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Brady Opening Statement: Hearing on Enhancing the U.S.-EU Trade Relationship

July 27, 2010

Mr. Chairman, thank you for convening this hearing.  You’ve shown great leadership on these issues in your role as President of the NATO Parliamentary Assembly.

Given the sheer scope and size of the U.S./EU trade relationship – we are, after all, each other’s largest trading partners – it is important for us to find ways to collaborate on trade and enhance our transatlantic ties.  

Today’s witnesses will discuss a number of important topics.  I would like to address three of them.

First, I look forward to hearing about ways we can address some of the regulatory barriers our exporters face in the EU.  I’d like to explore how the current transatlantic architecture can be strengthened to better address these barriers and improve the business environment on both sides of the Atlantic.  I’m also interested in ways that the Congress can strengthen its relationship with the European Parliament, which now plays an expanded and important role in EU trade policy. 

Second, we must work together to avoid protectionism worldwide and liberalize trade globally.  The United States and the EU have traditionally been close allies and leaders in multilateral trade negotiations.  However, I am concerned that the EU’s defensive stance on agriculture negotiations seems to be preventing us from collaborating effectively.  Ironically, the EU’s exclusive focus on agriculture is hurting its service and non-agriculture sectors.  In my view, the EU must step up and support the ambition we’ve been seeking from key emerging economies, including Brazil, India, and China, so we can achieve a Doha Round that is ambitious and meaningful.  We must work with – not against – each other to reinvigorate negotiations and to improve market access offers. 

Third, I worry that America is falling behind Europe when it comes to opening new markets and finding new global customers for our products and services.  This is one aspect of EU trade policy that can be viewed with a certain amount of envy.  Specifically, the EU’s active and aggressive bilateral trade and investment agenda is currently far more ambitious in scope than ours.  The EU is negotiating bilateral trade agreements with a large number of countries, including China, India, Canada, and the Association of Southeast Asian Nations (ASEAN).

The EU’s active trade agreement agenda allows EU exporters to win an advantage over U.S. exports, jeopardizing U.S. jobs.  This advantage comes from establishing lower tariffs for European products, giving them greater market access.  The EU also obtains a significant leg up because its agreements force its partners to adopt EU standards and regulations, creating a severe disadvantage for U.S. products into those markets.

In addition, by ceding the playing field to Europe, Congress and the White House are making it more difficult for our negotiators to conclude strong agreements.  For example, most EU trade agreements include generally less ambitious intellectual property (IP) protections than high standards commonly found in U.S. trade agreements.  It is difficult for the United States to subsequently negotiate high-quality IP protections with a partner that has already adopted the lower EU standards. 

In addition to negotiating trade agreements, the EU is developing an active bilateral investment treaty negotiating agenda.  These agreements would provide EU investors with important protections that U.S. investors, and their employees, would not enjoy.  The EU intends to pursue investment treaties with China and Russia in the “short to medium term” and to add an investment chapter to pending FTA negotiations with Canada, India, Singapore and MERCOSUR.  In contrast, U.S. investment treaty negotiations with China and India are effectively on hold. 

While the EU is aggressively seeking to open new markets for its exports, we must counter the EU effort with an aggressive strategy of our own, beginning with moving the pending trade agreements. It is imperative for the United States to break open new markets both to grow U.S. exports and to prevent the EU from exporting its standards and regulations.  I am excited that President Obama has identified a timetable for moving forward on our Korea agreement, and I hope he will launch a similar plan for Colombia and Panama as well.

Thank you, Mr. Chairman.