“For too long, American businesses, workers, farmers, and ranchers have faced an unlevel playing field. Yet the previous administration refused to take the enforcement action needed to protect American interests…”
As prepared for delivery.
“Thank you to the Subcommittee Members and witnesses for joining us today for our first Trade Subcommittee hearing of the 119th Congress. I anticipate this will be a busy Congress for the subcommittee to complement a rigorous trade agenda from the executive branch.
“I would also like to acknowledge Congresswoman Linda Sanchez from California, our new Subcommittee Ranking Member. I look forward to continuing our bipartisan efforts on the subcommittee with you.
“Now turning to the topic of today’s hearing—American Trade Enforcement Priorities.
“On his first day in office, President Trump laid out a strong vision for our nation’s trade policy through the America First Trade Policy memorandum. This vision builds on the many successes of President Trump’s first term, and after four years of inaction, I am confident we can work together to right the ship.
“For too long, American businesses, workers, farmers, and ranchers have faced an unlevel playing field. Yet the previous administration refused to take the enforcement action needed to protect American interests, which is why I was glad to see strong and strategic trade enforcement featured prominently on day one of the Trump Administration.
“I appreciate the Administration established a deliberative process to incorporate congressional and stakeholder feedback into the American trade agenda. This is precisely why we are holding this hearing today—to ensure a bipartisan opportunity to outline and clearly demonstrate congressional trade enforcement priorities while the Trump Administration reviews and analyzes key trade enforcement issues.
“Effective enforcement starts with using all the tools at our disposal to ensure fair treatment for American products, including the enforcement tools established in our trade agreements. Because of President Trump’s vigorous engagement on trade and successful negotiations during his first term, the Biden Administration inherited two new agreements with strong enforcement mechanisms: the United States-Mexico-Canada Agreement and the Economic and Trade Agreement with China, often known as the ‘Phase One Agreement.’
“Unfortunately, the Biden Administration declined to enforce the China agreement entirely and had a mixed record of success in enforcing USMCA. For instance, China did not fulfill its structural or purchase commitments for U.S. agricultural products and faced no consequences.
“Under USMCA, American energy and mining companies face continued discriminatory treatment in Mexico, and in some cases, outright expropriation. The Biden Administration filed a Request for Consultations related to many concerning energy issues under USMCA’s dispute settlement mechanism in July 2022, which I supported. However, the Biden Administration never took additional steps to pursue this dispute. In some cases, the Biden Administration actively worked to undermine the interests of U.S. companies facing expropriation.
“Similar enforcement challenges were also seen with Canada. USTR failed to effectively enforce U.S. rights regarding dairy market access, and it took months of bipartisan urging for the USTR to challenge Canada’s discriminatory digital services tax. However, this challenge, like so much under the administration’s passive trade posture, languished in consultations.
“We must recognize enforcement delays, particularly with key partners like Canada and Mexico, not only hinder market certainty for domestic industries but also embolden trading partners to take similar actions. When Mexico provided the United States with ample warning of their intentions to restrict U.S. biotech corn exports, it was met with slow-walked complacency. While the dispute panel eventually ruled in our favor, I am disappointed it took four years when immediate engagement by the Biden Administration could have prevented the policy from ever going into place. Standing up for science-driven, rules-based trade requires a sense of urgency, and I am concerned the previous administration’s record of undermining or delaying enforcement will not only lead to similar issues under USMCA but also encourage other countries to follow suit.
“Contrast this with the first Trump Administration, which alongside many other enforcement initiatives took swift and decisive action using Section 301 against the Digital Services Taxes proposed by France and other nations. Just last week, the President announced these discriminatory policies would continue to be a focus of his enforcement policies during the current term.
“On digital trade issues, this administration will not stand by as foreign governments, including allies and partners like the European Union, Canada, and Korea, attempt to regulate American innovators out of existence. Each of these markets has enacted or proposed regulatory measures specifically aimed at imposing massive fines and regulations on our companies. Our closest partners should not be allowed to target our businesses.
“Creating an environment where American businesses can thrive and continue developing world-leading products and services doesn’t end with digital trade. Giving our partners a pass on unjustified practices, such as the TRIPS waiver expansion, can have a chilling effect on advancements in many fields, not the least being health care. Strong IP rules and enforcement are essential for fostering innovation, economic growth, and prosperity; but U.S. companies must operate and compete in countries with weak IP protections. To combat this, USTR should take an active role in ensuring foreign governments respect and safeguard American innovation or face real consequences for failing to do so.
“There is no shortage of issues to discuss today, and I look forward to a robust conversation.”