In testimony to the Senate Committee on Finance Thursday, US Trade Representative Katherine Tai fended off bipartisian criticism of the Administration’s diplomatic priorities and process,
Chairman Ron Wyden (D-OR) kicked off the meeting calling for “ramped up enforcement.. stronger, faster-acting enforcement tools like the Rapid Response Mechanism,
“Second, the administration needs to make opening export markets a priority. I have real concerns that USTR isn’t doing enough to break down barriers our exporters face…the U.S. cannot conclude agreements with Japan, Indonesia, or the EU that leave issues facing our exporters unaddressed.”
“The Executive Branch has begun to embrace a “go it alone” trade policy. Let me be clear: Congress’ role in U.S. trade policy is defined by the Constitution. It’s right there in Article I, Section 8. That is black-letter law, and it’s unacceptable to suggest otherwise.”
Mr. Wyden cited concerns that the USTR would enter into Critical Minerals trade agreements without consultation with Congress.
“First your office needs to release detailed, publicly available negotiating objectives, before discussions start with foreign governments. To just hear about it in the news or have staff discussions is not the same thing,” said Mr. Wyden. Second, Congress and the public need a chance to vet trade agreements before they're signed… Finally Congress needs a final say on any of these agreements.
Responding to Mr. Wyden’s call for a to a “pro competition digital agenda,” in negotiation, Ms. Tai counseled caution. “This is an incredibly important area, an area that is new to trade negotiations around the world, and also one where we want to take surefooted steps.”
Ranking Member Ron Crapo called out us trade with Vietnam as an example of a failure in US Leadership. Despite being the US being Vietnam’s largest trading partner, “China and the EU have concluded trade agreements to reduce their tariffs eventually down to zero, while signature American products, like automobiles, apples, poultry, potatoes, milk, and others, will continue to face high tariffs.”
Mr. Crapo noted the USTR had yet to respond to the committee’s [letter] of December 1, 2022 calling for consultation, transparency and a process understanding while implementing the Indo-Pacific Economic Framework for Prosperity (IPEF). Ms. Tai blamed the lack of response on the Commerce Department.
Sen. Charles Grassley (R-Iowa) pushed unsuccessfully for Ms. Tai’s commitment to file a USMCA formal dispute settlement on the matter of GMO Corn April 7th. Grassley further asked directly “Do you plan to pursue concrete market access commitments in any of the frameworks and initiatives that you're pursuing?” Ms. Tai did not answer yes, though she noted that she was “open minded.”
See Bob Menendez (D-NJ) raised the topic of voting FTA partners out. “I believe we cannot ignore when one of our free trade partners specifically Nicaragua becomes a brutal dictatorship… I look forward to working with you and the administration to suspend Nicaragua's market access under CAFTA. It is just absolutely outrageous.” Ms. Tai was unable to commit to such a measure.
With the exception of the Senator from the Garden State, most panelists were focused on agricultural market access. From Potatoes to Pears, to Corn, to Apples and Poultry, the message from the committee was that market access is a priority and the administration’s approach is not winning friends at home
The Administration remains open to negotiating traditional comprehensive free trade agreements with the right partner and the right time, Ms. Tai said in response to repeated complaints from senators that the trade deals currently being negotiated by the Administration leave out market access in the form of tariff reductions.
“The Administration needs to make opening export markets a priority,” Chairman Wyden said. He pointed to the US-Mexico-Canada Agreement, which passed Congress with bipartisan support, as “proof that US trade policy can raise the bar on labor and environmental standards and bust down barriers to American exports – at the same time.”
The Indo-Pacific Economic Framework and bilateral trade deals being negotiated with Taiwan, Kenya and other countries, should include market access and technical barriers to trade chapters like the USMCA, according to Sen. Crapo.
The Administration is willing to consider traditional trade agreements, but is trying to tailor trade deals to specific partners, Ms. Tai said. In the meantime, tariff and non-tariff barriers can be addressed through discussions with trade partners.
Sen. Ben Cardin (D-Md) expressed concern that unlike the USMCA, the IPEF does not appear to have an enforcement mechanism. Ms. Tai assured him that the IPEF and other agreement sunder negotiation will have enforcement, but not like a traditional FTA. “We’re going to have to bring a new approach on these agreements. We’re going to have to look at carrots and sticks.”
The Administration should let South Africa know that it should not count on continuing to receive duty free access to the US market under the African Growth and Opportunity Act, said Sen. Todd Young (R-Ind). He cited South Africa’s close relationships with China and Russia as a reason to drop the country from the program.
Meanwhile, Sen. Mark Warner (D-Va) urged the Administration to think about restoring AGOA benefits for Ethiopia. Ms. Tai said USTR is working with the Ethiopian government on benchmarks to track its progress in meeting AGOA’s criteria for beneficiaries.
In her prepared remarks, Ms. Tai said the Administration is keeping the door open to conversations with China, including on its commitments under the Phase One trade agreement negotiated by the previous Administration. “We must also vigorously defend our values and economic interests from the negative impacts of the PRC’s unfair economic policies and practices,” she stated
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