Transcripts For CSPAN3 U.S. Trade Representative Lighthizer Testifies Before House Ways And Means 20240714

You today to testify on the president s trade jaeagenda ande newly renegotiated United States mexico canada agreement. I would like to begin by notie ingnoteing that the American Economy is growing well. Were growing substantially faster than any other g7 country. We added 5. 8 million jobs since the 2016 election. Notab notably, 500,000 of those jobs are in manufacturing. The Unemployment Rate of 3. 6 is the lowest in half a century and has been at or below 4 for 15 consecutive months. Hourly wages were up some 3. 1 over the last 12 months. And contrary to what one hears, exports are growing. Indeed, 2018 was the highest year in our history for exports of both goods and services. While agricultural exports in 2018 were not the highest in history, they were up over 2017 and 2016. Im pleased to present the trade policy agenda at the 2018 annual report of the committee. This document, which u. S. Put out usgr put out recently outlines the administrations trade priorities and catalogs recent accomplishments. The president is troubled by huge and persistent trade deficits which the United States has with many countries. These deficits are the result of many factors. Faster economic growth. Currency valuations. And to some extent, tax policy. But they are also partially the result of trade rules that oftentimes are unfair to americans and lock in noneconomic advantages to our trading partners. We at ustr are very much focused on changing these rules when they are unfair to American Farmers, ranchers, workers, and businesses. This included renegotiating chorus, renegotiating nafta. We also have been reviewing gsp eligibility around the world. Actively engaging in tifa talks with many, many countries. Reviewing the rules and function of the wto also. Ustr has been active in enforcing the existing obligations of our trading partners. We brought many wto cases. We filed counternotifications, the wto, and worked with members on proposals to improve compliance with existing rules. We are also engaged directly with trading partners under existing agreements. We have successfully resolved concerns with peru after requesting the first ever environmental consultation in the u. S. peru trade promotion agreement. In addition, we have used section 301 to investigate unfair trade practices in china. We believe our economic relationship with china has been unbalanced and grossly unfair to American Workers, farmers, ranchers, and businesses, for decades. After an exhaustive process, we put tariffs on certain chinese products and are prepared to put more tariffs in place if certain issues are not resolved sat factofacsat fact torly. We have worked very closely with members throughout this process and many of the improvements in this agreement reflect republican and democratic members ideas and thoughts. In short, i believe its the strongest, most momentous trade agreement in u. S. History. It is the Gold Standard for rules on Digital Economy, financial services, intellectual property, and many other areas. It has it will help to stop the outsourcing of manufacturing and return many jobs to the United States. Its labor and environment provisions are the most farreaching ever negotiated in a trade agreement. The agriculture chapter will lead to increased Market Access and eliminate unfair practices by our trading partners. This is truly a great agreement and i look forward to working with members to make it even better and to write implementing legislation that will earn large bipartisan majorities. With that, mr. Chairman, i will stop. Thank you, again, for your courtesy and that of the other members that have been shown to me over the last twoplus years and i look forward to your questions. Thank you, mr. Ambassador. Well move to questioning under fiveminute rule. Those members will be recognized first in the order of seniority. Let me begin we recognizing myself. Mr. Ambassador, i was surprised when the president announced his intention to impose 5 tariffs on mexico with a possible escalation to 25 over immigration issues. Particularly when you sent the draft statement of administrative action from the new nafta on the same day as the president s announcement. Are you supportive of the president s threat to impose those tariffs on imports from mexico . Whats the legal and policy rationale from such tariffs . Do you think the president s threat undermines or makes more complicated our efforts to pass the new nafta . So that would be yes, yes, and no. So the the original do i support it . Absolutely, i support it. Do i think it makes it more difficult to pass . The usma krrusmca . Theres no reason in my judgment why it should. Whats the policy and legal rationale, the policy of legal action, our rationale is a law that was passed by the United States congress ca, and you believe there is a crisis and have to deal with it in some way, you do what you have to do, so i support the president entirely on that. So the question is that, again, its a followup, so we could use National Security based upon the border issue with mexico . So, in the first place, im not an expert on that act, but the answer, in my judgment, is, yes, if you declare there being a national emergency, you can use that statute for that purpose. I would say that we ought not to lose sight of the fact that the issue was satisfactorily resolved. Mexicans are happy. The United States is happy. The crisis seems to have been averted and were movinging in the right direction. Let me seek, as i have in the past, the commitment that youre going to continue to work collaboratively with this committee and staff to address the concerns that House Democrats have raised about the new nafta. This phase in the consultation process must be driven by substance and certainly not arbitrary deadlines. My part, im willing to work with you on a path forward. We need assurances from you that youll give us the space and the time to work out these complex issues. Its important that we get this right once and for all. Would you care to comment . Well, i guess i would say, mr. Chairman, first of all, i have worked with republicans and democrats from day one, 90 of your members, ive had personal conversations with, this has been by no means been a partisan approach. So that would be the first thing i would say. Secondly, i would say i certainly agree that the speaker has the option of deciding when bills come to the floor and thats unquestionable in in my judgme judgment. The third thing i would say is the bill has been public and weve been in negotiations for nine months. So the suggestion that somehow thats rushing, i guess i would push back against that. I dont believe that waiting nine months to get to the point where you can make improvements is rushing anything. I think were in a position where where the members know what they want. I know what the members want. Its a question of sitting down and deciding where the lines are and what can be done and what cant be done. Thats what ive been trying to get to for some period of time. Thankfully, the speakers moving forward on that. Im very grateful for that. I think, as i said in the senate yesterday, in all respects she has treated the process fairly and professionally and done exactly what a person would hope she would do. Not surprisingly, but she has done exactly on this and im very eager to sit down and say, okay, members, tell me with some specificity, then to be able to say, here, ill do this, is that enough . We just have to get to that stage. And i guess just the final thing i would say is getting this done sooner rather than later is in everybodys interest. It saves jobs. It helps the economy. It gets certainty in place. So theres every reason to get this done. And it avoids the possibility that were going to have something unrelated to anything anybody here cares about come in and change the nature of this. This is this is tens of millions of jobs. Its 1. 4 trillion worth of the economy. Its a huge improvement. Nobody disagrees with that. And getting it over the finish line, i think, is really important for the American People. Thank you. Let me recognize the ranking member, mr. Brady, for five minutes. Thank you, chairman. I come from texas. I think it is Shameful Congress has turned a blind eye to the humanitarian crisis on the border. Weve never seen it like this. Rural people are suffering. Its time, in my view, for congress to step up, the resources necessary no take care of lts kids and families surging across the border. I do think we can have a Strong Border relationship, security relationship with mexico and strong trading relationship with mexico. I was pleased to see the white house negotiated improvements to security and now its our job in congress to pass improvements to the trade relationship, itself. Let me start with china. Where are we with china . What are your expectations for President Trumps meeting president xi at the g20 . And do you expect the talks, of which there was great substance, a lot of good work done, wouldnt you expect those to restart . You can hit that microphone. I should turn it on, too. So, thank you, congressman. First of all, as you say, we had negotiations with china. This is extremely important. We have a very unbalanced relationship with china and we have one that risks literally the jobs of the future for america. So its very important that we get this relationship right and that we not go on the way it had gone on, escalatingly getting worse over the course of the last twoplus decades. So we had good negotiations. They went on for a period of months. Everyone knows the history of it. And i think we were making good headway. I think in the tifinal analysis the chinese side decided that they wouldnt go forward on the basis that we are, and at that point, negotiations stopped. I dont want to say broke off because there was no real breakoff. But i think its in the interest of both china and the United States to have some kind of a successful agreement. The president has said he definitely wants an agreement. If we can get a great agreement for america. He, as you say, had a phone call yesterday and then he sent out a tweet that we were going to get together. I have a conversation set up with my counterpart on the telephone in the next day and a half and then i expect to meet with him, with secretary mnuchin, in in osaka before the president meets and then i expect the president to have the meeting. When when actual negotiations begin again, i cant say at this point, but were clearly going to were talking, were going to meet, and, you know, i we have the same objective that you and the other members have. And that is that if we can resolve these issues in a way that that improves this relationship, preserves the competitive advantage of the United States, we have an obligation to do that. And hopefully well get to that point. So china comes back to the table, you are red ady to engag . Well, absolutely. We are ready to engage. There was a lot of good work don done. A lot of trust built up. Theyre very tough negotiators. Very professional. Were certainly willing to to engage. So, ambassador, on sort of shifting to the issue, obviously you negotiated up of the most farreaching chapters on labor that, frankly, ive ever seen. It includes a number of labor provisions that our democratic colleagues have sought for decades and have never achieved. You this agreement is transforming the labor environment in mexico. It is truly transformational. What is the most important part about enforcement that this committee needs to know, what china is doing to make we all want china to or excuse me, mexico, to achieve whats been reached in this agreement and for all this to be enforceable. Whats the most important issue here that shows that mexico are taking these steps, transformational steps, and will enforce them . So, i would say thank you, congressman. I would say first, we have to acknowledge the fact that what mexico did was historic. Theres a kind of a sense in the u. S. That this is like a normal thing to do. What they did is really, really a bold, strong, labor reform. Something that hasnt happened in other than a couple countries in the whole world. And its very precise in that annex. What they what they agreed to do. It is the view of labor and i certainly our view that they implemented those things in their statute. The question then for us will be to make sure that they actually follow through. I think theres every expectation that they will. But i think we want to plus up in discussions with members. Some procedures that will make sure that in the years ahead, we can continue to make sure that they follow the rules because the Current Administration there wont be there forever, either. But there is statetostate dispute settlement. There are very precise standards that they have to meet. And im prepared to add other things certainly in u. S. Law that members think will make it more likely that well actually bring cases if there are problems. So having a mechanism in place i think is a good idea and im just eager to sit down with members and make sure theyre satisfied with how we do that. Thank you. Thank you, mr. Ambassador. Let me recognize the gentleman from texas to inquire. Mr. Doggett. Thank you, mr. Chairman. Thank you, ambassador. Certainly the one that im most concerned with is our shared desire to see early approval of a new nafta. You are very familiar with the issues that ive raised with you over a year and a half. At the top of that list is ensuring that nothing in this agreement handcuffs or limits the congress in any way from addressing the problem of prescription price gouging. I believe in what youve told me personally, and in what you said yesterday in the Senate Finance committee, you share the objective of ensuring that the agreement does not limit the power of congress to address drug pricing. Is that correct . Is turn on your microphone, please. I want to get it loud and clear. This is the first time ive ever testified before congress so i keep forgetting to put my mic on. Yes. Ill take you through the history of all that. Yes. The answer is yes. I completely agree. I said that. I think its very, very important that congress have the policy space to do what Congress Wants to do in this very important area and it was i believe thats something i can satisfy you and other members on. And second, you also have indicated both privately and in public testimony that you want an agreement with reference to working conditions and labor that is fully enforceable and the progress that you made in this new nafta is more than just in name but is in practice . Is that correct . Yeah, that is also absolutely correct. I try to convince members that this is an important part of the president s legacy. Its also an important part of my personal legacy. We have no interest at all in doing something which we both think is extremely important. Is transform ti forformative no mexico. Thats their business. I think it will have a Huge Positive effect on the United States. The last thing either of us want is to have this disappear in six years when we walk out the door. So it is we want we have every reason to have this be something that is enforced inperpetuity. Let me just say that with regard to those two issues, as well as the issue that ive raised with your colleague here today, ambassador mahoney, concerning the environmental provisions and not wanting to see less protection on the environment that is afforded under the may 10th agreement that is was included within the failed Transpacific Partnership agreement, that on all of these, what im seeking, and i think other colleagues are seeking, is truly enforceable provisions. I think that a meaningless side letter like we had on Environmental Enforcement under the original nafta are some other meaningless provision is not what were looking for and that short of, quote, reopening the agreement that a self selfexecuting amendment signed by all three countries that makes it clear that this has the same status as the original agreement would fulfill that objective. I would add, however, much this echos what the chairman has said to you about mexico. One of the strongest advocates that i know of nafta from san antonio, a chamber leader, contacted me this week with a message, hold out until the administration commits to no tariffs imposed on mexico outside of our trade agreements, no reallocation of resources at the points of entry impacting trade, and funding. Usmca, or nafta, mean nothing if we dont get that agreement. I know that whats been done by the administration with the possibility of a 25 tax on texans and americans generally because of unrelated issues is not necessarily a policy that you initiated, but it does undermight unde undermine our attempt to Reach Agreement on this. Finally with regard to china i, again, note not within your direct responsibility, ive raised with you before huawei, also the problem of a million uighurs imprisoned in china. Apparently, many doing work on behalf of American Companies as indicated in a recent wall street journal study. Those issues of forced labor to produce goods contrary to american law are troubling and i hope in a broader discussions outside what you individually are responsible for that they are issues that are raised with the chinese. We need a stable policy that considers all these issues. Thank you very much. Thank you. Thank you, mr. Doggett. With that, let me recognize the gentleman from california, mr. Nunes, to inquire. Thank you. Congratulations, ambassador, especially on the lab proer visi i think this is quite an accomplishment. Especially for our mexican allies to the south. I have a question on enforcement as it relates to agriculture. It seems like agriculture is always talk ed about then it the new u. S. mexico canada agreement, those that are concerned the Enforcement Mechanisms are not going to be effective . Thank you, congressman. Obviously, first of all, we have the best access as you know and the best agriculture chapter we have ever negotiated any other agreement and open up new markets. It takes care of this class 6, class 7, problem that i had more members talk to me about than any other single thing until we got it fixed then nobody talks about it anymore. So we did some we did a whole lot of fantastic stuff in here that we did do. Everything in this agreement is fully enforceable in the same way that other things are. Theres none of them are outside of the normal enforcement. You have the normal statetostate process. You have one where we can bring an action, pardon me, and will against canada or mexico if theres any violation of any of these agreements. Its fully forcible. I expect to have it enforce d being from california being the number one agricultural state a lot of people dont realize the premier hightech area in terms of agreements with protecting private property and technological patents. Do you want to talk any about that about what youve whats new to this agreement, u. S. mexico canada, versus what weve seen before . Well, i would spay a cay a cf things. Thank you for that question. Number one, there is no digital chapter in the current nafta, right . Current nafta, people i remember those days better than most members. And we didnt have any clue about any of this stuff going on. So theres no chapter in there at all. So anyone who compares this to nafta, there is nothing. And i would say its an extremely part of its where a lot of american jobs are. It is where where americans edge is. Its where our technology is. And the digital trade obligations in here really go across most of the industries were worried about. It isnt just we think of that as like one set of industries but really it isnt. Its something that goes across the entire economy. This is the most farreaching agreement ever negotiated. It has prohibitions on source code and algorithm. It has data flow provisions. It has data localization of provisions. Its had electronic authorization provisions. It has access to public data provisions. It has just an enormous number of provisions. It is better than tpp which had a pretty good chapter in this respect. Its better than tpp in all respects. And this is literally the Gold Standard. This is the in this area, this is what every other trade agreement will be measured against. Well, congratulations on that, ambassador. As just to remind everyone, at the time that nafta was first implemented the interprnet was basically brandnew at the time. There really is a need for this agreement to be upgraded and were excited especially in california where we have so much to gain from these agreeptmeagr. I want to switch a little bit to china. China may be the only thing you get bipartisan agreement on here in the congress. You havent seen a lot of criticism. None of us, unless on the republican side, really like the tariffs, but at the same time, were well aware of the National Security threat that china poses to not only the United States but our allies. And like i said, this is i just want to make clear as i dont think youll see much criticism even from the ways and Means Committee members today as it relates to how were dealing with how the administration is dealing with china. And i i just want to make sure i reassure you today that i dont want to get a deal with china just to get a deal. What id rather see us do is look at other countries like the uk, if they go through with brexit, like the philippines, like vietnam, and other asian countries, japan, especially, that youve been working on. Id like to see us focus on that and only make a deal with the chinese if the chinese are really going to stop their aggressive behavior. Can i just say briefly, then your time is up, i really want to thank the members, republicans and democrats, for their support for the president and for me and this endeavor. You are exactly right. The difference between winning and losing on these absolutely essential issues is the extent to which its viewed internationally as a bipartisan priority and i think it is. And i think it says a lot about our political system that were in that spot. Thank you. Thank you, mr. Chairman. Let me recognize the gentleman from california, mr. Thompson, inquire. Thank you. Thank you for being here today. As a member of the house usmca working group, i look forward to working with you. Im committed to negotiating in good faith. We should work collaboratively toward the best possible outcome. Passage of a trade agreement that creates jobs and protects workers and consumers in mexico, canada, and the United States of america. I hope youll continue to work with democrats and not rush through on implementing a bill. Strong labor laws in mention ko a mexico are good for american wo workers, too. Mexicos passed landmark labor reform but will take years for real reform to take place. Im interested to know how you will judge progress on labor reforms in both the short and the long term. So that is a terrific question. First of all, ive made the point that what they did was absolutely historic. The second thing, just to put a punctuation point on that, what mexico has agreed to do is have secret ballot votes on all new collective bargain agreements and get rid of these protection contracts and on all existing contracts of which there are 700,000. So its an enormous, enormous undertaking that they have agreed to ly in mexicos interest. As you say, its also, in my judgment, in our interest. After negotiations, and really renegotiated this not only working with democrats and republicans on this committee and in the senate, but also with organized labor. We decided that as two parties that four years was a reasonable period of time. Thats a lot thats a heavy burden on them. So they have to set up course. It they have to set up a whole system and have to have this series of votes in four years. That requires, number one, an allocation of resources. Number two, Capacity Building of which we should be part. I know a lot of members feel that way and i essential certai. Canada also feels that way. So in various areas you will have actual benchmarks. Now first of all, obviously, we cant wait to pass uscma until they do this or wed have no usmca and the effect on the economy would be dramatic and negative. But we will have actual benchmarks on some things like getting these votes done on that. Setting up their courts. How much money they put in. So well have well have benchmarks. We have very specific obligations that we can then enforce them by saying this is a specific thing, you can do it. So i expect to do that. Number two, i expect to have a level of monitoring down there. And i want to work with members on what that level should be. But we clearly need a level of monitoring. I dont think we should start with the proposition that the leadership in mexico does not want to enforce it. Right . I mean, these people are actual reformers. So i have to assume they want to do the right thing. Then the final thing i think i would say is, this is something i want to work out with members, i dont want to rush members, but i want to do it urgently. Im trying to find that, like, tension so that it gets done in some reasonable period of time. But its reasonable to say we ought to have some process where outside people have an obligation, in this case, in an many cases organized labor but not just organized labor, to come in and say here is a problem that we see at this or that facility and something has to be done about it. Process then i believe we go through the process. I think there are real ways to make sure they do it. I dont think theyre trying to avoid it. But its tough. Thank you, ambassador. On a district specific issue, thank you for help with canada in regard to wine placement in the canadian stores. I have two questions, one, what steps can you tell me what steps canada and British Columbia have taken or planning to take to kay comply with that agreement . Second, as you know the Wine Community has taken a terrific hit because of the tariffs that theyre facing. 54 in china. Can you tell me what the administration is doing to bring in dispute to a successful conclusion . Were at a real disadvantage when some of our major competitors and australia and chile are paying zero and were paying 54 . Number one on the question of canada, as you say we have specific complaints, legitimate complaints from our industry. And in the course of the negotiations we resolved them. And are they complying. In the first place they dont have to comply until we pass this law. So the minute we pass this law if i have to this is lake a false promise ill fly up there to make sure that we can that theyre not discriminating against us. But dont quite hold me to that unless we pass it sooner rather than later. Well go in september. You know there is Nothing Better than white napa wine in july. Its just perfect. Stepanen belong blanc. Its perfect in july. Well bring a case in 15 minutes if we dont. In the winona thing we brought a wto action. China has retaliated and those were things that will be worked out if we get a deal. If we dont get a deal over a long period of time then we have to figure out another way to take care of the industry. By the way and several other industries. And thank you, mr. Ambassador i just just want to remind members we want to make sure everybody has an opportunity to inquire before the votes scheduled at 1 00. We need to be fast tied yuious in observe the five minute rule. Mr. Buchanan from florida is recognized. Thank you, mr. Chairman and thank you mr. Ambassador. I want to thank you for your outreach. Youve done a great job reaching out to both sides. But i want to talk about the cost of delay. Everybody believes this needs to get done. The longer it drags on its more difficult. The u. S. International trade Commission Found in a recent study that usmca would increase the u. S. Gdp by 68 billion at add up in american jbs process grow exports to canada and mexico by 33 billion and increase american wages. Also concluded that the new labor commitments would increase wages of unionized workers in mexico by 17. 2 . So let me just ask you in terms of cost of delay what impact does that have . Do we have any kind of a time line . Because ive been in business a lot of years. If you dont have a time line you dont get anything done it drags on forever. You mentioned its been nine months. I know a lot of my colleagues ive talked and said slow down go at our pace. I understand that. I think we need a time line and the cost of delay id be interested in your comments. First of all would you please turn on your microphone, mr. Ambassador. The itc report was showed the strongest results of any trade agreement weve ever entered into. And the midpoint as you say was 3. 5 of gdp and that didnt include some of the advantages which they thought were difficult to calculate. The high end of the approach and they have language in the report which says they expect it may very well be close to the high end is 550,000 jobs and more than 1 of gdp. I mean, this is a massive, massive effect on the economy. And it is literally in in abeyance while we sit and talk. Its having real effect on real jobs and real wages. I think its something that obviously its my top priority and i will do anything any time any member wants to meet on this. The other thing i would say you cite experience and experience of many other members in the business area. We have had a level of uncertainty in our economic relationship with mexico and canada over a period of several months. And that uncertainty has people stop investment. They there is a lot of real consequences to business uncertainty. And i think it is costing people jobs and its costing us economic growth. Its its not a situation where there is no cost to this. Let me add also dsh i want to focus on florida a little bit. I know we had this conversation. But on specialty crops, fruits and vegetables i have to again go on the record. I can tell new our area at one point we had had the largest tomato growing county the heart of my district in the country. Seven packing houses. Were down 3. 5. But there is a general feeling of unfair trade practices dumping thats impacting florida. I can tell you every exact and republican were all together in terms of our 29 members in the state of florida. What can you tell me or whats your thoughts on where were at or what we might be able to do in terms of having it where its a little bit more fair for, you know, our farmers and in flor a florida . First, as you say, we have an issue of an import issue in this area. First, i should remind members that mexico is is either our first or second best agriculture export market. But net we have a trade deficit in agriculture with mexico. We dont have a trade surplus. There is this view the reason we dont is because of the the seasonal fruits and vegetables that you are worried about. I prepared a change in the agreement. It was not something that in the final analysis that that mexico could agree to. And and but i think there are ways to try to modify the current laws of unfair trade. The problem they have in this area is that the current laws are really not set up for seasonal products. Its just the way the laws work. You have to have prove injury over a period of time. And it makes it very difficult for someone in the seasonal business. I think we have to find some way to help those people. They are there is no question that they are hurting. On the other hand, for mexico,s in also an extremely important issue, right . This is this is they would say its a 2 billion industry. I think we have to try to find that sweet spot. Its outside of the context of the agreement. But clearly this is a legitimate concern that the administration its a big concern of florida for our farmers. And they create millions of jobs there. Thank you, mr. Ambassador. I yield back. Thank you mr. Buchanan. Let me recognize the jae from connecticut fl larson to inquire. Thank you, mr. Chairman. And thank you mr. Ambassador for your ongoing work and we really appreciate the cooperative nature that exists between you and the members of congress. My question deals with nafta or mexican and canada agreement. And it seems to me from an environmental provision that some of the montreal protocols and notably that of Climate Change were left out. Can you comment on that . And where we think many of us on this die as teed to address Climate Change to vitally important between that ongoing relationship between canada and mexico. Well thank you, congressman. First of all i would say that as you say, Climate Change is not dealt with in this in this agreement. The montreal protocol of course is. And we would say directly or indirectly all of the multilateral environmental agreements are covered, either directly specifically or the obligations are in there. The second thing i would say from an environmental point of view this is the farthest reaching agreement ever negotiated by the United States government. It has provisions on wildlife. It has provisions on what we call ocean litter but you think of as plastic. Its by far the most farreaching environmental agreement,ed trade agreement. I i shouldnt say other agreement. But just trade agreement ever negotiated. And i think the combination of these provisions and enforceability its going to have a real impact in this area. I keep repeating this because we are very proud of the fact that we went out on the limb and did and did what we thought the furtheringest you could push in this area. But as you say, Climate Change, the president has a different opinion on Climate Change. Climate change is something not something normally considered in a trade agreement and its not covered here. Well, we just heard from representative thompson and having had the great opportunity to visit his district, and see the devastation this occurred from the wildfires that swept through skra, a number of areas in this country, it seems in this day and age to still be in denial about Climate Change is quite remarkable. I will commend the administration and yourself for making sure that the environmental measuring not be a side bar agreement but are part of the process. And i think you articulated that pretty well. Are you saying that the president that there is no further opportunity to bring nafta more in line with the montreal protocols . Well, in the first place, the montreal protocols are specifically mentioned in the agreement. So so thats not a problem. I would point out that the tpa which is the authority under which we operate says specifically we cannot take new obligations in the admissions area. So thats precluded by our the operating authority that congress has given to me. Were not going to do Something Like the paris climate accord. Its specifically prohibited under the agreement. Taking steps to make sure that members are sufficiently happy that we are going to actually enforce, after im gone because everyone is comfortable it will happen while im here. But after im gone all the environmental provisions is a legitimate concern and one that i specifically look forward to working with you you specifically on, you and actually the colleagues on either side of you, to make sure that members are comfortable with that. Thats a legitimate position. And i certainly endorse it. We look forward to working with you, especially on the enforcement side, which you note has had some gaps over the years. And thank you for your testimony. Thank you. I would say ive spent a dwood part of my Career Change about lack of enforcement in trade agreements. Im completely with you on that. Thank you. Let me recognize the gentleman from nebraska, mr. Smith, to inquire. Thank you, mr. Chairman. Thank you ambassador. A very timely hearing, and ambassador thank you for your presence here today. These topics as you know and as you are articulating are very important. And engagement on these trade issues is vital. Let me begin by thanking the president for bringing down the 232 steel and aluminum tariffs on canada and mexico on may 17th. I advocated for the course of action and grateful that the ustr is making that a reality. In lifting of the 232 tariffs and the decision to avoid new tariffs on mexico have led to substantial progress in moving the usmca agreement forward both in mexico and canada. We cant lose sight of ou important our north american trade relationships are and hue crucial in tint kwas is the well being of Farmers Ranchers and American Communities and lets not forget consumers as well pl no presence comprehensive trade agreement is going to be perfect in the eyes of everyone. However, usmca is a needed modernization of native aif. As you have stated. I strongly encourage the ratification in a timely fashion because we know the costs of delay are very significant. Markets lost are not easily regained. Farmers and ranchers need markets. And the president recognizes the current sacrifices made by our nations ag producerers. I cant emphasize enough to you how real the pain inspect in parts of our economy. And i know you realized that. We all understand is a china is a bad economic actor on many fronts. Im pleased the president plans to meet with chinese president xi next woke engaging with china is certainly a step in the right direction. Thank you for also engaging with jpen. On how best to reach a successful trade agreement and even while those talks continue, nebraska livestock producer face declining market share due to competition from nations which have prenks trading terms already with the japanese. We need to level that Playing Field. Mr. Ambassador, the current struggles of our ag producer are real we must work toward timely principled productive subluxations and work toward sustainable and robust markets. Thank you for addressing the committee. I was wondering if you could reflect a bit on the current progress of talks with japan. Well, thank you, congressman. I as you say, first of all, i make the point that i make here with all the issues in agriculture and there are substantial ones, most of which predated in administration. But, you know, that were trying to deal with as you know, as farm income has just been a problem for a number of years. And its and then you dump on top of it, you know, a million tons of rain. And all of a sudden you have you go from a bad situation to a crisis. The president is very concerned about this. Its something that i literally never have a meeting when he doesnt bring it up. And i meet with him a lot. Its on his mind an awful lot. The japan thing you mentioned, i would say this, japan ha has been a pretty good market for the United States in a number of products. It should be much better. They still have a stateorganized Agricultural Sector and they also have fairly high tariffs. But we have a fair amount of access, particular like in bef and some other areas. We are in a position now some members may not know i know you do that because any entered into tpp and a separate agreement with europe we are going to be in a position where were treated worse than our competitors. Our competitors will be all of our competitors in europe of which there are substantial but also mexico, canada and new zealand. Its a big, big, problem one we have to take care of in a swift manner so the president instructed me to get on this. Ive had a number of meetings. I expect to have another meeting with my japanese counterpart on the outskirts of the g20 next woke. I had a meeting with him here in town last week. Sos in and our staffs have met more or less continuously. We understand the nature of this problem. And we have to resolve it because if we dont these farmers are going to lose that market because of nothing they did, just because japan gave more access to somebody else and may never get the markets back and the japanese understand completely our position. And im hopeful that well have something resolved in the in the woks and months ahead. But there is an enormous urgency. And we completely agree with your assessment. Thank you. And certainly as you look at 40 plus tariff on some u. S. Beef heading to japan to reduce that obviously is good for our producers here. But its great for japanese consumers as well. If all countries would just keep consumers in mind i think we would be in a better place. And i know that that is what you are working toward. And i thank you for your time today. I yield back. Thank the gentleman. Let me recognize the trade subcommittee chairman mr. Blumenauer. Thank you with chairman. Welcome mr. Ambassador. Thank you. People sitting back at home auto to reflect the tone and nature of this conversation i think is encouraging. You have been involved with more meetings with members of this committee and of congress probably than you can count or care to. But i think there are a variety of areas that have been identified where were bag going to be able to move forward. The speaker and the chairman are committed to being able to strengthen the agreements with nafta 29. 0 so that we can move with dispatch. Im hopeful that the working group that she established can start working with you within the week so that we can drill down on some of the specific things you mentioned. Our committee has been clear about the four priorities that we feel need to be strengthened. We have talked about this them. I think its time to get down to cases. I have welcomed this overall view of the trade agenda, because we cant just deal with naf nafta 2. 0 we rerch referenced whats going on with china, the european union, the enforcement of ongoing agreements and concerns about the wto. Im hopeful that we can concentrate on strengthening some of of the existing relationships of people who are our partners, who in consultation i think with a number of us on the committee who are a little confused. The canadians really dont think they are a National Security threat to the United States. And there have been some i think some opportunities that have been lost to have people who share our values and our concerns who are our friends to be enlisted to help us, for example, with concerns that we have with china. Your reference about farreaching provisions, i find encouraging. I agree. I think some of the environmental elements in the nafta 2. 0 building on some progress in the tpp and trying to strengthen them offers some help going forward. But as you mentioned, just dealing with whats going on with mexico and i truly believe they want to enact the reforms themselves. But they have challenges. You mentioned seven hundred thousand agreements that have to be renegotiated. Plus new ones going forward. And its going to be an extraordinary challenge for them to do so. I am hopeful that one of the things we can drill down and make some progress is being able to help mexico with that implementation, and that something thats not just based on who happens to be the trade ambassador at the moment, to give the sort of confidence that American Workers, unions, and i think this committee want. I have appreciated your commitment to enforcement. You mentioned the environmental consultation with peru, something that as you know has been something that is a deep concern of mine. And your predecessor caused me no small measure of consternation that we seemingly did not move to stop the illegal logging in peru, which was explicitly prohibited with the mechanisms we negotiated in the peru Free Trade Agreement. With an eye towards whats going to happen with enforcement of environmental provisions in the future. Can you comment for a moment about what the significance of the environmental consultation is, and what that is going to por tend in the foreseeable future. Well, first of all, thank you for your comments. I you know, im and for your leadership, and those of your colleagues on this issue. The the peru situation is a good study in why we have to negotiate our agreements. I mean i mean we have to enforce our agreements. Up in one we brought two different actions as you know upon illegal dumping. And then they were going to renegotiate or reorganize their government in a way inconsistent with our agreement. And we stopped that also. So really by insisting on our rights under that agreement we had two or three significant victories. And i dont want to criticize my predecessors. But i can assure you that this administration is going to move forward on all of those kinds of things. You mentioned the big areas and the the usmca. My own heart felt view is i can sit down with the members i have to sit down with on the labor provision and come in a conclusion in a half a day. I dont need weeks or months. There is a whole separate of the floor time and the speakers thats a whole separate issue. But in terms of agreeing with members i could sit down in half a day and work out the labor provisions. Ky sit down in half a day and work out the environmental provisions right we all know what they are im going im not im not on the other side. Right im on the same side so. I think the commitment here is to be able to move with dispatch to do that i agree. Right and i appreciate your making yourself available and your schedule and all of that. Thats an important part of it because members are in a position where they have let eye of stuff they are trying to do. Thank the gentleman. Let me recognize the gentleman from texas, mr. Marchand to inquire. Thank you, mr. Chairman. Thank you, ambassador for the hard work you have done on usmca. And i would also like to thank the group sitting behind you, the staff from your office and the staff from the white house for their continued work on that. I cant remember an issue where there has been this level of involvement on a day to day basis from that group. And my district would also also like to thank you for renewed from and reengagement of the chinese on that tariff agreement. My district is a very concentrated district that relies on trade very much. Also, i would like to say a few words about and a few words of thanks to the president and the country of mexico in their just recent agreement that they had to settle in previous tariff agreement this tariff thing. And thank the government of mexico for its renewed efforts in trying to solve the crisis on the border. And i think all of us see that the Mexican Government is very serious about that. And i think it shows that theyre very, very serious about in trade agreement as well. As i travel drought throughout the world and meet with countries that are not involved in these two tariff agreements, we find that there are a lot of country that is would like to sit done and begin to work out trade agreements with us. And one of those that ive just recently visited with is is switzerland. And i would like for you to comment on what you think the possibility would be with switzerland and countries like switzerland, who see this as an opportunity for us to step forward and do something i know that President Trump met with swiss president marer in the oval office not long ago to talk about that. And what is your assessment and the president s assessment of the possibility of that trade agreement . Well, thank you, congressman. First of all, thank you for your comments about my staff. I should say that one of the real blessings of being the United States trade representative is ive got a group of professional people that are really top to bottom in my judgment the best in the government. We are a small little tiny group. But they are really really good people. They work around the clock on this usmca, doing the same thing on china, japan, do thing the same thing on korey and europe. I wont go on further. But the political people we beirut in are really top notch and the professional people who are there are every bit as good. Indeed when we announced the usmca standing behind the president in that famous picture dsh famous for us at least of the announcement are mostly our professional people. And they really get enormous credit. Ive had people ive said this before. Ive had people who literally sleep in the office at night when were in the middle of the negotiations. And its really remarkable for Public Servants to do that. Im really pleased you brought that up. There are a number of other countries where we have talked about ft as. Number one i should say its a tpa process that requires consultations, requires letters, requires there is a lot of formality involved. And we are in the process of consulting one level or another with the members on a whole variety of the countries. We talked about really at some point we have to have an fta with a country in africa that would be a model and then spread. We have talked about the tpp countries and that. So there are a lot of options. As you say, one country that has come around and met with the president also came around and met with me is switzerland. Its something that we are exploring. When i when im asked about this, i always say to myself, tell me what more were going to sell to you . Right. I want to know why in why this is going to make somebody somewhere in america some worker, some farmer just a little bit richer . If it doesnt do that then its probably not worth my time because i have a lot of things towork on. And that is something that im exploring right now. If you look at dairy you think youre selling dairy there, i think not. Right . Im right now in the analysis of trying to go through that. There are leer clearly people who want to do that. It may make sense. Im trying to decide who in america what worker will be better off. Thank the gentleman. Let me recognize the gentleman from wisconsin. Mr. Kye to inquire. Thank you for being here mr. Ambassador. Thanks for your efforts in lift processing the 232s as related to canada and mexico. Thanks for the progress you made on class 7 dairy as it affects canada. I thought that was significant moving forward. But let me also report back from wisconsin that the president s trade war that he has decided to engage virtually everyone throughout the globe is having a real damaging effect on folks back home. Weve lost over 50 market share and 50 of our exports of Dairy Products going into mcin the last year alone. June is june dairy days in wisconsin. Time for to us celebrate our family farmers in the dairy industry. Every weekend i go home im attending dairy breakfasts talking to the farmers. And the fear i hear in their voices. The fear i see in their eyes are real. Theyre getting kwiepd oud preponderate record bankruptcies last year two a day thats gone to three a day this year. Im not saying the trade war has everything to do with it but its certainly piling on right now. And the efforts youre making with china right now i say speed is of the essence. Because many of them are hanging on by their fingernails. If the president is hoping to carry wisconsin next year this is the worst way to go about it. They are losing confidence in him because of how theyre being wiped out individually in the state. And so i know you have ongoing negotiations with china. You also have it with japan. I am unaware as a member of trade committee of any serious consultation overs to thoraxes with members of congress. It is it your opinion that the administration that you dont need to consult with us on the ongoing negotiations with china and japan right now . I guess im surprised by that. I view myself as talking to members a good part of every single day. And including you, congressman. Im happy to sit down as you know or talk on the phone about all of these things in detail. But youre talking about one off conversations now but there are requirements under tpa and if there is any change of our behavior our responsibility and our relationships with china or japan, do you feel that youre going to need to bring that back to congress for our approval . Well, it depends with respect to china, no, i dont. I dont think im going to use tpa at all with china. So having said that, i know youre concerned for the farmers. I understand that. The president has exactly the same concerns. So do i. And ner in a very bad way process. And its something we have to deal with as soon as we can. And i also appreciate your compensates and all your work with me on usmca and how important usmc a and how passing usmca will be better and quicker for all the farmers in wisconsin. Let me. This fremont doesnt does more for wisconsin farmers than any trade agreement in history. Let me ask you about usmca where were going from here. It seems we are stuck each side is waiting for the other to make a move here. And what would be helpful come from you and the administration is a set of proposals in order no address the concerns and the feedback that youre getting right now. And you know, the implementation of the labor refrmt mexico decided to do how well is that going to go . Something more detailed would be helpful in moving the process along. The resolution to the enforcement provisions in it, how do we ensure that there isnt panel blocking as we move forward under this agreement . And that youre not resorting to 301 which wouldnt go over very very well by members of congress. The 10year exclusivity tor biologics. Youve heard concerns. How do you best address that if you dont reopen the agreement . And especially in helping mexico with the limitation of resources and expertise in implementing the labor reforms right now. The Capacity Building that we could be in a unique position to help them with, a more detailed proposal from you and the administration on what that would look like and how we can feel more confident that this is actually going to get done . Light of the fact that mexico with the limited resources are deforted time, attention and resources to immigration issues now as opposed to how they can best implement the labor reforms that they passed legitimatingly but have a long ways to go to implement. One other issue, eye i lap the agency at the department of labor in rj cha of monitoring and enforcing labor violations and trade agreements. I dont know if youre aware but the administrations budget that they submitted reduces their budget from 87 million to 19 million over 807 reduction. Ifs in a way to engender confidence from us that these labor provisions will be monitored and will be enforced, its sending all the wrong signals. Can you give us any assurance that youll go back to the powers that be to get a commitment from them to properly resource and staff i lab so that the they have the ability to enforce labor violations as we move forward . Im going to let the ambassador by way of precedent answer the question. So so i would say first of all, i dont really know much about budgeting at the labor dbt. They have a whole Different Group that worries about that. I would say its legitimate point that we have to be able to enforce this law. And we have to have the resources to do it. I look forward to working with the group the speaker put together to make sure thats the case. And i i certainly with respect to usmca and labor we have to make sure we have the right the right resources. Thank you thank the gentleman. Thank you. I want i want to say thank you for thework on thing a stuff during the negotiations. Let me recognize the gentleman from pennsylvania mr. Kelly to inquire. Thank you mr. Chairman for holding the meeting today. Ambassador always good to see you. And mr. Marchand said this but i cant imagine the hours you and your staff puff put in and deeply appreciated although you dont hear that enough. I think the entire committee feels that way. Its always good to see you. You know what you talked about the opening remarks. You talked about jobsen a the creation of jobs and regaining of jobs appear what this is about because its about its about america regaining market share. I think there is a saying out there that you cant forfeit the game and then cry because you lost. We have had 40 years of losing market share and sitting back and saying gees, i wish the other countries would quit stealing our economy from us. So the efforts that youre putting forth right now are really good. And with that in mind i think we all have different concerns based on the districts that we help. One of the concerns ive had and weve talked about this and youve been very good about this. Is the with in the implementation of canadas u. S. Hope shopping axle that would allow more shopping rk ins like qvc who is a major employer with vendors in the district i help represent to provide service in canada without a lot of red tape and or delays. Im asking this question because our experience with past ft as has shone us that implementation and enforcements are not always perfect after trade deals are ratified by the parties. And in addition, mr. Ambassador, as you know, i have a i have a really the privilege of representing so many different people. One of the hardwood lumber people, theyre concerned about their market. Another thing that people were and theyre going to get a real visual display of this in a couple of weeks is the fireworks people. And where im fireman one of the oldest Fireworks Companies in the country is based there. And also pyrotechnic o. Pan also everything they use to make the fireworks comes from china. We are watching to see what we can do there. I go got it to tell you one of good things about the job is you get a chance to talk to other members and about concerns. And go around the district. I sat down with a man named bruce kinny operates a company in new castle in blare strip sfeel. Started in pittsburg when it was the iron city before it became the steel city. Mr. Kinny and i were talking and i said, so mr. Kinny with whats going on what were trying to get done when it comes to fair trade and a balanced trade thing, with whats being proposed and implemented give me your opinion on that. He said you know what im going to tell you, kmtz, the one thing i would change in all this if i could i wish we would have elected this guy 40 years aigt. Because weve been losing market share so long. During campaign everybody talks about what they are doing for the American Workers and bring the economy back to life and how its a real vibrant were going to take back our market share. I got to tell you one thing in the Automobile Industry once you lose market share you dont get it back. You dont get it back. Whats lost is lost. And i know as i said earlier that the years that you put into fighting this fight is very much appreciated. But if you can just a little bit, expand on any of those things that we can do when it comes to qvc and the ability to make sure that were getting fair treatment from canada when it comes though the to the Home Shopping Network Annual people like zambelys and pyro tech nick al. A brief summary i know youre barraged but i do appreciate what youve done and your staff. Anything we can tell the folks back home whats going to happen. First of all i appreciate your comments. We at ustr and the president believes that we have a very bad and unsustainable trade situation in the United States. We have over 800 billion in trade deficits. And its not the result of economic forces for the most part. Its the result of subsidies and closed markets and people have too high tariffs and people taking our technology. And there has for too long weve in the not done anything about it. And the president says no mas, this is going to stop. Everything he directs me to do is to do that. Its all not perfect. But everything is designed to do exactly that, we want the United States to compete in a way that efficiency and hard work and innovation dictate results, not taking your technology, forcing people to give in or that up in order to come and work there, tariffs which were cooked into the 60 or 70 years ago when little developing countries have now become trillion dollar economies. There has to be a reset. The president wants to do a reset. And he is going to do a reset and were working on it. On the Home Shopping issue, no, you worked with us very closely and in usmca. There are provisions we are going to enforcepeople. Im sure your constituents will tell if you therapy not being enforced and youre going to call me and im going to go and call my counterpart and say, you know, were going to have to get this enforced. I have every confidence that they will do it. The issue was china are complicated, right. Its taking a while to work that out. There are people with products like that most of which like fireworks most of which do come from china. I realize there are su issues. We have the exclusion process to work this thing out. And i apologize thank the gentleman. Let me recognize the gentleman from new jersey with mr. Pascrell to inquire. Thank you for being here today mr. Lighthizer and your staff. We worked closely together. I would say without apology that youre probably one of the best negotiators that this since ive been here, 20 some odd years to represent the United States of america. You are not the problem. Here is the problem. Trust is key. Its been mentioned once before. To everything we do. And there is standing, as every president looked at it article 1, section 8. We, you, have to respect the role of congress in terms of commerce. Article 1, section 8 is pretty darn clear. I know that the white house is eager to finish a new nafta. Theyre trying to drive this thing across the finish line 100mileperhour. But the they were last summer by the way too. But the real deal and the right deal for America Needs to come under the speed limit. If congress cant look at over every inch, were not giving the greenlight. Our surprise when the president prematurely sent us the draft statement of administrative action for the new nafta, i almost got whiplash when he tried to implement tariffs about 15 minutes later. In erratic behavior does not help build trust. And im not in the Behavioral Sciences right now. Well leave that for another time. But i worry the president will try to jam us with an implementing bill the first chance he gets. I note we have yet to see this bill. So let me ask you this question. I have a number of questions here. To build trust, will you commit to coming back to our committee before you send us the draft of the implementing bill . Will you commit to do that . No. Enforcement of trade deals essential to their effectiveness, without enforcement and agreement isnt what the paper is written on. Ive heard you say that yourself. A broken dispute settlement process that lingers like a fog from the first nafta cannot continue. The congress cannot and will not be fooled gwen by fake promises. If i had to list the promises from the first nafta that go from one side of the room to the other side of the room. If the new nafta is approved it will last beyond this administration. We need the dispute settlement process that can be sustained for generations. That is one reason why i am skeptical of trusting the proposal to use section 301. I was dissatisfactioned with the response in february about declining to use section 301 to hold china accountable for labor environmental issues. That is the main reason of outsourcing of jobs in america. Its been proved over and over again. There is a litany of data which shows that. If we dont approach that problem, reverse that problem, the jobs will continue to move. Were fighting ourselves, mr. Ambassador. If you wont act interest, what else will this administration turn a blind eye to . So yesterday you told senator wyden that you would do whatever it would takes to address core enforcement concerns held by many members. Does in mean you are open to changing the text of the agreement . Mr. Ambassador. So, i dont think its necessary to to change the text of the agreement to meet the legitimate needs of members needs which i agree with. But as a general matter i have a process. The speaker has given me a. Im going to work with the members the speaker has instructed me to work with. And im going to come up with a conclusion. And that conclusion will be what it is. And im going to satisfy the members. And im going to do what is necessary to satisfy those members on things that i think are legitimate, which by the way, 99 i agree them on walking into the room. As you know well. And im out of time. But i also appreciate working with you this year and last year on this process, congressman. Thank the gentleman. Let me recognize the gentleman from North Carolina to inquire. Mr. Holding. Thank you, mr. Chairman. And mr. Chairman i agree with you, the there are a lot of trade issues on the table. And were exploring a number of them this morning. And i want to agree with my colleagues who have given the ambassador praise for his aptly named lighthizer brigade behind him there, behind him there hard working on the issues. I appreciate you guys have a number of countries who want to engage with us. And i really like the standard you are setting, the it is only working your time if neck present a scenario where it will create more wealth and more opportunity in the United States for us to engage with a Free Trade Agreement. So a couple that are on the horizon that i really believe are worth your time, first and foremost is the United Kingdom. The president had an outstanding and successful visit to the United Kingdom a few weeks ago. Ive talked to a number of my counterparts there. And they all were very pleased with how the meeting the whole state visit went. And out of that state visit the president sent a clear message that, you know, we are ready and willing to do a Free Trade Agreement with the United Kingdom. And as things are progressing and developing on the political spectrum in the United Kingdom it looks more and more likely that there will be an opportunity late in the fall where they exit the eu without some sort of agreement that binds them to different standards and trade agreements with the eu that will preclude them from doing a complete agreement with us. I just hope that that is on your radar. And there are sufficient members of the lighthizer brigade working on that. So well be able to strike while the iron is hot by the end of the year, get things rolling. And perhaps perhaps be able to effectuate an agreement before the end of this president s term. You can just nod in agreement and not use your time. Hit the record reflect im nodding in agreement. Thank you. Secondly i think we have great opportunities with india. India is becoming a more and more important partner with the United States. And on the military front. There are trade opportunities there. The president is going to have the opportunity to meet with Prime Minister modi at the g20 summit. Before that ib secretary pompeo will be in india meeting with Prime Minister modi before the g20. I hoe you see that there are opportunities in india and are prepared to aspen the resources and time to talk through the difficulties that we have. There are some trade controversies. And but there are great trade opportunities there. So maybe you can expand a little bit further on what you see there as an opportunity. Well, thank you, congressman. First of all i would say we have spent a lot of time worrying about indy, as you say. Its a massive economy and its only getting bigger. Its a great opportunity for a lot of American Farmers and businesses. Having said that, we have a series of problems with them, things that we have raised with them over a period of months. We did a review of gsp, and the president decided to take the gsp in which because we made literally no headway on the issues over the course of months and months and months. And and we are looking at a variety of other unfair action that is may provoke us to take some other kind some additional action. Having said that they have a new government. Obviously the same leader but a new government. I have a new counterpart. And i will talk to him in the next few days. And my hope, we can jump start and make headway. But india has about the highest tariffs of any country can you imagine in the world. They have a very status kind of economy. Very heavily regulated. They have created problems in the Digital Space, the agriculture space, regular manufacturing. I mean, in retail, just across the board. Right, right, if i could interject with the election of a new Prime Minister there i believe that he now has more of a mandate and a stronger hand to come and negotiate with us a stronger hand with trying to address the many problems that he knows he has in his country. I think the the time, again, you know theyre all coming upon you at one moment. And the lighthizer brigade is spread thin. But i believe there is a commitment within the new government in india to try to address some of the problems that they understand that they have. I yield back. Thank the gentleman. Let me recognize the gentleman from illinois, mr. Davis to inquire. Thank you, mr. Chairman. And thank you very much mr. Ambassador. I certainly agree with the complexity of these issues and the negotiations. But, you know i was thinking that overall in real terms, the average annual mexican wages are down 2 . And the minimum wage is down 14 from prenafta levels according to data transmitted by the Mexican Government to the oecd. According to analysis by the bank of america, merrill lynch, the manufacturing wage in mexico has stagnated since 2003 and is now 40 lower than in china. Prior to nafta, mexican automobile wages were five times lower than in the United States. Today, even as u. S. Wages stagnated, mexican auto wages are nine times lower. You mentioned secret ballot votes on existing contracts. But what else do we see in the revised nafta that would reverse this trend . Do you have confidence that the texas is would raise wages in mexico . And if not, what requires improvements to achieve the outcomes, since we know that raising mexican wages clearly is essential to stopping the race to the bottom that has caused so much damage and so Much Movement of work opportunities, especially in manufacturing in the United States . Well, thank you very much for that question. I think in many ways it goes to one of the most important aspects of renegotiating this agreement. And why the president puts so much time on it. Thats the outsourcing, the effect on our losing american jobs. So what happened is exactly what you said. We entered into nafta in 1994. Or we pass to do in 1994. The expectation was that mexican wages were coming up. If you Read Everything that was said and they were going to become great customers for the United States. And off and on of that happened. We find ourselves 25 years later. The wages are essentially the same or slightly down from where they were. A couple of things took place in my judgment. One, there was a massive devaluation in their currency. My guess is if anybody here knew that devaluation was going to happen they would never passed nafta. It changed the whole nature of the agreement wle when there was a devaluation. The second thing is there developed in mexico this this system of protection contracts where basically a business person shows up, says im going to start a factory. He goes, sits down with a union leader. We would not recognize these as Union Leaders the way we do but technically a union leader. They work out a contract. There is no workers involved. They dont have anything to do about it. And 20 years later they are working on under that contract with worker that is never said anything about it, no have really no input at all and negotiated before there were workers. So the system is called protection contracts. And its been very bad for mexico. And the current well good for some mexican businesses and some american businesses to be honest. But very bad for the workers. And bad for our workers by extension. So what what we have done in this agreement is we there is a whole variety of provisions to address this. And by the way this is not all stuff we dreamt up. The previous Mexican Government put if in a constitutional amendment and the current government is very voe sifrous about about enforcing it. You have labor courts i wont go into the detail. But it used to be a system you couldnt get arbitration on what hour you were treated badly if you were a work. They are going to have registration of all the contracts. There is a whole system of government thats sets up one of the things the members are talking about lighthizer you got to playbook sure this happens. And thats legitimate. But to me the key is you have the secret ballot the vote on getting a Union Getting rid of a union and on collective bargaining agreements existing and new ones. And if you do that i think over a period of time the workers will assert themselves. And that as long as we insist on enforcement of that my view is that that we will have the needed effect. Well get the promise. And well help to stop outsourcing there are other provisions i wont go on about stopping outsourcing in here. Thank the gentleman. Thank you. Let me call upon the gentleman from South Carolina mr. Rice to inquire. Thank you chairmanned. Thank you ambassador lighthizer once again for appearing before the committee. The reason i ran for congress was what started me down this path was my sons were graduating from college and it became readily apparent in 2012 that they did not have the same opportunities that i had when i graduated from college. And i said, you know, maybe i can do something about that. Maybe i can help. And i got a menu i was worried that america was not longer competitive in the world, that we sat union our hands for 30 years and watched our jobs go overseas. And the american middle class not get a raise and wither on the vine, smaller makes less money or did two years ago than it did 30 years before. Now, all thats changed in the last couple of years. Were heading in the right direction. You know, i had this menu of things we needed to do to make youre country kmettive that i got from a economist at harvard mr. Michael porter. I think you know mr. Potterer the top thing on the list was tax reform that our tax code was uncompetitive in the world and we had to fix that if we expected businesses to kpet. Next thing was regulatory reform. You know we have undertaken a lot of that. And two years ago we were told we would never see 2 gdp growth now we have the 333. 3 gchd. 3 wage droegt. 3 unemployment. Hasnt happened in a long time. This economy is doing great. Finally the middle class gets a raise. We cant sit on our hands because other countries are competing the next item on michael porters list was balanced trade agreements. Mr. Porter said 30 years ago we were so far ahead of the of the rest of the world we could afraid imbalanced trade agreements but we cant anymore. I told you ambassador lighthizer over and over gwen that one of the things that gives me the most confidence about this administration is the fact that youve agreed to come on and help us to rebalance these trade agreements so that the American Worker at least has a fair shake. Because i think if the American Worker has a fair shake he can compete with anybody on level Playing Field. After that on his menu infrastructure and merit based immigration. What other countries use to they use the immigration system to make themselves more competitive rather than rather than chain migration that we have right now. All theegs are things we need to work on. We have bipartisan consensus on this trade, i think. As you said earlier, everybody ive spoken to even the democrat witnesses that have come up before in panel have said that this agreement is far superior to the existing nafta. And if i believe if we got a vote today it would pass today. The question is politics. And whether or not the speaker is going to allow us to have a vote and give mr. Trump a victory before the election. So i hope that we choose the benefit of the American Worker over politics. That is my sincere hope. So, again, mr. Ambassador, i want to you take a message back to President Trump from me. I want to you tell him that i very much applaud his decision to put competent, hard nosed negotiate he issers like you in charge of rebalancing our trade so the American Worker has a fair shake. If we can get usmca done and the china agreement done we can expect to have the 3, 3, 3 for a long time for the foreseeable future if we dont we can expect it to deteriorate. And you tell the president that South Carolina is behind him. We are routing for him. Keep charging. I yield back. I thank the gentleman. Let me recognize the gentle lady from california. The key is any interested trade agreement is enforcement unfortunately our track record on that front has been incredibly poor particularly with regard to labor provisions. I was around in congress for the negotiation of our agreements with Central American countries columbia and peru. And in each case the countries made strong promises about the labor reforms they were going to make and often made significant changes to laws and called them sweeping and the best ever, and the you know the strongest ever. I i cant tell you how how g the terms were about how great their labor laws were going to be and even pass some of these great labor laws, five and 10 years later these situations for workers remains dangerous and, frankly, unchanged. I am deeply concerned that we appear to be in the same position today with mexico and your assertion that if we get a secret ballot election to workers that suddenly all of the labor problems are going to magically correct themselves i think that is a little pollyanna. Mexico is just past what appears to be a historic reform of their labor and justice system. Our Committee Staff returned from a Factfinding Mission to determine what the process will look like in the coming years and while there is some reason to be hopeful, reforming the labor system is a massive undertaking that will require years to implement and significant resources and it will require Technical Expertise from outside experts and quite frankly, i am very concerned that the new nafta repeats the same mistakes that we keep making over and over again. It lacks the necessary enforcement tools without enforcement he treated agreements are not what they are written on. I am curious to know if you will commit to working which you just mentioned. Points are now ironclad. The question iswe agree this is u. S. Law. This was signed by the president. We think there are nowhere near the problems you think of public morality civic language to make sure that was not a problem. I guess, the third thing i would say, very briefly as there is a whole updated digital traded chapter that takes care of all of these issues and tries to reflect what is in the laws of the United States. This is thought to be a way that small Internet Companies can grow and use their advantages. After recognizing him we will proceed for a to one recognition. A couple of things tried to go through some of these quickly so, mister ambassador, still getting inbound concerns from arizona our numbers and businesses on isd s feeling they are being put at a disadvantage because mexican businesses, canadian businesses would have access to our court system. What can i say to them to make them feel better about the changes . I dont understand the nature of the problem. There is appropriation and they get the benefit and if there is denial they get the benefit. One of the biggest advantages the United States has as a country is this legal system and if they want the benefit of the system all they have to invest is the United States. The responses dont invest in mexico, invest here. Im not saying that. When you invest in a country one of the considerations you have is the political stability. We made a policy decision to roll back the protections to encourage you not to do that type of Capital Investment south of the border. No, no, we made the opposite we made a commitment not to subsidize their businesses. To not give them a mechanism to force them to have to go through the Mexican Court system. They are making the decision to put their investment in mexico. They should consider that. Thats what im saying. And i appreciate the honesty. It is not really helpful for being a border state for the manufacturing infrastructure and it is what it is. Customs act and as you know i have a great interest and do you believe we have to do something in updating the customs act or will it just be the proxy for adjusting the minimum lacks i dont know precisely, i find it ridiculous to me that we have these tiny de minimis standards in mexico and canada and we negotiate up to the very end and finally got them to double what they have and ridiculous that we let them bring in things at 800 and we get to bring it for 50 or 60 into their country strikes me as a crazy balance and it adds to the trade deficit. I think republicans and democrats were in support with you. Another one and this might be a comment for staff, there are a number of us that have had conversations, how in the future, how do we build a working were some mechanisms to help you on a vision that would fix the inequities in the mechanism . The timeline, enforcement. It is in need of reform. I have worked with a number of members on it and i continue to do that in some way that was organized some group within the committee i am happy to do that. I think it is an important issue and it is extremely complicated. On that, that might worthy of a psych process for many of us that have demonstrated on that. Two last things, i know seasonality ends up becoming as much of regions of the United States and i know some may have been much louder. These take into consideration a smaller population and we also have california, texas that to play on tomatoes and things like that, it has been reported would hurt our industry while benefiting others. Have a level of sensitivity that it makes a lot of our growers very nervous. I appreciate that and i am aware of that. Lasting and we would love to build an open trade agreement with an african country, please, and parts of that consideration i know you made a great statement earlier that trade agreement should be about maximizing Economic Vitality for the United States and we have a country like tunisia even though it is north africa, they were the tip of the spear on the revolution, the only successful country out of the arab spring to develop an open constitution, small country actually that should be reworded. But let me recognize that someone from new york. United states economy ambassador is 21 trillion and 70 consumption. The population of 327 Million People. Canada is a population of 37 Million People almost 2 trillion economy with the United States and canada share and both mixed economies. Highly integrated and a high level of respect for worker wages and labor standards and the environment. Is a is a population of 130 Million People and since nafta mexican economy grew by a little more than 1 per year. The poverty rate is still the same after 25 years and the minimum wage in mexico is five dollars a day a little bit less than . 63 an hour assuming an eight hour workday. Unless they are explicit and enforceable. The primary goal, the primary goal was the integration of mexico with the highly developed high wage economy with United States and canada. This was referred to as wage. If familiar with the factory concept which was accelerated under nafta, it is essentially 3000 factories that do Manufacturing Assembly and export and owned by japanese and european companies. They employ million mexicans workers. This has led to a significant increase in pollution and environmental damage along the northern border of mexico costing tens of billions of dollars each year for both governments. What, if anything, in the new agreement to replace nafta is being done to reform the factories and the low wages that are being paid and the Environmental Standards that are not enforced there. I agree with your analysis, but we did not see the promises that were made in nafta and we didnt see them in a variety of areas and that is an attempt by mexico several years ago to try to industrialize and develop manufacturing and i would suggest later they tried to do the same thing and similar kinds of things. What is being done to try to correct these problems . I would come back to what i said before there are a lot of specific things that are in this agreement and to me the reasons that mexican labor is not benefited from nafta and does have the affected benefit. These were entered into by like we would suggest i dont want to call them at least not real progressive and this law basically changes and you talk about what was voted on many of them will be on those factories and for the first time these workers are going to have to know what the benefits are and what their recommendations are and vote on a contract. I am hopeful that these are going to have a real positive impact. Additionally there is language that is called trade adjustment and most believe that that would adequately fund that and basically was to save the American Worker through these trade agreements that would be disruption that would require reemployment and retraining. Is anything done that would bolster the level of funding under trade adjustments. This is general and i dont have complete control of that area. It says i once had one labor union tell me years and years ago about trade adjustment assistance and what we want is jobs and i thought in that context since back in the 70s and 80s that there is a large element of retraining and there are a lot of good things about it. I think you and welcome, mister ambassador. I have so many questions because my constituents are hurting from these trade policies. The economic pillars of the alabama seventh Congressional District are agriculture, artistry and manufacturing. Workers are struggling, my farmers are suffering from the trade war with china and the artwork is are terrified of potential tariffs on automobiles and autoparts, by the way, section 232 auto report is still being kept a secret from congress and the american public. I think, that we should all know what is in the order. I think the autoworkers deserve to know why the Trump Administration is labeling their job as a National Security threat. Hopefully i can follow up with you to discuss these issues because i know i want to focus on enforcement. I am a true believer in trade. I believe trade can be fair and reasonable to the workers as well as management and we have to be able to enforce trade policy. Last year alabama exported many dollars in goods accounting for 10 of my states gdp. Many went to mexico and canada. The access was a big economic boost and the enforcement provision in the old nafta was totally inadequate. Fortunately there is a broad consensus around strengthening enforcement in the new agreement to ensure that American Workers, farmers and manufacturers are treated fairly. Not only do we need a level Playing Field, but the American People deserve to know that it can be adjudicated through a structured process that is equitable and transparent. The old agreement failed to meet this standard. To your credit some improvements have been made to the enforcement language. Serious issues remain with the state to state mechanism including the Panel Formation loophole. What is even more concerning to me is that your proposed solution and this thought in the new agreement. I will tell you that the unilateral section 301 tariff is not a substitute for a strong enforcement mechanism. Look at section 301 currently being used against china. They have yet to produce any tangible results and have trapped American Workers, manufacturers and consumers in a trade war with no end in sight. I know you want a deal that will outlast and be a landmark trade agreement. What is the next administration is more reluctant to use unilateral 301 terrace to address this dispute . Should we be leaving it up to future ministrations when we have the opportunity to strengthen it. Would you agree with that . Thank you for your comments in terms of manufacturing in alabama, i would note that there would be new investments, Major Investments announced by mercedes, toyota and mazda in alabama so the autoworkers there which there are many should be very happy. They are happy and they really are concerned about this section 232 using them considering what they do to be a National Security threat. There has been a sixmonth reprieve, where is this administration with respect to auto terrace . My suggestion to you is one of the principal reasons why some of this investment is going to alabama is because of fear of the auto terrace. How can that be when the prices increase to consumers . First hill, i could not be happier to give your comments about how bad it has been for alabama because i agree with that completely and i think everything in here will make it better for your constituents in agriculture and manufacturing and im happy we will working together because i realize now then more than even before you realize getting rid of nafta and i completely agree on the issue of enforcement and i will repeated double time. I can tell youall we see is a war on pricing and the consumers especially the low income are hurting the worst. Thank you. Asked that i include in the record that he has written to me and let me recognize the gentle lady from indiana. Thank you, great to see you have a lot of ground to cover so i apologize for speed. I want to thank you the agreement goes a long way. It sets a strong standard and is levels the Playing Field for workers to ensure we dont lose with the tariffs lifted on mexico and canada i think it is time for congress act and time to vote. Next, and associations urging a deal with china, this is number one. Just to letters. I want to turn my attention to the china tariffs. I want to thank mister kind and langford handed that assisted us in these letters. I have a few questions and we appreciate being able to get these in. The letter i just mentioned noting the exclusion that it is expiring soon. Will you commit to automatically and they havent asked change in their experience seems there could be a simple act that could save the limited Staff Resources and devote more times on the request. You have to put your microphone on. I want a voice from concern that they excluded through the notes and comments for list one through three including things like medical devices and i have heard from companies who thought they had escaped the terrace and they have to go through this process and the expense all over again and it seems like a waste of time for them and time for your staff who have to reevaluate days. Why were these lists put back . List four includes all of the rest of the trade in the United States and to china so we are, that was the president s direction. When will that process officially began . We have the form up now, but the electronic process at the end of the month. Is that goes into effect will you commit to a inclusion process consistent for what you have done with this one, two, three. Yes. Ive spoken with some companies that have received inclusions on the tariffs only to be added to list for again have to stare down the potential of the 25 tariff and another agency has ruled is not a National Security threats and isnt available. With this factor into your analysis . No. Stuck i have one more question. I appreciate you being here. Because you know congress raised the level just a few years ago and we continue to believe that 800 is the right level rather than lowering our level should we not be continuing to engage with canada and mexico . To raise their own . So we engage quite a bit on it and unfortunately there reporter retail lobbyists and after months and months and they made a small move in our direction and not nearly sufficient and the balance to me is very problematic and when you say engage with them how . One way to engage is to say you get the same thing that we get there. That is one way to engage. Some members dont like that. Otherwise i dont know how to engage with them. Get on the phone and say please . Whenever i had a year of doing that their retail lobbyists is very strong. But thank you. Ideal back. Thank you and thank you mister ambassador for being with us today. I want to reread many of the concerns brought up by my colleagues on the retaliatory tariffs. They have been struggling for a long time and it is critical that we address this issue so they continue to have access to markets. It will be hard for them to get some of these back. I want to make sure this is a top priority, in particular speaking of china, earlier this year we discussed reforms to the digital regime and you told me you are optimistic about securing commitments on cloud restrictions. Are you still optimistic about this outcome or is this one of the areas china backtracked before talks broke down and i want to add on cloud issues what is the realistic assessment to secure from china and the digital trade space and when he talks to him at the 220 . First of all, i appreciate your comments on agriculture and the effect on the rest alatorre terrace as others have pointed out the president and i greatly appreciated. It has a big impact on a lot of our farmers. I should note that they have come out and endorsedthere clearly clearly is a strong view that this is something that should be done and done quickly. In the area of digital cloud services, im happy to have a private conversation with you about it. The Digital Space generally areas where there was a backtracking for sure and the details of it i want to talk to about it privately. Okay. Also over a year ago the ministration put tariffs on imported steel and aluminum and 90s overcapacity is a real significant problem have we made any progress with the commitments from china. Are you talking about numerical targets . Also have there been any discussions about updating bankruptcy laws to deal with indented Zombie Companies and reduced industrial overcapacity . As you say,they are in the process of creating them. At this point, there clearly is a recognition when we deal in china that this is a problem. We are trying to get assuming we get starting again and moving forward is something that certainly reformers in china realizes something is in their interest to deal with and they are trying to come up with ways to deal with it and in addition, we have the steel forum which has had rather modest effect on actual steel overcapacity. This is something that we are talking about it as part of the negotiations and i am hopeful if we get an agreement this is a big if that we would make headway. There are clearly reformers and i agree with you that they have to deal with these. And that also. Back to farmers again, and what we need to do there. The Dairy Farmers are essentially shut out of the market because of the tariffs and you talked a little bit about japan and how quickly you can reach an agreement with japan. That is a high priority and i think you are sitting there patiently and ive had meetings last week and next week on this issue and our staff has worked continuously. They have agriculture industry. Generally in dairy as with most cases it is among the worst in agriculture in terms of protection. I am hopeful we will come to an agreement in the next several weeks. That is as close as i can come. That is a high priority. Thank you. I yield back. I am extremely concerned about the impact of the section 301 tariffs on our countries economy. I know it is hurting many businesses in my los angeles district as you raise the tariffs from 10 to 25 . One of those businesses is i robot in pasadena. They are the inventors of the popular vacuum and they are the only americanowned consumer robotic company. They employ 675 fulltime employees and high Pain Research and development jobs. They manufacture is in china. They have managed to absorb the costs of the 10 tariff and now with that being raised to 25 they will truly be adversely affected in multiple ways. I urge you to reach a deal soon and reverse these asap. At the very least allow businesses to apply for an exemption and i would like to submit this testimony for the record and support their application or code exclusion. In terms of procedures, will they be able to meet the deadline for beginning the waiver process for list three of section 301 tariff and are you planning to hire more Staff Members to ensure a timely review of the application . Without objection that will be entered into the record. Im hopeful. I believe we will need it. We are hiring more people. We are buying people from other agencies and trying to put together what we need to review these quickly as we have noted before we are a small agency and we are a small agency and we are borrowing a bunch of people on a temporary basis and we are hiring up and we have some of these temporary contracts with certain jobs. We are taking this very seriously and realizing there is a substantial impact on real business and even aside from the actual cost the cash flow is an issue. Something we are very concerned about. Let me talk about others heard. The most recent list includes the 25 tariff on printed material. This means childrens books, textbooks, technical, scientific and professional books many of which are created in the United States by american authors and illustrators and are printed on paper exclusively made in china. I understand that under the International Emergency economic powers act that information and materials are exempt from these types of restrictions. How is this justified . In the first place we are not using it for Legal Authority to put these in place. We are using section 301 and under section 301 we are permitted to put duties in place. There is no exclusion for paper or whatever there was. I am not a expert on that. I know it reasonably well. In terms of the last group of products as you know i guess they started on monday and will go until next tuesday and theres a lot of people submitting that and making submissions and we will consider all that and take it on before the president makes a final decision whether to put tariffs on or what level. Thank you. Next question i recognize you are taking the labor provision further than it has been taken before. I continue to be concerned about the enforceability of those decisions if it is not in the agreement. Also, mexico facing challenges in these reforms so what extent have baby and engaged with the department of labor . Im happy to do that. I spoke to the secretary and quite happy to do that. I think that is an important part and i should make the points that the labor provisions are in the usmc a. One of the problems they had with nafta was that these all letters which were unenforceable so these are part of the agreement and i certainly will work with the Labor Department on that. Thank you, thank you for being here. We all know you have a very busy schedule which is wide ranging and very ambitious. We appreciate the updates you have provided to us today. I want to thank you and the president for all of your hard work. Strong trade agreement that will benefit every american. I am hopeful that we will be able to vote on this agreement very soon in the house of representatives and every day that we delay American Consumers , American Farmers and american businesses lose out on the many benefits of this agreement. We have seen the idc report and we know usmc a will be great for our economy and we know it will create thousands of new american jobs. We know it will bring key improvements. Leading to increased agriculture exports and with two of our top trading partners. The agreement breaks new ground including some of the strongest labor and environment provisions of any previous agreement. Something i think we can all recognize it is a great achievement. We dont get those benefits until the agreement is in place. There is much work to be done on multiple trade fronts and i look forward to working with you to expand american Market Access all over the world. This agreement is currently signed and waiting. The American People are ready for this vote, canada, and mexico are moving forward. They will follow our lead when congress acts. Congress needs to act. I know you are as anxious as any of us to see usmca move forward. Some members seem to be stuck. Democrat members dont seem to understand that mexico will enforce the laws it agreed to and we are having another hearing next week on the trade subcommittee to discuss the labor reforms they recently signed into law. You and the president negotiated a strong agreement on labor for workers and outlook point do you think we have to allow mexico, with proper oversight in the United States to make good on its word and implement the laws it already passed . Fortunately mexico has moved forward and passed a law and they have an appropriation process that they will go through in the fall and it is my hope we hear a lot that this list of obligations is meaningless and that is of course true. The whole exercise and that is the point you are making and i certainly agree with you that delaying this process unduly cost jobs and it costs wealth and farmers their income. Thank you, i want to get on a couple of sessions. With regard to china there is a lot of concern among farmers and producers who we represent on loss of market share while we work toward an agreement. What can you provide in regaining that as part of your ongoing negotiations with china wakes for sure that is getting rid of those tariffs and new purchases by the chinese is an important part. Something the president focuses on every day. After promising to open the markets in 2001 the uk has yet to ship one kernel of rice to china. Thanks to trade barriers china has put in place. They are the largest importer of rice in the world. Can you offer any indication that u. S. Rice farmers will have access to the market they were promised nearly 20 years ago the promise . That is something we are working on, that is one of the principal issues and i would also say that when the chinese were here in december they said they were going to buy additional rice and that never happened. Not because of anything that happened in negotiations, it just literally never happened. I know you are fighting for that. I want to hit 100 point. We know that india provides Domestic Support for the wisconsin industry and in violation of the wto. We have discussed this before. Last year u. S. Took steps to counter that support. What is their response to that and what are our next steps . Since im already past the time. I remember our conversation. We did in fact know we would think not permitted subsidies in india and we have a new government in india and this is something that i expect to engage on a new trade minister very soon thank you it is always good to have you. I represent flint michigan a community steeped in the Auto Industry gave birth to the uaw and helped build the middle class and has gone through a significant change many of those traceable to changes in the economy and in part of globalization and exacerbated by the failures that we experience under nafta. The difficulty that we have is that at the time nafta was enacted and i know it is a dramatically different deal that has been negotiated. There were promises made that things would change and things would change for mexican Labor Conditions and mexican workers would be lifted up and the American Worker would be protected because of that and we know that history did not bear that out. The reason i mentioned that, it is a different deal is that for many of us that this is a better deal. You can the language and see that it is better. Having more comfort on this very important point that you were addressing that there will be rigorous enforcement. While mexico changes its law there are a lot of questions about whether they willfully fund the new regime that will be required to implement and enforce this agreement and i am interested in the notion that there would be some additional overlays and independent monitoring and there are a lot of details that need to be worked out and i dont necessarily want to ask you to respond to a specific proposal, but the underlying of brown wyden might be a starting point to work on this issue and i wonder if you might be willing to commit to work with myself and others who are interested in this area to ensure that enforcement will be done in such a way that it wont hurt the autoworkers that i represent that feel like they are just getting their feet under them. I will, i have enjoyed working with you very much on this issue as you know, the effect of this is one of our principal motivators. We have to turned around. I have enjoyed working with you on that. You are a good spokesman for the pointed view. They are the biggest single beneficiaries of this agreement and they were the ones who are punished the most and this is going to be a binary choice of seven point. You go with this agreement and you go with the agreement that is either spectacular or really good. It will be a binary choice of one point and that distinguishes it from others and our issue is making sure it is the best binary choice that we can possibly have and comment quickly and that i have one more point, the for your implementation schedule or plan in mexico, how realistic do you feel like that is given the magnitude of the changes and secondly, this relates to the magnitude of the problem, will the Mexican Government commit the resources it will take for implementation and if you could quickly answer because i have another question. The answer is i think four years is aggressive. It is something we insisted on at the request and advocacy of organized labor. It was the American Union that wanted that the mexicans wanted six years it is doable and i think they will do it by quickly changing gears, i wonder if you could comment quick we regarding china as you have discussed, we need to address china blocking poly silicon coming from the United States to support manufacturers and getting access to the chinese market. I know it is a difficult issue but it is really important to the people i represent. You can comment on that. Are we forceful in dealing with that . It is clearly an issue. You know the issue very well and on fair trade was brought against our industry. We believe it was retaliation. This is clearly an issue that is within these negotiations and we will continue that. Bucket the gentle lady from wisconsin. Thank you so much and thank you for your indulgence. I have had a lot of other responsibilities so forgive me, material you have already covered. In terms of nafta 2. 0, i am wondering about the protecting capital versus workers, the allegations that this agreement doesnt move far enough in the direction of creating additional incentives to move their operation to mexico and take advantage of the low wages of regulation. I am not going to say it is perfect. This was, among our principal objectives we did a variety of things to try to stop this outsourcing you would call it and i think we have made an enormous amount of progress in this area. Obviously, that is the case. They talk about a loophole where the oil and gas, for example, this particular industry can still contractually sued the Mexican Government directly under those rules and i am and there is no incentive or no effort to close that particular loophole. Was there a reason why we are retaining that for Certain Industries . On this issue it is a difficult issue and one i wish a variety of members have very strong views. We thought that i sds was a source of outsourcing and other issues that we thought needed to be corrected. We improve the situation from your perspective and probably not as far as you want to go. If you said how would i distinguish the oil and gas industry from other industries i would say allowing i sds that would incentivize moving a factory to mexico is something to mexico i think is a mistake and that doesnt apply to a Natural Resource that the industry has to go there. Started let me move on. You have talked on about the increase in the gnp and the lowering of unemployment and how wonderfully things are taking along. Many economists say that these are shortterm, small gains, temporary and that they are unsustainable for the longterm. We can always talk about how we have an increase in gnp. 85 or 86 of that goes to the wealthiest people and not really to workers. Any increase in wages is marginal. What would you say to that. I would say those economists are crazy. I think they are crazy. Stuff they call me crazy 84 of this last taxcut went to the 1 . This trade agreement is different. Can i ask you a question i brought this up with you before about furniture that is made in china. For new parents. Im wondering why we are not excluding that i want to put that in the record rollcall article. Stuck the so ordered. Lien into looking at juvenile furniture and one of the things we need to prevent sids and keeping children safe and right now the Cost Effective way to do that is to make surethere arent tariffs that will interfere with the transportation of those products. Im not much of an expert on child care safety. I think, first of all we have a process we are happy to do that and secondly, those can be made thank you so much. Thank you. Thank you and thank you for coping here and i want to say thank you for your responsiveness to us here in congress and your attention in a bipartisan way with democrats and republicans and your entire team you have behind you. You have been great to work with and as we think about usmca and getting this clock started, that is what we are waiting on and youve been looking at this for the last year and working on it and it concerns me a little bit that we havent started the clock and that Speaker Pelosi hasnt brought this forth and i worry every week that goes by that we are losing time and, frankly, i am losing patience with not getting this going. If you put politics aside and look at usmca this is good for workers, jobs, longterm economy of this country so i am hopeful that all of that goodwill that you have engaged with will pay off and we can get that clock started to get it across the finish line. I want to compliment you on being a superb negotiator and being great for america when it comes to china, usmca, trade agreements on the horizon with japan and the eu. You have been superb in that manner. Frankly, when i look at where things are up in china i want to ask you some specific questions. I am not generally a fan of tariffs they are taxes on consumers and businesses. I have a district that is the eighth largest agricultural district in the country and my farmers dont necessarily like tariffs but ill tell you what they dont like is the fact that china has been ripping us off for 25 years and most of my farmers they are Americans First and former second and we look about where we are with china right now and where this administration is and i applaud you on being tough with china because longterm when we look at technology and i have heard you say this before, technology is the future of the world and we leave the world in technology and china wants to beat us. As we look at what happened with the breakdown in negotiations with china it appeared we were making progress and your negotiations and it broke down. It appears that the chinese maybe reneged on some of their promises, that cause things to go south. I wonder if you could comment on what went wrong and secondly , does that change our negotiating policy moving forward and are those faultlines repairable . First of all, thank you for your kind of statement about me and my team and the president s trade policy because we have a bad situation that the president will not tolerate. We will make changes and the president has done that across the board and the president will say to me every now and then, bob, we have to do something we are not doing anything in trade and i say, okay. On what happened in the china talks it is more speculation right now. My speculation is that some person in china decided they had gone too far and went on beyond their mandate. I dont know i am speculating on that. I have good faith and those i am negotiating with and they are professional i dont have a question the issues havent changed and they are the same issues my hope is we can get back i hope it is in their interest and our interest and the politics over there will line up and allow that to happen. Next week and secondly, what is your plan for additional tariffs if talks continue to stall . Stall we have a process ongoing, and a couple of weeks we will have the Legal Authority in a in the present of that point will make a decision if he wants to put in place and keep everyone informed and he will decide on which to provide and what the amount is. Its up to 25 . In terms of the d 20, we are hopeful it. Thank you i recognize the gentleman from pennsylvania,. And 1st i want to echo the comments that my colleagues from illinois made about you and your staff and your bipartisan approach. I do appreciate it and appreciate your public service. I am in leave five minutes of allotted i will attempt to hit three different issues so kind of around the world. So please bear with me. The first is, the overall approach. We are a trust just under 5 of the worlds population. Clearly, to remain the number one economy in the world, we need to to trade. Of course that trading needs to be done on fair terms. And so to give you an idea of where im coming from and more importantly where my constituents are coming from, in philadelphia for more than 50 years, we had a very famous nabisco plant on roosevelt boulevard. It was in a largely residential area it was the only multistory holding. That made all of the sort of nabisco products that you would be familiar with, or youll cookies, chips always, you could smell the cookies from miles away. This plant importantly was profitable, this not one of those companies that had to go out of business and understandably liquidate or move. Highly profitable company, owned later by. They decided to close that plant, lay off 325 workers including neighbors of mine who had good family sustaining jobs. They shipped those jobs to a brandnew plant they built in mexico. They did the same thing to their plant in chicago. And at the time i believe candidates from picked up on that. I talked about it on the house floor, railed against a. Unfortunately to no avail. And now those plants in my district in philadelphia and chicago were closed and you have those jobs in mexico where they pay approximately 2. 35 dollars an hour. Is there anything in the new nafta 2. 0 are usmca that will in any way prohibit or discourage companies from making that sort of behavior . That sort of decision . I would say and i will try to be as brief as i can to respect her time. These are the kinds of cases that drive us crazy. They has been dripping driving the president crazy for 30 years before he ran for president. And i would say, in terms of this happening again, i would say theres a number of things in here. This is the cutting edge of what we have to discourage. There will always be the wage thing right but we talked about in some sectors, the rules have a big impact, the labor has a big impact because of the change of the nature of the relationship between labor and employment down there. This issue of isd is that we just talked about in my judgment is a subsidy for people to move down there. So, there are informative provisions that will have a discouraging effect. Or impact. So this was a primary objective, and it was a consideration literally and every single part of this discussion it. Thats a perfect segue into a conversation on enforcement. Because when i was first elected to the state legislature or of a decade ago, i thought i had an agreement with someone and a wise 30 year veteran let me know, theres a difference between a promise and an agreement. That difference is the extent to which it can be enforced. So specifically on enforcement, would you explain why the administration seems to be still be skeptical about having a binding dispute settlement mechanism . First of all i want to say what i said many times, i want to work this out, i want to do it quickly and i think i could do it in an afternoon with the groups that the speaker has identified. So, we believe the thing has to be enforceable for sure. So what youre talking about is panel blocking. All right so the question is, do you want to have the right in a rare circumstance where someone challenges something of the particular importance to you, not on a regular basis but of her to go importance to you, the one have the right to block that panel . If you have another way to still in for sure on rights. Thats what were trying to find the balance, so the question is, what is the risk that for example, you will have a problem with the challenge to the trade laws. We have a challenge under the trade laws under the wto. They are fundamental to all these workers that we are talking about, thats the balance of and perpetrate and if thats the balance im trying to strike. I want to work it out with nafta and i want members to be happy. No i dont care about the balance. The other two i will follow up, we are out of time. We have to go a different direction. Thank you ambassador and we want the members to be happy. Let me recognize the gentleman from virginia. Mr. Chime in thank you very much and ambassador, thank you for working diligently to try to come to good trade agreements. Extraordinarily frustrated by this president s approach to terrorist. You have set a look at what happened to steel. Production will not 5 last year. The Steel Industry created 200 new jobs. 200. They ramped up production with a highly efficient mill with electric furnaces that employ very few workers. What happened still companies middle like greater profits. The impact on American Workers is negligible. And you said the president gets frustrated with unfair trade practices around the raw. It drives him crazy. Quote so we have the temper tantrum and basically and reacts with tariffs that hurt us more than he hurts the people were trying to punish. So he is so frustrated that he starts destroying his own toys like a child. He doesnt know what else to do. So were you involved in the decision to levy the antirefugee tariffs on mexican products . Escalating from 5 to possible 25 . First of all i disagree with almost everything you just said. Which wont surprise you at all, ive never seen the present have a tent or tempered or anything remotely like that. I think the steel aluminum program has been wildly successful. It saved thousands of jobs and created thousands of additional jobs. I dont agree with you on any of that. But certainly think tariffs are a tool which can be very which can be very useful. In many cases have been successful. And i think they had changed the nature of of our relationship with china for example which was heading right down the rat hole. And now we have an opportunity to turn that around. So in terms of the president s decision to put tariffs on mexico, in the case that there isnt some solution to the immigration problem, thats not specifically in my area of expertise. Im not an immigration person. Shouldnt we as a community is your section create trade policies that are disconcerting that he was trade representative and have input in to those decisions . I didnt have input i was certainly involved in the meeting, im just not an immigration person. I dont know enough about that is not my area. I do know that if youre sitting here in the president of United States and you think theres a legitimate National Security threat, you think theres a huge problem, i dont want to use the numbers you problem we know them better than i do but if you see that commute to do something. The president came to that conclusion. And it worked out. I dont know why people are so upset. Is there anything of the new nafta that you would consider that would constrain those authorities to limit the president to oppose nontrade related tariffs on one of her closest trading partners . Just a yes or no answer. Well, its one of those things that cant quite be yes or no answer because you can always take National Security actions in every trade agreement. Everybody deserves that nobody will ever be in a position where they say my National Security is that threat i will let my trade agreement overwhelm enter my National Security interest. This always that. As a general matter, there is restraint on what you can do with respect to tariffs and regulations and a lot of other things. All of which are in disagreement. I dont know if that answers your question. Not really. I am happy to expound on it. Mr. Ambassador, when the alleys come to talked with beth usmca, they say the best part of is the benefit of certainty. When the idc did his report, they said the lion share of economic benefits is certainty. Today you mentioned that is a major benefit of usmca but if the president had a rule had imposed in those broad punitive nontrade related to some mexico, which would be devastating for both the usa and mexican economies, and by the way it might lead to increases in migration, what is the point of a new nafta . Anybody under the gun under the president swims . Do you have any certainty if he can come right back with these tariffs . Let me say, first of all there is this National Security exclusion which we talked about. But i always am impressed with people who were so worried about certainty and business and nafta, we signed it nine months ago. I am prepared to come to certainty and have a boat and come to conclusions, sit down with a handful of numbers. And come to a conclusion and have them voting. I agree completely with your sense that we need absolute certainty. The best way to get certainty is to pass the thing as soon as possible. I will yield back is the let me recognize the gentleman from ohio. Thank you very much, mr. Chairman and thank you ambassador for being here today. I appreciate it. Weve heard a lot of talk about enforcement of labor agreements. It seems to me the first step in then is what you have already tried to do, which is to agree to it. Have it signed. Have it in the usmca as it is as opposed to a side agreement. So utep taken the first of in my opinion and i want to apply do. And your willingness to talk to this committee and to the panel to come up with ways to enhance enforcement. I think it is important. In my mind, you have taken the 1st. It does not exist today. So thank you for that. I want to echo something that her concerns for farmers and thats something we have in ohio, and i think , one of the questions i have is, to what extent do you think the usmca will relieve some of the burden they are facing right now . Before we get into china, in other words if we get this taken care of with canada and mexico, how much advantage with that relieve the burden right now. I think you will have a huge effect. And i think a strong argument, mexico and canada are number 1 and 2 and sometimes in our agricultural export markets. This is, whatever the number is, it is 36 billion worth of agricultural sales. We have taken, we have the report we have taken the steps to get the aluminum tariffs on aluminum on mexico until we have gotten rid of retaliatory tariffs gets up and now we have certainty so farmers can move forward on this. I couldnt agree with you more. I would like to talk and have you engage in a little bit about the difference between dealing with mexico and canada and dealing with china. And it is a completely different situation in my opinion from a National Security standpoint. You know we have certain tools in our chest, diplomacy, military, what we can do economically. What we have been seeing from china over the past several years is the expansion around the role. And theyre really doing it on our dime. In my opinion. They have been able to do a tremendous amount of things, if you look at whats going on of the child south china sea, and how their trying to engage in africa, surrounding countries, dangling little shiny objects. And i say theyre doing that on our dime. And so we have to be tough on them in the long term. Because its more than just getting a good trade agreement. InterNational Security as well. I would like to comment on that it. I certainly agree with that. I think we all are going to benefit by passing usmca and getting back to all these great provisions that are going to lead to more jobs and more agricultural sales in the United States. There gonna help execute on canada and thats great for north america. China is different. We do have other considerations, number 1 and number two, if you are concerned about trade, trade deficits, which i am, which of course the president is, and enormous part of the problem is china. It is not basic economics. It is not economics. It is all unfair trade practices. And what we are really looking at is what kind of a future giving twerk it. In the case of canada and mexico, we have that on course and that is great. But with respect to china, it is literally a question of what kind of an economy were going to give her kids. What kind of the future they will have. And wears her place in the role . Do you see any opportunities for other countries to step up where china has been dominant . You know maybe in other areas of trade, either from taiwan or the philippines or even vietnam. And they feel some of the gaps in china is starting to struggle . Or left out . You have seen a lot of that im sure, that is something the chinese are following more closely than we are. That there are certainly a variety of other countries that have been the beneficiaries of plants moving out of china because of this uncertainty. I think that something he was raising. And i would say this, i think this is important, another beneficiary of that is mexico. Mexico was a great spot to put those plans. And that is why this is going to be good for mexico. It is far more likely to be good for us if it is good for mexico. I think if youre seeing that happen, there are a variety of beneficiaries, one of them is mexico. I yield back. Let me recognize the gentleman from illinois, mr. Snyder to inquire. And investor thank you again for joining us today. And for your work in reaching out to us and openness and candor is greatly appreciated. Last time you were here, i share the specific example of company my district that was happening with their dodgy trade practices. And you are pursuing and securing the negotiations from china. 2 and half months later, we will start there because i have not seen progress and in fact some of these companies with situations have gotten worse. Instead the president continues to issue tariffs by tweets creative massive uncertainty as you said earlier. And thats creating challenges for u. S. Businesses. And challenging environment for the plan for the future to grow. I would like to submit for the record an article in yesterdays New York Times cut Global Economic growth is slowing in you is trade worse making it worse. And to reference, the article close to the chairman, said his own case that the cost of tariffs that exceeded the benefits of the 2017 Corporate Tax cut. He said quote, in terms in place now and maybe in place for some time are significant for non us businesses and farms. In the article goes on to say they suggest trade tensions are wing Economic Confidence globally in the by the state. For the record. So we have this fortat trade war with china, it big and small american businesses. At me be clear, the pain that it incurred is passed on to mere consumer. The president will occasionally acknowledge the turks are hurting people, and thats why he proposed for example he proposed 16 billion to aid farmers struggling with the policies. But he definitely would not acknowledge it, acknowledge who is paying the price. In his recent interview he said quote out of the billions of dollars that chinas pain, im taking 16 billion out to give farmers because that is what they have lost because of china. And not making it up im taking it out but it comes out of tariffs and collecting. Investor lighthizer my question is do not the president is referring to . The cost of terror was paid by china are you as consumers . Let me makes a couple of comments if i could about some of the things you have said so they dont stand. I dont believe for a second that what we are doing with china is having a negative effect largely negative effect on economic growth. And reality u. S. Is growing faster almost by two times then the other g7 country. But, the economy and a lot of countries is slowing down. It doesnt have any to do with what in my judgment with what we are doing. The question we have with china, is are you willing to, in my judgment, what we are doing or take the status quo until we have the conversation. We had the for 20 years, we talked about the. 20 years of that and that literally the trade deficit went up and up. And we lost more and more technology. So it was the worst thing for the night estate, we could not continue to go down in that direction. In my judgment. If you have a different view, then this all looks different right. Let me be clear, chinas a bad doctor and we do hold them to account. And their behaviors but the question is the tariffs is china paying the tariffs or is the fewest essences and consumers that are paying the tariffs . Was a ball i would say its a complicated question. The first thing it depends on what products you pick. With respect to some products, clearly the chinese are paying and not you as consumers. The second thing is, if china devalues the currency which they have their making a decision to pay those tariffs and spread across, number three, in many cases, they absorb the tariffs specifically to maintain market share. Number four, in many cases they end up subsidizing the sales in the United States for a whole variety of economic reasons. In which case, china pays for those. So it is far more complicated, the other thing is, other countries come in and substitute for china. In which case the products even the price of the products dont go up. So i dont buy this idea. I realize these economists have the snows sort of high notion that that you as consumers pay for all of this. I dont buy that at all. I would like to reclaim my time. We can continue the debate but i want to submit for the record, one of my concerns is that the administrations policies toward israel, the administration has not granted one of our strongest allies on the tariffs, i hope we can make progress in doing that. And how we deal with i will call you on israel. Based on the request to have those included in the record so order. Me recognize mr. Swazi. Thank you mr. Chairman, ambassador thank you so much for being here today. I want to reiterate my support for your efforts, china is cheating. China has a plan for World Domination economically, technologically and space, militarily. In the next 30 years and they treat their people awfully. And with the tibetan buddhist, the protest we see in home kick i want to reiterate my support for what youre doing. My focus today is about the usmca, the new nafta. And about enforcement. Enforcement enforcement and forces, wages wages wages. We heard a lot about the improving economy. American economy has improved dramatically since the 1980s. The dow jones has gone up 1200 , the gdp has gone up 600 . Peoples wages have not gone up. Peoples wages have gone up by less than 20 . And that dow jones 600 . And is one of my colleagues said earlier, the middle class need to raise. So we want people in america to make more money. We want to have a lot of things we want in america and we are competing against countries with the dont have those things. So there have been things negotiating the agreement to try to get mexico to do a better job. Regarding paying their workers and they had labor reforms. Mexico passer labor reform legislation that required them to overhaul their current labor system replacing the structurally biased arbitration boards with labor courts. Graham collective bargaining agreements to be subject to personal vote by workers. To fix the system for Union Electricians which are subject to prolonged delays. As much as years. The problem is enforcement gjysma how do we know they do these Different Things . This administration has said that in order to try to enforce these agreements, not by correcting some of the flaws from the first nafta but instead they want to rely on the executive authorities under section through one of the trade that imposed tariffs and trade taps. About it hard to believe that after negation of this monumental agreement, after going through all these efforts, making an agreement with other nations, we are going to open up an agreement because somebody is violating a liberal at a particular company and we will impose imposters, i dont think thats realistic. I think we need to have more stringent labor enforcement requirements. You said you could negotiate this in half hour. And been assigned. Have to it. Okay, still the same. So the labor Advisor Committee and folks that work with you from different labor representatives have indicated there could be a second specific enforcement provisions such as an independent secretariat who brings labor cases to the courts. Or the specific certification requirement that would enter the trade agreement rules are abided by. You like that idea . Do you think thats a good idea cut. Would you support that . I dont have that in front of me , there are labor courts in mexico come thats part of the reform and that part of the reform and they did pass that. At the idea of creating an independent secretariat who would bring labor cases to the court it. No, i dont think that makes sense at all. Senator brown has created a proposal that would increase enforcement personnel to join initiative to recognize labor rights in america and allow the was and Mexican Governments to Work Together to audit and inspect facilities for complaints. And for companies when theyre in violation, do you like that idea . There are a lot of, its a complicated proposal. I talked to them about it and theres a lot of things to like about a. I think they will be discussed with the leadership group. Are you open to reopening the agreement to address the implementing these Enforcement Mechanisms . I dont think we want to reopen the agreement. Step you think there mechanisms in place that could be put in place that would say, listen we see this company is violating neighbor roles and we think that her standards should be abide by, we see their breaking rules. Could we stop the goods at the board if we wanted to stop them . It depends on what rule. If its forced labor, yes, we have laws that could deal with that. If there is we heard earlier today about violence, people trying to break up elections and using violence. And not letting them support union, how can we stop the goods at the border for example if the company is doing the quick theres two things congressman to think about. One, are you denying them the and if it of nafta . All right, the second question is, are you stopping the product from coming into the border, theres are very different ideas. The idea of stopping them at the border and is been talked about in the brown widen bill, other than the forced labor con context. But what we are really talk about is denying the benefit of nafta. And the question is, how do you determine whether theres a violation . Some things are black and white and some things are it. Ideal, specifically not referring to widen the but support you would to block goods as a vehicle to enforce. Let me recognize the jelm and from kansas. Thank you mr. Chairman. Thank you for ambassador light heizer for being here today and for all the work that you and doing of the last two years. To help make this process better for the country and in general for the role. Having good traits. You know, as the representative of the red capital and breadbasket of america, trade is really important to kansas. Like many states, kansas trading to partners are mexico and canada. Infect trade with candidate is roughly and mexico is roughly 4. 9 billion dollars and supports about 110,000 jobs in our state. That just underscores how important nafta is for our country. Hopefully this will help a little bit it. You know, the usmca has a major focus on how we make sure manufacturing wages improve, make sure they have new access for american agriculture, sets unprecedented standards in areas like digital trade and supports innovation and intellectual property provisions. And every day we delay a vote on usmca, our country loses jobs and economic growth. Unfortunately we are behind the curve. Mexico and canada have started that process. Im open for your testimony today to my colleagues both on the committee and in congress to join the Bipartisan Group of ranchers and farmers and workers manufacturers who are urging us to ratify usmca. You know, as you have mentioned already, i do understand the need to make sure that usmca is enforceable, not just on environmental and labor provisions but actually and all the provisions. I believe usmca can work as a strong standard for trade negotiations moving forward, just adding to the importance of making sure that we get this agreement on. So as negotiations continue i look for to making sure that any trade deals open up more markets for kansas farmers and manufacturers and set clear enforcement benchmarks that will benefit our economy and american jobs in the future. As a mentor, ambassador, usmca just one trade area that your administration is focusing on. I recognize that mexico and canada to kansas are the biggest trading partners but the third one is close behind in japan. Can you talk about how japanese trade deal would be beneficial for you as agriculture and the ethanol in some those products that we produce . I would be happy to. Japan is right now a pretty good market for the United States. It out to be much better. And for a lot of products from places other than the United States and one of the points that i mention all the time is if you look at their trade balance, they basically have a surplus with the world about equal to what their surplus is with United States which is another way of saying that all their deficits like japanese deficits with the rotor basically offset by the trade and benefits with United States. And if that is the case, we are there best customer. And if you are the best customer you cannot keep your best customer working and and from work in these other countries in europe and all the other tpp countries. That is the argument we have made. The principal thing were trying to do on a fasttrack basis is to an early basis, and an early basis is to get agricultural access equal to what the japanese have given to the tpp, the other 10 countries that they have their, anti europe. And is quite detailed and very, very complicated as you know and agriculture exports. The deer cues and all the other stuff. There huge benefits for beef, and huge benefits for poor, and huge benefits for Dairy Products, theres a lot of stuff in there that we are working a way through. I am hopeful that we will make headway on that. We realize how important it is. If we dont do it now, we not only are going to move backwards, right, we are going to be worse off because we will lose market share to those other people. Thank you, one of the things i want to mention is the Digital Services tax and some of things that countries like france and others are looking at. Understand the usdr is contemplating investigations into the digital tax for majors from france and of the countries. Can you comment briefly or is there quick answer . I think i think we ought to take action against the digital tax if someone puts that, thats one person you. Thanked the jelm and let me call upon the gentleman from pennsylvania. Thank you, mr. Ambassador, as you know, im all about finding out which tools in the toolbox we can use to fight poverty. Trade it is an important tool that i will call the poverty buster. Trade needs to fight poverty by creating economic growth, providing jobs and generating revenue. In my home city of philadelphia, trade exports supports over 185,000 jobs. It generates about a 2 , 31 billion metropolitan annually. That being said, i believe it is important that any trade agreement the u. S. Takes firmly protects our priorities and citizens in the global market. Mr. Ambassador how do you or the policies that have been laid out in the president s 2019 trade policy protects the ability for trade to continue to be the poverty buster in the United States . First of all, i agree with you completely. My basic view is that if we have fair trade, if we dont have these impediments, we dont have these embedded unfair tariffs, that we have agreed to around the world, that we are going to see an enormous explosion in the us economy and we are going to see more manufacturing, more agriculture. Pursley, in terms of busting poverty, it is my perspective, i think it is manufacturing jobs more than any single thing that has the most direct effect, like where the rubber meets the road. And if you look at what has happened since the last election, we have created 5. 8 million jobs and most importantly we have created half a Million Manufacturing jobs. These are the jobs that take people from high school to the middle class. And that is what, when you say trade being poverty busting, thats what it means to me, youre taking people out of high school and putting them in a manufacturing job where theyre making 20 an hour or more, and that changes their life. Their kids are different and the family is different. And i think when you see the opposite side, another words where the poverty comes from, you lose the manufacturing jobs, you have hollowed out cities and you have hollowed out small towns. Not that we had before. You have crack cocaine and fentanyl and all the bad things that come from that in my judgment, not entirely but a good part of this is losing those basic jobs. And if you can get those, they werent lost because of economics. Best the problem. If you get those jobs back, you will turn the cycle around. And that really is one of the motivators motivations that we have. Ambassador, i am also buster the Small Business committee. As you know trade is a critical important to provide growth and opportunity for Small Business. In your testimony you mentioned security new markets. As for farmers and countries around the globe. Can you elaborate on what this Market Access looks like . And what will it work to support for the nations Small Businesses . I would say first of all one of the most important things we do when we think about Small Business and the Economic Vitality of Small Business, improve the digital trade. There is an enormous amount of in a fit to digital trade from small manufacturers, small companies, retail sellers, we can now reach for 5, 10 times the amount of customers that they could before. So, this is something we have stressed all over the role in international, theres a wto process that were going through to put rules in place, United States has a real economic advantage in the sierra. We have the best technology in the best companies in this area right now. So it is an area that is very, very helpful. We also have in most of our trade agreements, we have the small and mediumsize enterprise provisions where we go through and try, theyre not always binding, but they are ways to try to encourage other economies as well as her own, to make sure that we are not discriminating against small and mediumsized enterprises. But, i would say, number one, if we have less fair trade, if we had more exports, it is going to help everyone, vertically Small Business. Mr. Chairman mrs. Let me recognize the jalen from california. Thank you mr. Chairman. Mr. Investor thank you once again for being here as you consistently have been for the past, my six months on this committee. As well as this term in congress. As i mentioned, in the ring with ambassador dowd, i do find you a pleasant presence here on capitol hill and hope you will continue to be especially working through these issues. When it comes to usmca. Obviously as you have heard, there are some issues that need to be addressed. And i think both sides here democrats and republicans want to work through them and get to yes when it comes to usmca. In my area as you know on the Central Coast of california, its all about agriculture. And thats why nafta has benefited my fresh fruits and vegetable producers. Here on the Central Coast especially with trade with canada and mexico and and investments in mexico and taking money that has earned and put it back into our area on the Central Coast. Though nafta has deftly been a big bennett and i appreciate the improvements that have been made in the usmca when it comes to agriculture especially for my producers. The improved sanitary measures, treating how technologies, using science to do that. And ending discrimination on certain one products from canada. But most importantly i think the usmca could provide certainty as you know could provide certainty to our farmers who have really been taking it in the deal with the markets, and Immigration Reform and based on the fact that the terps have been imposed and have hurt them. As you know well. But theres also some pretty good labor and improbable chapters that a been post in usmca. The mexican annex and led to positive change in mexican labor laws. But the issue is whether or not as you invert over and over is about enforcement. Now, recently we had a representative from aflcio talk about certain recommendations such as having an independent labor secretary moore specification when it comes to acceptable work conditions and requirements to crops when theres worker violence as well as protections for recruited migrant workers. Some of those workers who come to my district and help our agriculture industry. And so i guess what you said earlier you talked about the congressman, when he talked or you said you dont believe that changing the text of the agreement is necessary. And that you would work with the working group as you mentioned and come up with the conclusion of how to proceed. I guess moving beyond that, should those changes be requested that require additional commitments from our trading partners and not just to her own domestic implementation of legislation, are you willing to take those proposals to canada and mexico, update the labor annex, or possibly do as i do . How do you want to go about it after something is to agree to here . First of all congressman, thank you for your comments, i appreciate that. I think we have clearly made an enormous improvement in this bill and every time i talk, i think, always think to myself, at some point you have to decide whether this is a horrible agreement and you think its so bad that you campaigned it gets it since you were in high school, although i wasnt in high school, you were in high school, and all of this improvement, i say to myself, at some point youve got to say, okay fine im going to get rid of the uncertainty and for the improvement and not tape we can make it better and better and better. So thats a little bit of venting on your time. I apologize. When we come to a final agreement with respect with these people, with the speakers group, i will call them, when we come to that we will figure out a way to do a. I think the vast majority of the stuff can be dealt with in the u. S. Law. I voice had the view you are far better off changing positive u. S. Law to enforce this. For example, if you change the list law and you say you have to come forward, somebody who comes forward with a complaint, that there is an obligation to take the complaint to the binational panel, and if you dont, you have to explain why you didnt to the weitzen committee. Even though there are things can be done but i dont want to fool anybody, and the final analysis analysis, if you have people that dont want to enforcement and the weitzen committee doesnt force people to enforce a, is not going to be in force. I yield back. I recognize the gentleman from texas, mr. Arrington. Thank you mr. Chairman, ambassador thank you for your hard work, your patience, through this process and your persistence. I can appreciate your venting. We have had seven months to look this deal of work and is never going to be a perfect deal. But this deal is substantially better in every way from the 170,000 jobs, Overall Economic impact, to the worker not only in the u. S. But in our partner nations, including mexico, what happens if we dont pass this, with respect to the new labor provisions that are not just a side car or side deal like it was in nafta, but actually part of the core of the usmca agreement. If we dont pass this, for heaven sake, what happens to all those provisions that the labor union reps who lined this panel here spoke with glowing sentiment about, even praise do for your great work in substantially improving the position of the worker. What happens to those mr. Ambassador if we fail to pass usmca . I think that is just so important. That that is the fundamental question. It would be great to have perfection. By the way, we wouldnt even agree on what perfection was but but right now, were going to have a catastrophe that this does not pass. Youre not going to have labor enforcement, you will not have economic, i mean tens of millions of jobs as they. I would say finally so i can shut up, and you can talk about your time, i would say it would have a bad effect with respect to relations with china and everyone else if we are in a position where we literally cant pass this agreement. What is is a but are resolved to have very trade existence . I have heard my colleagues expressed concern on behalf of the farmer and id i dont want this to be misunderstood as bragging because im from texas where bragging is a sport. But we do produce more ag products out of texas, we trade more ag products of any state in the union. We have 20 50,000 farms in the great state of texas. Three times more than the next eight on the list. And i think ive got a pretty good pulse on the farmer. And, the farmer has legitimate concerns. Times are tough. Theyve got some stiff headwinds. You know the last several years, they have seen a reduction in 50 of their income, you know and can sympathize as does our president , the current fight plight of the farmer and all their having to endure. But lets be clear. The farmer knows exactly what is going on and how china has taken us for a ride for decades. And nobody higgs experienced the adverse effects of that lycra farmers. Our farmers are fair and tough and strong and they want somebody fair, tough and strong to negotiate for them like this president. And like you mr. Lighthizer. And they understand that there is never going to be a good time to renegotiate a deal with china, to hit reset and hold them accountable for all of their unscrews and unjust and unscrupulous behavior. America is the only country that can do the. You know that and i know that. And you know theyre one of the greatest greatest existential threat to the future of this country. And the role. And, the farmer knows that this president is fighting for them and for this great country. And they know there will be some pain between here and there. And i continue to be vexed by the question of what is the endgame . What is the endgame . The endgame is a fair, equitable, and balance trade deal with a partner we can trust. Period. And thats exactly what this president understands. It is what he is doggedly committed to. And i appreciate the fact that, for such a time as this, such an issue as this, we have a president like donald trump. And so i think i can speak for my farmers, we appreciate, there are also gracious people mr. Lighthizer and they want to say thank you to this president for the trade assistance, for the tariff mitigation, the mfp coming through, mr. Produce agency, we need to give the president give them enough relate to allow them to get the president of runway so he can get to a real deal. A real deal, thank you mr. Chairman i yield back. Let me recognize the gentleman from florida, mr. Murphy. Ms. Murphy. Thank you mr. Investor, i believe our country has benefited from fair trade both as an economic and security matter, the trade chris many jobs in my home city florida. River, what seems to be never ending tariffs imposed by the Trump Administration are causing significant damage to our economy. Despite the president s constant claim to the crying trick, it is you is companies and u. S. Consumers that pay taxes on imports. The turf list is long. Cheaper National Security tariffs on steel and aluminum, the california tariffs and the threat of auto tariffs and then china and 25 tariffs on 20 50 billion chinese imports, chinese retaliations potential 25 tariffs on the remaining 3 million of the chinese imports. These products are mostly consumer goods toys computers, products where when their prices increase, it will really be noticed back at home. And kitchen tables in my district. The negotiators seem to have stalled at our constituents are still paying the price for the trade were. And then there was mexico only a couple of weeks ago, the president threatens to a poster of someone of her closest allies for something completely unrelated to trade. Putting u. S. Jobs at risk. When will this stop . Mr. Chairman i would like to enter for the record a letter highlighting from the associate highlight the negative effects of terrace on the economy. So order. These cases the ministration consulted in a meaningful way with Congress Prior to imposing tariffs. In many cases the axis two factions have been opposed by members of congress on a bipartisan basis. The results of this week i will introduce legislation to retain of the senate bill to enhance the role of congress for decision by the ministration imposing tab tariffs were neck National Security reasons. To ensure that this congress and future congresses have a say in trade policy decisions that affect Small Businesses, farmers and families across the country. My first comment is related to the new nafta. Is from bastrop i appreciate the outreach you been doing but i want to say that for the record that mexicos unfair practices have severely harmed our fruit and vegetable sectors important. Something you and i talked a lot about. I look for to working with you to find a solution to ensure that all sealable producers and ford have access to effective enforcement tools that my friends in the western states have. Mr. Investor the last time you were here, i told you about the plight of david who owns an Electronic Firm and linda. He was hit with 10 tariffs for the three and in response you said the stronger dollar would offset the cost. Now the products are facing a 25 two and he is not a farmer. So hes not receiving any of the subsidies. He does know where not his company will be able to survive this. What you think i should tell him . I guess i dont know precisely which products he has what the tariff situation is on it is, i dont know enough about his business. I would say first of all, we have an exclusion process and we have an obligation to try to do the most we can to try to reduce the effect of these actions on david and others people in that position. But one has to start with the analysis i believe its whether or not we have a problem. And if you dont believe we have a problem, with china, if you dont think thats by i dont believe that anybody disagrees with you that we have a problem with china. But for david is that we fit entered into this trade were and for him theres no end in sight. And you know that for business, predictability is the to their ability to continue to work and employees and workers in our community. It doesnt look like this negotiation is progressing forward. How long does it have to hang on, why is it that some industries get assistance to hold on whereas others dont . I think my point here is that as you move forward, if we are moving forward with these negotiation, that you understand the human and Economic Cost of every district of our districts of this policy. Everybody is just hoping and praying that we get to an end at some point. But that does not help them in the daytoday management of their businesses. My final question for you is in yesterday senate hearing, you said you still believe it was the right decision to withdraw from tpp. But in this hearing earlier today, you pointed to japan being a tpp with other countries as the reason that the u. S. Is disadvantaged. Had the square that . Bissett it will take more than eight seconds imports it. Number one is why was tpp a bad idea . Heres an example, you could make a car at tpp 45 in vietnam, 65 or 55 in china, and then bring it into that state . What effect would that have on you is Auto Industry . Thats just an example. It doesnt deal with currency stuff. From top to bottom, it was just plain at that agreement. Now, with the agricultural advantages, yes, there were some, and what we want to do is obtain those in negotiations with japan. Is that more or less square for you . Thank you investor for your response, we recognize the gentleman from nevada thank you very much mr. Chama. I will get right to it, thank you mr. Light heizer i also want to echo my colleagues sentiments expressing the need , many of us there trying to get together. Im a little concerned with todays hearing and the tone by some of my colleagues on the other side that are making this more partisan that it needs to be. Every time that you spoken to us you have said this needs to be nonpartisan. There needs to be about the workers and american businesses, not an individual or a partisan agenda. And i hope that we can work towards that goal. I want to bring up three points. One is on the trump tariff taxes which in nevada, 39,000 are dependent upon nevada exports. Over 37 million of these trade taxes on mexican goods and products and were talking by the consumers and businesses an additional 37 million from everything from vegetables to fuel to alcohol. I want to ask you specifically how i respond to my constituents about why we are even going down this road. Im glad to see the president has stepped back from that but where we even bringing those proposals forward . Secondly, i want to ask about the Digital Services tax. The fact that france would draft the Digital Services tax which was disproportionately affect you as Technology Exporters and could potentially be double taxation. Third, i want to ask about the trade adjustment assistance program. I asked you about this in the caucus meeting when you briefed us and you indicated your team with gettis information. There is no provision in usmca regarding taa, and this is the program that directly supports workers. And i would like to know what the plan is there. And finally, im concerned about the sunset clause. And the fact the it that it has automatic renewal provisions that could go around Congressional Authority and approval. Can you speak to those four points for me please . Sure, thank you. First of all, on the issue of tariffs and mexico and the immigration policy, my hope is that those issues are resolved, that was a serious problem and im hoping that we are in a good place on the. And i have every expectation that we are on the digital sale or digital tax, i agree with you completely. I think it is attack that is geared toward hitting American Companies is proportionately. I think its in the United States has to take strong action on. And im happy to continue to work with you and others on that. It is something on which we have to have some debate within the administration. And as you know, there was talk about doing it at the eu wide basis and some objection to that, it still may happen. But it looks like the french are very close to putting it in place such a tax and i believe United States did respond very strongly to that and i believe the president will respond. So on the issue of taa, as you say, it is a separate issue, its a separate program. All of these issues are related to fix extent the members have a broader perspective. I made this, before you werent in the room, i am sympathetic to the objectives of taa, obviously people who are disadvantaged because of a trade agreement, you need training at some point. You need payment, the needs to be more payment. In the old days i can remember being told in the past that what we really have to do is figure out a way to get these people jobs, not trade adjustment it is with if i could, i come out of workforce development, its about skills not jobs. We know before they get to this place that they need that her skills and we need investment in the taa to achieve that. For us not to include it in the trade agreement is an oversight. In my view. And then on the issue of sunset, i guess i didnt quite understand the point. We have a sunset provision, most trade agreements for reasons that dont make any sense to me, our eternal. This one is temporal. Although it is complicated how it works. So, if theres any usurpation of congressional prerogatives in trade agreements, i would suggest it would be and all the others and lessen this one. So if i could, just to clarify, you will come back for approval within a sunset clause . It doesnt take the congressional oversight and accountability or approval process . No, there will be no coming back. Thats how trade agreements were. Its kind of a crazy thing that they kind of become eternal. We passed of these things and then they go on forever and ever. What this one does is it has a process which every six years you have a review to see whether or not this is something you want to extend. If it isnt, it will expire at a certain period of time after that. But this is, i would suggest this is like an extremely important idea, exactly consistent with where youre coming from and in an innovative way to do exactly what you want to do. Thank you, i think this is right in your sweet spot. Thank you mr. Ambassador i will recognize mr. Ferguson. Thank you, thank you for your time today. And thank you for your hard work on this issue. There was a comment from one of my colleagues made earlier about hoping that you would take into account the human and Economic Impact of decisions regarding tariffs and trade. I want to thank you for doing just that. Record i said them for a Community Like mine that lost tens of thousands of jobs following the nafta trade agreement that was seen for far too long between job losses and manufacturing to china and other areas around the world. Understanding the impact they had on bad trade deals on all the human and economic additions across this country, i want think you for recognizing that and fighting to make sure they have opportunities, great careers in manufacturing jobs that are so vitally important to our small towns and communities. Thank you for that and thank you for cocreating the sense of urgency that i know we all share and i agree with my colleague from nevada that this should be something that we view as good for america is not a partisan conversation because every single District Across this country is impacted by this trade agreement and getting this across the finish line sooner rather than later is important. All of the goals that we want our advanced if not always certainly a meaningful way by advancing this more quickly. Thank you for helping to create the sense of urgency. We would like to get this into consideration as soon as possible. One of the areas that i have really liked in this agreement is the stronger intellectual Property Protections and i think that is something that is very positive and one particular conversation we have had many times as on Prescription Drug pricing and one of the things i would like you to address is the fact, talk about how this agreement doesnt create change to u. S. Law it simply rings mexican and canadian laws in alignment with hours were closer to where hours are. Could you speak to that for just a minute . Thank you, congressman. I would be happy to do that and thank you for your comments about me and my staff and your points about when we worry about tariffs on someone we will have to think about the effect of all these peoples lives who are destroyed because they lost their jobs not because they were told for 100 years they have stupid bosses and they were lazy and they lost these jobs and in many cases like what mister evans was saying the reality is a lot of these people are just plain victims of bad Economic Policy and bad trade policy and diversity not by itself and i think that is so important. A lot more people that have lost their jobs because of unfair activity by china than because of anything to do with tariffs. On this issue of Data Protection and ip protection from pharmaceuticals i think the crucial thing to remember is what you said and that is we dont change u. S. Law. The Congress Changes it. We are not changing it. The congress decided you should have 12 years for biologics and there are only eight in this agreement. Congress set up what the intellectual Property Protection is in Chemical Pharmaceuticals as well in biologics. What we are trying to do and where we were asked to do is get the rest of the world to adopt our standards. That is what we have tried to do. There is nothing in here that in any way will have any negative impact on drug prices. We are making one of the big arguments we are making for better trade agreement with china is intellectual property theft. If we fail to adopt it wouldnt we have concerns about loss of intellectual property under the current agreement or with the lack of protection we have . If we dont pass this agreement this Digital Economy and intellectual property and culture and all of it will disappear. People tend to focus on the issue of biologics and Data Protection and there are a lot of things and extension of a copyright term and there is a 15 year protection for Industrial Design and there is criminal and Civil Penalties and a lot of serious issues that are out here that are addressed. Thank you. Let me call upon the gentleman from california. Thank you, let me thank you for meeting with me last week. You have been more engaging than i think anybody in this administration has been on a particular issue. You set up a meeting with me not knowing i would be one of the eight individuals selected by the speaker to negotiate on this trade deal so i want to say thank you for the engagement. It has been impressive and i also want to emphasize a lien on the timing and i heard some frustration on your part that youve been negotiating with congress for over nine months, but i dont think that tells the whole story because in the nine months since the democrats won weve had over 100 brand new members of congress who got sworn in in january and one of the things when i got here as a freshman in 2017 in july people would tell me we voted on this before and i would have to remind them you voted on this before. You dont speak for me for the constituents that i got elected by to represent so i know the administration wants to work on this, i think we are moving fast ahead and i want to share since the sticks and you probably know this because the minute i got assigned to this working group you have to know where the votes are in and out of the Democratic Caucus we have hundred 34 members who have no recorded vote on fta including myself. 134 members with no recorded vote. You have 16 who voted for the previous in the past and you have 45 that have voted for less than 50 in the past so we needed to have a lot more outreach and that is what i want to emphasize is these number of members havent had the time given to think about this stuff when it comes to the usmca because we have the longest shutdown in u. S. History that put everything behind. Assignments and stepping up and you name the Different Things when it comes to building up members offices. They have had a lot and i wouldnt say that is in the of their fault. April 19 was the date when i received the usi d. C. Report on usmca and you know that is an important report for the likely impact of the agreement and is projected to provide over 76,000 new auto jobs and the report says 28,000. There is some discrepancy so i want to figure that out. Also, mexico, you are right. The agreement for has made on some of these could be huge. That depends on if it is enforceable and make sure they are living up to their commitment. I want to say that we hear you and there is an urgency and there are a lot of members that need to have a conversation so they are brought along. I know that no one here including myself or the chairman or speaker will slow Office Agreement and we will be working diligently to make sure we address the issues. Before i run out of time i want to turn your attention to a separate matter that was brought up once people found out i was working on some trade issues. One issue is the 52 billion in subsidies received by middle east airline and italy to force them to be more transparent and play by the rules of engagement. Is is a bipartisan issue. Can you remind the president of the bipartisan shift that we want to see the full enforcement of the open skies agreement and at the same time we also see that it has been having an impact not only across the country, but at lax which i cover and i fly out of and remind the president to enforce the open skies agreement. The answer is yes. I will tell the president. Bucket thank you. I look forward to having this conversation and we do have some work to do and i think we can get there if it is an understanding that it cannot be rushed because if it is rush it can fall apart. I appreciate that. The only thing i would say on the other side is at some points, this is what scares so many people when sunny season comes people ball vote based on the merits anymore and that is what scares people. Thank you and thank you for your comments and i look forward to working with you not just on this, but in the years ahead. Bucket thank you for joining us. Two weeks to submit written questions to the answers and those questions and your answers will be made part of the formal hearing record. We will here some members of the Trump Administration speak of the faith and Freedom Coalition conference in washington d. C. Leaders the Surgeon General shares how the government can help combat the opioid epidemic. President trump is in japan this week for the annual summit. He is said to hold a News Conference before heading to a News Conference. We will have live coverage. Former president jimmy carter and former president Walter Mondale talk about the importance of human rights and American Foreign policy as a way to promote American Democratic ideals around the world. Posted at the Carter Center a little less than an hour. Thank you very much. It is my great honor to introduce this remarkable panel on a topic that is at the very core of everything that the Carter Center does. The norstar for this organization forever and ever will be human rights because that has been the norstar for my grandparents for ever and ever and we are honored to do that. Many of these people have been introduced to you. I will introduce you say pr