Senate Finance Hearing on Trade Negotiating Authority
On Jan. 16th’s at a Senate Finance Committee hearing, lawmakers discussed trade promotion authority (TPA) and its
importance to ongoing trade negotiations in Europe and Asia. Senate Finance
Committee members also discussed the recently introduced bill from Chairman Max
Baucus (D-Mont.), Ranking Member Orrin Hatch (R-Utah), and House Ways and Means
Committee Chairman Dave Camp (R-Mich.) entitled, the Bipartisan
Congressional Trade Priorities Act of 2014.
In
his opening
statement, Baucus discussed the importance of trade agreements for U.S.
exports and job growth. In order to complete trade agreements, “we need trade
promotion authority,” he stated.
In
order for trade negotiation to work, “countries need to know that our
negotiators are good for their word. So we need TPA, and we need a TPA that
empowers Congress to play a larger role in negotiations from the beginning.”
In
his opening
statement, Hatch expressed “sincere disappointment” that the U.S. Trade
Representative did not accept his invitation to testify at the hearing.
“If
the administration does not get more involved in this effort to pass trade
negotiating authority, we’re not going to be successful. It’s just that
simple.”
Without
TPA, Congress’ power to set priorities for the negotiations and to ensure that
priorities are met “is limited,” he remarked. Under the recently introduced
legislation, Congress “has the opportunity to set forth clear priorities for
our negotiations and to articulate standards that our trade agreements must
meet in order to be approved.”
Testimony
David
Cote, Chairman and Chief Executive Officer, Honeywell International, and
testifying on behalf of the Business Roundtable and Trade Benefits America,
mentioned how the global economy has changed over the last twenty years and how
it will “move forward with or without us.” He also mentioned that while the
negative effects of trade “are sometimes more obvious,” they are “more than
outweighed” by its positive effects overall on jobs. Since the geographical
composition of world GDP will change substantially in the coming years and
shift more to developing countries, “we need to be there.” It is critical that
the U.S. continue to “aggressively pursue” new trade agreements and enact TPA.
“If
the U.S. is not in the vanguard of pursuing new agreements, we risk falling
behind other countries that are pursuing agreements of their own. We also
surrender the opportunity to negotiate new rules to address trade barriers and
issues that did not exist previously.”
Jim
Allen, President, New York Apple Association Inc., Victor, NY, said he
supports TPA renewal for two reasons: 1) timing; and 2) provides negotiators
with the ability to act within the parameters set forth by Congress. Allen
mentioned that negotiations continue every day between countries, while the
U.S. lags behind “in our ability to effectively negotiate and execute quickly
on trade agreements, rendering U.S. producers uncompetitive.”
Elena
Stegemann, Director of International Business, NuStep Inc., Ann Arbor, MI,
said she strongly supported the bipartisan bill and mentioned how TPA will
guide U.S. negotiators to ensure trade agreements knock down foreign barriers
and will include strong intellectual property (IP) protections.
Larry
Cohen, President, Communications Workers of America (CWA), Washington, DC,
said he is “quite concerned about where we’re going on trade and fast track
authority.” Cohen repeated throughout the hearing that any trade framework must
“serve our national goals.” In order for everyone to succeed in the global
trading environment, Congress must establish priorities for any TPA legislation
including: 1) document that any new trade deal is not likely to add to the $1
trillion annual trade deficit in goods which has grown “since we’ve adopted the
NAFTA style trade agreements of the past”; 2) document the net effect on
employment, and not just look at increases in exports; 3) document the likely
effect on pay and standard of living; 4) ensure customer protections are not
diminished; 5) ensure that all trading partners comply with International Labor
Organization (ILO) principles and conventions; 6) ensure environmental
standards are upheld not diminished; 7) ensure such social goals are
enforceable “at least at the same level as all other sections”; and 8) ensure
that Congress plays a meaningful role.
Question
and Answer
Cote,
Allen, and Stegemann discussed the benefits of TPA renewal and the importance
of finalizing the Trans-Pacific Partnership (TPP) agreement, as well as
continuing the Transatlantic Trade and Investment Partnership (TTIP)
negotiations. Simplified regulatory standards, a level playing field, IP
protection, and a reduction in trade barriers were cited by panelists as
extremely important outcomes from trade agreements.
The
three panelists also listed concerns if TPA renewal is not passed including
being left behind as other countries negotiate bilateral or regional treaties
without the U.S., the inability to promote and set high standards comparable to
U.S. standards, the inability to improve or enforce IP standards, and the loss
of American leadership.
Cohen
discussed how the U.S. has only ratified two of the eight fundamental
conventions, and suggested that any trade agreement or fast track authority
should include currency manipulation, and environmental and child labor
standards, for instance, that are enforceable.
Sens.
Chuck Grassley (R-Iowa) and Robert Menendez (D-N.J.) brought up discussion on
currency manipulation. On whether this issue is a top concern for panelists,
Cote, Allen, and Stegemann mentioned that it rarely has an effect on a company
or industry’s results or decision-making. However, Cohen remarked that currency
manipulation is a “huge consideration” and has a large impact on jobs and where
those jobs are ultimately created. Currency manipulation provisions in the bill
need to be enforceable with major consequences, he added.
Sen.
Ben Cardin (D-Md.) was concerned about the delegation of Congressional
authority and discussed the importance of having a clear role to play in trade
agreements. Cardin also mentioned his concern that the U.S. is engaging with
and entering into agreements with countries that “do not have good governance,”
which puts U.S. firms “at a strong disadvantage.” He noted that the U.S. must
be “bold in our trade agreement objectives.” Cardin said he would like to see
the business community “fight on behalf of American companies” for a level
playing field, and through trade, promote good governance in countries.
Cote
replied that, at the end of the day, “I don’t know we can use trade as a weapon
to get something done.” Adding more issues to TPA legislation will effectively
kill it and all negotiations that depend on it.
In
response to a question from Sen. Pat Toomey (R-Pa.) on whether the completion
of trade agreements will lead to job growth, Cote said that to the extent sales
increase, “that’s what causes me to add more employees.” Cote also mentioned
how the completion of trade agreements can also open the opportunity for
increased foreign direct investment (FDI) into the U.S.
Toomey
also said he was encouraged to hear comments from the Secretary of the
Department of Commerce, Rebecca Blank, on the TPA legislation, but noted that
support from those on the other side of the aisle “is at a level that could use
some encouragement.”
Sen.
Sherrod Brown (D-Ohio) focused on investor-state dispute settlement and
mentioned his concern that the TPP agreement “may allow companies to take legal
action through investor-state” to effectively weaken a foreign country’s
domestic laws.
Cohen
replied that corporations “should not have the right to sue governments that
provide consumer protection. Unfortunately, TPP and TPA will not stop it – TPP
will actually encourage it.” Standards, such as the ILO’s list of fundamental
conventions, need to be set and enforced, he repeated.
Sen.
Robert Casey (D-Pa.) said the U.S. seems to get the short end of the stick on
trade agreements concluded in past years. He mentioned his concern that U.S.
negotiators do not have set priorities or policy heading into negotiations,
rather just a list of concerns, which end up being cast aside by the end of
negotiations.
Questioned
on whether such policy is needed, Cohen agreed and added that the objectives
should be transparent and form the basis for TPA and trade negotiations.
Menendez
asked Cote and Cohen to explain why they have different views when it comes to
implementing labor standards, for instance.
Cote
said the difference “is in how far we go to implement it.” While it is
important to raise standards around the world, “it’s a question of degree,” he
said.
Cohen
said he has seen the consequences of a “race to the bottom” in standards. “In
an economic workplace, if there’s not minimum standards that are enforceable
that’s where you lower production costs and create profits.” As a result, “a
decision is made. How much does it cost in Vietnam? And how much does it cost
in Trenton, or Camden?”
Baucus
disagreed with Cohen’s concerns and stated that the legislation “does include
core labor standards that must be enforced” like other provisions in the TPA.
Cohen noted again that the U.S. has only adopted two of the eight ILO
conventions, and remained concerned, despite objections by Baucus, that even if
they are included in TPA, whether they are truly enforceable like other
provisions contained in the TPA.
Sen.
Ron Wyden (D-Ore.) noted that TPA needs to reflect a new array of changes and
challenges that have emerged in the 21st century including advances
to the internet, challenges from SOEs, and “aggressive currency manipulation.”
He added, “TPA needs to reflect these changes so that trade agreements are well
shaped.”
Sen.
Rob Portman (R-Ohio) urged lawmakers to approve TPA, noting that other
countries have completed agreements, without the U.S., as a result of not
having the authority.
“We
cannot compete in this global marketplace without this authority,” he said.
,Blog Tags:,Blog Categories:,Blog TrackBack:,Blog Pingback:No,Hearing Summaries Issues:International/Trade,Hearing Summaries Agency:Senate Finance Committee,Publish Year:2014
On Jan. 16th’s at a Senate Finance Committee hearing, lawmakers discussed trade promotion authority (TPA) and its
importance to ongoing trade negotiations in Europe and Asia. Senate Finance
Committee members also discussed the recently introduced bill from Chairman Max
Baucus (D-Mont.), Ranking Member Orrin Hatch (R-Utah), and House Ways and Means
Committee Chairman Dave Camp (R-Mich.) entitled, the Bipartisan
Congressional Trade Priorities Act of 2014.
In
his opening
statement, Baucus discussed the importance of trade agreements for U.S.
exports and job growth. In order to complete trade agreements, “we need trade
promotion authority,” he stated.
In
order for trade negotiation to work, “countries need to know that our
negotiators are good for their word. So we need TPA, and we need a TPA that
empowers Congress to play a larger role in negotiations from the beginning.”
In
his opening
statement, Hatch expressed “sincere disappointment” that the U.S. Trade
Representative did not accept his invitation to testify at the hearing.
“If
the administration does not get more involved in this effort to pass trade
negotiating authority, we’re not going to be successful. It’s just that
simple.”
Without
TPA, Congress’ power to set priorities for the negotiations and to ensure that
priorities are met “is limited,” he remarked. Under the recently introduced
legislation, Congress “has the opportunity to set forth clear priorities for
our negotiations and to articulate standards that our trade agreements must
meet in order to be approved.”
Testimony
David
Cote, Chairman and Chief Executive Officer, Honeywell International, and
testifying on behalf of the Business Roundtable and Trade Benefits America,
mentioned how the global economy has changed over the last twenty years and how
it will “move forward with or without us.” He also mentioned that while the
negative effects of trade “are sometimes more obvious,” they are “more than
outweighed” by its positive effects overall on jobs. Since the geographical
composition of world GDP will change substantially in the coming years and
shift more to developing countries, “we need to be there.” It is critical that
the U.S. continue to “aggressively pursue” new trade agreements and enact TPA.
“If
the U.S. is not in the vanguard of pursuing new agreements, we risk falling
behind other countries that are pursuing agreements of their own. We also
surrender the opportunity to negotiate new rules to address trade barriers and
issues that did not exist previously.”
Jim
Allen, President, New York Apple Association Inc., Victor, NY, said he
supports TPA renewal for two reasons: 1) timing; and 2) provides negotiators
with the ability to act within the parameters set forth by Congress. Allen
mentioned that negotiations continue every day between countries, while the
U.S. lags behind “in our ability to effectively negotiate and execute quickly
on trade agreements, rendering U.S. producers uncompetitive.”
Elena
Stegemann, Director of International Business, NuStep Inc., Ann Arbor, MI,
said she strongly supported the bipartisan bill and mentioned how TPA will
guide U.S. negotiators to ensure trade agreements knock down foreign barriers
and will include strong intellectual property (IP) protections.
Larry
Cohen, President, Communications Workers of America (CWA), Washington, DC,
said he is “quite concerned about where we’re going on trade and fast track
authority.” Cohen repeated throughout the hearing that any trade framework must
“serve our national goals.” In order for everyone to succeed in the global
trading environment, Congress must establish priorities for any TPA legislation
including: 1) document that any new trade deal is not likely to add to the $1
trillion annual trade deficit in goods which has grown “since we’ve adopted the
NAFTA style trade agreements of the past”; 2) document the net effect on
employment, and not just look at increases in exports; 3) document the likely
effect on pay and standard of living; 4) ensure customer protections are not
diminished; 5) ensure that all trading partners comply with International Labor
Organization (ILO) principles and conventions; 6) ensure environmental
standards are upheld not diminished; 7) ensure such social goals are
enforceable “at least at the same level as all other sections”; and 8) ensure
that Congress plays a meaningful role.
Question
and Answer
Cote,
Allen, and Stegemann discussed the benefits of TPA renewal and the importance
of finalizing the Trans-Pacific Partnership (TPP) agreement, as well as
continuing the Transatlantic Trade and Investment Partnership (TTIP)
negotiations. Simplified regulatory standards, a level playing field, IP
protection, and a reduction in trade barriers were cited by panelists as
extremely important outcomes from trade agreements.
The
three panelists also listed concerns if TPA renewal is not passed including
being left behind as other countries negotiate bilateral or regional treaties
without the U.S., the inability to promote and set high standards comparable to
U.S. standards, the inability to improve or enforce IP standards, and the loss
of American leadership.
Cohen
discussed how the U.S. has only ratified two of the eight fundamental
conventions, and suggested that any trade agreement or fast track authority
should include currency manipulation, and environmental and child labor
standards, for instance, that are enforceable.
Sens.
Chuck Grassley (R-Iowa) and Robert Menendez (D-N.J.) brought up discussion on
currency manipulation. On whether this issue is a top concern for panelists,
Cote, Allen, and Stegemann mentioned that it rarely has an effect on a company
or industry’s results or decision-making. However, Cohen remarked that currency
manipulation is a “huge consideration” and has a large impact on jobs and where
those jobs are ultimately created. Currency manipulation provisions in the bill
need to be enforceable with major consequences, he added.
Sen.
Ben Cardin (D-Md.) was concerned about the delegation of Congressional
authority and discussed the importance of having a clear role to play in trade
agreements. Cardin also mentioned his concern that the U.S. is engaging with
and entering into agreements with countries that “do not have good governance,”
which puts U.S. firms “at a strong disadvantage.” He noted that the U.S. must
be “bold in our trade agreement objectives.” Cardin said he would like to see
the business community “fight on behalf of American companies” for a level
playing field, and through trade, promote good governance in countries.
Cote
replied that, at the end of the day, “I don’t know we can use trade as a weapon
to get something done.” Adding more issues to TPA legislation will effectively
kill it and all negotiations that depend on it.
In
response to a question from Sen. Pat Toomey (R-Pa.) on whether the completion
of trade agreements will lead to job growth, Cote said that to the extent sales
increase, “that’s what causes me to add more employees.” Cote also mentioned
how the completion of trade agreements can also open the opportunity for
increased foreign direct investment (FDI) into the U.S.
Toomey
also said he was encouraged to hear comments from the Secretary of the
Department of Commerce, Rebecca Blank, on the TPA legislation, but noted that
support from those on the other side of the aisle “is at a level that could use
some encouragement.”
Sen.
Sherrod Brown (D-Ohio) focused on investor-state dispute settlement and
mentioned his concern that the TPP agreement “may allow companies to take legal
action through investor-state” to effectively weaken a foreign country’s
domestic laws.
Cohen
replied that corporations “should not have the right to sue governments that
provide consumer protection. Unfortunately, TPP and TPA will not stop it – TPP
will actually encourage it.” Standards, such as the ILO’s list of fundamental
conventions, need to be set and enforced, he repeated.
Sen.
Robert Casey (D-Pa.) said the U.S. seems to get the short end of the stick on
trade agreements concluded in past years. He mentioned his concern that U.S.
negotiators do not have set priorities or policy heading into negotiations,
rather just a list of concerns, which end up being cast aside by the end of
negotiations.
Questioned
on whether such policy is needed, Cohen agreed and added that the objectives
should be transparent and form the basis for TPA and trade negotiations.
Menendez
asked Cote and Cohen to explain why they have different views when it comes to
implementing labor standards, for instance.
Cote
said the difference “is in how far we go to implement it.” While it is
important to raise standards around the world, “it’s a question of degree,” he
said.
Cohen
said he has seen the consequences of a “race to the bottom” in standards. “In
an economic workplace, if there’s not minimum standards that are enforceable
that’s where you lower production costs and create profits.” As a result, “a
decision is made. How much does it cost in Vietnam? And how much does it cost
in Trenton, or Camden?”
Baucus
disagreed with Cohen’s concerns and stated that the legislation “does include
core labor standards that must be enforced” like other provisions in the TPA.
Cohen noted again that the U.S. has only adopted two of the eight ILO
conventions, and remained concerned, despite objections by Baucus, that even if
they are included in TPA, whether they are truly enforceable like other
provisions contained in the TPA.
Sen.
Ron Wyden (D-Ore.) noted that TPA needs to reflect a new array of changes and
challenges that have emerged in the 21st century including advances
to the internet, challenges from SOEs, and “aggressive currency manipulation.”
He added, “TPA needs to reflect these changes so that trade agreements are well
shaped.”
Sen.
Rob Portman (R-Ohio) urged lawmakers to approve TPA, noting that other
countries have completed agreements, without the U.S., as a result of not
having the authority.
“We
cannot compete in this global marketplace without this authority,” he said.