Transcripts For CSPAN2 U.S. Trade Representative Robert Lighthizer Testifies Before Senate On... 20240712

U. S. Trade representative Robert Lighthizer was on capitol hill to testify on the Trump Administration trade policy. The use of tariffs, trade with china and implementation of the u. S. Canada trade agreement. Mr. Lighthizer was asked about the Global Supply chain of the inquisition of personal protective equipment during the coronavirus pandemic. The Senate Hearing is just under three hours. Im pleased to welcome ambassador lighthizer. Thank you for joining us. We need to have you here because we face great challenges whether its the murder of floyd or whether its the economic downturn we had because of the pandemic or the pandemic itself. We have a lot facing our country. Its not going to be easy to bring us back on the course of iran and their brave but good trade policy will be one important part of doing so so im glad we have that discussion today. Trade policy is immediately significant because we need to make sure we dont have any unnecessary taxes on goods g2 the recovery or in fighting the pandemic. Thats why a vastly International Trade condition commission on what those goods are, where they come from and how much they are taxed. This study which is ongoing will provide an independent and transparent snapshot of the medical and ppe supplychain. Its important that we carefully study the supplychain before we rush to judgment and act. We have two take a long hard look at our ability to protect ourselves with this crisis but we have to find a Smart Solution that accepts the realities that trade is fundamental to our supply and prosperity. The longterm trade is a key part of the solution because it promotes freedom. It provides customers for our best in the class Agricultural Products. It eliminates arbitrary areas and exhibits entrepreneurship and independence. He particularly trade empowers Small Businesses that are the back long of our communities and in fact 97 of u. S. Export our Small Businesses. It could start to empower people in fixing our economy. Making sure as many people as possible have the option of being their own boss. Well attend them and our communities to press for even more opportunities. This is especially true because our trading partners already enjoyed the fact that we have one the most open economies in the world. Ambassador lighthizer, you have taken important steps to help with these issues. I am pleased this year starting off with congress approving the u. S. Mexico agreement. U. S. Mca is expected to spur 176,000 new jobs and create new opportunities with their two most important trading partners. We are couple of weeks away from it entering force and we all went to our American Farmers workers and businesses and innovators to make sure this agreement delivers. I look forward to implementing a new era of north American Free trade and focusing on many other agendas on the president s trade agenda. The issues are complex and challenging but the Trump Administration is ambitious. If we get it right the opportunities for americans are immense and i want to highlight a few in particular. First we have a free trade negotiations with the United Kingdom. Good trade relations with the United Kingdom are crucial. 2017 we exported 125, almost 126 billion of goods and services to the uk. The uk companies in turn have invested more than 540 billion in the United States. Unfortunately those numbers dont reflect our full potential. In large part he who rules stood in the way and he who rules unfairly restricted our goods without any scientific basis and required unnecessary testing for industrial goods and now that the uk has been free from those eu rules we can bring our a tonomics relationship to a level befitting our longstanding political special relationship and improve trading relationships with the uk and also signaled severe peanut union that its past time for them to start regulating on the basis of sound science for them also looking forward to trade negotiations advancing with kenya as you have the earlier talk to us about the next step. We dont have a single Free Trade Agreement. I applaud the Trump Administration for being the First Administration to take this on. A High Standard of Free Trade Agreement with kenya can be a model for both good economics and Good Governance throughout the regions. Third im glad the Administration Remains committed to wto reform. The rules of that organization including those on Services Agriculture procurement and intellectual property are vital for workers and businesses. They reflect decades of persistent american leadership. We cant let china take the pan when it comes to writing the rules for that organization. Instead congress and the best ration must Work Together to fix this vital vitally important institution. We will revitalize the wtos negotiating function so the rules reflect the modern economy including ecommerce. Additionally congress will who continue to insist that rules remain enforceable and applied as written. Thats why i am glad that trade agenda highlighted in the administrations wto enforcement against the eu launch aid and against china over its policies on puig corn and rice and india over tech support subsidies. There are a lot of problems with the wto but it has an Important Role to play including through the use of dispute settlements. The trick is to make sure those rules are followed rather than rewritten by wto judges. Mr. Ambassador i think together we can accomplish this task. Finally i note that the trade agenda highlights that the administration took strong discriminatory Digital Service packs with the recent announcement of more investigations. The Trump Administration is demonstrating that america will not stand for discriminatory treatment that treats americas companies as banks. Our businesses are entitled to fair and equitable treatment and we will defend our right to probe relay. In closing i want to emphasize this point. The president has laid out an agenda that can improve the lives of our fellow citizens but it will require commitment and cooperation from all of us. The constitution vests congress with the authority of her trade not some generalized interest in trade. We cant simply be passengers along for the ride. We must fulfill our constitutional role so that our trading partners know that ambassador lighthizer has the full support and power of the United States behind him. Thank you and senator. Thank you mr. Chairman welcome ambassador. This is the nance committees Fourth Annual hearing on the trump trade agenda and that means it is the fourth time the committee has heard a familiar old routine, donald trump is getting tough on china and he is protecting american jobs everywhere. The president is cracking down once and for all, big changes around the corner and americas economy on the brink of transformation. It has been three and a half years of those big promises. I want to start by laying out the actual results. The phase 1 trade deal with china that the president calls and i quote the biggest deal there is anywhere in the world so far is already coming apart with china falling behind. According to an analysis by the Peterson Institute looking at the first four months of the deal chinas purchases are u. S. Manufactured goods were at 56 of the target level set by the phase 1 china deal. Chinas purchases are u. S. Agriculture goods were at 38 . President trump said it stops the over production of steel in china that has wiped out so many steel jobs here in the United States. But colleagues mills are producing steel at record levels. The president said he would fix the most damaging rebuffs the target american jobs it when it comes to i. T. Report Technology Transfers the phase 1 china deal recycles existing laws and repeats the same promises that china has broken again and again. According to the Economic Policy institute the United States has lost 3. 7 million jobs to china in the last two decades. Threequarters of them in manufacturing. Donald trump is not meaningfully changing any of the conditions that allowed these job losses to happen. Now the bottom line with respect to china trade policy is real clear. The status quo under President Trump is good for china and the Chinese Government is reportedly interested in maintaining it. Now onto the new new nafta. Ambassador lighthizer and i has long agreed that nafta needed in the overhaul. To a great extent in economy driven by activity industry and wasnt Strong Enough on enforcement to protect the american worker. When the Trump Administration right its renegotiated deal to the congress get made some progress on several issues but it didnt go nearly far enough to protect family wage jobs and workers on labor and environmental protection. In fact the old broken down system of enforcement from the old nafta was really pretty much a star to the Trump Administrations approach to the new nafta and that meant all the big claims about getting a great deal for workers was more of the same old happy talk on trade. Now when that was rocked to the Congress Democrats in the senate and the house said that some acceptable and we went to work to improve the area where the president s proposal and nafta came up short. Senator brown and i worked for example with our colleagues on a more aggressive approach for labor enforcement so American Workers wont have to spend years literally waiting for action against the trade chief in the trade ripoff. Ambassador lighthizer help us get that done. The deal is set to go in effect in two weeks at the start of the deal colleagues means that the work is just getting started. I have Major Concerns about staying on track with implementing their obligation and our ability to monitor and enforce it through demonstrations has to get hit the ground running on trade loves and enforcement on day one. There are a few other areas where american distances and producers and workers need more information and more certainty as the agreement comes into effect at our Dairy Farmers for example need to know that their product wont face unfair discrimination by canada and mexico. American innovators need to make sure that mexico will made changes that promise intellectual property laws and finally American Automakers need to know how usd or the department of labor will apply the auto rules which impact their supply chain and their ability to qualify for tariffs. My bottom line on nafta is that it made Real Progress on several key issues. Thats why it got overwhelming support in the committee and the senate but we better understand and why this hearing is so important that progress can be on done very quickly if the administration doesnt take strong steps needed to enforce the deal particularly using the enforcement tools that congress created to protect american jobs. Thats going to be a prime focus of our work in the days ahead to make sure the administration uses those trade enforcement tools that were given to them and finally let me thank ambassador lighthizer for joining us but im quite certain im not the only democrat on that committee who has been appreciative of him constantly reaching out and trying to find bipartisan ground and i think my colleagues know the questions and answers with ambassador Bob Lighthizer will never be dull. Thank you mr. Chairman. We have got a lot of business to cover. I only have a one sentence introduction for ambassador lighthizer. He was sworn in as the 18th United States trade representative on may the 15th , 2017. Please give us your Opening Statement to ambassador lighthizer. Thank you mr. Chairman. Mr. Chairman Ranking Member and members of the committee i want to start out by saying i cant see most of you in any event. I cant accurately say that. This is for me at least an unusual experience. Im assuming youre out there. We have been going through two crises recently and these indeed are challenging times. I wont go through all of the history of it but i want to say that i am confident irking together in good faith we can all help to heal the wounds of this nation and i certainly at the ustr want to play my part in some ways the problems have been facing make talk about International Trade seem less important but in enough ways rebuilding our economy and helping to create goodpaying jobs from americans insecure and fairness for business and bringing back manufacturing can be some part of the solution. We have a nice waited in quarantine for so long i fear we might have forgotten what it great achievements we had during the early part of this year all of us together. Republicans and democrats house and senate worked closely with the administration to write and pass the biggest and i would say thats trade agreement in u. S. History usmc april i would like to again thank you for working with me and my team to achieve the historic accomplishment. I would also like to thank you for your support and help as we worked our way through the china phase 1 agreements a very important usjapan agreement and numerous other smaller agreements during this last year or together i think we have helped American Workers businesses farmers and ranchers. Going forward there is much to achieve. As you all know we have an active agreement under negotiation with United Kingdom. We have also very soon in the next couple of weeks commence talks with kenya. We have active agreements engagements on trade issues with numerous other countries and i look forward to working with all members on the crucial issue of wto reform. Thank you to all the members for working so closely with me and for making time to talk in the meet with me and perhaps her staff which is so crucial to this worked with ustr and making our end product consistently better as a result of your work and your staffs work. Thats my statement that i will just continue for a second because senator wyden was so kind as to bring up that i agree with the president that the greatest trade agreement. China is a very very big problem. We move to the next step every administration before the president did nothing, absolutely nothing. Im sitting here thinking i feel a little bit like what hoover would have felt like are what roosevelt would have felt like if hoover came forward and said i want to talk to you about depressions or as chamberlain had talked to churchill about german policy per the reality is nobody did anything. There was this great agreement on cybersecurity that the Obama Administration do with china protest and show me the agreement. There is no agreement. It wasnt even coordinate it. There was nothing. We have now an agreement and i have it right here and it covers Ip Tech Transfer Financial Services currency are the covers at an enormous amount of ag and china is doing for the most part what they said they are going to do. It contains 370 billion worth of tariffs on china. So compare this to anything that was done before is just critically totally unfair. This business about the purchases just so we understand these are exports many of which were booked months in advance. Everybody has knows agriculture if we look at what was shipped in march it wasnt bought in march. It was bought weeks and weeks before that so those numbers really are not telling. Im happy as questions come and go through the numbers with members. With my stated opening comment and slightly less staid reaction to my good friend senator wyden i will now stop talking. We will start with questions and we will do five minutes of rounds. The steel and aluminum tariffs on canada, mexico are one of the factors that delayed the usmc approval. Im glad they are gone and we are about to start a new era of free trade in north america however im concerned that some groups are trying to push to rancid to tariffs worth they dont rancid to them to putting section 230 to tariffs on closely related goods. My view is that any issue concerning steel and aluminum tariffs need to be through the framework of the may 17, 2019 understanding that you negotiated with canada and mexico. The first question but dont answer until i ask the second question. A commitment from you that the United States will continue to abide by that understanding and will you also commit to this committee in the event the administration agrees theres a surge in imports and before any request for consultations made under the understanding . Im sorry. I do want to answer until you ask the second question. We will certainly consult with the committee. I would say there have been surges on steel and aluminum. Some from canada substantially from canada and some from mexico and it is something that we are looking at and talking tube mexico and canada about the degrees meant worked as both countries agreed that they would maintain substantially same trade as they have before. We are seeing surges on products previously in fact put the tariffs back on with those they cant retaliate except in that sector so they cant retaliate on agriculture and the like are im happy to talk to you mr. Chairman and the Ranking Member and other members if they indicate an interest in it but its something of genuine concern to us now that we are looking at. For clarification i will read my statement again. My view is that any issue concerning steel and aluminum tariffs needs to be done through the framework of the may 17, 2019 understanding that you negotiated. Are you saying yes to that . The answer is yes. That is our understanding with mexico and canada but we would have to tariffs on the condition they maintain the same trade and if they didnt and we put tariffs on because they surge they would only retaliate in that sector and not another sector. Im glad ustr decided to grant exclusions from section 301 tariffs from certain products related to combating the pandemic but im also glad unc or is accepting Public Comments until june 25 on what additional medical products could benefit from lifting tariffs over some of these exclusions ustr has granted will expire in the next few months but can you tell us whether you will consider extending the existing pandemic related exclusion and granting additional exclusion for relevant products . What we expect to do mr. Chairman is make an assessment as to whether or not there is a critical need for those products related to the pandemic and if there is we will and if there is a we wont. Usmcj had a letter addressing certain geographic locations. This is a very important issue for our farmers. As your special 301 report noted that driver the problem is the eu was hurting her Market Access by granting common food names defined in International Standards and also pushing our great partners to adopt these protectionist measures. The uk negotiations need to reach a more invasive outcome with you mca side letters since the uk now has the opportunity to roll back its protections measures. This outcome is to include an expanded list of wheat and Grain Products and should be an integral part of the agreement rather than a side letter per that outcome would be consistent with u. S. Law which uses trademarks to protect consumers and the reputation of businesses and not to limit legitimate competition. Would you be able to tell us and commit to seeking that level of ambition for an outcome on geographic indicators and if not, why not . That will be my last question. Thank you mr. Chairman. The answer is yes i completely agree with your position but its a very difficult issue. To the extent that europe and the uk make a deal and they give away the space and its not clear they will give it away or whether they will or they wont that they do its going to be a bigger problem. I agree completely on geographic indications that with your position i agree that its thinly dies protectionism and its something that we have fought with europe about and will continue to fight with them about not just direct we but through proxies. And i agree with your position. Whether we get it or not we will make an assessment as we move along. Thank you mr. Chairman. Mr. Ambassador lets start with the new nafta and we have appreciated your working with senator brown and i on the Rapid Response trade enforcement mechanism and its going to be key to coming out of the gate immediately in july and showing that we are serious about that because of we dont do that it just seems to me zero will be back to the same old kind of pack x. To delay. Tell me if you would first how you were going to commit and actually putting the brown wyden response mechanism into place quickly . Thank you senator. First of all i completely agree with your statement and secondly im grateful for the work that you and senator brown did and i would say other members of this committee on enforcement provisions, democrats and republicans and i agree with you completely that if we dont use the tools of enforcement we have the trade agreement we are making our commitment with the congress but more importantly with the American People. We have talked about this. We have made the appointment and set up the structure in terms of labor and environment both of the Interagency Committees have had their first meetings. We expect to be very diligent on this. Obviously nothing can happen is to say until july 1 but after july 1 i expect to consult with this committee and the Ways Means Committee to look at complaints and begin first with some kind of a consultation process and then to the extent we have problems i expect to bring cases predicted mystical understands and i hope they understand it could have made it as clear as i can. Lets go on then to another key enforcement issue and thats china phase 1. The first stage of the dispute resolution there is basically an escalating set of meetings. They get more and more urgent with influential officials and my understanding is the agreement specifies that this whole process is confidential. My question here is does this confidential reality arrangement in the china deal phase 1 mean that nobody including members of this committee will know if the United States is taking action against china . No comment does not mean that. Tell me how there is transparency then because as i read it it just looks to me like there isnt and i think it would be helpful for you to be very specific. Absolutely all be happy to do that senator. Heres the situation we are faced with. For the first time we have a written agreement and for the first time we have a really really good enforcement mechanism one which escalates within the United States and can take action if we dont get a satisfactory resolution. And we wont be retaliated against. This is a historic thing and i want to point that out. Then you have a problem what do you do with the company that comes and says for example somebody from oregon for common say i have this problem. U. S. Grove wants to raise it to dont use my name because its you my that i may be retaliated against for them giving you confidential information so what do you do in a situation like that when you gritty confidentiality . Is a confidence on that case . No, of course not that we are going to bring some of these complaints depending on the circumstances as generic complaints and individual and super tech specific American Companies. Thats the nature of why we put that in there and that does not mean other than confidential information which we would share that and appropriate members of the congress kept in the dark. I want to get into one other timesensitive matter. I would like to see in writing how we are actually going to have transparency and a provision that sounds to me like there is a transparency but i get your point with respect to sensitive matters and with respect to American Companies and american jobs. I think you get my point with respect to transparency. We will keep the record open on that. One last question if i might the chairman and i this is an area we have worked on and we are very concerned about the Digital Service tax because they really hit Americas Technology Companies Presented cantwell and i would hit Art Companies like a wrecking ball and earlier today the treasury secretary notified several of the largest european trading partners and said he was going to spend the multilateral negotiation. When you hear Something Like that its kind of like well hey we are just walking out of here and they are going to do anything about the process. What is the administrations plan here to protect these Critical Industries from discriminatory taxation that would really devastate our ability to have goodpaying jobs in a crucial time . Whats the plan to deal with that . Thank you senator and as you know i completely share your view and thats why is the chairman said we started one that we have are to completed an investigation on france because they were the leader in this area that would start a dozen others. We will have reports on each one of them and authorize to take retaliatory action if they do it. What europe is doing is fundamentally unfair to American Companies. They are taking on a because they are the best and they are not there companies that i was going to say senator long is to say famously dont tax me tax the man behind the tree. This is what everyone is doing and unfortunately we are the man behind the tree. So we put in place at 301 because we think its appropriate and we authorize action. Then the present work to a deal where they wouldnt collect the tax and wouldnt do anything on 301 and i would go through the course of negotiations at the oecd greed unfortunately the other countries are completely but the other countries are completely dug in on this. We have to show our strength and what the secretary said is if you are going to get a consensus around taxing our companies unfairly we are going to be part of it so thats the nature of it. We still have to i believe find a solution and to me that solution involves a lot of congressional action. Involves a tax scheme that treats everyone fairly internationally and if we are treated unfairly that i think the president will make a decision as to whether or not we take action against these people. I dont think thats what happened with the oecd is the end of the process of trying to work out a solution. We still have to do that. I think since senator wyden wrought that up and im glad he did because i havent read this letter that went from the secretary of the treasury but people out of nowhere i stand on the presence reporting on what the oac negotiations on these taxes have hit an impasse with United States objecting to interim proposals that will continue to disproportionally targeted u. S. Companies. I am continuing my consistent support of the Treasury Department to continue these efforts to reach a consensus of the oecd. We are in the middle of an Unprecedented Health and economic crisis in our immediate focus needs to stay on the American People in the Business Community that employs them as we were together to develop solutions to our countrys recovery reaching an agreement with the oecd represents the best outcome for resolving the International Tax issues presented by our changing Global Economy but those negotiations should not need especially during the Current Health and Economic Situation. Its better to take the time necessary to get fair and Equitable Solutions so i support treasury continuing to negotiate on these important willful taxations and working towards an agreement that does not disproportionally and adversely affect u. S. Businesses for their remain firmly opposed to the unilateral measures for which oecd partnered to discriminate against u. S. Businesses. Im going to name the first four people for questions that senator cantwell, senator roberts and senator stabenow and senator finn. Thank you mr. Chairman and dr. Lighthizer i have three issues to cover so we can help me out with that. I wanted to talk about personal protective equipment. There are more than 40 countries that have taken steps to eliminate tariffs on ppe or the United States has a tariff on face mask and n95 respirators temporarily eliminating those tariffs. We have tariffs on gloves and canada suspended those. We have a 5. 3 tariff on face shields and gowns and 2. 5 on goggles. Well you did wave the tariffs up of up to 25 on ppe from china that only last through the end of the summer. To me why not go with some of our allies in canada and europe abolished the tariffs on the ppe products until we are through the pandemic. I would say first of all as you say we got rid of the tariffs because that would have been a problem, the 301 terrace. We looked at 23 different tariff lines for david 23 different terror finds there were no tariffs on over half of them. The highest was as you say one of the mask which happens to be the category that have the n95 and up are the surgical masks, there were none. In my judgment zero tariffs and affects 7 tariffs to have a real impact and we are better off keeping the terrorists in place and incentivizing American Companies to make these products at this point we dont have the same shortage and you are more of an expert on this than i am that we had originally but the important thing is now we stand by u. S. Companies. Many of which is just started undertaking to get into this business. With that only have a shortage and n95 respirators are needed now. We need them in a few months and they will be in very high demand next fall. And i just listen to what my governor said and i listen to him practically every week on his call and he wants the defense production act. He doesnt think we are getting the mask so to me thats at least get them at a cheaper value and not have to pay a tariff that i feel out the same way about a lot of green products. There should be zero tariffs on ruddock said to reduce Carbon Emissions predicting zero turso by marva trade person on these things then the administration. The 232 tariffs remained so we have a 70 on apple so obviously a big product in the state of washington. What can we do to get those tariffs off of apple and india . As you know we of course agree with you. We agree there are regular tariffs are back the retaliatory tariffs in negotiations with india could be to await their gsp and we are in the process of restoring it if we can get an adequate counterbalancing proposal from them. Until now we havent gotten that so this is something we are negotiating right now. Where do we stand with Ranking Member senator wyden brought up trade agreement with china net purchases off where we thought where we be. Where are we in getting those commitments to the phase 1 product . Thats a really good question. I think we purchase Something Like 4. 2 billion ag ruddock said of the 4 billion that we committed to for 2020. I understand. We only have 50 seconds left but when you decide what the setting is an ag products i realize we have the Peterson Institute which i would suggest has a very very failed methodology. What they do is they look and they say okay fine what was exported by such and such a date, the ag people know and i know you are an ag person but that is bought six or eight weeks in advance to what you try to do is develop the methodology that says what is the level purchases . It didnt even go into effect until february 14 so anything that came in by march was probably before the agreement so as to compensate it thing and they have a methodology to what we have tried to develop is one that takes actual sales reports which come out every thursday, the previous week and put them together with exports. The data is not created for this kind of a purpose to tell in the short term what people are doing. If you use the methodologies that i suggest which is purchases up until now to the extent you can calculate them. That may give an example. Last week china bought a half a billion dollars worth of soybeans. Those might not ship until august but if you say we are going to get them for not purchasing thats not right either. You have to figure out this new methodology. To do this hybrid methodology and its not foolproof. Its a good faith effort to use the data that we have too tried to tell what they are doing for the first estimate is that they are clearly trying to meet the deadlines, i mean the targets particularly given the situation as we have going on in the world with covid19. You probably have got about 10 though you do not have it in my notes 10 billion worth of purchases towards the target of something 40 or 50. You then will say okay maybe 10 additional billion at the end of the year on soybeans and then you have to look at what to purchase between now and then. I think if you do its reasonable to make the assessment that we are going to get to those numbers awfully close to done. Its interesting. I definitely want to understand that. We have very highly perishable products from shellfish to cherries and other things and we deftly wonder id products through that phase 1 purchase a we will get back with you on the specific details. I would suggest and i know your products but i should work with your staff to make sure. We are talking to them all the time about this. You make a really good point. You have a very seasonal product. You have to seasonal products that i can think of so we really do have to press on that. Thank you mr. Chairman. Senator roberts. C mr. Ambassador thank you very much. I want to thank you for your perseverance. I was talking to senator cornyn here and i said Bob Lighthizer has more appearances than any other trade ambassador that i know of and he asked again i sit here look on google and look up the word perseverance and by golly the synonym for perseverance is lighthizer right there on google. Its just amazing so thank you for the job you are doing. I want to know about mexico and what you and ambassador dowd are doing with relation to mexico and the new policies that do not adhere to strong riskbased framework we have long shared with them. And talking about targeting tools of modern agriculture and biotech. Im sorry. What we have is an administration i believe in mexico for whom part of their philosophy is not to, thank you, not to use cuttingedge agricultural for our practices. For the last year and a half they havent approved a single biotech application could i know you know this but im just saying it for your colleagues. This is something that we find unacceptable. We have raised it with them. We have complained about it. When the agreement goes into effect will then have a mechanism to actually do something about it. My own view is its one of those things like heart of their philosophy and until they lose a case they are going to be very flexible but what do you say is its a serious problem. What happens when the other members come me get an application is approved over period of time and eventually it expires but if you dont get an application that doesnt going to mexico and warrants a question of season but also question up at the sides and chemicals in the light. We agree with you that its a violation of u. S. And ca. We expect to bring action if the situation continues. I appreciate that. I think there is some concern in farm country when we have virtual discussions with various ag groups. That question has come up a lot with the opportunities coming up in july 1 with regard to and i might remind you it stands for the United States marine corps always as well as a good trade agreement. So they signed that and if they find this is not working too well in terms of products we usually sell them the products they need for dogs that thats the time they will probably come to the table. I want to talk about energy in china and by the way i want to thank you and especially ambassador dowd. He has met with his chinese counterpart time and time and time again. I made a list they are buying corn even not as much beef as we want, soybeans and sorghum. The sorghum were the first ones hit on the number one trade retaliation and they are getting some price recovery. Out this it not enough that we are making some progress but on the energy side of it they have been increasing purchases of certain products such as crude oil from saudi arabia and russia and my question is can you share your thoughts on how you see china reaching the significant purchased targets laid out for the Energy Products in the phase 1 agreement . First let me reinforce what you said about the other products and i should have brought the chart. We put a chart down in 2017 which is our best ag youre ever 20 above that of the steel. If you do and this is the line 22,007 is the best ever. You look at the light three times what we sold at this time in 2017. Energy has been a problem. We have been discussing it with them. Energy for us is graphs in the normal products but its also ethanol. We need exclusions and they have granted exclusions on ethanol so im hoping to see ethanol sales go. I would say that traditional liquefied Natural Gas Crude Oil and Refined Products theres no waste and they are behind there but its something we are stressing. I think its as much a reflection of the Economic Situation and the fact is as you know well the price a while ago went to the floor. Oil was worth less than a barrel and they also screwed up a mechanism but its something we are stressing and we will continue to stress with them. [spelling] thank you mr. Ambassador in thank you mr. Chairman. Now we have senator stabenow by tv and senator stabenow before you start can you tell me and it i will be applicable to everybody else is going to be on tv and that is three force of the committee today. Do you have a way of telling when youre five minutes are up . I do not. I was hoping, one point i thought there was a clock on the picture but i dont see that today so mr. Chairman i will do my best. Was in for the fall of the gavel in five minutes. My Ranking Member can help you with that. Thank you mr. Chairman. My five minutes starts now right . Yes right now. Sara thank you mr. Chairman very much and thank you ambassador lighthizer. I do have to join with my colleagues on the committee about agricultural issues and we need to continue talking about it together so i appreciate your reaching out continually on issues that we agree and that we dont agree as well but to me i really want to take my time to focus on the pandemic that has highlighted vulnerabilities for all of us. I know you and i agree we need to make changes so we can manufacture more critical supplies at home and work with their International Partners to draft issues address issues in the supply chain. Working with our governor and her great team in michigan, the pandemic has highlighted massive failures by the Trump Administration and we cant just lame for supply chain in the fact that United States has over 25 deaths from the pandemic while we are only slightly over 4 of the worlds population. You said in a recent article this administrations goal is on worker focused trade policy that achieves rod bipartisan consensus in Better Outcomes for americans. I certainly agree with that statement but we know that doesnt happen in a vacuum and my worry is as we talk about workers abroad had what is happening to American Workers right now and how do they know that they are going to be able to be safe that were . The administrations covid19 response has been a mess frankly on ppe. There has been no National Strategy as we all know no transparency related to our countrys ability to keep us safe or medical supplies and equipment made in america in the future to be able to do that. While we are a Global Economy its in a credible threat to rely on other countries for basic medical needs among other things and frankly the president has such a great relationship with china why cant we get a National Agreement with them to get protective equipment and supplies that we need . In michigan ive been in multiple situations reaching out to people i know the medical field where the conversation went i know a guy who knows a guy who knows a guy in china which is how we recently began to get our masks n95 and surgical masks and gowns. We still dont have enough and in the state of ppe as well as the pharmaceutical drug manufacturing globally United States and frankly the u. S. And ca the Trump Administration tried to slip in a special benefit for pharmaceutical companies manufacturing drugs outside of our country which we all objected to. From my perspective the present rather than pointing to our governor is trying to do the right thing he should now deactivating the defense production act to guarantee critical medical supplies are made in the United States. When we look at this and i just want to say from the frontlines of michigan there are no staff wearing garbage bags. Most of which is currently made in china. So how do we have any worker focused Administration Domestic halsey failed to focus on keeping our own workers safe right now . You wont a surprise senator to know that i dont agree with very much of what you said except for the part that we want to Work Together on her worker focused trade policy but i think when this pandemic hit, this is not my area and are not an expert at it. We were in a situation where we had depleted reserves of ppe as result of the failure to replace supplies in the past administration are they think this of administration if i may make one quick point the former director said in 2019 before the pandemic was wellequipped so i know there were a few areas but just so you know the former director said it was wellequipped last year. I will let you enter them then we will go to senator thune. I will say briefly the president used the defense production act. We have gone all over the world to bring in ppe gradea think the job that was done is absolutely amazing that they created multiple ventilator producers. They have had shipments coming in by the billions for that think its a very unfair criticism in my judgment. I appreciate that. A totally different picture on the ground. Senator thune. Thank you mr. Chairman. Ambassador thank you for all you are doing to promote u. S. Trade around the world and i know in testimony earlier today said the United States would agree to a trade deal with United Kingdom unless the uk provided access for u. S. Agricultural products including u. S. Meat imports. I applaud that position. You and i have talk time and time again about how much or add producers are hurting and how we can and should be doing more to help them. One way we can do more is by making sure that our trade agreements require our allies and trading partners to rely on his sound science. Do you agree that many food standards are actually disguised protectionism and a follow question is what is the best way to stop that threat to . They now, in terms of some residue levels, they actually had, if theres any detection at all, the product is out. To me, that is protectionism and making every regulation science based, its equivalent of getting rid of protectionism. Getting rid of any other nontariff trade barrier. It something if anything, europe is going in the wrong direction, not the right direction. Stepping controlled by these interests and well, let me just leave it at that. In my judgment, we have to insist on science based standards for our farmers and i would say the standard thing, they are using standards and industry, too, it is a higher magnet, we have to insist on it and to the extent people deny us access, we shouldnt give a trade agreement and if we dont have a trade agreement, we ought to be taking trade action against them. Im working right now at what some of these actions are. I want to consult with you and your staff, right now, we should not look at these things, its getting so far where they say literally if theres any detectable residue, it is unacceptable. It is nothing to do with science. Thank you. You have full support on that. Keep fighting the good fight. You talked earlier about the visual Services Taxes being applied in europe and im wondering if you expect the trend of unilateral digital worsening due to revenue shortfalls resulting from the covid19 pandemic. We going to see more of this . I think we are going to see more for sure. Whether its a result of covid, i think they were going to do it anyway. It is a Natural Inclination to tax other citizens if you cant because theres no political price for it. Weve seen it, we just brought 12 more cases and we are going to continue and we will take action if there is some agreement, internationally says here is how we are going to treat companies that make money in your market but dont have a present. I appreciate the things your office does, investigation into those taxes earlier this month. In your testimony, you suggest the way to strengthen our existing trade policies to better protect americans to tighten the threshold for important last year, during a hearing heard from a Small Business owner who said the business rather than hurt Small Businesses like hers, i would suggest another option to strengthen, negotiate agreements that increase negotiating partners. Based on your testimony, it appears you will have upcoming opportunity to pursue other options and i will add congress would be likely to support the effort. Do you agree or think like multiple ways of addressing your concerns . For sure. We tried to do it in u. S. Mci. We are at 800 these were proximate, mexico is at 20 and canada at 40. They doubled theres and to me, there may be Small Businesses, we need to study the issue, if you look at where countries are, it is unbelievable the difference. Other than australia where we are much bigger than everyone else, 50 times more. I would like to study the issue, i think it is costing far more jobs than is helping. I think nobody anticipated that as a result of this, we would have a million packages a day from china taking advantage of this 800, a million a day. The numbers are staggering. 600 but depending on how you count 700 million packages a year in the u. S. Taking advantage. We are no what is in part of it, we dont have any way of checking. They avoid customs, to me, it is a real problem. If you ask me why does every other country keep it small, it is because there small retailers realize is online people or put them out of business if they raise it. I have the opposite, i would love to get involved in the committee and have the Committee Study the facts on the ground. We welcome back. Time has expired. Now we will have three people by tv in this order. As i said, by tv, evidently you folks dont have the time or in front of you so expect five minutes or until you get done question and the answer, i will wrap the gavel. Okay. How about senator menendez . Okay, about senator tormey . Well, go ahead. Senator menendez. Senator menendez, go ahead. First green chinese president and japan. Start over again. We didnt get your voice at the beginning we couldnt hear you. Okay. I was on and they didnt comportment, you are ahead of menendez. Im sorry for something not working right. Can you hear me . Yes. Okay, i am sorry. I couldnt hear either. Anyway, i want to tell you we can all see it, ill try not to do that. Also, thank you for being before us again and theres so many issues i want to talk about but i know how interested you are in bringing ppe back, personal protective equipment back into the u. S. I will tell you this may not be exactly but i hope you will engage because we are not going to get things made here, including immediately we are trying to get gallons made here. They cannot be made without longterm contracts. Doi is an agency in charge of this, they are not providing these longterm contracts. Theres a bigger issue than any other specific matter as it relates to this capability to make ppe. We need a market signal from longer terms. No, needed, just get your way and. Kenya, i know we have begun the process of working with potential trading partners from a summary of where we are in kenya. Okay, we had a good first and second round. I want to short thats a comprehensive agreement and know theres a concern about cutting corners there. I want you to reassure us on that. Finally, wto, i have questions but i will ask you to weigh in on kenya. Thank you. I will followup on the other. In respect to kenya, we will want that on i think its the fifth or sixth of july from the beginning of that. We have had preliminary discussions, we expect that to be as ambitious on fta as you would have under the circumstances with their level of institutional development. We are excited about that, i know the canyons are excited and i know their hope is we can get this done in enough time so it comes in under his term. On the uk, yes. As far as im concerned, it is a comprehensive agreement. I dont know if theres a provision that you think, i would expect it to be comprehensive agreement and it will cover that but of course i say comprehensive, that isnt to say im suggesting zero in on every tariff. As you know, we share an interest in reform of the wto id love to have a discussion about what that means this administration for my biggest concerns is, i know you share how they treated us and how its broken down. I also like the fact that youre doing work with the eu and jap japan. Its an opportunity for us to bring parties together with the exception perhaps of china to come up with new roles and finally, what is the future . We have relatively low rates and others relatively high rates. Thats good for us in many respects but it makes it hard for us to negotiate agreements sometimes because we dont have as much play in terms of tariffs with other countries. Tell us where you are in terms of wto reforms and what congress can do. Im looking legislation, be helpful in making the wto work more effectively with the u. S. And the world. Thank you. To me, i would say the wto is in desperate need of reform. If you said what are my criticisms . Number one is what you said, we negotiate tariffs and then there. If you take our average tariffs on non Agricultural Products 3. 2 , india is 34 from indonesia is 35. Vietnam is 11th. Europe is slightly above hours. South korea at ten. There applied tariffs are higher but more important, their tariffs are much higher because we have essentially no tariffs left, theres no way for us to change that so we are locked into an unfair, unbalanced situation. Something has to be done to change that we do a reset on tariffs and everybody comes down to the same tariffs. I dont like the idea of everybody coming up. Maybe we have to meet in the middle, i dont know but we cant be locked into this in the past, negotiations have been from of the currency has spent the u. S. Paid everybody to lower a little bit. The biggest single problem is that you have unaccountable people who make prudence, which binds the u. S. , affects our jobs and businesses and farmers and ranchers and theres nothing we can do about it. Its a system where you have people doing things that they are never intended to do. Thats a large part of the reason why we have no negotiations in the last 25 years. I could go on but i wont. Thank you. Lets talk about reform going forward. Your time is up. Senator menendez. Ambassador, were you in the meeting between President Trump and chinese president xi jinping in japan . I cant hear you. Im sorry, i didnt have my microphone on. There was a meeting on the outskirts of the g20 in osaka between the president and president xi jinping, i dont know whether thats what youre referring to but that is the situation. About an hour ago, the Washington Post published a story that says former National Security advisor bolton said at one time in that meeting, President Trump turned the conversation into the upcoming u. S. President ial election, alluding to chinas economic capability to affect the ongoing campaigns. To ensure he would when. Absolutely untrue, i was there, never happened. No recollection of that happening, i dont believe it happened. Now you probably recollect hubert there. I was at the meeting, of course i would recollect Something Like that. I know you were at the meeting, you dispute mr. Boltons account of what took place. I told you, that is correct. I dont want you to this never happened, for sure. That would be crazy. I assume its the same meeting and if its not, ill find out. If its true, it shows how clear the administration doesnt have intention of solving our trade problems with china. Tariffs remain in place because china still hasnt dismantled the capacity. Stop subsidizing its own industries so this would be an outrageous use of president ial power instead of trying to solve our trade problems. Let me turn to Something Else, shortly after Congress Approved usmca from mexicos television regulator issued a new interpretation that severely limits the amount of advertising u. S. Media firms can show on their paid tv channels in the country. U. S. Industry argued this is ruminates against the tb providers violation of usmca and will undercut u. S. Jobs that support their programming in mexico. Would mexico be in compliance with the obligations of this regulation modified by july 1 . I would say, i am aware of this issue, i want to study it but if you want an answer right now, i would say no, it is not in compliance. I want to study it but i agree. I agree with you that because they viewed this as a violation six years ago and successfully resulted until the latest change so we are going to start off by july 1 with mexico being out of compliance from the very start. It seems like a horrible way to kick off a new agreement. I hope, can you commit to us that you will review this and make sure mexico is in full compliance with the obligation assuming it is the same what they had six years ago . Absolutely. If not, we will bring the case against them. I appreciate that. On sunday, we heard reports to employees who had been intimately involved in the negotiating usmca had approached Companies Offering to serve paid advisors, these employees were looking to cash in on helping Companies Navigate usmcas complex rules, rules that the employees help draft. They even try to steer companies to a website they set up for the future lobbying firm. Do you know if the Ethics Office told the employees they could approach companies . While still on government payroll . I read that story also, i would say the situation is this, their career employees to they went to the Ethics Office and three, i am told the career employees as opposed to political employees can do things like this. I was troubled as it is much as you are. I appreciate that because i think we should have a very clear understanding of what is and is not acceptable. I dont care whether your career or political, it seems you negotiate elements of agreement, then while you are still on the payroll, he set up a website and pursue your own interest. The ultimate essence of the revolving door. I hope you will look at the internal questions of whether or not that can happen. I want to followup, i completely agree with you. Thank you. Senator reitan has requested something. Unanimous consent request. When i was done, i saw the same Washington Post story senator menendez is referring to. I heard your response, these are obviously very disturbing allegations, mike unanimous consent request given the fact that the posters suggesting that donald trump offer trade concessions for trade benefits for electorally important states, i would just like to, ill send you a list of written questions and id like a response to the written questions within a week. That is mike unanimous consent request. Is their objection . Im happy to answer questions from outlook and see your questions. They are going to refer to this broke the paper, there allegations and i want to emphasize that but i would like a response within a week. Well talk about it further. Now we go to senator toomey. Thank you. Good to see you again, welcome. I will start with something in which you and i i think agree that is prior to the arrival of the covid virus for several years, our economy was remarkably strong, acrosstheboard setting Strong Performance records for the last several years or we might not agree based on the testimony i would argue the strength of our economy is not because of tariffs. In fact, the strength was because, for the most part, weve had a trading environment in 100 years and under that global free trade, certainly much more in recent decades. Its enabled us to prosper. In fact, it was the steel and aluminum tariffs and trade work with china which began the deceleration of what had been extremely strong. The unintended consequences of these tariffs, in pennsylvania, we have fewer manufacturing jobs today than three years ago. Weve lost manufacturing jobs and weve lost a number of them in steel and Aluminum Industries because more people are in the business of using steel and aluminum to produce things than the people who actually make steel and aluminum. Tariffs raise on steel and aluminum, their higher cost inputs for those manufacturers who then are less able to compete with Foreign Companies that are not subject to those. Imposing taxes on American Consumers and manufacturers generally makes up less competitive, not more competitive. For ppe, i read your comments from earlier today in which you seem to suggest you might support higher tariffs rather than lower tariffs in this notion that that might encourage domestic manufacturing, i would urge you to consider, right now, we are in a desperate crisis still for ppe. It is not helpful to Nursing Homes and Healthcare Providers to pay more for this than necessary. We really need the long run is diversified sources. We shouldnt be dependent on any one source for pe, not any one manufacturing facility but if weve got lots of sources including many back in gear up in a hurry, thats probably the optimal arrangement. The direct question i have, id like to get a little bit better understanding of your plans and goals with the u. S. Uk Free Trade Agreement which i am enthusiastic about. Id like to better understand what your goal is, what you would like to see, what is the ideal arrangement . I think i heard you say we are not likely to get 20 tariffs on everything and i wonder, is that is a practical reality given the inevitable reluctance on the part of the uk to give up tariffs on certain things or do you go in with a goal of not having zero tariffs on certain things . If so, which are those things . Id like a better understanding on how your approaching this agreement and what you would like to get out of it. First of all, the issue in which we agreed, we clearly had the best economy decades before this pandemic, i think the vision use it is not the case, not supported by which i am aware and secondly, i think it contributed to the trade policy. I realize you dont agree with that. Before the pandemic, we had more than 600,000 manufacturing jobs in the president s policy bringing back 600,000 manufacturing jobs. I think youre going to see more coming back very quickly once we get past this pandemic. On the issue up to 32, i appreciate, with the situation we have right now, it scares me to think our industry would be in without those 232 tariffs. It is scary to think. I talked about tariffs on ppe and frank testament this morning to clarify what i meant was down the road, incentive to get there, im not talking about doing it now. And if you understand that. This idea of diverse source for ppe, something 50 or 60 countries took action to export as part of their obligations of ppe because when they are in a situation where their citizens are going to suffer if they ship something out, they dont ship it out. Its a universal trend so i think we have to make america, but i realized that. In terms of the goal of the u. S. uk from our view, an agreement that goes across all sectors, highest standards what do i think we will go to zero tariffs . No, i dont. Life support, no. For example, i think we will find agricultural areas and their sensitive areas in both our economies, as much the open and free as we can, given the critical circumstances in each country and i think a lot of fight will be over these issues things like that. The kinds of stuff completely agree on. My time has expired. Thank you. I apologize to my colleagues, i didnt realize time has expired. Good to work with you. I want to start off by thanking you and members of your team, we met recently. I want to start off by thinking your team for your hard work on the trade negotiations. Priority for a number of us ill probably go to my grave thinking that we made a big mistake in pulling out of the partnership, trade partnership. The idea of having the nations together 40 of the world trade, regarding militarizing it, that is another story for another day. Id like to ask a question. In respect to china, studies by multiple reserve economists, academics, american businesses and consumers bear the brunt of it Trump Administration trade work with china. Farmers made have been throughout the country. These tariffs were supposed to force them to make structural changes to its planned economy. The issues outlined in the section 301 report including chinas government subsidies, Technology Transfers among many others. As it turns out, none of these tough issues were addressed in the phase one trading year. I know there is a Technology Transfer section two have those specific, according to people more closer than i have are. I appreciate how hard you and your team work but the trade deal, is it worth all this pain, they are still going through this today. Thats my first question. Thank you for meeting with my people, they enjoyed the meeting. The nominee, it was a wonderful meeting. Ive never vote for you i did not say that. [laughter] you are very thoughtful gave us a lot of things to think about. He did single pop out and i told him i know you probably forgot this but you flew to vietnam with the College Buddy of mine, bobby francis. We just communicated a week ago. You are up there doing the work serving the country bravely during that time. On a couple of things, one of the things on the uk, the socalled its going to be a huge problem and ive made it clear this is not an agreement, or not bring back an agreement to the u. S. Congress that includes this. So on the ppe, i realize you will take this to the grave, i hope it is not soon. The nub of your argument is we are going to have 12 countries, keeping china out and we have this, china says they are probably going to join it. You and i spoke about this, two and half years ago in your office, i said what happens the whole thing doesnt have any meaning. If they are talking about maybe doing it you guys are welcome to come in but lets. First of all, i know what studies you are referring to. There are studies that say anything to do on tariffs is that they give no benefit the costbenefit analysis to change that behavior. If youre an economist and you start with the proposition, Mental Services and currency mutilation and the like as a bad thing, youre going to conclude doing anything to stop it a waste. Thats how i think they approach it. The reality is, if you change bad behavior that has real economic benefits in the u. S. , thats the nature behind this agreement, behind most of our trading limits. I have all these people and i would not put you in this category but i have all these people i talked to about it and i say have you looked at it . Have you paid through it . On the issue of technology, if lata says you are not allowed to use Technology Transfer to require in person, to get a license to have an acquisition and it goes right in the clear as possible language. I would take a step back and say what i said before, all these critics, nobody did anything in the face of this horrible situation for 25 years. The President Trump comes along and people say that is not perfect. Nobody did anything in the face of this but i do, commence you to read this document. Its real and i can take you through, not now, it is too much but id like to walk you through some of the things theyve done in the structural phase. Beginning this issue, i think you would be impressed particularly about things you care about like Financial Services. Theyve done a lot of stuff. Theyve done a lot of licensing so id like to walk you through the empty critics who say this is not a real agreement, its just not being fair. Senator got bike tv. Thank you. Good afternoon. Thank you for giving us an opportunity to continue this discussion weve been having with the ambassador. Thank you for joining us this afternoon, there are a lot of medical issues and lots of problems youre trying to solve. I will add a couple more. Farmers make the south east from our famous the, imposing serious economic harm in our producers around the country. Constituents lost millions of dollars last year alone, in january, you sent congress a letter from stuff you would take unfairly distorting agricultural carcasses here in the u. S. Number two, are you still on track to release a plant by august which is within the 60 day window like u. S. Mta entry entry force . I appreciate that. Ive been watching what you been doing recently and i will show gratitude for that. The issue of seasonal fruits and vegetables, a very serious issue, we committed to one, have hearings in georgia and florida and we were going back and forth on whether the visual, we are going to have when the members say its safe. Real lives safely done so we are doing that. Do i expect to have our plans and 60 days . Yes. I would like to work with you and your staff on putting that together because it is a very serious problem and its at least four or five states having a huge impact and its billions of dollars. Youve always been there, meeting the deadline and continuing the dialogue in helping me better represent the state of south carolina. The farmers around the country having a harder time because of the pandemic so this situation is always encouraging when we hear steps in the right direction. The Automotive Industry, you support my legislation to provide this to the u. S. Mta . I dont know what it is. Aligning of merchandise processing be refunded with all of our fta. So some of these issues, in some ways, yes, i support your legislation. Okay right. Transparency is important without dramatically we changed the world. Of mechanism or Automotive Industry to consult with ustr as the implementation of the u. S. Mta proceeding. Interesting. I havent thought about. The members of the committee think its a good idea, we will do it. Yes. We would love that. Thank god for the Staff Members who have been working on this. It helps have a great team. I would be nowhere without my. You and me both. Thank you, senator. Can i be hurt . Heard. I hope i can be heard. I cannot hear back. Anyway, thank you very much for your service, i appreciate all the help youve given my staff. I want to underscore the regards to culture, theres a great deal of interest to make sure we make advancements in that regard so i assure you you will be hearing from a group of senators in regards to the issue. I want to get more on kenya. Kenya present unique challenges for a trade agreement with the u. S. You are committed to deal with the government, you did that in u. S. Mta, if you use the model, its going to be a real challenge to see how kenya implies those types of commitments on governance, can you share with me how you are going to go about that discussion the governance and how we can help you to make sure we have the strongest possible visions as it relates to those issues . So, thank you, senator. I appreciate your comments on both. I know how strong you feel on the issue. I assure you it will be a cutting edge issue and i agree with you completely. The issue of governance, one of our objectives with kenya is to start a process where countries in africa began to put in place something closer what we consider to be the infrastructure, the legal and Regulatory Infrastructure to facilitate International Trade and what we consider to be best practices the governance and corruption aircraft. I think, as you are suggesting, this is going to be a difficult issue with respect to kenya. The first thing you need, which we have here is commitment at the highest level and we do have that. Thats one of the reasons why we selected kenya from among the countries who are interested in doing this. You have to have commitment at the highest level, we believe we do have that. I think it is going to require some modification, some realism and some phase in. All of those things i would like to work with you because i know this is one of the areas, i dont think ive ever had a hearing with you outside of the hearing from we didnt raise these important issue and they are important. One of the reasons we want to enter into this agreement and have it be a model for other agreements africa is so we can put in place the kind of structure we need for Good Government best practices. Want to work with you on that, i agree with you in it something you focused on, literally your entire career in government. It is very much of the focus of what we are trying to do that. I can assure you i enjoy working with your staff on this issue. Mark transparency you deal with congress as it relates to these provisions, stronger support you can get on the understanding of where you are trying to drive this agreement as a model for other agreements similarly situated countries. We look forward to that discussion. I want to raise the second issue with u. S. Mta, this is a chapter dealing with Small Business from a covid19 has havent all businesses, Small Businesses particularly have been partially hit. I know youve had a working group and dialogue, are we on schedule to have a meaningful implementation the Small Business provisions of the u. S. Mta . The answer is yes, we expect we will. Weve had good cooperation with both mexico and canada on that. I think we are going to have issues but i dont think we will have issues in that way, in that area. I may be proven wrong if i am proven wrong, we will take the necessary steps to make sure the agreement is looked up too but right now we feel very good about this. This area is something both Prime Minister trudeau and president feels strongly on. The president of u. S. , mexico and of canada very much in agreement on the importance of Small Businesses. I expect it to go smoothly. If it doesnt, then we will take steps to enforce and i look forward to working forward to working with you on that. Small Business Committee informed to have a chapter, great interest on members of our committee. Figure. Young was going to be here in person, is he on tv . Thank you. Can you hear me . I can hear you. Thank you for conducting this hearing. Its good to see you again, i hope you and your family are doing well. I want to ask you about agriculture, back to the conversation we had a month ago about the crosshairs of farmers and ranchers because of retaliatory tariffs and once again, to me, it feels like they are trapped between a rock and a hard place with china. According to at least farm bureau and usda chinese agricultural purposes are off the phase one deal as much of 60 . Thats what we are hearing from our farmers and ranchers the farm bureau and usda. Id be interested to hear your thoughts about why because of your sense of downloading the deal this week, the administration asked to stick with the china deal and make sure china holds up its end of the bargain. I am interested in how you expect to hold china accountable without agricultural markets if china fills the agricultural obligations, how will be no and will you be transparent with the American People . How are you going to work the terms of this agreement in a way that does boomerang on our farmers and how quickly do you think our farmers and ranchers can expect a remedy if you decide china is not complying with the terms of the deal . Thank you. I appreciate the question. I would say first of all, the numbers in this, ill go through this quickly. The numbers are difficult to calculate, export shipments but export shipments will pick up things that have been purchased by now for at least, it depends on the products. You can assume a minimum six weeks and sometimes much longer than that. We put together numbers that are one export number we have pretty good numbers on. Then we take the sales reports and add to that, you can sure we dont double count. We add to the sales up to now and will make like a week or so behind as opposed to if you take exit numbers, verse six, eight and ten weeks behind. Then you dont have any idea what goes on. Lets remember the agreement was signed on the 15th of january. The 14th of february and i was about march 1 when they started renting exclusions and giving licenses and the kinds of things we need. So i would say those things, the next thing, 200 farm groups and organizations, they were all saying this is really a great agreement, but stick with it. I took that as a positive thing, i think it was meant to be a positive letter and i thought it was come from entry of the president and the deal. I think it said, they wanted you to stick with the deal. I question is different, when will you know, adding up the weeks you are adding up, and will you know whether or not china is upholding the end of this bargain . How will you make that transparent to the American People . What remedies are available to you if they do not, if for example the trends farm bureau is reporting continue to be the trends rather than your more optimistic view . I would say it is enforceable in a few months, we will know it is a commitment by a certain amount by the end of the year, its reasonable to say you will meet your deadlines. Right now, my feeling is giving some time to pass. I would say if you use our methodology, im not sure exactly what you are most concerned about, i shouldnt speculate on it. If you look at oil seats, there have been soybeans, substantial perpetrators to including five semi dollars last week so those purchases are probably well north of three billing dollars already and you know swiping season is later on so if you look at 2017, which is the biggest you ever had china, ten billing at the end of the year from so another way to look at it, in the last couple months, increases of agricultural sales to china have gone up 34 in increases the rest of the world has gone down 13 . I think we are seeing a real effort, how much has been shipped by now, it depends on what youre looking at. If you look at porn acute related compared, compared to 2017 from heres where we are now, heres 2017. The best year we ever had. If you look at sorghum, another example, we were ahead. At work, we are astronomically ahead of where we were. Theres a lot of reasons for that. Beef, which i know you do care about, literally there was no beef in the best year ever and now we are up. Its like our second best. Beef market right now, caught is the same thing. Those are the big rocks ahead. The other thing to think about is theres also been 25 or 30 sps changes and changes what they have actually given licenses for products and allow certain Agricultural Products, theyve never allowed them before. Theyve now formally have done. Im not saying anything, we have to keep on it and looking at it but if you had to but now, they say you have to do it. Thank you very much for the hearing. It is good to be with you from a distance. Help next time it is in a hearing room. I get for your work. Especially thank you for the work youve done, especially on the usmca and working as hard as you did to bring together the parties on the agreement. I want to raise two issues with you that will take the form of bills and ask for your assessment of each. Released your sense of where each policy is. One is rules of origin from of the other on womens rights trade. Ill start with rules of origin. China often writes free on trade agreement as much as 70 of content originating from china and the negotiated trade rates or tariff rates for trade agreement. If this issue was not resolved in usmca market economy surging act will establish a secondary role of origin to provide free writing by china for the market economy. I hope you would look at this in the context of considering it as an objective and negotiations with the United Kingdom and we should try our best to ensure benefits on countries that respect market principal. One issue and ill ask in a moment to comment on that. The second one is womens rights. You have legislation to update gsp to incorporate measures on womens rights, monstrous termination in the workplace as well because of us leave quickly everyone i know believes these are common sense measures include trade, basically part of gsp from any economy in the world, in my judgment cannot develop fully grow if it doesnt recognize these rights organize people rights of protection from the highback countrys population, they should allow determination against or failed to prevent violence and harassment in the workplace. Hope we can discuss both of these bills. What was your sense on rules of origin and womens rights . Thank you. The rules of origin, or to study the details of the role. Of yorkville. Certainly i agree with you on both of them rules of origin usmca, we increase regional, as you know, automobile. We took a lot of steps in that direction and a good part of the reason was the whole reason was to stop free fighters but a good part was specific writers and to go to sanders, one of the reasons i, for one, thought it was a bad deal with because under those rules of origin from a car could be manufactured 60 in china and 40 in vietnam and still qualify. Thats how bad the rules of origin for so i agree completely with you about using rules of origin thats. Like to discuss that. Terms of including those concepts in the uk agreement is something we are interested in. At least in the auto industry, the situation is very different than in north america. Thats something im not technically familiar with your womens rights issue in nondiscrimination as a matter of principle, i agree with the president and thats why he put if anke trump in charge of issue. Its something she feels strongly about. I want to look at it, it is timely. Gsp expires at the end of the year, we have to decide or very soon what we want to do on it. I have a variety i have some problems and this could be part of a solution. Thank you very much. Cap we go to senator warren by tv. Thank you. It is great to see you again. My apologies, i am not quite this hazy although, when i raise my question, it may be intervention of social Media Companies because if you want to talk about before, that is section 230 reform and we think about advancing the u. S. , uk trade agreement, ive had a number of conversations with members of parliament in both labor and conservative parties in the uk to express concern about the potential inclusion of the 230 harbor uk. You may be well aware is a great deal of bipartisan interest in trying to change around this section 230 democrats and republicans in the house and senate and to be clear, i dont favor repeal section 230 which i understand President Trump i know recently advocated and this is for you and also for senator. A great advocate for section 230. I think it started, its great in early stages in these platforms but i think for some of the larger platforms, this provision safe harbor has been abused on a regular basis, ive been draining peace efforts by Consumer Protection groups. Civil Rights Groups that say section 230 underlies a series of efforts, trying to hold these Platform Companies accountable because too often, groups come on whether discrimination or facilitating, Consumer Product abuse whether it taking on the challenge of actually harassme harassment, online fraud, and a host of issues where i think there is meaningful to 30 reform that could be done so given this bipartisan, even our colleagues in the uk in both Political Parties and the president objection to section 230 and you describe the state of negotiation from this issue. Thank you. First of all, i want to say how disheartening it is to see the Actual Technology guy in the senate have a foggy picture so thats just a little bit. It may be one of the Platform Companies, either but or widen is stopping. He is pointing something out. [laughter] in any event, once ive gotten over that disappointment, i would say first of all, we ought to take a step back and say what do we do trade agreements . I know you know this but ill say this for the other members, im not going to write to 30 or a change in 230 into a trade agreement and into cloth. And you say what you do in a situation where there is an un settled area. I dont know whether its settled or not. But your point is a really good one that there is a different view we write a trade agreement so that there is policy space in the policy agreement with the United States at congress to take action they think is appropriate. My job is not to attempt to resolve the issue that is between all of you have been elected to office. And leave you space what you think needs to be done very think there is a sweet spot there think you could work that out. Im not that worried about in terms of where we are right now with the agreement we have we havent tabled the language on that yet. Ive only got a minute or so left, i would simply say i think there is a way that does not totally embed a safe harbor that would embed the status quo, not give us the freedom and flexibility my staff has been working with yours on these consumer and civil rights protections. Some of the prevention online fraud and some of the harassment issues that i think we acknowledge a real and present. I would appreciate your continued staff working with us and the language go back and forth even after memorial day. I appreciate that i look forward to working with you and hope the next micu would be tensely clear or even in person. Smacked thank you center i look forward to that. Are holding the hearing was bipartisan work. [inaudible] sender i dont know what it is but theres something youre not coming through clear and its not because you are not loud enough theres Something Else wrong. Can it be fixed . [inaudible] were trying to fix my speaker. This is the same group this probably going after me. Two maggots working goahead. Two this is working . Okay good. I want to thank you and the Ranking Member for holding this hearing i want to thank the embed basilar for strong work i do want to followup, mr. Ambassador on the issues that a number of my colleagues have raised regarding the current supply of life saving personal protective equipment as we continue to address the pandemic. Aunt emphasizes not just public and individual health. Its economic recovery. Business seed physical been to reopen pools and Daycare Centers of workers are going to build return to their jobs. They need this equipment. The cost of this equipment will be borne by americans taxpayers and consumers. So both supply and pricing is important. Let me be clear about happening on the ground. People do not have enough ppe. I just spoke with my nursing home administrators at the end of last week they are scrambling in a constant way to find enough ppe. The same is true for Daycare Centers. The administration shows they do not have a plan for sustained supply of all protests into personal protective equipment we need for the long term and theyre counting on users to reuse some of the ppe to reach even minimal bulls of supply. You mentioned tariffs would help encourage domestic protection. I have to tell you when i will echo senator to me on this. All that tariffs do right now is make personal protective equipment more expensive with many Small Businesses and hospitals and other users who will need ongoing supply for months if not years to come. In states getting ppe have had informal business connections paying exorbitant prices to even get a portion of what they need. What would be better is to directly incentivize as support of Domestic Production and do longterm contracted he suggested to increase the supply here at home. Followup on what center portman asked you to do, he asked you to work with other agencies for cot longterm contract issues. I would like to take a step back. How do they coordinate with other agencies such as fema on efforts to increase the supply of ppe here at home to preserve the International Supply chain . Have you been involved with the task force . Our involvement michael b say first of all i disagree with your proposition. Think the administration has done an amazing job starting with what was basically an empty closet. Then they filled it up and getting an enormous supply and totally un precedented circumstances. It is not surprising to you that i dont agree with it your characterization at all. Secondly we talked about tariffs the quote was from my hearing this morning in which i said in the long run, i think part of the solution ought to be rewarding people to manufacture the product in the United States. There are two ways to do that maybe you do both one is subsidies if you decide you want to do debt that. The others have tariffs. Person i think you need both in terms of our involvement we work closely with hhs, we dont really work with fema we work with hhs on what are the tariff consequences, what are the products that people think should get excluded and then we exclude the products from the tariffs that we put into place. We did this by the way wasnt overly there are some stages and i dont remember, for inclusion from our tariffs on all products that had touched the ppe space. We have worked closely with hhs, we do agree. Have you been involved with the task force . No. Okay let me move on to one other quick question. I will just say that hard work does not get people to ppe they need. That isnt where we need to be. We need to be getting the ppe so the people in the front lines in the country. And while i do this i want to submit because im seeing will have about 20 seconds left on the clock. I will submit my next question about the way the lack of exclusions in the china terraces hurting Small Business the middle of a pandemic. Thank you chater translator grassley and ambassador thank such is good to see you again. Let me just reinforce what the senator talks about work fulltime at the womens empowerment trade act its an important peace of legislation the focus on workers right in the women to have equal protection under the law. Women disproportionately face challenges in the workplace including legal areas to work, engaging in action, restrictions on property ownership, educational opportunities, and heartbreaking reports on violence, her harassment or race discrimination but we have to tear down the barriers we have to have safe workplaces globally. This this legislation is common sense majors to strengthen and makes clear countries need to guarantee the cost of protection and womens rights i just wanted to make that clear i do want to talk to about an industry thats important for my state of nevada which is Tourism Hospitality during this pandemic prayed we are literally at ground zero for the impact this pandemic is having on travel, tourism, hospital trent hospitality and the containment industry. The largest numbers of visitors to las vegas came overwhelmingly from canada and mexico. And the revise the thresholds in the u. S. And they will encourage those visitors each year to spend a little more on her local community. My question to you is looking forward to the 2020 trade agenda, what other policy can we consider to help stimulate and revitalize these sectors of our economy with covid19. Im curious if that is something that you have been looking at in that particular industry to address . Thank you, senator. First of all we are happy to work with you on the bill you and senator im sure you heard my comment to senator casey the part of the president s agenda very close to the heart of a bunker trump which i think we could all agree she sent a great job in emphasizing this area we agree thew on whats grown. The tourism and hospitality will people ask me what is the economic effect of covid and you look at the data and you see approximately 30 or so reduction in exports and something less than that and imports. If you look at just about the single biggest area thats hit is in services and it is in hospitality, travel, we are very sympathetic to what is going on we dont if its the hardest hit sector but if its not its close to the hardest hit sector. And the United States have a very aggressive policy to encourage services, trade agreements given the usmc agreement there would be important i would be interested in what you think we ought to be doing if theres things i should be doing specifically to help the Hospitality Industry that is huge but its really for the whole country. Anything that you think i should be doing to help bring it to my attention even now and in the future because i am not completely committed with the on this. I think these people are important and they have ticked combat really fast for get it back to where we were prayed. Thank you im happy to talk to about it its not just about the free flow across the borders its the free flow of travelers. The International Travelers we will definitely take you up on that and work with you. I notice my time is up i will submit my questions to the record. Senator brown by tv. I want to say i want to start by saying i read your recent peace in Foreign Affairs you are speedily referred to the rust belt. As someone would mean the workers in ohio and the midwest and devalues the with the industrial heartland. You turned off. We cant hear you senator brown. So i guess we had to all luther industrial heartland. The workers 60 miles from where you grope her proud of their work until gm close the factory took away their jobs. I want to ask a question on their behalf. The last crew rolled off the line and orange town on march 6, 2016. Gm knew well before that they were going to close the plants. They announced their building the blazer in mexico the last day the second shift reported to work 2018 this is important in the riding in the worlds of origin with the new enough and the first half of 2018 work closely with kara sea made in the u. S. Disqualify for enough benefits pretty claim the updated rules will call a drink create tens of thousands of auto jobs in the country. Gm knew the rules in fact help write them for they still decided to close offshore production to mexico. This week there is a news report of the staff in charge of writing the rules of origin are playing their own business to help Auto Companies comply. Even worse they were letting the Companies Know that they were still on your payroll. Many of them say the trade deals are written and secret from corporations by corporations and the administration of both parties which you have criticized equally with the auto rules of origin were not Strong Enough to stop the off shoring of large jobs to mexico on your staff are more focused on helping companies with their own personal gain and on helping American Workers why should American Workers who lost their jobs in large town believe President Trumps promises the new enough will create the auto sector jobs that you and he claim . Im going to stake that is a slightly tilted question. First of all the lordstown thing, took us by surprise to you know the president made a big thing out of it, he called the ceo of General Motors on several occasions he is trying to fill that spot. Secondly, with respect to the staff i have the same reaction when i read. The article these are two career staff people, not political people career staff people who consulted apparently with our ethnic officials who are career ethics officials on they at least said it was alright i dont know anything about the website or about the conversations between the career ethics people and these two career bureaucrats but i have the same sort of reaction and i dont if the law needs to be change, i know political people could not do what they did and that the Civil Service laws need to be changed to prevent that im certainly you and other senators. [inaudible] we have a sense of betrayal from this administration they said dont sell your homes are bringing all these job specs. We differ on how hard the president tried. Its clear they had democrats on this committee withstands the new enough that so i got brown whiten as you know. Its clear the china deal, phase one did not address provision they didnt try to address the low wages and antiunion losses clear this administration negotiated with the next biggest economy in the world, not protecting workers or raising working standards outside of the trade in the talk on trade i admired he is a public official is done his job well but outside of the trade this is a pro corporate president who has passed a truly dollar tax giveaway giving more companies to move overseas but he suggest work on the back of those who paid into Social Security their whole life, taken every opportunity to have workers rights for safety sanders four straight years of trumps betrayal of workers culminating in the efforts to force workers, mostly women disproportionately blacken Brown Workers that middle of a pandemic. Doctor king said all labor has dignity prayed that means all workers with the slight budget swipe a badge or get tips or salary and it is pretty clear you use the term intermittent with the network obviously made something very different to me than it does to President Trump it was just consistently, as we know betrayed workers in this country. Ive got to respond to that. I disagree with every single word. When youre done more than willing to go to the senator. Go ahead and bassett appears to act first of all i disagree with every single thing you said, senator. I think it is so unfair. We are being lectured, literally by democrats who did nothing for eight years literally nothing this takes tariffs he challenges them he has an agreement his fabulous results. I made this comment before and i want to make it again but i feel like i am churchill being lectured by chamberlain. The fact is i realize you were in the position of defending the Obama Administration. The reality is they did nothing that gone after china like no one else before. Its going to bring back these jobs. Under the Previous Administration eight of the previous 11 auto manufacturing plants, built in north america were built in mexico. That is all stopped. The reality is he is bringing it back. And the lordstown plant theres a lot going General Motors did it all on that. That was not the result of what happened on our watch. [inaudible] termini criticized. [inaudible] [inaudible] fundamentally. [inaudible] so thank you ambassador filigree here with more of a political rally than anything else. I certainly not in an effort to get information we should be number of senators brought up the covid19 viruses demonstrated the vulnerability of our supply chains. Like nothing else has. I read last week an acacia you wrote you talked about the importance you said trade policy alone cannot do that. As part of a broader suite of tax and regulatory policies we talked about Semi Conductors the last couple of weeks they want to reduce in the future Semi Conductors from overseas. So for the president has reduced the imports by half i do think we need to take the next step. As you know many of the most critical, high end Semi Conductors are manufactured in taiwan. The administration negotiated the building of a foundry in arizona but it is going to require the swedes of tax and regulatory policies. What specific measures to you recommend we used to incentivize production in the United States including the tax code . First of all i applaud your bill. If we allow ourselves to be in ten years where we cant be the highest level of Semi Conductors in the United States and shame on us. Everyone who is in the political life right now should bear some of that. This is one of those things that is predictable. We know its going to happen and i matter what happens Semi Conductors are going to be a key part of the economy of the future. If you look for those of you and i nil many members care about Artificial Intelligence and how important that is for the future of american industry but was Semi Conductors were not can be the leader in Artificial Intelligence i applaud that. I feel we have to manufacture here but we also have American Companies have manufacturing. I have of viewing and that world i dont mention specific companies but there is the leading company traditionally is intel they have been part of the solution. If i were one company i would agree with you on. I would say i agree with you, senator warner and ive tried to craft a bill in such a way for all Semi Conductor manufacturers including those here in the United States and hopefully create an environment in multiple sources here in the United States. What do my question, do you agree we could or should use the tax code as part of that sweet of policies designed to encourage that investment . You clearly need subsidies, you know that given the structure of the people are subsidizing weather to the form of tax credits or if there is a long history very effectively in this area. No others details of the bills theres a general matter in the thrust of your bill is strongly supported in the administration. Thank you and i did not want to put you in that position but i was intrigued by your acacia. And obviously since the finance committee is the principal Tax Writing Committee we are going to play an Important Role in that and i know the chairman and Ranking Member know that as well. In that same vein of the 26 multibilliondollar micro chp fobs under construction 2019, only one was located in the United States in 17 located in china. In the meantime we are in a race for the next generation of Telecommunication Networks that would support 5g with state act firms. Our ability to produce that domestically is extremely limited. What can we do from a trade policy perspective to constructively bridge the gap with our allies to Counter China as it relates to 5g . At this point i think the administration through the export controls which are part security and part trade policy is take the steps to protect our own technology and we use the fact that Semiconductor Manufacturing technology to sell to those other companies i think thats important i think when you end up putting together your package you are going to say this sounds like lighthizer i think you have tariffs as part of the solution. One of the ways you incentivize people to manufacture in the night and to manufacture and traditionally do it is through some kind of effective use of tariffs. Also another way straight up grants is proposed a new bill are a nether way. And my guess is the solution will end up being a fine combination of all three. Thank you very much. You have to have the record for me the most patient person youve been all afternoon thank you. Thank you chairman for holding this hearing i think ambassador lighthizer may hold the record with me is a most responsive person in the Trump Administration we dont always agree but you always get back to me. My question is about the Marine Plastic progress that was made in the usmc a. The article stipulates that the parties recognize the importance of taking action to reduce with the mitral under micro plastics. Im wondering what measures have been taken pursuant to that paragraph. It says the parties shall cooperate with respect with landbased pollution and advancing efforts relating to abandon or ghost gear. I mentioned how we have been cooperating on that. Specifically what have you demanded of mexico i see the language but im not aware of any activities that ensued. Thank you. Lets start with what measures has each party taken to prevent that and pursuant to the agreement . First of all thank you for that and for the question and also for your contribution to usmc a. It broke my heart, you know you didnt vote for. But nonetheless, you made a contribution to an important peace of Bipartisan Legislation that you did not support. Symmetric think your heart is very robust ambassador at. [laughter] ive been in town a long time this is not the first time ive had my heart broken. I would say we are serious about this i want to use it going forward. The agreement is not yet in fact it goes into effect july 1 have an inner Agency Environmental committee which is already met once and theres another meeting scheduled for the beginning of july and at that point will start putting into effect these positions and something that is innovative and we are going to require action. The reason i ask here is because of the july 1 date that is our last leverage on that agreement and once that passes, and its got into a fact its a different landscape in terms to push for action and enforcement. So its between now and then. I dont know if youll be able to teach anything up before july 1 is part of the task force negotiation is to lay out some of the understandings of how this will be implemented. I love to hear about them. If thats not between a july 1 problem menu to pursue this after july 1 i would like to see how it with a minute 45 seconds left them obviously not going to get a very robust answer here. Perhaps we can follow up to try to make sure this language just doesnt go into immediate destitute and nothing but a dust gathering paragraph. I certainly do not want that to happen. In the spirit of the letter of it. I look at it the opposite way to me we do not have the rights of the end of agreement until it comes into effect. So we cant really enforce it until we come into effect. But we have done what we have spent tens of thousands of hours over the last several weeks has been getting in place all of the rules and in this case senator brown is still watching which was in an area port and enforcement part hitting those rules in place, setting up the structure so we can let mexico do they have to do with the legal ability to do it in mexico and canada. And then once we get to july 1 with the Interagency Committee that we all put together its wellfunded its already staff, that responsibility, theres a variety of other things to make sure this happens. We chair that committee, we talked to the person who chairs it and i will ask precisely what you just asked me. And at some time post july 1 then when youre settling in to how we use these measures or we demand something of mexico, perhaps we can have a conversation with whoever in your office has a wheel on that. We will do that and i appreciate your staying on it. Because down the road, members of congress dont insist on enforcement there will not be enforcement i feel. And even sometimes when we do. Thank you. Senator cassidy by tv. Mr. Ambassador this is a second hearing today in its now 530 youre doing a great job and thank you so much for your patience and hanging in there, you still look fresh. The thing about going near the end is most folks have asked questions but i have one question that is not been asked and its more based upon your article. Talking about mexico, the energy sector, investors have been seeing that the Mexican Government appears to be tilting the table with the mexican utility company, changing the rules for u. S. Investors. And this is related to Energy Exploration and production the fuel permits downstream the power and renewables, again it seems like there trying to do that with mechanisms with a level Playing Field. Can we expect this to be a just once the usmc as put into effect . Are you aware of this . I am aware of it. Sure i dont know that much aware of it is a problem something expect to enforce. I would say the administration in mexico as you know is very much wants to go in the direction of nationalizing Energy Production prayed that is one of the greatest things they feel strongly about them pushing back against that something weve done in this agreement and expect to do. I know its not my business perhaps but in the long run this is not in mexicos interest to take competition out of the equation with something thats as valuable as Energy Production. My impression is that is clearly the direction that administration wants to go into the extent we have tools we expect to use them to require equal treatment. Thank you at the interesting article theres a lot there. Theres some supply chains would have at least a portion outside the United States. And sometimes its related to costs i dont think youre endorsing or just acknowledging. I have been thinking it probably benefits the United States more if those supply chains are in latin america than they are lets say china. I say that because it looks like enough wont benefit from enough if it stops net migration from mexico to the United States. There are no jobs there. And that in turn is led to Higher Expectations of mexico. I dont know if you have thoughts on that. As we talk about bringing supply chain back from china, least in part, what are your thoughts to that degree might not be in the United States, at least trying to keep it in latin america. Senator, i certainly agree with the thrust of your analysis. And i think its not just china. It is in asia generally. Are we better off the first place and think all of the supply chain should rent United States. I kind of take your point and acknowledge their situations whats probably not going to happen are there places that are better economically and geopolitically for the United States to have those supply chains . Absolutely. I think that is a positive outcome if it works that way. I think a healthy, peaceful mexico for example and by extension jesus that other countries, latin america is clearly an interest of the United States with creating customers, Good Neighbors for all of our states along the southern border. I completely agree with the thrust of what youre saying when you are to specifics everybody can have their own views but i think what youre saying is correct and im flattered that you read the article. I hope it made some contribution to the way people think about trade policy generally prayed. Do you have any data clearly china has filled the void and it may have been spent to the detriment or geopolitical positions you have a study on that . We have not done its not this a pull out of latin american china, rather than do that at the time the companies are going later vietnam and whole others on the next tier or more and more hospitable are aggressive in the terms of getting the supply chain. I dont know if there are other examples no one pops into my head about leaving somebody there may be cases but i think the tendency is at the time when this happens, that was the place to go. And to be honest one of the things i allude to is you end up with a bunch of Business Consultants acacia here go there and all the sudden there is a lemming affects also. Senator langford by tv. Ambassador thank you again for the work you continue to do and the marathon day today to talk there all the issues today meet walkthrough a couple issues one is not going to be a surprise two. Specific in the uk with the progress for the United States is making on any new trade agreements. So, we have discussions ongoing and use you and i have said on the issue of ecommerce with new zealand. We have, of course you know we have a longstanding fta which is been one of our more successful ftas. With australia in terms of trade agreements im trying to think that is probably about it. We had trade discussions across the board, and does have led to a variety of successes in terms of clearing up a whole variety of impediments and that some cases opening markets United States but i could go through those to an interesting thing people think of scr as being involved with these big negotiations. In course we are involved with big negotiations. But an awful lot of what we do are like regular negotiations which we have we have a big negotiation with india which im sure you are aware of potentially moving to fta at some point if we can make headway we have a lot of ongoing discussions. Trade and investment and discussion forms and negotiating points with most of the countries throughout that area indonesia weve had active malaysia there is an awful lot of engagement but not necessarily leading to an fta. Part of the reason for that movement to clear up specific irritants we have or they have with impediments to freetrade. Also part of it is at such a big issue to enter into an fta to go through the whole process. Its something we tend to do kind of less often. Their targeted countries we need to work on Bilateral Agreement with longterm let me shift into a single issue on this. That is the focus dependent on Critical Minerals, Rare Minerals coming out of china depending on with the mineral is 60 to 98 of where the minerals are coming out of one source, china. We have seen them before in 2010 cut off japan and due to a political issue they clearly use were minerals as a leverage point with negotiations in the past. Theres minerals that are rare and can expand availability to help us and help us to more production here in the United States as well. Always a conversation like to get his way from a Single Source of vulnerability . First of all i agree with your assessment. Had a number of conversations its not an area, the solution is not entirely within the st art realm. But we have a part of it. Theres also part of it is the department of commerce, the department of defense and other focus on this area right now you know we have wellin the United States that we cannot economically get it out when its effectively china. The policy being developed not primarily responsible for with your specific emphasis on it whats a reasonable likelihood its a train wreck that some point down the road and people like you part of avoiding that train wreck. For think its a problem with china cutting off ppe during a pandemic, wait till they cut off rare and Critical Minerals and when that happens it is all really is an Economic Disaster at that point. If a single point of failure and a lot of vulnerability there. That estate out entities in china were trying to compete with what the prices in the non environmental rules and Everything Else they do their. Definitely not a clear platform for us. Twenty the issues without longterm any focus we have anything we can continue to raise and push on it. I appreciate your focus we can expand that and definitely discourage australia we would lose more of our sources through chinese ownership in australia. I appreciate your engagement and all the work you do. Thank you, senator i appreciate that. Senator dane thank you, mr. Chairman, therefore largest trading partners i think we lost perspective on that, we have great deals signed in the me went to impeachment, covid we lost sight on the importance on these so congratulations on those wins is very important. Important for senator from montana, because as we think about the access of google markets and farmers and ranchers and other businesses depend heavily on those markets. When you step back and think about the 95 of the worlds consumers live outside the United States, if we are going to grow our businesses, our egg economy its probably going to be depended upon growing a greater market share with 95 of the rest of the worlds consumers who live outside of the u. S. As you know, montana is the number one with silver beings in india is the Largest Consumer and an important market for montana farmers. Unfortunately, u. S. Faces high tariffs in an un fair Playing Field in india. Thats why earlier this year senator cramer and i gave the president a letter wanting him to raise that issue. I was pleased to see the president , President Trump handdeliver that letter to the Prime Minister and he had a picture sent handing the letter to the Prime Minister want to make sure we saw. I want to applaud his leadership during that state visit. What is the negotiations with india . Will you work to commit to remove the tariffs in any ongoing issues . So the answer is yes and then i will elaborate. Diversified appreciate very much working with you and your sort of dogged assistance with us keeping our attention on agricultural not just poultry and beef but montana and there are three or four. Ambassador there is another dogged senator here called senator grassley. We considered a tagteam if we need to. There are a few of you every time i go into these negotiations i think about you during. So you really have made an impact. In terms of the agreements we have a lot in severals are insisting we do this. I think all of the agreements are better because of your involvement in it. The wt i mean the mfn tariff that india has are extremely high on just about everything. One of the indictments i have at the wto is the fact we find ourselves in this position when india joined up the gap in 1948, they had a gdp of maybe 250 billion. Now theyre almost 3 trillion and they still have a third of their tariffs and a whole bunch bound at one 100 . There is nothing we can do about that. How do we change that . The notion we are locked into a wto that says forever you are stuck with that imbalance is crazy. We have to do something about it on terms of the status we are ongoing with negotiations. It is clearly taking longer they are insistent on keeping their tariffs were insisting were getting a fair deal so were still working on it very much. Hopefully we will get to a good outcome. Thank you we appreciate your determination to move the negotiation to the right place pretty want to shift gears to china phase one. It is essential the phase i agreement is implemented quickly as possible in chinas held accountable to the trade deal. The question is this china act in good faith faith in the phase one agreement . And my judgment, they are. Remember the timing, this was not in effect until fibroid 14t. Its not that long ago. Given particularly the length of time in terms of egg sales bird they started giving the exclusions from their tariffs at the beginning of march. They granted a great deal of them including of interest to the chairman on ethanol, which i think will start seeing some ethanol purchases of hopefully of significance. Are they behind . Yes. But you cannot look at it, sat like they agreed to a certain month every month. So if you look at the deal generally about a third of the deal is soybeans. They have already purchased maybe 3 billion with of soybeans. But as you know soybeans tend to be a fault market. So if you look at this and ive made the point before if you look at 2017 we had 10 billion of soybeans at the end of the year. I would expect we will see that again. Are they behind . Yes, are they making substantial purchases in the way we calculated not just whats exporting thats weeks and weeks before was bought. But actual purchases. The number is pretty high is about half a billion dollars with of soybeans. They have beef coming in for the first time ever. If you look at where they are versus where we were in the best year ever we are ahead of it in almost every single major crop. But we got a long way to go. Has just gotten started here. Mr. Chairman can i ask the or someone else . So that will be your last question and i have one question that we will adjourn. Also asked for efforts with the poly silicon industry for years has been targeted by china retaliatory tariffs are threatening some manufacturing jobs that relate directly to our ec silicon which is in butte, montana. Could you lewis updates and how chinas move forth any purchases . I will talk to you about that i do something i know its important to you, something therefore that is important to me. I be happy to talk to about that offline bird. Ive seen a pretty impressive result want to commend you for that. The usmca is garnered much of the passive methods understand by know the agreement is one of the truly unsung hero stories. One that is just as important. More so for u. S. Ad particular for beef. Japan is the largest beef export market. This help level the Playing Field for renters in this important market. I got the charter beef export to japan is increased by nearly 25 yearoveryear. That is the january to april timeframe. We are up almost 25 with the largest beef export market in the world as we are grateful for print that is a significant win. Want to thank you and your team for your efforts. My Cattle Producers are having a hard time right now with the covid related issue with packers its nice to see that japan volume increased by nearly 25 , thank you for the work of the open these markets up with these barriers theres a Bright Future ahead of us in japan as well. I want to thank you again tell your ranchers were thinking about them all the time and thank them for what they are doing. It is the best base of the world, thank you usb. Before asked my last question it sounds like im probably the only one who hasnt told you ive rigged your missile, about a third of the way through. I am honored to even got that far so thank you for that. I recognize, this is my question i recognize many of the usmcas commitments might be models or other freetrade agreements but not all for example u. S. Mc requires mexico and canada be a party to the inner american Tourism Convention which is the management of fisheries in the eastern specific ocean party also has measures that are specific to mexico recent labor reforms. I dont see the same issues with the uk which does not border the eastern pacific already has pretty high labor standards. On the other hand there are some unique issues we have with the uk as a result of their time with eu including restrictions on our Agricultural Products. I hope you can assure me and the committee that our proposals for the uk agreement recognize these important distinctions. Absolutely. We absolutely do. Then for you, i thank you for your appearance today. And particularly keeping your obligation to consult with the committee on a regular basis. I know you have a lot on your plate i pushed your willingness to spend time with us discussing the issues, hearing us out. So for my fellow senators if you have questions for the record, i would like to have them, please submit them by close of business on july 2 and with that i think you once again this term bass that are and the meeting is adjourned. Thank you very much mr. Chairman. Cspans washington journal, every day we are taking your calls live on air on the news of the day and discussing policy issues that impact you. Coming up friday morning former new york city commissioner on efforts to reform policing in the u. S. And cochair of the Poor Peoples Campaign talks about racial and economic injustice in the rural clergy in the fight for equality. 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