(Remarks as Prepard)
Almost five months ago, just before the elections, I was asked to give a speech on taxes and trade. I started off discussing how it wasn’t always easy being an advocate for a free trade agenda and a tax code that promotes international expansion rather than isolationism.
I said, at the time, that:
“Not since the 1930s has so much uncertainty gripped investors, employers and families. The unemployment rate here in the U.S. has been stuck above 9 percent for 16 consecutive months. This uncertainty reflects historic and dangerous levels of U.S. debt, nearly $700 billion in new taxes so far in this Congress, a $3.8 trillion tax hike still looming on the horizon, and the hazards of paralysis in U.S. trade policy.”
Well, we managed to avoid the tax hike (at least temporarily), but as of today, the unemployment rate has been at or above 9 percent for 21 consecutive months; the debt has only grown and – despite a lot of good work on the South Korea trade agreement and a lot of good rhetoric coming out of the administration – I fear we still face the hazards of paralysis in U.S. trade policy. I mean to change that.
Under the Democrats’ control, we did not hold a single hearing on our pending trade agreements since they were signed three and a half years ago – not Colombia, not Panama and not South Korea. Well, as you might have guessed, I’ve got a different agenda, and it includes opening markets around the globe so that American businesses, farmers and ranchers can sell their products and grow their operations – and jobs – here at home.
In the first few weeks of this year – and before many committees had even organized – the Ways and Means Committee held a hearing on all three pending trade agreements. Later this morning we will hear from the United States Trade Ambassador, Ron Kirk, who has never been invited to testify before Ways & Means in the nearly two years that he’s been in office. And, there will be more to come. I intend for the full committee and the trade subcommittee to be very active and to hold this Administration’s feet to the fire when it comes to how it will meet its stated goal of doubling exports. To me, that isn’t an option; it is something we must do for American workers and employers.
Now, let me be clear – I like Ron Kirk. I firmly believe that he is dedicated to expanding our export opportunities through new trade agreements. During the South Korea negotiations, he was tireless in his efforts to resolve the outstanding auto issues successfully. But that was South Korea and, unfortunately, it seems we need to keep reminding the Administration that we have three pending trade agreements, not just one. This morning, I intend to press the Ambassador on the need for all three agreements – Colombia, Panama and South Korea.
As you know, these agreements have the potential to add over $10 billion to our economy and will help to reinforce critical strategic partnerships. Using the President’s own measure, that kind of expansion to our exports could create up to 250,000 new American jobs. At a time when we just saw the worst private sector jobs report in months, I would expect the Administration to be more vocal and forceful when it comes to our trading opportunities. Instead, the President barely mentioned Colombia and Panama in his State of the Union address – creating further skepticism, if not outright doubt, as to this Administration’s dedication to free trade.
Frankly, I am very disappointed in the state of play on our Latin American FTAs. I have made it clear to the White House that all three agreements should be considered in the first six months of this year.
Panama has made significant progress in increasing transparency of its financial sector and signed a Tax Information Exchange Agreement late last year. Yet, there is no plan to move Panama from the White House. As to Colombia, we’ve seen no roadmap, no timetable, nothing from the Administration about what it wants the Colombians to do – not even a commitment to act. That is unacceptable.
In short, the Administration’s absence from the Latin American region is both troubling and mystifying. Some of our greatest trade policy successes have occurred right here in our hemisphere.
I understand that the politics of trade can be complex. I am one of only three Republican members on the committee at the time that NAFTA was considered, which I supported. I have seen first-hand how the unions demagogue this and other agreements – usually while the business community sits quietly on the sidelines. But even in states like Michigan and Ohio, the facts are indisputable: NAFTA has been a tremendous success for America.
CAFTA and the Peru agreements are two more great examples of the benefits of trade agreements to U.S. workers and businesses. These agreements quite literally reversed our trade deficits with those countries. Given our clear and convincing success in Latin America, the failure of the Administration to engage aggressively and replicate this success with Colombia and Panama is inexplicable and inexcusable.
Worse yet, the lack of U.S. action in Latin America has opened the door for our competitors, like Canada, the EU, and China. We are literally falling behind these nations and losing market share to their goods and services as they pursue their own trade agreements and relationships.
Last year, Frank Lucas – now chairman of the Agriculture Committee – and I released a report showing that the implementation of the Colombia – MERCOSUR agreement has already cost American farmers and ranchers millions of dollars in exports because we don’t yet have our own agreement with Colombia in place. I updated this study just within the last two weeks, showing that this trend has continued and that, in contrast, our agreement with Peru has allowed our farmers to seize new market share.
Falling further behind is not an acceptable trade policy, and it is not an acceptable outcome for the United States of America. We must get back in the game, and we must prepare to compete on the international stage – and not just in Latin America, but in Asia and all around the globe.
Due to the hearing this morning, my time with you is short. So, let me close with a few words about China – a country that while representing our largest export opportunities, is also a country that flagrantly disregards its international obligations and seeks to impede fair commerce at every opportunity. China blatantly steals the intellectual property of American businesses and grossly subsidizes domestic industries — and its list of trade abuses goes on and on.
Yet, some in Congress want to talk only about currency manipulation. That is a mistake and misses the far larger issues we have with China. While successfully implementing the South Korea agreement would provide us with a critical counterbalance in the region, part of our China strategy must include resumption of our bilateral investment treaty negotiations.
Again, the Administration’s lack of action here is as confusing as it is damaging to the interest of U.S. businesses and their workers. Again we are sitting on the sidelines while our trading partners are aggressively moving forward – many of which have already signed investment agreements with China that give their investors more rights in China than U.S. investors have. The EU just announced last week that it will negotiate its own investment agreement with China.
Given the hurdles I’ve just laid out, some of you may think I should be discouraged. I’m not. Each of these areas – Colombia, Panama, South Korea, China…not to mention the Trans-Pacific Partnership talks and the Doha Round – all represent an opportunity for this Congress and this White House to work together. More importantly, they represent an opportunity for American employers and workers at a time when our economy needs every bit of help it can get.
Before I take any questions you all might have, let me ask you all for a bit of help. I know you are already involved: you are here today and Doug has done a tremendous job of getting the forum together and bringing these issues to the forefront. But I need you to do more. Increase the pressure on this White House to act on all three pending trade agreements, and just as importantly, explain back home why we need these agreements. If we do that together, I am confident we can and will get the trade agreements implemented.