Transcripts For CSPAN2 U.S. Trade Representative Lighthizer Testifies Before House Ways Means... 20240712

I want to thank everyone for their adherence to the guidelines as we continue to do our work while protecting the health and safety of our staff, families and communities. Thank you for joining us today. In pursuant to notice, todays hearing is taking place in our ways and Means Committee hearing room, with members permitted to attend remotely in compliance with the regulations for Remote Committee proceedings, pursuant to House Resolution 965. We currently have 33 members logged in and participating via the webex platform. For those members who arent here in washington and plan to participate in person, we have a limited number of available seats to ensure that we adhere to social distancing guidelines. I encourage members to watch from their office and only come to the hearing room when it is your turn for questioning. Before we turn to todays topic, i want to remind members of a few procedures as we navigate this hybrid hearing setting. First, consistent with regulations, the committee will keep microphones of those webex muted, to limit background noise. Members in the hearing room or via webex are responsible for unmuting themselves, when they seek recognition or when recognized for their five minutes. For members physically present, please remember to keep your microphone muted, when you are not speaking. This will help avoid any feedback on the webex platform. Second, consistent with committee practice, we will adhere to the fiveminute rule today. Members participating remotely should have already pinned the clock so it appears in the bottom line of your screen. If for some reason, you are unable to hear the hearing room clock or unable to see it, i will give you a light tap of the gavel when your five minute s ae up. Finally members participating remotely must leave their cameras on at all times. If you need to step away from the proceeding, please leave your camera on rather than logging out. I thank you for your patience as we continue to navigate this new technology and challenge in order to continue serving our country in the great time of need. With that, i want to recognize and welcome the United States trade ambassador Robert Lighthizer to discuss important trade issues that impact the health and Economic Opportunity of all americans during these challenging times. Last year democrats worked tirelessly with the ambassador to improve the usmca and to create a successful model for good trade policy that strengthens our economy and meaningfully benefits our workers. A reminder that more than 190 democrats i believe voted for that agreement. We are very proud of the new High Water Mark we established in usmca, particularly closing the loopholes in the old nafta state to state enforcement mechanism, the new usmca has a system now that will allow all obligations in the usmca on agriculture, on ecommerce or customs rules and yes on labor and environment to be enforced. We, my democratic colleagues and i, are looking forward, acknowledging that you intend to offer rigorous enforcement. I was pleased to read your recent writings in which you promoted the core labor standards and labor specific enforcement mechanism that we fought so hard to include. We are eager to see evidence that you and the Current Administration will implement and enforce those and similar provisions for the fullest extent. As we approach usmcas entry into force, we face historic challenges. Some expected. Others unanticipated. The covid19 thrust to the forefront our health and National Economic systems that disproportionately affect the most vulnerable communities and workers inside the United States and across north america. How the United States addresses these issues will impact the lives of millions of people. The usmca provides important opportunities to reduce the pandemics negative effects, but only with effective and strategic enforcement and implementation. Similarly, we also face the historic challenge of reversing the continued deterioration of basic labor rights for workers south of our border and therefore our own workers. In the usmca we achieved the most robust labor enforcement mechanism seen in any u. S. Trade agreement ever to date. I hope you agree that the success of the whole agreement depends heavily on this badlyneeded tool to help raise labor standards and prevent systemic and egregious violations of workers and their human rights. Were aware serious deficiencies exist in the current implementation of these legislative reforms and threaten to undermine the successful model we have worked so hard to build. Specifically the failure of the current collective Bargaining Agreement legitimate process to deter undue influence and interference by employer protection unions jeopardizes mexicos ability to raise labor standards. This only serves to further chill the rights of millions of workers in mexico and also helps to undermine the rights of american workers. Last week, the aflcio president Richard Trumka has echoed these concerns. The mexican legislative reforms are the foundation of building Effective Labor rights enforcements, and they require our urgent attention. Similarly, we need to hold our own Companies Accountable as well. Reports emerge daily of American Companies pressuring their factories in mexico to keep operating to reopen, without taking into account health and safety protections for their workers. Some of these companies are the same ones that shuttered their operations and laid off workers in communities here in the United States. We engaged over the last year in good faith relying on the facts and evidence to negotiate usmca. Ambassador, we know that you are a hardliner on these issues and will apply the same vigor to ensuring the enforcement of this trade deal as we did in negotiating it. With respect top to the larger with respect to the larger trade agenda, the administration has been very active over this year. The administration started section 301 enforcement investigations into Digital Service taxes by our european allies and friends and others. There is broad support on this committee for that initiative. The administration negotiated preliminary agreements with china and japan that both await more comprehensive and meaningful followup. The administration is negotiating or preparing to negotiate trade agreements with the u. K. And kenya, maybe the onagainoffagain with the eu will come back to life. At the moment, it looks doubtful. The administration is also reportedly engaging in limited negotiations with brazil and may consider limited digital trade negotiations with brazil and other trading partners. You should know that many of our colleagues were unhappy with the administrations lack of coordination and consultation with limited agreements as they relate to japan last year. With respect to the larger trade agreement, the administration has been very active over the past year. The administration as we know is very challenged on a series of fronts as it relates to our relationship with china. Yet it has not raised labor issues including the forced labor agreements in concentration camps or with china encouraging them to take action pending petitions under our ftas alleging labor violations in columbia, peru, honduras, or the dominican republic. The administration often leverages trade policies and trade tools in the name of americas workers. Yet we see little actual enforcement of the cases and several labor rights cases continue to languish without results. At the same time, we see tax policies, education policies, worker and Family Support policies and border policies that undercut the interest of americas workers and make life more difficult for middle class families. Our committee continues to stand ready to advance u. S. Trade policy for the benefit of all americans. Our work in usmca was an important first step, but we know much work remains to be done. With that, let me recognize the Ranking Member, mr. Brady, for the purposes of an opening statement. Thank you, chairman, neal. Thank you, ambassador lighthizer for joining us today in person. Its good to be finally back in this historic room where we write laws that shape our countrys economy and that of the entire world. One important key to a strong u. S. Economy is trade thats smart and fair and open and enforceable. Whats even more important in the midst of an Economic Hardship caused by the pandemic. Mr. Ambassador, you played the central role in advancing President Trumps aggressive trade agenda. The administrations aggressive trade policy agenda has opened more export markets for American Goods and services and create a far more level Playing Field for american workers, farmers, ranchers and businesses which is vital for our economic recovery. Especially in the face of covid19, implementation enforcement of usmca will bring good jobs back to america and increase paychecks for our workers. Once this agreement is enforced in just two short weeks, enforcement will be essential. The agreement strong Enforcement Mechanisms absent from nafta will now ensure canada and mexico abide by their commitments so we reap the benefits we bargained for. As to china, the president s phase one agreement will create significant opportunities for americas growth and prosperity and will enhance fairness and accountability. I know you wont hesitate to use the powerful Enforcement Mechanisms, if china fails to live up to its obligations. Republicans agree with the president. We will insist that americans receive our expected benefits and that china does not backtrack. In addition to usmca in china, the administration has achieved a phase one agreement with japan that gives our farmers and ranchers new access to an important market, that australia, the eu and canada tried to seize from us. These three agreements plus your modernization of the agreement has created Significant Energy and momentum for future trade negotiations, momentum that will benefit our country as negotiations with u. K. Progress and start negotiations with kenya as well as phase two negotiations with japan and china. Another issue we should discuss today is world trade organization. I reiterate my strong support for wto as well as my frequent calls for real reform. While the wto is not perfect, it serves the interest of American Farmers, workers and businesses by tearing down barriers abroad, establishing rules based on our system, enforcing countries to comply, to rigorous settlement. The reforms are long overdue. This institution has gone astray. I thank you for your strong leadership in assisting real reform and not papering over the wtos wayward direction. We have to push our trading partners to address chinas consistent practice of subverting the rules. We have to establish new and more modern rules to tackle distortions, created by stateowned enterprises, technology, theft and subsidies. We cant allow countries like china to dodge their obligations to be transparent and claim they are entitled to special treatment as developing countries when they are in fact economic powerhouses. Bureaucrats within the wto have to stop imposing new obligations on us by fiat rather than negotiate outcomes. Mr. Chairman, lets move to the floor our bipartisan resolution we passed by voice vote in december to show the world the United States is unified in rallying for a strong wto that serves our interests. We must also be unified in denouncing actions by so many economies to seize revenues from our companies and our country to discriminatory Digital Services taxes. Thank you, ambassador for holding firm as others try to flagrantly steal revenue they didnt earn. Lets move to immediately renew the generalized system of preferences, the haiti preference programs, to reduce costs here at home, strengthen our relationships with developing countries and establish incentives for those countries to work with us. Pass miscellaneous tariff bill, manufacturers. One last issue as the chairman has said, covid19 has rocked our economy, highlighting the necessity of durable supply chain, speed our economic recovery, make us more competitive and secure. Lets Work Together to create marketdriven incentives that allow and encourage our companies to increase capacity, developing manufacturing in critical products, medicines and supplies and ingredients here at home while working with our allies to ensure diverse dependable supply chains. In the meantime, lets suspend duties for medical products, if theres no domestic opposition. Americans need to return to work. A progrowth trade policy agenda will create new opportunities, strengthen our economy, make us resilient, and allow us to compete and win, so lets use todays hearing as an opportunity to determine how we will build together on the progress that youve made over the last three years and best position america for a strong future. Thank you, mr. Ambassador. I yield back, chairman neal. Thank you, mr. Brady. Without objection, all members Opening Statements will be made part of the record. Ambassador, lighthizer, welcome back to the ways and Means Committee. Your full written statement will be made a part of the record in its entirety. I would ask that you summarize your testimony in five minutes or so to help you with that time, please keep an eye on the clock, if you do go over your time, i will notify you with a light tap of the gavel. Ambassador lighthizer . Thank you, mr. Chairman, Ranking Member brady. Let me say first of all that over these last few months, ive actually missed seeing the members of the ways and Means Committee. I know you have never heard a United States trade representative say that before in history, but in fact, it is true. Weve had calls, but i look forward to the time when we actually get back to traditional legislation in the historic way that we have done it for all these many years. Weve been going through two crises. These are indeed challenging times. I thought of many of you often during these crises. Im confident that if we Work Together in good faith, as we have in the past, we will get through these problems, heal, and move forward. Hoefully things will be even better than they were before. In some ways, these problems make talking International Trade seem less important, but in other ways, perhaps rebuilding our economy, helping to create good paying jobs for all americans, securing fairness for our businesses and bringing back manufacturing can be part of the solution to bring us all together as one great country again. I have been we have been isolated and quarantined so long that i fear we might forget the great achievement of the last few months. Together republicans and democrats, house and senate, worked closely with the administration to write, pass, and pass the biggest and i would say best trade agreement in american history, usmca. Mr. Chairman and Ranking Member both made reference to it. We should not forget how important that was for our country and for our workers and businesses and ranchers and farmers. I would like to again thank all of you for working with me on that. Together we had a historic accomplishment. I would also like to thank you for support and help as we worked our way through china phase one agreement. The congress had an Important Role in that, very important u. S. Japan agreement and numerous smaller trade achievements during the last year. Together i think weve helped our workers, farmers, ranchers and businesses. Going forward, theres much to achieve. As we all know, we have active negotiations ongoing with the u. K. We will very soon commence negotiations with kenya. Finally, we have active engagements on trade with numerous other countries and of course i look forward to working with members on the crucial issue of the wto. Thank you to all members for working so closely with me, for making time to talk to me and to meet with me, for having your staff work so closely with ustr and for making our end product consistently better than it would have been without your involvement. I look forward to hearing your questions. Thank you, mr. Ambassador. Without objection, each member will be recognized for five minutes. Having an opportunity to question ambassador lighthizer, we will not observe the rule and we will instead go in the order of seniority switching between majority and minority members. Members are reminded to unmute yourselves when youre recognized for your five minutes. If you have technical difficulties, when you turn comes up, i will come back to you when you are ready. Let me begin by recognizing myself. Mr. Ambassador, as i noted in my opening comments, we have received reports from mexico that there are serious challenges with the process for legit mating existing collective Bargaining Agreements many of which as you know in the past have been sham protection contracts that were really never voted on by workers. We always knew that mexicos implementation of labor reforms and usmca labor obligations would be a challenge. With covid19, things are likely to be more complicated than we had expected. You have repeatedly assured us that you are committed to the success of this agreement, as we are, making sure that it delivers on its promises to u. S. Workers and to mexicos workers. What options do we have and that you are currently entertaining to provide reinforcement and course correction in mexico . Thank you, mr. Chairman. So i would say first of all, we have taken all the steps necessary to get usmca enforced, and they are enormous number of steps. Im happy to go through them. We set up the committees. Weve hired for the most part hired the people. And weve done the necessary certifications. Im happy to walk through all of these, if you like, and the new Rapid Response mechanism is up and ready to go. I would say the same thing is true on the environment side. So ustr has taken hundreds of steps as necessary to swing into action. I realize that and we have all realized, and thats why we spend so much time on it, that labor enforcement in mexico is going to be a problem. It is a crucial part of this agreement. It is something that all of us have realized from the beginning, and i know mr. Trump as you mentioned has also made that a key part of his support. The agreement hasnt gone into effect yet. It goes into effect july 1. But i can assure the committee that when it does go into effect, we will take action early and often when there are problems. Till now weve built in a very a very good system, a Rapid Response system, plus a state to state dispute settlement system. We have committees. We have ways for congressional involvement, and the administration will follow through. To the extent there are violations, we will bring Rapid Response mechanism. And to the extent there are state to state actions, we will do that. Im happy to walk through the steps we have taken if the chairman thinks thats appropriate. Otherwise i can put them in the record. You could perhaps give us a snap sis of those and put synopsis of those and put the others in the record, mr. Ambassador. Sure. The labor chapter we created the Labor Committee, which is section 711 of the act. We have an executive order that set that up. They had their first meeting on april 30th. We put in place the forced labor task force. That is being created. These are all things that were required. We set up all the mechanisms for the Rapid Response. We have an appropriation of we have the appropriations. We have the panelists selected with the cooperation of the various stake holders and the congress. We have the the way this works is theres not national members. Theres u. S. Members and mexican members. At this point, the United States has put forward five members. Mexico has three. We expect them to go up to five, and then there are six nonnational members. We have written the rules of procedure which is complicated. The rules have been agreed to by mexico. We have set up to be effective july 1, both a hotline and a webbased position for submission of complaints. So were ready to go. Theres a whole time frame which at least members of the task force are aware of. We expect to bring actions as soon as we think theres a violation. Thank you. Another of the most consequential trade policy issues that this committee is actively engaged relates to u. S. China trade and competition. Last year you appeared for the first time in front of our committee to testify as to that relationship. In february of this year, our first full committee trade hearing of 2020 was devoted to testimony on the subject of u. S. China trade and competition, during which the committee discussed how the United States can effectively compete with and count counteract chinas poll sis and ambitions directed at undermining our competitiveness. Chinas policies and ambitions directed at undermining our competitiveness. Talk to that in broad terms and the developments that are occurring in hong kong and beijings intention to snuff out democracy in hong kong. What do you know that the Trump Administrations position is as it relates to those issues . And are there options that the administration is considering that go beyond the trade tools to punish beijing . Is the administration contemplating strategically how democracy can be defended across hong kong and much of asia . Thank you, mr. Chairman. I have testified as you said often on the issue of the relationship between the United States and china. My position has been that this is a very complicated relationship. Its gotten more complicated because of actions that they have taken recently. It has security implications and cyber implications. It has business implications. It has human rights implications. And i view my space, my lane as being the trade lane. A number of american jobs depend on fair trade around the world and fair trade with china is of course part of that. As you say, we negotiated and signed and i have a copy of it, our agreement. I commend to members to look at it. I see press reports sometimes, and they act like its just a soybeans sales contract, right, when it really has a lot of very very serious parts to it. It has obligations on tech transfer, on ip, on sbs for agriculture, on currency, on Financial Services and a variety of other things, and its an enforceable agreement which we fully intend to enforce. It also has certain requirements for purchasing, which i think is really important for american workers. It is also it is not just individual purchases, but over a period of time people develop customers and the like. My own view is i meet with the people that have responsibility for other lanes. I talk to them about it. I give thm my advice on it i give them my advice on it. If i try to solve all problems between the United States and china, i will end up not solving any of them. Im focusing on the trade relationship. I think we have what is an excellent agreement. We have in place 370 billion dollars worth of tariffs in addition to all the things that i said so far. I think it is a really good agreement for the United States. We expect it to be honored. Happy to go through and talk to those members. Some of the members will be interested about the agriculture numbers and the like. As you know, i have been a fairly hardliner on china for at least 25 to 30 years. And i havent changed my view any on that. But my sense is that i have an obligation to operate in the trade base and to do what the president and what members of Congress Want me to do in that space, and that is to help our economy and make sure we get fair trade for american workers, and i think this agreement is the beginning of that, and i think its a great achievement. Thank you, mr. Ambassador. With that, let me recognize the Ranking Member mr. Brady to inquire. Thank you, mr. Chairman. Lets stick with those two subjects, the usmca and hong kong, obviously come from texas, were very excited about that the entry into the force here in just two weeks. Thanks for working with us. The procedures are meaningful and effective. Thank you for understanding the impact of the covid19 and some to have regulatory developments in mexico. Obviously we are concerned about the lack of biotech approvals, despite longstanding applications and discriminatory policies against u. S. Companies, in the energy, in the broadcasting sectors. I want to make sure canada fully implements its dairy obligations. So we have talked about this in other areas as well, so one question, how do you intend to use entry and enforce to ensure we hold usmca partners accountable and they meet their obligations . The second is hong kong the president is exactly right to hold china accountable. Only china can change the consequences by reconsidering its actions and stepping back from the brink. This is a major challenge we are facing. We need to balance the importance of Holding China accountable, for whats best for the people of hong kong, and therefore the u. S. I know that the president has said we will take action, revoke hong kongs preferential treatment, as a separate customs and travel territory from the rest of china. I know the administration hasnt yet announced its decision, what trade related actions it will take. When do you expect that decision or what general timetable are you looking at, and are there some broad approaches or discernment which tends to be your mark as ustr, discerning on these tariffs issues and treatments that we ought to be aware of . Thank you, mr. Brady. First of all, there are specific obligations, a whole host of them that were written and agreed to by most members, 90 of the members of the congress, in usmca, and there are a number of things that were looking at that are quite troubling. One of the reasons that i wanted to get this into effect on july 1 was so that we could start enforcing it. There were people that thought we should let it slide for one reason or another. Some covid related. Some others. My sense was we dont have any ability to enforce anything until we get it. The reality is that nafta didnt have much by way of enforcement, didnt have specificity. One of the issues you mentioned is biotech. Thats a major major problem. The reality is that mexico has not approved any Biotech Products in the last almost two years. Our view is thats not right. My own sense is that this is one of those issues where the administration down there has a very strong view, and i think the only way were going to get that to change is first by consultations and then by an action. I personally believe thats going to be one of those things where we will have to file a state to state dispute settlement. It is something we have talked to them about. We will have formal consultations once the agreement goes into effect. It is a serious problem, and its almost it seems almost like a philosophical problem, with the new government down there. You mentioned also dairy. Dairy is something were going to be very closely monitoring, with canada. They have a period of a few months to get rid of class 7 and class 6. We expect them to do it on time. Theres no reason to believe they wont. Implementation has a lot of technical aspects to it. I wont go through it here. I know you know what they are, but some of them are well be looking very closely to see whether they are going to shade and not have American Farmers get the full benefit of what they negotiated. If theres any shading of the benefits to American Farmers, were going to bring a case against them. I think both countries realize that from the beginning of the negotiation, that we expect to enforce these agreements. We bring cases whenever we think theres a good case, and well continue to do that there. On the issue of hong kong, the administration has you say has taken a lot of steps in that direction. In my space, the administration has taken the position that they would treat hong kong the same as it was china. I pointed a couple of things out, one in the case of hong kong, we have about a 30 billion dollars trade surplus with hong kong. Now, who knows where that product ends up going, but we have a very large trade surplus with hong kong. Hong kong charges us we charge hong kong and china the same tariffs. Hong kong charges us lower tariffs than china does, because at least until now, they have had different historic obligations. We do have a big surplus there. Were continuing to look at what it really means to be treated the same, but that really is a decision that the president has made. Thanks. Thank you, gentlemen. Let me recognize the gentleman from texas, to inquire. Will the gentleman unmute, please . Sorry im having a few we can hear you you got me . Ive got you. Sorry for the technical difficulties and thank you ambassador. Ambassador, do you envision in the agreements that you are currently negotiating to maintain the progress that we made in the usmca with regard to dispute resolution so that when were dealing with a developed country like the u. K. , we rely on a legal system rather than a closed dispute resolution system following the precedent that you set in canada, which is applied successfully in australia . Yes. Great. Do you think that youll have a u. K. Agreement or any other trade agreement to present in the remaining months this year to the congress . Congressman, thats hard for me to say. If you look at the timing on most of these agreements, as you know well, youve been around i was going to say you have been around longer than i have, but im not sure thats entirely true, but you have been afternoon a long time. That would be very very quick time. I think its unlikely that that happens. It is unlikely that we would get an agreement i would say, one to present to congress for congressional action, i would put that nearly impossible time given the various time delays that are built in to tpa. So i would say its possible, although unlikely that we could get an agreement. It is almost impossible unless the members decided they wanted to do something extraordinary to have it actually come before the congress before november. Okay. Another issue ambassador you will recall i was very interested in, still am is pharmaceutical pricegouging. Do you expect any of the agreements you are negotiating will contain special treatment on the pharmaceutical industry on exclusivity or anything else . So those are two questions. One is that anything else and two is the biotech. Is it possible for me to look at him when im talking to him rather than looking at myself . That would be helpful. I want to see what kind of reaction i get when i talk to him. Say no and you will get very positive reaction. For some members i would prefer to look at myself, but for you, i would prefer to look at you. I reserve the right to go back and forth. So i guess i would say the members have made it pretty clear that they are not in favor of a long and data exclusive exclusively exclusivity provision, so that is something where we inform where we end up in that space. When you say do anything exclusive, there i would say that there are a number of intellectual property provisions, many of which you i think agree with, some you may not, but intellectual property provisions that are used by the pharmaceutical industry and certainly we expect to have those, many of those are in usmca and they are in other agreements and we certainly expect to do that, but i realize that theres thank you. Just one more, ambassador. That is with regard to the investigation that you have worked with treasury on that would be effective at raising the prices americans have to pay for european goods. Im sure agree that the better solution is an International Agreement that determines how Digital Service companies are taxed. Every country in the organization for Economic Cooperation and development has agreed to such an International Tax plan except for the United States. And it is my understanding that the only plan that the United States will support thus far is to make the Digital Services tax optional. Now while this committee has great tax jurisdiction, i have never heard of us relying upon an optional tax. My concern is that the administration is about to start another trade war of the type that we have found damaging in the past, where americans have to pay more in taxes or tariffs added to goods and industries are disrupted. We know there are billions of dollars that go untaxed everywhere. Can you outline what your plans are to assure that were not simply reinforcing the booking of billions of dollars in places like bermuda and the Cayman Islands with these services not being taxed anywhere and that your program is to be on the side of assuring that tax revenue is earned is generated where the marketing occurs and that we dont get in a trade war in order to simply protect some International Tax dollars . So yeah, thank you, congressman. I mean, thats a lot of things. I only have a few seconds. I will try to be fairly brief. I would say first of all i agree completely with what we did. The reality was they all came together and agreed they would screw america, and thats not something that we will ever be a part of. Secondly, the notion that there arent options in the tax code. The tax code is full of options; right . Everybody has options. Right now whether you take an itemized or standard deduction, so i would suggest that the notion of proposing options on which tax you use is something that this committee has been, you know, fond of for, you know, as long as i think its been here. I certainly agree with you completely. Im not a loophole guy. I dont want to be a loophole guy. Any loopholes. But i dont want tax systems that unfairly treat American Companies. These companies employ tens hundreds of thousands of americans, and so i dont think thats fair. I think what we need, and i really want to reach out to you and talk about it because i think youre one of the best minds on the committee in this area. What we need is a standard tax that taxes that takes away the tax planning that a lot of these people go into and is uniform acrosscountries and treats every business fairly, and i think there is some evidence there is some momentum to do that, but the United States will put in place i believe its up to the president , tariffs against these countries if they move forward unilaterally discriminating against American Companies. Thank the gentleman. Let me recognize the gentleman from florida. Mr. Buchanan to inquire. Thank you, mr. Chairman. Want to thank the leader and also the ambassador for your bipartisan leadership. The chairman and myself last week had a hearing on wto, in terms of the director general. They are looking for someone to lead the organization. As someone thats been in business for 30 years plus, i know one thing, that thats a critical position and especially a memberdriven organization, but any organization, whether its this committee or any other committee, the chairman makes a huge difference. Obviously theres a lot of challenges with wto in terms of reforms with china [inaudible]. But as you look to the right leader, whats your thoughts in terms of qualities, in terms of that leadership moving forward that we should be looking towards . Can you give us your thoughts on that, ambassador . Sure. Thank you, congressman. So in the first place, i think the wto is a mess, and at the appropriate time in this hearing, im prepared to go through my list of indictments. This perhaps is not the appropriate time. But im happy to do it at this point. But i think the wto has failed america and has failed the International Trading system. So and then so what do i look for in a new way director general . I would say first of all, someone who wants reform, fundamental reform. I think that we have to do things very very differently. I think a number of countries are not treated fairly, but particularly the one that i work for is not treated fairly. I think we need reform. Secondly i think we need a director general that understands the fundamental problem that an extremely large staterun economy cannot be disciplined under the current wto rules. I look for someone who understands the nature of the problem of free economies, dealing with china and deal with someone who understands that we need across the board reform. Beyond that, i have no real preference. Those are the fundamental things for me. I guess and someone who doesnt have any in some cases there are if i see any antiamericanism in any of the persons past actions, i would certainly be willing to veto their appointment. The other question i had in terms of usmca, building some momentum there, im excited about the enforcement of that, gives you a lot more tools, but as we build off that momentum, a lot of other countries, in terms of the u. K. , eu, even china, will go to another phase, kenya of course, so theres a lot of opportunities, more than i have ever seen the last ten years, so i congratulate you for that. As you look at the global pandemic, whats been the impact in terms of your effort with these various countries in terms of not just today, but Going Forward . What do you see . You know what . Thats kind of a fundamental question. First when you ask as a practical matter, the biggest single problem is you dont have facetoface meetings, and im not one that believes you are ever going to negotiate a major trade deal over video or over the telephone. I just dont think it is possible. I may be wrong about that, but ive seen no evidence of it. The telephone video tends to be sort of scripted sort of things, and you end up not having 10, 12, 15 hours together in a room which i think is necessary to come to compromise. So thats the biggest problem. If you look at its effect on trade, trade during this pandemic is down substantially. Exports are down about 30 more or less, and the imports probably a little less and the effect seems to be about what you would expected, right, just getting clobbered in the Services Areas like travel and leisure and all these kinds of things. You can kind of it is kind of predictable where we have been hit. But i also really believe im one who believes that theres pentup demand, and when we get to the other side of this, which think is, you know, very soon, were going to end up with that being turned around very fast. Again, what we have had among probably not the biggest drop in exports in trade in history, but among the biggest, right, theres only three or four times when we have been in this league, i think were going to have a much much faster comeback than we did in any of the other times because what we have here is something that is not driven by basic economics. But it is driven by a Health Crisis. Thank the gentleman. The chair would recognize the gentleman from california, mr. Thompson to inquire. I encourage members to make sure they monitor their own muting services. Were catching background noise here. Mr. Thompson is recognized thank you, mr. Chairman. Thank you for holding the hearing. Can you hear me all right . Yes. Thank you, mr. Chairman. Mr. Ambassador, thank you very much for being with us today and thank you for all the great work that you do. It is a pleasure working with you. I have got three issues that i will just raise, and then i will let you respond to all three of them. First im increasingly concerned about mexicos ability to implement its historic labor reforms. The pandemic has served to highlight some of these issues. There are numerous reports about mexican workers being forced to go back into unsafe working conditions. You know that i raised this with you personally. Thank you for your response yesterday. But nonetheless, it is still an issue. This is in part u. S. Companies pushing this, and in some instances, members of the administration pushing it as well. So i would like to know how you plan to effectively use the tools that you have that were given to you in this historic usmca that we worked on together to make sure that the mexican labor reform actually comes to fruition. Second, as you know, theres been a reduced or postponed excise tax provision in place since 2017. And its been extended now to the end of 2020. Theres a problem that a lot of folks are having because alcohol, tobacco tax and trade bureau, they deal with the domestic tax issues and customs and Border Patrol deal with the foreignproduced alcohol thats imported in to the u. S. So it puts it puts folks in a difficult position when theyre not working from the same set of rules. I would like to know what you can do to work with your colleagues at treasury to make sure were all in the same page and that these provisions are being implemented evenly between foreign, imported, and domestic. And then lastly, were getting a lot of attention in regard to our trade issues because of covid, but as we know, and as the National Bureau of Economic Research pointed out, we were going into recessionary times before covid. And all the leading economists tell us its because of these tariff wars that weve been subjected to. And i know in my district, the leading industries in regard to exports are hit extremely hard because of the tariffs and the tariff wars. Wine, which is a big product in my district, takes a huge hit because of these tariffs, so id like to know what ustr is doing and planning to do to resolve the ongoing trade disputes without or with our trading partners without resorting to additional tariffs and tariff wars. Id appreciate your response on those three issues great, thank you, congressman. And, you know, i should specifically along with several of the other members of the task force thank you for all of your great work, with us on usmca. So i would say first of all, this issue of supply chains running through mexico, some of you may have seen that i wrote a New York Times oped last week or the week before, couple weeks ago, basically making this points that these businesses that thought they were so clever running these supply chains all over the world instead of making it in the United States now realizing they were taking on substantially more risk than they thought they were and this was a problem, and i think this was an example of it, and hopefully businesses are learning that you can run the supply chains right through the United States and it is a safer better way to do it. I would say on the issue of labor enforcement, i have stated, i will state again, we fully expect to bring every case that is a legitimate case, and we have pressed and will continue to press mexico, and i think that i think that they operate to be honest for the most part in good faith. But even with that it is going to be really hard for them to do it. I dont think that all members of their system want to have labor reform. We will do between Rapid Response and state to state, we will take the actions that are required. Im happy to work with the Treasury Department to answer your question on excise taxes, and i will certainly make that call tomorrow. The third point you make, which is about getting rid of tariffs on imported wine, we all know what the context is. The context is that we want a 15year case because we lost a lot of jobs because europe was subsidizing airbus and will continue those tariffs in place until we resolve that issue. I would say i understand that there are people who import wine that dont like the tariffs on the other hand many members of this committee and in congress generally come from areas that have in my judgment the best wine in the world, and theres no tariff on any of it. Finally, i would just say the notion that we were going into a recession before covid is just absolutely i have never heard of such a thing to be honest with you. I have never seen anybody ever say that before in my entire life. I hope i never hear it again. The reality is we had the lowest unemployment. We had the fastest the Fastest Growing economy, and i dont so i just want to lay down the marker without elaborating that i think thats totally untrue. Thank the gentleman. Let me recognize the gentleman from nebraska, mr. Smith to inquire. Thank you, mr. Chairman, and certainly thank you mr. Ambassador for your presentation here today, even more importantly for your stellar service. The productivity of you and your team, i mean, im looking at my notes here, and theres so much that has been happening with trade between our country and other countries. We know a lot of folks said usmca could never be done, and it got done. It was very bipartisan in nature, not by accident, but by design, and i think that is really due to your efforts and the president s efforts of prioritizing the various issues in usmca that i think can really be a great trajectory on moving forward. I know that as we look at other trade agreements or possible trade agreements, i know that the eu has been unreasonable. But now we are finding that the u. K. Is eager for trade agreements, and i think thats good news. Im hoping that they will be more reasonable than the eu, especially when it comes to agriculture, as i represent one of the largest agriculture districts in the congress. You touched on it a bit earlier, but [inaudible]. We temporarily seemed to have lost you, mr. Smith. Would you also turn your camera on, please. Oh. Okay. Please, proceed. Can you reflect on the trade agreement with the u. K. And what it might look like in comparison to what the eu has been pushing for and then again on the time line . Great, thank you, congressman. I would say first of all, weve made i would say very little headway as you suggest with the European Union, on trying to resolve some of our issues. I think theres a desire to work through things, but for whatever reason, we havent made much headway. Agriculture i think as you know has been a focus of our trade policy from the very beginning. Agriculture has been a huge huge winner in the usmca and in the china agreement where we have seen literally billions and billions of new sales. In japan, where we have i know youre aware of this, but we have i think last year was one of our best years ever in beef and this year is like 25 above it so were really really i think the trade agreements have really worked for agriculture. The u. K. , we will have agricultural problems in those negotiations, i can guarantee you. They will tend to be in the sps area. There is a sense in europe which i think is shared hopefully not as deeply with the u. K. As it is with europe and that is this issue that American Food is unsafe. So i think and i think thats its thinly veiled protectionism. I often comment that using standards as protection as risen to a state of a high art in europe. Theyre among the best places in the world to figure out ways to get protectionism by pretending like its a standard and not have it be science based. So i these are very difficult issues with europe, and they will be very difficult issues with the United Kingdom also. Im hopeful. Im hopeful that well work our way through them, but on areas of american agriculture, the United States, this administration is not going to compromise, right. We either have fair access to agriculture or we wont have a deal with either one of them. Very good. Again, i appreciate that, and, you know, given the fact that agriculture [inaudible]. Were not hearing you, mr. Smith, but we will proceed to the next panelist. The gentleman from connecticut, mr. Larson is recognized to inquire. Thank you, mr. Chairman, and good to see everybody, and ambassador, let me echo the sentiment of so many who have spoken, what a pleasure it was to work with you on usmca, and i think your efforts can be summed up in one word, integrity, that youve brought to the process at every single level and facet that you are involved with. I have two questions for you. One, the good friday accords that i know you have heard from us before, but just to emphasize, our ongoing concern about open borders, and the other one has to deal with shellfish and specifically with regard to shellfish, the negotiations with the eu. Obviously we strongly support future relationships between the u. K. And the eu. A hard boarder between ireland and Northern Ireland and safeguards all the island economy and the good friday agreement with all of its dimensions. i know you understand this is the purview i hope you can also play a role as we pursue an agreement if you take those first i would appreciate it. Well you prioritize and one of the prospects beyond the initial areas to all parts of the country. Thank you. It was a pleasure working with you and the other members and for all of us but came away with the same at least how we think it used to be in the old days when people worked together and that was a good result. For me that was a good experience with all members so thank you for your comments on that. I am of course aware of the shellfish dish issue and its something they are still in discussions with them about. It is a priority if we do a deal with europe and right now and i would say its not looking good in the short run. The president will use tariffs so it is a priority and there is no logic to their position. We ought to have equal wednesd wednesday. My guess is thi that they are is not going to happen although i could be wrong. But that doesnt mean that we are not going to try. I know its something youve cared a great deal about and for all of the people in this business in the United States. On the accord my position is quite clear if we put up borders, the agreement will Pass Congress so there wont be much point in negotiating it and the chairman made it quite clear and the president agrees this isnt something on whicis notsomething to have a negotiation i must say at this stage i dont see a great deal of pushback. But to some extent this is something that has to be worked out before it is worked out with us. I think that hes smiling. I cant tell because he has a mask on. We are in a court on that in either know the president agrees that also. I think the gentleman. What they recognize the gentleman from new york. Thank you very much. We are having a bit of technical difficulties with other issues here. If the gentleman is prepared to proceed. Thank you for convening this hearing today and its great to be with you as always invested fourpoint i. Would echo how you make yourself accessible and id appreciate that hard work that youve shown. I am going to get to a couple of specific questions. Its been part of the policy decision process recognizing its the same for domestic producers and the guidelines and customs and border protection. We are involved in peace issues and work with the Treasury Department and others. Im happy to raise that with the treasury and try to resolve the. Im familiar with the issue and i will certainly look into it tomorrow. Folks in the district are impacted by this so we appreciate. And then i would want to get your thoughts as we look into the relationship we see what they are struggling with right now and i just want to be aware of what specifically your thoughts are in how we move forward which will be a positive relationship if we are just weeks away from it. What are your thoughts on making sure that this new agreement specifically how we make sure we have that opportunity and the vision will . Canada has a few months to get rid of the class six and seven programs that have been so harmful to us. Theres also a lot of technical things i dont want to go through them right now. There are a number of ways that they could implement that would be less helpful to us than others. We are monitoring those and other members that have been particularly concerned about this issue that we will follow very closely. For the members who dont follow very closely, it is a very complicated system up in canada. Its partially government and qualified private and there is a long history this is something canada agreed to that is clear. I dont believe the government itself will do anything not to live up to their obligations. I think the government will do it but there are levels of complication including industry involvement that make it difficult so we will monitor that very closely and hopefully that is not necessary. I would say the canadian government has been good at leading up to the spirit as we move through that and we will make sure that happens also. I appreciate that. Any assistance that you need but in the meantime, we stand with you to monitor those same metrics. With that, i yield back. The chairman of the subcommittee. Mr. Ambassador, we welcome you. It is a tragic experience for all of us taking the nafta agreement i hope that model can be used Going Forward. They spend too much money subsidizing corporations and doesnt adequately help the majority of small and midsized farmers and to subsidize its manufacturing that we have entered into the phase two agreement with the United Kingdom. I hope that the negotiators can focus on tearing down the protections their ears to trade a price control measures are the two countries may simply have reasonable policy differences. I think too often we hide behind requiring justification for other nations, symmetry or via sanitary measures without allowing flexibility on the values and public input while many may be you should be asking about the production process that requires us in the first place. Cant people have concerns about the state of slaughterhouses in the United States. And how those environmental effects impact our health. Can we export our standards to another country that has legitimate Public Policy concerns and they provide better protection for genetically growth hormones is it possible they might choose to restrict the practices rather than interfering in american commerce as did all negotiations there are some priorities that could push for harder than others but rather than the areas of legitimate policy differences. To allow for the targeted regulations i would hope that you and your staff would be willing to help us to determine where there are some legitimate policy differences rather than the protection impact. Thank you, congressman. First of all, let me return and say what a pleasure it was working with you in this process. Everyone said it was impossible. Without, we wouldnt have had this agreement so they want to thank you for that. On this issue of agriculture i will repeat what i said number one Agricultural Policy is set by the congress modified the representatives so the issues that you raised i know are difficult and are being fought out in congress and i will be guided by what congress does. For right now, the reality is what we want and what they insist from our trading partners is equal access. Access based on science. The difference between big and Small Farmers cut corporate farmers, i dont know much about that. I would say the United States has the best agriculture in the world and highest standards and we shouldnt consume if they have the preference they should exercise the preference but im going to do is try to insist on sciencebased restrictions and to the extent they are not sciencebased window object. Thinthank the gentleman. Before i recognized him i want to recognize mr. Thompson for the purpose of unanimous consent request. Thank you mr. Chairman. Id like to ask unanimous consent to submit for the record the National Bureau of Economic Research in regards to hitting the peak in february and moving into discretionary times. Mr. Kelly to inquire. Thank you, mr. Chairman and mr. Ambassador for being with us today. Im not sure if my camera is on or not. To make sure that they are in the place where they can type fairly and doesnt have to worry about the unfair trade practices around the world. We were having the highest employment in over half a century people were going back to work in places absolutely on a rocket ship so i just want to make sure that we understand during these times they buy houses and cars and it would be hard to find. I do want to talk with you if you can help me again the intervention is more than they are finishing up in the comment section. We start to do infrastructure its about a half a mile for the dealership although i sent this letter and a Company Called steel White International and its u. S. Headquarters are in the district i represent in newcastle pennsylvania is one of the biggest in the world. It is 120 jobs but they have section 301. We do not have a u. S. Supplier of this product and the company has been trying to get relief but they are not getting it. What i am asking you is what should i talk about if there is no producer. We have had talks about the difficulties dealing with china and the problems and the focus that we have literally from april or august of 2017 on this issue of technology and transferred to protect u. S. Intellectual property cyber theft and the like and the effect on the economy so we put forth a study and have a long history to stop the bad behavior so thats the context we are in. Someone that imparts flatware from china i dont know precisely what the u. S. Manufacturers in this area i dont know, clearly they are not in the low end, but there are and a lot of other countries. So, what we have told the members that weve given people exclusions if you have a year or two years to make a change then you should have made the change. Im happy to talk about this particular situation if you li like. The general policy is based on the fundamental interest of the. I would love to talk about this case of the constituents. Thank the gentleman. What we recognize the gentleman from wisconsin to inquire. One of the reasons it is a good model because of the bilaterals [inaudible] like myself and others on the board to the overall negotiating objectives. Where do we go with the uk and the fact that we are currently in the negotiations are going to be updating and thinking it difficult to speak of i think we have lost you. To comment on how we do proceed in light of the decision and what order they will ultimately operate under. Thank you. It was a pleasure working with you all the way not just through the u. S. Mca but other issues also because i felt with you and several of the members and i think they are all better because we worked together so thank you for that. I would say first of all in my willing to work with members of course i am. On the vast majority of them we have some specific funds and big table of some that we are working our way through and its still early in the process. You are worried with a doing regulation and in their negotiations with the European Union will be crucial to us i would say a couple of things. They have twice as big a relationship with europe and actually more than they do with us so economically that is more important for them. Thats a more important relationship with them and in some ways their view is taken to each other separately and they are willing to go with us and that is the basis that we are willing to act they have to remember the reality is that they give europe will affect what we get in here in the position of im a pure pragmatist that we should give up less so its difficult to do these negotiations at the same time but tha that that is the pn that they are in. I do look forward to working with you on this. Its something you talked with me a number of times about so i look forward to both of those. What they recognize the gentleman from north carolina. Thank you mr. Chairman. Always a pleasure to see you as we are approaching the implementation of the first of july id like to bring your attention to several situations that have been brought to my attention just days after Congress Approved the implementation act, the federal institute of telecommunications overturned two decades of practice by imposing a strict six minutes per hour paid tv advertising and this violates by discriminating against tv providers and benefits the powerful broadcasters. Another situation theyve expropriated the property confiscating the technologies with 100 million of property to the advanced motives in mexico city. Obviously we cannot allow them to take advantage of the american entities and we want them to build longlasting free relationships and im going to provide you and your staff with more materials on these matters and i look forward to talking with you about it in the future. We are hearing a lot now on the agreement, a law fro lot from ms and im thankful the members are getting more and more engaged in this ever since the United Kingdom wanted to leave the European Union in fact the first opportunity that i had to meet this is what i brought up with him and also we represent only half i think that there is a lot of potential there and we have a lot of things in common. None of the trade has kept pace with the advancements and there are barriers that they can tear down with the Fee Agreement that would set up a Gold Standard with other countries. To some degree if we could seal the deal with the uk it would forgo the bow with what they are able to do because it would set up a standard. So id like to get a comment on that. If you could talk with some specificity about the next point in the trade negotiation you were trying to get to and what do you think the likelihood of us getting to that intermediary plaintiff there is such a thing before we get to something that is presented before congress its good to see you tomac. We are aware of that and weve talked with stakeholders particularly on this case i look forward to working closely with you to resolve that. Theres nothing we can do until this goes into effect into ticket reaction to enforce its rights under this agreement and i am familiar with both of those issues and they are things that we will and are focused on. In terms of the deal with the uk, i believe ultimately we will have the deal and like every negotiation is when the imperative to have one is overwhelming and our systems are fairly close and they are among our closest allies so im confident they will get an agreement and it will be warmly received by congress. Even between rounds we are doing this visually. At the end of the round which will be the end of next week, we will make an assessment to see where we are. My hope is that they have at least a couple of chapters at the point. We will see if that happens. My hope is they have at least a couple of chapters closeout. But its still a long way to go and a very fundamental issues that we have to come to grips with is the way dont want anybody to think that this is going to be a rollover. I read the press as i know that you do and agricultural issues are heating up over there and i know there are a lot of other issues and the United States and that the congress would not accept in a trade deal and if they insist on those we would push this off until they dont. My hope is that they see the overall benefits of the workers and farmers the same as we do and we can move forward. At this point id say i havent gotten to the point that we can see this issue or that is going to pull things up, but we all know we have certain defensive interests and one thing is for sure where they are not treated fairly. Thank the gentleman. We will now proceed to the questioning ratio beginning with the gentleman from new jersey. Thank you for your Great Service. It did not go unnoticed. I want to talk about labor into something that makes us uncomfortable. It says in the agreement that we must vet all collective Bargaining Agreements. Once fitted, the process for overturning the contract allows to exert. Of the 162 contract legitimation quotes, zero resulted in defeat so far. Some of those have been marred by allegations of employer interference and misrepresentation. So what are they doing to press the Mexican Government for the reforms that cannot be manipulated and will you advocate for the workers to initiate the contract process or labor inspector to supervise . In the collective bargaining certification from either o the company or the union asked for the vote and have to have them all done in as you know there are hundreds of thousands of them so there are a lot. Thereve only been a few done so far. I believe its fair to say that theres been some sort of a labor expert. The other thing i would say its hard for us to use any of the tools to make sure that its enforced but they certainly expect to do it when the time comes. In terms of jobs coming back i would also point out they will be very effective bringing jobs back to america and those were already not in effect the companies were putting in place those rules. The final thing i would say on this the way the labor system really operates, the workers can challenge the certification of the union so theres two things to think about. That is the collective Bargaining Agreement. I think both of those are going to be used with respect to the Bargaining Agreement in the way that that works they will ask for a vote. Remember when we get to the deadline all of the agreements go away so at that point is clear there is a pressure on these companies to get the votes because at some point, they all go away. I want people to remember challenging the union is an important part of the process as well these are not democratically elected. One more question the labor leader that was arrested last week that the authorities believe they become arrested suzanna on trumped up charges. That is something we are working with our embassy and their interests. I am glad you brought that up because it isnt a very it is a bad indicator. They are aware of it and we are going to take this very seriously. But they recognize the gentleman from illinois. Thank you. Thank you for your outstanding work especially the accessibility and that the way in which youve responded to to the questions that ive raised. Two of the issues that im very much concerned about, one has been raised by they both relate to the creation and equity the differentiation between that you dont have to respond. Like many others, im very pleased with the ability that the exercise to negotiate the agreement is the agreement between mexico, canada and the United States into during the talks, the chair and Ranking Member of the house sent a letter demanding that it not include the terms to enact the sort of liability provided for in section 230 of decency act. Of course you didnt necessarily respond to that and some of the other concerns raised by speaker pelosi. At the very end of may, president of trump issued an executive order to rollback section 230 so can you confirm to us that the uk digital trade agreements like any other that we agree to will not include the liability waiver term . Thank you, congressman. I would say i would ask your forbearance the purpose of the trade agreement is and to change any u. S. Policy and this is one where there is a lot of controversy and discussion particularly as we mentioned with a variety of other people. And this is something the congress has to work out. The purpose of the trade law is to make sure that the United States congress, the trade agreement, the United States congress has enough room and policy space within accommodating with the Congress Comes up with and thats where we are trying to move into spa space. I want to be in the position where what they put in the trade agreement consistent with the tpa accommodates the ability to work its will and bob have anything in the agreement be consistent with what congress operates. People try to draw me into the debate. The president has his executive order but that could change the u. S. Law. Congress has to do that and agreed to however that works out but what i want to do in the trade agreement is make sure there is space so that you can collectively decide what the policy should be and i am trying to find the language on that. You dont have to respond to this, but i certainly would like to see us take a more proactive stance on the issue as well as the ability for labor in the changes. Thank you very much and i will you attack. What they recognize the gentleman from missouri to inquire. Thank you mr. Chair and mr. Ambassador for taking the time to be here today. Its good to be in the committee room. You and president , have worked tirelessly to protect american air cultur agriculture which wed true. No one could have predicted the ways in which the phase one agreements would be tested with ink on the page barely dry. Farmers and ranchers are suffering heavy losses due to the global covenant virus pandemic. In the loss of demanded that many producers on. No as we continue to deal with the impact of the virus pandemic on our country. Last month he sent a letter with several of my republican colleagues raising these concerns and urged him to continue to prioritize the agriculture purchases as part of the implementation of the agreement and then enter that letter from may 11 int 11th to e record, mr. Chairman. Thank you, mr. Sharon. They may be issued a statement saying despite the pandemic both the u. S. And china plan to meet their obligations and in its complete ability to hold up the u. S. Agreement with signals have they given that they are prepared to do the same in terms of the agriculture . Disagreement in my opinion is historical for a whole lot of reasons. It has a lot to it and one of the purchases i would say a couple of things on. One, every contact i had with the chinese, they have reaffirmed the commitment to live up to the agreement. Number two, i could go through all of the structural changes and there are scores of them theyve put in place pursuant to the agreement. Number three specifically said when we address the congress, whatever a couple of weeks ago that they expect to live up to this agreement. Number four, i would say just to remind ourselves of the timing of it all. It goes into effect on februar february 14. I know you know this but i will say for the record it was the beginning of march when they started getting the exclusions i think if you do sort of a fair process of trying to determine if i think at this stage, at this stage there is a 10 billiondollar range as recently as last week they bought a half a billion dollars worth of soybeans, for example. Every indication is despite this, they are going to do what they say now. Right now the process we expect them to buy they bought about a billion dollar dollars worth ofn right now and the target is substantially north of that. But a billion dollara billion df coffin as you know is a big thing. I can show you the chart on where they are, but if you look at on a monthly basis this is what we score every day. They still have a good amount to go. But our best estimate at this point i think they bought a fair amount which is particularly important as an indicator because they are in payroll intl business is slow for these reasons because of the covid19. So we believe they bought a fair amount and have more to go. I expect them to live up to the agreement they indicated they will and i know have important it is not just for congress i do want to get on one other point with the uk agreement i know agriculture is going to be front and center in discussions and a big sticking point. Missouri was the largest cow path producing state of peace consumption and purchasing is extremely important. And i hope that we can have assurances that they will engage greatly in their purchases. We will make every effort. I would say this administration has done a good job. I know you know that if you look down the line china and japan which is the biggest market this is something we will focus on. What they recognize the gentle lady to inquire. Thank you for joining us today. I want to get right into my questions and followup. The administration has been the ongoing negotiations and recently released the findings of the fiveyear study on section 512 concluding that section of last balance. They are undertaking the review of the position indicating his intent. I was curious to know if you would connect to have the flexibility to accommodate changes such as those that are under consideration if not walk us into a regime. I am not familiar with that. I will look at it and get back to you. My objective is to get people to follow the rules congress decided on and accommodate the policy changes. With respect to that provision im happy to get back to you. With respect to an enforcement i want to press on some points about trade with china. Your testimony states they have a basic practice of things like intellectual property, forcing Technology Transfers and discriminatory regulations yet you state the agreement was signed in january of this year. You describq. Describe it as grg and say the administration has maintained that the authority and leverage. If that is the case can you tell me how we are doing with enforcement of the agreement because my understanding is that since 2017, theyve agreed to more revenue but they are still not paying what theyve agreed. Has that changed since it was signed into effect january 15 of this year . I dont agree with the statement that there was no congressional input. Ive talked to many members over the course of. I don i dont know what members you were talking to, but we dont feel like they have any input in the process. I will be quiet now and what you speak. I would like you to address the substance of the agreement. The u. S. And china film agreement. Has that changed substantially . It wasnt covered by phase number one. Its an issue on which we are still negotiating. I realize the industry has thoughtfully consider to be a bad deal and its way below International Standards into something we are negotiating. It isnt covered by phase number one right now. But it is something we are still having ongoing negotiations. My guess the reason we called this phase one if my guess you can find things and complain and it would be in that group. We worked with the industry at great length and final analysis we couldnt come to an agreement with china. I take issue with saying that its groundbreaking to force compliance because there is still a lot of compliance in the film provision. I want to ask one more question in the time i have remaining and that is trade policy has a direct effect on jobs in black and browand blackand brown comm. What trade priority is our dataprocessing to ensure that it promotes racial equality and equity . Im glad you brought that up. The trade agenda and fiv in fivr report is something that i commend that we specifically had provisions that we think are significant results of the policy and the fact that its so prominent is on page two of the agenda but it goes through a variety of professions and that is that the wages are growing faster and they are seeking the fastest growth since President Trump took office. Those with a bachelors degree im going to get to it if i can. Average growth in the tenth percentile is outpaced growth of individuals and average for africanamericans and hispanics outpaced overall. My question is what specific policies as the administration pursued . Spec this is such an important part of the trade policy to take back manufacturing jobs to america and the result is those that have historically been disadvantaged will have middleclass Family Supporting jobs and thats precisely the policy and its also to discourage outsourcing where we lose those kind of jobs and so nothing has made me happy caret about the results of the policy. We are going to move on from here. It would be better if you spoke on the phone together . I was going to ask if the ambassador were willing to answer in writing because im asking about specific. Thank you and i will yield back. What they recognize the gentleman from new york. Thank you mr. Chairman and ambassador. We both appreciate the qualities that you have displayed over the past year in your work with our committee so thank you for your service. As you know the United States was the worlds manufacturing powerhouse for the last 20 years we lost 56,000 in factoring businesses into 6 Million Manufacturing jobs. U. S. Trade deficit was 650 billion last year. The United States has had a trade deficit every year since 1976. There was one here before our colleague was born which shows the trade deficit. It is a high wage high regulated economy, 4. 5 trillion with 83 million people. Its the strongest and largest economy in all of europe and 20 of germanys economy is manufacturing versus 10 in the United States. The Martin Luther king statue on the National Mall in San Francisco bridge was made in china. The Freedom Tower that extends almost 2,000 feet is 104 stories. The tower that was placed. The twin towers that fell on the 9 11 the glass was made in china and steel was made in germany. They learned from the german manufacturing powerhouse. So first, thank you for your comments but also for your emphasis on that. I am not one who believes that when they talk about it i did a lengthy article in the Current Foreign Affairs that makes the point i think you would be in total agreement with i hope you get a chance to read it. I think manufacturing jobs are really important particularly for people who dont have a college degree. We have to remind ourselves is half of our workforce. It so important we bring back manufacturing. You mentioned germany. Why does germany . I believe its fair to say they have a trade deficit may be well beyond that. I would say a couple things about germany. Number one i believe that part of the agreement that created the European Union was that countries like germany would end up with the currency of the euro which is essentially twoweek for their economy. To me the basic commitment was a weak currency allows him to be a manufacturing powerhouse and in return they pay money to the south so that is part of their equation and its unfortunate there is no way to emulate that. Also they use standards as a defensive to all. To all. That so we could and should take on. And then you get to private level sectors the next big thing is the Automobile Industry where they have been so effective. One of the things we are trying to do is use usmca to insist they bring manufacturing to the United States. The German Automobile manufacturers that are so important and all those that spin off come to the United States. We have seen that happened in the past but we try to emphasize that. Usmca i do think we will have that effect most members agree the Automobile Industry was moving south before usmca and probably it was one of the last automobile plants before we started the renegotiation to be built in mexico it was industrial policy and we have turned that around. I will and where i started i completely agree with your fundamental decision we have to bring manufacturing back to the United States the president agrees. I dont think any administration has actually taken that on. I am pleased with it until now. To me thats nonsense i will recognize the gentleman from South Carolina we hope is doing well. Unmute yourself. Can you hear me now . Mr. Ambassador, thank you so much for being here today. My whole focus is on american competitiveness and between tax reforms and tort reform which you have been the spearhead usmca, progress moving forward with eu and brazil and britain has been amazing. It is the reason why we are the envy of the world three. 6 percent unemployment, historic lows. We at a rate workforce of the work numbers not even the Obama Administration returning all these things that show up with our economy saying that we were going into recession i cannot see that anywhere. That is blatantly false again we are the envy of the world and in fact i want to reintroduce that into the record mr. Sherman to show the Economic Indicators in that very report showed how exceptional our economy was and in fact moving on from that ambassador lighthizer i want to commend you again on what you have done and what the president has done with tax reform to create opportunities for americans that havent seen an opportunity like this and decades. You heard me say before when i took office in 2012 we were right at 20 percent unemployment just before the virus it as we wrap four. 2 percent which is just a miraculous turnaround due in no small part to your efforts. Thank you very much. I want to move on to the china deal and phase one i have farmers in my district with various commodities including tobacco and i want to get your sense of a timetable with chinas commitments under phase one. Thank you congressman. The way we structure the phase i agreement is because there is a disconnect when it starts it when the economy starts we expect to make commitments in this calendar year even though technically we did not start until february 14 and that exclusion the beginning of march if you look at the commitments, generally there is back loading if you look at sales and that soybeans are sold at the end of the year they are buying a lot now that a big emphasis at the end of the year if you look at 2017 that we compare it to it is 10 billion so our objective is to get as much of the other commodities to be a lot of soybean sales. Imi deputies talk to china every few days. We work out a variety of problems. We monitor the data. I will comment specifically on any one product in that respect, but they say they will meet their commitments and the indicators now they will. So that is what we are hoping. Mr. Ambassador ive Steel Production in my district as well i understand despite the fact it is down 10 percent china continues to increase their capacity that they are at the highest capacity ever growing 1 percent since last year what is the administration doing . I believe that was steel i couldnt quite hear. If you go back and look at the last 25 year problem in the Steel Industry that said come down to one word and that is china. You know this very well we have talked about it. China has created ten times more capacity than the United States has we dont believe that economic. What the president did was put tariffs, 32 tariffs on all the Steel Companies in the United States and there are issues here and they are on that. But i believe the president had not done that we would be looking at a catastrophe in the Steel Industry im very proud that some of the most important things he did. China is still moving ahead as you suggest with their production but its more and more expensive for them to do it so the president took a bold step two years ago and thank god he did. There are still big problems in the Steel Industry. Your time is expired. I will recognize the gentle lady from alabama. Thank you mr. Chairman. Mr. Ambassador thank you again for all the hard work you and your staff did on usmca. As a part of the Democratic Task force we spent many months together negotiating an agreement because of the collaborative effort i can truly say i think that agreement was transformative in the area of labor and the environment and enforcement provisions. We cannot hold of usmca as an example of what is possible when the administration works of congress. Despite its success unfortunately the administration has chosen not to work with congress on other types of trade agreements. Instead it frequently tries to byPass Congress to implement those trade policies against objections. Instead of consulting with congress to use the trade Promotion Authority as congress intended this administration shows to pursue any deal with japan to deliberately cut congress out of the process now it appears this administration is doubling down on the skinny deal strategy as they rush to have expedient deals with india and brazil and potentially with australia and singapore and i believe this is dodging congressional oversight to deny us an opportunity to vote up or down i know there are holes in the trade Promotion Authority but its meant for a better work product not just driven by the executive branch but also has input by the legislative branch. Furthermore you know i am troubled by President Trumps 232 tariff threats against our allies he issued another threat just last week as workers across the country continue to be threatened by the Economic Impact of covid19 not only are they abusing this section 232 powers by labeling imports as a National Security threat that continues to violate the law by refusing to release section 23 d to auto report to congress as required by law. I know you know these issues very well. At least my statements for the record. The use of skinny deals im supportive to comprehensive Free Trade Agreement with United Kingdom im glad they are beginning the second round of negotiations because this has to skirt the tpa requirements by congress i cannot believe if it will reach a skinny deal with the uk to be done by november. Can we get assurances today that you will not buy a Pass Congress with a japanesestyle skinny deal . Yes. I like that answer. I am interested to see are pursuing a free trade on Free Trade Agreement with kenya with kenya and a skinny deal does not shut out the ability to provide oversight so i will trust we will make sure we get congressional oversight when it comes to kenya. I am curious how you view of potential kenya Free Trade Agreement i saw support efforts to strengthen our economic ties with african countries but i am concerned if you view Free Trade Agreement . Turn your microphone. It was a pleasure dealing with you for the whole process and the usmca process and the result was better because of your involvement. Needless to say i dont agree with your statement on the japan deal i can talk about that at great length if you want i will let that go at this point. And i guess i should say that this is worth saying quickly come everything we do is not just an fta we worry about problems that come from american manufacturers and workers and unions i have a list that has 40 or 50 things that these things come to us from shareholders of congress and we work through these things. There are scores of these things and thats what we do with ustr in agriculture and other areas. In the case of japan we basically got the benefit negotiated tpp by a different route and did not have to pay ten times as much. What we do in all these cases is solve problems for american businesses and farmers and ranchers and labor and we do work with congress so the relationship is we want to Free Trade Agreement that is as ambitious as reasonable and we want that to be a model its not a substitute. But i will say most people in the world when they negotiate get something for what they giv give. Look at europe and their preference program. We havent gotten anything. I think this is a good program for some people is not a good program for other people and the best thing we can do is have a model agreement that works for significant relatively large agreement. We recognize the lady from washington state. Thank you mr. Chairman and mr. On mr. Ambassador. Last year with the chinese overcapacity i asked if you made progress on a specific commitment to address the issue and since then we had a phase i deal failing to address this issue and now one of the few left in the country unveiled its operations putting 700 people out of work. Im also concerned china plans to revive Industrial Production following the downturn of the covert pandemic to exacerbate the current problems in the market. Its past time for this to be a priority in the coming weeks and months i hope he will step up the efforts for chinese overcapacity and it will work with you on this. I also want to ask given the pandemic we definitely have seen the importance of a stronger Manufacturing Base with ppe and pharmaceuticals the reality is we still need to rely on imports to a certain extent the eu had a proposal to negotiate an agreement to eliminate or substantially reduce to strength and cooperation what are your thoughts on such an agreement . I will spend time on aluminum that the president did take a bold step to put tariffs and the problem isnt just china as you know but also a problem with canada we are working on. I am a Firm Believer that the things we need to fight this in the next pandemic should be made in america we are a great country if we are a small country with a small economy. We need to put together a program that includes tariffs. Im not in favor of reducing tariffs on the things we need im far more in favor of increasing tariffs. As part of the overall plan to make sure the next time we have domestic manufacturing capability in these areas. I think we have to have the manufacturing capability but you dont get to that by entering into agreements the net effect is to shift that overseas. The other point i would make to have a pharmaceutical section where those countries got together that we will all agree zero tariffs on our pharmaceutical products and then give that benefit to the rest of the world is what struck me as crazys we have a position with certain pharmaceuticals we are other condition of others that are not so committed i dont buy that approach to have a tariff piece. I also want to ask about the digital project on protection and then to make the moratorium . And what about the countries to sign off . And to care about the whole area we have a moratorium and then to do everything to have that initiative moving forward in that current environment. It with those videoconferences and talking to a variety of them. And with the United States makes commitments and clearly it is a matter of emphasis for us. My time is expired. Thank you mr. Chairman. Mr. Ambassador, those that have a real interest to be fixated on this what can congress do or the committee do to the adjudication body to give them proper reform to start working again . The issue is the appellate body its a long position a starter for the proposition the wto and radical reform and to run up over time and the appellate body at least in my opinion is nonfunctional we have grown up in a situation with Free Trade Agreements and the like all of which have extra benefit that are members of the fta. My problem with the appellate body is i have a long indictment of it. Then you borrow are looking at this talking about it. Mr. Ambassador the question i was asking is what do you have us as the committee . At this stage to on at this stage to be honest and then to realize the nature of the problem. The creation of jurisprudence the people that are unaccountable at the wto at the heart of negotiations so if you say what what i have the committee do to get the appellate body back again it was hurting our workers and i dont feel any compulsion to ever have it come back into affect so then you can say that is a reasonable debate to have a discussion whether or not what kind of dispute. And then to have a settlement process that you have panels that make a decision and sometimes they had a stalemate. Post uruguay. And with the appellate body on trade. And the economic wellbeing of the United States. If that ever goes into effect that will be fine. So what is the alternative . To be fair to the United States. And then to engage with the members on. We would love to hear ideas and the usmca coming into effect shortly. With those rules are mechanisms that need to come online . And to do everything that is necessary with respect to canada and mexico and then to litigate about. And then the situation on the border with the effects on arizona after july 1 day on this but we are fully ready to go. Thank you for your patience i yelled back. Gentle lady and meet please. Thank you mr. Chair. Talk about protecting the intellectual property of the Free Trade Agreement im in possession of a letter from several stakeholder including the physicians and the Recording Academy for the successful efforts what the allegation with usmexico Canada Agreement to ensure that americans are compensated for the recordings. As you go forward with future trade agreements there are deficits that deny 150 million annually and with that uk treatment that you work on similar agreements that they are properly compensated i ask unanimous consent to include the letter. With respect to mexico compliance that there is a concerned about whether of a robust notice for that content creators can notify about copyright infringements and then to impose a 30 percent quota if that were to pass with usmca and those with the most valuable prime time tv ads for the providers of mexican broadcasters that is the de facto barrier for us entertainment with that discrimination. Led you elaborate that they are in fully compliance with the ip chapter. Thank you for your comments and with that provision of usmca and this is the correction of a long long and justice. In all things we are concerned about. And one in question it was already raised those that have voiced a concern it is a clear violation to make it clear to mexico they move in this direction and then it is our view that these are violations and the kinds of things that we wrote the agreement to avoid and to enforce. Thank you for that. And asking about the exclusion process i have a district and then to keep that in the us and with that exclusion in march but and then to have that extension request to file nearly 800 separate request so it is a nightmare situation the dont know how long that extension will be while others are only being granted until the end of the calendar year. First time play with the company. Second, there is a process they go through. And to get the refunds and hopefully is not too lengthy or difficult we are happy they are getting the refunds. All of the extensions from now on and then its what happens after that. And i would say with respect to these companies a have had a few minutes ago depending on the situation they have had a year or two years to make some change in that process with that whole background and to remind ourselves with that intellectual property in american jobs and i realized thats why we created the exclusion process. Thank you for your ability to walk across the aisle. So i just want to follow up on some questioning and in fully intend to ask this but and those that want to stand up with a Free Trade Agreement that it looks a lot like the others so for those that we see and whether or not word look at providing at number one and number two whether or not there is any mechanism in place that the us markets are opened in kenya we dont destroy the market for the canyon and the economy and then i have a followup question. Thank you. First of all if i said we want that agreement to look like the other than a most on misspoke we wanted to look like a traditional Free Trade Agreement witnesses we are in a new territory. With Free Trade Agreement with the country and africa that is less developed with the structures we dont want to do anything to harm the canyon economy. And no specific plans. And with that tpa process. To start another couple of week weeks. And we were talking about eradicating forced labor in china and their human rights violations. And then to have accountability and then this came into effect and in that case with oil and gas companies. Now in the absence of these kinds of safeguards what are we doing to protect the supply chain and what are we doing with regard to making sure we are conflict Free Trade Agreements. I cant get the sense of that the nature of the question is what are we doing on forced labor and we have statutes where you can stop the product. And i would be interested to know. The predicate is and then the congressional reading that the sec role we have seen murders and rapes with conflict minerals with that commercial development with these human rights violations. Mishap and two weeks i want to know the success. Im not familiar with the regulation two weeks into the administration and from our point of view we have provisions in the usmc also with violence against workers with forced labor there are specific statutes and something we have to be vigilant about. Thank you gentle lady. We want to make sure everybody gets their questions in the ambassador has a chance to offer answers. The gentle lady from indiana. We are so good to see you and what you continue to do you want to associate myself with a strong support to reauthorize the gse. We have talked at length about a specific issue and with that almost always found in indonesia. They found its the best on flexibility where is no substitute and i thought hard to ensure it is coming in dutyfree if that lapses will be back to paying unnecessary terrace. So that administration of formally taking the position and to point out one thing that has come to my attention to the benefit of mr. Brady there are countries and then to have better trade benefits and to be completely have a situation and if its not indonesia with a Free Trade Agreement on to get have dutyfree access and it requires them to get have reciprocity so for example as a poultry producer in the United States to have a very high with south africa something that has come to my attention recently but i havent talked to the president and it is a reasonable suggestion. But i will. This feels forever ago i called to we examine tariffs on the medical supply and thank you for doing that. It was in short supply in the businesses with the responsibly trying to reopen by protecting their workers that some of these exclusions are set to expire with those surgical masks on september 1st so we share the same goal to bring the supply chains i have legislation to do that but demand will be high for the foreseeable future so to build that domestic capacity that has to me standard so would you be related in granting exclusions as well and are you taking the recent report on coronavirus for any other exclusions . With respect to the tijuana and process from those that the members brought to our attention that something that we will look at where that be the policy and those 23 products brought to our attention almost none of them have tariffs that the same time we have us Companies Getting into this business which is what we wanted to do i deafly would not give away then the manufacturer american one of the ways to do that is to add tariffs. You see any Automatic Extension given the fact trying to give these companies backup. Well i grant extensions 2301 because of covid . Probably not. Thank you mr. Chairman. The gentle man from michigan. It is good to see you. Thank you for your service and to be as my colleagues expressed to the extent china lives up to the agreement in phase one to see consequences of my district already. And then to use every tool at your disposal to make sure that they do. And with usmca and with the improvements without the support of that agreement that specifically i am concerned to which the American Companies that they may not fully comply that one question i have that while the agreement is adopted that the labor reforms i assume that is correct from your perspective . Mexico has done what . Adopted . That is the necessary reforms labor reforms. They did pass the labor reform bill but do they have in place laws that conform to their obligations. Thats not the same to put those practices that are not consistent with obligations. And during that process leading up usmc a and with their practice in mexico. And many of those same companies now are violating the law and mexico but what im concerned about obligated to do but only do it they are forced to do im just curious with the implementation is important but it strikes me as a sets frustration on a source of frustration and now they dont seem to be with that full implementation of the enforcement mechanism to address these companies by adhering to the new labor reforms in mexico. Thank you congressman for your help throughout this process usmca for the first time in history has a Rapid Response mechanism and if companies from any other country are not following the provisions with respect to collective bargaining and organizing there is a very fast process taking place in the consequences are drastic just remind ourselves that there is a violation through the Rapid Response mechanism with response the products from the facility there has to be a proportionate response with response to the second with respect to a third violation they cannot ship anything from mexico to the United States. They are jacksonian actions i am expecting companies to take the steps necessary so to hope that they would get to us if there are things to the extent we can enforce the agreement you want to bring that to their attention in the bargain that they made with mexico and with us. We do have examples of companies we would like to follow up with you on that i yield back. The gentle man from philadelphia. Thank you mr. Chairman and mr. Teeten. To express my agreement something that was said two hours ago those were the words and the sanctity of that agreement that is so important and essential that before we talk about adopting any trade deal there is no violation of that negotiated agreement and with the response to that the second response of there is no violation of the good friday agreement i would find many advantages to the perspective of the trade deal i am curious and here is what i mean the uk is the market of 60 million the European Union is a market of 450,000,007 times larger so why is it it is such a high priority when we leave on the table the market close to half a billion people. Thats a great question. It takes two to tango. Europe does not want a deal. And in tax law. And protection is a. So why are we dealing with the uk because they want to deal with us. And with those in the eu. And with the french media or german media. And then made is that this attention gets. And with that misperceptions. If one of these things is taking on mythical proportions and to know the food supply. And to be very concerned that food process is safe and one of the things we do is to require its not chlorinated it is awash to make sure pathogens are killed on the products so with a lot of vegetables and the like that the United States has safety standards. I believe there are combination of protectionism and nonsense the europeans have decided and the opposite is probably true it is probably healthier to do it the way the americans do it. This is something in my judgment has to be resolved a question of consumer preference. I have been in the United States with lots of europeans none of them ever got sick from eating chicken. In my view it is emblematic of a problem that they have that they will use that they think of as standards as protection without science. So i just want to say im glad to hear your response the whole question about many deals. And to recognize the gentleman to inquire. And then in terms of the representation of the trade agreement and then talk about japan and future trade agreements. And that progrowth agenda. Thank you for that. And the first one is the responsibility to have purchase agreements can you give an update specifically on those purchases between 50 and 60 china is obligated to go through on . The vulnerae so as related to pharmaceuticals and other medicines. As it relates to moving the supply chains back, to me this are complicated, intricate and if they are going to do that it seems theres a sadistic and cost associated with that if you can comment on how would we pay for that if it comes from tax incentives or money that has to be put forth by the government to implement bringing back some of those supply chains. Thank you, mr. Ambassador. First of all, on the question of agriculture. Over 12 billion in 2017. It is the difference between export import numbers. They are at about 3 billion. We feel good if you think about this one way to think about it is early in the year basically throughout the year they were from brazil because that is when the season is. Right now its when you expect them to be bought if you look at the 2017 where i gave that big number, close to 10 billion of that was towards the end of the year so we are starting to see a lot of the major purchases and we feel good about it. The vast majority even though its a little early for our season last week it was half a billion dollars of soybeans and i focus on a little bit because its such an important market for the companies. This issue is a complicated one. Do i think it should be brought back, yes. But i think it should be brought back everywhere else, yes. As i mentioned before with one of your colleagues we basically need to bring as much back as we can. Do i think we can sit down and decouple the economy, no. That was a policy option years ago. But i think that you will see supply chains come back as a result of the policy including the kind of things you all did in the tax bill and regulatory space. We shouldnt forget the substantial 370 million. I think you will see some change in that respect, but i am basically for manufacturing in the United States. Thank you. Let me recognize the gentleman from pennsylvania. Thank you mr. Chairman for this opportunity. Its been a great discussion. Mr. Ambassador, how are you . Why dont you hit your microphone, mr. Ambassador. Im doing well and they look while also. Thank you. I participated in the Business Roundtable and we discussed how to create this opportunity [inaudible] a number of colleagues talked about this but i want you to spend a little time to on the growth and opportunity act. I talked with you personally about that. But a lot of people under 30 years of age. Thank you, congressman. You and i have spoken about this. The reason we wanted to do something, i think that we are all going to look back into not too distant future and say we didnt do anything in the policy and that is inexcusable. I believe in 15 or 20 years ticket of 2. 4 billion in Subsaharan Africa so we have to have something. Theres a whole lot of complicated issues on that. The first thing we have to do is get as much as they can with one of the significant countries. Thats number one and see if we can have other people start doing that. Its complicated because they are part of the community and they also have this issue of africa starting their. Is the infrastructure for trade. They need to be able to have hardworking people and the resources. They need this kind of infrastructure. My hope is we can develop that and then have it spread. Its a good program in my judgment and its been used less than probably most of the ambassadors you talked to. We wanted to build this regulatory structure so people have confidence when they are doing business. That will make africa more prosperous and better suppliers. It is a High Standard for the Free Trade Agreement. They are not thorough kinds of agreements, so our hope is that we can do this and maybe it will spread to the [inaudible] given limited time its more than any other time in our history. Nobody knows what it will look like that it will be the postworld war ii. One thing im sure of is there will still be a Global Economy in the position and ability to compete will be critical to preventing futur the future proy of our children and grandchildren. My belief is if we want to ensure the longterm growth. How will the administration start to work with us in congress to optimize and protect and grow american jobs to in terms of the vaccine that will need production for such things as the syringe into the house and in that context we can discuss the administration. In the first place, congressman, if your view is that they should submit additional response am happy to do that i certainly agree with you we have learned a lot in this whole process and one of the things we learned, and i wrote about this in a New York Times oped theres risks in extended supply chains to so that doesnt mean its going to be the case. The issue is a pretense for the industry that went through to mexico. So theres things you cant control outside of the United States. So i think that we did affirm that and hopefully its something since we live in a freemarkefree market economy te businesses will all understand and when they make decisions in the future will make that a part of the population. I talked to Business People who have certainly made that point. In terms of multilateral agreements and Bilateral Agreements, i expect they will have a combination of both. You know because youve spoken we are better having Bilateral Agreements with thei that therea major role for the agreement also. Would be welcome doctor lindstrom. It is great to see you again face to face. I appreciate that. Congratulations on your work on additional agreements and i have to say that there was a wee value the relationship we have with you and the expertise that you bring to the table. What im going to talk about is a little bit redundant from what youve already been asked about today but forgive me if you will. Right now we have a Public Health challenge obviously and with the bat has come and economic. As such we have a National Security challenge that i think we need to face. With this pandemic, it gives the opportunity as it should have an after action review to take a look and see what peace challenges were, with the shortfalls weresome of the vulnerabilities were and what they are. One of the issues that rose to the surface. The surface the reliance on adversaries for things of great need. If someone had told me that our protective equipment and pharmaceuticals were coming from an adversary that would be surprising. Most people were caught unaware of the potential danger that gave. I was at an interview not long after it starte started and we d we were short on supplies. Whats the answer . With this administration has been doing which is bringing manufacturing back to the United States, and i think that is the key i give you credit for bringing up the dangers int dand trade abuses and working in china in particular but the change is very challenging at this point. We could have done a lot of tenr 15 years ago but its even tougher today and i appreciate that. One of the things going through my mind as the forceful agreement on medical goods, pharmaceuticals and a look at some we debated a couple of years ago with the Running Shoes that were given when they join the military because it has to be 100 domestic. There was only one that was 100 domestic and we debated over that and i find it ironic now that that was a big deal compared to what they are really taking a look at now because it isnt that simple mvc import export, things that we do not want to have happen if we want to encourage innovators and developers to be in the United States. We look after the hurricanes we were short on saline because we rely on one area domestically to produce something thats very necessary. We are challenged with what is our minimal domestic need and production and on what products and retooling capabilities and things like that in manufacturing. Its going to require discussion but i believe the time to you what should congress be looking at doing to address this problem, what can we do in trade that we all agree could have a huge impact and where do we start, how do we encourage them to come back looking at these agreements you said it could be a combination. Im glad to hear the openmindedness. If you have any newer thoughts i would appreciate it. I completely agree with your conclusions and the fundamental we could never be in that position again when they dont have basic manufacturing we think about these masks and do not have enough capability in the United States it seems completely counterintuitive. I would say as i talked to some smaller countries they need a plan so we can all share and theyll look at those kind of plans but weve learned in the final analysis, our closest allies will keep this stuff for themselves if it comes to whether or not a and so should they so should we. It isnt rational to expect to people to set up a ventilator they need to keep people. Its crazy. We are not going to do that and neither is anybody else. Having these agreements is a good idea but fundamentally, i believe and i think the president believes they have to have the ability to make these things in this country. And that is going to require a combination of a lot of the things the youve already done. Also you have to have enough incentives to win the next crisis comes. Let me recognize the gentleman from new york to inquire. I want to echo my colleagues and thank you for your Public Service you have done a Great Service to the people of the United States of america and your expertise to address these issues in what has been a very forthright and balanced. With the remarks of all of my colleagues talked about the importance of enforcement regarding labor and the environment, and i want to spend the balance of my time just talking with you about china. As i said before here in the United States of america we believe that persons they elected to the more they become like a sand obviously they have excelled much to our detriment in fact we refer to them as being an existential threat to us. I appreciate your hardline approach. I am concerned about a lot of the behavior. Many of the products are introduced into ouwereintroducey chains and brought here to the United States. And im concerned this administration hasnt taken the task even as a part of our trade negotiations and regarding the treatment of others and if we have the power to do so correctly and it hasnt even been brought up with strong bipartisan support it hasnt yet been signed by the president. I skimmed over an article that you wrote on the council of Foreign Relations about how to make the trade work charting the path between protectionism and globalism. Its fantastic and balanced when we talk about the role of trade whether it is foreignpolicy or maximizing output. Hell do we balance the desire to get the world to be like us as far as creating the society that we think it should be to create a just world with a desire for an economically efficient system at the same time and what is your plan for dealing with china as we see them rejecting these ideas that we have adopted in our country and the rest of the world is about to it and getting them to be more like us but if they dont, recognizing that we cannot continue to have this trade policy with them. I cant hear you. That your microphone on, thank you. Thank you for the comment on the article. I do hope the members read this and i think that it does reflect the way that a lot of us think about manufacturing and trade policy. No one has done more than President Trump to try to rebalance our relationship with china particularly where nothing has been done and i do not see that as a partisan comment as all and then ten years later and years after that. No one has done anything and we have put the tariffs in place and have done all the things we would expect to but its pretty obvious from the beginning that we were letting this get out of control. I always ask people to think about what is china, as a group with several people. There are those that are hardliners and they do a lot of the things that we find really quite horrific in terms of our own relationships. We need to know what they are going to do about the forced labor camps. From the point of view of the trade agreement, it doesnt cover this issue but i would say in terms of importation on that specific question and maybe we could have a longer argument online about this because they really do want to engage with you on it, they cannot be shipped into the United States and that is that u. S. Law and isnt something that will be strongly enforced. Let me recognize the gentle lady from florida. Thank you mr. Chairman. It is always a pleasure to hear from you. As you all know, it is critical when countries around the world need each other in combating this virus. Id like to get a little bit of background and then ask you three questions. First is our topic of seasonality which is especially relevant. Id like to remind you from your january letter including the commitment to hold. Second, ive been pretty consistent with unilateral tariffs under section 232 and 301 the National Security justification. On 301 i agree that it is a bad actor that utilizes trade and practices inconsistent with the commitment that i am concerned the approach youve taken has done more damage than they have in making any changes in china. After all, they are taxes on the consumers industries. More generally, what i think ive heard you say repeatedly in this hearing is they are imported to change american behavior, too so that they will produce in the u. S. Isnt, however, the pain felt by American Consumers and businesses is now being magnified and people with the loss of loved ones due to the virus, they block income from the jobs and they dont really have the extra cash in this moment for the burden of paying higher prices. As it relates to businesses in the revenue from the foreclosures and economic crisis and the ability they also lack the liquidity in the downturn to make significant supplychain shifts for investments in the domestic manufacturing so, i am concerned the trade agenda and inflexibility on extending its hours the factors and finally with respect to brazil, you may have noticed i was the only democrat to not sign a letter to the i dont want to preclude any trading so the question as that follows on the seasonality do you have any plan to have an inperson hearing later this year and is it fair to say as long as the Trump Administration is at the helm they should continue to expect to pay them indefinitely into been on brazil how did you plan to change the policies to ensure the values or is that even a consideration . Think you and i wont go back the rest of my time. Thank you, congressman. It wont surprise anyone to know i dont agree with an awful lot of what you have to say. Pure efficiency at the cost of manufacturing and cost of using intellectual property is not a good policy. I like to say every now and then what would you do and so far i havent had any response other than in the face of china i suggest over the last decades people talk to them a lot in the situation. We are dealing with a world of alternatives. In terms of seasonality, we want to wade through seems to be won in floridonein florida and one a and obviously our preference would be to have a hearing that is what most members want so im happy to do that if that is what the members want and it can be done safely. In terms of brazil, what were doing right now is trying to work our way through specific problems to have brazil open up and create jobs for america. We dont have any plans right now but on this general they should be used to create jobs in america i and the tariffs on the other hand if they become counterproductive. Thank you, chairman neil and Ranking Member for this important hearing. Its great to see you and what an exciting and happy topic. In recent history is not in our total history have we ever seen more farreaching or substantive for the good of the country with respect to trade policy van in the last three years or so. Politicians have been talking about doing this for years or decades. But you put some shoe leather around the verbiage and got it done. So that they stay bipartisan and they are truly sincerely thankful for the. With his political will to stay the course. Its for the worker and the American People and the economy and the future generation that will reap the benefits of so kudos to you and the negotiator and i think if all americans recognize the accomplishments of i appreciate the comments in response to my colleague of we lost 50 of the market in china and that is our Number One International market and with all of the other pressures in price drop, we needed to say thanks for your comments. Now let me say this with all the work weve done we will only realize the full impact of this if two things happen and i would love for your comments on this enforcement, enforcement. All the above provisions this is nothing but a piece of paper. The way will reap the benefits and i know you know that a. We can make these changes. Theres more to go there as you know. But if we need an International Mechanism like this it doesnt function fairly then what good is it so i would ask you number one the ways and means to we can make all these games you negotiate and supported and worked on over the course of the last couple of years. Thank you for your comments. I would have left the meeting immediately. I was in some alternative universe. Third, we sold a lot and we are going to sell more and its almost countercyclical because i cited before as evidence if its something thats bipartisan ive never had anybody come to me and say dont enforce, so i completely agree. Bipartisan bond enforcement and right now in this Congress Bipartisan so i agree with that and i really want to work with the members. It may make sense to get together a thank you mr. Chairman and ambassador thank you. I dont think that could be possible if. In the past the administration had trade issues into that with the steps the president has taken with hong kong does this signal a new approach especially with regards to the ongoing situation . Thank you first of all no one has tried to change the relationship between the United States and china acros acrosstheboard more than the president of the United States its one of the things he ran on what an awful lot of democrats that were designated with the end i think that its taken a very bold step and thats important. In terms of it being a new policy, i dont know how to quite respond to that. Weve always had a firm policy and we will continue to have one. We have to find a way to create change. I remember the letter well and ive talked to several members about it. I realize there is no appetite and i would say we are always working with countries its not an endorsement of their policies or anything else. But i have a list i wont go through for 45 or 50 things we will continue to do that but i understand your sense very clearly. Counterpart to pulling out they are rightfully concerned about them, but is there any perspective on the negotiations here and why they pulled out of the negotiations . We have a situation where a variety of countries have decided that the easiest way to raise revenue is to tax somebody elses country and they are also in the position where its a sweet spot and easy for them to United States will not let that happen. Weve had a negotiation going on and found we were not making headway onto it was the most important pillar. The other people getting together to take action against the United States without our acquiescence is something that is not acceptable. If you ask me the answer on the International Regime it not only focuses on certain sides and industries that where we generally agree how we are going to tax people rather than have them go off on their own they would say we are no longer involved in the negotiations. Id be happy to sit down and go through this with you because i have a lot of ideas on this. A person we could reach out to and have an honest conversation even if we disagreed. This is a week befor the week bd the boat where we 385 votes and 41 no votes. What does it mean for the u. S. And the u. S. Will in the globe when it comes to trade . That is a great question and before i say anything, thank you for working so closely together on that. I would commend in terms of thinking about the trade policy, i wrote a piece in the Foreign Affairs magazine that deals with these issues in a way that will resonate with you and hopefully you will get the chance to read that. If you ask me what is the consensus on trade they will make trade deals that are in the interest of the United States thats fundamental that we are going to enforce every single agreement and create new mechanisms. Some would agree thats probably we could do this to make headw headway. So to me it updated and the other thing that was important as they had a roll at the end when it didnt matter who was in the majority or the minority they want to have a fair and balanced relationship. I think working that way. I agree with you it sends the message its not just how much it helps grow the countrys gdp but its what we do to help that agreement. How does it do Different Things forward and how does it help the american worker. But i would disagree that it could be better. Im not going to spend the rest of the day arguing about it they were in violation of some labor rights. Another question has to do with can you tell me in the Office Mandate and how does it relate to . Are you there . What was the first question again the purpose of which is to try to determine what we can do to bring manufacturing back to the United States. So, i think that in some cases other countries will focus on why is this specific industry not manufacturing in the United States, and what we wanted to do is have a group of people thats a fine if we make fees were those changes we could bring the industry back and im sorry i cannot read member of the first question. What we expect to do is to investigate all complaints and work with congress and if we think theres a valid complaint we will start a consultation process and begin the settlement. The doctor ferguson. Thank you for coming to capitol hill today. I happen to be sitting on my porch just a half a block up from the business that you remember well the. The. We truly appreciate your work in bringing manufacturing back to the u. S. I want to focus my questions in the comments today around intellectual property. I think that its pretty remarkable its made the rebound but it has and there were a lot of components to get into the trade deal certainly as a critical component of a competitive tax code is a critical component of that as well. If we are going to stay at the forefront of manufacturing we need to make sure that its protected and that the intellectual property can be brought back here as well. Can you comment on what you think freetrade standpoint is needed to be able to bring the manufacturing to be able to bring back to the u. S. And also to protect if you could comment on that i would appreciate it. I agree completely with your premise manufacturing for the next generations if you dont develop it then you are going to fall behind very, very quickly you see that in some areas. We work in all of our agreements to have stateoftheart obligations that are forcible to protect intellectual property. We have been in the United States and we tried to protect. I would think another point this is outside of my area but worth noting we allow them to put their intellectual property and countries in order to get over tax rates. I think discouraging things like that is something that we ought to do. We have to protect intellectual property and reworked research and development and to the extent keep intellectual property in the United States. Im glad to hear you say what you did and i look forward to working with you and the committee to develop policies that not only protect current intellectual property but also creates the environment where research and development makes sense here. Anwhile you touched on the tax code, and i know that these issues have been very clear we want to do things not only from a trade perspective but also the tax perspective that make bringing our intellectual Property Home something that makes sense for companies and it doesnt matter if we are talking about the things that may be in the Film Industry whether it is genetics or Biopharmaceutical Research they need to be here so thank you for your comments and i look forward to working with you into doing all that we can to make sure that this is the best place for the Research Development to be done and i will yield back. Weve covered a lot of ground today and we are coming towards the end. I am one of the members that ended up supporting the agreement we are looking at over 30 right now and we have more than 500,000 people have already claimed unemployment. Of course this has hurt the biggest industry sector, hospitality and Service Sector but theres others that have already impacted so my question you stated that the provisions are a crucial part of the usmc aid agreement. All of those depend on the ability of the workers to learn and know the rights of the law and to be able to actually exercise without fear of intimidation, threats, retaliation or violence. This also inquires the cultural change in the workplace across mexico, congress dedicated unprecedented resources and fun and in the usmc aid to ensure they get their hands on information for education and training they need to be able to overcome the obstacles to create just workplaces. Funding for database the databae bureaucrats is not going to cut it. Independent Workers Organizing is resource intensive from the top to the bottom of the structure. It plays the role in allocating the resources that what are you doing on the Interagency Committee to ensure that those taxpayer resources are effectively used to educate and empower on the ground and separately what can we continue to do i think that ive asked you before working with other members of the committee for the work force to bworkforce to be r priority, the program is abysmal. It doesnt work. With record unemployment, i dont care how much this administration tries to count how great it was. It wasnt great for a lot of the marginalized communities particularly in the africanamerican and latino communities. So i would like to know specifically what you are doing regarding the Labor Committee and what we can do to help the workforce training here in america. Thank you. Thank you, congressman. First, i totally agree with the point of training. I think the administration has done a good job making this a priority and has many of companies that are doing extra training and there are a lot of examples of thought. I go to those meetings, but of course it isnt my initiative but i think it is an Important Initiative we have to prepare the jobs we have and the jobs that are coming. When you see change the culture of thof a believer in the busins culture in mexico, i completely agree with you. That is the fundamental thing. I will talk for a second about the agency group, but changing that is one, they have a president down there that i believe is committed and has a resistance to the committee that others im getting down to the wire. What is the interagency roles that is the role that we in congress has oversight over. I dont have oversight of the president of mexico. So, at this point, we are in the position of putting people on the interagency group. It is fully funded, fully formed. I think that its had its first meeting was in april. But what they are going to do is very closely monitor the situation and make sure we have complete enforcement of the agreement. To have a continuous stream of increased payroll all through the Trump Administration through march of this year and i have some Fact Checking america was not headed into a recession before the coronavirus i would enter that into the record. For decades various administrations talk tough on trade reform with china but fail to confront the unfair and deceptive trade practices chinas being held accountable for the first times and were seeing results also driving reform with the wto was absolutely necessary for that organization to fill the free trade role so vital to the world recovering from the recent Health Crisis we must continue to implement and enforce historic trade agreements like usmca and china phase one we made significant progress in need to ensure we build on previous agreements. Its great to see the National Treatment for usmca i would increase those provisions as we continue to work with the uk. Thank you for your advocacy against unilateral Digital Services taxes like those adopted in france and other countries can be averted american commerce the Us Government should use every tool at our disposal to ensure American Companies are not unfairly targeted free and fair trade requires a consistent approach lastly i support the deal tsp eligibility for last year i would like to see that move forward and also Hope Congress will reauthorize the program that is scheduled to expire in december i look forward to working with you in the Trump Administration with recent trade agreements as the World Economy recover with forward thinking trade agreements that america can and will compete on real trade also to congratulate the administration to take significant stress on the steps to level the Playing Field with agricultural exports to the phase i agreement with japan to continue to engage in negotiations with a High Standard to benefit additional sectors of the us economy including Manufacturing Services and agriculture. Ambassador lighthizer where do things stand with continued negotiations with japan . Thank you. I turned it on. Thank you. First of all the phase i deal with japan was spectacular seeing an anonymous amount of increase that we need we are going up the rest of the world going down because of the economy with a beef area but also other areas we are very happy with the phase i deal with respect to phase two, we probably would have begun that by now but havent because of coronavirus we are probably a few months away before we start that. There are some products that were left out that we want to cover they have a whole variety of things but my guess we will start phase two sometime in the next couple months we have been slow down more than anything with this virus but is still a priority and something we expect to do im very happy with phase 11 of the single best trade agreements weve ever entered into paying dividends and it really was the motivation with the agriculture issues in japan and we got those 99 percent accomplished i expect phase two to begin in a few months. It has been positive. Thank you for your work on the Free Trade Agreement with kenya not only will that be beneficial to our two countries but opens the door with other countries in africa and others we appreciate the work you are doing in that regard thank you for spending time with us today. I think the gentleman. Mr. Ambassador thank you for joining us today please be advised members have two weeks to submit written questions they would be made part of the formal record and with that we stand adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]. Good morning thank you for coming out leader mcconnell, thank you for the opportunity to have this conversation as i approach you about the importance of this issue i ask you give me an opportunity to share some thoughts