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Brady Opening Statement: Hearing on Trade Aspects of Climate Change Legislation

March 24, 2009


Mr. Chairman, you have commented that the globe is smaller and more interconnected than ever, and I couldn’t agree more.  In this era of increased globalization, the prosperity of American families is intricately linked to the global market, and therefore America’s prosperity is intricately linked to its international competitiveness.

Millions of American jobs depend on international trade.  Last year, international trade contributed more to U.S. economic growth than any other factor.  Expanded trade cushioned the blow our economy took from the collapse of the housing and credit markets.  Exports have supported American jobs as domestic demand has declined.  So if we seek a return to prosperity, it is not enough to merely Buy American, we must Sell American products and services throughout the world. 

Because of the importance of international trade to our economy, we must pursue policies that enhance the international competitiveness of American workers.  One way to do that is to pass expeditiously the three pending free trade agreements with Colombia, Panama and South Korea.

These agreements will add billions of dollars to U.S. exports and economic growth and support good paying American jobs.  Mr. Chairman, I am ready to work with you, Chairman Rangel, and the Administration to address any concerns about these agreements and bring them to the floor of the House for a vote.  As part of that effort I urge you to schedule a hearing on the three pending trade agreements as soon as possible.  The Trade Subcommittee has not held a hearing on the FTAs in over two years.  In contrast, the Foreign Affairs Committee has already held three hearings on the agreements in this Congress alone.  

The topic of today’s hearing – the impact of climate change legislation on the U.S. competitiveness – is another issue that has garnered interest across the Congress.  While there are genuine and legitimate questions surrounding the science of global warming, and I urge Congress to examine them in depth, for the sake of this hearing we will focus on the trade implications and impact on American jobs as a result of imposing a cap-and-trade system.

I am very concerned about the impact the hundreds of billions of dollars in new energy taxes included in the President’s budget will have on America’s international competitiveness.  These energy taxes will raise costs for every family and business in America.  The EPA has estimated


that energy taxes from cap-and-trade like those proposed by the President would damage virtually every sector of the American economy and would be particularly devastating for

American manufacturing.  The higher costs imposed on American businesses would make them uncompetitive with the imports they compete against here and make American exports
uncompetitive in the international market.  The President’s new energy taxes would create the ultimate in an unlevel playing field that would result in scores – actually millions – of Americans losing their jobs.

Energy Secretary Chu recently advocated establishing a carbon tariff against other countries, as have some Members of Congress.  I have several concerns about these proposals.  It appears that these tariffs or other charges on imports would further increase costs on American families and businesses, are unlikely to be effective in limiting the damage to import competing industries, do nothing to assist U.S. exports, and could quite possibly start a global trade war. 

As proposed, U.S. trade measures alone would cover only a fraction of global trade in carbon-intensive goods, have limited impact on overall industrial CO2 emissions, and fail to recognize that global demand will see the most growth in foreign markets in the years ahead. Moreover, trade measures provide little leverage internationally, given that the U.S. accounts for only 10 percent of global demand in the five carbon-intensive  industries, the imported share of which accounts for less than 3 percent, according to the recent report Leveling the Carbon Playing Field produced jointly by the Peterson Institute for International Economics and the World Resources Institute.

These trade barriers would conflict with longstanding American bipartisan policies in regard to developing countries.  Many of the same countries that we provide with access to the U.S. market through our preference programs could be subject to these new tariffs. In effect, we would be lowering tariffs on one hand and raising them right back up on the other, more than offsetting any preference benefits and leaving workers worse off in these developing countries. 

Mr. Chairman, these are just some of the reasons why I am very concerned about the impact of climate change policies on America’s international competitiveness.  The Ways and Means Committee, and this subcommittee in particular, must play a key role in this debate.

As such, I am anxious to hear from our witnesses today and to have a frank and honest discussion with you Mr. Chairman and the other Members of the Committee, because we must carefully consider the impact of the President’s proposed energy taxes on America’s international competitiveness.