Ambassador Lighthizer’s Testimony
In his prepared remarks for both the Senate Finance Committee and the Ways and Means Committee, Ambassador Lighthizer emphasized the renegotiation of NAFTA. Ambassador Lighthizer stated that his office “is talking to stakeholders, [Congressional] staff, and the public to help us develop our policy outcomes for the negotiations. USTR is reviewing the more than 12,400 comments received from everyday Americans during the open-comment process. . . . My staff is now busy reviewing and analyzing those comments, in order to help formulate our positions on how to improve the NAFTA.” He added that “we will be publishing a detailed summary of the negotiating objectives at least 30 days before the negotiations begin.” On May 18, and as required by law, Ambassador Lighthizer provided a 90-day notice to Congress of the administration’s intent to renegotiate NAFTA. This means that negotiations can begin as early as August.
Ambassador Lighthizer added that, as required by Executive Order 13796, USTR’s Office of General Counsel “is in the process of examining our trade relationships and identifying issues that can be addressed through enforcement of U.S. trade laws. We believe that too little has been done in this area in recent years, and we are actively assessing ways to get tough on countries who do not respect our economic system.” In mentioning a “big victory” for the United States in a World Trade Organization (WTO) case brought by the European Union involving large civil aircraft, Ambassador Lighthizer also said that “I look forward to continuing the trend of defending American businesses against unfair claims from foreign nations. Further, we will not hesitate to file claims against nations that do not follow the rules.”
Senate Finance Committee Hearing
In his prepared statement at the Senate Finance Committee hearing, Committee Chairman Orrin Hatch emphasized that “the upcoming negotiations with Canada and Mexico provide the administration with a unique opportunity to improve North American integration. This will make the region a more attractive investment and manufacturing hub and serve as a counterweight to China.” According to Chairman Hatch, “the best way to ensure a strong U.S. economy through trade is to negotiate deals with foreign nations that require them to play by our rules, and allow us to hold those countries accountable when they fail to do so.” He also stated that building and maintaining a healthy U.S. economy “requires a trade policy that not only increases economic opportunities for American companies and consumers, but also holds foreign nations accountable when they abuse the system.” Chairman Hatch continued to say that “ensuring that our trading partners follow the rules is only part of the equation. Establishing those rules also is in our national interest.”
In his prepared remarks, Ranking Member Wyden stated that “the trade agenda ought to be focused on creating more high-skill, high-wage middle-class jobs right here in the United States—red, white and blue jobs. That means aggressively going after trade cheats to make sure our U.S. workers are competing on a level playing field, and it means opening up new markets for the Oregon brand and the American brand.” He focused much of his remarks on NAFTA, stating that “NAFTA could use a complete overhaul.” Specifically, his idea of a NAFTA overhaul would result in “high-standard, enforceable labor and environmental commitments; removing Chapter 19 (binational panel reviews of antidumping and countervailing duty determinations), which hampers our ability to fight unfair trade practices; and addressing challenges that are specific to dairy, wine and key manufacturing industries. The U.S. also needs to combat currency manipulation, market-distorting state owned enterprises, and the trade cheats that have become more sophisticated in evading our trade enforcers.”
House Ways and Means Committee Hearing
Ways and Means Committee leadership discussed similar issues in its June 22 hearing. Committee Chairman Kevin Brady considered NAFTA renegotiation in the context of U.S. free trade agreements, stating that “[o]ur trade agreements, including NAFTA, have been tremendously successful. They’ve created American jobs, lowered prices for consumers, and helped our businesses compete and win in all three crucial segments of our economy: agriculture, services, and, yes, manufacturing.” “That said,” Chairman Brady added, “we have to take action to strengthen our existing agreements to ensure they continue to benefit the American people. I’m pleased that President Trump is taking this approach with NAFTA. NAFTA was negotiated nearly 25 years ago. It should be updated to reflect the modern realities of trade” on issues such as “digital commerce, intellectual property, state-owned enterprises, and customs barriers.”
In his prepared remarks, Committee Ranking Member Richard Neal also mentioned NAFTA renegotiation, the Transatlantic Trade and Investment Partnership (TTIP), and a number of other trade issues. Ranking Member Neal expressed hope that Ambassador Lighthizer could “clarify the Administration’s position on the full range of trade issues today, from the specific objectives of a NAFTA rewrite, to the Administration’s position on negotiating TTIP and an Environmental Goods Agreement, to how the Administration will address currency manipulation, to the Administration’s current thinking in the steel and aluminum national security investigations.” Ranking Member Neal concluded that “[w]e look forward to working with you to prioritize the needs of American workers and families through our trade policy.”
These hearings and the subjects that were discussed set the stage for an eventful 2017 and beyond for U.S. trade policy.
