Senate Finance Committee Hearing on Trade Policy with USTR Michael Froman
At the May 1 Senate Finance Committee hearing,
U.S. Trade Representative Michael Froman gave testimony on the administration’s
2014 trade policy agenda.
Opening
Remarks
In
his opening
remarks, Chairman Ron Wyden (D-Ore.) said that American trade policy over
the past several decades has been a story of adaptation and change, and policy
should continue to reflect changing times.
Wyden
mentioned internet freedom as a priority for trade agreements, and specifically
named Vietnam and China as countries that restrict the internet and limit
American companies’ access to their publics. He also said that intellectual
property rights are not respected in China and India.
A
major concern for the U.S., Wyden said, must be currency manipulation. He again
accused China of violating World Trade Organization (WTO) requirements and said
that manipulation hurts the ability of American companies and workers to
compete globally.
Wyden
also criticized the lack of transparency in trade negotiations, saying that
Americans expect to be able to easily access information they want on key
policy issues and that details of negotiations should be made public.
Responding
to changes in world trade will be crucial to restoring Americans’ confidence
that trade policy will be beneficial to workers, Wyden said. He continued that
“the new breed of trade challenges spawned over the last generation has to be
addressed with imaginative new policies and locked into enforceable, ambitious,
job generating agreements that have to reflect the need for a free and open
internet, strong labor rights, and environmental protections.”
In
his opening
remarks, Ranking Member Orrin Hatch (R-Utah) called the administration’s
trade agenda extremely ambitious. If successful, he said, it will shape global
trade patterns for decades; if it fails, however, it will represent billions of
dollars in missed opportunities.
Hatch
said that while he does not doubt Froman’s capabilities, history tells us that
without Trade Promotion Authority (TPA), the trade agenda will fail. He said he
is very disappointed with the president’s passive approach to TPA, and said
that without more effort from the administration he is not sure trade
agreements such as the Trans-Pacific Partnership (TPP) and Transatlantic Trade
and Investment Partnership (TTIP) could succeed.
Criticizing
the administration’s record of enforcement of trade agreements, Hatch pointed
out that there has not been “a single case” to the WTO regarding Russia, nor
have there been any cases on intellectual property rights (IPR) in India. He
said that countries “are taking note of the president’s failure to act in this
area” and this is feeding the perception that they can continue to violate IPR
with impunity.
Hatch
also criticized the U.S. Trade Representative (USTR) for failing to play its
“traditional role as a bulwark against other federal agencies.” He said that
too often during the interagency process, regulatory agencies are rejecting
cooperative participation in negotiations. It was the Department of the
Treasury, Hatch said, that insisted on “relegating financial services
discussions to pre-existing forums that resulted in the USTR’s position that
financial services should be carved out of trade negotiations with the European
Union.”
Witness
Testimony
In
his testimony,
Froman said the core of the president’s economic policy is to create jobs, promote
growth, and strengthen the middle class. He added that through trade policy,
the administration is opening markets for American exports and leveling the
playing field for American companies and workers.
Froman
said that President Obama is pursuing the most ambitious trade agenda in
decades, with simultaneous negotiations for TTP and TTIP that would give
American companies access to two thirds of global GDP.
The
last TPA legislation was passed over a decade ago, Froman said, and much has
changed since then. He said the administration believes these issues should be
reflected in a new TPA bill, and looks forward to working with Congress on
this.
Question
& Answer
Wyden
opened the questioning period by emphasizing his belief that “unprecedented
transparency” is needed on trade issues and asking Froman if the American
public would have time to review the TPP agreement before the president signs
it. Froman agreed that there is a need to engage the public and said this is
why USTR works so closely with Congress and its advisory committees. Regarding
the disclosure of the TPP text prior to presidential approval, he said that
USTR will work with Congress to “determine what the right timelines are.”
Hatch
continued the discussion of transparency by asking Froman if he would commit to
publish the details of trade negotiations and agreements online for public
review. Froman said USTR believes it is important to inform the public and
publishes its objectives and summaries of negotiations. Because USTR cares about
public engagement, he said, its negotiators spend any time not working with
other governments by talking to Congress and stakeholders.
Hatch
noted that the administration does not have TPA, and said this hurts its
ability to sign strong international agreements and again stressed that
President Obama must be more publicly engaged on this front.
Next,
Hatch said that intellectual property rights are “under attack around the
globe” and said USTR is not doing enough to fight back. He specifically asked
about India and why no cases on IPR have been brought to the WTO. Froman said
that his office is very concerned with the erosion of IPR in India and has been
encouraging India to find ways to address their legitimate policy concerns
without violating American patents. He noted that India is currently having
elections, and said he looked forward to engaging the next Indian government.
Sen.
Charles Schumer (D-N.Y.) said that bipartisan voices in both the Senate and
House of Representatives have made clear the need for strong anti-currency
manipulation language in any TPP agreement, and called it a vital first step in
earning Democratic support. He said nothing would give TPP a better “fighting
chance” of getting passed than currency reforms. Schumer said that he “cannot
and will not” support a TPP agreement without strong language to define and
enforce against currency manipulation. Froman agreed on the importance of the
issue and said the U.S. has been pressing China unilaterally, through the G20,
and through the International Monetary Fund on the issue. He said USTR would
continue to consult with Congress and stakeholders.
Schumer
then asked if currency manipulation has been discussed thus far in TPP
negotiations, and Froman said it had not yet been the subject of negotiations.
Sen.
Debbie Stabenow (D-Mich.) said she was surprised to hear that currency
manipulation has not come up in negotiations, and noted that 60 senators and
230 representatives have written letters in support of strong language on the
issue. She questioned whether Froman is concerned about the competitive
advantage that currency manipulation gives to foreign companies. Froman said
the administration is very concerned and wants a level economic playing field,
and this would continue to be a key part of the overall economic policy.
Sen.
Maria Cantwell (D-Wash.) cited a study that estimated the size of the global
middle class would reach 5 billion by 2030, with most in the Asia-Pacific
region, and emphasized the need to ensure access to this massive market. She
noted that TPA and TPP would help the U.S. to set standards with labor and
environmental protections around the world. Froman said it is important to
consider who will be selling to the 2.7 billion strong middle class of the
Asia-Pacific region in 2030. He stressed that TPP would be an opportunity to
have a seat at the table to establish market standards and high quality laws,
adding that if the U.S. does not negotiate these agreements then other nations
would seize the opportunity.
Sen.
Johnny Isakson (R-Ga.) asked about developments towards the Trade in Services
Agreement (TISA). Froman said only that USTR is making good progress in TISA
talks, and that the countries involved in discussions represent over 70 percent
of the global services market.
Sen.
Robert Menendez (D-N.J.) asked about the administration’s strategy for IPR,
noting that the U.S. economy is increasingly based on innovation that needs to
be protected. Froman said that within TPP the U.S. has a robust IPR agenda and
is working with partners countries to strengthen levels of IPR to be consistent
with their levels of development. He added that USTR is working closely with
both the Commerce Department and the Patent Office on this issue.
For
more information on this hearing and to view a webcast, please click here.
,Blog Tags:,Blog Categories:,Blog TrackBack:,Blog Pingback:No,Hearing Summaries Issues:International/Trade,Hearing Summaries Agency:Senate Finance Committee,Publish Year:2014
At the May 1 Senate Finance Committee hearing,
U.S. Trade Representative Michael Froman gave testimony on the administration’s
2014 trade policy agenda.
Opening
Remarks
In
his opening
remarks, Chairman Ron Wyden (D-Ore.) said that American trade policy over
the past several decades has been a story of adaptation and change, and policy
should continue to reflect changing times.
Wyden
mentioned internet freedom as a priority for trade agreements, and specifically
named Vietnam and China as countries that restrict the internet and limit
American companies’ access to their publics. He also said that intellectual
property rights are not respected in China and India.
A
major concern for the U.S., Wyden said, must be currency manipulation. He again
accused China of violating World Trade Organization (WTO) requirements and said
that manipulation hurts the ability of American companies and workers to
compete globally.
Wyden
also criticized the lack of transparency in trade negotiations, saying that
Americans expect to be able to easily access information they want on key
policy issues and that details of negotiations should be made public.
Responding
to changes in world trade will be crucial to restoring Americans’ confidence
that trade policy will be beneficial to workers, Wyden said. He continued that
“the new breed of trade challenges spawned over the last generation has to be
addressed with imaginative new policies and locked into enforceable, ambitious,
job generating agreements that have to reflect the need for a free and open
internet, strong labor rights, and environmental protections.”
In
his opening
remarks, Ranking Member Orrin Hatch (R-Utah) called the administration’s
trade agenda extremely ambitious. If successful, he said, it will shape global
trade patterns for decades; if it fails, however, it will represent billions of
dollars in missed opportunities.
Hatch
said that while he does not doubt Froman’s capabilities, history tells us that
without Trade Promotion Authority (TPA), the trade agenda will fail. He said he
is very disappointed with the president’s passive approach to TPA, and said
that without more effort from the administration he is not sure trade
agreements such as the Trans-Pacific Partnership (TPP) and Transatlantic Trade
and Investment Partnership (TTIP) could succeed.
Criticizing
the administration’s record of enforcement of trade agreements, Hatch pointed
out that there has not been “a single case” to the WTO regarding Russia, nor
have there been any cases on intellectual property rights (IPR) in India. He
said that countries “are taking note of the president’s failure to act in this
area” and this is feeding the perception that they can continue to violate IPR
with impunity.
Hatch
also criticized the U.S. Trade Representative (USTR) for failing to play its
“traditional role as a bulwark against other federal agencies.” He said that
too often during the interagency process, regulatory agencies are rejecting
cooperative participation in negotiations. It was the Department of the
Treasury, Hatch said, that insisted on “relegating financial services
discussions to pre-existing forums that resulted in the USTR’s position that
financial services should be carved out of trade negotiations with the European
Union.”
Witness
Testimony
In
his testimony,
Froman said the core of the president’s economic policy is to create jobs, promote
growth, and strengthen the middle class. He added that through trade policy,
the administration is opening markets for American exports and leveling the
playing field for American companies and workers.
Froman
said that President Obama is pursuing the most ambitious trade agenda in
decades, with simultaneous negotiations for TTP and TTIP that would give
American companies access to two thirds of global GDP.
The
last TPA legislation was passed over a decade ago, Froman said, and much has
changed since then. He said the administration believes these issues should be
reflected in a new TPA bill, and looks forward to working with Congress on
this.
Question
& Answer
Wyden
opened the questioning period by emphasizing his belief that “unprecedented
transparency” is needed on trade issues and asking Froman if the American
public would have time to review the TPP agreement before the president signs
it. Froman agreed that there is a need to engage the public and said this is
why USTR works so closely with Congress and its advisory committees. Regarding
the disclosure of the TPP text prior to presidential approval, he said that
USTR will work with Congress to “determine what the right timelines are.”
Hatch
continued the discussion of transparency by asking Froman if he would commit to
publish the details of trade negotiations and agreements online for public
review. Froman said USTR believes it is important to inform the public and
publishes its objectives and summaries of negotiations. Because USTR cares about
public engagement, he said, its negotiators spend any time not working with
other governments by talking to Congress and stakeholders.
Hatch
noted that the administration does not have TPA, and said this hurts its
ability to sign strong international agreements and again stressed that
President Obama must be more publicly engaged on this front.
Next,
Hatch said that intellectual property rights are “under attack around the
globe” and said USTR is not doing enough to fight back. He specifically asked
about India and why no cases on IPR have been brought to the WTO. Froman said
that his office is very concerned with the erosion of IPR in India and has been
encouraging India to find ways to address their legitimate policy concerns
without violating American patents. He noted that India is currently having
elections, and said he looked forward to engaging the next Indian government.
Sen.
Charles Schumer (D-N.Y.) said that bipartisan voices in both the Senate and
House of Representatives have made clear the need for strong anti-currency
manipulation language in any TPP agreement, and called it a vital first step in
earning Democratic support. He said nothing would give TPP a better “fighting
chance” of getting passed than currency reforms. Schumer said that he “cannot
and will not” support a TPP agreement without strong language to define and
enforce against currency manipulation. Froman agreed on the importance of the
issue and said the U.S. has been pressing China unilaterally, through the G20,
and through the International Monetary Fund on the issue. He said USTR would
continue to consult with Congress and stakeholders.
Schumer
then asked if currency manipulation has been discussed thus far in TPP
negotiations, and Froman said it had not yet been the subject of negotiations.
Sen.
Debbie Stabenow (D-Mich.) said she was surprised to hear that currency
manipulation has not come up in negotiations, and noted that 60 senators and
230 representatives have written letters in support of strong language on the
issue. She questioned whether Froman is concerned about the competitive
advantage that currency manipulation gives to foreign companies. Froman said
the administration is very concerned and wants a level economic playing field,
and this would continue to be a key part of the overall economic policy.
Sen.
Maria Cantwell (D-Wash.) cited a study that estimated the size of the global
middle class would reach 5 billion by 2030, with most in the Asia-Pacific
region, and emphasized the need to ensure access to this massive market. She
noted that TPA and TPP would help the U.S. to set standards with labor and
environmental protections around the world. Froman said it is important to
consider who will be selling to the 2.7 billion strong middle class of the
Asia-Pacific region in 2030. He stressed that TPP would be an opportunity to
have a seat at the table to establish market standards and high quality laws,
adding that if the U.S. does not negotiate these agreements then other nations
would seize the opportunity.
Sen.
Johnny Isakson (R-Ga.) asked about developments towards the Trade in Services
Agreement (TISA). Froman said only that USTR is making good progress in TISA
talks, and that the countries involved in discussions represent over 70 percent
of the global services market.
Sen.
Robert Menendez (D-N.J.) asked about the administration’s strategy for IPR,
noting that the U.S. economy is increasingly based on innovation that needs to
be protected. Froman said that within TPP the U.S. has a robust IPR agenda and
is working with partners countries to strengthen levels of IPR to be consistent
with their levels of development. He added that USTR is working closely with
both the Commerce Department and the Patent Office on this issue.
For
more information on this hearing and to view a webcast, please click here.