Good morning, and thank you Ambassador Barshefsky for the kind introduction. Let me return the compliment by saying that your tenure as U.S. Trade Representative was marked by admirable bipartisanship, and you laid the groundwork for much of our recent accomplishments on trade policy.
I would also like to thank all of you for being here and CSIS for hosting me this morning. I would particularly like to thank Meredith Broadbent, who spent many productive years on the W&M staff before we lost her to USTR.
CSIS has been a leader in promoting bipartisan solutions focusing on economic growth through the expansion of U.S. trade opportunities. That is a goal we both share, and the passage of the trade agreements with Colombia, Panama, and South Korea was the clearest signal that Congress can and will have bipartisan support for a vibrant trade agenda.
Last summer and fall represented some of the most significant developments in trade policy in fifteen years. The overwhelming consensus and support we had for passage of the trade agreements made a very clear statement: America is back in the game. This year, we must and will make it clear that, as Randy Jackson likes to say on American Idol, we’re in it to win it.
Ushering these trade agreements through Congress has been one of my proudest legislative accomplishments. And, as the South Korean agreement has now gone into full effect and the Colombia agreement will be fully implemented next month, the U.S. will soon be able to realize the positive effects that trade agreements bring to our businesses and our economy. But we cannot rest on our laurels; we cannot wait another fifteen years to take action.
International trade has been a cornerstone of U.S. foreign policy for the past sixty years, and its importance is stronger now than ever. A robust trade agenda will secure the U.S. position as a global economic leader. It will also ensure that our economic future goes hand in hand with creating good-paying jobs here in the U.S. With nearly 13 million Americans out of work, we must ensure the full job creating potential of international trade.
But I and fellow Republicans cannot do this alone. It will take true partnership across the aisle and from the Administration, and more than just talking about trade. We need concrete action from the White House.
The Ways and Means Committee will do its part to continue to build on the bipartisan success that we have laid out for American workers. Beyond our trade agreements, we also secured a win this year for U.S. job creators in passing legislation that gives American businesses the tools they need to fight the distorting influence of unfair subsidies from non-market economies like China.
And, just recently, the Committee launched the Miscellaneous Tariff Bill process so it can be completed by December to avoid a tax increase when over 600 provisions expire. The Senate is undertaking the same process as well. MTBs have long been a bipartisan effort to help both American manufacturers and consumers obtain lower-cost products that aren’t made in the United States.
The process used to assemble this legislation is a model in transparency and accountability. In my view, more bills that go through Congress should replicate this process we created. These broadly available benefits are a clear cut way to promote job creation.
We also held a hearing last month to explore the new negotiations the United States should consider, such as an international services agreement, a trade facilitation agreement, an updated International Technology agreement, and a bilateral agreement with the EU.
Now, that takes us to a big issue I know you all are concerned about – our economic relationship with China. We cannot ignore that China is our second largest trading partner overall and our third largest export market, offering the United States multiple opportunities. While China presents the potential of 1.4 billion customers for our exports, it purposefully impedes market access for U.S. goods and services and blatantly steals the intellectual property of American businesses.
China’s currency misalignment continues to be a serious problem and one that attracts significant political attention. The disagreement is not over whether China’s currency is misaligned, but how to most effectively address this misalignment.
Earlier this year, Senate Finance Chairman Max Baucus and I wrote to the Administration to encourage it to press the Chinese on the currency issue at the WTO. While there have been some encouraging signs as China seeks to rebalance its economy away from export-led growth and undertakes limited financial sector reforms, China must do more. The Administration should continue to aggressively press China to allow market forces to determine China’s currency and should seize opportunities in multilateral forums such as the WTO, IMF, and G20 to expand and intensify pressure on China.
The strategic and economic dialogue with China beginning shortly provides such an opportunity, and my W&M colleagues are sending the Administration a detailed letter this week outlining goals for that meeting.
In addition, we should pursue a Bilateral Investment Treaty with China, and I’m glad that the Administration has finally launched its Model BIT. I hope that move has ended the Administration’s self-imposed paralysis in negotiating such agreements, although I do remain concerned that the greatly expanded labor and environment provisions will set us back and undermine our objectives improving the investment climate for U.S. stakeholders.
The fact is that despite benefitting significantly from globalization and a more integrated global economy, China remains stubbornly closed to U.S. companies, farmers, ranchers, and workers. The litany of China’s trade distorting policies is deeply troubling and cannot be allowed to stand.
Plain and simple, we cannot allow China to continue its unacceptable trade practices, and I have concerns that countries such as India, Brazil, and Argentina are emulating some of China’s poor trade practices. We need better engagement with these countries to prevent them from going down this slippery slope.
More broadly, there are very bright prospects for our trade relations to build off the strong momentum that we have had thus far. I strongly support the Trans-Pacific Partnership negotiations, which will allow U.S. goods and services to more easily reach consumers across the Asia-Pacific.
While I am committed to TPP, I remain concerned about the Administration’s approach to labor and environment issues. Its insistence on re-opening issues after much hard-fought, bipartisan consensus is unnecessary and counter-productive.
Clearly, we must conclude the TPP negotiations as soon as possible this year. Establishing a greater presence in Asian markets, and creating a counterbalance to China, is vital to our economic success. A successful TPP will deepen our economic relations in this fast-growing part of the world and allow us to connect our Asian and Latin American trading partners. Our vision is that TPP will combine the successes of past trade agreements with new approaches to meet the challenges to trade and investment in the 21st century.
One measure of the success of the TPP already is the considerable interest by several countries in joining. In my view, we should consider such expressions of interest as a positive development, giving us an opportunity we would not otherwise have to solve longstanding problems. I support new entrants as long as they do not slow down the negotiations or reduce their ambition. In addition, we must be able to constructively address existing barriers imposed by these countries.
For all the Administration’s hard work on TPP, we have seen little outward effort with regard to Russia. Our ongoing relationship with Russia is a complex one, but to obtain the benefits of the concessions Russia made to join the WTO, we must grant Russia Permanent Normal Trade Relations.
The economic benefits of doing so are clear: greater opportunities for U.S. businesses, farmers, and ranchers to sell American goods and services to Russia. In granting PNTR, we would give up nothing – not a single U.S. tariff – but we would obtain a powerful new enforcement tool and important rights, while bringing our two countries closer on multiple fronts.
And while I share the view of many Members that Russia poses significant problems on foreign policy and human rights issues, holding up PNTR because of non-trade concerns does not increase our leverage to address them.
As you well know, Russia continues to have its skeptics on Capitol Hill, and whispering presidents inadvertently heard around the world have not made our task any easier. As such, I call on the Administration to intensify its efforts with regard to Russia and make its best case for why Congress should act this year on PNTR. It is time for the White House to get out front on this issue.
And, I will do the same. This morning, I will let you be the first to know that the Committee will hold a hearing on granting Russia PNTR in June. I hope the Administration uses the month of May wisely to build confidence and provide leadership on the economic and non-economic issues we have with Russia.
We have other challenges as well that we will consider this year. We must address our sanctions policy with respect to Burma – the current sanctions expire this summer, and we should carefully consider what would be the most constructive path at this point. We also will consider must-do legislation concerning the expiration of a key provision in our Africa preference program, non-controversial “fixes” to the CAFTA textile provisions, PNTR for Moldova, and a long-overdue Customs authorization bill.
While I have laid out many challenges before you, each of these areas represents 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. I look forward to working with you to advance each of these initiatives.