Senate Finance Committee Hearing on Robert Lighthizer to be USTR
Key Topics & Takeaways
- NAFTA: Lighthizer declined to provide details on the Trump administration’s plans regarding the future of the North American Free Trade Agreement (NAFTA). Lighthizer promised to defend U.S. agricultural producers in any NAFTA renegotiation, as numerous Senators noted the importance of the Mexican market for U.S. agricultural products and broad Canadian restrictions on U.S. agricultural exports.
- China: China dominated the discussion during the hearing, and many Senators expressed concern over the Chinese dumping of steel and metal products, Chinese government support for state-owned and state-aligned industries, and the lack of Chinese protection for intellectual property. Lighthizer assured the Senators he would protect the U.S. steel industry from unfair Chinese trade practices and would use the World Trade Organization (WTO) and bilateral agreements to protect U.S. producers.
- Agriculture: Numerous Senators requested Lighthizer, and the Office of the United States Trade Representative (USTR), protect U.S. agricultural producers and break down barriers overseas to U.S. agricultural exports. Lighthizer said that agricultural exports would be a priority for him at the USTR, as the U.S. is a major producer of agricultural products.
Nominee
- Robert Lighthizer, to be United States Trade Representative
Opening Statements
In his opening statement, Chairman Orrin Hatch (R-Utah) criticized the Obama administration for not filling vacancies at the Office of USTR, and criticized Democrats for attaching the “extraneous” issue of miners’ health benefits to Lighthizer’s candidacy. Hatch also discussed Lighthizer’s previous legal representations of foreign clients in the 1980s and 1990s, which Democrats believe necessitate a Congressional waiver for Lighthizer to fill the position of USTR. Hatch argued that it is “unclear” if the statute in question – a component of the 1995 Lobbying Disclosure Act – applied to Lighthizer, and accused the Democrats of “legislative hostage-taking” by trying to link the waiver to the miners’ health benefits issue. Hatch also discussed trade priorities for next USTR, saying he expects Lighthizer to serve as a strong advocate for US intellectual property rights, and that he expects “quick and effective use” of Trade Promotion Authority to negotiate new, strong trade agreements and update existing agreements. Hatch also named anticorruption, trade secrets protection, transparency in government reimbursement regimes, and price fixing overseas as key priorities for the next USTR.
In his opening statement, Ranking Member Ron Wyden (D-Ore.) linked any waiver for Lighthizer to the miners’ health issue. Wyden also criticized the administration trade policies thus far, describing it as “just talk.” Wyden called on Lighthizer to improve U.S. enforcement of existing trade agreements, saying that foreign subsidies and dumping should be identified and halted, and US trade partners should be held to their commitments, including their labor and environmental obligations. Wyden identified the Asia Pacific region as a key area of interest for the U.S., noting the large number of people entering the middle class in that region. Wyden said that the U.S. cannot remain “on the sidelines while other nations negotiate trade deals that advantage their exporters over ours.”
Former Senator Bob Dole introduced Lighthizer. Sherrod Brown (D-Ohio) and Rob Portman (R-Ohio) each testified briefly in support of Lighthizer’s nomination. Brown described him as the “man to design a new trade policy” and spoke favorably of his previous work on behalf of the steel industry. Portman also supported Lighthizer and lauded his previous experience as Deputy US Trade Representative. Brown did criticize the committee’s inaction on the miners’ health and pension issue during his remarks.
Testimony
Robert Lighthizer, to be United States Trade Representative
In his brief testimony, Lighthizer talked about his previous work on trade issues. He stated his support for President Trump’s ‘America First’ trade policy, and discussed the importance of strong enforcement of existing trade agreements. Lighthizer said the administration would work with like-minded trading partners to “ensure fair trade and to encourage market efficiency.” He also discussed the importance of trade to economic growth and to improving the lives of everyday Americans.
Question & Answer
North American Free Trade Agreement (NAFTA)
Sen. Chuck Grassley (R-Iowa) asked Lighthizer whether NAFTA would be renegotiated through a new trilateral agreement or two new bilateral agreements. Lighthizer said the administration has not decided how it will renegotiate NAFTA.
Sen. Tom Carper asked Lighthizer if the U.S. needed to renegotiate NAFTA completely, or if the U.S. would use the Trans-Pacific Partnership (TPP) as a baseline for changes to NAFTA. Lighthizer agreed with using TPP as a baseline, saying former USTR Michael Froman did a “good job” on TPP.
Numerous Senators asked Lighthizer about the U.S. trade relationship with China. Questions focused on Chinese steel and metal exports and the impact of Chinese dumping on global markets. Lighthizer said the U.S. needed to “Start thinking about some new remedies” saying that using the WTO should be one part of broader engagement on trade with China. Lighthizer also said he did not believe the WTO could effectively deal with Chinese industrial policy. Lighthizer said he would oppose “Market Economy” status for China. He was also asked several times about ways to reduce Chinese steel exports to the U.S., and reiterated numerous times his commitment to protecting the U.S. steel industry from dumping.
Sen. Pat Roberts (R-KS) and Grassley asked Lighthizer about the importance of U.S. agricultural exports in trade negotiations overseas. Both asked for assurances that the USTR would prioritize gaining access to new markets for U.S. farmers, which Lighthizer assented to. Lighthizer said it is “hard…to understand why we tolerate so man barriers to agricultural trade when America is the number one producer of agriculture products.” Grassley specifically called on Lighthizer to protect agricultural products in any NAFTA renegotiation, noting that Mexico is a major destination of U.S. agricultural exports.
Wyden discussed the U.S.’s long-running dispute with Canada over that country’s exports of softwood lumber. Lighthizer assured Wyden that softwood lumber would be “at the top of [his] list” in any trade discussions with Canada.
Sen. Michael Bennet (D-Colo.) and Sen. Bill Cassidy (R-La.) both expressed concern over possible Mexican retaliation on U.S. agricultural exports in the event of a contentious NAFTA renegotiation. Toomey also asked Lighthizer to help U.S. dairy producers gain better access to the Canadian market.
Intellectual Property
Hatch asked Lighthizer several times about the USTR’s role in enforcing U.S. intellectual property (IP) rights overseas, especially in India. Lighthizer assured the administration would provide “robust protection” for U.S. intellectual property and promised to bring WTO and bilateral enforcement actions against violators of IP rights. Lighthizer also promised to include IP rights enforcement in any trade negotiation with Canada, in response to Hatch’s questions about Canada’s refusal to enforce U.S. IP rights on in transit cargo.
Sen. Pat Toomey (R-Pa) also asked Lighthizer to protect U.S. IP rights overseas, particularly for biologics. Several other Senators made statements about the importance of IP for the U.S. economy.
Data Location
Wyden asked Lighthizer about data location issues, saying it is important to stop “foreign efforts to require American companies to store data where governments want the data stored, not where it makes sense for the private economy.” Lighthizer said it is “essential” to protect the free flow of data, and to ensure that companies can store their data where “it makes sense economically.” Lighthizer said he was “fully committed” to protecting U.S. companies’ data and that data location would be included in any new trade agreements, as well as any updates to existing trade agreements. Lighthizer noted that this issue “didn’t even exist” when NAFTA was originally negotiated and promised data location would be a priority for the USTR.
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Key Topics & Takeaways
- NAFTA: Lighthizer declined to provide details on the Trump administration’s plans regarding the future of the North American Free Trade Agreement (NAFTA). Lighthizer promised to defend U.S. agricultural producers in any NAFTA renegotiation, as numerous Senators noted the importance of the Mexican market for U.S. agricultural products and broad Canadian restrictions on U.S. agricultural exports.
- China: China dominated the discussion during the hearing, and many Senators expressed concern over the Chinese dumping of steel and metal products, Chinese government support for state-owned and state-aligned industries, and the lack of Chinese protection for intellectual property. Lighthizer assured the Senators he would protect the U.S. steel industry from unfair Chinese trade practices and would use the World Trade Organization (WTO) and bilateral agreements to protect U.S. producers.
- Agriculture: Numerous Senators requested Lighthizer, and the Office of the United States Trade Representative (USTR), protect U.S. agricultural producers and break down barriers overseas to U.S. agricultural exports. Lighthizer said that agricultural exports would be a priority for him at the USTR, as the U.S. is a major producer of agricultural products.
Nominee
- Robert Lighthizer, to be United States Trade Representative
Opening Statements
In his opening statement, Chairman Orrin Hatch (R-Utah) criticized the Obama administration for not filling vacancies at the Office of USTR, and criticized Democrats for attaching the “extraneous” issue of miners’ health benefits to Lighthizer’s candidacy. Hatch also discussed Lighthizer’s previous legal representations of foreign clients in the 1980s and 1990s, which Democrats believe necessitate a Congressional waiver for Lighthizer to fill the position of USTR. Hatch argued that it is “unclear” if the statute in question – a component of the 1995 Lobbying Disclosure Act – applied to Lighthizer, and accused the Democrats of “legislative hostage-taking” by trying to link the waiver to the miners’ health benefits issue. Hatch also discussed trade priorities for next USTR, saying he expects Lighthizer to serve as a strong advocate for US intellectual property rights, and that he expects “quick and effective use” of Trade Promotion Authority to negotiate new, strong trade agreements and update existing agreements. Hatch also named anticorruption, trade secrets protection, transparency in government reimbursement regimes, and price fixing overseas as key priorities for the next USTR.
In his opening statement, Ranking Member Ron Wyden (D-Ore.) linked any waiver for Lighthizer to the miners’ health issue. Wyden also criticized the administration trade policies thus far, describing it as “just talk.” Wyden called on Lighthizer to improve U.S. enforcement of existing trade agreements, saying that foreign subsidies and dumping should be identified and halted, and US trade partners should be held to their commitments, including their labor and environmental obligations. Wyden identified the Asia Pacific region as a key area of interest for the U.S., noting the large number of people entering the middle class in that region. Wyden said that the U.S. cannot remain “on the sidelines while other nations negotiate trade deals that advantage their exporters over ours.”
Former Senator Bob Dole introduced Lighthizer. Sherrod Brown (D-Ohio) and Rob Portman (R-Ohio) each testified briefly in support of Lighthizer’s nomination. Brown described him as the “man to design a new trade policy” and spoke favorably of his previous work on behalf of the steel industry. Portman also supported Lighthizer and lauded his previous experience as Deputy US Trade Representative. Brown did criticize the committee’s inaction on the miners’ health and pension issue during his remarks.
Testimony
Robert Lighthizer, to be United States Trade Representative
In his brief testimony, Lighthizer talked about his previous work on trade issues. He stated his support for President Trump’s ‘America First’ trade policy, and discussed the importance of strong enforcement of existing trade agreements. Lighthizer said the administration would work with like-minded trading partners to “ensure fair trade and to encourage market efficiency.” He also discussed the importance of trade to economic growth and to improving the lives of everyday Americans.
Question & Answer
North American Free Trade Agreement (NAFTA)
Sen. Chuck Grassley (R-Iowa) asked Lighthizer whether NAFTA would be renegotiated through a new trilateral agreement or two new bilateral agreements. Lighthizer said the administration has not decided how it will renegotiate NAFTA.
Sen. Tom Carper asked Lighthizer if the U.S. needed to renegotiate NAFTA completely, or if the U.S. would use the Trans-Pacific Partnership (TPP) as a baseline for changes to NAFTA. Lighthizer agreed with using TPP as a baseline, saying former USTR Michael Froman did a “good job” on TPP.
Numerous Senators asked Lighthizer about the U.S. trade relationship with China. Questions focused on Chinese steel and metal exports and the impact of Chinese dumping on global markets. Lighthizer said the U.S. needed to “Start thinking about some new remedies” saying that using the WTO should be one part of broader engagement on trade with China. Lighthizer also said he did not believe the WTO could effectively deal with Chinese industrial policy. Lighthizer said he would oppose “Market Economy” status for China. He was also asked several times about ways to reduce Chinese steel exports to the U.S., and reiterated numerous times his commitment to protecting the U.S. steel industry from dumping.
Sen. Pat Roberts (R-KS) and Grassley asked Lighthizer about the importance of U.S. agricultural exports in trade negotiations overseas. Both asked for assurances that the USTR would prioritize gaining access to new markets for U.S. farmers, which Lighthizer assented to. Lighthizer said it is “hard…to understand why we tolerate so man barriers to agricultural trade when America is the number one producer of agriculture products.” Grassley specifically called on Lighthizer to protect agricultural products in any NAFTA renegotiation, noting that Mexico is a major destination of U.S. agricultural exports.
Wyden discussed the U.S.’s long-running dispute with Canada over that country’s exports of softwood lumber. Lighthizer assured Wyden that softwood lumber would be “at the top of [his] list” in any trade discussions with Canada.
Sen. Michael Bennet (D-Colo.) and Sen. Bill Cassidy (R-La.) both expressed concern over possible Mexican retaliation on U.S. agricultural exports in the event of a contentious NAFTA renegotiation. Toomey also asked Lighthizer to help U.S. dairy producers gain better access to the Canadian market.
Intellectual Property
Hatch asked Lighthizer several times about the USTR’s role in enforcing U.S. intellectual property (IP) rights overseas, especially in India. Lighthizer assured the administration would provide “robust protection” for U.S. intellectual property and promised to bring WTO and bilateral enforcement actions against violators of IP rights. Lighthizer also promised to include IP rights enforcement in any trade negotiation with Canada, in response to Hatch’s questions about Canada’s refusal to enforce U.S. IP rights on in transit cargo.
Sen. Pat Toomey (R-Pa) also asked Lighthizer to protect U.S. IP rights overseas, particularly for biologics. Several other Senators made statements about the importance of IP for the U.S. economy.
Data Location
Wyden asked Lighthizer about data location issues, saying it is important to stop “foreign efforts to require American companies to store data where governments want the data stored, not where it makes sense for the private economy.” Lighthizer said it is “essential” to protect the free flow of data, and to ensure that companies can store their data where “it makes sense economically.” Lighthizer said he was “fully committed” to protecting U.S. companies’ data and that data location would be included in any new trade agreements, as well as any updates to existing trade agreements. Lighthizer noted that this issue “didn’t even exist” when NAFTA was originally negotiated and promised data location would be a priority for the USTR.