truck Drivers along with customers. Manufacturers, farmers and consumers, this would provide certainty and increased innovation. More good pay american jobs and sustained Economic Growth. They strongly urged congress to act swiftly and support this. We stand ready to help drive this agreement across the finish line. Thank you for the opportunity to testify today. Im happy to answer your questions. Thank you for coming. Members of the committee, i want to express my appreciation to appear today. This is an amazing hearing that is important to the council as well as 39000 family farm. I have a simple message for the committee. Xports matter but percent of agriculture income is directly related to imports. The 40 billion of activity, nearly one million exportsing job spirit to mexico and canada matter to the dairy industry and farms across the u. S. 28 of exports go to mexico and canada. Some between 45 billion. For many commodities, they represent the top market. Thefication matters to dairy industry and Dairy Farmers as well as new producers and those involved provide agriculture commodities. It preserves our dutyfree access to a number one market and the market has been limited for far too long. Quotas,asing our trade way, and other Dairy Products. Canadians and reforms imposingolicies and more trade friendly discipline. Strong sanitary provisions that will include safety, helping to avoid unscientific barriers to exports. Regardings safeguards companys rights to use common food names and helping to of avoid further abuse and it could cost the dairy industry billions in revenue. The ratification matters to all andagriculture industry other trade discussions, especially in japan. The food and agriculture industry and matters to the entire country. Associates, don millions ofnt impactsed americans and 20 of the workforce in our economy. Industry supports the environment. I look forward to responding to your questions and assisting this committee and its important work, work that is vital to the future of american agriculture. I know from following publications that youve been doing this for quite a few months, and we thank you for your leadership in the area. Mr. Chairman, it is an honor to appear before you today. Hereme is michael and i am as the staff chair of the labor Advisor Committee for trade negotiations and trade policy. Organized labor wants nafta fixed. We have worked in a constructive effort to find solutions and not just lodge complaints. We remain optimistic about the ability to resolve the issues. But we will not hesitate to oppose an agreement that fails to improve nafta and the current trade template in meaningful and effective ways by adopting the many recommendations that we have made. Much work remains and the current usmca is not enough. The existing naftas impact is had a corrosive impact on the u. S. Manufacturing, public and private Sector Workers have all been work for you steelworkers and indiana have seen their jobs go to mexico. Nabisco,nd philadelphia, and chicago so their jobs shipped to mexico where workers are paid . 97 an hour. Autoworkers in ohio are seeing their jobs relocated to mexico. Aerospace workers throughout the country has seen tens of thousands of jobs moved to mexico by workers at utc and chula vista. And that is just the tip of the iceberg. It is time to reverse the trend. Our continued and engagement results not only from the depths of our concerns but results to attribute ambassador lighthizer and his team. Let me make a number of quick points, but i do not to minimize the importance of issues i do not raise. Moving the goalpost but we will not accept charges that if we did not raise an issue in every conversation, that issue must not be of concern. There is a long list. Critical need of improvement to the enforcement provisions which were essentially absent from the current agreement. Panel blocking must be fixed. We support necessary provisions in the agreement. Enforcement is only as good as the standards and laws that are subject to enforcement. Madeve repeatedly suggestions for improving the labor standards included in the labor Chapter Three much work remains. Newe the annex provided a framework for mexico, the interpretation of some of the language is still in question and we have not seen how mexico will implement and monitor new laws and provide funding. Must be fixed. Are beingabor reforms challenged including by the employee friendly labor federation. At last count, there were more than 400 appeals against mexicos labor reform. There is no infrastructure to allow workers to achieve internationally recognized workers rights. There needs to be accelerated implementation rather than waiting for the four yea r cloc. We need to ensure the process for bringing complaints is dramatically improved. We need to address the access to medicines issues. Virtually every labo costact deals with increases fueled by huge Prescription Drug cost increases. Fueling drug price increases in mexico and canada via usmcas provisions is not only unjust, it will have a direct impact on our ability to sell products there. The rules of origins need to be strengthened and clarified. Allows foreignat steel and aluminum to be counted as domestic originating materials must be closed. Organized labor is committed to working to improve the existing agreement. Leaders are publicly supported the negotiations and as it relates to the text, indicates that it improves upon the existing framework. It must be strengthened and coupled with implementing and monitoring conditions. Even if we achieve all goals, we will not oversell the final product to our members. They have lived with the devastating impact of existing trade policy. They are rightly skeptical and their leaders will not mislead them. We need meaningful and effective chances, and meaningfully address the outsourcing across industries. We have waited for the flaws in nafta to be addressed, and our experience will drive our decision. Not partisan politics. We look forward to working with the committee in congress in the coming days. Thank you. Now, we will have five minute round of questioning. This agreement for the first time dealt specifically with biotechnology to support americans innovations in agriculture and continued cooperation with canada and mexico. It improves transparency and functioning of approval process and providesrops for cooperation and information exchange. On the agricultural biotechnological trade matters including gene editing. How will these biotechnology provisions of the agreement ability to tevas innovate and bring benefits to our farmers and consumers . Thank you, chairman. Right, thattly usmca creates a process for u. S. , mexico, and canadian regulators to share information back and forth across themselves and to better collaborate on the regulation of biotech crops including the new breeding techniques you mentioned. This process has the potential to alleviate trade barriers that can sometimes result from different processes and different procedures that evolve in different countries. Including the time frames that are associated with the approval of biotech products. A more coordinated, Regulatory Framework by which we can approach these markets in lockstep as opposed to sequentially has really helped. It is a benefit for the u. S. , the innovation, but also for all farmers in north america. We think these provisions will provide an important precedent for future trade discussions with other partners as well. The new agreement will expand Market Access for u. S. Dairy products in canada and eliminate that countrys on fair sale program which allowed Dairy Products to undercut american competitors in canada and third world markets. Additionally, mexico agreed to restrict Market Access for u. S. Cheeses labeled with certain names. How will american Dairy Farmers of benefit and take advantage of the new Market Access as a part of usmca . I am also interested on whether or not it will expand market share in canada. 2017, america suffered a loss of seven dairy farms a day. Times were tough out in rural america. Ans agreement would provide opportunity for dairy farms to stay in business. It would expand access to Canadian Market that has been closed. It will increase our market share opportunities. Class six and seven, it gives us an opportunity to have a powder market, a global part powder market that provides appropriate pricing. The canadian Pricing System basically undercut the world price was created some havoc in the powder market globally and impacting negatively are producers as well as those around the world. The implementation of this provision will be important. We will have to make sure this is not a replacement that has the same effects, but we are hopeful. There also export controls. There are potential penalties that exporters will have to pay if they export more than the limits set forth in the agreement. It is an increase in market share, increase for u. S. Dairy to do business in canada, and it preserves our number one market of mexico. My last question. You referenced in a bloomberg piece in your testimony about how a single capacitor had crossed the border numerous times before was finally in a final product. It paints a clear picture that in 25 years since nafta was enacted, technological advances have redefined the trade environment. Could you shed more light on how technology has revolutionized lastedde practices has only five years and why it is imperative that we revolutionized the north american trade agreement . Yes. I was on the ground in mexico city before nafta was enacted the first time, living and working and running a mexican trucking company. Over these last 25 years and we think about usmca and i think about the opportunity in front of us, it literally contemplates and for the first time, addresses issues that did not exist then. We did not have internet to speak of and there was no ecommerce. Truckingge crossborder time was 24 hours if we were lucky. Today we wake up in a world 25 years later where we are doing advanced customs clearing, clearance of goods. We are digitally interacting with our shippers and receivers, the are working with the unified customs process with officials collaborating at the border in a more seamless and efficient crossing process. Having the usmca ratified to help address from our perspective the importance of all of those digital ecommerce and Digital Information and the records and their security to be better recognized and have better treatment in the agreement is of a critical importance. Is increasingly one that is moving more digitally by the day. E i think your story is incredibly inspiring how you as a single mom have been able to come up with this attractive, exciting new business where in effect you are able to look to Global Markets through the result of Digital Innovation and i just have a quick question for you. The minimus to rates thiscan Law Committee is not going to go along with uncertainty in u. S. Law and nafta. Why dont you tell us what the value of acrosstheboard certainty would mean for you and your business. S. Barnett thank you for the question. I export my goods as well as would likelies and i to not have to worry about my items crossing the border. I want my items to get to my customers as fast as possible because they expect that. Some of my items are lowerpriced and some of them , and ite higherpriced have be valuable to me to my customers not have to pay so much extra taxes. In terms of the u. S. The minimus, because i do import a lot of my stones, i would like to not have to worry about having to pay extra taxes because it does cut into my bottom line, and since i am a proprietor full , every dollar counts. I dontake jewelry, want to have to worry about uncertain provisions and laws. On this committee, there is strong support for that kind of certainty you are talking about. You have really laid the case out well. On thiso turn to you whole question of a labor issue and enforcement, and i am not sure that everybody knows, but you and i have been talking about these issues for years and i appreciate your good work. It seems the administration has made progress on improving the labor obligations and the in the new agreement, but that is not worth much if you dont have tough enforcement. Working on this. Also, to provide a backstop to protect American Workers from being disadvantaged by unscrupulous factories in mexico. What would it mean for u. S. Workers if we were able to finally get full compliance by mexico of their labor obligations . It is the single most critical issue in the question of the balance between our two countries, the outsourcing of jobs, the relocation of a lot of our supply chains to mexico because of the artificially low wages in that country primarily stimulated by low current labor standards and no enforcement. As you know, there are roughly 700,000 protection contracts currently in place. The vast majority of which workers have no idea of whether they exist or what their terms are. Making sure that workers are paid a decent wage in return for their hard work, their creativity, their skills is a fundamental component of what we are looking for long term. Without strong enforcement, we are going to continue to have the same process and the results we have today. Ogden let me follow that up and try to take the enforceability issue beyond what senator brown and i have been working away from month now and weve been working with the speakers and house members and the like, i gather you have additional ideas for enforcing trade law and particularly nafta 2. 0. Any recommendations you would like to make . Enforcementfirst, means that there has been injury and someone has been her in the labor context. Our goal is to have the infrastructure in place to make sure that workers know what their rights are, are able to freely associate and enjoy the rights that they have, and that is a fundamental component of what you intended senator brown have talked about in terms of the infrastructure. Theeed to make sure that state to state dispute resolution is binding. We need to make sure that the front end of the process, we do not see what we saw in the weombia situation where had an agreement that called for certain actions but those actions were not in fact adopted prior to certification. So a better certification process that we have had in the past. We also need the infrastructure to provide greater access to the enforcement process. All of the labor rights cases have been brought by organized labor. It is a very difficult process to enter and time consuming, we need to shorten that process, we need to make sure that it is timely. Sen. Wyden thank you. I did want to thank all of our witnesses. Thank you. I want to thank our witnesses as well, but i want to focus on some of the concerns that i have about this agreement. I want to start out by pointing out a really important fact that we ought to keep in mind. If and when we get to a vote on usmca in the United States senate, the choice we will be making is not between usmca and nothing. The choice will be making is between usmca and the existing nafta agreement. I say that because the president clearly does not have the constitutional or Legal Authority to unilaterally withdraw from nafta. Nafta is in place by statute. We should be clear about that. It is not going away, the president does not have the authority. Should be,n before i is usmca a better agreement than nafta or is it not . Witnesses here today and their prepared testimony have cited as one of the biggest reductionf the usmca in terry policy uncertainty. Governor blunt, you said that usmca will come help bring a muchneeded stability to the auto industry. Mr. Collins, you correctly identified that the positive effects of usmca found by the International Trade commission come primarily from the usmca. Y created by the question is where is all of the uncertainty coming from . It does not come from nafta. Nafta is a welldefined agreement that we have had for a couple of decades, and it on 100 hes zero tariffs of nonagricultural goods, zero tariffs on 97 of agricultural goods. The only uncertainty is whether beple think we might unilaterally withdrawing from it and the president has no authority to do that. The question we ought to be asking ourselves about usmcas are the policy changes actually promoting growth relative to nafta. My colleague sometimes point to a study from the itc that shows modest gains to Economic Growth from usmca, it does. Policyfound reducing uncertainty accounts are nearly all of the agreement. Tinyu back out the little boost to gdp of the reduced uncertainty, then the itc found that the usmca would reduce gdp by a very small amount. It is not a gain. About 23 billion over six years. That is despite the fact that did not attempt to quantify and did not factor thato of the provisions are virtually guaranteed to increase uncertainty and diminished investment, and reduce trade and act as a drag on growth. One is a sunset provision. Not to explicitly chose try to quantify the effects of that. Vetting ofs dramatic protection for american investors in mexico and canada. How could either of those things provide more certainty . They clearly dont. The sunset provision, this agreement goes away and 16 years unless everyone of the parties of the agreement agrees to extend it. We have no certainty. Is ins a provision that every single freetrade agreement that we have except for australia. Canadianf mexican or court treat our investors unfairly, they can seek recourse including monetary damages. This happens in canada as well as mexico. There is a case of a canadian local government trying to shut down a u. S. Application to open a salt mine by claiming that the , coreolated the quote community values. It was obviously an invention that was made to discriminate american investors. The american investors challenge that and one. Hat challenged that and won it works. Usmca,are going to under completely eliminate the investor state mechanism for canada and virtually eliminated in mexico. There are provisions in the usmca that i think are constructive modernizations. Some very modest reciprocal reductions in ag barriers. Tpp. And were all in these could have been achieved without this. If we adopt this agreement, it will be the first time that i know of in the history of the will agreeat we to a new trade agreement that is designed to diminish trade. The combination of the uncertainty in these provisions and the onerous new costs imposed on mexican automakers is designed to reduce trade in autos and diminish total trades. We import and i work 3 billion 3we import and export billion. I agree with my colleague that we are talking about these things, we should be talking about expanding the economic opportunity. Ingree, it is a monetization some areas that were not i wantsly included, but to also say that i support the chairmans great activities and getting the administration to iffs on mexicotar and canada. I have a feeling that we would not have this hearing if that had not first been accomplished. I greatly appreciate that by the chairman and i greatly appreciate by the Ranking Member , his enforcement on the ranking mechanisms. This, too, is a critical aspects. To haveto get u. S. Tr the capacity to follow up on disputes and forced trade agreements. I believe there is a big mark outside the u. S. , but we have to have the tools and the teams to make sure these agreements are lived up to. Wessel, to ask you, mr. Earlier this year, mexico entered into new labor laws ensuring that mexicans had the right to organize and bargain collectively. Now they have to create their independent labor courts and as you mentioned, columbia and the challenges we faced in getting the right infrastructure there to make these decisions. Now they have to lament these reforms. What do we need to do to build capacity in this area and dont we need to put in place enforcement tools to build capacity to protect and enforce labor rates . Thank you for your question and also the Market Opportunities that you are talking about are enhanced by having workers be able to enjoy the right so that they are good consumers of our products. Having labor rights in mexico will enhance opportunities for our exporters of all products. What you are talking about is a critical issue and to thank you for your leadership a few user trust fundgo on a because it helped establish the funding mechanisms we need. Mexico has a number of things it , and in do on its own our opinion, it is far too lengthy. It is uncertain not only because of the constitutional challenges lodged more than 400 of them so far, but mexico has failed to either define their budget or appropriate the money that will. Ome later this year the u. S. Helping on capacity Capacity Building means having people at our embassy who are able to go after the bill and support them. It means having capacity here to support unions and the free weor movements that we need do not have to go to enforcement occurring,ies are but we have to ensure capacity to make sure the agreements are success. So you believe similarly to using dollars to hire lawyers, we should hire more capacity to help implement these enforcement of Labor Agreement . We have and other trade areas, there is a role for u. S. Resources. We are not going to pay for mexico to hire its labor inspectors, but there is more infrastructure that can be put. N place for mexico it may be a north west perspective, but we definitely see an economy outside the u. S. , and the key is getting these issues right in making sure that we can enforce our agreements. Thank you for those ideas. Thank you. We thank all of our witnesses. Or your contribution to this usmca is an important agreement for manufacturers, producers, and farmers to maintain markets. We understand the importance of maintaining the trade relations between the three countries. We worked in tpp for a Good Governance and the entire corruption provision, but i want to just acknowledge that those provisions are carried over into the usmca agreements on Good Governance and anticorruption. That will be standard for us on all trade agreements moving board. I want to speak in favor of the access in the poultry industry which is very important of the Eastern Shore of maryland. I want to also agree with senator wyden on the point that we raise. The 1800 limit is critically important. I am deeply concerned that because of the way that this is structured, the number could be significantly reduced affecting Small Businesses because of the president demanding to have the nafta negotiate canada and mexicos role. Who gets hurt if he changes it is Small Businesses in the u. S. I do not know whether we will have an opportunity to negotiate that further, but the way that is worded, i think it is extremely damaging to Small Businesses and could be damaging to Small Businesses and the country. I want to concentrate on the dispute settlement provisions and the fact that many of us think there is not effective enforcement on the u. S. Mexicocanadian agreement. Provisions ofhe chapter 20 from nafta which means it is difficult to see how, mr. Wessel, you talk about the for your time schedule on labor, but if they do not follow it, what is the enforcement . We are limited under chapter 20 so even if we want to use our underr duty measures chapter 19 which is carried over to the u. S. Mexico canadian , canada and mexico have the right to challenge us on using our traditional trade remedy rules. It seems to me that we really compromised our ability to enforce the labor provisions, the environmental provisions, and others because there is not effective enforcement. Question, how do we within the context of the current agreement, fix that . Is one of theat principal issues that you and others have raised. It is one of the issues that is being discussed between the usgr and the House Working Group to find a way to make sure that panel blocking is eliminated in state to state dispute revelations will work, but also some of the plans that were talked about that will ensure that not only the capacity is within the structure, but that there are relief members available if a cite to a sitespecific location where there have been inadequate labor rights for workers. We need to fix the underlying provision and we need to supplement it with what senators brown and wyden are working on and under discussion between the house and the administration. I want to give anyone of you on the panel to respond to senator toomeys point about the sunset provisions. I find that somewhat unsettling the way the sunset provisions have been drafted in this agreement six teen years with a sixyear review that could leave uncertainty as early as six years from now. Does that raise concerns . One of the advantages would be to give us in the dairy industry a process to make sure that canada is in fact following through on a limiting class six in class seven for the dairy industry which is very important. It is less of a concern because they give us a chance a chance to pull out of the agreement. I chance and make sure that it is implemented in the way that it was intended. If it is not . We are to make sure the candidate follows through. There is a replacement system for the mechanism they are currently using. It could have a positive impact, but we are wary because past agreements with canada have a tendency to fire john commitments. Thank you mr. Chairman. Thank you for holding this hearing. Very distinguished panel. I want to start with just some concerns i have about this administration does not seem to have a really coherent policy when it comes to trade. I would argue for decades, our trade policy demoted american values. We maintained to National Security issues. I feel we missed an opportunity in tpp particularly as a focus on americas relationship with china that we could have developed a regional counterweight against china both on trade with also on National Security concerns. The president took us out of tpp. Interesting to see that there are so many areas that there appears to me that usmca busily duplicate so we have already initiated in tpp. It was not like it was changing the standards. I worry that what we have seen from the administration when two allies like canada and mexico, that we have ended up antagonizing both those countries. I would offer for the whole panel, does anybody believe the highly contentious and adversarial process that the president took with mexico and canada actually strengthened our relationship . I will let the rest of the panel answer and then mr. Leathers, when the president goes about and threatens to shut down the what does that do in terms of uncertainty. Commentdy wants to first, this notion of approaching our two allies with new mexico and canada in a stronger way. Does that really build a relationship, does anybody know . I would be happy to respond, senator. From organized labor, you might find it strange that we did not fs onve that the tarif mexico and canada were appropriate. The goal of enhancing aluminum and Steel Production in the u. S. To support National Security was a goal, but the fact that the tariffs were applied to more against allies than they were against those who were cheating and breaking the rules to us was in an appropriate structure and from day one, had said that they should not be applied to those two countries. We support some of the goals that the administration was doing, challenging china, but there is a lot of questions about the execution. I could not agree with you more. But somehow the amount of damage that we did to canada and mexico, canada, and particular, that we used a National Security provision to. O against legislation i want you to comment, i was go back to the secretary and mla. Of whether the issue created and adversarial relation or concerns with some of the rhetoric, i think we can all agree and i am not really looking to be political with the statement, there may have been times where the way things were expressed could have been done differently or more delicately. In myell you that experience of having lived and worked in predominately and life, 70 ing has been working on north american trade activity with my customers. That what has happened is the elevation of the conversation, businesstobusiness between companies to talk about the real issues in the underlying problems and why they need to be addressed has never been greater. Ondom do we go to a movement to a meeting that does not end up being an open, transparent dialogue about concerns, so i think there is a positive as well. Shutdowns,es to this it is a concern because it is a concerning of my customer. We would like to see and i think one of the things usmca does is gives the opportunity to provide opinion,rk who i my certainly can live with. I want to make sure i get secretary vilsac in. , whatou get out of tpp happens when things like japan, u. S. Agriculture have come in and take advantage of the opportunity . Senator, challenge that i move it had opened up to into Market Opportunities that they did not have before. Their accelerated negotiations with mexico and japan once we pulled out of tpp to enter into a freetrade agreement that put at risk, names, put at risk geographic locations, and a negatively impacted our capacity to do trade in both countries. Fortunately, the removal of 232 process ofan the restoring that market in mexico and we are keeping our fingers crossed that negotiations with japan will result in getting our fingers back in the market completely. Whitehouse,r because we have three votes, this is how we will run the committee. Robert is voting and then when he comes back, i will go and vote on the first and second one, and we will keep it going. Senator whitehouse is next. Thank you mr. E chairman into the panel for being here. Rhode island i think was pretty hurt by nafta. I think you are seeing interesting views across party lines because this is an area where geography and economy matter. Im going to manufacturing facilities and seeing holes in the floor and asking what they were, those were, those are the places where the machinery had been unbolted from the floor of the plan. They could be shipped from central america. The same product in the same customer on the same machine could be made in a different country thanks to nafta. I do not see this as a significant change. I agree that this is nafta 2. 0. You can call it whatever you want but it looks a lot like nafta. If you focus particularly on the environment till side which i tend to, this is pretty bleak. In this day and age, if you can agree that an agreement does not even mention climate change. I mean, i dont know how grownups can write an agreement in this environment and not address Environmental Issues and not mention it. Industries polluting theyotect from isds so can go and bullet countries bully which i think is unnecessary and inappropriate. I take as a signal the area of Marine Plastic brie, because the area of Marine Plastic debris is the one environmental area in which the Trump Administration has tried to give itself some degree of environmental credibility. Throughhad bills come this body unanimously, it has been very bipartisan. The president gave strong remarks about the Marine Plastic waste. It is a tremendous problem, he said. Thousands of tons of this debris flowed onto our shores after it is dumped onto the oceans by other countries. It is a tremendous problem, thousands of tons of garbage comes us. So i start in the proposition that on this issue, they are putting their best foot forward. This is how they are going to make up for the environment of disaster that the Trump Administration is. Want to look behind what the president and secretary pompeo says, what trade representative lighthizer says it aint good. Last year at the g7 meeting in canada, the u. S. Refused to assign the oceans plastic charter. In march at the u. N. Environment conference in nairobi, u. S. Interference produce nonbinding proposals. And the u. S. Rejected the watereddown declaration finally. In june, the g20 failed to agree Marine Plastic debris based on the u. S. Already agreed to that prevent the dumping of Plastic Waste without consent. The headlines i see on this on urges voluntary action Marine Plastic a crisis with the United States blocking demands. One unexpected Sticking Point at the g7, lasting pollution in the oceans. Why . The americans did not want to sign on. They hoped the u. S. Would agree to tackle ocean pollution and in the end, it did not. The communique released at the and of the sonnets, we, the leaders of canada, france, germany, italy, the united kingdom, and European Union endorse the Marine Plastics charter. Guess who did not sign . The u. S. U. S. Accused of blocking ambitious Global Action against plastic pollution. March 15. Although story since march. If this is the way the Trump Administration enforces Environmental Concerns that it claims to support, then, look out for the other environmental enforcement. And as somebody who has been critical of the Obama Administration for the incredibly weak enforcement of environmental and labor standards, ics going off the cliff. Our companies are going to lose business to polluters and people who dump Plastic Waste into the rivers and other countries, and although there is a lot of big talk from the oval office about how this is their big whenonment to an issue, the rubber hits the road and when the negotiators are working , it is always the Trump Administration that is the weak link and dragging back against process. I find the whole thing incredible at this point. Thank you. Thank you. I want to thank the Ranking Member and you for having this hearing. I would like to associate myself with senator whitehouses remarks right now the environment of protection and enforcement. , i want toilsack follow up on some of senator grassleys questioning to you about the enforcement method that would ensure that canada reverses the unfair pricing policy for certain skim milk class sevenled products. Canada has used a special pricing policy to undercut competition from American Dairy exporters including farmers in New Hampshire. You have raised concerns that canada could eventually work around and to create unfair milk practices that are like the class seven price in everything but name. Can you explain to the committee how that might happen in practice and how you think the u. S. M. C. A. s elimination of this milk price could be effectively enforced . Thank you sec. Vilsack thank you. There is no question that the class seven hurt farmers around the states. Six month after the ratifications of these agreements by all three countries, canada has agreed to eliminate classics and class seven replacing it. First and foremost, it is an opportunity to keep an eye on how that in them lamented. The agreement does contain restrictions or limits on how much can be exported in these areas. There are financial penalties if you will if those limits are exceeded. It gives us a tool that we did not have relative to class seven. There is the opportunity for periodic review of the agreement and concerns that all countries can raise. This is incredibly important. Powder produced in this country are exported. So anything that impacts the export of powder is a concern. We are hopeful that the elimination of classics and class seven and the export limitations and penalties will provide a forceful mechanism for us to ensure that it is indeed a repeal of class seven and not a replacement. Thank you. As you know canadas supply management for dairy is not very transparent. We need to have effective enforcement of the u. S. M. C. A. To ensure that canada does not restrict its dairy market in some new way. Onlso wanted to touch another aspect of the agreement when it comes to dairies. Under the u. S. M. C. A. , canada has a agreed. You have suggested that canada could still play games with these tariff rates quotas and you talked about that a little bit now. You pointed out in the past tariffhat canadas the purchase Dairy Products. How do you think we can effectively stop. You mentioned the fluid milk issue. There was a quota and they contended that they were complying with the quota because people across the border were coming back into canada. Of thaty, the concerns practice raises ensure that we keep a weary eye on these quotas. The good news is the amount of the quotas and the amount of the increase is greater than we would have received under tpp and we do not to share that quota with other nations. The opportunity to periodically review agreement gives us the chance to raise issue sooner rather than later and not have to wait for years and years. I think the opportunity for us to make sure that our canadian friends are following through. Thank you. Ms. Barnett, your story reminds me of the many small Business Owners in my state who are helping floor Economic Growth. Unfortunately, both New Hampshire and oregon, the reme court backwards wafer and i believe that trade certainty for a small amount of businesses is all the more important. Abouts why i am concerned a footnote in the u. S. M. C. A. That would allow the administration to lower our inimus threshold that allows Small Business products to ship tariff free. You talk alluded bit about this in response the Ranking Members question, but can you tell the musmittee how demini threshold help cut red tape for businesses . I ship a 40when pair of earrings to canada or mexico, usually mostly canada it willuch mexico, generally fall across the border and into the customers hands. If an item is over that certain amount, i am not sure exactly what the amount would be but it is around 40, the customer is going to have to run down to the Customs Office and pay a fine or extra taxes and fees just a collector item and sometimes it can be as much as what they paid for the item. It is a major hassle for you and for them and it is an impediment to your business. I am over time, so im going to perhaps follow up with you, i want people to understand how important it is to have of the system predictable with border policies and deminimus amounts. I look forward to talking more about it. Thank you. I know that mr. Portman is next, but i promised that for ones schedule, i would recognize one next. Calling my Longtime Star way backovie with regards to the person who started at high noon. Thank you, mr. Chairman. It is almost tiny and and you are my chairman and i appreciate that. Like many people in the office, i had to look up gary cooper to see if i was flattered by that are not. By saying that i want to associate myself with the comments that senator wyden said earlier about the strong bipartisan support there is for maintaining the increased u. S. Deminimus threshold which i think is something that he and i got signed into law. I think it is really important and i hope we can maintain those levels because i think it is important to our ability to trade effectively with other countries and make it easy for Small Businesses to compete. , this agreement think is the most work late worker friendly trade agreement the United States has ever configured. A number of my friends across the aisle have expressed concern, side would just like a yes or no answer, given the choice between u. S. M. C. A. And nafta, which would you choose . Yes. U. S. M. C. A. . U. S. M. C. A. U. S. M. C. A. Is a significant improvement. We would choose u. S. M. C. A. U. S. M. C. A. There are 2. 2 billion reasons for saying u. S. M. C. A. U. S. M. C. A. Thanks. Because my own view is that this is something we can get done quickly and i think it is an improvement if you look at the whole gamut from manufacturing to Digital Services to automotive to agriculture which i care deeply about, but the itc study said it would create 176,000 us jobs for the economy and workers so again bredth of the progress we have made, it is time to pass this to realize these economic benefits. Is there any reason we would not act now and could somebody explain what the cost of not acting would be . I will start. Our opinion is that we should act now. The cost of not acting would be the uncertainty we are talked about several times today. Are orate america, we we go through processes not dissimilar from the federal government to figure out capital expenditures. 300number is at or around million per year. Not knowing without great certainty that the u. S. M. C. A. Will be ratified makes it difficult to make decisions. We have invested heavily in the southern border and now it is 100 acres a largest operation of its kind on the southern border. We would like to see that certainty. I personally believe its a step forward and the time to act is now. My view is that we cannot afford the current situation. We cannot afford to see jobs like the workers in chicago and philadelphia making oreos now gone to mexico where workers are making . 97 an hour. The last of my checked the oreo package is not sold any cheaper here in the United States. Usmca with its provisions of labor laws that will be effectively enforced and implemented can help change that and we are working for that. I would just add that to put ourselves in the role of our customers and of day farmer, decisionsthey make about what we plant 12 months ahead. They planted the seed and Farm Management plan so having that certainty of where the demand will come from in the Global Market really helps in that decisionmaking. So it was a tough year in 2019 and trying to make the best decisions they can for 2020 but having certainty with that market looks like could be beneficial. I could not agree more. Farmers and ranchers are facing a ton of uncertainty with these ongoing trade negotiations not sure what the rules look like in the future is very problematic. And so which starts to change that trajectory is this agreement. We need to get it done and those in kansas the chairman represents desperately need this i hope we get it done thank you mister chairman for the courtesy to let me go for. Thank you for being here today this is a great hearing to build on the momentum to get usmca done. Because one of my colleagues at. Had a chart earlier i thought it would be dueling charts. Sam is doing an awesome job. Excuse me. Too complex for me. I am going to make it simple. The reason i like u. S. M. C. A. Better is that it doesnt modernize an agreement that a 25 years old, so things like the Digital Economy we have to upgrade it. And that is done and i think that is going to be very helpful. We talked about the de minimis threshold, but we did not talk about the fact that mexico and canada have to raise that de threshold. Not as much as i like but the alternative is nafta. I guess you could say nothing bethe alternative to nafta bound to theirs anyway for the president a pull out of nafta the other day because it is law. We can talk about enforcement, but the choice is not about enforcement or not. It is about whether you have the standard at all that is enforceable in the nafta, we dont and u. S. M. C. A. , we do. It is very important to me and that is why that community is strongly important of it a strongly supportive of it. In terms of the labor standards, we have things in this agreement that have never been in any agreement, so my democrat colleagues who has talked for years about some of these issues including talking itme when i was usgr, surprises me that they are not finally saying that they can accept victory because this is what they have been asking for. Well start with the number of jobs created. Analysis, 177 new jobs. Are they in nafta, no. Are they u. S. M. C. A. . Yes. 70 of this deal of vehicles made including in mexico have to made in steel from north america. That is a big deal and that is something that has not been talked about today at all. That is in u. S. M. C. A. It is not nafta. Workers making at least 16 an hour. I is surprising to me that Republican Administration would negotiate that, but they did. For democrats to look at that and say that is not good enough give me a break. That is what my democratic colleagues have been calling for for years. And that is in this agreement. Is it in nafta . No, of course not. If we are objective about it as you all have been today and point out the differences, it is a pretty easy decision for republican and democratic cares about the standards. Mr. Wessel, he saw to us today how you would like to see more certainty on the enforcement size. You on the goodyear board, and appreciate all the work youve done for years. We have made some progress. You are looking for a way to ensure that we have a better standard. Of course we want them to fully and effectively implement these agreements. If we want mexico to do all of that, who want them to export the hiring of thousands of judges, appropriate the funds necessary to implement reforms, take lever justice seriously, we to make good on our and. In other words, mexico adopted these reforms legally. They change their laws and of thisbecause agreement and because of our willingness to say that we make good on our promise to support u. S. M. C. A. You make a good point. I want them to fully implement a law because i know it will create the level Playing Field for the workers. We also have to consider what governs the rules of u. S. Mexico trade agreement. , foure four year year transition, is it better for American Workers to compete under nafta rules under the usmca rules to make these enforceable . Thank you for your question and for your work to level the Playing Field and other issues. Let me respond because we are still working to improve those standards. So as it relates to the 70 percent of the product of steel and aluminum to allow for chinese carbon steel to be imported into mexico, transformed into body panels to qualify as originating originating. We are seeking to fix that and we are engaged in discussions with the administration. An average of 16 an hour is actually an average provision. You can have two people making 28, a number that can make 12, and it would all be averaged in. Behind each one of the provisions you added there, there is a lot of work that needs to be done. We are looking and trying to have a highvalue target average working with the administration making sure that in certain traded sectors, lets take auto parts which contributed to the deficit where we have seen job loss that action and those worst places the workplaces for first. D we think there could be a phased front loader approach to make sure that we get the highvalue targets that matter to u. S. Workers first, and if lament over time all of the remaining provisions. Toi hope you will be able work through some of those issues and get the clarification you need, but also not make the perfect enemy of the good. We are hard at improvement for you and your interests, and it a crime if we cannot get this agreement done going into the next Election Year with all the uncertainty that would entail. But this agreement is a status is a big improvement over the status quo. Thank you. This is a tough choice with the rewarding the former senator kent conrad of how you receive that. Senator coffer. Senator menendez you are on deck. Thank you. Vilsack, when i first met you, i think it was that new Governor School at hotel dupont and previously, you had been a state senator and i was just saying to the other panelists i was so impressed with you as a newly elected governor. Not just by the fact that you were smart and had a great wife, but i was impressed by your humility. I say one of the hallmarks of great leaders is humility. I applaud you for what you did secretaryr, and to be eight years ago by the administration, it is great to see you here today, so welcome. Have a question for three of our witnesses and then a question for jim collins, mr. Wessel, michael, and for you, tom. Issue thatn is on an i raced at her last hearing and i think it was about a month or two ago in june. It was involving the enforcement of the new nafta through state to state dispute satellite systems. State to state dispute in the new nafta continues to allow for panel blocking. In the main reason for disputes over the panel has not been established over the 2000s. The tpp made changes to fix panel blocking, but these improvements were not included in new nafta. A number of the provisions from the tpp have been included. Of administrative action, the administration planned to use section 301 two unilaterally enforce the new nafta when a dispute occurs. Concerned that tariffs would invite retaliation from canada and mexico. As we have seen, American Farmers are often times the first target for retaliation. From all the Witnesses Today on the importance of this uncertainty, i hear the every day. It is a part of my dna as well. Administrations tariffs on china and the ,etaliatory tariffs from china how does it impede what you represent . Mr. Collins thank you, senator. Production agriculture, we have a deep history of cooperation with canada and mexico. Therts being at 350 since adoption of nafta. So these areas we are talking about covered by u. S. M. C. A. , we already have a good traditional relationship. However, we need to have some mechanisms in place to resolve disputes. There is no doubt about that. It is our view that no one country should have the ability to block the important the enforcement of the Panel Process that you mentioned. I am not a trade expert, especially around specific mechanisms that can be utilized for the enforcement, i will leave that for the administration and the congress. Thatwe would hope for in dialogue and discussion would be a system that is the most agile and also action oriented enforcement system as possible. Hadite the successes youve for some mechanism. Thank you, you and i share some thing in common that we both married up. We wereur question, headed in the first five months of 2015 with a record exports to tariffshe effect of the and up with a percentage the client the roughly 43 percent of decline in activity but the preference for the dairy industry is that we would use tools other than tariffs to compel enforcement. You. Ank the position of most organized labor would be that we have lost far more jobs to the predatory protectionist and unfair trade practices over the years and we need to respond. Tariffs have brought the parties to the table and we are not interested in terrorists longterm, tariffs but we are interested in relief and continuation of them. I appreciate. Especially your testimony with that was very compelling and heartfelt. Now we goes by that i do not hear from folks in new jersey that find it hard to grow their workerses to hire more because of the administrations unpredictable trade policies. He threatened thousands of american jobs at risk by putting tariffs on mexico. I always like to remind people that tariff is a fancy word for a tax. Those are ultimately paid by the american people. Anytime the president threatens to impose more, he forces businesses to rearrange their supply chains. We talk about democrats efforts labor protections, these are not insurmountable challenges. But every time the president president threatens to pull out of nafta or to create more and certainty for those in jeopardy so we can finally get a trade agreement that works for all americans, that is greater uncertainty. Would you agree that threatening to put tariffs on imports from a Major Trading partner completely unrelated to trade has increased uncertainty and held back our economy in the past few months . Certainly threats of triffs tariffs by definition decree uncertainty. Mention china earlier and the impact of farmers and trade as that has been felt, at the same time, the offset here is that we have to acknowledge that there have been other issues on the intellectualproperty side how about immigration, is immigration something that is iffs that putting tar disrupt i am not an expert, so i will not speak to that. It doesnt take an expert. When the committee was considering tax reform, had s, the one Common Thread that they said to me was two things. No matter what your tax policy is, give me predictability and certainty and we will make money. The president is driving the greatest lack of predictability to create the greatest amount of certainty in the tariff wars. You all stayed quiet over it. It is pretty amazing. Would u. S. M. C. A. Prevent the president from imposing tariffs for issues not related to trade. Trade . Sec. Vilsack no, senator. Agriculture has deep concerns about the use of tariffs, because every time they are utilized, it is agriculture that pays the price. They can be a continued source of Economic Uncertainty, is that not fair . Yes. That a corrected u. S. M. C. A. Into nafta have this essentially the same procedures when it comes to withdrawal . Is it correct that u. S. M. C. A. And nafta have this essentially the same procedure when it comes to withdrawal . The president and congress would eventually end up with a comprehensive reform package. Hope we passeen my one in 2013 with a 67 votes in the senate, only to languish in the house and never gave vote. Tariffst is when use for nontrade issue, you are creating uncertainty. Labor,sel, turning to there is a lot of work between having reforms and making those reforms enforceable. What specifically should you be looking for when it comes to questions of implementation, resources, and enforcement so we can finally get an agreement with mexico . Example of where we went wrong. I was just there recently. Sure enough, everything i said recently what should we be looking for when it relates to mexico . The experience with colombia and the certification of its standards and the action plan before those provisions were attacked inappropriately implemented gives us pause. We believe any to be strong certification provisions in usmca to ensure there are certain steps that have to be taken before the agreement enters into force. Hase would look at mexico already identified publicly the steps they will take to hire the inspectors, to hire the judges, dip at the infrastructure in. What we need to do to support that from a variety of mechanisms that would support facilitation and Capacity Building on the ground, no one should think that nafta is going to enter into force on january 1 if we pass in the next couple of months. There is a lot of work that needs to be done before it should be unlamented to that we have the confidence that you are raising about doing the right thing. Thank you mr. Chairman. Mr. Chairman, can i make one comment to the last line of questioning . Just this idea of it being unrelated and immigration being unrelated, i just want to speak for the Trucking Industry because there was in this case and very direct relationships rest. As customs and Border Patrol people and assets are being shifted from custom to Border Patrol, we saw crossing times go from 45 minute stop to nine to 11 hours for extended time. The immigration issue to us was affecting trade and we saw the slow down the supply chain and delivering on behalf of our customers. Thats the point i was trying to make in the beginning. In those times were increased because of differences in policy because otherwise the border crossings would be much more effective. Thank you. Senator brown, seven minutes before the vote. So dont worry about being on time. I do not think that ive been in a hearing dating back to better panel so thank you all for coming. I wish we would k quit beating p on nafta. When thethe days chairman of the sometimes powerful house agricultural committee, i was the ranking worked and he terribly hard on nafta. Florida andke me to he would say, where i am a little mixed on nafta, but there is this guy from kansas and he said, let him talk. We had a good time. If you look at the progress of several decades that followed, they have been unprecedented. Ofad a whole series questions to ask, but im going to turn to secretary vilsack who is a great friend. Tom, what i am concerned about f this continues with the tariff retaliations, look at two. We are in the mitigation payments. Farmers do not want aid, they want trade. You know that. You have been a great proponent of that. In 2018,what we did 2019, and the demand situation that we see out there with a continuation of no real breakthroughs of can get that it is an uphill battle. I am very worried of the other thing that affects Mother Nature on world demand for product where we are in 2020, 2021, 2022. If this keeps up, we will lose a lot of folks in the agriculture sector. Once that happens, it is very hard, it went you lose a market, it is hard to get it back. When you lose a farming operation, it is seldom that you will get the same and maybe somebody else will jump an and to take a punch. Where are we heading . What do you see if we do not get a better situation with trade down the road for agriculture . I am talking about looking over the hill and not talking about right now. You for the thank question. As i said earlier, last year we day inven dairy farms a large part because of Market Conditions and circumstances impacting and being impacted by trade. I think the future for american agriculture for a long time can potentially be quite right because there are rising middle classes, increased operations, and there is an opportunity to ever feed a world increasing population. I think is going to be incredibly important for us to have trade agreements that provide level Playing Field for our farmers. Let me give you an example, and japan. By pulling out of tpp, we invited the European Union to come in, complete their freetrade agreement and here is what is at risk. If we do not get a fair level Playing Field with our european friends, weother could lose one third of our market share as well as increasing the volume and triple the value of dairy sales in japan if we just had a level Playing Field. That is an example of the opportunity, but it does require us to be more competitive and requires us to have a level Playing Field and that requires a trade agreement. I think it starts with usmca because that is where our number one market is and mexico, preserving the market and expanding opportunity and in canada. I appreciate your comment, and i want to thank all of the panelists. Tom, thank you and thank you to all of the witnesses. We are going to do the best we can on the committee and we have been working hard. All of us having a bipartisan way. Brown thank you, mr. Chairman. Fornt to focus on the need enhanced enforcement. And Environmental Standards, we know that corporations offer offshore jobs to lowwage countries because it helps their bottom line, and an Iconic American Company headquartered in ohio announce they will make a 500 Million Investment in the americas. I wrote the ceo urging him to reconsider building a plant in ohio with our highly skilled generational workforce and chose they chose instead to build 2017. Ico and opened in and the subcommittee led House Democrats to mexico and to ask in advance if they could can on tour the facility. Goodyear said no. They asked if they could enter. Goodyear said no. We know why they dont want members of congress to tour the facility because workers make six dollars an hour, much lower than that. Far lower than the 23 an hour the american counterparts make in our subject to our protection contract meaning collective Bargaining Agreement written mexican style through the government by the employer for employer. For the employer between 60800 workers went on strike within one year opening to protest the lowwage and working conditions. Company turned around and fired dozens of these workers and goodyear felt the factory in mexico because of low wages and they would not have to live up to us labor standards and to make more money for executives at the expense of american jobs. Trade agreements again let them get away with that. This goal must be to stop american jobs from going to mexico. If this administration does not make improvements from the antioutsourcing provisions being enforceable, more factories will be built in mexico instead of ohio. Meant what that means. It is why democrats, what we are fighting for to let trade agreements stop the race for the bottom and not exacerbate it, but accelerated. From those factories into the United States that blocking goods into the United States if violations were found to enforce labor standards at the goodyear plant at the factory level where the violations occur. My questions are for you, mr. Wessel. I know you have a friday share eat responsibility to goodyear. I ask you to enter the that the labor reppo is inventive on the panel. I ask that you give yes or no answers first. The do you agree Companies Like goodyear built the factories in mexico are not in the u. S. Because they can pay the mexican workers lower wages . Do you believe that the u. S. Would deny access to mexican facilities because they dont want officials to see labor violations . Yes. Do you believe that without the changes democrats are asking for, the new nafta will let them make offshore decisions with impunity . Yes. Do you agree to Level Inspections enforcement are necessary to make sure nafta outsourcing provisions mean something . I would say it is vital, thank you. Thank you. I asked unanimous consent to enter into the record a letter that i wrote to the ceo of goodyear to Richard Kramer in 2014 urging their company to ingld their manufactur plant in ohio and the second to the same ceo yesterday by House Democrats asking the company to respond to labor violations and they were denied access. Thank you mr. Chair. Thank you. I am committed, and i have said this in the past, to work collaboratively to get a positive outcome. There is some good things within the proposal that i have seen. We also know that more work needs to be done. I do want to reaffirm my hope that the administration will continue to work with the democrats to incorporate the brownwyden labor enforcement proposal to make an agreement that is bipartisan. In nevada, we do have the dairy industry, so there are some good proposals and opportunities. Thank you for the hard work. It talked a little bit about earlier which are the protection contracts and we are dealing with mexico. I also understand that mexico wants to compliant or are fouryear over a fouryear period. Two things. Laborovisions of mexicos law, if fully implemented, for requiring that for any new contract, it would be voted on by workers. During the fouryear, everyone of them will have to be voted on. They have tried to have an orderly process with 700,000 are many of those agreements exist. They are trying to be able to accommodate that. Our view is it needs to be a shorter period of time and terms of making sure the most trade impacted or trade sensitive ones be voted on early. And what is the shorter time you would be looking for . I would like to see this by mid next year. Yous this something that identified earlier that the u. S. Gr, the House Working Group, is this something they are working on as well . Earlier, this administration has been more ,ggressive about engagement more responsive than any i have seen and i have done this 40 years. There is still a lot of work, and this is one of the items on the table, and i do not think that democrats are willing to push their chairs away from the table until this issue is addressed as well. How long do you anticipate it will take for the Mexican Government to build the legal infrastructure to ensure that reforms are fully implemented . They have them on committed they have a document for a schedule of implementation. We think those need to be kept strictly to the schedule and as and thearlier, entry force of the agreement should be delayed until there is certification that they are living up to the standards and the commitments they made. Thank you, all of you, for being here. I have two questions i want to ask and then if nobody else shows up, we will adjourn. U. S. Nor blunt, the International Trade commission is highlighted. The agreement will have a number of important economic things new jobs for our country, but you say the benefits will be even larger for the u. S. Auto industry. I would like to have you since you have a good view on this, could you explain how you came to that conclusion and the benefits that i read about . Certainly, thank you for the question. We believe the changes in the u. S. M. C. A. , particularly the changes in the rule of origin will drive tremendous investment in the u. S. And in north america, but the United States in particular. On plan submitted by the companies for what they will need to do in addition the plans that they followed and that they will need to comply. If you aggregate those, you have 34 million of new automotive investment over a fiveyear per iod. And i concludes over 76,000 new jobs. We think the jobs numbers particularly are conservative, but all of those numbers are sca,to support with the ford, and a deep footprint in the United States that have 6 million in investment. And the need to comply with u. S. M. C. A. Rules is part of the reason they have invested looked at the investment in the u. S. Thank you for the answer. , dont to ask mr. Wessels you agree or dont you agree three questions. Do you agree that this is the first time that we have had such strong labor and environmental commandments in a freetrade agreement . Yes, but they need certain standards fixed. I have publicly expressed my willingness as light hauser is doing to try at lighthizer is doing to see how we can hit this to the u. S. House of representatives. By any major labor environment and the agreement exceeding those of any other freetrade agreement, would you agree on that . Step labor, they are a forward which labor has indicated on environment. Note are number that are subject to commitments of the environment is not actually a step backwards in many areas. The u. S. M. C. A. Labor commitments have heavily encouraged expeditiously implementing historic labor reforms, do you agree . And i think i heard through a previous question we are appreciative of the steps that mexico is taken to implement the constitutional changes in the past two years. They still need work, and we are in fact deeply engaged, to make sure that they are able to implement all of those on the ground. For the hard work haveof you ive put put into this is to thank you for your kind commandment and being here from your busy schedules to answer questions. Your input has been extremely valuable. I think i want to see this agreement get through even if some changes have to be made to satisfy it to get it through the house or representatives, because we have a chance to benefit our consumers. For the benefit of staff who are still here, but i think it is pretty normal, we will have , augustose of business 13 for questions to be submitted folks get and if you such questions, i hope you will respond. Thank you very much. Meeting adjourned. Tonight on cspan. A gun rights debate. We will hear from lawyers on both sides of the issue. Here is a preview of what you will see at 8 10 p. M. Eastern. Of course, there is the obvious sort of practical problem of drawing useful comparisons from the late 1700s and the mid 1800s to today. Especially with regard to a rapidly changing Technology Like guns. Some judges have tried to do this by trying to identify the lineal descendents of guns from the late 1700s today, or the descendents of gun regulations. That is a hard thing to do. Judges are not historians and guns do not have family trees. Ar15 away is in descendent of a musket . You look to their barrel links, how many shots per minute, and muzzle velocity those are hard questions. I think in practice what we will see is the judges are going to answer them, and judge kavanaugh says that by analogy. There is nothing wrong with that. Relevantize us to find similarities between two things. That puts a lot of weight on what judges see as relevant similarities. Maybe their views look like yours, but maybe they dont. Maybe their intuitions are the same as yours, maybe they are not. Maybe they are protective of gun rights, and maybe they are not. I think there is reason to be skeptical of a test that says it is based on history and traditions but will probably boil down to a test of judicial intuition or judicial analogy. To puts always critical in context the language of people like to pull out to support the gun regulation side of things. When heller talks about handguns being the quintessential firearm and why they are the quintessential self protection weapon, the courts were saying that in the context of rejecting the argument that there is no need for people to have handguns just as long as they can possess long guns. No, the court said was, this is not where the state can pick one and you get nothing else. They said, even if you can have long guns, yellow constitutional right to handguns because they are commonly owned for the lawful service of selfdefense. What you then have the jurisdictions that turn around and say, heller said handguns are protective, so we dont have to worry about the rest of it. If you look at what is drilled down on some of these definitions of what it is that constitutes a socalled assault weapon, and what it is that courts look at when trying to say these weapons are somehow categorically different, essentially, it is taking traditional rifles and having aspects of the net make them easier for someone to use for selfdefense, make them safer for someone to use, and it makes them less likely to cause Collateral Damage if you do actually need to use them for selfdefense purposes. Yet what you have is court saying, all of these things make them more effective and therefore, more dangerous, and therefore, take them outside the scope of the constitution. That is a counterintuitive proposition of what you thinking what you are thinking about is the notion of being able to protectively use a firearm. Dartmouth College Hosted the debate over the constitutional right to bear arms. See the entire debate from hanover, New Hampshire tonight at 8 10 eastern. Coverage of the 2020 president ial candidate at the iowa state fair. Starting thursday at 1 45 p. M. Eastern montana governor Steve Bullock fired by former Vice President joe biden. On friday, we are live at 10 00 a. M. Eastern with julian castro, and former congressman, beto orourke. And we are live with governor jay inslee, kamala harris. Senator elizabeth warren, and senator cory booker, and watch the 2020 candidates live at the iowa state fair starting thursday on cspan. Watch anytime online at cspan. Org or listen live from wherever you are on the go using the free cspan radio app. Senator ted cruz spoke recently about liberty, social justice, and free enterprise. The Young Americas Foundation conference in washington dc. [cheering and applause]