policies with russia and china. this is a little over two and a half hours. [gavel] sen. wyden: the committee will come to order. today we are focused on russia and china because those are the big national security and economic developments in our world. their governments are united in putting up barriers to american products and american values. since putin launched his invasion of ukraine, the u.s. and our allies have hit russia, putin and the oligarchs with the most powerful sanctions in history. it's not just about yanking away super-yachts and private jets. putin is now the head of a pariah state. the senate and my colleague, senator crapo and i, are working hard to designate russia as a pariah state by revoking its permanent normal trade relations status. our country is showing russia that taking this abusive totalitarian road is a bad bet. the u.s. and our allies must prove the same to china. china's government is a human-rights abusing, jobs- and tech-stealing behemoth at the head of an economic superpower. one of my top concerns about the chinese government's economic model is censorship. when the internet took off, american innovators were first out of the gate with big ideas. the chinese government responded by using its great firewall to block those companies, and allowing chinese firms to rip off their ideas instead of -- ideas. even worse, chinese tech comes with chinese censorship, and it censors american people and our businesses. the chinese model of censorship is popping up all over the world. it fractures the internet and it is something we see in russia where the people are being fed lies about what's going on in ukraine. the u.s. must stand up to that kind of censorship, and ustr has a big role in fighting for a free and open internet through smart digital trade policy. the chinese government wants to dominate the technologies that will dominate the rest of the 21st century, such as semiconductors, ev batteries and artificial intelligence. it continues its horrendous record of abusing human rights and trampling on workers. again, this is where ustr comes in. it has responsibility to take on china's anticompetitive and antifreedom practices, and we will be working closely with them as they do. the u.s. and our allies have shown our collective economic power is certainly anything but soft. a big reason the u.s. was able to marshal such strength was because of the biden administration and ustr has worked to mend relationships in europe. the united states has racked up significant wins which don't seem to get a lot of discussion. ustr brokered a deal in an aircraft dispute with the eu and u.k. that had been unresolved for nearly two decades. ustr and the commerce department reached deals with the eu, u.k. and japan on steel and aluminum. it will help us remove existing tariffs, bring down prices for americans and fight carbon emissions. american firms had been in the crossfire with tariffs on everything from airplanes to cranberries to wine. eu tariffs endangered oregon's craft beverage industry. ambassador tai's work eliminated significant threats and helped to ensure that americans would grow good paying jobs and more exports. ustr convinced japan to bring in more beef, which is big news for ranchers. american fishers are exporting live oysters, clams and muscles to europe for. decades. finally, the committee held a hearing on the indo pacific economic framework. another opportunity to strengthen our economic ties and marginalized the russia-china model. the indo pacific effort is especially important to folks in our part of the world, the pacific northwest because the pacific northwest is the gateway to the pacific. a good agreement will build overseas barriers from columbia gorge pear to beef. reducing barriers means better market access for farmers and manufacturers. this is so important for our state where the trade related jobs often pay better than the non-trade jobs because there can be a higher value-added component. it is an important opportunity to raise standards for labor rights and a free and open internet. i will close with one last point that is especially important to senator crapo and i. this is a positive development with respect to transparency in government. ambassador tai has made it clear to us there are going to be new transparency and consultation efforts to make sure there is a broader debate about how to get more american workers and small businesses in the winners circle. thank you for joining us. our friend, senator crapo. sen. crapo: thank you and welcome, ambassador tai. i read with the issues senator wyden raised and the progress he has identified. i'm going to issue a strong statement today. on your drive here, ambassador tai you probably passed an inscription engraved on the national archives which says passed his prolonged. president reagan's address to the nation on international free trade, which was founded on his personal commitment to free market principles both at home and abroad. he explained as americans, we must insist on sound domestic policies at home that bring down inflation, provide opportunity for free world countries to go forward and sustain the drive towards more open markets, such as the meeting he organized in geneva which eventually led to the creation of the wto. and most importantly, negotiate. particularly for free trade agreements, like the united states' first two trade agreements with israel and canada that were led by president reagan. president reagan's policies helped to break inflation and restore american leadership on trade, but it seems president biden's trade policy takes the opposite stance. at a time when inflation has soared to 7.9%, president biden says he will not pursue trade agreements until his domestic agenda is complete. if ever enacted, this reckless spending agenda would not only make inflation worse, it would undercut u.s. leadership on trade by promoting a china style industrial policy. proposed electric vehicle provisions will discriminate against 48 of the 50 models available for sale in the united states. it is no wonder why 25 foreign ambassadors told congress these provisions breached our international trade obligations. i'm disappointed that the administration continues to pursue this agenda. instead of focusing on negotiations for new trade agreements. this is a shame because the blighted administration knows better. its 2022 trade agenda opens on the very point -- "the biden administration recognizes that trade can and should be a force for good." absolutely. my home state of idaho is proof positive of that proposition. in 2019, international trade supported over 200,000 jobs in idaho. we're almost 20% of the state's employment. trade liberalization saves the average idaho family of four more than $10,000 per year. the problem here is that president biden's recognition of trade's overall importance is not matched with an agenda that contains the requisite ambition to succeed. there is not a single free-trade agreement under consideration in this agenda. free-trade agreements open opportunities. we have seen it over and over in the past -- and the past really is prolonged. idaho's exports to korea increased by more than 250% since our free-trade agreement in 2012. but in lieu of trade agreements, this administration is proposing dialogues and frameworks, including the new indo pacific economic framework. ipef may be a positive first step to engagement in asia, but it is no substitute for comprehensive trade agreements. the center for strategic and international studies will soon release its upcoming analysis on ipef based on conversations with over a dozen governments in the indo pacific. two points per minutes analysisare instructive. first, u.s. engagement is welcome in the indo pacific. one diplomat stressed in particular that his country wants the united states to lay out an economic strategy that complements its security presence in the region. second, our partners see it as a proposal with many u.s. asks, few u.s. offers and a variety of credible alternatives to the framework that could provide more tangible benefits. if the u.s. is to meet and exceed china's challenge, than the u.s. must make stronger commitments than china. if the administration's negotiation ambitions are low, its consultations with congress on the few negotiations taking place is even lower. at last year's trade hearing, you stated you would brief this committee before and after every negotiating session with respect to a waiver of the wto agreement. that has not happened. ustr recently issued a press release confirming it reached a compromised outcome on the trip's waiver and discussion with south africa, india and the european union. ustr refuses to share the text of that outcome with this committee. while members may have different views on the merits of this waiver, every member should agree the administration cannot withhold documents concerning u.s. rights under a congressionally approved trade agreement. we need to see the documents and we need to ask questions because that is what respect for the constitution requires. there are serious questions to be asked. for example, last week south africa and india joined with russia and china to establish the vaccine rnd center on vaccine cooperation. congress should know whether the text allow south africa and india to share insights on u.s. intellectual property with russia and china. ustr's transparency is also poor. the american innovators who developed the vaccines provided plenty of evidence on why a waiver is unnecessary, including the 20 billion doses will be produced this year, more than enough to achieve the world health organization's vaccination target. the administration has not shared with the public any evidence as to why a waiver will get shots into the arms any faster. i'm disappointed about negotiations and congressional consultation, but i also have concerns about enforcement. americans need to compete on a level playing field and i appreciate the administration's prosecution of two disputes. yet, much more can be done. with respect to the usmca, agricultural market challenges remain. mexico continues to restrict potatoes and delay approval of biotech crops. discriminatory practices targeting our technology companies are increasing. rather than launch cases, the administration appears to be in retreat. the trade agenda highlights terminating the investigations across countries. let's be clear about what this means. those countries are going to continue imposing discriminatory taxes on u.s. firms. they may give a credit one day, but only if congress approves the biden administration's international tax deal. the administration's blessing foreign governments which discriminate against americans as long as congress refuses to go along with its plan for taxing rights and revenue to competitors. past being prolonged. history proves americans do not fear competition but rise to it. now is the time to go further on trade, not stray from it. thank you. sen. wyden: thank you. i know we will be working closely together on many of his issues. ambassador, please proceed. amb. tai: thank you, chairman, ranking member and members of this committee. i appreciate the opportunity to be here today to discuss the president's trade agenda. president biden believes trade can be a force for good. that grows the middle class and addresses inequality. he believes we are at our strongest when we work with others around the world. over the last year in coordination with my colleagues across the administration, we have worked to repair strained relationships and recommitted the u.s. to the world's institution. these partnerships have led to the united response to russia's unjustified attack on ukraine. turning specifically to our work at ustr, our agenda begins with putting workers at the center of our trade policy. when we defend the rights of workers at home and abroad, labor standards go up and we race to the top. farmers, ranchers, fissures and food manufacturers are key to our trade agenda and we have delivered real, economically meaningful wins for them. the 232 tariff arrangements and civil aircraft frameworks with you and u.k. lifted retaliatory tariffs on billions of dollars on u.s. agricultural exports. the agreement with japan will allow exporters to me japan's growing beef demand. we regain access to the eu for the shellfish industry and open access for u.s. pork exports to india. we are realigning the u.s.-china trade relationship. we launched a discussion with the phase one pitfalls and market practices. those discussions have been unduly difficult and it is time for us to turn the page on the old playbook. that starts with developing new domestic tools and making strategic investments to maintain our global competitive edge. we have made progress on this effort through the american rescue plan. the administration's focus on supply-chain resilience. and the bipartisan infrastructure law. passing the bipartisan innovation act will build on this significant progress. we have renewed our engagement with partners and allies and are developing innovative engagements that strengthen our resilience and address the china challenge. the global arrangement we are negotiating with the eu will be the world's first sectoral arrangement on steel and aluminum trade to tackle both emissions and nonmarket excess capacity. beyond this cooperation, we have deepened our relations with trading partners. we launched u.s. and eu trade and technology council. we relaunched the united states-india trade policy forum to enhance our relationship. we hosted the first dialogue on the future of atlantic trade in baltimore last week with the united kingdom. we will meet again in scotland next month to consider what concrete, economically meaningful steps we could take. we are also committed to intensifying economic engagement in the indo pacific. ustr will lead efforts to craft a trade agreement that includes high standard labor commitment, environmental sustainability, the digital economy, sustainable food systems and science-based agricultural regulations, good regulatory practices, and trade facilitation. on the multilateral front, the biden administration has continued efforts to make the wto a force for good. we are working towards an intellectual property outcome to help end the pandemic. we will continue to engage with wto members to get safe and effective vaccines to as many people as possible, and we are committed to bringing reform to the organization. the biden administration also knows that enforcement is key to trade policy delivering on its promises. we have used the usmca rapid response mechanism twice to defend workers rights in mexico, which helps workers here by driving a race to the top. we have insured u.s. theory farmers are treated fairly. we also initiated environmental consultations with mexico to prevent unreported and unregulated fishing. a final important part of our trade agenda is promoting trade policy that is equitable, inclusive, and durable. and the president's trade agenda includes objectives to advance racial and gender equity. we will continue to pair these values with sustained stakeholder engagement. i want to close with one final point. congress is our constitutional partner on trade and collaboration is critical to our agenda and america's success. in an increasingly complicated world, i'm more confident than ever that we can walk, chew gum and play chess at the same time. i look forward to continuing this work in the year ahead with you. thank you and i look forward to answering your questions. sen. wyden: thank you very much. let me start by focusing on what you said in your trade agenda with respect to environmental issues being front and center. you highlighted your goals of promoting sustainability, addressing carbon emissions, and enforcing environmental commitments on trade agreements. i want to focus on a concern that hits on all of these issues. mexico is a key partner in the usmca and it sure looks to me like they are slamming the brakes on renewable energy reform. in recent years, mexico made substantial efforts to modernize to green the electricity market. they gave the green light to foreign investment and they opened their market, particularly to innovative american providers of renewable electricity. but as i just indicated, now it looks like they are in retreat. they're considering laws that concentrate market power and regulatory authority in the hands of the state owned electric company. that result will mean a bigger focus on fossil fuels with limited opportunities for clean energy providers. so, mexico's new reforms are a 1-2 punch against environmental progress in america. not only are they a setback in the fight against the climate crisis, but they are denying american companies, companies in the pacific northwest, a fair shake in the mexican market. my view is what mexico is doing now looks to me like it is running opposite from the promises mexico made in the usmca. so, ambassador, as we have talked about, the united states needs to make sure every chapter of usmca is fully implemented and paid off for american workers and businesses, and a cleaner climate in the americas. that was what was pursued in the usmca. what are you doing to address mexico's actions in the energy market that i have described? amb. tai: thank you for answering this and -- asking this important question. let me start by confirming my commitment that the usmca must be enforced and implemented across all chapters. that is an organizing principle of our work. i'm deeply concerned with the legislative and regulatory developments in the mexican energy industry that we have seen in recent months. my team and i, along with much of the u.s. government, have expressed these concerns regularly and directly to our counterparts in the mexican government. just last week, i convened a roundtable with members of congress, with members from our environmental organization community, from our energy industry that includes renewable energy companies, as well as our more traditional energy companies. the testimony i heard from them was palpable. they have been unified in expressing concerns with what is happening in mexico, specifically with respect to the competitiveness of this north american energy market, as well as the competitiveness of mexico's own energy industry. i have informed mexico, and i assure you that we at ustr are looking at all available options under the usmca to address these issues so that the usmca can work for our stakeholders and protect our environment across all three countries. sen. wyden: we will want to work very closely with you because it seems to me that mexico on one area after another as it relates to greener energy and the challenge of environmental reform is walking back what they pledged in usmca, and we can't sit by. let me ask you one other question. it deals with russia and china, and the challenge of today. we all remember the searing image at the opening ceremony of the olympics. president xi and president putin standing together, asserting their friendship has "no limits." xi was flexing his power to expand his authoritarian orbit. basically thumbing his nose at the american-led international order. that was before putin's brutal invasion of ukraine. how are you working with our allies to ensure that when the united states confronts china's anticompetitive behavior and theft of homegrown innovation, it's got the allies on board? amb. tai: chairman wyden, let me begin by saying working with our allies is a key component of the biden administration's approach to a smarter strategy towards china and this has been the case since day one. i have invested a lot of time personally, as have my colleagues in the cabinet to rebuild relation