Transcripts For CSPAN3 U.S. Trade Representative Lighthizer Testifies Before House Ways Means... 20240712

Good morning and welcome. Consistent with the guidelines released last night by the ho e attending physician and the speaker all present today in the hearing room are required to wear face coverings. Brief removal of the masks for the purposes of speaking on the record is permitted. I want to thank everyone for their adherence to these guidelines as we continue to do our work protecting the health and safety of our staff families and communities. So thank you for joining us today. Pursuant to todays instance n our hearing is taking place in the ways and Means Committee room with members able to attend remotely with compliance with proceedings pursuant to House Resolution 965. We currently have 33 members logged in and participating via the platform. For those members here in washington and plan to participate in person we have a limited number of available seats at the dias to ensure we adhereby to social distancing guidelines. I encourage members to watch from their office and only come to the hearing room when it is your turn for questioning. Before we turn to todays topic i want to remind members of a few procedures as we navigate this hybrid hearing setting. First, consistent with are regulations the committee will keep microphones of those webex muted to limit background noise. Members of the hearing room or via webex are responsible for unmuting themselves when they seek recognition or when recognized for their five minutes. For members physically present please remember to keep your microphone muted when you are not speaking. This will help avoid camera on rather than logging out. I thank all of you for your patience as we continue to navigate this new technology and challenge in order to continue serving our country in this great time of need. With that i want to recognize and welcome the United States trade ambassador Robert Lighthizer to discuss important trade issues that impact the health and Economic Opportunity of all americans during these challeng challenging times. Last year democrats worked tirelessly with the ambassador to improve the usmca and create a successful model for good trade policy that strengthens our economy and meaningfully benefits our workers. A reminder that more than 190 democrats i believe voted for that agreement. We are very proud of the new high watermark we established in usmca closing the loopholes in the old nafta state to state enforcement meckmism. The new usmca has a system now that will allow all obligations in the usmca on agriculture, on ecommerce, customs rules and yes, on labor and environment to be enforced. We, our democratic colleagues and i are looking forward, acknowledging you intend to offer rigorous enforcement. I was pleased to read your recent writings in which you promoted the core labor standards and labor mechanism we fought so hard to include. We are eager to see evidence you and the Current Administration will implement and enforce those and similar provisions to the fullest extent. As we approach usmcas entry into force we face historic challenges some expected, others unanticipated. The covid19 thrust to the forefront flaws in our Economic Health systems that disproportionately affect the most vulnerable communities and workers inside the United States and across north america. How the United States addresses these issues will impact the lives of millions of people. The usmca provides important opportunities to reduce the pandemics negative effects but only with effective and strategic enforcement and implementation. Similarly, we also face the historic challenge of reversing the continued deterioration of basic labor rights for workers south of our border and therefore our own workers. In the usmca we achieved the most robust Law Enforcement mechanism seen in any u. S. Trade agreement ever to do date. I hope you agree that the success of the whole agreement depends heavily on this badly needed tool to help raise labor standards and prevent systemic and egregious violations of workers and their human rights. We are aware that serious deficiencies exist and they threaten to preemptively undermine the successful model we have worked so hard to build. Specifically the failure of the current collective Bargaining Agreement legitimation process to deter undo influence and interference by employer protection unions jeopardizes mexicos ability to raise labor standards. This only serves to further chill the rights of workers in mexico and undermine the rights of American Workers. Theyre the foundation of bidding Effective Labor Rights Enforcement and they require our urge want attention. Similarly we need to hold our own Companies Accountable as well. Reports emerge daily of American Companies pressuring their factories in mexico to keep operating to reopen without taking into account health and safety protections for their workers. Some of these companyerize the same ones that shuttered their operations and laid off workers in communities here in the United States. We engaged over the last year in good faith, relying on the facts and evidence to negotiate usmca. Mr. Ambassador, we know that you are a hard liner on these issues and will apply the same vigor ensure the enforcement of this trade deal as we did with negotiating it. With respect to the larger trade agenda the administration we know has been very active over this year. The administration started section 301 enforcement investigation news Digital Service taxes by our european allies and friends and others there is broad support on this committee on that initiative. The administration negotiated preliminary agreements with china and japan that both await more comprehensive and meaningful followup. The administration is negotiating or preparing to negotiate trade agreements with the u. K. And kenya. Maybe the onagain, offagain discussions with the eu will come back to life. At the moment it looks doubtful. The administration is also reportedly engaging in limited negotiations with brazil and may consider limited trade negotiations with brazil and other trading partners. You should know many of our colleagues were unhappy with the administrations lack of coordination and consultation with limited agreements as they relate to japan last year. With respect to the larger trade agreement the administration has been very active over the past year. The administration as we know is very challenged on a series of fronts as it relates to our relationship with china. Yet it is not raised labor issues including the forced labor agreements with weugers in concentration camps or with china pending petitions underour fda it was alleging violations in columbia, peru, the honduras or the dominican republic. The administration often leverages trade policies and trade tools in the name of American Workers yet we see no actual enforcement of the cases, and several labor rights cases continue to languish without results. At the same time we see tax policies, education policies, worker and Family Support policies and border policies that undercut the interests of americas workers and make life difficult for middle class families. O our work in usmca was an important first step but we know much work remain tuesday be done. With that let me recognize the Ranking Member mr. Brady for the purposes of an opening statement. Thank you, chairman neal, and ambassador lighthizer for joining us today in person. Its good to be finally back in this historic room where we write laws that shape our countries economy and that of an entire world. One important key of a strong u. S. Economy is a trade agenda. Its smart and fair and open and enforceable. Its even more important in the midst of an Economic Hardship caused by the pandemic. Mr. Ambassador, you played the central role in advancing President Trumps aggressive trade agenda. The administrations aggressive trade policy agenda has opened more export markets for American Goods and services and create a far more level Playing Field for American Workers, farmers, ranchers and businesses, which is vital for our economic recovery. Especially in the face of covid19 implementation and enforcement will bring good jobs back to america and increase paychecks for our workers. Once this agreement is enforced in just two short weeks enforcement will be essential. The agreement strong Enforcement Mechanisms absent from nafta will now ensure canada and mexico abide by their commitments so we reap the benefits we fwabargained for. The president s phase one agreement will trade significant opportunity for growth and prosperity and enhance fairness and more importantly accountability. Can and know you wont hesitate to use powerful Enforcement Mechanisms if china fails to live up to its obligations. Republicans agree with President Trump we will insist americans receive our expected benefits and that china does not backtrack. In addition to usmca chinas administration achieved a phase one agreement with japan that gives our farmers and ranchers new access to an important market, that australia, the eu and canada tried to seize from us. These three agreements has created Significant Energy and momentum for future trade negotiations. Negotiations with the u. K. Progress and as we start negotiations with kenya as well as a phase two negotiations with japan and china. Another issue we should discuss today is the world trade organization. I reiterate both my strong support for the w. T. O. As well as my frequent calls for real reform. While the w. T. O. Is not perfect it serves the interests of American Farmers, workers and business by tearing down barriers abroad, establishing rules based on our system, enforcing countries to comply through rigorous dispute settlements. The reforms are long overdue. This institution has gone astray. I thank you for your strong leadership and assisting on real reform and not papering over the w. T. O. s wayward direction. We have to push our trading partners to address chinas consistent practice of subverting the rules. You have to establish new and more modern rules to tackle distortions, Technology Theft and subsidies. We cant allow countries like china to dodge their obligations and be transparent and claim their entitled to special treatment. Mr. Chairman, lets move to the floor our bipartisan resolution we passed by voice vote in december showed the world is United States is unified in rallying for a stronger w. T. O. That serves our interests. Must also be unified in denouncing actions by so many economies that seize revenues from our companies and our country through discriminatory service taxes. Thank you, ambassador, for holding firm as others try to flagrantly seize revenue they did not own. Reduce costs here at home, strengthen our relationships with developing countries and establishing centers for those countries to work with us. Upper manufacturers, and one last issue as the chairman has said covid19 has rocked our economy highlighting the necessity of durable supply chains, speed our economic recovery, make us more competitive and secure and low and encourage our companies to increase capacity, develop and manufacture critical products, medicines, supplies here at home while working with our allies. And ensure a diverse, dependable supply chain. Then meantime lets suspend duties for American Products if theres no domestic opposition. Americans need to return to work. Probreath trade policy agenda will create new opportunities, strengthen our economy, make us resilient and allow us to compete and win. Todays hearing is an opportunity to determine how we will build together on the progress that you have made over the last three years and best positioned america for a strong future. Thank you, mr. Ambassador, and i yield back mr. Neal. Chairman neal. Thank you, mr. Brady. Without objection all members Opening Statements will be made part of the record. Ambassador lighthizer, welcome back to the ways and Means Committee. I would ask you summarize your testimony in five minutes or so. To help you with that time please keep an eye on the clock. If you do go over your time i will notify you with a light tap of the gavel. Ambassador lighthizer. Thank you, mr. Chairman, Ranking Member brady. I know youve never heard a United States trade representative say that in history but its true. Weve had calls. But i look forward to the time we actually get back to traditional legislation in the historic way weve done and for all these many years. Weve been going through two crises. These are indeed challenging times. I thought of many of you often during these crises. Im confident if we Work Together in good faith as we have in the past we will get through these problems, heal and move forward. Hopefully things will be better than they were before. In some ways these problems make talk of International Trade seem less important, but in other ways perhaps rebuilding our economy, helping to create good paying jobs for all americans, securing fairness for our businesses and bringing back manufacturing can be part of the solution to bring us all together as one great country again. I have been we have been isolated and quarantined so long that i fear we might forget the great achievement of the last few months. Together republicans and democrats, house and senate worked closely with the administration to write, pass and pass the biggest and i would say the best trade agreement in american history, usmca. Mr. Chairman and Ranking Member made reference to it. We should not forget how important that was for our country and for our workers and businesses and ranchers and farmers. I would like to, again, thank all of you for working with me on that. Together we have had a historic accomplishment. I would also like to thank you for your support and help as we worked our way through china phase one agreement. Congress had an Important Role in that, the very important u. S. And japan agreement and numerous agreements in the last year. Toorlgt i think weve helped our workers, farmers, ranchers and businesses. Going forward theres much to achieve. As we all know we have active negotiations ongoing with the United Kingdom. We will very soon commence negotiations with kenya. Finally, we have active engagements on trade with numerous other countries, and of course, i look forward to working with members on the crucial issue of the w. T. O. Thank you to all members for working so closely with me, for making time to talk with me and meet with me. For having your staffs works so closely with ustr and for making our end product consistently better than it would have been without our involvement. I look forward to hearing your questions. Thank you. Thank you, mr. Ambassador. Without objection each member will be recognized for five minutes having an opportunity to question ambassador lighthizer. We will not observe the gibbons rule and will instead go through the order of seniority. Members are reminded to unmute yourselves when you are recognized for your five minutes. If you have technical difficulties when your turn comes up i will come back to you when you are ready. Let me begin by recognizing myself. Mr. Ambassador, as i noted in my opening comments we have received reports from mexico that there are serious challenges with the process for legitimating existive collective Bargaining Agreements, many of which as you know in the past have been sham protection contracts that were never really voted on by workers. We always knew that mexicos imp limitation of its Domestic Labor reforms and usmca labor regulations would be a challenge. With covid19 things are likely to be even more complicated than we have expected. You have repeatedly ensured us you are committed to the success of this agreement as we are. Making sure it delivers on its promises to u. S. Workers and to mexico workers. What options do we have and you are currently entertaining to provide reinforcement and course correction in mexico . Well, thank you, mr. Chairman. So i would say, first of all, we have taken all the steps necessary to get usmca enforced, and there are a enormous number of steps. Weve setup the committees, for the most part hired the people, and weve done the necessary certifications. Im happy to walk through all of these if you like, and the new Rapid Response mechanism is up and ready to go. I would say the same thing is trueoon the environment side. So the ustr has taken the hundreds of steps necessary to swing into action. I realize that and weve all realized all of us, and thats why we spend so much time on it that labor enforcement in mexico is going to be a problem. Its a crucial part of this agreement. Its something that all of us have realized from the beginning and i know you mentioned this also, made that a key part of his support. The agreement hasnt gone into effect yet, so it goes into effect july 1. But i can assure the committee when it does go into effect we will take action early and often when there are problems. Until now weve built in a very good system, a Rapid Response system plus a state to state dispute settlement system. We have committees, ways for congressional involvement, and the administration will follow through. To the extent there are violations well bring a Rapid Response mechanism and to the extent there are state to state actions we will do that. Im happy to walk you through the steps weve taken if the chairman thinks thats appropriate otherwise i could put them in the record. You could perhaps give us a synopsis of those and put the others in the record, mr. Ambassador. Sure. On the labor chapter we created interagency labor. They had their first meeting on april 30th. We put in place the forced labor task force. That has been created. These are all things required. We setup all the mechanisms for the Rapid Response. We have an appropriation we have the appropriations. We have the panelists selected with the cooperation of the various stakeholders in the congress. We have the the way this works is theres not initial members. Theres u. S. Members and theres mexican members. At this point the United States has put forward five members. Mexico has three, and we expect them to go up to five. And then there are six nonnational members. We have written the rules of procedure. The rules have been agreed to by mexico. We have setup to be effective july 1 both a hot line and a web based position for submissions of complaints. So were ready to go. Theres a whole time frame which at least members of the task force are aware of. After all we expect to bring actions as soon as we think theres a violation. Another of the most consequential trade policy issues this committee has actively engaged relates to u. S. China, trade and competition. Last year you appeared for the first time in front of our committee to testify as to that relationship. And in february of this year our first full committee trade hearing of 2020 was devoted to testimony on the subject of u. S. China trade and competition during which the committee discussed how the United States can effectively compete with and counteract chinas policies and ambitions directed at undermining our competitiveness. Perhaps you could speak to that in broad terms and simultaneously speak to the issue of developments occurring in hong kong and to beijings intention to snuff out democracy in hong kong. What do you know the Trump Administrations position is as it relates to those issues . And are there options the administration is considering that go beyond the trade tools to punish beijing . Is the administration contemplating strategically how democracy can be defended across hong kong and much of asia . Would you hit your microphone, mr. Ambassador . There you are. Thank you, mr. Chairman. I have testified as you said often on the issue of the relationship between the United States and china. My position has been that this is a very complicated relationship. Its gotten more complicated because of acs that theyve taken recently, the security implications and cyber implications. It has business implications. It has human rights implications, and i view my space, my lane as being the trade lane. A number of american jobs depend on fair trade around the world and fair trade with china is of course part of that. As you say we negotiated and signed and i have a copy of it our agreement. I commend to members to look at it. I see press reports sometimes, and they act like its just a soybeans sales contract, right, when it really has a lot of very, very serious parts to it. It has obligations on tech transfer, on ip, on sps for agriculture, on currency, on Financial Services and a variety of other things. And its an enforcement agreement, which we fully intend to enforce. It also has certain requirements for purchasing, which i think is really important for American Workers. Its also its not just individual purchases but over a period of time people develop customers and the like. My own view is i meet with the people that have responsibility, i talk to them about it, i give them my advice on it, but if i try to solve all problems between the United States and china im going to end up not solving any of them, so im focusing on the trade relationship. I think we have what the an excellent agreement. We have in place 370 billion worth of tariffs in addition to all the things i said so far. I think its a really good agreement for the United States. We expect it to be honored. Happy to go through and talk to those members. Some of the members will be a interested about the agriculture numbers and the like. As you know youve been a fairly hard liner on china for at least 25, 30 years. But my sense is i have an obligation to operate in the trade base and to do what the president and what members of Congress Want me to do in that space and that is to help our economy and make sure we get fair trade for American Workers. And i think this agreement is the beginning of that, and i think its a great achievement. Thank you, mr. Ambassador. With that let me recognize the Ranking Member, mr. Brady, to inquire. Thank you, mr. Chairman. Lets stick with those two subjects. Obviously come from texas and were very excited about the entry in the force here in just the two weeks. Thank you for understanding the impact of the covid pandemic and some regulatory developments in mexico. Obviously we are concerned about the lack of bio tech approvals despite longstanding applications to end discriminatory policy against u. S. Companies, in the energy and broadcasting sectors. And i want to make sure he fully implements the stereo obligations. We talked about this in other areas as well. How do you intend to use entry in the force and settlement to ensure we hold usmc partners accountable and that they meet their obligations . And the second is on hong kong the president is exactly right to hold china accountable for encroaching on hong kongs authority. And china is fully responsible for this escalation and only china can change these consequences by stepping back from the brink. We need to balance the importance of Holding China accountable and whats best for the people of hong kong and the u. S. For know that the president has said we will take action, revoke hong kongs preference treatment as a separate territory from the rest of china. When do you expect that decision or what general timetable are you looking at . And are there some broad approaches or discernment, which tends to be your mark as the ustr, a discerning on these tariff issues and treatments that we ought to be aware of . Well, yeah, thank you, mr. Brady. First of all, there are specific obligations, a whole host of them that were written and agreed to by all by most members, 90 of the members of the congress in usmca, and there are a number of things that were looking at that are quite troubling. One of the reasons that i wanted to get this into effect on july 1 was so we could start enforcing it. There are people who thought we should let it slide for one reason or another, some covid related, some others. My sense was we dont have any ability to enforce anything until we get it. The reality is the nafta didnt have much by way of enforcement, didnt have specificity. One of the issues you mentioned is biotech. That is a major, major whereby. The reality is mexico has not approved any Biotech Products in the last almost two years. Our view is thats not right. My own sense is that this is one of those issues where the administration down there has a very strong view, and i think the only way were going to get that to change is first by consultations and then via on action. I personally believe thats going to be one of those things where were going to have to file a state to state settlement. We will have formal consultations once this agreement goes into effect. Its a serious problem, and its almost it seems almost like a philosophical problem with the new government down there. You mentioned also dairy. Dairy is something were going to be very closely monitoring with canada. They have a period of a few months to get rid of class 7 and class 6. We expect them to do it on time. Theres no reason to believe they wont. Implementation has a lot of technical aspects to it. I wont go through them here. I know you know what they are, but some of them, well be looking very closely to see whether theyre going to shade and not have American Farmers get the full benefit of what theyve negotiated. If theres any shading of the benefit to American Farmers were going to bring a case against them. I think both countries realize that from the beginning of the negotiation that we expect to enforce these agreements. We bring cases whenever we think theres a good case and will continue to do that there. On the issue of hong kong the administration as you say has taken a lot of steps in that direction. In my space the administration has taken the position that they would treat hong kong the same as if it was china. Id point a couple of things out. One, in the case of hong kong we have about a 30 billion trade surplus with hong kong. Now, who knows where that product ends up going but we have a large surplus with hong kong. Hong kong charges us we charge hong kong and china the same tariffs. Hong kong charges us lower tariffs than china does because at least until now theyve had different obgaeligations. Were continuing to look at what it means to be treated the same, but that really is a decision that the president has made. Thank the gentleman. Let me recognize the gentleman from texas to inquire. Will the gentleman unmute, please . Sorry, im having a few weve got you. Okay, thank you very much. Sorry for the technical difficulties and thank you, ambassador. Ambassador, do you envision in the agreements that youre currently negotiating to maintain the progress that we made in the usmca with regard to dispute resolution so that when were dealing with a developed country like the United Kingdom we rely on a mature legal system rather than a closed dispute resolution system following the precedent that you set in canada and which is applied successfully in australia . Yes. Great. Well, do you think youll have a United Kingdom agreement or any other trade agreement to present in the remaining months this year to the congress . Congressman, thats hard for me to say. If you look at the timing on most of these agreements as you know well youve been around i was going to say youve been around longer than i have, butthets not necessarily true. I think its unlikely that happens. Its unlikely we had get an agreement i would say one to present to congress for congressional action. I would put that near the impossible time given the various time delays that are built in to tpa. So i would say its possible although unlikely we could get an agreement. It is almost impossible unless the members decided they want to do something extraordinary to have it actually come before the congress before november. Okay, the other issue, ambassador, youll recall i was very interested in and still i am is pharmaceutical price gouging. Do you expect any of the agreements youre negotiating will contain information on exclusivity or anything else . So those are two questions. One is the anything else and two is the biotech. Is it possible to have me look mr. Doggett when im talking to him rather than myself . That would be helpful. I want to see what kind of reaction im getting when im talking. Just so you know youll get a very positive reaction. For some members i would prefer to look at myself but for mr. Doggett i would prefer to look at him. Now, i reserve the right to go back and forth. So i guess i would say the members have made it pretty clear theyre not in favor of a long data exclusivity provision, so that is probably something that will inform where we end up in that space. When you say do anything exclusive there i would say there are a number of intellectual property provisions many of which you agree with, some you may not but intellectual property provisions used in the procurement industry. Certainly we expect to have many of those in usmca and there are other agreements, but we expect to do that. Thank you. Just one more, ambassador. And that is with regard to the investigation that you have worked with treasury on that looked up the effect of raising the prices americans have to pay for european goods. Im sure you agree that the better solution is an International Agreement that determines how Digital Service companies are taxed. Every country in the organization for Economic Cooperation and development has agreed to such an International Tax plan except for the United States. And its my understanding that the only plan that the United States will support thus far is to make the Digital Services tax optional. Now, while this committee has great Tax Jurisdiction ive never heard of us relying upon an actual tax. My concern is the administration is about to start another trade war of the type we are found damaging in the past where americans have to pay for taxes or tariffs added to goods and industries are disrupted. We know there are billions of dollars that go untaxed ever where. Can you outline what your plans are to assure that were not simply reinforcing the booking of billions of dollaress in places like burr meada and the Cayman Islands with these services not being taxed anywhere and your program is to be on the side of assuring that tax revenue is earned is generated where the marketing occurs and that we dont get in a trade war in order to simply protect some International Tax dollars. So yeah, thank you, congressman. Thats a lot of things and i only have a few seconds so ill try to be fairly brief. Frau first of all i agree completely what we did, but the reality is they all came together and agreed they screwed america. Secondly the notion there arent options in the tax code, the tax code is full of options, right . Everybody has options right down to whether you take an itemized or standard deduction. So i would suggest that the notion of proposing options on which tax you use is something that this you know, fond of for as long as i think its been here. I certainly agree with you completely. Im not a loophole guy. And any loopholes, but i dont want tax systems that unfair treat American Companies. These companies employ tens and a group together, hundreds of thousands of americans. I dont think thats fair. What we need, and i really want to reach out to you and talk about it, because i think youre one of the best minds on the committee in this area. What we need is a standard tax that taxes, that takes away the tax planning that a lot of these people go into it, and is uniform across countries and treats every business fairly. I think there is some evidence, some momentum to do that, but the United States will put in place, i believe, its up to the president , tariff said against these countries if they move forward unilaterally, discriminating against American Companies. Thank you. Let me introduce the gentleman from florida. I want to thank the leader. Also the ambassador for your bipartisan leadership. Blooming myself last week had a hearing on the wto in terms of the director general. Theyre looking for someone to lead the organization. Someone who has been in business for 30 years plus, i know one thing, thats a critical position and especially a member driven organization, but any organization, whether its this committee or any other committee, the chairman makes a huge difference. Obviously, theres a lot of challenges with wto in terms of reforms with china. As you look to the right leader, whats your thoughts in terms of the qualities in terms of that leadership moving forward that we should be looking towards . Can you give us your thoughts on that, ambassador . Sure. Thank you, congressman. So first place, i think the wto is a mess. And at the appropriate time in this hearing, im prepared to go through my list of indictments. This perhaps is not the appropriate time, but im happy to do it at some point. Members generally know i think the wto has failed america, has failed the International Trading system. So and then so i ask myself, what do i look for in a new director general . I would say first of all, someone who wants reform, fundamental reform. I think we have to do things very, very differently. I think a number of countries are not treated fairly, but particularly the one that i work for is not treated fairly. I think we need fundamental reform. Secondly, i think we need a director general that understands the fundamental problem that an extremely large staterun economy cannot be disciplined into the current wto rules. So i look for someone who understands the nature of the problem of free economies dealing with china and i deal with someone who understands that we need across the board reform. And beyond that, you know, i have no real preference. Those are the fundamental things for me. I guess in someone who doesnt have, which in some cases there are, if i see any whiff of antiamericanism is any of the persons past actions, i would certainly be willing to veto their appointment. The other question i had in terms of the usmca, built some momentum there. Im excited about the enforcement of that. It gives you a lot more tools. As we build off that momentum, a lot of other countries in terms of the uk, eu, even china, if we go to another phase, kenya, of course, so theres lot of opportunities. I congratulate you for that, but as you look at the Global Pandemic, whats been the impact in terms of your effort with these various countries in terms of not just today but going forward, what do you see . So you know, thats kind of a fundamental question. First, which you ask is a practical matter, the biggest single problem is you dont have facetoface meetings. Im not one to believe youre ever going to negotiate a major trade deal over video or the telephone. I dont think its possible. I may be wrong about that, but i have seen no evidence of it. The telephone, video tends to be a scripted sort of thing and you end up not having 10, 12, 15 hours togetherane room which i think is necessary to come to compromise. So thats the biggest problem. If you look at its effect on trade, trade during this pandemic is down substantially. Exports are down about 30 more or less, and imports probably a little less. And the effect seems to be about what you would expect. Youre just getting clobbered in Services Areas like travel and leisure and all these kinds of things. Its kind of predictable where we have been hit. But i also really believe, im one who believes theres pentup demand and when we get to the other side of this, which i think is, you know, very soon, were going to end up with that being turned around very fast. Again, then, while we have had among probably not the biggest drop in exports and trade in history, but among the biggest, right . Only three or four times when we have been in this league, i think well have a much, much faster comeback in any of the other times because what we have here is something that is not driven by basic economics. Its driven by a health crisis. Thank the gentleman. Chair would recognize the gentleman from california, mr. Thompson, to inquire. Could i encourage members make sure they maonitor their own muting services . Were catching background noise. Thank you, mr. Chairman. Thank you for holding the hearing. Can you hear me all right . Yes. Thank you, mr. Chairman. Mr. Ambassador, thank you very much for being with us today. And thank you for all the great work you do. Its a pleasure working with you. Ive got three issues that ill just raise and let you respond to all three of them. First, im recently concerned about mexicos ability to implement its historic labor reforms. The pandemic has served to highlight some of these issues. The are numerous reports about mexican workers being forced to go back into unsafe working conditions. You know that i raised this with you personally. Thank you for your response yesterday, but nonetheless, its still an issue. And this is in part u. S. Companies pushing this, and in some instances, members of the administration pushing it as well. And so id like to know how you plan to effectively use the tools that you have, given to you in this historic usmca that we worked on together, to make sure that the mexican labor reform actually comes to fruition . Second, as you know, theres been a reduced or postponed excise tax provision in place since 2017. And its been extended now to the end of 2020. Theres a problem that a lot of folks are having because alcohol tobacco tax and trade bureau, they deal with the domestic tax issues, and customs and Border Patrol deal with the foreignproduced alcohol thats imported into the u. S. So it puts folks in a difficult position when theyre not working from the same set of rules. And id like to know what you can do to work with your colleagues at treasury to make sure were all on the same page and that these provisions are being implemented evenly between foreign imported and domestic. And then lastly, were getting a lot of attention in regard to our trade issues because of covid, but as we know, and as the National Bureau of Economic Research pointed out, we were going into recessionary times before covid. And all the leading economists tell us its because of these tariff wars that we have been subjected to. And i know in my district, the leading industries in regard to export are hit extremely hard because of tariffs and the tariff wars. Wine, which is a big product in my district, takes a huge hit because of these tariffs. I would like to know what usdr is doing and planning to do to resolve the ongoing trade disputes with our trading partners without resorting to additional tariffs and tariff wars. I would appreciate your response on these three issues. Great. Thank you, congressman. And you know, i should specifically, along with several of the other members of the task force, thank you for all your great work with us on usmca. So i would say first of all, this issue of supply chains running through mexico, some of you may have seen that i wrote a New York Times oped last week or the week before, a couple weeks ago, basically making the point that these businesses that thought they were so clever running these supply chains all over the world instead of making the stuff in the United States now realize they were taking on substantially more risk than they thought they were and this was a problem. And i think this was an example of it, and hopefully, business is learning you can run these supply chains right through the United States and its a safer, better way to do it. I would say on the issue of labor enforcement, i have stated and i will state again, we fully expect to bring every case that is a legitimate case and that we have pressed and will continue to press mexico. And i think that they operate, to be honest, for the most part in good faith. I think amlo is a really square guy. Eve wn that, its going to be really hard to do it, and i dont think all members of their system want to have labor reform. Well do between Rapid Response and statetostate, well take the actions that are required. Im happy to work with the Treasury Department to answer your question on excise taxes and ill certainly make that call tomorrow. The third point you make, which is about getting rid of tariffs on imported wine, we all know what the context is, the context is we want a 15year case. Because we lost a lot of jobs because europe was subsidizing airbus. And well continue those tariffs in place until we resolve that issue. I would say i understand that there are people who import wine that dont like the tariffs. On the other hand, many members of this committee and in congress generally come from areas that have, in my judgment, the best wine in the world, and theres no tariff on any of it. Finally, i would just say the notion that we were going into a recession before covid is just absolutely i have never heard of such a thing, to be honest with you. I have never seen anybody say that before in my entire life and hope i never hear it again. The reality is we had the lowest unemployment. The Fastest Growing economy, so i just want to lay down the marker without elaborating, but i think thats totally untrue. Thank the gentleman. Let me recognize the gentleman from nebraska, mr. Smith, to inquire. Thank you, mr. Chairman, and certainly thank you mr. Ambassador, for your presentation here today. Even more importantly for your stellar service. The productivity of you and your team, i mean, im looking at my notes here, and there is so much that has been happening with trade between our country and other countries. We know a lot of folks said usmca could never be done, and it got done. It was very bipartisan in nature, not by accident but by design, and i think that is really due to your efforts and the president s efforts of prioritizing the various issues in usmca that i think can really be a great trajectory moving forward. I know that as we look at other trade agreements or possible trade agreements, i know that the eu has been unreasonable. But now we are finding that the uk is eager for a trade agreement. And i think thats good news. Im hoping that they will be more reasonable than the eu, especially when it comes to agriculture, as i represent one of the largest agriculture districts in congress. Is there a possibility, you touched on it a bit earlier, but with the uk. We temporarily seem to have lost you, mr. Smith. Would you also turn your camera on, please . Please, proceed. Can you reflect on the trade agreement with the uk and what it might look like in comparison to what the eu has been pushing for, and again on the timeline . Great. Thank you, congressman. I would say first of all, we have made, i would say, very little headway, as you suggest, with the European Union. On trying to resolve some of our issues. I think there is a desire to work through things, but for whatever reason, we havent made much headway. Agriculture, i think, as you know, has been a focus of our trade policy from the very beginning. Agriculture has been a huge, huge winner in the usmca and in the china agreement where we have seen literally billions of new billions and billions of new sales. In japan, where i know youre aware of this, but i think last year was one of our best years ever in beef, and this year is like 25 above it, so were really, really, really, i think the trade agreements have really worked for agriculture. The uk, we will have agricultural problems in that negotiation. I can guarantee you, they will tend to be in the sps area. There is a sense in europe, which i think is shared, hopefully not as deeply, with the uk as it is with europe, and that is this issue that American Food is unsafe. So i think, and i think that its thinly veiled protectionism. I often comment that using standards as protection has risen to the state of a high art in europe. Theyre among the best places in the world to figure out ways to get protectionism by pretending like its a standard. And not have it be sciencebased. These were very difficult issues with europe, and they will be very difficult issues with the United Kingdom also. Im hopeful. Im hopeful well work our way through them, but on areas of american agriculture, the United States, this administration is not going to compromise. We either have a fair access for agriculture or we wont have a deal with either one of them. Very good. Again, i appreciate that. And given the fact that agric agriculture we are not hearing you, mr. Smith, but well proceed to the next panelist, the gentleman from connecticut, mr. Larson, is recognized to inquire. Thank you, mr. Chairman. And good to see everybody. And ambassador, let me echo the sentiment of so many who have spoken already, what a pleasure it was to work with you on usmca. And i think your efforts can be summed up in one word integrity that you brought to the process at every single level and facet you were involved with. I have two questions for you. One that deals with the good friday accords that i know you have heard from us before, but just to emphasize our ongoing concern about open borders. And the other one has to deal with shellfish and specifically with regard to shellfish, the negotiations with the eu. Obviously, we strongly support future relationships between the uk and the eu, that avoids a hard border between ireland and northern ireland. And safeguards all of the island economy and the good friday agreement with all of its dimensions. I know you share that view, and we hope that you will affirm that any bilateral United States uk agreement will include conditions to insure the continued upholding of the good friday agreement. My second question has to deal with shellfishing and, as you know, there has been a longstanding dispute between the European Union and the United States that has blocked the trade of shellfish between the two trading partners for almost nine years. The dispute centers around questions of whether our respect of shellfish sanitize programs are equivalent. We were hopeful in 2018 when the fda proposed an equivalency determination to begin allowing shellfish trade with massachusetts and Washington State and spain and the netherlands. Unfortunately, those equivalency determinations were never finalized, and shellfish trade remains stuck. Earlier this year, we heard positive statements from the European Union about finalizing these equivalency determinations this year, which is long overdue. I recognize and i know you understand that this is also the purview of the fda, but i hope you can also play a role as we pursue an agreement with the eu. And my specific questions on shellfish and if you take those first, i would appreciate it. What are the prospects of opening up shellfish trade with the eu this year . Will you prioritize this issue during our negotiations with the eu . And what are the prospects for opening up shellfish trade beyond the initial equivalency areas to all parts of our country . So, thank you. Im happy to deal with the shell hp fish issue, but first i want to thank you for your kind words about me. It was a pleasure working with you and with the other members. For all of us, hopefully everybody came away with the same sense that i did under usmca, that this is at least how we think it used to be in the old days when people worked together and ended up with really good results. I hope that thats what we continue to do. It was really a very, for me at least, a really good experience. With all members, i had a really i developed a Good Relationship. And im very pleased and hope that continues. Thank you for your comments on that. First of all, i am, of course, aware of the shellfish issue with the European Union, and its something that we are still in discussions with them about. It is clearly a priority if we do a deal with europe, and right now, i would say its not looking good in the short run, although i think ultimately, we have to get something worked out with europe. And with deference to those who dont want us to use tariffs, the president will use tariffs if he has to to get a share shake for american businesses. So it is a priority. I think there is reason there certainly is no logic to their position. We ought to have equivalency. I will work on it. My guess is this year is not going to happen. Although i could be wrong. But that doesnt mean that were not going to try. I know this is something you have cared a great deal about, and we would really like to come through for you and for all the people in this business in the United States. On the good friday accord, my position is quite clear. I think that if we put up borders, the agreement wont pass congress. There wont be much point in negotiating it. I made that quite clear. The chairman has made it quite clear to me, the president agrees. This is not something on which were going to have a negotiation if they and i must say, at least with this stage, i dont see a great deal of pushback, but to some extent, this is something that has to be worked out between the uk and europe in the first franinstanc before its worked out with us. I know the chairman agrees with your position. I think hes smiling. I cant tell, hes got a mask on, but he is smiling. Were in accord on that. I know the president agrees with it also. Thank the gentleman. Let me recognize the gentleman from new york, mr. Reed, to inquire. Thank you very much. Would you insure your camera is on . Were having technical difficulties with some other issues. When the gentleman im prepared. Can you hear me . Yes. Well, thank you, mr. Chairman. Thank you for convening this hearing today, and welcome, ambassador. Great to be with you, as always. Appreciate all your hard work. As you your point about the relationship with members you fa fostered, i would exo i hear often the positive response of members how you make yourself accessible. I appreciate that hard work you have shown a commitment to. Im just going to get to a couple specific questions. Dont know if im going use all my time. One of the things i wanted to focus on was the beverage alcohol imports federal excise tax. Its my understanding that ustr has been part of the policy Decision Making process with treasury regarding the customs and Border Protections federal excise tax deferral guidelines for beverage alcohol for u. S. Importers. Recognizing that beverage alcohol excise taxes are the same for domestic produces and u. S. Importers how could we work with treasury to insure parity between the vastly different guidelines on domestics and customs and Border Protection on taxes for imports . First of all, we are involved in these deferral issues. We work with the Treasury Department and others on them. Im happy to raise that with the treasury, as i said before, im happy to bring that up and try to resolve that or at least raise it with the secretary, probably tomorrow. Im familiar with the issue. This is the second time its come up in this hearing and ill certainly look into it tomorrow. Folks in our district are very impacted by this, so we appreciate any attention you can give to it. And then i just would want to get your thoughts on as we go into the canadian relationship, we have a lot of dairy in western new york, and theyre struggling, and i want to make i want to be aware of what you specifically, your thoughts on are on regards to how we move forward with canada, which i think will be a very positive relationship, given the new mexico canada agreement. What are your thoughts on making sure that this new agreement in regards to dairy specifically, how we make sure we have that opportunity that we envisioned when we negotiated that new open deal. So thank you, congressman. First of all, i would say that canada has a few months to get rid of the class 6 and class 7 programs which have been so harmful to us. There also a lot of very technical things. I dont want to go through them right now on this because i dont want to draw particular attention to them, but there are a number of ways that they could implement their program that would be less helpful to us than others. Were monitoring those and i want you to know and other members who have been particularly concerned about this issue of canadian dairy we will follow it closely, if we need to, we will bring an action against them. For members who dont follow dairy very closely, its a very complicated system up in canada. Its partially government and partially quasiprivate, and theres a long history there of manipulation, i would say, of manipulation of commitments and of the like. So were going to be very, very dogged on that. This is something that canada agreed to. Its clear. I dont believe that the government itself will do anything, not to live up to their obligations. Maybe the other way to say is it i think the government will do it, but there are levels of complication, including industry vol involvement, that make it different. We will monitor it closely and if we need to, well bring an action. Hopefully thats not necessary. The canadian government has been good at living up to the spirit of the agreement as we moved our way through it and well make sure it happens in the dairy space also. I appreciate that. And any assistance you need from us, and i look forward to the new relationship with canada on the dairy front. But in the meantime, we stand with you to monitor those same metrics so we have a fair shake that. I yield back. Let he recognize the gentleman from oregon, the chairman of the subcommittee on trade, mr. Blumenauer. Where. Thank you very much, and mr. Ambassador, we welcome you. It was a terrific experience, i think, for all of us taking the nafta agreement and being able to Work Together, something that was probably dead in the water, but by hard work, negotiations, good faith on both sides, we were able to produce something that was worthy of the overwhelming support that it gained. I hope that that model can be used going forward. Let me say, i have a particularly interest in dealing with food and agricultural policy. To make it more visionary and equitable. Currently, the United States spends too much money subsidizing large corporations and doesnt adequately help the majority of small and midsized farmers. And it subsidizes manufacturing food at the expense of fresh, healthy food. We have entered into a phase two of our agreements with the United Kingdom. I hope that our negotiators can focus on tearing down protections and barriers to trade, like quotas and price control measures. And spend less Political Capital on areas where our two countries may simply have reasonable policy differences. I think too often we hide behind requiring sciencebased justification for other nations sanitary measures without allowing flexibility on values and public input. Many large agricultural focuses scientific studies on pathogen rinses for poultry. Maybe we should be asking about our production process that requires us to wash chickens in chlorteine in the first place. Cant people have reasonable concerns about slaughterhouses in the United States. Anyone who has looked at the news recently understands american policy on slaughterhouses needs a much closer review. With pesticides, our regulations do not set a high enough standard for determining their effects on our environment and how those environmental effects impact our health. Should we really export our weak standards to another country who has legitimate Public Policy concerns and may provide better protections . For genetically modified meat or meat altered by growth hormones, is it possible that a democracy where consumers have input might choose to restrict these for practices other than interfering with american commerce . As with all negotiations, there are some priorities you will push harder than others, but i would hope that you could focus your attention and that of your team on protectionist hurdles to our farmers rather than areas of legitimate policy differences. American families need national and International Agricultural policies that address our common welfare and allow for targeted regulations that promote health, address climate change, and put people ahead of corporate interests. I would hope that you and your staff would be willing to help us explore these differences to determine where there are some legitimate policy differences rather than simply protectionist impacts. Would it be possible for us to work with your team to explore this . Well, yeah, thank you, congressman. First of all, let me return the compliments and say what a pleasure it was working with you during this usmca process, something everyone said was impossible. I thought you did an excellent job as chairman. And i thought vern did an excellent job as Ranking Member of that subcommittee. Without the cooperation and you alls work, we would not have had that agreement. So i want to thank both of you for that. On this issue of agriculture, ill just repeat what i have said before. Number one, Agriculture Policy is set by the United States congress, not by the u. S. Trade representative. So the issues you raised i know are difficult issues, and theyre being fought out in congress and congress will come to some conclusion and ill be guided by what congress says. For right now, the reality is that what we want and what we insist from our trading partners is equal access, fair access based on science. The difference between big and Small Farmers and corporate farmers, i dont know much about that. I would say the United States has the best agriculture in the world. It has the safest, highest standards. And i think we shouldnt confuse science with consumer preference. If consumers have a preference of one thing or another, they should certainly exercise their preference, but its not the role of the United States trade representative to change Agriculture Policy. Im dictated that by the agriculture department, but mostly by the United States congress. So what im going to do is try to insist on sciencebased restrictions and to the extent they have restrictions that are not sciencebased, we will object. Thank you. I thank the gentleman. Before i recognize mr. Kelly, i want to recognize mr. Thompson for the purposes of a unanimous consent request. Mr. Thompson. Thank you, for chairman. I would like to ask unanimous consent to submit to the record the National Bureau of Economic Research information in regard to hitting our peak in february and moving into recessionary times. Thank you. So ordered. With that, let me recognize the gentleman from pennsylvania, mr. Kelly, to inquire. Thank you, mr. Chairman. And mr. Ambassador, thank you so much for being with us today. Im not sure that my camera is on or not. Yes, it is. Okay. It was. You and your staff can you hear me, chairman . Yes. Okay, so were set. Okay. Ambassador lighthizer, you and your staff have been incredible. And tireless in your efforts to make sure that america is in a place where it can fight fairly and doesnt have to worry about unfair trade practices around the world. My good friend from california was talking about the economy. I gotta tell you from an area where were having the highest employment up until the pandemic hit in half a century with wages that were rises over 4 , and people going back to work in places that they never thought there would be jobs again, it was absolutely on a rocket ship, this economy was soaring. So i just want to make sure that we understand that. I can tell you from being in the retail business, that during these times, when people come out of a recession, its usually they buy houses and cars. Im in the car business. We actually couldnt keep up with the demand. So why there is some talk out there about a recession, it would be hard to find. I do want to talk to you, if you could help me on this, and thank you for your help on the grain oriented electric mill. I think you have congress onboard and theyre finishing up their Comment Section and were going to try to protect the fact that the last producer of grain oriented electric steel, and this is used when we do infrastructure, is happening right here in the district i represent and about a half a mile from the dealership became ak steel, now cleveland, so thank you for your intervention on that. But i do want to ask you about something. I sent this letter to you, and i think the staff probably has looked at it, and i also sent it to secretary ross, about a Company Called steel light international. Its u. S. Headquarters are in the district i represent, new castle, pennsylvania. Steel light is under a situation where they import, they do tableware, glassware, flatware, anything to do with the serving of food and host business. Theyre one of the biggest in the world. That factory or that position in new castle, pennsylvania, is 120 jobs. But they have section 301 tariffs on some of the tableware products. Its very hard to find people that make forks and knives and spoons now in the United States, and my question is this, despite the u. S. , we do not have a u. S. Supplier of this product. And the company still, they have been trying to get relief from section 301 tariffs, but theyre not getting it. And they tell me it has paid millions of dollars in tariffs over the last year or so on products for which there is no reasonable prospect of u. S. Manufacturing. So as a result, steel light has put on hold, and i have been to their facility, they were adding on to their warehouse, a huge, huge addition. They have held up on it because of the risk that theyre looking at and saying, it may be greater than we can take right now. So what im asking you is, what can we do to help them . What should i talk to them about if theres no substitute, no american producer of it, and they have to get it overseas, what can i tell them when it dms to section 301 because they have no other option, yet theyre getting burdened with these tariffs . Thank you, congressman. First of all, lets remind ourselves why we have tariffs on china. We had talk here about the difficulties dealing with china and the problems and the focus that we had literally from april of august of 2017 was on this issue of Technology Transfer and failure to protect u. S. Intellectual property, cybertheft and the like, and the effect on our economy, so we went forward, put together an eightmonth study and have a long history of putting tariffs in supply and order in order to stop bad behavior and get fair treatment by america. So thats the context were in. All right. Now, youre saying theres someone that imports flatware from china. So i dont know precisely when the tariffs went on forks and the likes, but its been at least a year, it could be two years. Other u. S. Manufacturers in this area, i dont know. Clearly, theyre not in the low end, but there are in a lot of other countries. So what we have told members and have given people exclusions and now they want extensions. Were saying if you have a year or two years to make a change, you should have made the change. So im happy to talk to you about this particular situation. If you like. But the general policy is a policy based on the fundamental interests of the United States. And people have had a substantial period of time to find another source. So anyway, i would love to talk to you about this case for your constituents. Thank the gentleman. Let me recognize the gentleman from wisconsin, mr. Kind, to inqui inquire. Well, thank you mr. Chairman, and mr. Ambassador, so good to see you again today. Mr. Ambassador, i want to echo the comments other members have made about the cooperation we had with you with usmca. I thought it was a good agreement. One of the reasons it became a good agreement is we got on the page as objectives we wanted to accomplish and what asks members of congress had to make of mexico and canada and what kinds of reforms and concessions. And thats a good form for the other bilaterals. Im chairing right gnaw a working group, a large part of our focus is on the bilateral trade negotiation. I would encourage you and your team to think about how you can bring members of Congress Like myself and others onboard as far as the overall negotiating objectives, and also, i want to hear your comments in regards to where we go with the uk in light of the fact theyre currently involved in negotiations with the eu. They have to make a decision as far as regulatory orbit theyre going to be operating on, making it difficult for us to get a clear understanding from them i think weve lost you, mr. Kind. I was just asking if you wanted to comment on how we do proceed with the uk in light of their decision on what regulatory orbit theyre going to ultimately operate under as it relates to the eu. Yeah, thank you, mr. Kind. It was a pleasure working with you all the way through not just on usmca, in fairness, but on the other issues, too, because i have dealt with you and several of the members on every one of these agreements and i think theyre all better because we worked together. So thank you for that. I would say, first of all, am i willing to work with members on the uk agreement . Of course, i am. I look forward to doing that. There hasnt been enormous amount thats happened yet. Were in our second round. Second round started this week. We have tabled text, and theres a process this goes through where your staff is involved and the like, so i know you know this, but if we end up with 30 or 32 chapters, and its not clear yet, we tabled text on the vast majority of them. We havent on some specific ones. And they have tabled text on some, and were kind of working our way through it. Still early in the process. Youre right. What they do on regulation within their negotiations with the European Union will be crucial to us. I would say a couple things. One, they have twice as big of a relationship with europe, actually more than twice as big, as they do with us. So that economically, thats probably a more important relationship for them, not that ours isnt important, but thats a more important relationship with them. And in some ways, their view is that they can deal with each of us separately, and theyre willing to go with us without going with europe. And thats a basis on which were certainly willing to act, but we have to remember the reality is what they give europe will affect what we get. And if they buy the europe total regulatory regime, bthen were n a position where we get substantially less, and thus the way i think about these because im a pure pragmatist, then we should give them less. So its difficult to do these two negotiations add the same time, but thats the position were in. I do look forward to working with you on this. And also, you didnt raise it, but i look forward to working with you on the issue of dairy, because i know thats Something Else, canadian dairy, that you really care about. You talked to me about it a number of times. I look forward to working on both of those. Great. Likewise, mr. Ambassador. We thank the gentleman. Let me recognize the gentleman from north carolina, mr. Holding, to inquire. Thank you, mr. Chairman. I appreciate it. Mr. Ambassador, always a pleasure to see you. Glad we can see each other in person. As were approaching the full implementation of usmca on the first of july, i would like to bring your attention to concerns. Just days after Congress Approved the usmca act, mexicos federal institute of telecommunications overturned two decades of practice by imposing a strict sixminute per hour on pay tv advertising. And this action violates the usmca by discriminated against u. S. Pay tv providers, and it benefits obviously the powerful mexican broadcasters. Another situation is mexico is the government of mexico city has recently expropriated the private product of an american company, confiscating taxi hailing technology and over 100 million in property to advance motives in mexico city. And obviously, we cant allow mexical officials to take advantage of american entities if we want the usmca to build longlasting free and fair trade relationship. Im going to provide you and your staff with more briefing materials on these two matters. And look forward to talking with you about it in the future. Were hearing a lot, pivoting now to the us uk agreement. Were hearing a lot from members and i am very thankful that members are getting more and more engaged on this. This is something i have been engaged in ever since the United Kingdom voted to leave the European Union. In fact, the first opportunity that i had to meet the president in 2017, this is what i brought up with him. I told him i thought this was something he could accomplish in his first term. And im glad to hear youre working apace. Our nations share a special bond and we have benefitted from a prosperous trade relationship for years. And although we represent only half of what is represented by uk eu, i think theres a lot of potential there, and we have a lot of things in common. We havent, you know, in some areas, we havent kept pace. None of our trade has kept pace with some of the structural and Technological Advancements in various economies and there are barriers there we can tear down with a uk agreement that maybe would set a goal standard for agreements with other countries. And to some degree, i think if we could seal a deal with the uk, it would forebode well for what were able to do with the eu because it would set a standard. So i would like for you to comment on that, where we could reach an agreement with the uk that would be the goal standard and an example for other trade agreements. And also, you have been asked several times about the timeline and so forth, and i appreciate your responses on that, but if you could talk with some specificity as to what is the next point in the trade negotiation that youre trying to get to . Is there kind of an intermediary point youre trying to get to . And where are you in that progress, and what do you think the likelihood of us kind of getting to the intermediary point, if there is such a thing, before we get to something that is presented before congress . I turn it over to you to comment. Thank you, congressman. Its good to see you, too. I would say on the issue of the paid advertising and the taxi, were aware of that. We talked to the stakeholders, particularly in the taxi case. I look forward to working closely with you to resolve that. Obviously, theres nothing we can do until this goes into effect, which is only a couple weeks away, and the United States will take every action to enforce its rights under this agreement. And i am familiar with both of those issues, and they are things that we will and are focusing on. In terms of a deal with the uk, i believe ultimately we will have a deal with the uk. The question on the negotiation is when. But the imperative to have one is overwhelming. Our economies are actually fairly close. Our systems are fairly close. And they are among our closest allies. And so i am confident that well get an agreement, and im confident well get one that will be warmly received by congress. The question is really when. So were in our second negotiation. Our second round. Even between rounds, were doing this visually. So there are meetings visually between rounds. At the end of this round, which will be the end of next week, well make an assessment to see where we are. My own hope is that we have at least a couple chapters at that point that we have closed out. Well see if that happens. We dont have any at this point, but my hope is we would have at least a couple chapters that are closed out, but its still a long way to go and there are very, very fundamental issues that we have to come to grips with. I dont want anyone to think this is going to be a roll over. I read their press, as i know you do, and the agriculture issues are heating up over there, and there are a lot of other issues that the United States and the United States congress would not accept in a trade deal. And if they insist on those, then well have to push this off until they dont. But my hope is that they see the overall benefit to their economy, to their workers and farmers the same as we do and we can move forward. At this point, at least, i would say theres no i havent gotten to the point where you say this issue or that is going to blow things up, but we all know we have certain defensive interests and we have certain offensive interests. And one thing is for sure, were not going to be in a position where our farmers arent treated fairly. Thank the gentleman. Consistent with Committee Practice and precedent, well proceed to a two to one questioning ratio beginning with mr. Pascarell. Thank you. And thanks for putting us together. Ambassador, thank you for your Great Service. It did not go unnoticed. And we hope youll have many more years. I want to talk about labor. I want to talk about something that makes us uncomfortable. We dont want to talk about it for some reason, and we thialwa i think, skirt the issues, whether were in labor or Corporate America or in congress, it doesnt matter. And i first want to talk about the jobs that are supposed to come back to the United States. Now, under this new nafta, this is not a tryout, where the first nafta was. This is for real. It says in the agreement that we must, mexico must, that all collective Bargaining Agreements, once vetted, the process for overturning contract allows protection unions to exert undue influence. Of the 162 contract legitimation votes, zero resulted in defeat so far. Several votes have been marred by allegations of employer interference. And misrepresentation. Several votes. So what is ustr doing to press the Mexican Government for reforms that cannot be manipulated . And will you advocate for workers to be able to initiate the contract verification process or labor inspector to supervise verifications . Those are my two questions for now, then i have another one later. So thank you, congressman. I would say, first of all, the way the system works, in the collective bargaining certification, either the company or the union asks for the vote. And they have to have them all done within two years. As you know, there are hundreds of thousands of them. So there are a lot. They have only been a few that have been done so far. I believe its fair to say that theres been some sort of a labor export at the ones they have had so far. The other thing i would say is that since the agreement doesnt go into effect for a couple weeks, its hard for us to use any of the tools that we all worked out to make sure that this agreement is enforced, but we certainly expect to do it when the time comes. In terms of jobs coming back, i would also point out that the autos are going to be very effective in bringing jobs back to america, and those are already, theyre not in effect, but the companies are putting in place those rules already. And the final thing that i would say on his, and i think its really important that we remember, the way the labor system really operates there, workers can challenge the certification of the union. So theres two things here to think about. One is the collective Bargaining Agreement. And they have this history of protectionist agreements, which you were so vocal in criticizing and i certainly agreed with. So thats the collective Bargaining Agreement vote. In addition, you can challenge whether or not this is a representative or what we would say a democratic union. So i think both of those are going to be used with respect to the collective Bargaining Agreements, the way that works is the current, at least initially, the Current Union or the employer will ask for a vote. Remember, when we get to the deadline, if they havent had a vote, all the agreements go away. At that point, its clear, theres this pressure on these companies and the unions to get these votes because at some point they all go away. But i would i do want people to remember that challenging the union is really an important part of this process also. And thats something that people can do right now to the extent these are not democratically elected, and thats the whole premise that we operate on, these are not democratic elected unions. Can i ask you one more question . And that is, on this labor leader that was just arrested last week. Mexican authorities arrested a labor advocate suzanna preto, on trumped up charges. Will the u. S. Government join calls for her release . So that is something that were working very closely with our embassy on. And also people who are looking out for their interests. You know, were aware of it, were working on it. Its something were going to monitor. Bea well take action if its appropriate. Im glad you brought that up because its not a very its a bad indicator. Im hoping its something they work out themselves within their own system. But i want you to know that were aware of it and that were taking were going to take this very seriously. Thank the gentleman. Let me recognize the gentleman from illinois, mr. Davis, to inquire. Thank you. Thank you, mr. Chairman. And thank you, mr. Secretary, for being with us today, and for your outstanding work, especially do i appreciate your accessibility and the way in which you have responded to inquiries that we may have had or questions that i have raised. Two of the issues that im very much concerned about. One has been raised by both mr. Thompson and mr. Reed, and you have responded to those, and they both relate to the creation of equity as we deal with the excise tax on alcohol and the differentials between that generated domestically and imports. You have already responded to those inquiries and you dont have to respond. Like many others, im very pleased with the ability that we exercise to negotiate the new nafta agreement or the agreement between mexico, canada, and the United States. During the talks, the chair and Ranking Member of the house energy and Commerce Committee sent you a letter demanding that the revised nafta not include terms requiring countries to enact the sort of liability waiver provided for section 230 of the Communications Decency act. Of course, you didnt necessarily respond to those. Also, the other concerns raised by Speaker Pelosi relative to the waiver. At the very end of may, President Trump issued an executive order to roll back section 230, so given the administrations new policy on 230, can you confirm for us that the uk and kenya agreement, the wto digital trade agreement, any other pact that we agreed to, will not include the liability waiver term . So thank you, congressman. I would say i would ask your forbearance while i explain my sense on this. And ive talked about this before. The purpose of a trade agreement is not to change any u. S. Policy. And this is one where there is a lot of there has been a lot of controversy and discussion particularly recently. As you mentioned, you but also the speaker and a variety of other people. And my view is this is something that congress has to work out as a matter of what the policy is. I would say the purpose of a trade law is to make sure that the United States congress, that a trade agreement, im sorry, the trade agreement and the United States congress has enough room, policy space within whatever we negotiate to accommodate whatever Congress Comes up and that is where were trying to move in that space. And we have not tabled language on it yet. Were still working with interested parties and the like. But as you say it is complicated. There are shifting grounds. It is an important policy. And i want to be in a position where what we put in the trade agreement consistent with tpa accommodates the ability to congress to work its will and not have anything in the agreement being inconsistent with what congress operates. So that is my space. There are people from time to time who try to draw me into the 230 debate. The president has his executive order as you said. But that order didnt change u. S. Law. Congress has to change u. S. Law. And the president has to obviously agree to it or have an override or however that works out. But what i wanted to do in a trade agreement is just make sure there is space so that you could do i mean you collectively, what the United States congress decides u. S. Policy should be and that is time trying to find language that accommodates that for this trade agreement. Here to by mexico and you dont have to respond to this but i certainly would like to see us take a more proactive stand visavis the issue regarding miss pretto as well as the ability of labor to organize and implement changes. Thank you very much and i yield back mr. Chairman. Thank the gentleman. Let me recognize mr. Smith to inquire. Thank you mr. Chairman. Thank you, ambassador, for taking the time and being here today. It is good to be in the committee room. And ambassador you and President Trump has worked tirelessly in my opinion to protect american agriculture which we hold dear in the midwest and southeast missouri. Unfortunately no one could have predicted the way in which the china phase one agreement would be tested with the ink on the page barely dry. Farmers and ranchers are suffering heavy losses due to the global coronavirus pandemic. Supply chains disruptions and the loss of demand have put many u. S. Producers on the ropes. Producers need longterm security which is why the purchasing committee in the history china phase one agreement are so critical. These purchases will secure a foot hold for u. S. Producers and the Chinese Market and ensure that our farmers and ranchers could compete abroad. It will also serve as a critical boost to our economy as we continue to deal with the impacts of the coronavirus pandemic on our country. Last month i sent a letter with several of my ways and means republican colleagues raising these concerns to President Trump and urged him to continue to prioritize u. S. Agriculture purchases as part of implementation of the phase one agreement. Id like to enter that letter from the may may 11th into the record, mr. Chairman. So ordered. Thank you, mr. Chairman. Ambassador, in may usdr issued a statement saying despite the Global Pandemic both the u. S. And china plan to meet phase one obligations. While i have complete faith in our ability to hold up the u. S. End of the agreement, what signals have you received from china that give you confidence theyre prepared to do the same in terms of their agriculture purchasing commitments . Thank you, congressman. And as i said before, this china phase one agreement is, in my opinion, a Historic Deal for a whole lot of reasons. It is the first really written agreement weve had with china. All of the rest of them have been oral and it has a lot of aspects to it. And one of the important ones, of course, is the purchases. So i would say a couple of things on that. One, when every contact ive had with the chinese, they have reaffirmed their commitment to living up to the agreement. Number two, although you havent raised this, i could go through all of the structural changes and there is scores of them that theyve put in place pursuant to the agreement which is another indicator. Number three, premier lee has said when he addressed the chinese congress, a couple of weeks ago, that they expect to live up to this agreement. Number four, i would say just to remind ourselves of the timing of it all. The agreement was in effect on february 14th. It was i know you know this but ill just reit for the record, that it was really the beginning of march when they started giving the exclusions and the like as part of their own process. It is hard to calculate what the effect has been because you have to somehow amalgamate shipments of things that were ordered months before with purchases recently so it is a complicated process. I wont take the committees time going through it but if you do i have fair process if you determine how much they are buying, i think at this stage theyre in the 10 billion or more range, as recently as last week they bought half a billion dollars worth of soybeans for example. So it is something were modifying, were monitoring very collectly. Secretary purdue and i have a methodology to get a handle it on because the data isnt designed to tell what you one country is doing in a purchase context, it is more shipments and the like. And anything with imports was bought months and months before. But every indication is that in spite of this covid19, they are going to do what they say. Now, i wot i would be curious, what are your expectations of holding up the Purchase Agreement of cotton. In cotton right now, the process i dont have yarn broken out. But if you have cotton, we expect them to buy, as you know, i guess you probably dont know the numbers, arent out. I guess i cant say that. Feel free to say it. They have bought we believe about a billion dollars worth of cotton right now. And the target is substantially north of that. But a billion dollars of cotton as you know is a bhig thing. If you look down, i show you the chart on where they are. But if you look at it, the way i keep tracks of things, i have 2017, which is the best year ever and where they are now on a monthly basis versus that. In cotton theyre way above where they were at that time. But they still have a fair amount of cotton to go. But our best estimate at this point is a billion dollars i dont know if i should be making these public statements but whatever, you asked so i did. I think theyve bought a mayor amount of cotton which is particularly important as an indicator, congressman, because their apparel business is slow, right. For obvious reasons, because of the covid19. So we have we believe they bought a fair amount. They have a fair amount additional to go. And i expect them to live up to the agreement. They have indicated they will. And i know how important it is for not just cotton but for all. That is great to hear for our Cotton Producers in southeast missouri. I want to hit on one other point with my time running out. With the u. K. Agreement, and the urgency to get that accomplishment, i know agriculture is front and center in the agricultures and a big Sticking Point missouri being the second largest cow calf producing state, beef purchasing is extremely important and i hope that we could have your assurances that the u. K. And u. S. Will engage greatly in their purchase of u. S. Beef. So, we will make every effort to have you and other people interested in beef be happy. I would say that this administration is really done a good job for beef producers, right. I know you know that. But if you look at right down the line, china, of course, but japan, which is our biggest market. So this is an emphasize on something we will focus on. Thank you for your service, ambassador. Thank you, gentlemen, let me recognize the gentle lady from california, miss sanchez to inquire. Thank you mr. Chairman and ambassador lighthizer, thank you for joining us today. I want to get right to my questions an follow up where mr. Davis left off. The administration has many ongoing negotiations, the u. S. , kenya and uk and others and the u. S. Copyright Office Released 512 of the dcma including the section lacks balance. The Senate Judiciary committee is undertaking a full review of that indicating the intent to amend it. Im curious to know if you will commit that the text in the upcoming agreements will have flexibility to accommodate changes such as those that are currently under consideration and not lock us into a flawed regime. So im not familiar with that with that specific provision. Ill certainly look at it and get back to you. I will i will repeat what i said and what you answer is to, is my objective is to follow the rules that congress decides on, make trade fair and accessible and accommodate the policy changes. But with respect to that provision, let me look at it congresswoman, and im happy to get back to you. I appreciate that. And with respect to enforcement, which you just mentioned, i want to sort of press on some points in your written testimony about trade with china. We all know that china cheats. Your testimony states that china has abusive trade practices, like stealing intellectual property, forcing Technology Transfers and employing to manipulate our currency but the trade one trade agreement that was signed without congressional input, i feel compelled to add, you describe it as Ground Breaking and say that, quote, the administration has maintained the authority and leverage to enforce chinas compliance with the agreement. If that is the case, can you tell me how we are doing with enforcement of the u. S. china agreement because my understanding is that since 2017 china has agreed to more equitably share box office retch with u. S. Film creators, yet theyre still not pay what they have agreed to pay. Has that changed since phase one was signed into effect on january 15th of this year . So, i would say, first of all, i dont agree with the statement there was no congressional input. I talked to many members about the china agreement over the course of the that was done by the administration. I dont know what members you were talking to. But we certainly dont feel like we had any input in that process. Well i assure you that i spoke to many members you could speak to the substance of the question. During the course could you please answer the question were talking over each other. Ill be quiet now and let you speak. I want you to address the substance of what i just asked about the u. S. china film agreement. Im sorry about the what . The u. S. china film agreement, the revenue sharing provision, has that changed substantially since the phase one came into effect in january or are we still not getting what were supposed to. First of all, the film agreement was not covered by phase one. It is an issue on which were still negotiating. I realize that the industry has what we consider to be a bad deal. The film share is way, way below International Standards and something on which were negotiating. It is not covered by phase one. There are a number of things that arent covered by phase one. Okay, thank you. This is one of them. But it is something on which were still having ongoing negotiations. My guess is the reason we called this phase one is because it is not phase everything. You could find things that you could complain about that are not in there. This would be in that group. So you admit would i have covered it. Of course. It is something we negotiated on. We worked with the industry on at great length and the final analysis we couldnt come to an agreement with china on it. Okay. I just take issue with your saying this is phase one is Ground Breaking and that youre going to be able to force compliance because there is compliance with the film provision. I want to ask one last question in the time that i have remaining and that is that trade policy has direct effect on jobs in black and brown communities. What trade priorities and policies is the administration pursuing to ensure that trade promotes racial equality and equity . So, im glad you brought that up. Because we put out our 2020 trade agenda and wto fiveyear report is something i commend in there. But in there we specifically have provisions that we think are significant results of our trade policy. And it is on it is so prominent it is on page two of the actual agenda. But it goes through a variety of specific provisions an that is wages are growing faster for all groups but since President Trump took office, average wage growth for americans without a bachelors degree has outpaced that is not the excuse me. But im going to get to if if i can. If i can. Average wage growth for individuals in the tenth percentile outpaced growth of individuals in the average growth rate for africanamericans and hispanics have outpaced that is not my question. So that is not my question, mr. Ambassador. That is not my question. My question is what specific trade and policies has the administration pursued so that we could ensure moving forward that there is racial equality and equity in our trade agreements . So my emphasis and which i think is such an important part of our trade policy is to bring back manufacturing jobs to america and the result of bringing back manufacturing jobs is that those who have historically been disadvantaged will have middle class Family Supporting jobs and that is precisely our policy. And our policy is to discourage outsourcing, where we lose those kind of jobs. So nothing has made me happier about the results of our trade policy than that it is were going to move on from here. I think mr. Ambassador, you and miss sanchez, if you spoke on the phone together, i think it would be a good idea. Yes. Mr. Chairman, thank you. I was just going to yield back. But i was going to ask if the ambassador could be willing to answer in writing. Because im asking about specific priorities and policies and all im getting is statistical information. Sure. Makes sense. Thank you. I yield back. With that let me recognize the gentleman from new york, mr. Higgins to inquire. Thank you, mr. Chairman. And thank you, ambassador. I, like my committee colleagues, both appreciate and admire the many qualities of honesty and integrity that youve displayed over the last year in your work with our committee. So thank you, sir, for your service. As you know, after world war ii the United States was the worlds manufacturing powerhouse. And in the last 20 years weve lost 56,000 manufacturing businesses and 6 Million Manufacturing jobs. U. S. Trade deficit was 650 billion last year. The United States has had a trade deficit every year since 1976. It was when our colleague, one year before our cleg Brendan Boyle was born to show how long weve had a trade deficit. Germany is a hightaxed, highwage, highregulated economy, 4. 5 trillion with 80 billion people. It is the strongest economy in all of europe and 20 of germanys economy is manufacturing versus 10 in the United States. The Martin Luther king jr. Statue on the National Mall was made in china. The San Francisco bay bridge was made in china. The Freedom Tower, which extends almost 2,000 feet is 104 stories, the Freedom Tower that replaces the twin towers that fell on 9 11, the glass was made in china. The steel made in germany. Ambassador, you had said that the United States, mexico, canadian trade agreement that replaced the 25yearold nafta agreement will turn out to be the best trade agreement in history. You have said and youve said repeatedly in this session today that the primary goal of this agreement is to increase United States manufacturing. I think that the trade agreement will be influential in that regard. But i also believe that manufacturing will be determined more than anything on the internal fortitude of our countrys willingness and determination to change. My question to you is what can the United States learn from the german manufacturing powerhouse . So, first of all, let me thank you for your comment but thank you mostly for your emphasis on manufacturing. As you know, im one who believes and when i write i talk about it, i could give another plug, i would did a lengthy article in the Current Foreign Affairs which i think sort of makes the point that i think you would find, you would be in total agreement with and i hope you get a chance and other members to read it. So i think manufacturing jobs are really, really important particularly for people that dont have a college degree. Which we have to remind ourselves is about half of our workforce. So it is so important that we bring back manufacturing. You mentioned germany. So why why does germany, i believe it is fair to say that they havent had a trade deficit at least since the 50s and maybe even well beyond that. I would say a couple of things about germany. One, im one who believes that part of the agreement that created the European Union was that countries like germany would end up with the currency, the euro, which is the economy and they get a weak currency which allows them to be a manufacturing powerhouse and in return they make, yeah, they pay money to the south. So i think that is part of their part of their equation. And it is unfortunate that there is no way for us to emulate that. I think they also use standards as a defensive tool. And that is one of the things that we can and should take on. So, then if you dissect it beyond that, you get down and try to look at sectors, you get down and say the next big thing for them is the Automobile Industry where they have been so effective. And one of the things that were trying to do is use usmca and other tools to insist that they that they bring that manufacturing to the United States. In other words, that the German Automobile manufacturers, which are so important and all of the companies that spinoff and owl of the suppliers important to their manufacturing strength come to the United States. And weve seen that happen in the past. But were really trying to emphasize it. So usmca, i do think will have the effect. Weve talked about it and worked with members. I think most members agree that our Automobile Industry was moving south before usmca and it was probably, i think it was eight or nine of the last 11 automobile plants in north america before we started this renegotiation, were built in mexico. So we had to stop that. It wasnt economic in my judgment. It was industrial policy down there and weve turned that around. But let me just end where i started. I completely agree with your fundamental position that we have to bring manufacturing back to the United States. The president completely agrees with it. I dont think that any administration has actually taken that on. And so im pleased with it. Until now may have had the feeling that we are post manufacturing and that is not consistent with the kind of country we want to have. Let me recognize the gentleman from South Carolina who we hope is doing well, mr. Rice. Mr. Rice, would you unmute yourself. Great. Can you hear me now. We can hear you. Okay. Mr. Ambassador, thank you so much for being here today. I want to say that my whole focus in congress is on american competitiveness and that between tax reform to make us internationally competitive and trade reform which you have been the spearhead of, your progress on china and usmca, your progress in moving forward with the e. U. And brazil and britain has been amazing. It is the reason why our economy before this crisis was the envy of the world. We were at 3. 6 unemployment, historic lows. Well were reentering the workforce in record numbers and wages were rising over 3 which was never done by the obama administration. The middle class was returned, all of these things show what a stellar economy we had. Mr. Thompson raised this report by the National Bureau of Economic Research and he said showed we were going into a recession. I cant see that anywhere in the report. That is absolutely false. And we are the envy of the world and i want to reintroduce that report into the record to show that the leading Economic Indicators in that very report show how exceptional our economy was and that, in fact, bill so ordered. Ambassador lighthizer, i just want to comment you on what you have done and what the president has done with regulatory reform, trade reform, tax reform and so forth to spur our economy into creating opportunity for americans that hadnt seen any level of opportunity like this in decades. In fact, youve heard me say before, i represent three of the four counties in South Carolina, and when i took office in 2012 under the obama administration, marion kelly, South Carolina was at 20 unemployment before the dreaded virus hit us it was at 4. 2 unemployment which is really just a miraculous turnaround due in no small part to your effort. So thank you very much. I want to move on to the china deal and the phase one. I have farmers here in district who deal with commodities to include tobacco and i want to get your sense on timetables an when you think china will come up with its commitments under the fade one agreement. So, thank you congressman. The way we structured this phase one agreement, because there is kind of a disconnect between when it starts and when the accounting starts. We expect them and they expect to make their commitments in this calendar year. Even though the agreement technically didnt start until february 14th. And the exclusions really started at the beginning of march. If you look at the commitments, generally there is a bit of a back loading, if you look at ag sales and bit of the back loading is that soybeans tend to be sold at the end of the year and theyre buying a lot of soybeans now but big numbers at the end of the year. If you look at 2017, which is the year we compare it to. There was 10 billion of selling at the end of the year. So our objective is to get as much of all of the other commodities as possible and realize at the end of the year there will be a lot of soybean sales. I talk and my deputies talk to china every few days. We work out a variety of problems. We monitor the data. I wont comment specifically on any one product in that respect. But they say theyre going to meet their commitments and the indicators now that we have are that they are going to meet them. So that is what were opening. Weve lost you, mr. Rice. There you are. We can hear you now. Okay. Mr. Ambassador, i have Steel Production in my district as well and i understand that despite the fact that Steel Production worldwide is down 10 , china continues to increase nir capacity and that, in fact, they are at the highest capacity ever, theyve grown over 1 since last year. What is the administration doing to try to so, i believe that was steel. I couldnt quite hear it . Was it steel . So, if you go back and look at the last 25year problem in the Steel Industry, that problem could be come down to one word and that word is china. And you know this very well because you and i have talked about it. China has created more capacity ten times more capacity than the United States has and we dont believe it is economic. What the president did is the president put tariffs, 232 tariffs on all of the Steel Companies in the United States. And there are issues here, issues that are on that. But i believe the president had not done that, we would be looking at a catastrophe in the Steel Industry. So im very proud that was one of the most important things he did. China is still moving ahead as you suggest with their production. But it is more and more expensive for them to do it. So the president took a very, very bold step on behalf of the Steel Industry and whatever that was two years ago and thank god he did. But there are still im not going to suggest there arent, there are still big problems in the Steel Industry. Thank the gentleman. The gentlemans time is expired. Let me recognize the gentle lady from alabama miss sewell to inquire. Thank you, mr. Chairman. Mr. Ambassador, i first want to thank you again for all of the hard work that you and your staff did on the usmca. As a part of the Democratic Task force, we spent many months together in rooms negotiating an agreement and because of our collaborate efforts i could truly say that i think that that agreement was transformative in the area of labor, the environment, and enforcement provisions. We really can hole up the usmca as an example of what is possible when the administration works with congress. Despite the success of usmca, unfortunately this administration has chosen not to work with congress on other types of trade agreements. Instead it frequently elected to bypass congress to implement controversial trade objectives from both sides of the aisle. Instead of consulting with congress and using the trade Promotion Authority as congress intended, this administration chose to pursue a skinny deal with japan to deliberately cut congress out of the process. Now it appears that this administration is doubling down on this skinny deal strategy as ustr rushes to negotiate politically expedient deals with india and brazil and potentially with australia and singapore by, i believe this is dodging congressional oversight and denying us an opportunity to vote up or down. I know that there are loopholes in our trade Promotion Authority. But it is really meant for a better work product that is not just driven by the executive branch, but also has input by the legislative branch. Furthermore, you know i continue to be troubled by President Trumps auto 232 tariff threats against our allies. President trump issued another threat just last week as auto workers across the country continue to be threatened by the Economic Impact of covid19. Not only is the administration abusing the section 232 tariff powers by labelling automobile imports as a National Security threat, but the president continues to violate the law and obstruct Congress Oversight by refusing to release the section 232 report, auto report to congress and the public. As youre required to do by law. Mr. Ambassador, i know that you know these issues very well of auto 232 tariffs so i wont focus my questioning today on those areas. I did want to admit them at least admit my statements for the record. I am supportive. My question is about the use of skinny deals. And im supportive to find and negotiate a comprehensive Free Trade Agreement with the United Kingdom. Im glad to see that the ustr is beginning the second round of negotiations, however because this administration has a history of skirting the tpa oversight by the congress i cant wonder whether this administration will cut out congress and reach a skinny deal with the u. K. So that it could be done by november. Could we get assurances from you today, mr. Ambassador, that will you not bypass congress during a u. K. Negotiations with a japanesestyle skinny deal. Yes. I like your quick answer. I am interested in seeing that the ustr is pursuing a Free Trade Agreement with kenya. First i hope that the u. S. Trade agreement, that your intent to negotiate a comprehensive Free Trade Agreement with kenya and not a skinny deal doesnt shut out our ability to provide over sight so im going to trust that your answer would be yes that you plan on making sure that we get congressional over sight and input when it comes to kenya. Second, im curious how you vieh a kenya Free Trade Agreement in opposition of angola. But im concerned if you view a kenya Free Trade Agreement as a model to replay agoa. Your thoughts, sir. You could turn on your microphone, mr. Ambassador. Ill repeat it. It was a pleasure dealing with you through the whole process. And i would say the usmca and the result was better because of your involvement and im grateful for that. Needless to say i dont agree with your statement on the japan deal. Im happy to talk about that at great length if you want. But ill as a concession to the shortness of everyone elses life ill let it go at this point. So, and i guess i should say that this is probably worth saying quickly, that everything that we do at usgr is not just nfta. We worry about problems that come from american manufactures and workers an unions and the like all over the world all of the time. And i have a list here which i wont go through which has 40 or 50, i call them singles and doubles. There are things, is congress involved, a lot of these things come from congress, they come from shareholders and we work through these things. This is opening the sorga market in vietnam. There is just scores of these kind of things. And that is one of the things that we do at usdr. In agriculture but also in other areas. In the case of japan, what did we do . We basically got the benefit that had been negotiated in tpp by a different route and didnt have to pay ten times as much for it which didnt have the tpa. So in all of the cases we go and solve problems for american for american businesses and farmers and ranchers and labor and we do work with congress on that. But theyre not under tpa. So the relationship between kenya and agoa, our view is we want a Free Trade Agreement that is as ambitious as reasonable to expect from kenya. And we want that then to be a model. It is not a substitute for agoa. But i will say this. Most people in the world, when they negotiate, get something for what they give. So if you go around and look and see what europe did in their preference program, they tend to get something for it. We havent gotten anything. And i think agoa is a good program for some people. It is not a good program for other people. And that the best thing we can do is try to have a model agreement that works for a significant african countries, by significant i mean large and with a relatively large thank the gentle lady. Let me recognize the gentle lady from Washington State, miss dell benny to inquire. Thank you, mr. Karm achairma mr. Ambassador for joining us today. Last year trades agenda hearing i raised the issue of chinese overcapacity in the aluminum sector and asked if you had made any progress about specific commitments to address this issue such as numerical targets. Since then weve had a phase one deal that failed to address this issue and now aluminum in my district, one of the few left in the country, just curtailed its operation which put 700 people out of work. Im also concerned that chinas plan to revive Industrial Production following the downturn caused by the covid pandemic could exacerbate the problems in the global aluminum market. So it is past time for this to be a priority to address this issue in the coming weeks and months i hope youll step up your efforts to address chinese overcapacity and i stand ready to work with you on this. I also want to ask you, given the pandemic, we definitely have seen the importance of developing a stronger, more resilient Manufacturing Base in the u. S. For personal protective equipment and pharmaceuticals however the reality is that we still need to reply on imports to a certain extent. This week the e. U. Floated a deal to negotiate a deal and that would eliminate or substantially reduce tariffs on pharmaceutical and medical goods and strengthen cooperation on Global Health crises. What are your thoughts on such an agreement . So, i wont spend time on the aluminum other than to say it is something were working on. The president did take a bold step when you put tariffs on. And the problem, unfortunately is not just china as you know well. It is also a problem with canada that were working on. So, i am a Firm Believer that the things we need to fight this and the next pandemic should be made in america. Were a great country. If were a small country with a small economy, we would need to rely on others. I believe we have to put together a program that includes tariffs. So im not in favor of reducing tariffs on the things we need. Id be far more in favor of increasing tariff on the things that we need. As part of an overall plan to make sure that the next time we have domestic Manufacturing Capabilities in those areas. So, i clearly think we have to have the manufacturing capability but i dont think you get to it by entering into agreements where the net effect is to shift the manufacturing overseas. The other point that i would make that i think is worth mentioning is we have, im sure youre aware, we have in the uruguay realm we have a pharmaceutical section, a pharmaceutical agreement. They called it. It is one of the agreements where then it might be 16 countries now got together and said well all agree to have zero tariffs on a certain list of pharmaceutical products and then well just give that benefit to the rest of the world. Which struck me as like really crazy. So we have a position where with respect to certain pharmaceuticals, were submitted to zero tariffs and china and india and others are not so committee. So i dont buy that approach. I think we need a comprehensive program but it has to have a tariff piece. Just speaking for myself. I also wanted to ask you about the recent string of digital protection in countries like india, brazil and indonesia. Do you think it is possible to extend the wto morea torum and what payoffs do you think it will be needed for developing countries to sign up . I know it is an area that you care about. The whole area of ecommerce is important. We had a moratorium, it is our view that it will continue into next year. Were doing everything we can to try to get the ecommerce initiative moving forward. We have, to the extent you can in the current environment, we have a lot of video conferences on this subject with our trading partners and were talking to a variety of them. Once again, would you say this is an area where i think if the United States makes the commitments, they shouldnt be given away to the rest of the world. But clearly it is something that is a matter of emphasis for us. Thank you. My time is expired. Thank you, mr. Ambassador and mr. Chairman. Thank the gentle lady. Let me recognize the gentleman from arizona, mr. Schweikert to inquire. Mr. Ambassador. There is a handful of us on the committee that has a real interest in and mr. Kind and i have been fixated on this, what do we do, what can congress do, what can the committee do to help you in the adjudication bodies at wto in getting them properly reformed so they actually start working again. You could turn on your microphone, mr. Ambassador. Thank you, mr. Chairman. I appreciate the reminder. So, the issue is the appellate body at the wto, i started and this is a long position. I start off with the proposition that the wto needs radical reform and in a variety of areas one with an unfair tariff situation run you have over time. Two, we have an appellate body that is at least in my opinion nonfunctional. Three, we have grown up with a situation where countries end up with Free Trade Agreements and the like. All of which are really giving extra benefit to people who are members of the fta and not to other members under a multilateral trade dispute. I mean, trade system. My problem with the apellat body is, one, it has taken away benefits from the United States unfairly, and two, put burdens on the United States that we never negotiated. So i have a long indictment of it. I know the committee had a meeting with a variety of people, Kelly Anne Shaw and michael punk are looking at this and talking about it. I think mr. Ambassador, i guess the question i was asking is what would you have us as the committee, if you would have us focus on something, what would you have if us do . So, at this stage, to be honest, what the committee could do is that is to say study the process and realize the nature of the problem. This is the creation of Juris Prudence by unaccountable people at wto is at the heart of what yes dont have negotiations and the heart of why were not moving forward with the multilateral trading system. So if you say what would i have the committee do to get the appellate body back working again, i dont think the apealot body was working well. I think it was working against the interest of the United States. I think it was hurting our workers. It is nonrepresentative and from my point of view i dont feel any compulsion to ever have it come into effect. So what do we do about dispute cementment and that is a reasonable debate. People ought to have a discussion about whether or not what kind of a dispute settlement process we have. Up until uruguay we have a panel and then the panels would make a decision. And then people would try to negotiate it out. Sometimes you had a good negotiation and sometimes had you a stalemate. But if you look at Economic Growth during that period versus the time now or the growth of trade during the preuruguay and prouruguay and trade growth, there is no correlation in my view about the appellate body and the economic well being of the United States or jobs in america or wages or any other thing. So im not a fan of the appellate body. If it never goes back into effect, i think that is fine. I think it is reasonable for members to sit down and say, okay, fine, what is an alternative dispute settlement process that wont cre ace Juris Prudence with the United States and something you want engage with the members on. Mr. Ambassador, wed love to hear ideas of then a parallel system. Just because of my last 30 seconds and it affects arizona, usmca coming into effect very shortly. Implementation, any particular rules and mechanisms that still need to come online . What still needs to happen to make sure that this benefits particularly states like arizona but our country. So i would say from the United States point of view weve done everything that is necessary. I believe that is true with respect to canada and mexico, they have the laws necessary. Whether theyll put in place those laws in practice is something that well litigate about if they dont. And the biggest problem right now is the situation on the border because of covid. That is going to have more to do with the effects on arizona after july 1 than that. But were fully ready to go. Thank you. My final is expired. Thank you. I yield back. Thank you. Let me recognize the gentle lady from california, mrs. Chui to inquire. Would you unmute, please. Would t would the gentle lady unmute. Yes. Can you hear me now. We can hear you. Thank you. Okay. Thank you, mr. Chair. As the caucus i care about the intellect um property in our Free Trade Agreements. Im in possession from several music stakeholders including the American Federation of musicians an the recording academy. A letter thanks you for your successful efforts to ensure that canada fully implements National Treatment to sound recordings in the u. S. , mexico, canada agreement, ensuring that americans are properly compensated for their recordings. And what it asks as we go forward in future trade agreements, we know that there are deficits that are denying americans royalties of about 150 million annually. As you go forward, especially as you negotiate the u. S. u. K. Treatment that you work on similar agreements that will ensure that americans are properly considered. So i would like to ask unanimous consent to include this letter in the record. So ordered. And then id like to ask about the status of three separate issues with respect to mexicos compliance with intellectual property in usmca. First there is a concern about whether mexico made sufficient progress to implement a robust notice and takedown system so that content creators could notify online providers about copyright infringement. Second, the Mexican Legislature proposed a change to copyright law which would impose a 30 quota for online video providers for over the top digit providers such as netflix and disney and that is a clear violation of usmca, if it were to pass. And finally one of mexicos regulators announced a reversal on policy that would shift money for the most valuable prime time tv ads away from u. S. Providers for the benefit of mexican broadcasters and that would create a de facto barrier for equal Market Access for u. S. Entertainment which is exactly the type of discrimination that usmca was supposed to prevent. So ambassador lighthizer, would you elaborate with your mexican colleagues to ensure theyre fully in compliance with the i. P. Chapter of the usmca. Id be happy to, congresswoman. And thank you for your comments. And were very pleased with the National Provision in usmca and that was a big win. And it was really the correction of a long, long time injustice. We are working with the administration in mexico on all three of the points that you just mentioned. They are all things that we are concerned about. The advertising is one that was already raised so there is general at least a couple of members and probably more than that who have voiced a concern about that. The quota provision we agree is a clear violation and what we have made it clear to mexico that if they move in this direction, well bring a case. Obviously we cant do anything except talk to them now. Because we dont have the agreement in effect. But it is our view we completely agree with you, our view is that these are violations and that theyre the kind of things that we wrote the agreement to avoid and we fully expect to enforce. Thank you for that. And i want to ask about the 301 tariff skplugs process. I have a kwp in my district, irobot which has operations in my district and keeps intellectual property in the u. S. And it was successful in receiving a 301 exclusion in march. But the exclusion expires on august 7th. So now the company has to file an extension request while theyre simultaneously filing 700 separate reimbursement requests from customs to recoup the tariffs bit by bit. So it is a nightmare situation. They also dont know how long an extension will be. Some companies have been granted full one nyear extensions and some are only granted an extension to the end of the year. Could you explain the length of the extensions . First of all, im familiar with the company. Second there is a process they go to get the refunds and we understand that. Hopefully it is not too lengthy or too difficult. But im sure theyre happy that theyre getting the refunds. All of the extensions from now on will expire the extensions of the inclusions will expire at the end of the calendar year and they will decide what happens after that. I would say that with respect to the companies, they have had, i mentioned this a few ago, they have had, depending on situation and i dont remember exactly which tranche their products are in, they have had a year or in some cases two years to make some change in their process so that they dont come under these cases. And i i mean under these tariffs. And i wouldnt go through the program. These are in place to protect American Intellectual property and american jobs and i realize it creates a problem for some people. Thank you gentle lady. Let me recognize miss moore to inquire. Thank you so much, mr. Chairman. And i thank you, ambassador lighthizer for your excellent work and your ability to work across the aisle. I do have the clock, mr. Chairman. I did learn. I just want to follow up on some questioning that congresswoman sewell have pursued. I didnt necessarily intend to ask this. But you ended your comments by saying that you sort of wanted to stand up a Free Trade Agreement with kenya that might look a lot like agoa and i guess number one i was wondering, with some of the flaws weve seen in agoa, not being able to reach some of the poorer countries in africa, not whether or not we could look to stand up something that won look at providing benefits to more than five or six countries, number one. And number two, i was also wondering whether or not there were any mechanisms in place that sure as u. S. Markets are opened in kenya, that we dont destroy the market for the kenyan economy. And then i have a followup question. So first id like you to yield to you to sort of respond to that. Well, thank you, congresswoman. First of all, if i said that we want an agreement with kenya to look like agoa, then i misspoke. We want an agreement with kenya to look as much like a traditional Free Trade Agreement as their stem will allow them to do at this time. This is a little bit i mean, were kind of in any territory here. Were trying to have a High Standard Free Trade Agreement with a country in africa that is less developed in terms of some of the structures that we need. So it is a tricky thing. Were trying to find the balance. We definitely dont want to do anything to harm the kenya economy. All right. So are there any specific, mr. Ambassador, any specific plans to make sure it doesnt happen. Like phasing any which products could come in. Is there any specific plan. First of all we havent started the negotiations because the tpa process. They wont start for another couple of weeks. Well have a formal announcement. But if youre saying do we and following that we absolutely expect it to be phases, for sure. Okay. That was not the thrust of my i guess im concerned were talking about eradicated forced labor in chocolate factories in china and their human rights violation. Child labor infractions and i know that im a transplant from the Financial Services committee and we have the s. E. C. That have accountability for the use of conflict products and protecting supply chain. And so probably in two weeks after this administration came into effect, they asked congressional review disapproving s. E. C. Resource extraction rule in which in that case public trading on oil and gas to disclose what they made to governments. Now in the absence of these kinds of safeguards, what are we doing to protect the supply chain from child labor, forced labor, and other than the u. S. Mtr agreement, what are we doing with regard to making sure that we have conflict Free Trade Agreements . So i apologize, i couldnt quite get the sense of that, i think the nature of the question was what are we doing on the issue of forced labor and child labor. And we have statues in the United States against forced labor, which one of those thins we can actually stop the product from coming in and i apologize, but i didnt hear the kind of predicate of there seemed to be something we did that wasnt that wasnt successful. Well, im happy to hear there are statutes for which youre abiding and i guess i would be interested in knowing what those protocols are. The predicate was is that soon after this administration came into office, through the congressional review act, they abolished or stopped they disapproved the s. E. C. Rule on resource extraction. We have seen murders, rapes, all kinds of problems with conflict minerals because commercial development from Natural Resources causes these human rights violations. And so i was wondering what we were doing other this happened two weeks into the administration. I wanted to know what the successor effort was to in our trade agreements that are conflict free. So im not familiar with the regulation that youre referring to that happened two weeks into the administration. But from our point of view, we clearly have provisions about and we do in the usmca also about violence against workers, the first one that people have had, but something we certainly find as a model, and forced labor where there are specific statutes against it. And i think it is something we have to be continually vigilant about. Thank the gentle lady. Let me remind all the ambassador i know will testify in the senate later on today, so we want to make sure everybody gets their questions in and the ambassador has a chance to offer answers. Miss walorski, the gentle lady from indiana is recognized to inquire. Thank you, mr. Chairman. Ambassador lighthizer, so good to see you, thank you for all the work youve done and you continue to do. I want to associate myself with mr. Bradys strong support for reauthorizing the gsp. Mr. Ambassador, we have talked at length probably longer than youve ever wanted to talk about specific issue in my district for the rb manufacturing, exclusively that wood is a specific type of tropical plywood, almost always found in indonesia. The rb manufacturers found it is the best combination of size, thickness and flexibility. It is also lightweight and less vulnerable to water and warping. There is no domestic substitute and it left rb manufacturers paying a Million Dollars a month in unnecessary tariffs. I fought hard to make sure and ensure that luwan is coming in duty free as if the program lapses, if the gst lapses they will be back to paying unnecessary tariffs. Mr. Ambassador, you also support reauthorizing gsp . The administration has not formally taken a position on that. I think the gsp program is something that has benefits but needs changes. I would point out one thing that has come to my attention recently i find rather knowing, for the benefit of mr. Brady, there are countries that give gsp from us that give that have Free Trade Agreements with, for example, europe and give europe better trade benefits than we do. And that strikes me as completely crazy that we would have a situation, something that im going to look at and see whether what the law prevents now or how the law should be changed. So the notion that im it is not indonesia, though i would have to look and see if indonesia has a Free Trade Agreement, but the notion is we give somebody duty free access to a variety of things, they make a deal with europe, europe requires them to give reciprocity, so therefore, for example, if youre a poultry producer in the United States, you will have to pay a very high duty to sell poultry to south africa, for example, and europe can sell it with no duty at all. That is something that has come to my attention recently and i think has to be worked out. But i havent talked to the president about gsp. And it is a it is a reasonable suggestion, comment why havent i and it is just but i will. It feels like it was forever ago back in february when you were on this committee. I called for ustr to look at supplies needed for the coronavirus pandemic and i want to thank you for doing that. Ppe was in short supply. Some tariffs have been hugely important for medical facilities on the front lines and businesses trying to reopen responsibly by protecting workers. There is still massive demand for ppe and some of these exclusions are set to expire, for example, the exclusion for gowns expires august 7th, gloves and surgical masks september 1st. My question, we share the same goal of bringing the supply chains to the United States for these products. I have legislation to do that. But demand is going to be high for the foirn seeable future. So it takes time to build a domestic capacity as you already have said on products that have to meet rigorous fda standards. With that in mind, will you consider more time frames for coronavirus related 301 exclusions, will you consider granting exclusions from mfn tariffs as well and are you taking the recent itc report on coronavirus supplies into consideration for any other exclusions . So with respect to the china the 301 process, we did grant exclusions from those, from the things that members brought to our attention. In terms of of the extension of that, thats something that well look at, depending what the need is. What i agree to would it be my policy to have us wave mfn tariffs on these items . No. I think i would not. If you look at, like, the 23 products that were brought to our attention, almost none of them half of them dont have any tariffs at all and almost none of them have tariffs above 7 . At the same time we have u. S. Companies who are now getting into this business, which is what we want them to do, and i would definitely not give away the mfn tariffs, so, no. I think we ought to do what we can to encourage u. S. Companies to operate, to manufacture, in america and one of the ways to do that is to have tariffs. Were just approved do you see any economic extension of 301s given the fact that theyre trying to get the Companies Back up the line after covid . Im sorry, i didnt get the nature of that question. You say am i going to grant extensions to the 301s that i wouldnt have granted because of covid . No, probably not. Okay. Thank you, mr. Chairman. I yield back. I thank the gentle lady. Let me call upon the gentleman from michigan, mr. Kildee, to inquire. Thank you very much, mr. Chairman, mr. Lighthizer. Good to see you. Thank you for your service. I dont know how many more times youll be in front of the committee, but if maybe one of the latter times, ill say how much i enjoyed working with you. Comment, first of all, we have serious concern as some of my colleagues have expressed about the extent to which china intends to live up to the agreement in phase one. We are seeing consequences in my district already. And the indication is china will not fully live up to the responsibilities under that agreement and im hoping youll use every tool you have at your disposal to ensure that they do. I would like to ask a question or two about implementation of usmca which i supported, as you know. That i was difficult path. I think the improvements we made made it possible for me to support that agreement. Specifically im concerned about the extent to which Large Companies continue to give signals they may not fully comply. One question i have, i think i already heard you answer the question, while the agreement goes into force july 1, mexico has adopted many of the reforms. For example, the labor reforms have been made law in mexico. I assume thats correct from your perspective . Im sorry, i couldnt hear that, mexico has done what, they adopted enacted the necessary reforms, passed laws regarding labor reform. So the they did pass the labor reform bill, but the certification that we make is do they have in place laws that conform to their obligations . Thats not the same as saying they would change or where they wouldnt put in fact practices, which are not consistent with our obligations and thats the space where we would litigate with them. Here is the frustration i want to get your take on. During the process leading up to usmca being finalized, i pressed american base companies about their practices in mexico. And very often heard in response that they followed the law of mexico. And im concerned that were hearing reports that many of those same companies now are violating the law in mexico, not adhering to those reforms. And what im concerned about is that they wont do what theyre obligated to do, but will only do what theyre forced to do. And im just curious about what tools obviously standing up the implementation is important. But it strikes me as a source of frustration that american based companies, who defaulted to the argument that they would adhere to mexican law now dont seem to be adhering to mexican law and if anything short of full implementation of the enforcement mechanism, that ustr and your rule can do to address these companies and help them lead by example by adhering to these new reforms, these labor reforms in mexico. Thank you, congressman, thank you also for your help throughout this entire process. I would say this usmca has for the first time in history, this Rapid Response mechanism. And if u. S. Companies or companies from any other country are not following the provisions particularly with respect to collective bargaining and organizing and all that sorts of things, there is a very fast process that will take place and the consequences are drastic. Just to remind ourselves, if there is a violation of this if there has been determined to be a violation through this Rapid Response mechanism, with respect to the first violation, the products from that facility dont come into the u. S. , but there has to be a proportionate kind of a response. With respect to the second, it is both facilities and with respect to a third violation, the company cant ship anything across from mexico to the United States. So these are really draconian actions. Im expecting u. S. Companies along with companies from everywhere else to take the steps necessary and if there are specific examples, once we get this in effect, i hope that your staff will get them to us, if there is things we should be doing that im not aware of to make sure u. S. Companies understand what the obligations are, to the extent we can enforce the agreement, i want to youll want to bring that to my attention. I look forward to working with you on that. That is clear lit bargain that we made with mexico and that you made with us. I thank the i appreciate. We do have examples of companies and employees and not following i would like to follow up with you on that. Thank you. I yield back. I thank the gentleman. With that, let me recognize the gentleman from philadelphia, mr. Boyle, to inquire. Thank you, mr. Chairman. And thank you, mr. Lighthizer. I first want to just express my agreement with something that was said maybe two hours ago now. And those were the words of congressman larson with respect to the good friday agreement and the sanctity of that agreement and why it is so important and essential that any before we talk about adopting any u. S. uk trade deal, we ensure there is no violation of that u. S. Negotiated agreement and was happy to hear your response to that. The second thing is, assuming there is no violation of the good friday agreement by the uk, i would find many advantages to a perspective u. S. uk trade deal. I am curious, though, as to why this has taken on such attention or urgency in terms of the order of importance. And heres what i mean. The uk is a market of about 60 million. The European Union is a market of 450 million. Literally more than seven times larger. So why is it that a u. S. uk trade deal has kind of been such the high priority when were leaving on the table this market of close to half a billion people . So, congressman, thats a great question. And it goes to sort of the order that you would take these things up in. I would say the first my First Response is that it takes two to tango. Right . The uk wants a deal. Europe doesnt want a deal. Europes got a real sweet deal right now. They have 180 billion trade surplus with the United States, in my opinion, based on a combination of stupid u. S. Tax law, a weak currency for some members, and protectionism. And a few other things that are sort of less derogatory. Like the fact that our economy is growing faster than theirs. So why are we dealing with the uk before europe, because the uk wants to deal with us. Yeah. Understood. For both the negotiations with the uk and the negotiations with the eu, i was wondering if you could wrest this issue that i constantly read about whether it is british media, french media, german media, there is this perception regarding u. S. Socalled chlorinated chicken. And im kind of amazed at the extent of the attention this issue gets. Could you address that at all and maybe add some light to what i think might be some misperceptions . Well, thank you. I appreciate the question. It is one of these things that has taken on myth cical proportions. So the United States basically in its food supply and ill exaggerate this or generalize it, not exaggerate it, generalize it, the food supply, very, very concerned that our food process is safe. One of the things we do is we require a wash. Not chlorinated, it is a wash to make sure that pathogens are killed on our products. It is something we have done, and, by the way, it is something that with a lot of vegetables and the like, the europeans and others do it too. But the United States has very high food safety standards. I believe through a combination of kind of protectionism and nonsense the europeans have decided that this is somehow unhealthy. There is literally no Science Behind it. And the opposite is probably true. That is to say it is probably healthier to do it the way the americans do it. This is something that has that in my judgment has to be resolved. It is a question of consumer preference. And i might say ill bet this is true in your experience too. Ive been in the United States with lots of europeans and lots of them make chicken and none of them ever got sick from eating chicken. It is just one of those nonsensical in my view protectionist items, but it is emblematic of a kind of a problem they have. And that problem is theyre going to use what they think of as standards really as protectionism without science. Yeah. Let me since i want to observe the five minutes here im under 20 seconds, i want to finally say i was glad to hear your response to my colleague, congresswoman sewells question about mini deals. I urged administration not to strike any. Particularly with the uk, but frankly with any other country and with that i yield back. I thank the gentleman. Let me recognize the gentleman from illinois, mr. Lahood, to inquire. Well, thank you, chairman, for holding this hearing today. I want to welcome ambassador lighthizer and thank you for your shift in the trade space. You have made us proud in terms of your representation in the trade agreements, usmc aa, the phase one deal with china and the deal with japan and what you talked about with future trade agreements. Your focus on reciprocal and fair trade and pro growth agenda is, you know, i think will reap benefits for the United States. Want to thank you for that. Im going to ask a couple of questions related to china. And the first one is, it has been mentioned today about the obligations and responsibilities that china has between now and the end of the year on Purchase Agreements. Im wondering if you could give an update specifically on ag purchases, 50 billion to 60 billion that china is obligated to come through on, contractually between now and the end of the year, if you give us an update on that. I know they bought a significant amount of sorghum and cotton. I have i would be interested on where theyre at on soybeans and corn and ethanol. If you could comment on that. Secondly, as you may be aware, the Republican Leadership put forth a china task force. Ive been appointed to that by leader mccarthy and we are working diligently on coming up with a comprehensive report. I think youre address the group at the end of the month. My specific question would be related there is a lot of talk in congress about decoupling, about moving back supply chains, particularly with the vulnerabilities that we saw during corona as related to pharmaceuticals and generic drugs and other medicines. Im wondering whether you could comment on the administrations position as it relates to moving those fly chains back. To me, these are complicated, intricate and nuanced supply chains with china. And if we are going to do that, it seems like there is a significant cost associated with that. And if you could comment on how do we pay for that, is that done through tax incentives or tax credit or is it actual money that has to be put forth by the government to implement bringing back some of those supply chains or the decoupling. Thank you, mr. Ambassador. Great, thank you, congressman. First of all, on the question of agriculture purchases and you mentioned specifically oil seeds, china has undertaken a very large commitment of oil seeds, to give you some of these numbers are confidential, but to give you a frame of reference, the most we ever sold by far to china was 12 billion over 12 billion in 2017. Once again, ive got to say there is a difference between our export numbers and their import numbers. These numbers are never quite as precise as we would like, because of the nature of trade statistics. But they have undertaken to make to buy substantially more than that, at this stage, more or less to date. They are at about theyre over 3 billion. So, you know, we feel we feel good that they will be on, if you think of oil seeds, one way to think about it is that early in the i know you know this is your area, but ill just answer it, early in the year, basically, oil seeds around the world are brought from brazil, thats when the planting season is. Later in the year, in the United States, thats when our planning season is. Right now were getting into when you expect a lot of seeds to be bought. If you look at 2017, where i gave that big number, close to 10 billion of that was toward the end of the year. Were starting to see a lot of major purchases. We feel very good about it. For example, last week and in recent weeks the vast majority of the purchases have been from the United States, even though it is a little early for our season. And last week it was half a billion dollars of soybeans. And i focus on little bit because soybeans more because thats such an important market for American Companies. This issue of decoupling is a complicated one. Do i think supply chains should be brought back . Yes. I do think they should be brought back from china . Yes. Do i think they should be brought back from everywhere else . Yes. As i mentioned before with one of your colleagues, mr. Higgins and i were agreeing we basically need to bring as much manufacturing back as we can. Do i think you sit down and decouple the United States economy from the chinese economy . No. That was a policy option years ago. I dont think it is a reasonable policy option at this point. So but i think that you will see supply chains come back as a result of u. S. Policy, including the kinds of things you all did in the tax bill, but also with a regulatory space that the president has done as well as tariffs we put in place. We shouldnt forget that phase one agreement has substantial 370 billion worth of tariffs. Thats a lot of tariffs on their products. So i think you will see some change in that in that respect. But im for im basically for manufacturing in the United States. Thank you. I thank the gentleman. Let me recognize the gentleman from pennsylvania, mr. Evans, to inquire. Thank you, mr. Chairman. Thank you for this opportunity. This has been a great discussion. Mr. Ambassador, how are you . Mr. Ambassador, how are you . Can you hear me . Hes inquiring as to your health, mr. Ambassador . Im doing well. What did he say . Yeah. Why dont you hit your miec, mr ambassador and reiterate that youre doing well. Im doing well and you look well also and im looking forward to virtually being with you i think in a few weeks in philadelphia. Thank you. Thank you, ambassador. Mr. Ambassador, last week i participated in the 45th annual business round table that included ambassadors from ghana, ivory coast. We discussed how to create Economic Opportunity for africanamerican people. Recently in the United States seems to have awoken to decades and centuries of struggles that africanamericans and discrimination. A number of my colleagues talked to you about kenya. I want you to spend a little time, because im going to only ask you this question about the african growth and opportunity act. And i talked to you personally about that. But, you know, with africa one of the Fastest Growing continents in the world, and a lot of people under 30 years of age, talk to me a little bit about your views of really how you feel about this opportunity. So thank you, congressman. You and i have spoken about this. The reason i wanted to do something on kenya, as i think were all going to look back in the not too distant future and say heres the most populist part of the world and we didnt do anything in the trade policy. And thats inexcusable. Africa, i believe it is in 15 or 20 years could have 2. 4 billion people and subsaharan africa. We have to have something. There is a whole lot of complicated issues on that. To me the first thing we have to do is get a real fta, as much as we can, with one of the significant african countries and that is and then see if we can profligate that and have others start doing that. It is complicated. Theyre part of the east african community, we also have this issue of africa starting their pan africa continental fta. So there is a lot of integration going on of economies, but what fundamentally they need is the infrastructure, the kind of legal and Regulatory Infrastructure for trade. They have the people, they have hard working people, they have the resources, they need this kind of infrastructure. My hope is we can develop that in kenya, and then have it spread. Agoa is a good program in my judgment. It has been used less than probably most of the ambassadors you talked to wanted it to be used. But the problem with agoa is that it doesnt require any obligations, it doesnt require many obligations on behalf of the other of the african side. And one of the things we want to do, we want them to have trade for sure, but we also want them to build up this legal and Regulatory Infrastructure, so that people have confidence when theyre doing business there and that will make africa more prosperous. And better suppliers, but also better customers for america. So this is something that you and i have spoken about. I think it is a really important thing for us to do. But nobody has really negotiated a real High Standard, as high as you can do under the circumstances. The standard Free Trade Agreement. The african the chinese agreements are really not very useful and even for the most part, the european agreements are not thorough kinds of agreements. So our hope is that we can do this and that it will spread and well create this infrastructure and create kind of a trading culture, more of a trading culture, International Trading culture, i should say, they have a trading culture in africa. Thank you, mr. Ambassador. I yield back, mr. Chairman. And thank you. Thank you, congressman. Let me recognize the gentleman from illinois, mr. Schneider to inquire. Thank you, mr. Chairman. And ambassador, thank you for staying with us this morning. I first want to thank you for the work youve done as i greatly appreciated your engagement in this committee, your dedication and integrity. And thats why this hearing is important and why given limited time im going to request whatever questions youre not able to answer here youll provide more detailed responses in writing. Something we always agreed on is the importance of u. S. Leadership in global trade. I would argue that u. S. Leadership is more important now than almost any time in our history. No one knows what the global post covid economy will look like. I suspect it will be different from what preceded the pandemic as a post world war ii economy was different than what preceded it. There will be a Global Economy in our position and our ability to compete in that economy will be critical in dertermining the future prosperity of our children and grandchildren. If we want to ensure the longterm growth of our economy and prosperity for our citizens, the continued quality american jobs and expansion of american businesses we need to not just compete, we need to lead the world in trade including innovation and services. So im asking a series of questions and you can answer each. First, what role do you think the u. S. Should seek to ensure u. S. Economic success both short and longterm. What role will multilateral trade agreements and organizations play . And what role will Bilateral Agreements have . And how should or will the administration constructively work with us in congress to optimize these to protect and grow american jobs and expand u. S. Markets overseas . And before you answer those questions, let me touch on one other matter. Specifically as it relates to covid. Ive long been pushing to shore up our supply chains for critical goods. Were all aware of the many ongoing changes we have faced from ventilators, ppe, testing supplies, et cetera. Im deeply concerned about preparing for future supply issues, especially in the case of a second wave in the fall and longer term with the development of a vaccine that will need Global Production and distribution for such things as vials, syringes and needles. Can you discuss how the administration has adjusted our trade policies to prepare for these future needs and in particular working with the Coronavirus Task force and what work is still left to do. And finally, let me close with one last thought. I hope we can count on you to ensure strong and comprehensive agreement that is submitted to congress. This is an opportunity to ensure conclusion of a strong environmental chapter that shows true leadership on climate change. With that, mr. Ambassador, ill leave you the remaining time. It was a suggestion i answer in writing or plenty of time left, mr. Schneiders time, two minutes left if you want to talk about as much as in the first place, congressman if your view is that we should submit additional responses in writing, im happy to do that. So i didnt quite get that point, but im happy to do it. I certainly agree with you that we have learned a lot in this whole covid process. And one of the things we learned is that extended and i wrote about this in a a New York Times oped a couple of weeks ago. One thing we learned is there are risks in extended supply chains that businesses didnt realize. So that doesnt mean you cant ever have supply chains. Thats not going to be the case. When people make a calculation, that theyre going to save a lo dollar by having a supply chain run through another country, they have to calculate in the risk and they didnt calculate sufficiently. And we have seen that in a lot of a lot of cases. And youre seeing it right now in some of the things some of the members have mentioned and that is this issue of supply chains for the Automobile Industry that run through to mexico. There is things you cant control when theyre outside of the United States. So i think thats something we did, we did learn and hopefully it is something we live if a free market economy that businesses will understand and will when they make decisions in the future, will make that part of the calculation. And i talked to Business People who have certainly made that point. In terms of multilateral agreements, and Bilateral Agreements i expect the United States will have a combination of both. You know because we have spoken that i have a view that were better off in many cases having Bilateral Agreements but certainly is a role for multilateral agreements also. I thank the gentleman. With that, let me i thank the gentleman. Let me recognize the gentleman from ohio. Dr. Wenstrup, to inquire. Thank you very much, mr. Chairman. Ambassador, thank you for being here. Great to see you again, face to face, i appreciate that too. Congratulations on usmca and work on additional agreements. I have to say as everyone has pretty much said, we value the relationship that we have on this committee with you. And the expertise that you bring to the table with us on so many things. And what im going to talk about say little bit redundant from what youve been asked already today, but forgive me if you will. Right now we have a Public Health challenge obviously and with that has come an economic challenge. As such we now have a National Security challenge that i think we need to face. With this pandemic gives us the opportunity as it should for us to have an after action review. To take a look and see what the challenges were, what our short falls were, what our vulnerabilities were, and what they are, you know. Since we look at this, you know, one of the issues that obviously rose to the surface is the United States and some of our allies in the west, our reliance on adversaries, four things of great need. I was a doctor in iraq, if someone had told me that our protective equipment and pharmaceuticals were coming from an adversary, we would be pretty surprised at that. And i think most people are caught unawares. Or at least unaware of the potential danger that that gave us. I was in an interview not long after the pandemic started and we realized we were short on supplies. What is the answer . I said, well, what this administration has been doing, which is bringing manufacturing back to the United States. I think thats the key i give you and the president credit for bringing up the dangers of trade abuses and looking at china in particular. There is strategic games that put us at risk. Change is very challenging at this point. I think you said something a little bit earlier, we could have really done a lot, 10 or 15 years ago, but even tougher today. I appreciate that. So we talk about global effort from the west, one thing going through my mind, possibly strong and enforceable International Agreements on medical goods, pharmaceuticals, and i look at something we debated here a couple of years ago with the Running Shoes that are given to our enlisted when they join the military. Because uniforms have to be 100 domestic. There was only one running shoe that was 11000 domestic and we debated over that. Find it ironic that was a big deal compared to what were taking a look at now, right. Because it is not that simple. And we see import export restrictions, things we dont want to have happen. And we want to obviously encourage innovators and developers to be in the United States. But there is evenically if you puerto rico after the hurricanes, we were short on saline because we relied on one area domestically to produce something that is very necessary. So, you know, i think were challenged with what is our minimal domestic need and on what products. What is our minimal Domestic Production and on what products. And retooling capabilities and things like that in manufacturing. And i guess in this is going to require a lot of discussion, but ill leave the time to you. What should congress be looking at doing to dress this problem that we all agree exists . What can we do in trade that we all agree can have a huge impact, and where do we start . How do we encourage the innovators to come back, should we be looking at International Agreements. We said it could be a combination. Im glad to hear the open mindedness. If you have any newer thoughts, you already shared today, i appreciate it. Well, first of all, i of course completely agree with your conclusions. And the fundamental one is that we can never be in a position again where we dont have basic manufacturing, we think about these masks that we have and we dont how could we not have enough mask capability in the United States . Seems completely counterintuitive. And i would say i talked to some smaller countries and their view is we need a plan so we can all share and i look at those kind of plans are fine, i dont want to be against them. We have learned that in the final analysis our closest allies will keep this stuff for themselves if it comes down to whether or not there is their citizens live or do and so should they and so should we. It is not rational to expect people to send us a ventilator because of some trade agreement if they needed to keep their people alive. It is just crazy. Were not going to do it. Neither is anybody else. So while working with our people, and having these agreements is a good idea, but fundamentally i believe, i think the president believes, the United States has to have the ability to make these things in this country. And thats going to require a combination of a lot of the things you already have done, but also i think it requires tariffs. I think personally i think you have to have not crazy or out of control but enough incentives so that you have enough capacity for these things in the United States when the next crisis comes. Thank you. I yield back. I thank the gentleman. Let me recognize the gentleman from new york, mr. Suozzi, to inquire. Well, thank you mr. Chairman. And thank you ambassador being with us here today. I want to echo the comments of many of my colleagues in thanking you for your public service. You have really done a Great Service to the people of the United States of america, using your expertise and talent to help address some very thorny issues in what i believe has been a very forth right and balanced way. So i want to thank you for your service. I want to associate myself with the remarks of all of my colleagues who talked about the usmca and the importance of enforcement regarding labor and regarding the environment. And i want to spend the balance of my time just talking with you about china. As i said before, to you, here in the United States of america, we have believed that ever since nixon went to china, that the more that china was exposed to our own way of life, the more theyre exposed to our capitalist system, the more theyre exposed to our democracy, the more they become like us. That has clearly not happened. Obviously they have excelled under our trade policy with them over the past several years, much to our december rimt. Detriment. You referred to their economies as being an excitizst existent to us. A appreciate your hardline approach to china. Im concerned about a lot of chinas behavior, regarding its treatment of the uighurs, and the forced labor camps that they have, where many of those forced labor products are introduced into our supply chain and are brought here into the United States. And im concerned that this administration has not taken the chinese to task, even as part of our trade negotiations regarding their treatment of the uighurs and others. And when we have the power to do so currently, and it really hasnt even been brought up. In fact, a bill has been passed with the strong bipartisan support out of both houses that has not yet been signed by the president regarding the uighurs. I read your i skimmed i havent read it as carefully as i will, it is impressive, the article you wrote in the council of Foreign Relations about how to make trade work for workers, charting the path between protectionism and globalism and the parts i have read are just really fantastic and balanced. We talk about the role of trade, whether it is foreign policy, geopolitical goals or economic efficiency and maximizing output and consumer prices. How do we balance our desire to get more of the world to be like us as far as creating the society that we think it should be, that respects workers rights, that protects the environment, that creates a just world, with our desire to create an economically efficient system at the same time. How do we balance those things and what is your plan for dealing with china as we see them as rejecting these ideas that we have adopted in our country and much of the western world has adopted and getting them to be more like us, if they dont, recognizing that we cant continue to have this liberal trade policy with them. I cant hear you. Would you put your microphone on, thank you. Thank you very much for the comment on the article. I really do hope that members read it. I think it really does reflect the way a lot of us think about manufacturing and about trade policy. I would say on the issue of china generally, no one has done more than President Trump to try to rebalance our relationship with china. Particularly in my space where really nothing was done. Ive been howling about it. I dont say that as a partisan comment at all. Because i was howling about it in the 90s and howling about it ten years later and howling about it ten years after that. So no one has done anything and we have gone out and taken put major tariffs in place and done all the things that i think all of us would look back to. It was pretty obvious from the beginning we were letting this get out of control. When you ask about china, i always ask people to think about what is china . China is not a monolith it is several groups of people. There are people in china who are hardliners and doing a lost things we find really quite horrific. Not just to the uighurs, but in terms of our own relationship in the ambassador, i have to cut you off, im running out of time. I need to know what were going to do about the uighurs in the forced labor camps . Well, well, in first place, from the point of view of our trade agreement, our trade agreement doesnt doesnt cover this issue but i would say in terms of importation, on that specific question and maybe you and i can have a longer philosophical argument offline about this because i want to engage with you on it, but forced labor products cannot be shipped into the United States. Thats the u. S. Law, something strongly enforced. I thank the gentleman. I thank the gentleman. Let me recognize the gentle lady from florida, miss murphy. Thank you, mr. Chairman. Ambassador lighthizer, it is always a pleasure to hear from you. Im glad we figured out a way to hold this important hearing during a pandemic. As you well know, trade never ceases and it is especially critical when countries around the world need each other for support and combatting a deadly virus. I would like to focus on three separate issues, give a little background and ask you the three questions. First, is our ever green topic of seasonality. Which is especially relevant with usmca entering in force on july 1st. I would like to remind you of the commitments you made in your january letter to the florida congressional delegation as well as in our conversations including a commitment to hold a field hearing. Second, i think pretty consistent in my opposition to the current use of unilateral tariffs under section 232 or 301, think the National Security justifications for the current 232 protections are weak and abuse the law. I agree that china say bad actor that utilizes trade and investment practices inconsistent with their wto commitments. Im concerned that the current approach youve taken has done more damage to American Consumers and businesses than they have in making any changes in china. After all, tariffs are taxes on American Consumers and businesses. And more generally, what i think ive heard you say repeatedly in this hearing is that you feel tariffs are important to change american behavior too. Create enough pain so that theyll produce in the u. S. And stop buying from foreign supply chains. However, the pain felt by American Consumers and businesses is now being magnified by the pandemic. People are suffering through the loss of loved ones due to the virus, they have lost income from losing jobs, and they dont really have the extra cash in this moment for the burden of paying higher prices due to the tariffs. As it relates to businesses, theyre losing revenue, from closures and the economic crisis, and they lack the ability to afford the tariffs from the taxes from the tariffs, but they also lack the liquidity in the midst of an economic downturn to make significant supply chain shifts or even to make investments into development of new domestic manufacturing. So im concerned your trade agenda, youre use of tariffs and inflexibility on extending exemptions ignores the domestic factors in play right now. Finally with respect to brazil, you may have noticed i was the only democrat to not sign the letter to you on the prospect of enhanced trade with brazil. However, i do share the serious concerns of my colleagues highlighted about the direction and nature of the brazilian governments policies. But brazil is floridas number one expert partner. I dont want to preclude any enhanced trade. My questions are as follows. On seasonality, do you have any plans to hold a virtual hearing or in person hearing later this year. On tariffs, is it fair to say that as long as the Trump Administration is at the helm, my constituents should continue to expect to pay tariffs indefinitely, even while suffering through the pandemic . And on brazil, how you to plan to use the prospect of enhanced trade to influence brazil to change their policies, ensure theyre consistent with u. S. Values or is that even a consideration for you. Thank you. Ill yield the rest of my time to you to answer. Thank you, congresswoman. So wont surprise anyone on the phone to know that i dont agree with an awful lot of what you said. I think that chasing pure efficiency at the cost of manufacturing and at the cost of using u. S. Intellectual property is not a good policy. People who criticize tariffs, i like to say every now and then, what would you do and so far i havent had any response other than, well, in the face of chinese cheating, we would talk to china. I would suggest over the last two decades, people talked to china a lot and the situation got worse and worse and worse and worse and worse. Were dealing in a world of alternatives. In terms of seasonality, yes, we want to wait and have an actual live hearing. That seems to be field hearings. One in georgia, one in florida, that seems to be what members want. Obviously were going to be completely informed on what you want. We have talked to Verne Buchanan and others, and so our preference would be to have a live hearing. Thats what most members want and so im happy to do that. If thats what we can what members wanted, if it can be done safely. In terms of brazil what we are doing right now on brazil is trying to work our way through specific problems to have brazil open up and create jobs for america. Thats we dont have any plans right now for an fta, with brazil. But on this general issue of equating tariffs with pain, i dont quite get that. I think tariffs are a tool. They should be used to create jobs in america when they can be used to create jobs in america. America had a lot of prosperity using tariffs. On the other hand, if they become counterproductive, then thats something that in those cases i thank the gentle lady. With that, let me recognize the gentleman from texas, mr. Arrington, to inquire. Thank you, chairman neal and Ranking Member brady for this important hearing. Ambassador lighthizer, greetings from lubbock, texas. It is great to see you. What an exciting and happy topic to discuss with respect to trade. Let me say i cant think in recent history if not in our total history in this country that we have ever seen the far reaching and more substantive reforms for the good of this country in with respect to trade policy than we have seen in the last three years or so from this administration. Let me commend you for your leadership. And your dogged commitment, your laserlike focus to get these things done. Politicians have been talking about doing this for years. Decades, with respect to usmca or nafta, formerly known as, but this president and you put some shoe leather around that verbiage and went out and got it done. The success has a thousand fathers. And im thank to chairman neal and his leadership to encourage and move along this usmca and other trade related issues so they stay bipartisan. And im truly and sincerely thankful for that. But the youre his wing man and with his political will to stay the course, with the slings and arrows coming at him every day on this issue, recur perfprm republicans, fracture industpre industries of all kinds and criticisms about using tariffs and other things and the outcome is sweet. Sweet for the manufacturer, sweet for the worker, sweet for the american people, our economy, and for the future generations that will reap the benefits of greater prosperity and opportunity. So kudos to you and our negotiator in chief. And i think all americans recognize the Great Strides made in accomplishments, maybe the most accomplished trade team in the history of this country. I dont think thats hype and i dont think thats an overstatement. But i appreciate the comments in response to my colleague jason smiths you know that by the way, i wore my cotton tie just for you. We lost 50 of that market in china. And thats our Number One International market. And with all the other pressures and the price drop, we really needed cotton to be part of the priorities on ag commodities. Youve done that and i encourage you to continue to make sure that china makes good on their purchases in that Purchase Agreement. So thanks for your comments on with respect to cotton. Let me say this, with all the work we have done, led by you and the president , and we will only realize the full impact of this if two things happen in my community. I would love for your comments on this. Number one, enforcement, enforcement, enforcement. The chairman started this with the discussion of the importance with our enforcement, regarding labor provisions. All the above provisions. This is nothing but a piece of paper. All these trade deals with nothing but a piece of paper if theyre not enforced. And im confident that you put the same vigilance and vim and vigor you have in negotiating these deals behind enforcement of them, we will reap the benefits, but we have to stay on it. I know you know that. Secondly, wto, we can make these structural changes with china and it is a huge feat to have done that. There is more to go there as you know. But we need an International Mechanism like the wto, but if it doesnt function fairly, and for not just america, but for all participants, then what good is it . I would ask you, number one, how do we help you . What is best way not just for republicans, the ways and means team, how do we best support you to fix the broken system of the wto so that we can make all these gains that you negotiated and that we supported and worked on over the course of the last couple of years. Can i take a second, first of all, thank you for your comments. Secondly if you hadnt mentioned cotton, i would have left the meeting immediately on the theory that i was in some alternative universe. Thirdly, we have solved a lot of cotton, were going to sell a lot more. It is almost countercyclical because their apparel is down and i cited it before as evidence. Whatever number im up to, four, one thing that is bipartisan, enforcement, im a complete enforcement guy, i never had any sensible person come to me and say dont enforce. I completely agree with you on that. I dont understand why what we had, bipartisan, nonenforcement administrations and this time now in this congress, bipartisan, lets enforce. The wto i want to work with the members and it may make sense for some small group of us to get together and not have a hearing, but just talk. So i would like to suggest that to the chairman and the Ranking Member at some point and just kind of talk through this stuff. Thats a good point. Let me recognize the gentleman from virginia, mr. Beyer, to inquire. Thank you, mr. Chairman, very much. And ambassador thank you very much for being here. I just want to you received a letter signed by many of my colleagues underlining the inadvisability of pursuing an agreement with brazil at this time, whether a full fta or lesser agreement. I want to take the opportunity to underline the importance of that letter and how deeply held the views expressed within most of the democrats on this committee are. The usmca relied on a bipartisan process, bipartisan agreement and i dont think thats going to be possible in the case of brazil, at least not right now. Mr. Ambassador, i want to build on the previous discussions about hong kong. In the past, the administration largely separated human from trade issues in negotiation with china, that seemed to be the approach of government in phase one. Now with the steps in regard to hong kong, does this signal a new approach, especially with particular regard for the ongoing and horrifying situations . I know you want to keep your discussions with your lane. There is a trade nexus here with forced labor and other issues. Certainly resonated with me. And i think that the hong kong issue the president has taken a very bold step, and i think thats important. So in terms of it being a new policy, i dont know how to respond to that. We had a very firm policy with china, we will continue to have one. I do think it is important that china abide by their agreement. I think there are real benefits not just for the United States but the world in the structural changes. As well as in as well as in the purchases for the United States so i personally think we have to find a way to create change. But not destroy the benefits that we do get out of it, out of trade. On the issue of brazil, i remember your letter well, i you and your colleagues, i understand, i talked to several members about it. I realized that there is no appetite among a variety of people for an fta. I would say and i tried to make this point before, we are always working with countries to work out specific problems. It is not an endorsement of their policies or anything else, but we work and i got a list here which i wont go through, but of 45 or 50 things that we try to work out for american businesses and agriculture with countries, we will continue to do that with brazil. I understand your sense very clearly on the issue of fta with brazil. Thanks, ambassador, very much. The Financial Times just reported that secretary mnuchin sent a letter to the eu counterparts about Digital Service taxes, pulling out of those Digital Service tax negotiations and obviously there is the existing 301 investigation on dsds and, you know, Many American businesses are rightfully concerned about them. But can you give us any perspective on the administrations negotiations here on why they pulled out of negotiations on dsds . Could you turn your microphone on, mr. Ambassador . Thank you. The context is this. We have a situation where a variety of countries have decided that the they want to that the easiest way to raise revenue is to tax somebody elses countries and those happened and they happened to be ours. And theyre also in a position where this is like a leading u. S. Industry, this whole digital trade area. So it is a sweet spot, easy for them, senator russell used to say many of you heard this, dont tax me, dont tax me, tax the man behind the tree. We have a process. We put in place these 301s so we can take action if people treat us unfairly and it burdens our or impacts our u. S. Congress. We had a negotiation going on, we have found at least until now that we have we were not making headway on pillar one, the most Important Pillar in there. The other people getting together and deciding theyll take action with the United States is something not acceptable f you ask me what the answer is, we need an International Regime that not only focuses on certain size and Certain Industries but where we generally agree how we tax people internationally. I think there is there is clearly room for a negotiated settlement. At that point, we were making no headway on the secretary made the decision that rather than having them go off on their own, he would say were no longer involved in the negotiations. But if youre interested in this, i would be happy to sit down and go over it with you, i have a lot of ideas on this too. I thank the gentleman. Thank you very much. Thank you. Let me recognize the gentleman from california, mr. Gomez, to inquire. Thank you, mr. Chairman. Mr. Ambassador, good to hear from you. Im watching and listening at the same time. It has been a while. I just want to kind of say that ive enjoyed the process of the trade working group, negotiating with you. Youre difficult at times, accommodating at other times and have been a person we can reach out to and have an honest conversation, even if we disagreed. The usmca as you know, it was a big deal. The counsel on Foreign Relations wrote on december 11th, the day after we announced the agreement, the usmca breakthrough, the new u. S. Trade consensus and what it means for the rule, and this was a week before we had a vote, where we had 385 aye votes and 341 no votes. It wasnt in reference to the vote count, even though the vote count was better than anybody ever suspected it would be. What do you how would you define the new trade consensus and what does it mean for the u. S. And the u. S. Role in the globe when it comes to trade . Thats a great question and i before i say anything, i want to thank you for our working so closely together on that. It was a real pleasure from my end. And at the beginning i dont know if you were on, i said im missing members and one of the ones i was thinking of was you because we have a Good Relationship and i do enjoy that. I also would command in terms of thinking about trade policy, i wrote a piece, it is long, because they like long pieces, but in the Foreign Affairs magazine and it deals with these issues in a way i think you will that will resonate with you and hopefully youll get a chance to read that. If you ask me what is the consensus on trade, the consensus is one that were going to make trade deals that are in the interest of the United States. And not just in the interest of multilateral corporations, but American Workers and farmers and ranchers. I think thats fundamental, two that were going to enforce every single agreement, were going to create new new mechanisms where necessary to make sure that we have actual enforcement across the board in everything we do. And some wouldnt agree but probably that we can do this, we can make real headway. Bilateral kind of a way. Not necessarily going entirely through the wto. So to me thats this rebalanced, updated, and the other thing that i think was important is that congress had a fundamental role. And congress did not just have a role at the end, right . You all know congress had a role on day one. When it didnt matter who was in the majority or who was in the minority, congress had a role, we worked with the people that want to have a fair, balanced relationship down there, and we did it on the first date and we did it on the last day. I think working that way pays dividends. No, and i agree with you. I think that it sends a message that it is not trade agreements are not just how much it helps grow a country our countrys gdp, but also what we do to enforce the agreement, how does it protect workers, protect the environment, how does it move Different Things forward. All with the eye on balance and how does it, of course, help the American Worker. But i would disagree. I think that it became better when democrats became the majority. That might be from my perspective. I may not fully endorse that position. But im not going to spend the rest of the day arguing with you about it. So real quick, i just want to ask a couple of questions and quick succession. One is the National Labor Relations Board just found that arsarco, a group in mexico was in violation of some labor rights. Want to get your how are you going to how is usgr office going to plan on remedying that situation in mexico. And another question has to do with the new office of american enterprise. What is the aces Office Mandate and how does it relate to the usmca . Two separate questions. Well did i stump you . Are you there . Hello . All right, yeah. Im sorry. So what was the first question again, the second question is we we want to have an office, the purpose of which is to try to determine what we can do to bring manufacturing back to the United States. So i think that in some cases other countries will focus on why is this why is this specific industry not manufacturing in the United States. And what we wanted to do was have a group of people who as their job sit back and say, okay, fine, if we make these or those changes, we can bring this industry back. And, jimmy, im sorry, i didnt get the first question. I cant remember the first question. The question with arsarco on that, what we expect to do is when we get this in effect, on july 1, were going to investigate all complaints, thats the complaint that were going to investigate. Well work with congress, of course, on it, and if we think if we think there is a valid complaint, well start a consultation process and begin the state to state dispute settlement. I thank the gentleman. Let me recognize the gentleman from georgia, dr. Ferguson, to inquire. Well, im going to return dont worry about him. No, im not going to miss moore, would you mute, please . Thank you. Dr. Ferguson . Ambassador lite highs, thank you for coming to capitol hill today. I happen to be sitting on a sitting on my porch, just a half a block up from business that you probably remember well, west point stevens. Used to be home to about 35,000 workers and following nafta went away. So we truly appreciate your work in bringing manufacturing back to the u. S. And your work in your role as trade ambassador. Really want to focus my questions today and comments today around around intellectual property. I think it is pretty remarkable that American Manufacturing has made the rebound it has. I think there are a lot of components to go into that trade deal certainly as a as a critical component, i think having a competitive tax code is a critical component of that as well. But, you know if were going to if were going to stay at the forefront of manufacturing and the u. S. , we need to make sure that our intellectual property is protected and we also need to make sure that our that intellectual property that was developed here can be brought back here as well. Can you comment on what you think from a trade standpoint is needed to be able to bring that manufacturing to be able to bring ip back to the u. S. And also to protect intellectual property that is developed here. If you can comment on that, i would appreciate it. Thank you, congressman. So i would say, first of all, i agree completely with your premise. I think intellectual property really is the heart of manufacturing for the next generation. And if you dont develop it, and if you dont protect it, then youre going to fall behind very, very quickly. And you see that in some areas. But fortunately the United States does have good protection of intellectual property and what were trying to do is get others around the world to do it. Important part of the china agreement and china has taken scores of steps to implement the structural part of this agreement and that relates to intellectual property, they have done a lot of major steps. They have been a source of intellectual property, lack of protection of intellectual property, theft over the years, so we work in all of our trade agreements to have state of the art obligations that are enforceable to protect intellectual property. We have those laws in the United States. And we try to protect them. I would make another point too, this is outside of my area, but it is something that is worth noticing, i think that noting, one of the things we do with our trade law, our tax laws is we allow countries to put their intellectual property in other countries in order to get in order to get lower tax rates. I wont go through the whole mechanism. Many of you members are aware, but i think discouraging things like that is Something Else that we ought to do. We have to protect the intellectual property, have to reward research and development and we have to to the extent we cant keep intellectual property in the United States. Dr. Ferguson, are you muted . Youre muted . How about that . Is that okay, chairman . Works fine. Okay. Thank you. Ambassador, im glad to hear you say what you did. And i look forward to working with you and the committee to develop policy that not only, you know, protects current intellectual property, but also creates the environment where research and development makes sense to be done here in the u. S. And keep that here. And while you touched on the tax code and i know that as you have been very clear, you know in your comments about your focus on the trade piece here, i was glad to hear you mention that. We want to do things not only from a trade perspective, but also from tax perspective that really make bringing our intellectual property home, something that makes sense for companies. And it doesnt matter if were talking about the arts, things that may be in the film industry, whether it is technology, whether it is genetics, whether it is biopharmaceutical research, the dollars and Technical Expertise that american minds and ingenuities and taxpayers invest in need to be here. So, again, thank you for your comments. I look forward to working with you and doing all that we worki with you and doing all that we can to bring it home and also to make sure that this is the best place for research and development to be done. I yield back. Thank the gentlemen, let me recognize the gentleman from nevada. Thank you very much mr. Chairman and to the Ranking Member and to you for joining us today. You know we covered a lot of ground today. Were coming toward the end. Im one of the members that ended up supporting the agreement because i believe that the aims were right. And that there were a number of major improvements so one of the things that i did express to you in one of our prior meetings is the challenges regarding work force preparedness, Skills Development and training. We cant just talk about it without talking about training of the American Work force so particularly post covid and the moment that were in right now where theres record unemployment in my home state of nevada were looking at unemployment right now and we have 500,000 people that already claimed unemployment. Of course this hurt our biggest industry sector and the hospitality and Service Sector but theres other sectors also impacted so my question mr. Ambassador is that you have stated that the labor provisions are a crucial part of the usmca agreement. I agree. All of those provisions depend on the ability of workers to learn and know their new rights under the law and to be able to actually exercise their rights without fear of intimidation, threats, retaliation or violence. Congress dedicated unprecedented resources and funding to ensure workers get the hands on information, education and training they will need to be able to overcome the obstacles. So i understand that the u. S. Department of labor plays an Important Role in allocating these resources but what are you doing on the inner agency Labor Committee to ensure that those precious taxpayer resources are effectively used to educate and empower workers on the ground in mexico and separately what can we continue to do . I think i asked you before working through the chairman and make it a priority. Its abyssmal and tries to work. Particularly the African American and latino communities so id like to know specifically what you are doing regarding the interagency Labor Committee and what we can do to help improve Work Force Training here in america. Thank you. Thank you congressman. I agree with your point about training. The administration has done a good job and trump has really made that a priority and Many Companies doing extra training and theres examples of that and i go to those meetings and its not my initiative and i think its an important initiative. We have to prepare people for the jobs that we have and for the jobs that are coming. When you say change the labor and Business Culture i agree with you. Thats the fundamental thing. Ill talk for a second about the inner agency group but the most important thing in changing that is one that they have a president down there that i believe is committed. I think he has resistance from the Business Community and others but i think that im getting down to the wire. The chairman is going to cut me off. What is the inner agency Labor Committee role . Thats the role that we in congress have oversight over. I dont have oversight over the president of mexico. So at this point, we are in the position of and the first meeting was in april and what theyre going to do is closely monitor the situation in mexico and really make sure that we have complete enforcement of the agreement. Thank you very much. I yield back. Let me recognize, i believe to conclude the gentlemen from kansas, mr. Estes to inquire. They have opened up new opportunities for american jobs and the u. S. Had a continuous stream of increased payroll and through march of this year. Id like to enter that into the record. So for decades various administrators have talked tough on trade reform but failed to confront the unfair and deceptive trade practices. Youre also driving reform for the wto which was absolutely necessary for that organization to fill a free trade role. It was great to see the National Treatment for music creators and i would encourage that we seek the same provisions as we continue to work with the u. K. To make sure that American Companies are not targeted. And it requires a consistent approach across all countries. Lastly, a letter supporting for gsp eligibility last year. Id like to see that move forward and Hope Congress will reauthorize the Overall Program set to expire. And america can and will compete on the world trade. Through the phase one trade agreement with japan. Its important that we build upon the success of this agreement and continue to engage toward a High Standard phase 2 agreement that benefits additional sectors of the u. S. Economy including Manufacturing Services and agriculture. Could you provide us an update. Thank you. After 19 times of turning it on i immediately turned it on. I sense a trend. It wont last. Thank you. First of all, we have seen an enormous amount that we need. And so were very happy with the phase one deal. With respect to phase 2, my guess is were still a few months away before we start that and theres some products left out that we want to catch and theres some other things that we want to cover and then they have a whole variety of things that they want to do but my guess is that we will start that phase 2 sometime in the next couple of months. We have been slowed down by the fact that we have this virus and havent been able to meet. Its still something to do. Its one of the best single trade agreements the United States ever entered into and its paying dividends. It was the motivation for a lot of the whole ttp was the agriculture issues in japan and we got those, you know, 99 of it accomplished. Great, thank you. It has been positive. Before i run out of time i want to mention thank you for your work on the Free Trade Agreement with kenya. Not only is that going to be beneficial to our two countries but it opens the door for other trade agreements with other countries in africa. So appreciate the work that youre doing in that regard and thank you for spending time with us today. Thank you, congressman. I thank the gentleman. Please be advised that and your answers will be made part of the formal record. Its routine. Theres still glitches. Theres plenty of glitches to defend on these things. Were going to learn that in a lot of ways its accelerating preexisting trends too. They got sped up a lot in the economy. More Online Shopping and things like that. So thats something about. And mr. Chairman with that in mind you advised us to go big and we have. Our National Debt is approaching 27 trillion. Our debt service on an annualized basis over 400 billion a year. I do have concerns about our ability to manage that. To pay that bill if you will moving forward and any counsel and guidance that you might share with we lawmakers as we contemplate some degree of fiscal responsibility going forward. First of all, i think congress did go big. It has gone big and i think that its been appropriate and i think that it will be well judged overtime. In terms of, you know, the National Debt, i think that time will come when its time to return to the concerns of fiscal sustainability. Sustainable fiscal plan is one that you stay on for many years. Its not something that we flip a switch and really go into difficult times. Its really ideally what you do is you get in a situation where the economy is growing faster than the debt and you stay on that path for a long time. Thats how successful countries have done it. Well need to get to that and we will. Mr. Chairman, thank you for joining us in this virtual setting during the strange times that were in. Previously when we come before your committee we continue to build on this growth that were all experiencing. Now id like to focus on getting back to where we were precoronavirus and as we talked about before, Small Businesses are the main economic engine. As you know im a Small Business owner and were the job creators in our country and im one of those that believes we could have growth in the fourth quarter. I feel pretty good about that. What do you think needs to be done to support the main street businesses as they attempt to remain viable as the lock down across our country ends. I think to the extent that we can continue to observe those, keep your distance, wear a mask, that kind of thing, thats going to help. That goes with a successful reopening so those things are really important. I also think, you know, we at the fed need to keep our foot on the gas until were really sure that were through this and thats certainly our intention. I think that you may find that theres more for you to do as well. And as a traditional snapshot of the Banking Industry during this unique time will likely not paint a rosy picture based upon the recent shutdowns and phase in recovery. However bank capital levels and reserves remain historically strong as we talked about and theres many borrowers that could return to profitability once the economy rebounds. So mr. Chairman, what steps are being taken to ensure that the regulators are taking an approach to oversight and how is that being communicated to the various Federal Reserve district banks and the