Good morning. Thanks for that warm introduction, Sarah. I want to thank Judge Morris and the Global Business Dialogue for having me to discuss the future of the U.S. trade agenda. GBD has done so much to advance trade policy through its informative programs and analysis, and I’m pleased to participate today.
Since I have been Ways and Means Chairman, we have had great success implementing free trade agreements – proven and effective job creators in the U.S., that ensure that the top-quality goods and services produced here in the U.S. can be exported all around the globe. We are already reaping some significant benefits from the Colombia, Korea, and Panama agreements, which have strong bipartisan support because they reflected the priorities of Congress and the American people.
The key that ensures the U.S. unlocks our full potential as we negotiate trade agreements is Trade Promotion Authority, which has been my top trade priority for the last two years. We are in the midst of three major trade negotiations – the Trans-Pacific Partnership (TPP), the Transatlantic (U.S.-EU) Trade and Investment Partnership (T-TIP), and the Trade in Services Agreement (TiSA). However, we will be unable to realize the significant economic boost these agreements can give the United States unless TPA is in place.
The reason is simple. Without TPA, our negotiators’ hands are tied. While you can certainly make progress without it, no Administration can get the absolute best possible deal for the American people without it. Eighty years of history – covering all iterations of TPA-style legislation – shows that not once have we been able to close a major trade deal without TPA. In my 20 years in Congress, I’ve voted for every trade agreement since – and including – NAFTA. I’ve worked closely with USTRs across Democratic and Republican Administrations. And that experience has made it clear – you cannot get the best agreement possible without TPA.
All of our Presidents since FDR could look our trading partners in the eye and say that Congress is its partner because TPA is in place, showing those countries that we’re serious and it’s time for them to end the posturing and the weak offers. This President, unfortunately, cannot yet do so. That means, by definition, he cannot conclude the best deal. In short, the only road to the best trade agreements that reflect our priorities and create benefits for our manufacturers, service providers, farmers, and workers is TPA.
What does this mean? TPA must be considered before finalizing any major trade agreements such as TPP. To do otherwise creates the very real risk that Congress will not and should not support the trade agreement for two reasons. First, why would we ever accept anything but the best possible deal for the American people? And, second, Congress will see concluding a trade agreement without TPA as trumping Congressional prerogatives and negotiating objectives and ignoring its Constitutional role.
So, I have to ask: Why is the President trying to conclude negotiations without every tool at his disposal? Is the Administration really willing to take any deal over the best deal? I would hope not. And again, Congress is not. We will demand the very best for the American people – they deserve nothing less.
I want to be very clear: If the Administration wants my support for TPP, it will ensure we have TPA before concluding TPP. And if it wants my support for TPA, it will not conclude TPP first. To those who may discount my view, I can assure you that it is shared by my Ways and Means colleagues, our leadership, and a majority of Members of Congress.
What must we do to get TPA passed? The TPA bill I introduced with Senator Hatch and then-Senator Baucus in January is the strongest in history. It establishes negotiating objectives that reflect a bipartisan consensus to tackle barriers to our exports. It ensures that the Administration consults thoroughly and effectively with Congress and the American people. Yet, the President has been notably silent. We won’t get TPA through Congress unless he is actively and personally engaged. Furthermore, there is not a single question that has been raised that is not answered by the legislation itself. With all due respect to former Speaker Pelosi, I want people to learn what’s in the bill so we can pass it – not the other way around.
But that is going to take Republicans, Democrats, the White House, and the business community. Many in the business community have acknowledged taking the foot off the gas because the Administration is so passive. But just because the President is distracted does not mean that the business community should abandon its laser focus. Otherwise, we simply won’t remain globally competitive. Both the President and the business community are key to forcing Congressional Democrats to engage.
I look forward to working with Chairman Wyden to find the path forward so we can move immediately on the bipartisan bill. While some Democrats prefer to wait until after the election, I believe that we can’t put our economy on hold just because it may upset some key party donors. We can’t sit on the sidelines and watch other countries take advantage of opportunities while we lag behind. Even if TPA is not considered by Congress until the Lame Duck session, we must line up support now so we can move quickly after the elections.
When Administrations work closely with Congress and make it an equal partner in the negotiations as well as provide full access to information, they are successful in passing and implementing trade deals. Our role is to provide analysis and guidance – as a partner – of what Congress and the American people will support, from both a policy and a strategic perspective. That means we need to know what is going on. We cannot fulfill our Constitutional role unless we do. Frankly, the Administration operates under a Constitutional delegation of authority from Congress on trade policy, not the other way around.
Now, I promise TPA isn’t the only topic I came to discuss today, but it simply has to be addressed before we can get to any other pending trade issues. One of those key issues is TPP. We have made significant progress in TPP, but we must not conclude an agreement with countries that do not meet the high standards.
In particular, I’m deeply concerned that Japan is stubbornly refusing to remove all of its severe restrictions that prevent our access to its agriculture and auto markets. Japan has been closed for too long, and it is time we finally get real access to its markets. We cannot move forward on TPP with Japan until it commits to fully eliminate ag tariffs – exclusions from tariff elimination translate to Congressional opposition and an unravelling of ambition across the broad scope of the agreement, even in non-ag areas.
In addition, an agreement on autos with Japan to address the byzantine and persistent barriers our companies face is essential to getting Congressional support, building on the autos chapter in the KORUS agreement as our model. And Japan is not the only problem on market access: Canada insists – without justification – on maintaining its steep barriers on dairy and poultry.
More broadly, considerable work remains on the rules chapters, to address critically important issues such as state-owned enterprises, investor-state dispute settlement, cross-border data flows, intellectual property protections, and currency disciplines. We must have high standards to get Congressional support for the agreement. A bad deal will not – and should not – pass Congress.
The U.S.-EU negotiations present an enormous opportunity for us as well. I am optimistic that we can continue pressing ahead despite significant political change in the EU. Like TPP, this agreement must be ambitious, with high standards, to earn Congressional support. In particular, the EU must eliminate all tariffs – including agriculture tariffs – as it committed to do at the outset. And even that’s not enough to create meaningful market access for our farmers and ranchers. The EU must also address SPS barriers that are not based on sound science – we cannot ensure true access for our high-quality agriculture products when the EU uses arbitrary measures in the name of “consumer safety.” We must also end the EU’s improper use of GIs to block U.S. exports to Europe and third countries.
This agreement also presents an opportunity to include robust investor-state dispute settlement to create a model, high-standard agreement. It must also include strong protections for cross-border data flows, and I must say that I’ve been very frustrated by the EU’s cynical and opportunistic spin on the NSA as an excuse for commercial advantage. In addition, the agreement provides an opportunity for an ambitious regulatory agenda establishing coherence and, most importantly, transparency in setting EU regulations, all without reducing standards in the U.S. or EU. And financial services must be part of this mix. The agreement must also reinforce a high standard for IP protection. While we have challenges, I am optimistic about the progress we’ve made.
TiSA has immense potential to increase jobs and economic growth at home. Given our leading role in providing services around the globe, TiSA promises enormous opportunities for our huge services sector, and for the manufacturing and agriculture sectors that services support. As with our other agreements, only countries that demonstrate they are willing and able to meet the standards should join. China has not yet done so, and I will not support its entry until we’re satisfied.
In addition to these three negotiations, we are continuing to make steady progress in other areas to open global markets to U.S. goods and services:
We are pressing ahead to complete ITA expansion at the WTO. By one estimate, expansion could create 60,000 new U.S. jobs. I am deeply frustrated that China – which stands to benefit immensely from this agreement – is still blocking progress. I see completion of ITA expansion as a critical element of a successful APEC Summit later this year.
We’re also poised to launch promising new negotiations to liberalize trade in environmental goods. And our BIT agenda continues apace. I’m eager to address in our BIT negotiations many of the barriers we see in China and India and encourage the Administration to continue to seek out new partners for these important agreements.
We’ve also made considerable progress in the WTO. We had a major win last December when the WTO concluded a strong Trade Facilitation Agreement. This agreement, if fully implemented, could add as much as $1 trillion to global GDP and will allow poor, developing countries to reduce costs, develop their economies, and make themselves attractive partners by cutting red tape and bureaucracy. I expect countries to work quickly to implement this agreement.
We have also had some important dispute settlement victories in the WTO – most recently a clear win against China for its unfair discrimination and retaliation against U.S. autos. We must continue pushing ahead on the difficult issues we face with emerging economies like China, Russia, India, and others. In particular, I am encouraged by the historic elections in India. I look forward to working with Prime Minister Modi’s government and hope that it will be responsive to our concerns. I’m also hoping that Brazil will set aside its traditional reticence on trade and seize the benefits of expanded global engagement.
We also have some important legislative priorities in addition to TPA. We’ve made considerable progress on a bipartisan, bicameral renewal of the GSP program, but we’re not there yet, particularly because of concerns about using our traditional offset. The news that the Administration intends to graduate Russia from the program prospectively because of its economic development is welcome, and we look forward to an official proclamation next month. In my view, Russia has been at the level of economic development for which GSP benefits are not appropriate for quite some time.
I want to address AGOA as well, which expires in fifteen months. We’ve reached across the aisle to study how to increase AGOA’s effectiveness as well as enhance the rule of law, infrastructure development, and regional integration through the preference program and capacity building. At the same time, we’re seeking to reduce African barriers to trade at the border, many of which could be addressed through implementation of the new Trade Facilitation Agreement. We’re also considering the impact of EU policies to establish reciprocal trade agreements that carve us out.
We have a lot of work ahead of us in the next six months, including a customs bill and the Miscellaneous Tariff Bill. The goals I have laid out are ambitious, but they are within reach. This agenda requires hard bipartisan, bicameral work in Congress, the Administration’s commitment, and active engagement from everyone in the room here today. I engage frequently with Ambassador Froman and Chairman Wyden, and I meet regularly to find solutions to these challenges and seize these opportunities. I’m also in contact with many of you. I look forward to working together in the coming months to overcome these challenges and help our country prosper through trade.