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[Senate Hearing 118-470]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 118-470

                THE PRESIDENT'S 2023 TRADE POLICY AGENDA

=======================================================================

                                HEARING

                               BEFORE THE

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 23, 2023

                               __________
                               
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                               
                                     

            Printed for the use of the Committee on Finance

                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
57-306 PDF                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------  

                          COMMITTEE ON FINANCE

                      RON WYDEN, Oregon, Chairman

DEBBIE STABENOW, Michigan            MIKE CRAPO, Idaho
MARIA CANTWELL, Washington           CHUCK GRASSLEY, Iowa
ROBERT MENENDEZ, New Jersey          JOHN CORNYN, Texas
THOMAS R. CARPER, Delaware           JOHN THUNE, South Dakota
BENJAMIN L. CARDIN, Maryland         TIM SCOTT, South Carolina
SHERROD BROWN, Ohio                  BILL CASSIDY, Louisiana
MICHAEL F. BENNET, Colorado          JAMES LANKFORD, Oklahoma
ROBERT P. CASEY, Jr., Pennsylvania   STEVE DAINES, Montana
MARK R. WARNER, Virginia             TODD YOUNG, Indiana
SHELDON WHITEHOUSE, Rhode Island     JOHN BARRASSO, Wyoming
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
CATHERINE CORTEZ MASTO, Nevada       THOM TILLIS, North Carolina
ELIZABETH WARREN, Massachusetts      MARSHA BLACKBURN, Tennessee

                    Joshua Sheinkman, Staff Director

                Gregg Richard, Republican Staff Director

                                  (II)

                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee 
  on Finance.....................................................     1
Crapo, Hon. Mike, a U.S. Senator from Idaho......................     3

                         ADMINISTRATION WITNESS

Tai, Hon. Katherine C., United States Trade Representative, 
  Executive Office of the President, Washington, DC..............     5

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Crapo, Hon. Mike:
    Opening statement............................................     3
    Prepared statement...........................................    47
Tai, Hon. Katherine C.:
    Testimony....................................................     5
    Prepared statement...........................................    49
    Responses to questions from committee members................    53
Wyden, Hon. Ron:
    Opening statement............................................     1
    Prepared statement...........................................    81

                             Communications

ACT | The App Association et al..................................    83
American Coatings Association, Inc...............................    86
American Farm Bureau Federation..................................    87
Americans for Free Trade.........................................    88
Center for Fiscal Equity.........................................   100
Consumer Technology Association..................................   104
Engine Advocacy..................................................   107
Flexible Packaging Association...................................   110
National Foreign Trade Council...................................   112
Nathan's Papers, LLC.............................................   118
Pitts Enterprises Inc............................................   120

                                 (III)

 
                         THE PRESIDENT'S 2023 
                          TRADE POLICY AGENDA

                              ----------                              

                        THURSDAY, MARCH 23, 2023

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10 a.m., 
in Room SD-215, Dirksen Senate Office Building, Hon. Ron Wyden 
(chairman of the committee) presiding.
    Present: Senators Cantwell, Menendez, Carper, Cardin, 
Brown, Bennet, Casey, Warner, Whitehouse, Hassan, Cortez Masto, 
Warren, Crapo, Grassley, Thune, Cassidy, Lankford, Daines, 
Young, Johnson, Tillis, and Blackburn.
    Also present: Democratic staff: Sally Stewart Laing, Chief 
International Trade Counsel; Joshua Sheinkman, Staff Director; 
and Tiffany Smith, Deputy Staff Director and Chief Counsel. 
Republican staff: Molly Newell, International Trade Counsel; 
John O'Hara, Trade Policy Director and Counsel; Mayur Patel, 
Chief International Trade Counsel; Gregg Richard, Staff 
Director; and Colin St. Maxens, International Trade Policy 
Advisor.

   OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR FROM 
             OREGON, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The Finance Committee will come to order.
    This morning, the committee is joined by Ambassador Tai to 
discuss the trade agenda for the year ahead. The Biden 
administration, from the get-go, had a difficult job to do with 
respect to trade. The Trump administration's chaotic approach 
turned some of our trade rivals into outright adversaries, and 
many of our friends into rivals. Now the United States needs to 
kick into a higher gear with a smarter, more innovative 
approach to trade which will deliver real results for American 
workers, farmers, and businesses.
    There are certainly big issues to address. For example, 
China continues to put up barriers to American products and 
American values, while ripping off jobs, using forced labor, 
and undermining free speech. It's a discriminatory model, and I 
think my colleagues know this, unfortunately, is spreading. 
Even our allies in the European Union and Canada are drafting 
laws intending to limit our digital companies' ability to do 
business in their jurisdiction, while shielding their own 
companies.
    Today, I am going to briefly outline a three-part strategy 
to get more Americans back in the winners' circle of trade. 
First, the administration needs to ramp up enforcement of the 
trade laws that are already on the books, and that means 
enforcement across the board. Let us start with the USMCA. 
Senator Brown and I fought for stronger, faster-acting 
enforcement tools like the rapid response mechanism. That is 
part of what makes the USMCA the most pro-labor trade agreement 
in American history.
    Ambassador Tai has used the Brown-Wyden mechanism to get 
some key wins, to stop labor violations in Mexico, and she has 
worked to help Pacific Northwest dairy farmers get into the 
Canadian market. Now she has to go further and enforce every 
provision of every chapter of USMCA. For example, Mexico is 
flouting its USMCA obligations by shutting out our renewable 
energy providers. Bad news for the economy, bad news for the 
environment.
    During last year's trade agenda hearing, I asked Ambassador 
Tai to take action. The U.S. did request consultations with 
Mexico in July 2022, but 8 months have passed. American clean 
energy producers, our companies in the Pacific Northwest, are 
still waiting for access. In my view, it is long past time to 
say ``enough'' and to make this a real dispute settlement case.
    The administration also needs to set up enforcement beyond 
USMCA to defend American workers and businesses from unfair 
trade practices wherever they are happening. To that end, the 
administration has not yet brought a single case before the 
World Trade Organization. There is no doubt that the World 
Trade Organization needs reforms. But if you do not press your 
case, you are stuck on defense. I want to make it clear--and I 
think colleagues agree with this--the United States of America 
has got to play offense on international trade.
    Next, the administration needs to make opening export 
markets a priority issue. This is imperative in terms of the 
administration's agenda. USMCA is proof that U.S. trade policy 
can raise the bar in labor and environmental standards and bust 
down the barriers to our exports. However, I have real concern 
that USTR is not doing enough to break down barriers our 
exporters face.
    For example, there is just old red tape preventing eastern 
Oregon potato farmers from shipping fresh potatoes into Japan. 
Oregon potatoes are the very best in the Nation, and I intend 
to give my friend Senator Crapo equal time in order to make his 
case with respect to his agricultural sector. But kidding 
aside, we are talking about an estimated $150 million market. 
Pacific Northwest apples and pears are blocked from the 
behemoth Australian market. Oregon wheat, upwards of 90 percent 
of which is exported, suffers from high tariffs in the market 
around the Pacific Rim. Vietnam has a litany of restrictive 
digital practices that hurt our startups.
    The administration ought to be taking every opportunity to 
fix these issues, but it is not even clear that USTR is 
discussing them as part of the whole effort with respect to the 
Indo-Pacific framework. So I want to draw a line here. The 
United States cannot conclude agreements with Japan, Indonesia, 
or the EU that leave issues facing our American exporters 
without remedies.
    Third, getting trade right is going to require creative 
approaches to new challenges. Whether it is shoring up our 
supply chains, promoting access to critical minerals, or 
addressing climate impacts of leading industries, smart trade 
policies have to be part of the solution. I am glad Ambassador 
Tai and her team are thinking outside the box.
    But what is needed here are real answers on how these 
proposals are going to work in practice. The administration has 
to deliver new markets. We are talking about, say the Middle 
East and Africa, and trading new products, say renewable energy 
and digital services, in a way that quickly pushes the American 
economy forward. Meeting that challenge requires that we 
strategize with our allies and we partner with the Congress.
    That will bring me to one last point. The executive branch, 
in my view, has begun to embrace a go-it-alone trade policy, 
and I want to be clear on this point. Congress's role in U.S. 
trade policy is defined by the Constitution of the United 
States. It is right there in article I, section 8. It is black 
letter law, colleagues, and it is unacceptable to even frame 
the argument otherwise. It is my expectation that Ambassador 
Tai and the committee can begin to charter a new path forward 
when it comes to transparency, consultation, and ultimately, 
approval of trade agreements.
    I also want to commend Senator Menendez of New Jersey for 
his leadership in the effort to promote these transparency 
reforms.
    Ambassador Tai, thank you for being with us today. We look 
forward to this discussion.
    Senator Crapo is next, who undoubtedly will have views on 
his potatoes.
    [The prepared statement of Chairman Wyden appears in the 
appendix.]

             OPENING STATEMENT OF HON. MIKE CRAPO, 
                   A U.S. SENATOR FROM IDAHO

    Senator Crapo. Thank you, Mr. Chairman, and of course we 
all know Idaho potatoes are the best. But we like the eastern 
Oregon efforts to try to catch up.
    The Chairman. Oh, I see. The rivalry is launched.
    Senator Crapo. Welcome, Ambassador Tai. The members of this 
committee have very thoughtful ideas to advance the trade 
interests of the American people. For example, just yesterday, 
Senator Young was recognized by the National Foreign Trade 
Council for his leadership on digital trade. Critically--and I 
know this from personal experience--every Senator on the 
committee wants to work with you, Ambassador, on a bipartisan 
basis to execute a successful trade policy.
    The challenge we face is how this administration approaches 
U.S. trade policy, both in terms of substance and policy. 
Substantively, the President's trade agenda emphasizes, quote, 
``the ground-breaking domestic investments enacted through the 
President's leadership.'' Respectfully, an American trade 
policy cannot rest on massive spending on subsidies. That 
approach borrows more from China's traditions than ours.
    American trade policy unleashes our people's talent and 
productivity by removing foreign barriers through tough 
negotiations and enforcement. The potential of the American 
people is staggering. What the administration proposes as trade 
negotiations and an enforcement agenda is strikingly limited. A 
few examples are indicative.
    First, American ranchers and farmers produce the world's 
best and safest food and exported $196 billion in 2022. They 
can accomplish even more if we eliminate the high tariffs and 
unscientific restrictions posed as safety measures. The only 
tariff reduction flagged in the President's agenda is that 
India will reduce its tariff on pecans to a still overly 
restrictive 30 percent. Instead of aggressively challenging 
non-science-based safety measures, the administration has only 
this month initiated technical consultations on Mexico's 
biotech restrictions.
    Second, American workers are highly skilled at 
manufacturing, and have drawn nearly $1.9 trillion in foreign 
investment, including a major auto manufacturing facility in 
Spartanburg, SC; similarly in Smyrna, TN and Marysville, OH, to 
name just a few. That kind of investment, coupled with American 
workers' talent, should make us an export powerhouse.
    But unreasonable product specification standards continue 
to keep our manufacturing out of many markets. Yet the 
administration chooses not to pursue a Technical Barrier to 
Trade chapter, or TBT, in this proposed Indo-Pacific Economic 
Framework, or IPEF. In contrast, the United States-Mexico-
Canada Agreement, USMCA, had a robust TBT chapter and explicit 
commitments that Mexico would continue to accept U.S. cars 
built to U.S. Federal safety standards.
    Third, our innovators and artists develop lifesaving 
products, and films and music that spread American values. 
Copyright industries alone generate $1.8 trillion in economic 
output. Yet, instead of working to strengthen U.S. intellectual 
property rules, the administration actually waived U.S. 
intellectual property rights for COVID vaccines under the World 
Trade Organization's Trade-Related Aspects of Intellectual 
Property Rights, or TRIPS agreement, and is even now 
considering expanding that waiver to diagnostic and therapeutic 
products.
    While we all agree that one of China's most pernicious, 
mercantilist policies is the theft of American intellectual 
property, the administration does not pursue any IP rules in 
IPEF or elsewhere that could help ensure China does not benefit 
from its theft through sales to other countries.
    Fourth, U.S. digital firms are a major contributor to U.S. 
economic growth, with the digital economy now compromising 10 
percent of U.S. GDP. The administration has yet to press the 
European Union, through the Trade and Technology Council, on 
measures that unreasonably target the U.S. digital economy, 
even though it readily agreed to discuss the EU's concerns with 
the Inflation Reduction Act at the very same forum. We can do 
better, and we must do better.
    One last example. Behind me is a chart comparing the 
respective tariff rates that the American, European, and 
Chinese products face entering Vietnam, a country of nearly 100 
million. You will notice there is only blue on the chart. That 
is the tariffs that the United States faces. The red and the 
yellow are not there because we ran out of ink. They are not 
there, rather, because China and the European Union have 
entered into agreements that have reduced the tariffs on their 
products in Vietnam. 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. While some of the tariff reductions in the EU and 
China deals will take time to phase in fully, we lose ground 
every day that we remain on the sidelines of real trade 
negotiations.
    Given this dynamic, the administration needs to reconsider 
its decision not to pursue market access in IPEF or other trade 
arrangements. Unfortunately, the ability to take on these 
substantive challenges is compounded by one very fundamental 
problem: the administration's insufficient consultation with 
Congress. We saw this problem with the negotiation for the 
TRIPS waiver, and they still continue. In the case of IPEF, the 
administration refuses to share their views with the same 
congressionally established advisory committees that assist 
Congress in determining whether a proposed trade agreement will 
assist Americans.
    This chart shows the statute. The text of this statute is 
crystal clear, that such information must be shared with 
designated members of Congress. The administration also refuses 
to share attributions of which countries support or oppose 
particular provisions in IPEF, even though the Trump 
administration provided such information during the USMCA 
consideration. This attempt to bypass Congress is unnecessary. 
Our trade policy is strongest when the administration and 
Congress work together.
    And mirroring what Senator Wyden said, the administration 
should accordingly partner with Congress and the American 
people, not try to cut us out, because under the Constitution 
it cannot.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Crapo appears in the 
appendix.]
    The Chairman. I thank my colleague.
    Ambassador, as you and I have talked about several times, 
the members of this committee have very, very strong views on 
these issues, as you can tell. We welcome your testimony and 
look forward to questioning. There can be differences of 
opinion on these issues, but I think certain issues--for 
example, the constitutional imperative of this committee's 
involvement--are areas that not only do we feel strongly about, 
we think are very clear. Welcome.

    STATEMENT OF HON. KATHERINE C. TAI, UNITED STATES TRADE 
REPRESENTATIVE, EXECUTIVE OFFICE OF THE PRESIDENT, WASHINGTON, 
                               DC

    Ambassador Tai. Thank you so much, Chairman Wyden, Ranking 
Member Crapo. I am really looking forward to a good back and 
forth with both of you and members of this committee, and as 
always, doing so respectfully, out of respect for the 
institutions and for each of you and Senators and people. 
Members of the committee, let me begin by affirming that 
Congress is our constitutional partner on trade. I appreciate 
the opportunity to discuss the President's trade agenda with 
you this morning.
    Under President Biden's leadership, this administration is 
writing a new story on trade, one that puts working families 
first and reflects more voices across the American economy; one 
that advances our global priorities and strengthens democracy 
here at home and abroad. Whether you have a college degree or 
not, whether you have five employees or 500, whether you are in 
rural Ohio or in the heart of Baltimore, whether you are a 
small dairy farmer in Michigan or a steelworker in 
Pennsylvania, we are restoring fairness to our trade and 
economic system for you.
    This means vigorously enforcing existing commitments to 
reestablish confidence and trust in trade, and this starts with 
the USMCA, which Congress passed on a strong bipartisan basis. 
We are pressing Canada to ensure that U.S. dairy farmers are 
treated fairly finally, and we are urging Mexico to address our 
concerns with the energy sector and with agricultural 
biotechnology.
    On the latter, we recently requested technical 
consultations with Mexico under the USMCA, and we will continue 
to consider all options available under that agreement to fix 
this problem.
    Restoring fairness to the system also means empowering 
workers to compete fairly. We are using the USMCA's rapid 
response mechanism to promote workers' rights in Mexico, and we 
are seeing real change and success for workers and independent 
unions. In the last year, we have secured wins for workers at 
four different facilities. We have ongoing open cases, and we 
will continue to work with the Government of Mexico. We are 
also working with the European Union, Japan, Canada, and Mexico 
to eliminate forced labor from global supply chains.
    Farmers, ranchers, fishers, and food manufacturers are also 
key to our trade agenda. We have secured real wins over the 
past few years, and U.S. agricultural exports have reached a 
record $202 billion in 2022. We brought into force an agreement 
with Japan to export more U.S. beef. We signed a Tariff Rate 
Quota agreement with the EU to open markets for U.S. rice, 
wheat, corn, shellfish, and beef, and we have opened access for 
pork and pecan exports to India. We have a nimble USTR team 
that is opening markets, and we will continue to work with 
Congress to find additional opportunities for as many of our 
stakeholders, especially the small and
medium-sized ones, as we can.
    Speaking of new opportunities, the United States is leading 
with a positive economic vision around the world, and our 
partners and our allies are joining us. The Indo-Pacific 
Economic Framework is a major priority this year, and we are 
making significant progress. This framework will level the 
playing field for American workers and businesses, create more 
resilient supply chains, boost agricultural exports, build an 
inclusive digital economy, and help businesses compete in the 
region. We also kicked off the Americas Partnership for 
Economic Prosperity with 11 countries in our hemisphere. 
Regionalization is an integral part of building resilience in 
the world economy. By strengthening our relationships with our 
closest neighbors, we can drive sustainable economic growth and 
bolster our collective prosperity.
    We are also deepening ties at the bilateral level. Taiwan 
is an essential partner, and our U.S.-Taiwan 21st Century Trade 
Initiative is moving forward. We launched the U.S.-Kenya 
Strategic Trade and Investment Partnership. We continue to work 
with the EU through the Trade and Technology Council to promote 
shared economic growth--and importantly, to coordinate our 
actions against Russia and Belarus.
    We are making progress on the world's first sectoral 
arrangement on steel and aluminum trade. This will tackle both 
emissions and non-market excess capacity, including from the 
PRC, which threatens American workers and businesses.
    On the multilateral front, our administration worked with 
WTO members to deliver tangible outcomes during the last 
ministerial conference, the first time in a decade, including 
on COVID-19 vaccines, fishery subsidies disciplines, and food 
insecurity. We are committed to transforming the institution to 
be more responsive to the rapidly changing global economy and 
the needs of everyday people. We are also taking full advantage 
of our APEC host year to build a more durable, resilient, and 
inclusive Asia-Pacific region.
    Another component of our trade agenda is realigning the 
U.S.-China relationship. This means making groundbreaking 
investments here at home to compete from a position of 
strength. That also means renewing our engagements with 
partners and allies to develop new tools to address the 
challenges posed by the PRC and its economic policies. The 
comprehensive 4-year review on section 301 tariffs is a part of 
this realignment. We are taking a deliberate and strategic look 
at how we can serve our economic interests, in light of the 
PRC's continued unfair policies and practices.
    Lastly but certainly not least, USTR will also continue to 
implement our equity action plan and work with the U.S. 
International Trade Commission to better understand the 
distributional effects of trade on American workers.
    I want to close where I started. Congress is our 
constitutional partner on trade. The success of our initiative 
depends on a robust partnership with all of you. Since last 
year's trade agenda hearings, USTR has held over 380 
congressional consultations, including more than 80 on IPEF 
alone, and your feedback has been incredibly helpful in 
informing our work. I have also heard your concerns about 
Congress's role on trade and transparency with the public, and 
I have asked my team to make further enhancements. That 
includes making it easier for congressional staff to review our 
negotiating texts, releasing public summaries of that text, and 
holding public stakeholder meetings, especially with groups who 
traditionally have not been involved in the process. Moving 
forward, I will continue to work hand in hand with members of 
Congress, their staff, and the public to develop effective 
trade policy together.
    I look forward to continuing this work in the year ahead. 
Thank you very much, Mr. Chairman.
    [The prepared statement of Ambassador Tai appears in the 
appendix.]
    The Chairman. Thank you, Ambassador, and I think we are 
going to have a good discussion.
    I have been seeing news reports, Ambassador, that as part 
of the Inflation Reduction Act implementation, the 
administration is looking at negotiating critical mineral 
agreements with Japan and the European Union. I understand that 
these negotiations may be finished soon. So I want to begin 
today with the question, will your office make these agreements 
public before they are signed?
    Ambassador Tai. Well, Chairman Wyden, I hope you are 
relying on more than news reports, because we have also been 
briefing your staff very intensively, and very recently as 
well, on our efforts here. You are right that we are engaged in 
negotiations with the European Union and Japan, and the 
substance of what we are talking about, we have also taken 
great pains to make available to members of your committee and 
to their staffs. In terms of----
    The Chairman. Respectfully, Ambassador, telling the staff 
is not the same thing as telling the American people. And one 
of the reasons I say that is I do all these town meetings, go 
to every county every year, because it is about building trust 
and confidence. So it is helpful that there are discussions at 
the staff level, but if you walked into a town hall meeting in 
rural Oregon and said that the people who find out are the 
staffers but not them, they will say ``uh-uh.'' We are the 
people who give you all on that committee an election 
certificate.
    So the question is, will the American people know what is 
in a minerals agreement before it is signed?
    Ambassador Tai. Well, Senator Wyden, you and I also have a 
responsibility to the American people, and you and I have also 
talked about these negotiations. To the extent that you are 
comfortable sharing with your constituents what we have talked 
about, I would also be comfortable sharing with your 
constituents what we are talking about.
    The Chairman. I still am trying to get an answer to my 
question. I want to be clear, to me, what I believe 
transparency is all about. First, your office needs to release 
detailed publicly available negotiating objectives before 
discussions start with foreign governments, and to just hear 
about it in the news or have staff discussions is not the same 
thing. The people up here get election certificates. We need to 
make sure that there are detailed negotiating objectives before 
negotiations start.
    Second, Congress and the public need a chance to vet trade 
agreements before they are signed. In the TPA, I pushed hard to 
ensure trade agreements were public for 60 days before signing.
    Finally, Congress needs a final say on any of these 
agreements. Do you support those transparency standards?
    Ambassador Tai. Well, Senator Wyden, as you know, because 
you have been involved in trade policy for a long time as a 
member of this committee and also Ways and Means when you were 
a House member----
    The Chairman. I was not on the Ways and Means.
    Ambassador Tai. Oh, you were not on Ways and Means. Well, 
you have been here for a long time, long enough to be chairman 
certainly, and I know how much you care about trade. Yes, I 
care deeply as well about transparency. I know that this is a 
core principle and value of yours, and I have committed to you 
to work with you on bringing transparency to our trade 
practice.
    I hope that you will recognize that we have taken steps 
forward, including, as you have acknowledged, in our work with 
Senator Menendez over the course of the past year. You also 
know that in terms of USTR's day-to-day work, everything that 
we do on a daily basis is some form of a negotiation and some 
form of an enforcement activity.
    With respect to TPA, those were guidelines that applied to 
a very specific set of negotiating projects, and as you know, 
we have been in close consultation with you and your staff 
about the guidelines that USTR continues to adhere to, which 
are very similar if not go further than the guidelines that 
were memorialized now 8 years ago.
    The Chairman. I want to make clear so everyone on this 
committee knows how strongly I feel. I think minerals 
agreements, critical minerals agreements, ought to be made 
public before they are signed, and we will continue to stress 
that with the administration.
    One other question really quickly, and that is about 
helping American exporters. We have got to compete with China. 
We all understand that. The Internet is the ball game for small 
business. Senator Cardin chairs the Small Business Committee. 
We want to make sure that red, white, and blue American 
products can get all over the world, and too many of our 
trading partners put up barriers to our exports, exports for 
example in the digital area, but plenty of other areas as well.
    So our small businesses want to be able to export using 
digital trade. We want to help them do that. What are you all 
doing at your office to attack these digital trade barriers 
abroad that rip off small American companies in particular?
    Ambassador Tai. Well, Senator Wyden, I want to go on the 
record and affirm my commitment to a pro-competition digital 
agenda, and in terms of what we are doing, as you know, we are 
negotiating digital terms and rules in our trade negotiations 
in many different contexts, including in the Indo-Pacific. This 
is an incredibly important area and also an area that is new to 
trade negotiations around the world, and also one where we want 
to take sure-footed steps because there is a lot of debate and 
legislative activity up here in the Senate and the House on our 
own domestic regulations.
    The Chairman. My time has expired. I just want again to 
express my concern about where things stand as it relates to 
helping American exporters. I continue to read these news 
reports that Indo-Pacific provisions on digital will not remove 
the barriers that our companies face, particularly small 
businesses. We have been clear about where we want to go. We 
want to use the standards from the USMCA. Those were the 
toughest, smartest digital rules. I hope that they will be used 
in future administration efforts.
    Senator Crapo?
    Senator Crapo. Thank you, Mr. Chairman.
    Ambassador Tai, the administration has not yet responded to 
this committee's letter of December 1st, signed by 20 members 
of this committee, noting that IPEF agreements need to be 
approved by Congress. Many of us are assuming that means the 
answer to the question is ``no.'' But could you clarify to me: 
is it the administration's position that you will enter into 
IPEF agreements without submitting them to Congress?
    Ambassador Tai. Well, Senator Crapo, my first turn of the 
head was to check on the status of our response to that letter. 
We take our congressional correspondence, as part of our 
consultations to the Congress, extremely seriously. So let me 
just first update you on the status of that letter. We have 
addressed--it was a letter, I believe, that was addressed to 
both myself and to the Commerce Department. Our draft has gone 
over to the Commerce Department, and I hope that you will 
receive the finalized letter soon.
    With respect to the congressional-executive partnership on 
trade and negotiations, and including on the Indo-Pacific 
Economic Framework, let me just reaffirm again my commitment, 
to this committee in particular, of the need for robust 
partnership in shaping these negotiations. With respect to what 
happens with the results of those negotiations, we are 
following the precedent of established USTR practice in terms 
of the types of agreements that come to Congress. There are 
legal requirements here, but I do hear--and I want to affirm 
for all of you while we are all here together in person, that I 
do hear the concerns of the members of this committee. I commit 
to working with you to see how we can address those.
    Senator Crapo. Well, I did not get a clear feeling from 
your answer that the answer to our question and our letter was 
``yes.'' So I will be looking very carefully for a prompt 
response to the letter that we have sent to you.
    To date, we have not heard of an IPEF enforcement 
mechanism, including with respect to agriculture. Accordingly, 
it is critical to see compliance happen before any agreement is 
finalized, especially if it seeks to bypass Congress, to ensure 
that the commitments are respected.
    Does the administration agree that before any IPEF 
agreement is finalized, the United States should see a number 
of existing trade irritants--particularly with regard to 
agricultural barriers that are inconsistent with proposed IPEF 
commitments--eliminated? For example, among those issues, I 
would include ensuring that Japan allows market access for all 
fresh potatoes, both eastern Oregon potatoes and Idaho 
potatoes----
    The Chairman. The rivalry continues----
    Senator Crapo [continuing]. Including table stock potatoes. 
What is your position on that?
    Ambassador Tai. Senator Crapo, I know how important 
potatoes are to this committee, not to just the chairman and 
the ranking member, but I know that Colorado has potatoes as 
well. Mr. Bennet is not here to speak on behalf of Colorado 
potatoes. Look, I would be delighted to raise the potato issues 
with our partners in Japan, through our bilateral channels, 
through our multilateral channels regardless----
    Senator Crapo. Well, my question went beyond potatoes, and 
it went beyond just raising the issue. It was: will we have 
assurance that these barriers to trade will be fixed before an 
IPEF agreement is reached?
    Ambassador Tai. I think what we need to do is continue to 
acknowledge and recognize where the world economy is today, 
where and why we have designed the Indo-Pacific Economic 
Framework to be the way that it is. You are right: tariff 
liberalization and tariff reductions are not a part of this 
negotiation. Nevertheless, what we are doing is bringing 
together critical partners in the region to improve the 
interoperability and compatibility between our economies.
    So I see that I am running down your clock, but let us 
continue to talk about this. Again, the agricultural barriers, 
the interests of our farmers, ranchers, agricultural producers 
are a top-line priority for our trade agenda, and I will be 
looking for opportunities to fix those problems in any context 
that I can.
    Senator Crapo. All right. I do not think I got the 
commitment I wanted, but we will continue this discussion.
    The Chairman. It will definitely continue.
    Senator Grassley is next.
    Senator Grassley. I do not understand your equivocation 
over whether or not these agreements ought to be submitted to 
Congress, because the Constitution is pretty clear that the 
power to regulate interstate and foreign commerce is a 
constitutional power. So, if you are not going to submit these 
to the Congress for consideration, it either comes from the 
laws that we have delegated to the President to do in the 
interstate commerce what we ask him to do, because Congress is 
not an institution that can do it, or you have to have some 
constitutional power to do it.
    Now, I do not want to have that discussion with you, but I 
want you to know my opinion on that. When you were in Iowa, you 
heard about how concerned Iowa farmers are about Mexico's ban 
on biotech corn. I was glad to see USTR take action with 
technical consultations. It is now over 2 years since Mexico 
first published its decree. This seems to be an easy one, and 
that's why we included the dispute resolution process in USMCA.
    With over 90 percent of the corn production in the United 
States planted with biotech seeds and Mexico being the number 
one purchaser of U.S. corn, farmers deserve a sense of urgency 
from your administration on this. Now, after 2 years and 
consultation, you put in place this first step that it takes to 
get the agreement going, and I thank you for doing that, and 
you did it very timely.
    Now, after you said that all options are on the table when 
you had your opening statement, there is only one option, and 
on April the 7th--that is, after 30 days--I would expect you to 
file a formal dispute settlement. Are you going to do that?
    Ambassador Tai. Well, Senator Grassley, you speak on this 
issue loud and clear, and I hear you in terms of your 
expectations. We are in the process of the technical 
consultations. And just to be clear about what technical 
consultation means, that means sitting down at the table with 
Mexico and pressing Mexico to come forward with the scientific 
basis for the aspects of its decree that impact our 
biotechnology agricultural exports.
    So, Senator Grassley, I will keep you apprised of how the 
current consultations are going, but you are absolutely correct 
about rules under the USMCA, and that 30 days after the filing 
of the technical consultations, we have the option of moving 
forward. Let me stay in very close contact with you about next 
steps.
    Senator Grassley. Well, if you do not let the Mexican 
Government know right now that you are going to institute that, 
you are going to continue these conversations for the 2 years 
that they have already gone on, and they are never going to 
end. You have a process that has an end to it, and that process 
needs to be instituted, and it needs to be instituted on April 
the 7th. We have been talking for 2 years.
    Ambassador Tai. You are absolutely right that we have those 
tools for a reason, and I assure you that it is not my 
intention to allow this to go on indefinitely.
    Senator Grassley. On to another matter. In your testimony, 
you mentioned that your agency will monitor the practices of 
other trading partners to ensure U.S. agricultural products are 
not subject to unfair, unjustified, and discriminatory 
restrictions. Last month, I led a letter with nine other 
Senators around President Biden's meeting with the president of 
Brazil.
    Just a week prior to that meeting, Brazil reinstituted a 
16-
percent tariff rate on U.S. ethanol. While Brazil may want more 
sugar access, they already have access to the U.S. with duty-
free ethanol imports that qualify for renewable fuel standards 
in California's low-carbon fuel program. This is unfair, it is 
unjustified, and yet President Biden made no mention whatsoever 
that I know of about the new tariff when he had the chance.
    So, I am happy that you are focused on a worker-centric 
trade policy. Then can you work with me to end the unjustified 
increase in U.S. ethanol tariffs?
    Ambassador Tai. I would be happy to. I also would like you 
to know that I was in Brazil 2 weeks ago, and that my Chief 
Agricultural Negotiator will also be following up on this 
particular issue, and I most certainly did raise this on my 
trip to Brasilia.
    Senator Grassley. In regard to whether or not you are going 
to have free trade agreements or not--and I do not understand 
why those three words are something that the administration 
never wants to utter--but you are talking about having certain 
talks with Kenya, the UK, and a couple of other countries, and 
you call them robust discussions. Robust discussions are not 
good enough. So my last question is, do you plan to pursue 
concrete market access commitments in any of the frameworks and 
initiatives that you are pursuing?
    Ambassador Tai. So, Senator Grassley, I would like to take 
this opportunity to say that I remain, and we remain, open-
minded with respect to the more traditional approach to trade 
agreements. However, with respect to each individual partner 
that we negotiate with, and with respect to the U.S. economic 
and world economic situation, we want to make sure that our 
trade policies are tailored to the needs of the relationship 
and the needs of our economies.
    At this moment, we do not have tariff liberalization 
negotiations going on with a partner. However, I want to 
indicate to you that I remain open-minded, that when it is fit 
for the partner and the times, that we are happy to do the 
right thing by the U.S. economy.
    Senator Grassley. Thank you, Mr. Chairman.
    The Chairman. I thank my colleague.
    Senator Cardin is next, the chairman of the Small Business 
Committee.
    Senator Cardin. Well, thank you Mr. Chairman. Madam 
Ambassador, I want to start by thanking you for the openness 
that we had in our personal communications. I did serve on the 
Ways and Means Committee before coming to the Finance 
Committee. I could not get on the Commerce Committee, so I had 
to go to the Ways and Means Committee. But I do appreciate the 
availability of meeting with you and your staff, to go over a 
lot of the issues we have in our State and our concerns about 
our trade policies in this country.
    But I just really want to underscore the concerns I have 
moving forward. We have gone through the transition of Congress 
delegating to the executive branch trade policies, and we went 
through a transition and came to Trade Promotion Authority as a 
way in which Congress could direct the administration on the 
priorities that they need to achieve in trade agreements and 
the consultation process, with the ability to approve trade 
agreements by the fast-track authority.
    That was thought to be the proper way for us to be able to 
get our input. It took me many years to be able to get, as a 
principal trade objective, good governance and anti-corruption 
issues and to deal with enforcement mechanisms, and now, as 
chair of the Small Business Committee, to deal with small 
business issues. And we have had success through the 
negotiations and the passage of the Trade Promotion Authority 
to get that type of direction to trade agreements.
    What worries me now is, we are going down a path in which 
you are using these framework agreements, bypassing the formal 
relationship with Congress, and it may be difficult in future 
administrations. We saw the previous administration do a lot of 
initiatives that we thought went over the edge, and now we see 
this in the Biden administration.
    So for those of us who are concerned about Congress 
directing the trade objectives, the principle objectives of our 
trade negotiations, that is being very much diminished by the 
process as you are going forward. So I will ask you 
specifically on the areas of my priorities, how do I assure 
good governance, anti-corruption protection for small 
businesses and enforcement of those issues?
    The problem with good governance is, you can get all the 
commitments you want from a country, that they are going to do 
all these good things on anti-corruption. We then enter into 
the framework, they do not do it, and there is no enforcement, 
because you do not have any trade sanctions that you could 
impose, which are the way that we enforce these agreements. Can 
you ease my concerns about where we are heading as far as being 
able to direct our trade policies to congressional objectives?
    Ambassador Tai. Certainly. Senator Cardin, I know that you 
have been a leader in all of these areas within the trade 
agenda, and I want to commend you, in large part because I 
share the respect for how important these are, economically and 
also in the larger picture as well.
    So let me begin by pointing out then, in each of the active 
negotiations that we have going, anti-corruption, good 
governance, small business promotion, bringing small businesses 
into the formal economy, into the international economy, are 
highlighted objectives in areas where we are actively 
negotiating. On your question about the enforceability, here I 
also want to commit and make very clear that in my entire 
career, because of all the work that I have done, I know that 
for our members of the Senate and House, for the American 
people, for our economy, what we negotiate has to be more than 
just words on a page, that it has to be meaningful.
    And so, in our new initiatives, which are structured very 
differently, we are going to have to bring a new approach to 
enforcement, enforceability. We are going to have to look at 
different carrots and sticks. I commit to working with you and 
your team and the others on this committee to innovate in this 
area and our trade practice as well.
    Senator Cardin. Well, I look forward to those discussions, 
because we are trying to figure out how we can help in that 
regard. Enforcement is going to be critically important. In a 
traditional agreement, there is an enforcement mechanism that 
leads, ultimately, to significant economic sanctions if the 
provisions are not carried out. It is difficult to see how that 
is done in a framework agreement. So I look forward to those 
discussions.
    Thank you, Mr. Chairman.
    The Chairman. I thank my colleague. Next is Senator 
Menendez. And colleagues keep coming in, so we are going to try 
to tell people how they can make the best use of their time.
    Senator Menendez is next.
    Senator Menendez. Thank you, Mr. Chairman.
    Ambassador, I have been hearing from many New Jersey 
businesses about the importance of GSP, which Congress has 
unfortunately failed to renew since it expired in 2020. In the 
past 2 years alone, GSP expiration has cost importers in my 
State an estimated $120 million, with national impact being 
estimated to be over $2.3 billion. What have you been hearing 
from businesses about the importance of GSP renewal?
    Ambassador Tai. Senator Menendez, I also hear from 
businesses that have made use of the GSP program that they 
would very much like for it to be reauthorized.
    Senator Menendez. Yes. Well, it is not just important 
because of the cost savings for American businesses. It also 
helps reduce our reliance on China, by making it more cost-
effective to import from low- and middle-income countries. 
Would you agree that GSP renewal is also a way to incentivize 
businesses to diversify their imports away from China?
    Ambassador Tai. Senator Menendez, what you have described 
makes a good amount of sense to me. I also would just take GSP 
back to its roots, which is that GSP is a fundamental part of 
our trade and development program, and a main part of the GSP 
objectives also is to stimulate and foster economic development 
with our developing country partners.
    Senator Menendez. Well, I agree, and I hope that renewal 
and retroactive relief can be one of the priorities for the 
committee.
    Now, one of the great privileges that we afford any country 
is preferential access to the U.S. market. There is a long list 
of governments that want a free trade agreement with the United 
States. When I was in Ecuador, I heard very much from the 
Ecuadorians. They unfortunately missed out because their 
previous President had a different view of the United States.
    This one is aligned with us, but at the time that the 
countries in the region got a trade agreement, they were 
excluded by their own actions. Yet we offer this benefit to a 
limited number of countries that are willing to meet our 
standards, and that share our commitment to democratic values. 
For this simple reason, I believe we cannot ignore when one of 
our free trade partners, specifically Nicaragua, becomes a 
brutal dictatorship.
    This month a United Nations investigative team concluded 
that Nicaragua's Ortega regime was responsible for crimes 
against humanity. In describing these atrocities, one U.S. 
investigator equated Ortega's abuses to crimes committed by the 
Nazi regime in Germany. A week later, Pope Francis similarly 
linked the brutality of the Ortega regime to that of Hitler's 
dictatorship. I do not take those similarities very lightly. I 
think when they are used, you really have to think about when 
you use them, but they did.
    These shocking characterizations underscore the urgency of 
ending a business-as-usual approach with Nicaragua. Do you 
think, Ambassador, the Ortega regime deserves preferential 
access to the United States market?
    Ambassador Tai. Senator Menendez, I think this has been a 
topic of broader administration deliberation and concern. I 
think you are absolutely right. When regimes turn, we have to 
reconsider how we treat them across the board, and it has been 
a question for us as well around how to respond accordingly.
    Senator Menendez. Well, I cannot think of any other 
dictatorship, specifically one committing crimes against 
humanity, that we willingly provide duty-free benefits to. So I 
look forward to working with you and the administration to 
suspend Nicaragua's market access under CAFTA. It is just 
absolutely outrageous.
    Finally, I want to thank you and your team for the diligent 
work in negotiating the U.S.-Taiwan Initiative on 21st Century 
Trade. Taiwan is a key trading partner with whom we have a 
strategic relationship that is intimately intertwined with our 
economic security, particularly as it relates to the trade in 
semiconductors. It is a model global citizen, a key stakeholder 
in the Indo-Pacific economic community, and a vibrant democracy 
that respects the rule of law.
    As you approach the end of the negotiations, what is your 
plan for submitting an agreement to Congress for approval, so 
that businesses in the United States and Taiwan have certainty 
that the agreement that you are currently negotiating will set 
durable standards into the future?
    Ambassador Tai. Well, Senator Menendez, let me also refer 
to the work that we have done together on transparency, and I 
would note that I think it was last week that we published 
publicly, public summaries of the proposals that we put forward 
in our first round of negotiations with Taiwan.
    Let me say this. I agree with you across the board in terms 
of how you have described our economic and strategic 
relationship with Taiwan, and I also want to be clear with all 
the members of this committee that when the members have spoken 
here, Senators, also House members, on supporting Taiwan's 
economy, we hear you. We are thinking about how we can make 
this relationship, using our economic tools, as strong as 
possible.
    With respect to the parts that we are negotiating right 
now, let me continue to stay close with you and members of this 
committee on our progress, and take up your question in that 
context.
    Senator Menendez. I look forward to hearing that, and I 
would be happy to work to find the appropriate mechanism to 
effectuate whatever agreement that you may come to.
    Thank you, Mr. Chairman.
    The Chairman. I thank my colleague.
    Senator Bennet?
    Senator Bennet. Thank you, Mr. Chairman. Thank you, 
Ambassador Tai, for your service and for being here today.
    Ambassador Tai, I wanted to talk about a subject that I 
think has received less attention than it should have, and that 
is the Uyghur population in China. The GDP of Xinjiang is about 
$260 billion, roughly the size of New Zealand's economy. The 
region produces about 90 percent of China's cotton and over 20 
percent of the world's cotton. About 20 percent of all cotton 
clothes on American store shelves have fiber from Xinjiang.
    Almost half the world's polysilicon comes from this region, 
which is one more reason we have to strengthen our domestic 
solar manufacturing. And I for one am very pleased that this 
administration is the first one, really since Ronald Reagan was 
President and outsourced everything to Southeast Asia, to start 
bringing something back to the United States.
    All of these consumer products and solar products are 
happening on the backs of over a million Uyghurs who are 
imprisoned in forced labor camps. There are numerous reports of 
torture, of sterilization, of people being placed under 24-7 
surveillance, with every move and every utterance monitored by 
the CCP, including in their own homes. That is what is 
happening in Xinjiang, and there are still many American 
companies that are operating in the region.
    I recognize that we passed the Uyghur Forced Labor 
Prevention Act, which is now law. But I remain concerned about 
American businesses and other multinational companies with 
supply chains that run through the region. So, Ambassador Tai, 
I would ask you to tell us what you would say to American 
companies that continue to operate in China or elsewhere with 
supply chain exposure to the Uyghur region, and what do you say 
to our global allies and partners about the importance of not 
enabling the Chinese Government's systemic oppression of the 
Uyghur people?
    Ambassador Tai. Thank you for your question, Senator 
Bennet. We have had a lot of conversations with American 
businesses about this, and I appreciate that, for a long time, 
we did not pay attention to where our supply chains went, and 
how the supply was being produced. But today in 2023, given all 
the challenges that our world economy is facing, these are 
critical questions we have to ask, especially when it comes to 
building a world economy that is not premised on the 
exploitation of our fellow human beings.
    In conversations with business, I understand and appreciate 
that they may not know, and often that they do not know how far 
their supply chains go or what the answers are in terms of who 
is producing and under what conditions. But the issue is that 
they have the responsibility to know, and in terms of working 
with our trading partners, eliminating forced labor from global 
supply chains is something that we cannot do alone. It is 
something that we must all work together to do.
    I have been getting very good cooperation and collaboration 
with the European Union, Japan, Canada, as well as Mexico. We 
are galvanizing efforts to make progress in this area. We have 
the UFLPA. A lot of our partners are working on due diligence 
legislation, exactly to put the burden on their businesses to 
know who is in their supply chain and how their supply is being 
produced.
    Senator Bennet. Well, I would encourage you to continue 
that work, to galvanize that effort, and I will turn, with the 
remaining moment that I have, to other work that you are doing 
in the name of regionalization, which you talked about earlier 
today. I am deeply concerned about China's growing influence 
across Latin America and the Caribbean.
    China is South America's top trading partner. It is South 
America's top trading partner, and a major source of both 
foreign direct investment and lending in energy and 
infrastructure, including through the Belt and Road Initiative. 
Last year during this hearing, I asked you about the 
opportunities you saw with our own trade policy to improve 
relations with key economies in the Western Hemisphere.
    Since then, the Biden administration announced the Americas 
Partnership for Economic Prosperity back in June, and you held 
its first ministerial, I think, this past January. How could 
our trade policies help us either reshore or ally-shore 
critical supply chains away from China, especially those that 
run through the Uyghur region, but others as well that may have 
for the last 30 years or so felt that that was the right place, 
but now maybe have the opportunity here?
    Can you talk about specific opportunities that you are 
targeting with our allies and partners across the Western 
Hemisphere and in this region, about what some of the 
opportunities are and some of the obstacles you are facing? I 
am out of time, but I will bet you the chairman will give you 
30 seconds to answer.
    Thank you, Mr. Chairman.
    The Chairman. Yes.
    Ambassador Tai. Thank you both. Yes, the Americas 
Partnership is an engagement that we at USTR are partnering 
with State on, precisely to bring an economic engagement to our 
own neighborhood that is regionally based. In the Latin America 
region and in the Western Hemisphere, we actually have the most 
existing FTAs that we have in any region.
    So you will see that of the 11 partners included--that is 
us and 10 other partners--with eight of them we already have 
FTAs, but that is not a limiting factor in participating in the 
Americas Partnership. We have two with whom we do not have an 
existing FTA. I have looked at the trade statistics. I know 
what you are talking about.
    Our partners in our own neighborhood nevertheless tell me 
that we are their most important trading partner, and the task 
for us is to work with those partners, but also to work with 
Congress on enhancing those relationships and bringing that 
regional prosperity that we have been wanting for a very long 
time and continue to aspire to.
    The Chairman. I thank my colleague.
    Senator Cantwell is next.
    Senator Cantwell. Thank you, Mr. Chairman. Ambassador Tai, 
good to see you. Thank you for your hard work.
    I wanted to raise a couple of issues. First, we have raised 
issues with you about the incredible tariffs in India on our 
apples, and you raised the concerns with Minister Goyal, and we 
appreciate that. Washington exports to India have declined 
quickly after they placed retaliatory tariffs in June 2019.
    So the market declined from a $120-million market to a $3-
million market in 2022. We raised these issues with Prime 
Minister Modi earlier this month, and I guess, not to my 
surprise but to my great interest, he said the U.S. and India 
should consider a free trade agreement or something similar to 
what they did with Australia.
    So I hope that you could respond on what you think we 
should do next. My colleagues here brought up the general GSP 
issue. I want to know if you are thinking about India as--all I 
know is that the retaliatory tariff environment is hurting our 
farm economy, and we need relief.
    Ambassador Tai. Senator Cantwell, I agree with you 
entirely. Thank you for raising these issues directly with 
Minister Goyal and with the Prime Minister himself. I have 
ideas that my team and I are working on. We would like to 
follow up with you. I agree with you that GSP is relevant here, 
and that there is a lot more work that we can do to tap the 
potential in this relationship, which we have struggled for 
years to be able to tap.
    But let me just start by saying ``thank you'' for the work 
that you have done here. I look forward to continuing to 
partner with you, whether tag-teaming or doing things even more 
jointly to improve this situation.
    Senator Cantwell. Great; thank you so much.
    The Indo-Pacific Economic Framework--as you know, I am a 
strong proponent of opening of markets for U.S. companies, from 
agriculture to high-tech. I would be interested in hearing more 
about how this negotiating platform can be used to address 
trade barriers.
    One specific thing, even though we are a close partner with 
Japan and have great trade relationships, there is one sector 
where I feel like we are facing types of non-trade barriers. 
For example, I am told that Sony controls a monopoly of 98 
percent of the high-end game market, yet Japan's Government has 
allowed Sony to engage in blatant anticompetitive conduct 
through exclusive deals and payments to game publishers--
establishing games that are among the most popular in Japan--
not to distribute the games on other platforms.
    And so, Japan's federal trade commission has failed to 
investigate these exclusionary conducts. So what do you think 
we can do to more address these issues and create a level 
playing field with the IPEF on something as important as this 
issue?
    Ambassador Tai. Senator Cantwell, the Indo-Pacific Economic 
Framework provides us with a lot of opportunities, and I think 
you are absolutely right that the economies that we are 
engaging with right now are all focused on expanding 
participation in their economies and looking at trade policies 
that also promote and support competition.
    So we have that particular outlook. We also have an ongoing 
digital negotiation as well. What you have described is 
something that I expect may very well come up in the 
intersection of those two perspectives, being pro-competition 
and also engaging on the digital economy. That is absolutely an 
area that we are primed to address. This one is new for me, but 
let me take this back, and I am happy to follow up with you and 
your team on this.
    Senator Cantwell. If they were blocking access, that would 
be of great concern, yes?
    Ambassador Tai. If they were, or are they?
    Senator Cantwell. If they--well, I am saying they are, but 
you said you were looking into it. I just want to make clear 
you view this as a problem.
    Ambassador Tai. Yes. I think monopolistic behavior is 
something that is a drag on economic growth and development.
    Senator Cantwell. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. I thank my colleague.
    I believe Senator Cassidy is next.
    Senator Cassidy. Thank you, Mr. Chairman, and, Ambassador, 
thank you for the meeting yesterday. I appreciate it.
    In the past, I have asked you about shrimp. To cut to the 
chase, the EU puts phytosanitary standards upon Indian shrimp, 
and a lot of those shrimp fail, and so India then dumps them on 
the U.S. market. They subsidize, et cetera. So we are getting 
stuff that doesn't pass European phytosanitary standards, that 
is subsidized, that is dumped onto our market, and my shrimpers 
are hurting, among many other problems that they have had in 
recent years.
    In the past, you have mentioned you have raised this, but 
it still seems to be an issue. Other agencies such as the FDA 
are addressing this. Can you speak to what USTR is doing?
    Ambassador Tai. Senator Cassidy, I suspected that you were 
going to raise shrimp, and so I wanted to come as prepared as I 
could be. We continue to raise this concern with India. I 
actually just had an exchange with Senator Cantwell about her 
concerns with respect to apples and other aspects of our 
agricultural trade with India.
    On this, what I would say is, I will commit to you that I 
will continue to raise our concerns, and that I will also work 
with you as closely as I can, to continue to try to find ways 
to tap the potential in the U.S.-India relationship, including 
around some of these thorny agricultural barriers that we face.
    Senator Cassidy. May I? There is nothing like a hanging to 
sharpen a person's mind, as Samuel Johnson said, and there is 
nothing like a tariff to suddenly dislodge a barrier. Is it 
time to review the tariff schedule on the shrimp that is coming 
from India, and why do we not?
    Ambassador Tai. Senator Cassidy, I will take that as a 
suggestion and a request, and let me just say that I have noted 
it.
    Senator Cassidy. Let me ask as well--Mexico under USMCA, 
they are supposed to be treating our energy producers similarly 
to their domestic. It is clearly not happening, with specific 
incidences of where the Mexican Government is clearly 
discriminating against our energy producers. Can you kind of 
address those issues and how we are trying to get the Mexican 
Government to live up, not only to the spirit but the actual 
letter of USMCA?
    Ambassador Tai. I would be glad to do this as well, because 
this is a really important issue for our economy, and it is 
also a really important challenge that we have in our 
relationship with Mexico, which is longstanding and close. So, 
as you will know, last July we requested consultations with 
Mexico regarding various of its energy measures. We have met 
with over a dozen companies and industry groups to discuss the 
issues they face.
    Last August and also September, we held consultations with 
Mexico, also in cooperation with Canada, which is also raising 
its concerns with Mexico. From December to February, the United 
States, Mexico, and Canada have engaged in a series of sessions 
to discuss specific concerns raised in the consultations 
request. We are engaging with Mexico on specific and concrete 
steps that Mexico must take to address the concerns set out in 
our consultations request. In addition, we also expect ongoing 
monitoring and discussions between the U.S. and Mexico on these 
issues. This is still very much a live issue.
    Senator Cassidy. And what do we have to leverage their 
cooperation?
    Ambassador Tai. Well, I think that a large part of it is 
Mexico's own self-interest in terms of the strength of its 
energy market, and the integration of that market in the North 
American----
    Senator Cassidy. But they seem to have a kind of 
nationalistic viewpoint, in which they are willing to sacrifice 
efficiency and tolerate corruption in order to have the pride 
of owning their own business. This seems to be an ideological 
viewpoint; in which case it seems like it has to move beyond 
their apparent self-interest and to something which is living 
up to the letter of the law. Does that sound right?
    Ambassador Tai. Let me just say that all sounds right to 
me, and we know that all of the tools in the USMCA are there 
for a reason.
    Senator Cassidy. Okay.
    And lastly, just to build upon our conversation yesterday, 
just any thoughts as to how we can reset or rebalance our 
trading relationship with China, seeing how they are not 
enforcing baseline environmental rules? They are polluting the 
international commons with pollutants flying over into Oregon 
and other west coast States but lowering their cost of 
manufacturing and incentivizing our manufacturing to move 
there, hurting our workers.
    Ambassador Tai. Senator Cassidy, yes, absolutely. Every 
single day on this job I am thinking about China in one way or 
another, in terms of our footprints in the global economy and 
in terms of how we relate to each other to bring about a better 
version of globalization. I know that you are a leading thinker 
on economic policies and tools that we could bring to bear.
    I am very interested in continuing to work with you on 
those items, and in terms of the way that you see the 
competition and the way that you think about how we need to 
move beyond past practices and tools, and to evolve and bring 
about new ones. I look forward to continuing this conversation 
with you and to working with you.
    Senator Cassidy. Thank you, Madam Ambassador.
    I yield.
    The Chairman. I was only smiling, Ambassador, because on 
this committee, there are lots of Senators who believe that 
they are being big economic thinkers too. So I just wanted to 
stick up for them.
    Senator Tillis?
    Senator Tillis. Thank you, Mr. Chairman. Ambassador, I 
first want to start by saying that I agree with Chair Wyden and 
the concerns of my colleagues about transparency. I think the 
lack of collaboration with the American public--and even more 
importantly the Congress--on trade-related activities is, let 
us say unwise. I also believe, and correct me if I am wrong, 
that the USTR has tried to assert classified privileges on 
documents that do not contain classified material, in an effort 
to require SCIF access and limit accessibility. That seems to 
be counter to the idea of transparency.
    Correct me if I am wrong on that, but I have a more basic 
question. As you are negotiating some of these agreements, it 
would seem to me that you would need to tell the negotiating 
partner that these agreements may only be valid for 18 months, 
depending upon the outcome of the presidential election, or 6 
years. Because, like the JCPOA and other things that I think 
would have done well by going through a treaty ratification, 
they go the way the winds blow.
    And we see how winds blow on trade policies. TPP was on the 
brink of being signed, which I think would have been far 
superior to the Indo-Pacific Economic Framework, and then the 
two candidates at both ends of the aisle used their opposition 
to TPP to pretty much end those negotiations back in that 
presidential cycle.
    So why would anybody on the other side of the agreement 
think that these unilateral agreements that are skirting 
Congress--likely to be subject to lawsuits after an injured 
party asserts that the administration has gone beyond its 
constitutional authority--why should they look at these as 
something that could have enduring quality and value?
    Ambassador Tai. Well, Senator Tillis, let me begin by 
addressing part of your lead-up to the question around 
classification of documents. And I want to let you know, if you 
do not already, that in some of the materials and documents 
recently, we have made a point of not classifying them so as to 
facilitate access to them.
    Senator Tillis. Well, that is great. So there would be no 
requirement for any briefings related to this that would 
require us to be in a classified setting going forward?
    Ambassador Tai. No, that is not what I said. But what I 
wanted to make clear is that we are doing everything we can to 
not bring an ideological approach, with a view of transparency 
and to be as forthcoming as possible.
    Senator Tillis. I want to move on to some detailed 
questions.
    Ambassador Tai. But let me just also make a point----
    Senator Tillis. What about the staying power and enduring 
value of these agreements?
    Ambassador Tai. Yes. The durability of our trade 
engagements with our trading partners and with all of you 
motivates almost everything that we do every single day. The 
TPP example is paramount, and so I want to make clear that with 
respect to the concerns that I am hearing up here, it is--I 
completely respect the concerns around whether or not and when 
the Congress gets a vote.
    But I also want to make it very, very clear that we are 
leaning very hard in consultations with Congress so that there 
are no negotiations that we are doing that are significant, 
that you do not know about.
    Senator Tillis. Okay. I will take that at face value, 
because I want to ask a few more detailed questions. I do want 
to make a point that I will be contacting your office about 
what I consider to be illegal taking of a quarry and a port 
down in Mexico. That is completely unacceptable, and that puts 
me in a posture of doing nothing more positive with Mexico 
until that is resolved, and we will educate the American public 
and more members as we go on.
    I am very concerned. We are at the end of the public health 
emergency with COVID, and yet the administration's posture is 
still to move forward with TRIPS, and not only move forward 
with TRIPS, but expand the focus to also include diagnostics 
and therapeutics. We had a hearing yesterday about this 
subject, and if the administration wants to create an 
environment where there are fewer therapeutics, less investment 
in small molecule research, and lost American jobs in the 
biotech space, go forward with that policy, because that is 
exactly what is going to happen.
    I will be able to come back before this committee, as I did 
yesterday with Eli Lilly and several others, who are simply 
saying they are exiting research and development that saves 
people's lives first, improves the quality of their life, and 
employs American workers. I think it is a dangerous policy.
    I am going to submit several questions for the record, and, 
Chair and Ranking Member, I did have to let you know, since you 
all did the unseemly thing of politicizing potatoes, I will 
also have questions for the record on sweet potatoes, where you 
have a one-in-two chance if you are eating a sweet potato, it 
was grown in North Carolina, and we have trade issues there as 
well.
    The Chairman. The heat intensifies around the potato issue. 
Okay.
    Ambassador Tai. Chairman Wyden, would you give me just 10 
seconds to respond to Senator Tillis on the TRIPS issue and the 
extensions?
    The Chairman. Yes, sure, sure. Yes, sure, of course.
    Ambassador Tai. Because I want to make sure that, Senator 
Tillis, you hear from me exactly what we are doing with respect 
to the extension question that has been raised by the WTO. We 
think that it is a legitimate question and there are legitimate 
interests that are being expressed at the WTO around access 
worldwide to diagnostic therapeutics, et cetera.
    What we have done is to say this is something that we need 
to consider and deliberate on as a serious policy matter. We 
have asked the International Trade Commission to run one of 
their very public processes with integrity, to invite comments 
from the world, actually stakeholders, and to inform us about 
what we should do next.
    Senator Tillis. But if we are weeks away----
    The Chairman. We are going to have to move on----
    Senator Tillis. But if we are weeks away from it being a 
national health crisis, and we are still moving forward on 
things that were driven by the health crisis, I would really 
like to get a briefing on that, because you cannot use it as a 
pretext and then do that.
    The Chairman. The time of the gentleman has expired.
    Senator Thune is next.
    Senator Thune. Thank you, Mr. Chairman. No potato 
questions. [Laughter.] Ambassador Tai, welcome back to 
Congress.
    As you know, the United Kingdom is one of our Nation's 
largest trading partners and closest allies. The UK is 
America's fifth largest export market and our largest services 
trading partner in the world. The U.S. and UK are also each 
other's largest foreign investors. While our two countries have 
a substantial foundation in trade and investment, it is clear 
there is room to strengthen those ties and deepen the special 
relationship, in particular with a comprehensive free trade 
agreement.
    A new U.S.-UK trade agreement would build upon the common 
values and interests of our two countries, and in doing so help 
reduce costs for American consumers, improve supply chain 
resilience with a trusted partner, and open new markets for 
U.S. producers, including products in my home State of South 
Dakota. Important groundwork has already been laid--including 
the bilateral negotiations initiated by President Trump toward 
a trade agreement, and the U.S.-UK dialogue on the future of 
the Atlantic trade initiated by President Biden--to improve 
economic cooperation.
    There is also bipartisan support for this effort, as 
Senator Coons and I recently introduced a bill to kickstart 
trade negotiations with the UK. With the recently announced 
Windsor Framework, which provides a pathway on post-Brexit 
trading arrangements in Northern Ireland and which President 
Biden supports, the timing could not be better to reengage with 
the UK on a trade agreement.
    But as with any trade agreement, it will require 
presidential leadership and a committed USTR to move the ball 
forward. So my question, Ambassador, is, will you commit to 
strengthen the U.S.-UK trade relationship, in particular by 
undertaking steps to negotiate a comprehensive trade agreement 
with the UK?
    Ambassador Tai. Senator Thune, on the first part of your 
question, I absolutely commit to working to strengthen this 
relationship and have been doing so for the last 2 years. On 
the second part of your question with respect to a free trade 
agreement negotiation, let me just say I remain open-minded. I 
will reinforce what I said earlier, which is, we look at each 
one of our trade relationships and we look at the overall 
situation in the global economy, what our economy needs, to 
make sure that what we do is tailored.
    You have mentioned a lot of developments in the UK. We are 
tracking all of them, and I had a conversation with my new 
counterpart, the Trade Secretary Badenoch, just last week. So I 
am happy to continue to stay in touch with you as we build that 
relationship and continue those conversations.
    Senator Thune. Good. So you are in conversations with them?
    Ambassador Tai. We are in conversations.
    Senator Thune. I appreciate that commitment, and I 
strongly, strongly encourage USTR and the President to make a 
trade deal with UK, one of our closest allies, a top priority. 
It is something that can and really just needs to be done.
    The USTR continues to push the Indo-Pacific Economic 
Framework. You heard some of my colleagues talk about that, 
which is presumably about reinforcing America's presence in the 
region and offering an alternative to China's influence. The 
problem is that IPEF does not achieve much of either, and while 
there may be areas of potential, what remains glaringly absent, 
in my view, are tangible benefits related to market access. If 
the U.S. does not meaningfully engage in the Indo-Pacific, I am 
concerned that South Dakota farmers and ranchers, and all 
American businesses, simply will not be able to compete on a 
level playing field. Without market access, enforceable 
commitments, and a binding approval from Congress, IPEF 
partners may also start to question America's commitment to 
trade and look elsewhere. Meanwhile, China is aggressively 
pressing forward a trade agenda, whether it is in the Asia-
Pacific, Africa, Latin America, or just earlier this week, 
reaffirming economic ties with Russia, which again entails a 
lot broader significance.
    So, given the economic and geopolitical interests at stake, 
I again strongly urge USTR to be more ambitious to bolster 
America's presence in the region. And I would ask: what is the 
administration doing to counter China's economic assertiveness 
and its apparent increasing alignment with Russia, and when 
will we see tangible progress?
    Ambassador Tai. Well, in terms of the Indo-Pacific Economic 
Framework--and I am conscious of the time that I have left--let 
me just make a couple of points. One is that we are making 
quite a bit of progress there. Since launching this last May, 
we have had a ministerial in-person in September, and we just 
concluded our second negotiating round in Indonesia, with a 
third one announced in Singapore in 2 months.
    To your point about--and let me just reinforce that our 
partners are extremely excited to have us back in the region, 
and they are very, very deeply engaged. On your market access 
point, let me just make this comment, which is that the 
traditional approach to free trade agreements being 
comprehensively tariff-liberalizing, has led to winners and to 
losers. While it has been, I believe, in general, very good for 
our agricultural producers, the other swaths of our economy 
very much feel like the playing field is not level.
    When we look at the brittleness and the vulnerabilities, 
especially with respect to concentrations of supply in our 
supply chains, we are keenly aware of the need for us to bring 
a more resilient approach to our trade engagements, and that is 
exactly what we are doing in this particular region. So I am 
happy to continue this conversation with you, but I want to let 
you know that we are not driven by an ideology about this. We 
are deeply practical about how we engage with our partners, how 
we make each other more resilient. That is a guiding principle 
for the IPEF, and it will continue----
    Senator Thune. And it has got to be about results, and 
ultimately, to me at least, when you look at the number of free 
trade agreements China has, particularly in the region, and how 
we are absent, we have to get free trade agreements. And the 
best way to do that is get Trade Promotion Authority, and we 
have had this conversation before. I wish the administration 
would do something about it.
    Thank you.
    The Chairman. I thank my colleague. Senator Lankford is 
next, and I hope my colleagues will then let Senator Warner go 
next, so we can get both of them in before the vote.
    Senator Lankford?
    Senator Lankford. I am going to stall as long as I can to 
keep Senator Warner from getting up then, if that is the goal. 
[Laughter.]
    Katherine, thanks for being here again. I appreciate your 
availability to this committee, to be able to talk to the 
issues on this. We have talked before about free trade 
agreements, and that this has not been a goal, to go get new 
free trade agreements at this point. It is trying to work with 
executive agreements and not bringing them back to this 
committee to be able to work through the process.
    I think you have heard bipartisan--we want to continue to 
stay engaged through the administration, to be able to work on 
free trade agreements, and we want to have a bipartisan 
conversation about the responsibility of Congress to do this. 
That is an older conversation we had. I was surprised to read 
that there is discussion at least about a new type of free 
trade agreement with Japan and with Germany, to try to deal 
with energy and climate issues that is also not coming back 
here. I cannot figure out how it gains market access and how it 
is an FTA.
    So help me understand this conversation about a free trade 
agreement that is not a free trade agreement, that does not 
really increase market access for American goods that way, but 
is increasing access for goods coming this way. What is this?
    Ambassador Tai. So, you and I are going to have a 
conversation around the free trade agreements issue, which we 
have done before. I just want to put a bit of clarification on, 
when I talk about free trade agreements--and I should make this 
clarification more often--I am talking about our traditional 
free trade agreement approach.
    Senator Lankford. Right.
    Ambassador Tai. I believe that there could be an approach 
that promotes resilience in a much better way, and in a way 
that our traditional approach has not. Your second question 
relates to, I think, critical minerals, and the interpretation 
of a free trade agreement in the Inflation Reduction Act. 
There, what I would have to do is really point to the guidance 
from the Treasury Department in the implementation of the 
Inflation Reduction Act, and note that that is an 
interpretation that the Treasury Department has made in its 
work that is part of, I would say, a different context than the 
one strictly that you and I have been in, where we have been 
talking about the free trade agreements.
    Senator Lankford. The one that has always been recognized.
    Ambassador Tai. Traditional.
    Senator Lankford. I think when everybody writes ``free 
trade agreement,'' there is an assumption of what that means, 
and suddenly free trade agreement does not mean free trade 
agreement. Even when it is in statute, it does not actually 
mean what everyone has understood. When you say 
``traditional,'' I do not know of an exception to that. If 
there has been an exception to that, I would be interested to 
be able to hear it.
    But there seems to be a way to work around Buy American, 
and to be able to now define things that are in Japan and 
Germany as American for the sake of the Inflation Reduction Act 
requirement of Buy American. Now suddenly Japanese products and 
critical minerals are going to be declared American to be able 
to come through the process. It seems like a very odd way to be 
able to do this, this workaround that is being developed in 
this new definition.
    So all I am trying to figure out is, if we are going to do 
critical minerals and we are going to try to gain additional 
critical minerals here in the United States, Japan has the same 
issue with critical minerals with China that we do. It does not 
help to then just declare China part of the United States, and 
then say we are just going to get it from there and declare it 
American when it is actually Chinese. Does that make sense?
    Ambassador Tai. So let me just say, I think that there are 
a lot of things that we agree on in your presentation, which is 
that critical minerals are critical. They are critical to our 
future and our economy----
    Senator Lankford. Right.
    Ambassador Tai [continuing]. And we have significant supply 
chain challenges with respect to our access to critical 
minerals and where critical mineral deposits are right now 
actively being exploited and being made available to the world 
market. And what I would say is that in terms of addressing our 
supply chain vulnerabilities with respect to critical minerals, 
it is something that we cannot do alone, that we have to do 
with our partners. That is what we are trying to do with 
respect to the current exercise.
    Senator Lankford. So, I would agree that we have to be able 
to expand to friends and relationships and all those things. 
That is a good thing. I just have a hard time declaring 
suddenly a new definition of free trade agreement that does not 
have market access, and then saying this meets the Buy American 
standard when it is actually not done in America. That just 
seems a little odd to me in that.
    Can I ask a separate question? I know we do not have much 
time on this. It is about the Abraham Accords. It is one of the 
things we have talked about extending to our foreign policy, 
also extending to our trade policy. What are we doing actively 
right now to expand our input and trade relationships with 
those in the Abraham Accords?
    Ambassador Tai. So, we have a number of existing free trade 
agreements from 15 to 20 years ago with countries in the Middle 
East. We have in the last months and weeks, I think most 
recently just a week or two ago, been engaging with those 
partners through our TIFA agreements and arrangements, and also 
through the committee set up in our FTAs. And so, as part of 
our work to be part of the foreign policy toolbox, we are 
bringing our tools to bear.
    Senator Lankford. Great; thank you. Please keep doing that.
    The Chairman. I thank my colleague, and as he knows--
Senator Warner knows as well--I feel very strongly about 
expanding the Abraham Accords and, particularly, bringing more 
economic opportunities to Palestinians, because I think this is 
one of the best ways to get a two-state solution moving once 
again.
    Senator Warner is next.
    Senator Warner. Thank you, Mr. Chairman. I am glad my 
friend from Oklahoma managed to use his whole 5 minutes. Wait 
until he gets back into Intel. [Laughter.]
    Let me--I have a bunch of questions. I want to also quickly 
say I agree with Senator Thune on the UK free trade agreement. 
We need to move on that, and I am not, Mr. Chairman, going to 
talk potatoes. But, Madam Ambassador, let us talk turkey.
    Yes, Virginia is one of the biggest States in poultry, both 
broilers and turkeys, about--what is their number?--17,000, 
18,000 direct jobs, $6 billion in economic direct interest, 
much more of that indirect. The chairman and I, with a group of 
members, were recently in India, and I am chair of the U.S.-
India Caucus, all for increased trade.
    But India is one of the most challenging places I know. I 
think colleagues have raised apples, and I am concerned about 
apples as well--we have Virgina apples. But on poultry, you 
know, they have tariffs up to 100 percent. So can you talk 
about, in your conversations with our Indian friends, whether 
poultry has gotten onto the agenda and what we can do to make 
sure we get more access to that market?
    Ambassador Tai. Certainly, agriculture and India--
agriculture is always on the agenda for our conversations. And 
as you have noted, for all of the potential in this 
relationship, we still have to work very, very hard at 
unlocking the economic potential. So it has been part of our 
conversations. We will continue to raise it. We will raise it 
more loudly and more vociferously.
    Senator Warner. Well, I really think we need to focus on 
this poultry issue. It is not just a benefit for Virginia. I 
know my friend from Delaware--let me jump line--this is an 
extraordinarily important issue for him as well, and I hope we 
can elevate that.
    I want to move continents and go over to Ethiopia. I 
understand the administration's decision about taking Ethiopia 
out of AGOA. I do think we have had a relatively stable peace 
agreement with the Ethiopians since November.
    I know Secretary Blinken was recently in the country. You 
know, I think stronger ties and getting Ethiopia back into AGOA 
need to happen, and I would like you to give me a brief update 
on how those conversations are going and when we might see a 
movement from the administration.
    Ambassador Tai. Certainly. The decision to remove AGOA 
benefits from Ethiopia was not an easy one, especially while 
seeing what was happening in Ethiopia. But the AGOA program is 
structured the way it is. It has criteria and conditions, as 
all of you know, because you created AGOA, and we are where we 
are now.
    As part of that, we have been working with the Ethiopian 
Government, with a list of benchmarks that we will be looking 
at very closely in terms of tracking progress. I know that 
there have been important developments. This is something that 
the administration is looking at across agencies. But we are 
working very closely with the State Department.
    Senator Warner. But can you share, Ambassador, with me 
after the fact, what those benchmarks are and what the timeline 
is for getting Ethiopia back in? I think it is an 
extraordinarily important relation. Most all of us in this 
committee are concerned about Chinese investment. Our walking 
away from Ethiopia has provided opportunities for the CCP to 
make inroads. I know we need to take action on telecom in 
Ethiopia.
    So, I would like to get--I appreciate your comments. But I 
need specifically what those benchmarks are, what the timeline 
is, and then if they meet that, when Ethiopia can rejoin AGOA.
    Ambassador Tai. We will be happy to share that.
    Senator Warner. Okay. I want to stay on Africa, because--
and again I want to commend the administration for having the 
summit with African leaders in December. I think this is an 
area where we need to pay a lot more attention from a 
population standpoint, from a rare earth minerals standpoint, 
from the fact that there is an opening again. Under the notion 
of Belt and Road, a lot of countries went down that route with 
China. They did not get the jobs. They ended up with products 
or infrastructure that were pretty shoddy, and at levels of 
debt that are unprecedented. But we have to be more assertive.
    Talk to us about, in your remaining 25 seconds, the U.S.-
Kenya circumstance. I think we need a free trade agreement with 
Kenya. Where does that stand? What can we do to help move that 
along?
    Ambassador Tai. Certainly. So we are very proud of the 
strategic trade and investment partnership work that we are 
doing with Kenya right now. We have met, I think, once already. 
The next round of negotiations is happening in April in Kenya, 
and I hope that that is public already. But if not, it is now. 
So we are moving along with a very, very good partnership with 
the Kenyans. We are motivated on both sides.
    Our focus really in this engagement is to bring to the 
engagement and the economic program those things that Kenya has 
told us that it really is prioritizing. One is making Kenya a 
preferred destination for foreign investment, and also looking 
at capacity building to ensure that Kenya has the equipment and 
the tools to take advantage of the economic opportunities that 
we are engaging with them to create.
    Senator Warner. Thank you, and thank you, Mr. Chairman. I 
also want to thank my colleague from Delaware for letting me 
jump line. But we did talk turkey with the Ambassador, and I 
know that is an issue of importance to you.
    The Chairman. All right. Here is where we are. We are going 
to have to do some juggling, but we can definitely get Senator 
Carper and Senator Young in before the end of the vote, and 
then I would just like my colleagues, on both sides of the 
aisle, to let us know about their schedules, because we are 
just going to try to keep this moving.
    In fact, it technically goes Carper, Young, Whitehouse--and 
then we have our colleagues as well who want to do it. Senator 
Whitehouse is going to get back, and I appreciate it.
    Senator Carper and then Senator Young.
    Senator Carper. Thanks, Mr. Chairman. And, Ambassador Tai, 
great to see you, and thanks not only for joining us today; 
thank you for serving our country in so many different ways 
over the years.
    Last month, as you may or may not know, I led, along with 
Senator Hassan, a bipartisan bicameral codel to Mexico, to 
Guatemala, to Honduras, to explore how we can better address 
the root causes of illegal immigration to this country, and 
also expand economic opportunity throughout Central America.
    The delegation saw firsthand how increased investments, 
including those spurred by the Biden administration's call to 
action initiative, can create good-paying jobs, while also 
advancing our humanitarian and security goals. While this is, I 
believe, a good start, it is clear that we can do more, and 
frankly the folks down there can do more to support the rule of 
law.
    I like to say that the main thing is to keep the main thing 
the main thing. As far as I am concerned, the main thing for 
economic development, for stemming illegal immigration, is rule 
of law and to create jobs, particularly jobs in the private 
sector. But how can we strengthen our trade and investment 
policies and facilitate greater economic cooperation throughout 
Central America and across the Western Hemisphere, in your 
view?
    Ambassador Tai. Well, Senator Carper, thank you for leading 
that bipartisan and bicameral codel. I do a lot of travel as 
part of my job. You learn so much by being on the ground, 
seeing with your own eyes and having conversations and 
establishing relationships directly. So I am delighted that you 
and colleagues have done that with three very important 
delegations.
    Senator Carper. Our President likes to say all politics is 
personal, all diplomacy is personal, and he is right.
    Ambassador Tai. I completely agree with you. You know, I 
had mentioned earlier that Latin America is one of the regions 
where we have the most existing FTAs, and yet even with 
partners with whom we have an existing traditional free trade 
agreement, we are hearing from them that in this moment in the 
global economy, that they are looking for something more, and 
that they are looking for something more in their relationship 
with the United States.
    So, whether it is with partners with whom we have an FTA, 
or with partners with whom we do not yet have an FTA, we are 
very focused on the parts of an economic engagement that are 
relevant to the challenges that we all have today, and this is 
coming after several years of economic turbulence--the 
pandemic, supply chains, Russia's war against Ukraine.
    So I completely agree with you with respect to the rule of 
law. Establishing stable environments where economies can 
grow--and you know, this is the President's vision of growing 
our economy from the bottom up and the middle out. It may be 
surprising to you--or not--how many of our partners have 
leaders who are also looking to cultivate that broad-based 
economic growth and support in these countries. We also see 
that. So that does inform the trade policies, the economic 
engagement policies that we are bringing, which are really key 
to achieving sustainability and resilience, right now 
especially, and also inclusiveness.
    Senator Carper. Good; thank you.
    Senator Cornyn and I have the privilege of leading the 
Trade Subcommittee of this committee, and we had a hearing not 
long ago exploring the importance of digital trade and economic 
growth and job creation. One of the key takeaways was how 
digital trade can benefit workers and unlock new opportunities 
for businesses of all sizes across a wide range of industries. 
As you negotiate the digital chapter in the Indo-Pacific 
Economic Framework, how are you creating new opportunities and 
promoting economic growth for small businesses?
    Ambassador Tai. I think this is a great question and key to 
my previous answer around looking for opportunities, working 
with our partners to find opportunities to work together to 
unlock that economic space for the smalls, the mediums, for 
regular people. That is really, really critical to our vision 
for how we engage with our trading partners.
    So, with respect to digital especially, we see the 
potential for digital to reach so many people, ordinary people, 
and to give them a gateway for interacting with not just their 
own economies, but the world economy. At the same time, we also 
know that there are structural barriers in this type of 
economy, just like in the more traditional economy, that can 
stand in the way of creating that economic growth.
    And so, in our engagements--whether it is in the Indo-
Pacific Economic Framework or in other negotiations where we 
have scoped active digital conversations--our focus is to make 
sure that the approach that we bring to these negotiations is 
as broad-based as possible, and that we are bringing in 
stakeholders from as broad a basis of our economy as possible, 
so that it is an agreement that will set us up for, again, a 
growth trajectory over the years, especially as our domestic 
regulators, our domestic legislators, continue to develop a 
vision for how regulation comes in contact with the digital 
economy.
    Senator Carper. Great. Thanks for that thoughtful response. 
Great to see you again. Keep up the good work. Thanks so much.
    The Chairman. I thank my friend.
    Senator Young?
    Senator Young. Welcome, Ambassador Tai. Good to have you 
before the committee, and I am going to pick up on Senator 
Carper's thoughts about digital trade. He and I are working 
together on a digital trade resolution. In the absence of kind 
of Trade Promotion Authority and some bolder action on market 
access, we have identified this area of potential bipartisan 
agreement, to send a signal to the world that the United States 
is leaning into the trade agenda, especially in this area, and 
the chairman and ranking member, I know are supportive of this 
effort.
    Specifically, the resolution calls out China for 
manipulating digital trade rules to benefit themselves, while 
undercutting American industries. We just cannot let China 
dictate the standard in digital trade. It is not just an 
economic issue; this will shape our values if we have not 
embedded it in the technologies of the future and the services 
that are provided through digital means. If those rules are 
shaped by the Chinese Communist Party, then they are going to 
have outsized cultural access, and their values will permeate 
the digital economy. So this is really important. It should be 
to every American.
    I understand the text of the Indo-Pacific Economic 
Framework is still in draft form, but could, Madam Ambassador, 
you tell me how IPEF will raise the standard for digital trade, 
and speak specifically to how countries, especially developing 
countries, will make meaningful progress to improve their 
digital trade practices under IPEF provisions?
    Ambassador Tai. Certainly; I would be happy to do that, 
Senator Young. As we shift our thinking to a trade system that 
aims to promote inclusiveness, resilience, sustainability, we 
have to apply this to the rapidly evolving digital economy that 
includes new and emerging technologies such as AI and a heavy 
reliance on using data for economic activity.
    In today's economy, trade increasingly occurs through the 
movement of data and information across international borders. 
First, we must pursue rules that promote a comprehensive vision 
of digital trade; that is, digital trade that is inclusive, 
that protects the privacy of consumers and workers, and 
supports U.S. values like freedom of expression, freedom from 
discrimination, and that supports the environmental 
sustainability goals as well.
    Second and very, very importantly, as we engage with our 
partners, we know that we must make sure that governments have 
the regulatory space to tackle the challenges arising from the 
rapid growth of the digital economy.
    Third, we need to develop rules that prevent some countries 
from moving in what we consider to be the wrong direction--
specifically, the direction of a government-controlled 
repressed Internet, where the government sets rules that 
disadvantage U.S. businesses, workers, especially small 
businesses. And, unlike the biggest companies, small businesses 
cannot absorb the costs that those rules impose.
    Senator Young. Thank you for that summary. When can we 
expect the IPEF framework to be publicly released so we can 
kind of scrutinize some of the details?
    Ambassador Tai. Certainly. So the proposals are available 
to you, and I have had this conversation with Chairman Wyden at 
the top of the hearing, and I think that today is Thursday. Two 
days ago, we released a public summary of the text that we have 
put out there.
    Senator Young. Excellent.
    Ambassador Tai. So you can begin talking about it with your 
constituents.
    Senator Young. Okay. We will look forward to dialoguing 
with you if we have any concerns about that as well.
    I am glad that Senator Warner asked a question about AGOA 
and the benefits, or lack thereof, given to Ethiopia. Can you 
give me an update about any other countries, particularly South 
Africa? I do not think the South Africans, if they are 
watching--and I hope they are--should assume that they will 
continue to enjoy AGOA benefits.
    They have been very closely aligned with Russia and China. 
It appears that that relationship is getting even closer. I am 
struggling--and I will continue to work on this issue--to 
divine why they should continue to enjoy AGOA benefits. So 
maybe give me an update on your thinking as it relates to that 
or commit to me here that you will follow up on that matter. 
But I would love to work with you and others in the 
administration on this issue.
    Ambassador Tai. So, on South Africa in particular, I know 
that these are challenging geopolitical times, very, very 
challenging. I also see a lot of potential in this particular 
relationship and have built a very strong relationship with my 
counterpart there, where we can talk a lot about a lot of 
things constructively. So, I commit to following up with you on 
South Africa in particular, and on Africa overall.
    I will just highlight last December when the African 
leaders were here in Washington, that the Secretary General of 
the African Continental Free Trade Area and I signed an MOU. We 
have an opportunity to bring a form of partnership with the 
countries in Africa that can be new, that can be forward-
looking, and that can help make each of us stronger.
    In terms of the demographics that Senator Warner talked 
about, by 2050 one in four people in the world will be African, 
and they will be overwhelmingly--there will be a lot of 
opportunity there.
    Senator Young. Listen. There have to be consequences for 
not being a good friend, partner, and the South Africans have 
not been. It is manifestly true, and something has to give. I 
mean, this is a high form of naivete if we continue to offer 
special trade benefits to a country that is unfriendly to the 
United States. Why? I think it is nice to revisit our 
principles and the intention of this program.
    So, let us continue to dialogue about this important issue. 
But I do not want to--forward-looking means as we look forward, 
there ought to be consequences. That is what I think. If the 
administration is taking a different view, then we should be 
very clear about that. I will give you the last word.
    Ambassador Tai. I am happy to follow up with you on this 
important issue.
    Senator Young. Thank you, Ambassador.
    Senator Whitehouse. Am I up? I guess I am the chairman, as 
well as the next one up for the moment. How are you, 
Ambassador?
    Senator Young. The gentleman is recognized.
    Senator Whitehouse. Thank you.
    I want to talk about carbon border adjustment for a moment 
with you. The EU has announced a CBAM. They have pretty well 
defined it. It is coming at us. I hope very much that that will 
be seen as a welcome step by the administration and one that we 
can try to meet and match. I think the EU CBAM opens the 
prospect of us joining into a common carbon border agreement.
    Canada, I am told, is eager to join. The UK has done a hard 
left, which is the carbon price. The tariff part is relatively 
easy. So we are within plausible reach of a carbon pricing 
agreement among the UK, U.S., Canada, EU, who knows, perhaps 
Australia. I worry in this context that the steel-aluminum 
arrangement that you are working on gets proposed as an 
alternative and is used as a stick, to stick in the spokes of 
progress on carbon border adjustment.
    So I am eager to make sure that that does not happen. We 
have reports showing that the carbon border adjustment has huge 
value to American industries, big ones like steel and pharma 
and cement and aluminum. One study shows that the iron and 
steel sector alone could have over a million jobs added in the 
U.S. if we have a solid carbon border tariff, because of the 
enormous tariff differential between us and China, and the 
relocation of jobs and construction to the United States.
    There is a bipartisan conversation about this happening in 
the House, and I commend to you the CCES recent report 
supporting carbon border tariffs in the House. I can get it to 
you if you do not have it handy. And it has been announced by 
Senator Cassidy of this committee that he is going to announce 
his own carbon border bill fairly soon, and I have had one for 
a long, long time as part of my carbon pricing measure.
    So there is bipartisanship on both sides of this building 
on this. I will tell you that when I have been challenged over 
the IRA at the Egypt Comp, at the Munich Security Conference, 
in meetings with EU officials, I have taken a very strong line 
that I believe is consistent with what the administration 
wants, which is basically tough bounce. You catch up, meet us 
or beat us. Nothing prevents you from stepping up the same way 
that we did, and I think Minister von der Leyen has also moved 
in that direction as well, and the EU is moving in that 
direction.
    So it puts me in a very, very awkward position if the EU 
makes the reciprocal argument to us, which is, ``Okay, we have 
a carbon border adjustment. Instead of whining and complaining 
about it, you ought to step up and meet us and agree on 
something, so that there is no tariffing between the two of 
us.'' I do not want to have to say, ``No, no, no, that step up 
and match us is only true when we are telling you you have to 
match us. But when it is the other way around, when the shoe is 
on the other foot, then we should get some kind of like special 
pass.'' So, if it is the administration's position to try to 
steer away from the EU CBAM rather than to meet it, please 
expect my vehement adverse activity to prevent that from being 
the outcome for two reasons.
    First, there is no chance in the world that the aluminum 
and steel arrangement will create anything like the emissions 
reductions of a proper carbon border tariff. It just is 
inconceivable. So we would have an enormous emissions 
reductions loss if we went that route. And then the second 
thing, of course, is consistency. I do not think we can tell 
our EU friends to basically go pound sand and match us with 
respect to our incentives, but then when they have their own 
plan, we try to weasel our way out of it.
    So please, please, please, lean into that as much as you 
can, and thank you for not talking about marine litter in the 
IPEF negotiations. That is a pathetic phrase from the USMCA. It 
is pollution, it is plastic, it has a cause, it has a source. 
It is not litter.
    Thank you.
    Ambassador Tai. Thank you so much, Senator Whitehouse, and 
in the time that I have, again I want to reassure you that in 
terms of----
    Senator Whitehouse. I think it is just us, so you can take 
all the time you need. [Laughter.]
    [To Senator Hassan.] Sorry, sorry, sorry.
    Ambassador Tai. In the global steel arrangement 
negotiations----
    Senator Whitehouse. Be brief.
    Ambassador Tai [continuing]. I want to assure you that the 
Europeans agree that this arrangement has to deal with carbon 
intensity as well as the distortive global overcapacity in 
steel and aluminum. So we see this very much consistent with 
the EU's approach to CBAM. But we also need to address the 
larger market challenges around steel and aluminum. So there is 
an overcapacity piece to what we are negotiating as well.
    Your views are very, very clear, and I just want to be as 
effective as I can be to persuade you that we are not working 
at cross purposes.
    Senator Whitehouse. Terrific. Thank you.
    Senator Hassan?
    Senator Hassan. Well, thank you. And, Ambassador, it is 
good to have you here, and thank you for spending a long 
morning here at the Finance Committee. We really appreciate it.
    I know you just heard from Senator Carper a little bit 
about the codel that we took. We joined several of our House 
colleagues on a bipartisan congressional delegation trip to 
Mexico, Guatemala, and Honduras. We met with Presidents and 
Ministers from those countries, U.S. officials on the ground, 
but also leaders from business and civil society, as well as 
community organizers and workers and survivors of human 
trafficking.
    In our meetings, both U.S. and Mexican Government officials 
said that the USMCA is having a really positive impact. To be 
sure, there are still trade issues between our two countries. 
No one agreement can solve everything. But what we heard is 
that we now have strong mechanisms in place to resolve those 
issues under the new agreement.
    So, does USTR share that assessment of the USMCA? Does USTR 
believe that the agreement has been important to improving our 
relationships with Mexico, for instance with respect to trade, 
and working together to improve regional stability?
    Ambassador Tai. Senator Hassan, thank you very much for 
sharing that feedback from your trip. It is really incredibly 
valuable to us. I think that the fact that we just went through 
a bit of a wild ride in renewing, updating, and correcting for 
the balance in the North American economic relationship, that 
having done that, having brought the USMCA into force to 
replace the NAFTA, that we have made progress in building trust 
between the countries and also with our stakeholders, 
especially with our workers.
    So I think that the USMCA remains a bedrock foundation for 
our vision of a worker-centered trade policy. To your point 
that you made very effectively, it has not solved all of our 
problems. New problems come up and, you know, it was negotiated 
before COVID certainly. But there is a lot that we can do here. 
We remain committed to implementing the promise of the USMCA. 
The relationships may be falling short, but we remain committed 
to working through the USMCA to improve them.
    Senator Hassan. Well, thank you, and I certainly heard from 
workers on the ground there. They feel new hope and new 
capacity in their strength too. So it is not without its 
challenges, obviously.
    Let me turn to another issue. In its 2022 report to 
Congress, the U.S.-China Economic and Security Review 
Commission recommended that the U.S. more proactively monitor 
and publicly identify industrial subsidies provided by the 
Chinese Government. This would help the U.S. respond to these 
harmful and distortive trade practices, which really pose a 
risk to domestic production and employment.
    So, Ambassador, how does the USTR currently monitor Chinese 
industrial subsidies, and how can we work together to 
proactively protect U.S. workers and supply chains from these 
harmful trade practices?
    Ambassador Tai. I am aware of that report, and it contains 
a lot of very useful analysis. We have also taken note of the 
recommendations that that Commission made to Congress. In terms 
of monitoring subsidies practices in China, I will tell you 
that we have dedicated personnel who are doing that research 
every single day. But I will also say that we should not have 
to be expending those types of resources, because all members 
of the WTO have an obligation to declare their support to the 
WTO.
    The fact that we have to actively monitor and search out 
these types of policies and practices is part of the challenge 
that we have in the competitive relationship with China, but 
also one of the challenges that we have in pushing for reform 
at the WTO.
    Senator Hassan. Sure, and I think the first step there is 
doing our own monitoring. We can show the WTO either what it is 
missing or really push them on what they are woefully not 
doing, right? So whichever one of those things it is.
    I only have a little bit of time left, but I wanted just to 
touch on trade and domestic manufacturing policy, because it is 
obviously really important to our economy and our national 
security, as we rebuild our domestic manufacturing base for 
critical goods and strengthen our supply chains from allied and 
partner nations. So can you talk about how we should be 
thinking about trade policy as part of our larger strategy to 
build production capacity in the U.S.?
    Ambassador Tai. Absolutely. Trade policy and manufacturing 
policy are connected. You trade for the things that you either 
do not have or you have decided not to make, and in order to 
make things, you have to have access. It is all part of the 
same economic ecosystem. A lot of what we are doing is making 
sure that trade policies are not, on the one hand, bleeding out 
the benefits and the rebuild from investments that all of you 
have made possible working with President Biden, whether it is 
with respect to infrastructure, CHIPS and Science, or the push 
for that innovation and clean technology and clean energy. So 
for us, that does mean bringing a new approach to trade, to 
make sure that we are working in concert with the needs of our 
economy, and I really appreciate this particular question, 
because I think that it is lost on a lot of people.
    Senator Hassan. Well, thank you very much, and thank you, 
Mr. Chairman.
    The Chairman. I thank my colleague.
    Senator Blackburn is next.
    Senator Blackburn. Thank you, Mr. Chairman. Ambassador, 
thank you for your generous time today. We appreciate it.
    Now, I am not talking potatoes or apples or turkeys, but 
you know I am going to talk to you about Tennessee whiskey, and 
we have some great ones when you look at Jack Daniels and 
George Dickel and the Nelson brothers and Uncle Nearest. I 
thank you for the work you have done on those issues, and I 
wanted to see if you could give me an update of where we are in 
the process. We are concerned about India's 150-percent tariff. 
We are concerned about the barriers this presents. You were 
just talking about how manufacturing, production, and trade go 
hand in hand. So if you would, give us a little bit of an 
update there.
    Ambassador Tai. So, with respect to India and the 
challenges that we face there, I will just refer to the 
commitments that I made to the other members on their issues. I 
make that commitment to you as well, Senator Blackburn, to work 
hand in glove with you on tapping that potential with India, 
and making progress with respect to barriers, in this case on 
Tennessee whiskey.
    The other note I would make is that Tennessee whiskey and 
our producers got very much caught in the crossfire of tariffs 
and retaliatory tariffs a couple of years ago. I just want to 
provide a status update, that with respect to the European 
Union and our lowering of tariffs as part of the Boeing Airbus 
dispute, we gave ourselves 5 years to create a framework where 
we can figure out how to work with each other better, to take 
on challenges that we share. I would like you to know that we 
are doing very good work as a part of that framework.
    As well, in the steel and aluminum context with the 
European Union, they took down their retaliatory tariffs. We 
converted them from being subject to a tariff to duty-free 
trade with some guard rails for 2 years, and we are facing down 
a deadline at the end of this year to conclude our global steel 
and aluminum arrangement, where we can avoid having to get back 
into that situation.
    Senator Blackburn. So let me ask you about that, because on 
the 301s, you think that your timetable is by the end of this 
year. Is that----
    Ambassador Tai. The steel and aluminum with Europe is 232. 
301s are with respect to China, and that is a separate issue.
    Senator Blackburn. Okay, okay. So then you do not have an 
update. You have opened that portal?
    Ambassador Tai. I can give you an update on the 301s as 
well. So, we have started a process; we opened that portal. We 
invited, at the request of our U.S. economic stakeholders, a 
review of the 301 actions from a couple of years ago, and those 
were the tariffs.
    Senator Blackburn. Okay.
    Ambassador Tai. The portal closed a couple of weeks ago, so 
we are in receipt of thousands of responses. We have taken a 
very responsible, deliberate approach. We will be reviewing 
those, and we will be undertaking a process for assessing the 
301 tariffs over the course of the next weeks and months.
    Senator Blackburn. Okay. Let me ask you--we have talked a 
little bit internally in our office about protecting IP. And 
when we look at China, when we look at what happened to Iran, 
COVID vaccines, and the WTO--along with the support of the 
Biden administration--reached a 5-year waiver on COVID vaccines 
last, I think it was June. And then the administration 
supported a limited waiver in 2021, but then they supported the 
final WTO decision.
    So as a result of that, we fear that this is going to be 
something that hampers and slows innovation and U.S. 
competitiveness. So talk a little bit about what is happening 
with this administration in protecting American IP in these 
trade agreements.
    Ambassador Tai. Certainly. So in 2021, what we did was lean 
into the negotiations at the WTO, to make sure the WTO would 
address this issue of whether or not intellectual property 
modifications needed to be made during COVID. The result was in 
2022, a negotiation concluded with 164 members of the WTO to 
make modifications to the IP rules, similar to what we had done 
in the early 2000s around HIV treatments and therapeutics. 
There is now an open question at the WTO around whether or not 
modifications should be made also to COVID therapeutics and 
diagnostics, and that is a question that we have put to the 
International Trade Commission here, an independent agency, to 
run a robust process of consulting with stakeholders and 
inviting commentary. That is something where the ITC will be 
concluding its report later this year.
    In terms of intellectual property, we are very proud of 
being an extremely innovative economy that is really quite 
often the envy of the rest of the world. And that is also part 
of the reason why we are leaning into it, to bring it back to 
the beginning of our conversation, revitalizing manufacturing 
in America as well, because manufacturing is a very intimately 
connected part of that innovation cycle. I want to----
    The Chairman. The time of the gentlewoman has expired, and 
we are going to have to move on, because we have colleagues who 
still have not had questions.
    Senator Cortez Masto?
    Senator Cortez Masto. Thank you, Mr. Chairman. Ambassador, 
it is great to see you again, and I know it has been a long 
morning for you, so I have just a couple of questions for you.
    One of them has to do with solar tariffs. So last year, the 
Commerce Department announced a 2-year pause on tariffs that 
would have hit solar panels coming from Southeast Asian 
countries. This pause allows our solar industry to continue to 
ramp up as the Department conducts its circumvention 
investigation. The pause is extremely important. Right now, the 
U.S. has the capacity to manufacture only about a third of 
domestic demand for solar panels.
    Now, we need to continue to support domestic manufacturing 
for the long term; I support that. But in my home State of 
Nevada, the solar industry is booming right now, and our demand 
for solar outpaces our ability to manufacture it. So when the 
threat of tariffs was in place, nearly 75 percent of domestic 
solar projects experienced cancellations or delays, and we saw 
that in my home State. That threatens jobs not just in Nevada, 
but across the country, and those are union jobs. Those are 
union jobs in my State.
    And so, I am concerned about this. So let me just ask you 
this. I am concerned by the effects of undoing the President's 
actions on this issue, and in the process needlessly 
reinjecting turmoil into the solar marketplace. Can you assure 
me that the administration does not support abruptly abandoning 
the President's approach?
    Ambassador Tai. Senator Cortez Masto, I take note of your 
observations around the solar industry and our needs, and the 
jobs. I think you noted at the beginning as well that the 2-
year pause was part of a Commerce action. So I know you have 
asked me about the administration's position. I will have to 
get back to you, because this is primarily something that is 
enacted in Commerce's jurisdiction.
    From where I sit at USTR, let me just say that if I look at 
the big picture, the challenge around solar, where we are--
which is only being able to provide one-third of our demand--is 
one of these situations where, if we looked back 20 years ago, 
we had a burgeoning solar industry that was innovative and 
growing, and we lost it. And in the wake of losing industries 
like this, which are so strategic and important, including to 
our climate goals, we find ourselves fighting each other around 
the jobs and the production and tariffs, in ways that are 
really heartbreaking for me and really inform, from USTR's 
perspective, how we need to be approaching our trade policy, to 
try to prevent this type of thing from happening again.
    On your specific question though, let me get back to you 
with more specifics.
    Senator Cortez Masto. I appreciate that; thank you.
    Let me ask you this. The other concern of mine is 
international standard-setting when it comes to emerging 
technologies. International standards have considerable impact 
on international trade and global economic development. Senator 
Portman and I have passed legislation to study the impact of 
the Chinese Government's influence on international standard-
setting bodies, and that study outlined a number of notable 
concerns about Chinese attempts to dominate international 
standards and set the terms in ways that are favorable to them.
    Can you speak to your view on this issue in the context of 
trade negotiations, and any efforts USTR is undertaking? And 
let me just clarify and add to this. Based on the legislation 
that we passed, a study came out. We asked NIST to do a study. 
One of the recommendations that they have put forward is to 
ensure--let me find it really quickly--that when it comes to 
trade, that we clarify existing export control regulations that 
could accidentally discourage U.S. companies from participating 
in standards development.
    So, I just want to put that on your radar as well, because 
this is such an important issue for us to address right now. So 
please, if you would give me your thoughts on it.
    Ambassador Tai. Certainly. With respect to standards, we 
know how critical they are to, if you will, the 
interoperability between our economies, whether it is 
recognizing each other's standards, whether it is in terms of 
standard-setting, creating advantages. So it is something that 
we are very conscious of as we engage our trading partners, and 
something that we are working towards, which is a better 
compatibility between our economies.
    On the NIST study and the recommendation, that is really 
very interesting. I know that export controls are an area of 
active collaboration in the context of the Trade and Technology 
Council between the U.S. and the EU, and it is something that I 
will take back. I am sure my team is aware of it. It is an area 
where, to the extent USTR works here, we partner very closely 
with Commerce.
    Senator Cortez Masto. Thank you.
    The Chairman. I thank my colleague.
    Senator Warren is next.
    Senator Warren. Thank you, Mr. Chairman.
    So, giant corporations lobby to rig the laws in their 
favor, but if it looks like someone in government might 
actually rein them in, they have a second bite at the apple. 
They try to rig the trade deal to lock in more favorable 
regulations. In other words, if a government tries to break up 
your monopoly or crack down on your price fixing, just call it 
illegal trade discrimination and keep right on going with those 
business practices.
    Now, this is not a theoretical concern. Ambassador Tai, I 
was concerned to see reporting just yesterday that you have 
used meetings with your Canadian counterpart to criticize 
Canada's effort to make big tech pay for the news content that 
big tech uses to make huge profits. That proposed Canadian law, 
by the way, looks a lot like pending U.S. legislation that 
right now has bipartisan support. So, Ambassador Tai, if that 
report is true, it would be wildly out of step with President 
Biden's whole-of-government order, to prioritize policies that 
promote competition in the economy.
    Do you agree that we should support our allies when they 
step up to regulate big tech, including supporting them in the 
way that we write and enforce digital trade deals?
    Ambassador Tai. Senator Warren, the short answer is, 
``yes,'' I do agree with your statement. The second piece, if I 
may interject on the basis of that reporting, which was brought 
to my attention yesterday. I think this is probably based on a 
readout of a meeting that I had with my Canadian counterpart, 
and I have in fact raised these Canadian bills that are in 
question with my Canadian counterpart, to ask more and to learn 
more about them.
    What I would like to do is to understand--especially in 
this realm where digital and trade intersect--what the 
motivations are of our trading partners.
    Senator Warren. Oh, okay. And just so I am clear on this, 
you were not patting the Canadians on the back for reining in 
big tech, I take it, which is what we would like to see happen. 
You were not telling them to back off regulation, however. Is 
that right? I just want to be clear on this.
    Ambassador Tai. The basis of the readout--and this is me 
going a step further from the readout--I raised the question to 
say I would like to learn more about this.
    Senator Warren. Okay. And this is critically important 
because as U.S. Trade Rep, you do not just enforce existing 
trade rules. You are also currently leading negotiation on 
digital rules in the Indo-Pacific Economic Framework, new rules 
that big tech lobbyists also want to rig in their favor, to 
undermine President Biden's competition agenda, and to 
undermine the work of Congress and regulators like the FTC and 
the DOJ. Ambassador Tai, can you assure me that the IPEF 
digital trade text you are currently negotiating will not 
impede in any way those efforts to stop big tech's 
anticompetitive practices like gobbling up competitors, or 
abusing monopoly power to jack up prices?
    Ambassador Tai. It is absolutely correct that it is not our 
intention to use these negotiations to impede. And I would also 
like to repeat for you comments that I made earlier in the 
hearing, that it is our vision--in terms of what we are 
negotiating in the Indo-Pacific Economic Framework, including 
in the digital areas--that we are bringing with us a pro-
competition outlook that is meant to enable as many 
participants in the economies as possible.
    Senator Warren. I am very glad to hear that, but I want to 
explain that I have real concerns here, because the text is 
classified. And that means, even though I may see it and my 
staff may see it--we are among the few members of Congress who 
have access--I cannot even talk with you right now about it in 
this hearing, on any of the specific issues in the text.
    This means that the American public cannot know what is in 
the text. But just last week, U.S. negotiators were in Bali 
discussing exactly this text with representatives from foreign 
countries. Who else got access to the text? Well, so-called 
non-government advisors, which includes Amazon and Google 
lobbyists. Now, Ambassador Tai, that is just not right. This 
text should be public, and the next tranche of digital text 
that you are planning to discuss with partners next month 
should also be public.
    Ambassador Tai, will you commit that, going forward, you 
will at the very least publish detailed summaries of digital 
negotiating text for public feedback, and do so before sharing 
further texts or having further discussions with our partner 
countries?
    Ambassador Tai. Senator Warren, in engagements with you and 
other members of this committee, I have heard a very clear 
desire for more transparency. I made a commitment that we would 
publish public summaries of the proposals that we have made, 
and on Tuesday we published a summary of the texts that we have 
tabled, I believe going into the first round of negotiations.
    Let me just share with you, we are moving at a slower pace 
than I would like, and part of it is because we are doing 
something new. So I do commit to you that we will keep working 
on improving our practices, and your feedback and the feedback 
from this committee on how we can do this better is valuable 
and will inform our work.
    Senator Warren. Well, I appreciate that. I know I am over 
time. I just want to say that when deals like the IPEF are 
negotiated in secret, it means that members of Congress who are 
trying to pass laws to rein in big tech cannot tell what you 
are or are not giving away. It means regulators like the FTC 
and DOJ cannot do it. So, I very much hope you will be 
transparent.
    Sorry, Mr. Chairman.
    The Chairman. I thank my colleague.
    Senator Casey is next.
    Senator Casey. Thank you, Mr. Chairman. Ambassador Tai, 
thanks so much for being here today and for your public 
service.
    I want to talk about two issues. One is gender equity in 
trade, and the other is manufacturing. I want to thank you and 
your office for all the work you are doing to lay the 
groundwork for trade policy that advances the rights and 
economic interests of women.
    This is an issue I have worked on in the Senate with 
Senator Cortez Masto, and a group of us led by her. Too often 
women are left out and often left behind when we and other 
countries negotiate trade deals that govern the global economy. 
We both know that only one of our free trade agreements has 
binding provisions on gender equity in trade, and only a 
handful of our 62 trade framework deals with other countries 
even contain provisions on women and trade.
    So I strongly encourage you and your team to continue to 
promote both gender equity and equality and women's economic 
empowerment in trade through every avenue available, but 
especially as you negotiate trade deals with countries in the 
Indo-Pacific, the Americas, and across the globe. So my 
question is, how do you envision the current trade agenda 
benefiting U.S. leadership on gender equity and equality?
    Ambassador Tai. Well, Senator Casey, I want to thank you 
and Senator Cortez Masto for your leadership on these issues, 
ensuring that the growing conversation in international trade 
circles around empowering women and advancing women's 
participation in the economy and the global economy will be 
more than just a conversation, and connecting the dots to 
things that we can do in trade policy, and frankly addressing 
structural challenges that women face in different economies.
    I want to share with you and highlight something that I 
think you already know about. At USTR, we requested the U.S. 
International Trade Commission to undertake a study to look at 
the distributional effects of our trade policy so far. I think 
that we have put a lot of faith in our trade policies that they 
will raise tides and that those tides raise all boats.
    But we have long suspected, and we have long had our 
economic stakeholders, including important stakeholders like 
our workers, tell us that the system does not work the way that 
we think it does or that it is intended to. The ITC came back 
and said first of all, it is clear we are not tracking the data 
that really will give us a crystal-clear picture of what we are 
doing. But in terms of the data that we do have and the studies 
that have been done, we see that women, communities of color, 
and also non-college-educated White men have not benefited from 
our trade policies the way that others in our economy have. 
That has been really critical to our thinking about a new 
approach to trade that is more inclusive, that is more 
sustainable, and that carries out the promise of trade as a 
positive force in the economic toolbox.
    Senator Casey. I appreciate that. I look forward to working 
with you on it.
    I want to talk about manufacturing. It is obviously a 
strong and vibrant sector of our economy in Pennsylvania, 
everything from semiconductors that power our computers and 
cars to skill that supports the bridges in our State. The 
President's 2023 trade agenda indicates that the manufacturing 
sector is responsible for 11 percent of U.S. GDP. It is a key 
driver of exports and, of course, employs so many Americans. 
But non-market economies like the People's Republic of China 
know the strength of our manufacturing sector and seek to force 
their way to global dominance by skirting trade enforcement, 
using forced labor, and committing unfair trade practices.
    Can you tell us what workers in our State of Pennsylvania, 
as well as other States, understand? Tell us how the current 
trade deals being negotiated will benefit them.
    Ambassador Tai. Certainly. I think it starts with 
recognizing the playing field is not level, and that is 
something that, depending on which part of the economy you are 
in and represent and who you are talking to, is not always 
apparent. It is because we have a very large economy, and this 
economy is shaped differently in different parts. But we know 
that in terms of the international playing field, we are 
operating in a world economy that has changed a lot in the last 
couple of decades and has led to a lot of fragilities for us 
and an erosion of our manufacturing base, as well as a kind of 
deindustrialization that we have experienced. By the way, we 
are not the only ones who have experienced this.
    So, in terms of the worker-centered trade policy and what 
we are doing in trade, we are looking at all of the things that 
we need to do to strengthen ourselves, to rebalance and to 
level that playing field. That does mean leaning into 
enforcement. That does mean embracing the investments that we 
are making in ourselves, our infrastructure, our people, and 
ensuring that our trade policies are reinforcing that.
    So, I think that there is a lot of work that we have also 
been doing to make our trade relationships more resilient, to 
produce more options in terms of our manufacturing supply 
chains, in terms of how global trade flows. All of that is 
about leveling the playing field and bringing us back to where 
we would like to be.
    Senator Casey. Thanks very much. Thank you, Mr. Chairman.
    The Chairman. I thank my colleague.
    Senator Daines?
    Senator Daines. Mr. Chairman, thank you. Ambassador Tai, 
thanks for coming here today.
    I think about 95 percent of our world's consumers live 
outside the United States, and here is a guy who represents a 
State where agriculture is the number one economic driver. It 
is very important that we get market access for agriculture, 
for the sake of our jobs. And I do not think it can be 
overstated, the importance to think about the future of 
agriculture.
    Ambassador Tai, the U.S.-China Economic and Security Review 
Commission recently published recommendations on how to counter 
China's growing abuse of intellectual property. I think it is 
stating the obvious here, but protecting American IP is 
something I have long fought for, including introducing this 
bipartisan Protecting IP Act to give the USTR more tools so you 
can be more effective to push back against China's abuse.
    I plan to reintroduce this bill to include some of USCC's 
recent recommendations. You will be seeing that soon. The 
question is, what actions have you taken to implement USCC's 
recommendations, and how have you worked to counter China's 
growing intellectual property abuses?
    Ambassador Tai. So, Senator Daines, I may need a brush-up 
on the USCC's mandate, but I know that the USCC, unlike the 
other commission, is here to advise Congress, as opposed to 
advising both the Congress and the executive.
    That said, I do stay apprised of this commission's work, 
and deeply respect the diligence and the rigor that they bring 
to their work. In terms of intellectual property, this is 
actually the basis for the section 301 action that the Trump 
administration took in 2018. As you may know, we are currently 
undertaking an exercise at USTR, a comprehensive 4-year review 
of the actions taken pursuant to that 301, with respect to how 
effective we have been in securing improvements in behavior. 
That is something that we are doing right now.
    Senator Daines. So, I do have a concern. The USTR is not 
enforcing some existing agreements--and I will talk in just a 
moment here regarding Japan--agreements that support U.S. 
companies, U.S. products, U.S. intellectual property. In Japan, 
they will take antitrust action against American tech 
companies, but then they will support policies that crowd out 
competition from the United States, despite commitments that 
have been made in the Japan digital trade agreement. We see 
this in the gaming market, where Japan appears to ignore some 
of these anticompetitive actions from Japanese companies, which 
suppress some of our major U.S. providers.
    I think this is a violation of its digital trade 
commitments, but yet we have not seen action from the USTR. 
Perhaps you can settle that here. Ambassador Tai, will you 
commit to raising this imbalance with Japan, and commit to 
increasing enforcement in support of U.S. companies, and gaming 
is one example?
    Ambassador Tai. Senator Daines, this is the second time 
this particular issue has come up in today's hearing, and so I 
am sure that I have team members who are already working on 
this and pulling information for me. Let me take this back and 
learn more about it, and I will get back to you.
    Senator Daines. Okay; great. That is a fair answer, and 
that is one of the purposes of some of these hearings, to raise 
these issues and work together here to accomplish better 
outcomes for U.S. companies.
    Lastly, I have called on Presidents of both parties--this 
has been a bipartisan challenge, whether it has been a Democrat 
President or Republican President--to reengage on the Trans-
Pacific Partnership. I believe that is a strategic, important 
direction we should head, both for economic benefits, but I 
think it is also part of our strategy to counter China in the 
Indo-Pacific region, as it has been advancing alternative 
agreements without the United States. I am concerned about the 
current administration's lack of ambition as it relates to its 
trade agenda, and the absence of market access commitments to, 
as you said a few times, level that playing field and increase 
opportunities. I look through the lens here representing 
Montana for farmers, ranchers, and small businesses.
    So just a closing statement. This will not be a question. I 
just urge you to shift course, prioritize reducing some of 
these unfair tariffs and other barriers to trade in IPEF, and 
pursue some more ambitious trade agreements with partners 
around the world. I think it is a great opportunity. You see 
it, and thanks for being here today.
    The Chairman. I thank my colleague.
    Senator Brown really showed the Congress over the years how 
to come up with responsible enforcement practices, so that we 
could say we are for trade, we are for good-paying jobs, we 
want to open up markets. And Senator Brown said, ``You bet. 
Just make sure you enforce the laws on the books.'' So I want 
to recognize him and thank him for all he has done all these 
years on enforcement.
    Senator Brown. Thank you, Mr. Chairman. Thank you for the 
partnership that you have helped to lead. So important, always 
putting workers at the center. Ambassador, it is a new day with 
the United States Trade Rep. No one has done what you have done 
in terms of putting workers at the center of our trade policy. 
It has usually been trickle-down. It has been corporate 
interests. It has been all that.
    Foreign competitors, as you know, undermine the goal--in 
too many cases, undermine your goals. We will not be able to 
realize the President's vision of a new American industrial 
policy without stronger trade enforcement. You have talked 
about the need to update. I have heard you--and I have been in 
and out today--but I heard you twice use the term ``our trade 
toolbox,'' noting that many of our trade enforcement tools have 
not been updated. Foreign companies and governments routinely 
circumvent these laws. Cheating is part of their business 
strategy.
    Last week I spoke with Jim Proctor from McWane, 
Incorporated. It has a large facility in Coshocton, OH. He 
discussed the game of Whack-A-Mole that we face, where 
countries caught cheating will just route their goods through a 
third country, and companies need more tools to fight back. I 
introduced, with Senator Tillis, the Fighting Trade Cheats Act 
to increase penalties.
    Will this legislation, with its private right of action, 
help combat unfair trade practices that harm manufacturers in 
the Midwest?
    Ambassador Tai. Senator Brown, I am aware of the 
legislation that you have introduced, and let me just highlight 
something that you said that I really wholeheartedly agree 
with, which is that a lot of our trade tools come from 
legislative acts from 1974 and 1988 and 2002. And the need to 
update them to reflect the challenges that we have and all of 
the lessons that we are learning around where Whack-A-Mole 
happens and where leakage happens is really critical.
    So let me just say that I am tremendously supportive of the 
improvement and the development of the toolbox and adding new 
tools to it.
    Senator Brown. Thank you.
    For years, I have heard from manufacturers across Ohio, 
including Cleveland-Cliffs, a major steel manufacturer, forced 
to compete with foreign companies that have learned to avoid 
AD/CVD orders by country-hopping, transshipment, and other 
circumvention schemes. The Leveling the Playing Field Act 2.0 I 
will be introducing with Senator Young would update U.S. trade 
laws. Will this legislation help curtail this kind of cheating?
    Ambassador Tai. I think that we do need to curtail that 
kind of seepage, and I very much hope so. I am very encouraged 
by the fact that you are continuing to work on this.
    Senator Brown. Thank you, and we will do that together.
    I also hear from Ohio steel companies concerned about the 
surging level of steel imports from Mexico. That undermines the 
agreement that exempted Mexico from section 232 measures, with 
a condition that Mexico adhere to historic levels of trade in 
steel. It is not happening.
    Last month, Senator Cotton and I led a letter signed by 10 
of our colleagues on the surge of conduit entering the United 
States. But it is not just about conduit. It is also wire and 
wire rod. Do you plan to raise this concerning import surge 
with Mexico the next time you meet with them?
    Ambassador Tai. Senator Brown, I received that letter and 
read it with a very, very deep concern. I will absolutely raise 
this the next time I meet with my Mexican counterpart.
    Senator Brown. And if they are not cooperative, section 232 
tariffs should be reimposed. I ask that you and the Commerce 
Secretary recommend that the President take action to do that.
    Last, turning to the Indo-Pacific Economic Framework, one 
of my first votes and one of my proudest votes, other than 
voting against the Iraq War, was against the North American 
Free Trade Agreement. I have fought for binding enforcement of 
labor and environmental rules. Workers in Zanesville and Toledo 
and Ashtabula in my State especially were impacted by that. It 
is why I refused to support it. And so the chairman was talking 
about this previous President's NAFTA renegotiation until we 
made it better for working people. As a result, the Brown-Wyden 
labor enforcement rapid response mechanism set the new floor 
from which any future U.S. pacts must build. How are you 
applying the lessons from USMCA generally, and the Brown-Wyden 
rapid response mechanism specifically, to your work on the 
Indo-Pacific Economic Framework?
    Ambassador Tai. Certainly. The Indo-Pacific Economic 
Framework is itself structured and designed very differently 
from our traditional free trade agreements. That said, the 
Brown-Wyden rapid response mechanism shows results to us every 
single day, has helped us to turn the narrative on its head, 
where we are using a mechanism in a trade agreement to help 
workers secure more rights.
    This is something that we very much are looking to 
replicate in our onward trade engagements. So, because it is a 
different kind of arrangement that we are negotiating, we are 
looking at how we can adapt all of the innovative elements of 
the Brown-Wyden mechanism to this particular structure with 
these particular partners. And it is something where I think we 
will really need to be in close partnership with your office, 
as well as others. I look forward to being able to engage with 
you on that.
    Senator Brown. Thank you. That was Chairman Wyden's and my 
hope from the beginning, so thank you.
    The Chairman. I thank my colleague.
    First of all, Ambassador, thank you for being here to 
answer all of the members' questions. I want to note that so 
often what happens is somebody says, ``Well, I have only X 
amount of time,'' and then everyone has to figure out how to 
deal with that. You never said that. You were here. You 
answered everyone's questions, and I thank you for it.
    A couple of just quick points, and then we are going to 
liberate you and let you get on about your day. With respect to 
enforcement, I continue to believe, as we have talked about, 
that the gold standard are the provisions from the USMCA. That 
needs to apply to the clean energy side, it needs to apply to 
the digital side. We have heard all this talk about big tech. 
You know, I am probably as involved in these issues as much as 
any member of Congress. My interests are the people who do not 
have power and do not have clout. From the beginning, we 
focused on their interests, because we could democratize the 
Internet. That was essentially what section 230 was about. So I 
feel very strongly about speaking up for those small businesses 
that depend on digital and that are digital companies in and of 
themselves and need those kinds of protections that Congress 
agreed to in the USMCA. I hope they will continue to apply.
    Now let us talk about this transparency issue, just so we 
are clear about what we are dealing with on the minerals issue, 
because I talked with the staff during the break and got this 
whole thing unpacked for me. This committee was the lead author 
of the clean energy tax credits. The reason I know something 
about it is because we spent well over a decade trying to break 
the gridlock on climate--you know, nothing was working. You 
could not do cap and trade; you could not do carbon tax. 
Nothing was working, and so, when Senator Manchin invited us to 
come to West Virginia after Waxman-Markey went down, I went, 
and we started talking about using the tax code. It is simple, 
it is linear. That is why we feel so strongly about these kinds 
of issues, and that is the backdrop of it.
    Now, when I asked you about the staff negotiations, I think 
I did not really go into specifically what our concerns were 
about. So I asked the staff during the break. What we have 
gotten as of this point, with respect to the negotiations, is 
an initial offer that our country made to Japan with respect to 
critical minerals. That is why I am so concerned. So I look 
forward to working with you. We are not going to go back over 
all of this again. But to build the kind of trust that you and 
I want--because we share so many of the same views on these 
kinds of issues--we are just going to have to get people more 
than an initial offer on an issue that is so central right now 
to making sure that we get implemented what we worked on for 
well over a decade.
    A lot of members of this committee, as you know, Madam 
Ambassador, really cast a lot of gutsy votes. They did not know 
anything was going to happen, but they wanted to do it because 
it was right, and we wanted to break decades of gridlock. So we 
do not need to go through that anymore. But I just wanted to 
put that in context.
    Also, members on both sides know that questions for the 
record are due March 30th at 5 p.m., and the last word for the 
morning, Ambassador, is again our thanks, because I think you 
showed your commitment to working with us this morning, just by 
saying, ``I am going to be there; I am going to answer your 
questions.'' And I am sure some of this was not the most fun to 
be part of. We will be looking forward to working closely with 
you in the days ahead.
    With that, the Finance Committee is adjourned.
    [Whereupon, at 12:41 p.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              

                Prepared Statement of Hon. Mike Crapo, 
                       a U.S. Senator From Idaho
    Thank you, Mr. Chairman. Welcome, Ambassador Tai.

    Members of this committee have very thoughtful ideas to advance the 
trade interests of the American people. For example, just yesterday, 
Senator Young was recognized by the National Foreign Trade Council for 
his leadership on digital trade.

    Critically--and I know this from personal experience--every Senator 
on the committee wants to work with you, Ambassador, on a bipartisan 
basis, to execute a successful trade policy. The challenge we face is 
how this administration approaches U.S. trade policy, both in terms of 
substance and process. Substantively, the President's trade agenda 
emphasizes ``the groundbreaking domestic investments enacted through 
the President's leadership.''

    Respectfully, however, an American trade policy cannot rest on 
massive spending on subsidies. That approach borrows more from China's 
traditions than ours. American trade policy unleashes our people's 
talent and productivity by removing foreign barriers through tough 
negotiations and enforcement. The potential of the American people is 
staggering; what the administration proposes as a trade negotiation and 
enforcement agenda is strikingly limited.

    A few examples are indicative.

    First--American ranchers and farmers produce the world's best and 
safest food, and exported $196 billion in 2022. They can accomplish 
even more if we eliminate the high tariffs and unscientific 
restrictions posing as safety measures.

    The only tariff reduction flagged in the President's agenda is that 
India will reduce its tariff on pecans to a still overly restrictive 30 
percent. Instead of aggressively challenging non-science-based safety 
measures, the administration has only this month initiated ``technical 
consultations'' on Mexico's biotech restrictions.

    Second--American workers are highly skilled at manufacturing and 
have drawn nearly $1.9 trillion in foreign investment, including in 
major auto manufacturing facilities in Spartanburg, SC; Smyrna, TN; and 
Marysville, OH, to name a few. That kind of investment coupled with 
American workers' talent should make us an export powerhouse, but 
unreasonable product specification standards continue to keep our 
manufacturing out of many markets. Yet the administration chooses not 
to pursue a ``technical barriers to trade'' chapter, or TBT, in its 
proposed Indo-Pacific Economic Framework (IPEF).

    In contrast, the United States-Mexico-Canada Agreement (USMCA) had 
a robust TBT chapter and explicit commitments that Mexico would 
continue to accept U.S. cars built to U.S. Federal safety standards.

    Third--Our innovators and artists develop lifesaving products, and 
films and music that spread American values. Copyright industries alone 
generate $1.8 trillion in economic output.

    Yet, instead of working to strengthen U.S. intellectual property 
rules, the administration actually waived U.S. intellectual property 
rights for COVID vaccines under the World Trade Organization (WTO) 
Trade-Related Aspects of Intellectual Property Rights (TRIPS) 
agreement, and is even now considering expanding that waiver to 
diagnostic and therapeutic products.

    And, while we all agree that one of China's most pernicious 
mercantilist policies is the theft of American intellectual property, 
the administration does not pursue any IP rules in IPEF--or elsewhere--
that could help ensure China does not benefit from its theft through 
sales in other countries.

    Fourth--U.S. digital firms are a major contributor to U.S. economic 
growth, with the digital economy now comprising 10 percent of U.S. GDP. 
The administration has yet to press the European Union, through the 
Trade and Technology Council, on measures that unreasonably target the 
U.S. digital economy, even though it readily agreed to discuss the EU's 
concerns with the Inflation Reduction Act at the very same forum.

    We can do better. We must do better.

    One last example: below is a chart comparing the respective tariff 
rates that American, European, and Chinese products face entering 
Vietnam, a country of nearly 100 million.

 [GRAPHIC] [TIFF OMITTED] T2323.001

    .epsThe reason there is no red or yellow ink to reflect the tariffs 
that Chinese and European producers face is not because the Senate 
print shop ran out of ink. 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.

    While some of the tariff reductions in the EU and China deals will 
take time to phase in fully, we lose ground every day we remain on the 
sidelines of real trade negotiations. Given this dynamic, the 
administration needs to reconsider its decision not to pursue market 
access in IPEF or other trade arrangements.

    Unfortunately, the ability to take on these substantive challenges 
is compounded by one, very fundamental problem: the administration's 
insufficient consultation with Congress. We saw this problem with the 
negotiations for the TRIPS waiver, and they still continue.

    In the case of IPEF, the administration refuses to share the views 
of the same congressionally established advisory committees that assist 
Congress in determining whether a proposed trade agreement will assist 
Americans. The text of the relevant statute is below, and it is crystal 
clear that such information must be shared with designated members of 
Congress.

[GRAPHIC] [TIFF OMITTED] T2323.002

    .epsThe administration also refuses to share attributions of which 
countries support or oppose particular provisions of IPEF, even though 
the Trump administration provided such information during USMCA 
consideration. This attempt to bypass Congress is unnecessary. Our 
trade policy is strongest when the administration and Congress work 
together.

    The administration should accordingly partner with Congress and the 
American people--not try to cut us out--because under the Constitution, 
it cannot.

                                 ______
                                 
   Prepared Statement of Hon. Katherine C. Tai, United States Trade 
           Representative, Executive Office of the President
    Thank you, Chairman Wyden, Ranking Member Crapo, and members of the 
committee. I appreciate the opportunity to be here today to discuss the 
President's Trade Agenda.

    President Biden promised to build the economy from the bottom up 
and the middle out, and he is delivering on that promise.

    Unemployment is at its lowest rate in over 50 years. Manufacturing 
is rebounding faster than it has in almost 40 years. We are seeing the 
strongest 2 years for small business applications on record with 10.5 
million new businesses created. Wages are rising, especially for lower- 
and middle-income workers. We have seen more jobs created in 2 years 
than any other administration has seen in four.

    Trade is an integral part of this pursuit of durable and inclusive 
economic growth.

    Our administration continues to believe that trade can be a force 
for good. We are writing a new story on trade. One that puts working 
families first and addresses today's pressing issues. One that brings 
more people in and reflects more voices across the American economy. 
One that advances our global priorities and strengthens democracy here 
at home and abroad.

    Whether you have a college degree or not, whether you have five 
employees or five hundred, whether you are in rural Ohio or in the 
heart of Baltimore, whether you are a small dairy farmer in Michigan or 
a steelworker in Pennsylvania--we are restoring fundamental fairness to 
our trade and economic system.

    We are leading on the world stage with this vision. We are 
collaborating with partners and allies to create broad-based economic 
growth and to continue the strong, united response to Russia's brutal 
invasion of Ukraine.

    I am pleased to tell you today that we are making significant 
progress on these goals. Let me give you some examples of what this 
looks like.
    engaging with key trading partners and multilateral institutions
    President Biden has said that the United States is opening an era 
of relentless diplomacy to address the challenges that matter most in 
the lives of all people. Trade is an important part of this relentless 
diplomacy. Over the last year, we have been leading with a positive 
economic vision around the world, and our partners and allies are 
joining us.

    We launched negotiations on the Indo-Pacific Economic Framework for 
Prosperity to deliver real opportunities for our people throughout the 
region. We are focusing on priorities like labor standards, the 
environment, science-based and transparent regulatory systems, and an 
inclusive digital economy. We had successful rounds of negotiations in 
December and earlier this month, and we are looking forward to a busy 
2023 to make further progress. We also kicked off the Americas 
Partnership for Economic Prosperity with eleven countries in our 
hemisphere.

    We already have deep economic ties in the region, including free 
trade agreements with eight of our initial partners. Regionalization is 
an integral part of building resilience in our economy. By 
strengthening our relationships with our closest neighbors, we can 
drive sustainable economic growth and bolster our collective 
resilience.

    We have also been busy on the bilateral front. Through the Trade 
and Technology Council, we are collaborating with the European Union on 
imposing economic costs on Russia and Belarus, addressing economic 
coercion and non-market policies and practices, facilitating trade in 
emerging technologies, protecting workers' rights, and strengthening 
our supply chains.

    We are also negotiating a Global Arrangement on Sustainable Steel 
and Aluminum. This will drive decarbonization while also limiting 
anticompetitive and non-market practices that contribute to worldwide 
excess capacity, including from the People's Republic of China (PRC), 
which threatens American workers and businesses. It also shows that 
effective climate action can also support good-paying jobs here at 
home.

    We also launched new initiatives with key partners in other 
important regions. Taiwan is a vibrant democracy and an important 
trading partner in East Asia, and we started the groundbreaking U.S.-
Taiwan 21st Century Trade Initiative last June.

    Our teams have been working diligently to deliver high-standard 
commitments and economically meaningful outcomes, covering everything 
from trade facilitation and good regulatory practices to services 
domestic regulation and anticorruption.

    Another important region for us is sub-Saharan Africa. Like I said 
during the U.S.-Africa Leaders' Summit, I believe the future is Africa, 
and we are ramping up our engagement to deepen our partnership with the 
continent.

    Last July, we launched the U.S.-Kenya Strategic Trade and 
Investment Partnership. We held our first round of conceptual 
discussions in February, and we will continue conversations this year 
to discuss important issues, including agriculture, digital trade, and 
supporting participation of women, youth, and others in trade.

    We also signed an MOU with the African Continental Free Trade Area 
Secretariat, which will facilitate greater cooperation on trade and 
investment between the United States and the continent.

    On the multilateral front, our administration has been clear that 
we are committed to the WTO. We continue to believe that the 
organization can be a force for good and address global challenges as 
they arise. This was demonstrated when we worked with other WTO members 
to deliver meaningful outcomes during the last ministerial meeting, 
including on COVID-19 vaccines, fisheries subsidies disciplines, and 
food insecurity.

    Speaking of fisheries subsidies, I was in Oregon last April with 
Senator Wyden and Senator Merkley to meet with fishers, and I also 
toured a groundfish vessel. We spoke about how our fishers are 
disadvantaged by unsustainable fishing practices, including illegal 
fishing and harmful subsidies. The WTO outcome is a step in the right 
direction to empower these fishers to compete on a level playing field 
and succeed.

    These were important outcomes, but the WTO must change to be more 
relevant and address the challenges of our time, including on dispute 
settlement and other areas. This administration has--and will continue 
to--work with other members on reform.

    Lastly, we are excited to serve as the APEC host this year, with 
the theme of ``Creating a Resilient and Sustainable Future for All.'' 
This demonstrates our commitment to the Asia-Pacific, and we are taking 
full advantage of our host year to collaborate with partners to build a 
more durable and resilient global economy. That includes lifting up 
workers and women entrepreneurs, empowering small businesses to enter 
the market, grow, and compete, and unlocking economic opportunities for 
those who have been underrepresented in all of our populations.

    Going forward, USTR will remain in close coordination and 
consultation with this committee and Congress to keep you updated as we 
develop our frameworks and initiatives.
                advancing a worker-centered trade policy
    Workers are at the center of our trade policy. American workers can 
compete anywhere if the competition is fair. That is why we have been 
laser-focused on using trade to defend workers' rights, both at home 
and abroad.

    We have been using the USMCA's rapid response mechanism (RRM) 
diligently to bring tangible changes and defend the right of workers to 
freedom of association and collective bargaining. From March 2022 
through February 2023, we secured wins for workers at four different 
facilities. We have an open case and are working with Mexico to address 
violations at that facility, and just last week, the Government of 
Mexico accepted our request to review yet another case. This is 
important because it drives a race to the top by elevating labor 
standards across the region.

    In September, we launched the Trade and Labor Dialogue with the 
European Union, to bring labor, business, and government 
representatives to address forced labor in supply chains. We will also 
expand this work to address the needs of workers and employers in 
navigating the digital transformation of our economies and workplaces.

    In January, we launched a task force with Japan to work on forced 
labor issues, and USTR is crafting our first-ever trade strategy on 
forced labor and conducting an interagency review of our existing tools 
to address this issue.

    We also recognize that farmers, ranchers, fishers, and food 
manufacturers are key to our worker-centered trade policy. Last August, 
I visited Spellman Farm, a sixth-generation family farm in Woodward, IA 
growing corn and soybeans. Sam Spellman was explaining how he is 
focusing on sustainable farming, including researching the effects of 
cover crops and no-till on Iowa's soil and nutrient retention. I could 
sense the immense pride he took in his work, not only for his own farm, 
but in educating fellow farmers.

    That is what our work is about: restoring pride and dignity for our 
workers. Empowering them to compete and thrive. And we have achieved 
several economically meaningful wins for our agricultural sector over 
the last year.

    We brought into force an amendment to Japan's beef safeguard 
mechanism under the U.S.-Japan Trade Agreement, which will provide more 
predictability for U.S. exporters to meet Japan's growing demand for 
high-quality beef.

    We signed the U.S.-EU Tariff Rate Quota Agreement to provide 
certainty to U.S. exporters and open markets for U.S. agricultural 
products such as rice, wheat, corn, and beef.

    We also opened access for U.S. pecan exports to India, following a 
70-percent cut to tariffs. This was a big win for farmers and was a 
result of the successfully revitalized United States-India Trade Policy 
Forum.

    We have a nimble USTR team that is opening markets for our 
agricultural sector, and we will continue to work with Congress to find 
additional opportunities.
              realigning the u.s.-china trade relationship
    Another component of our trade agenda is the realignment of the 
U.S.-China trade relationship. This relationship is one of profound 
consequence. As the two largest economies in the world, our bilateral 
engagement affects not just the two participants, but the rest of 
world.

    We recognize that the relationship is complex and competitive. And 
yet, American workers, farmers, producers, and businesses should not 
have to compete against the PRC's state-led policies, labor rights 
suppression, weak environmental regime, or other distortions that put 
market-oriented participants out of business.

    While we continue to keep the door open to conversations with the 
PRC, including on its Phase One agreement commitments, we must also 
vigorously defend our values and economic interests from the negative 
impacts of the PRC's unfair economic policies and practices.

    That means making groundbreaking investments here at home so that 
we can compete--and collaborate--from a position of strength. That is 
exactly what our administration is doing. We are fixing our roads and 
bridges through the Bipartisan Infrastructure Law, bolstering our 
capacity for critical technologies through the CHIPS and Science Act, 
and incentivizing the manufacturing of clean energy technology here at 
home through the Inflation Reduction Act.

    That also means coordinating with our partners and allies to 
confront policies and practices that are fundamentally at odds with a 
global trading system based on market competition. An example of this 
is the U.S.-EU Cooperative Framework for Large Civil Aircraft. We held 
a ministerial meeting last December. We are analyzing the PRC's non-
market policies and practices in this sector, and we are considering 
tools needed to effectively counter them. We are also exchanging views 
on the long-term risks posed by the PRC's state-directed industrial 
dominance goals to market-oriented sectors.

    We are working to deepen our understanding of the PRC's state-
directed industrial targeting goals and to more effectively defend our 
market-oriented aerospace workers and companies.

    In May 2022, USTR also commenced a comprehensive 4-year review 
process of the section 301 tariffs on imports from the PRC. We are 
mindful of the effects that trade actions can have on American 
businesses and workers. At the same time, we are taking a deliberate 
and strategic look at how our economic interests can be served in light 
of the PRC's continued unfair policies and practices.
        promoting confidence in trade policy through enforcement
    Doing trade the right way means standing up to the forces that have 
harmed and undermined workers, producers, and communities to not just 
thrive but sometimes also to survive. That is why the Biden 
administration remains fully committed to vigorously enforcing our 
trade agreements. We will continue to use all of the tools at our 
disposal to combat unfair, non-market practices, defend American jobs, 
and create broad-based economic prosperity.

    As I mentioned earlier, we have been diligently using the USMCA's 
RRM to defend workers' rights in Mexico. But our enforcement under the 
USMCA does not stop there.

    We established a dispute settlement panel to address our concerns 
with Canada's revised dairy restrictions. We are also consulting with 
Mexico to address our concerns with measures that undermine American 
energy companies. We also continue to engage with Mexico to address 
concerns regarding agricultural biotechnology.

    Mexico's policies threaten to cause serious economic harm to U.S. 
farmers and stifle innovation that can promote global food security. On 
March 6th, the United States requested technical consultations with 
Mexico under the USMCA. If our concerns are not resolved through 
technical consultations, we will consider all options to fix this 
problem, including by taking additional steps under the USMCA.

    We are also upholding the eligibility requirements in our 
preference programs, in line with our worker-centered agenda and in 
accordance to the statutory eligibility criteria. In November 2022, 
after using all diplomatic measures available to induce the government 
to remediate the issues, President Biden announced the termination of 
Burkina Faso's eligibility for the African Growth and Opportunity Act 
(AGOA) trade preference program, due to concerns with the 
unconstitutional changes in government in the country. We remain 
committed to working with Burkina Faso to meet the statutory benchmarks 
that would enable it to be reinstated in the AGOA program.

    We recognize that many of our existing trade tools may not 
adequately address the challenges posed by today's economy, so we will 
continue to work with Congress to identify areas where new tools may be 
needed.
       promoting equitable, inclusive, and durable trade policy 
                  and expanding stakeholder engagement
    I want to close where I started: on how our new story on trade 
strives to bring more people in and reflect more voices across the 
American economy. This administration is promoting inclusive and 
durable trade policy for all Americans.

    Last month, along with Senator Durbin, I had the opportunity to 
visit a welding class in Chicago, with a group of local tradeswomen. 
Listening to their stories, I was reminded of what President Biden said 
during his State of the Union Address--that he ran for President ``to 
fundamentally change things, to make sure the economy works for 
everyone so we can all feel pride in what we do.''

    Fairness and equity must be bedrock principles in trade policy. 
That means having diverse voices at the table--especially underserved 
and marginalized communities that have been historically left out of 
trade policymaking--and incorporating their priorities into our 
policies. That is why USTR released our Equity Action Plan last April. 
We developed this plan in accordance with President Biden's Executive 
Order on Advancing Racial Equity and Support for Underserved 
Communities Through the Federal Government.

    Not only that, I have had the honor to serve as the co-chair of the 
White House Initiative and President's Advisory Commission on Asian 
American Native Hawaiian and Pacific Islanders, and as a member of the 
Gender Policy Council and White House Council on Native American 
Affairs.

    In January, the White House convened Federal Government officials 
and community leaders to release the Biden administration's first-ever 
National Strategy to Advance Equity, Justice, and Opportunity for AA 
and NHPI Communities. This includes detailed plans from thirty-two 
Federal agencies, including USTR, which build on the administration's 
previous actions to promote safety and equity for AA and NHPI 
communities.

    I am incredibly proud to be a part of this important work, but we 
know there is more that we can do to make trade policy more equitable 
and inclusive. So, we are continuing to work with the U.S. 
International Trade Commission on the distributional effects of trade 
on American workers and sustaining our engagement with diverse 
communities across our country.

    This engagement includes Congress and this committee. You are our 
constitutional partner on trade, and the administration recognizes 
Congress' important role in crafting trade policy. We will continue 
this partnership through regular briefings with you and your staff.

    Two years into this administration, we are leading with a positive 
economic vision in key parts of the world, and we are already starting 
to see results. None of this is possible without the devotion and 
professionalism of our USTR staff, and I am grateful for their 
expertise and dedication as we press forward to finish the job.

    Thank you for your time, and I look forward to answering your 
questions.

                                 ______
                                 
      Questions Submitted for the Record to Hon. Katherine C. Tai
                 Questions Submitted by Hon. Ron Wyden
    Question. The U.S. potato industry estimates that Japan has the 
potential to be a $150-million market annually for U.S. fresh potatoes, 
much of which is expected to come from Pacific Northwest farmers. 
However, the Japanese Government has long denied market access for U.S. 
fresh potatoes due to concerns regarding pests. The United States has 
formally requested market access for table stock potatoes, and Japan 
has formally recognized the U.S. request. Yet, despite multiple 
attempts by USDA to supply Japanese officials with information, as well 
as site visits, the Japanese government has made little progress on a 
pest risk assessment (PRA) on U.S. table stock potatoes.

    What is the status of USTR's efforts to obtain market access for 
U.S. table stock potatoes in Japan, including by pressing Japan to 
complete its PRA? Is USTR engaging on this market access request in the 
context of the Indo-Pacific Economic Framework (IPEF) negotiations?

    Answer. USTR continues to raise the market access request for U.S. 
table-stock potatoes under the U.S.-Japan Partnership on Trade to 
advance the request in a timely and science-based manner. In the 
context of the Indo-Pacific Economic Framework, USTR envisions that the 
agriculture negotiations will enhance market access for U.S. 
agricultural exporters by, for example, advancing the implementation of 
science-based policies and improving transparency in the development of 
import rules and regulations.

    Question. Oregon's dairy farmers produce top-of-the-line dairy and 
dairy products, exports of which achieve the twin goals of increasing 
economic competitiveness in Oregon and supplying the growing demand for 
U.S. dairy products abroad. However, our trading partners are 
increasingly misusing geographical indications to limit the use of 
common food names, leading to unfair results for Oregon's dairy 
farmers.

    What is USTR doing to ensure common food names can be utilized on 
labels and advertisements in priority export markets, beginning with 
our existing FTA partners? Is USTR raising this issue in the context of 
the Indo-Pacific Economic Framework (IPEF) negotiations?

    Answer. USTR has been pressing trading partners on their 
geographical indication policies and pushing trading partners to keep 
their markets open for U.S. agricultural products that rely on the use 
of common food names. For example, in the context of IPEF, we are 
working bilaterally with certain partners, including Australia, the 
Philippines and Singapore, seeking to preserve long-term market access 
for U.S. cheeses and meats that are important to dairy farmers in 
Oregon and across the United States. In addition, we are engaging other 
FTA partners such as Chile, to effectively address and mitigate 
concerns regarding geographical indication policies.

    Question. With respect to the EU, what is USTR doing to address 
this trade irritant?

    Answer. USTR remains concerned regarding the European Union's (EU), 
and some other trading partners' efforts to seek automatic protection 
for certain cheese, meat, and other food terms as geographic indicators 
(GIs), which imposes barriers on market access for U.S.-made goods 
relying on the use of common names. USTR is pushing for transparency 
and procedural fairness concerning the protection of GIs and to ensure 
that any granting of GI protection does not deprive U.S. industries of 
their ability to use common names in the marketing of food products.

    Question. The United Kingdom is now free to move away from the many 
protectionist practices of the European Union that have created an 
imbalance in agricultural trade across the Atlantic. But the UK remains 
under pressure from the EU to continue to align its practices with the 
EU's non-scientific, overly burdensome approach to agricultural trade. 
That poses a significant problem, as those existing EU policies have 
led to a deep Transatlantic agricultural trade imbalance.

    How is USTR leveraging the joint U.S.-UK Dialogues on the Future of 
Atlantic Trade to encourage the UK to reduce trade barriers to U.S. 
wheat and other agricultural products and ensure any sanitary and 
phytosanitary regulations are science based?

    Answer. USTR is working with the UK to deepen our bilateral trade 
ties. In bilateral discussions, we have emphasized the need to reduce 
restrictive tariff and non-tariff barriers and to allow U.S. products 
to fulfill demand within the UK, especially given rising global food 
prices. We have stressed, in particular, the need for the UK to ensure 
that sanitary and phytosanitary measures are science-based.

    Question. Additionally, both the EU and UK maintain prohibitive 
tariffs on U.S. wheat under 13.5-percent protein, which is the majority 
of Oregon wheat production. By contrast, the United States has long 
allowed EU and UK wheat to enter the U.S. duty-free.

    Recognizing that you are not pursuing traditional free trade 
agreement negotiations, are there opportunities for discussion on 
reducing tariff barriers to U.S. agricultural exports in potentially 
large markets such as the EU and the UK?

    Answer. We have emphasized to all our trading partners, both 
bilaterally and multilaterally, the need to reduce restrictive tariff 
and non-tariff barriers and to allow U.S. products to fulfill demand, 
especially given rising global food prices. We continue to make this 
point to both the UK and the EU. The United States continues to raise 
concerns with the EU at the WTO to ensure that the EU complies with its 
international obligations.

    Question. Oregon's wheat growers are highly dependent on 
international trade and market access, as approximately 90 percent of 
Oregon wheat production is exported into an increasingly competitive 
global market. India is an important market for Oregon wheat exports, 
though exports to India have been stymied by a number of trade barriers 
from the Indian government, including domestic subsidies. I appreciate 
the steps that the United States Government has taken to hold India 
accountable for its unfair trade practices that harm U.S. farmers, 
including filing an additional counter-notification with the World 
Trade Organization (WTO) in April 2023.

    What other actions is USTR taking to ensure India makes the 
necessary changes to comply with its WTO commitments? Is USTR 
considering pursuing a formal dispute settlement case against India?

    Answer. We appreciate that India is a notable competitor for U.S. 
farmers, including Oregon wheat farmers, and its agricultural policies 
impact our ability to export grains and other products to both India 
and world markets. The United States is actively coordinating with a 
growing number of WTO members who are also deeply concerned about 
India's trade-distortive measures, including its domestic subsidies. 
The next step is for the counter notification, which is co-sponsored by 
four WTO members in addition to the United States, to be on the agenda 
for the June 27th-28th WTO Committee on Agriculture meeting where we 
expect a robust discussion of India's policies. We will continue to 
closely monitor India's policies and actions and continually assess our 
options for holding India accountable to its WTO commitments.

    Question. Japan is a critical market for frozen blueberries from 
the Pacific Northwest. The U.S.-Japan Trade Agreement eliminated 
tariffs on frozen blackberries, raspberries, and strawberries, but not 
on frozen blueberries. As a result, Pacific Northwest blueberry growers 
currently face a 6- to 9.6-percent tariff on frozen blueberry exports 
to Japan, putting them at a disadvantage with respect to growers in 
Comprehensive and Progressive Agreement for Trans-Pacific Partnership 
(CPTPP) countries, who can trade freely with Japan on all blueberry 
products.

    Is USTR seeking to address this trade barrier for Pacific Northwest 
blueberry growers, either through a technical amendment to the U.S.-
Japan Trade Agreement or through other venues for dialogue?

    Answer. While tariff negotiations are not being considered at this 
time under IPEF, USTR envisions that IPEF's Trade Pillar will enhance 
market access for U.S. agricultural exporters by, for example, 
advancing the implementation of science-based policies and improving 
transparency in the development of import rules and regulations. USTR 
is not currently considering reopening the U.S.-Japan Trade Agreement 
tariff negotiations, but may request that Japan consider unilaterally 
reducing its tariffs for frozen blueberries on a most favored nation 
basis.

    Question. Pacific Northwest growers continue to face barriers to 
tree fruit export in the Indo-Pacific, including sanitary and 
phytosanitary (SPS) measures. These measures are ostensibly imposed to 
protect health and safety, but in reality are often a protectionist 
tool used to keep U.S. products out of export markets. For instance:

          Since 2017, Pacific Northwest apple growers have sought non-
        fumigated access to the Japanese market. Currently, Japan 
        requires fumigation, which damages fruit quality, rendering 
        apple access to Japan not commercially viable. U.S. industry 
        estimates that with non-fumigated access, Japan could develop 
        into a $20-million market for U.S. apple exports.

          For decades, Pacific Northwest growers have sought access to 
        the Australian market for apples and pears, but phytosanitary 
        issues continue to impede market access. U.S. industry 
        estimates that Australia could become a $16-
        million market for apples and a $4.5-million market for pears.

          South Korea has long prohibited the importation of apples 
        and pears from the United States due to phytosanitary concerns. 
        U.S. industry estimates that resolving the phytosanitary 
        barriers in South Korea for apples and pears would result in 
        yearly sales of $10 million to $25 million.

    Will the Indo-Pacific Economic Framework (IPEF) include binding 
commitments requiring parties to implement science-based measures and 
eliminate non-tariff barriers that prevent American producers from 
accessing markets in the region? If yes, how does USTR plan to make 
these commitments enforceable?

    With respect to the trade concerns described above, is USTR seeking 
to resolve them through the IPEF?

    Answer. Within the trade pillar of IPEF, the United States will 
encourage partners, including Japan, Australia, South Korea and others, 
to implement measures that are consistent with U.S. regulatory 
practices and international standards to minimize and eliminate 
nontariff barriers, issues which prevent American producers from 
accessing markets in Indo-Pacific countries where demand for U.S. food 
and agricultural products is rapidly increasing. To address specific 
barriers of concern and produce tangible benefits for U.S. agricultural 
producers, USTR will seek to promote the use of science- and risk-based 
decision making to maintain and expand market access for U.S. 
agricultural exports.

    Under the U.S.-Japan Partnership on Trade, the United States has 
been requesting that Japan allow for import of U.S. apples using a 
systems approach, which would remove fumigation requirement through 
other mitigation methods. This is a priority issue for USTR and we will 
continue to engage with Japan on the matter.

    We continue to press Australia to uphold their FTA commitments and 
build fair, non- discriminatory and science-based regulatory 
frameworks. Apples are a top priority issue for USTR in these 
discussions and we will continue to engage with Australia on the issue.

    In addition to our regular bilateral engagements, the United States 
engages with Korea annually on SPS issues through the KORUS SPS 
Committee and the KORUS Committee on Agriculture, where we continue to 
press Korea to adopt predictable, transparent, and science-based 
standards.

    Question. Last year, USTR began its statutory 4-year review of the 
section 301 tariffs imposed in response to China's forced technology 
transfer and intellectual property theft. I continue to support these 
tariffs, as well as other efforts to address China's rampant unfair 
trade practices. That said, certain tariffs have had negative impacts 
on American businesses and workers, particularly those that need inputs 
to goods manufactured in the United States. I continue to support a 
comprehensive, fair, and transparent exclusion process to allow U.S. 
producers, manufacturers, and importers to request case-by-case relief 
from these tariffs.

    Please indicate whether you are considering opening an exclusion 
process, whether as part of the 4-year review or otherwise.

    Answer. Within the 4-year review, USTR is reviewing the overall 
structure of the tariffs, including which products should be subject to 
additional duties. As part of the public comment process, submitters 
were requested to submit comments on whether certain tariff headings 
should remain covered by the actions or removed. USTR continues to 
consider additional exclusion processes, as warranted.

    Question. On November 30, 2022, you met virtually with Mary Ng, 
Canada's Minister of International Trade, Export Promotion, Small 
Business, and Economic Development. According to the public readout of 
the meeting,\1\ you ``expressed concern about Canada's proposed 
unilateral digital service tax and pending legislation in the Canadian 
Parliament that could impact digital streaming services and online news 
sharing and discriminate against U.S. businesses.'' Yet, when asked 
about the meeting during the Finance Committee's hearing on March 23, 
2023, you testified that you only raised the Canadian policies to 
``understand what the motivations are of our trading partners'' and 
that you ``raised the question to say [you] would like to learn more 
about this.''
---------------------------------------------------------------------------
    \1\ https://ustr.gov/about-us/policy-offices/press-office/press-
releases/2022/november/readout-ambassador-katherine-tais-meeting-
canadas-minister-international-trade-export-promotion.

    As you are aware, Canada's pending Online Streaming Act and Online 
News Act both contain discriminatory aspects that disadvantage U.S.-
based entities, both large and small. These appear to be inconsistent 
with trade commitments undertaken by Canada as part of the USMCA and 
---------------------------------------------------------------------------
WTO.

    During your meetings with Canadian officials, did you clarify that 
laws and regulations with a discriminatory impact on U.S. entities, 
regardless of sector, raise concern under Canada's trade obligations?

    Answer. As I stated at the Senate Finance Committee Trade Agenda 
hearing, during my meeting with my Canadian counterpart, I raised 
questions about the Online Streaming Act and the Online News Act in 
order to learn more about the legislation and the motivations behind 
them.

                                 ______
                                 
                 Questions Submitted by Hon. Mike Crapo
    Question. The President's Agenda states it will conclude its 
``paradigm-shifting'' Global Arrangement on Sustainable Steel and 
Aluminum, this year. Congress has not been informed of key details 
regarding this initiative.

    What methodology does the administration propose to determine the 
carbon intensity of a particular steel or aluminum product? Please 
include any information regarding any aspect of the methodology that 
may consider upstream or downstream impacts.

    What legal authority does the administration intend to rely on to 
enact the Global Arrangement? If the administration plans to ask 
Congress for authority, when will Congress receive the administration's 
legislative proposal?

    Answer. Under the Joint U.S.-EU Statement on Trade in Steel and 
Aluminum, the United States and the EU recognized their shared 
commitment to take ``joint steps to defend workers, industries and 
communities from global overcapacity and climate change, including 
through a new arrangement to discourage trade in high-carbon steel and 
aluminum that contributes to global excess capacity from other 
countries and ensure that domestic policies support lowering the carbon 
intensity of these industries.''

    As envisioned by the administration, the Global Arrangement would 
eventually cover all direct (scope 1) and certain indirect (scope 2 and 
scope 3) emissions. Due to current data availability limitations across 
economies, the initial types of emissions considered for assessing the 
emissions intensity of the imports may be limited to direct emissions 
for steel and direct and certain indirect (scope 2) emissions for 
aluminum. As data improves over time, this would expand to include more 
complete emissions data, including additional data on indirect 
emissions (scope 2 and 3).

    As negotiations are ongoing, we are still considering the 
authority(ies) that may be necessary to conclude and implement the 
Global Arrangement. This will depend on the structure and content of 
the instrument we announce with the EU. We have been consulting closely 
with and will continue to consult with Congress as the negotiations 
advance.

    Question. USTR is not sharing foreign government proposals related 
to the Indo-Pacific Economic Framework with the Finance Committee. 
Instead, USTR proposed that it would eventually provide consolidated 
texts that would contain some of the proposed language. The 
administration thus undercuts a practice established under USMCA by its 
failure to provide country attributions in these proposed consolidated 
texts. As a result, Congress is left in the dark about who supports 
which foreign proposal. Based on conversations held with foreign 
governments, none object to Congress knowing this information, 
particularly since they still want congressional support for a final 
product to make sure it is durable.

    Will you provide foreign government proposals and attributions?

    Answer. I have worked to ensure that Congress is engaged in the 
IPEF negotiation process and is both aware of partner country views and 
able to provide input on partner country feedback. USTR has provided 
the Finance and Ways and Means committees with consolidated text that 
shows edits to negotiating text requested by partner countries. USTR 
has provided the trade committees these consolidated texts in 
conjunction with negotiating rounds and staff from the Ways and Means 
and Finance committees have traveled to each IPEF negotiating round. 
During these rounds, USTR has met with committee staff to discuss 
consolidated texts and has provided country attributions for specific 
edits. In addition, these on-the-ground meetings during negotiating 
rounds allow congressional staff to hear partner country views directly 
from those negotiators. USTR provides its views on partner country 
feedback and USTR has facilitated meetings between congressional staff 
and partner countries at negotiating rounds so congressional staff can 
hear directly from partner countries and share their views directly 
with them. Moving forward, USTR will continue ensuring Congress is 
meaningfully engaged in the negotiating process.

    Question. One of the key elements of our digital economy is the 
creative content that we make available through streaming and other 
digital services. Unfortunately, international piracy remains a major 
problem for this industry.

    Do you agree that modern digital trade agreements need to 
incorporate baseline copyright protections, such as those reflected in 
the WIPO Internet Treaties?

    Answer. The World Intellectual Property Organization (WIPO) 
Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty 
(WPPT), collectively known as the WIPO Internet Treaties, have 
established norms for copyright protection around the world, 
particularly with regard to online delivery of copyrighted content. The 
treaties provide for certain exclusive rights and require parties to 
provide adequate legal protection and effective legal remedies against 
the circumvention of technological protection measures (TPMs), as well 
as adequate and effective legal remedies against certain acts affecting 
rights management information (RMI).We will continue to press trading 
partners to join these critical treaties.

    Question. The administration proposes negotiating critical minerals 
agreements with countries aggrieved by the clean vehicle credit in the 
Inflation Reduction Act. There is strong interest in Congress to expand 
production of critical minerals to end U.S. supply chain reliance on 
China.

    What new binding commitments--not reaffirmations--can you point to 
in the Japan Critical Minerals Agreement to stimulate production and 
trade in critical minerals? Please provide any economic data or 
analysis that supports your position.

    The Inflation Reduction Act includes the term ``free trade 
agreement,'' which should mean an agreement that actually frees trade. 
Indeed, the USTR webpage, which identifies free trade agreements, lists 
precisely these types of agreements. What, if any, restriction does the 
administration see in its ability to deem any trade or environmental 
agreement a ``free trade agreement?''

    Answer. The Japan Critical Minerals Agreement contains new binding 
commitments relating to trade in critical minerals with respect to 
export duties, measures to address non-market policies and practices of 
non-parties, best practices regarding investment reviews, efforts to 
address supply chain disruptions, and activities to strengthen labor 
rights enforcement and protect the environment. Building on the 2019 
United States-Japan Trade Agreement, the Japan Critical Minerals 
Agreement will strengthen and diversify critical minerals supply chains 
and promote the adoption of electric vehicle battery technologies.

    The criteria governing Treasury's recent proposal to treat Japan as 
a ``country with which the United States has a free trade agreement in 
effect'' are found in its recent Notice of Proposed Rulemaking, see 
section 30D New Clean Vehicle Credit, 88 Fed. Reg. 23370, 23376 (April 
17, 2023). This proposal was based on the Japan Critical Minerals 
Agreement, in the context of other elements of the U.S.-Japan trade 
relationship, as explained in the Notice.

    Question. The administration has yet to respond to the Finance 
Committee's December 1st letter to the President calling for 
congressional approval of IPEF. Meanwhile, our IPEF partners indicate 
capacity building assistance is required before they can commit to 
IPEF. The President's current budget flags $50 million to advance IPEF 
for just this year. Presumably, much more funding will be needed. USMCA 
needed $843 million to enforce the labor and environmental provisions, 
and IPEF has a dozen more countries.

    When will Congress receive a cost estimate for IPEF technical 
capacity building?

    Answer. Throughout the course of the negotiations, USTR and partner 
countries have discussed potential technical assistance needs. 
Ultimately, technical assistance needs will be assessed by USTR and the 
Parties based on the outcomes of negotiations of the Trade Pillar 
(Pillar I). The administration, including USTR, will keep Congress 
apprised of any potential funding needed for IPEF, including, technical 
assistance and capacity building, through our regular President's 
Budget process.

    Question. American leadership on digital trade is critical, 
particularly at a time when China works hard every day to establish its 
own standards and rules in the field.

    Do you agree that the United States must make it a top priority to 
renew the Moratorium on Customs Duties on Electronic Transmissions, 
well ahead of its expiration, next February?

    Answer. The United States continues to support the practice of not 
imposing Customs duties on electronic transmissions. USTR remains 
committed to developing rules that govern the emerging and evolving 
digital economy that support workers, consumers, and businesses.

    Question. Do you agree that the United States must consider all 
appropriate enforcement tools to protect its rights if the moratorium 
expires and countries decide to adopt tariffs on U.S. electronic 
transmissions?

    Answer. While we remain committed to working with other WTO members 
to build further support for the extension of the moratorium, as well 
as pursuing a robust discussion about the future of the moratorium and 
the impact of the digital economy on developing members, we will 
consider all options to address barriers to digital trade that 
negatively impact our workers, consumers, and businesses.

    Question. Do you agree that the United States must press for 
digital trade rules that combat forced disclosures of proprietary 
computer source codes and algorithms?

    Answer. The United States remains concerned with the harms to U.S. 
companies that can result from actions by foreign governments to force 
access to or the transfer of the source code of software. It is also 
clear that the use of artificial intelligence and algorithms in the 
United States and its impact on all aspects of society will continue to 
grow. We are continuing to evaluate the appropriate approach to these 
issues in IPEF at the same time as we follow the debates on this taking 
place in the Congress.

                                 ______
                                 
               Questions Submitted by Hon. Maria Cantwell
    Question. Thank you for the attention you have placed on working to 
relieve India's retaliatory tariffs on American products- and 
particularly Washington apples. You mentioned that you and your office 
are thinking through ways to get these issues resolved. I would like to 
stay coordinated with you to ensure we are effective.

    Can your staff follow up with my staff about the measures you are 
considering? And please mention any areas where we can be helpful to 
your efforts.

    Answer. On June 22nd, I announced that the United States and India 
have finalized an agreement resolving several outstanding trade issues, 
including the termination of six WTO disputes and the removal of 
retaliatory tariffs on certain U.S. agricultural products, including 
chickpeas, lentils, almonds, walnuts, apples, boric acid, and 
diagnostic reagents.

    The agreement, which was reached during the Official State Visit of 
Prime Minister Narendra Modi of the Republic of India, reflects the 
growing strength of the U.S.-India bilateral economic and trade 
relationship.

    Question. Pacific Northwest seafood processors have remained at the 
same competitive disadvantage in accessing China's market for the past 
several years. Other seafood-producing nations can access China without 
retaliatory tariffs, and they are reaping the benefits of China's 
increasing demand while U.S. producers are effectively sidelined. 
Chinese imports of non-U.S. seafood are up 122 percent while their 
import of U.S. products are down 26 percent from 2017--despite purchase 
commitments.

    Whether part of USTR's section 301 tariff review or through another 
process, what are USTR and collaborating agencies doing to quantify and 
evaluate the impacts of China's retaliatory tariffs on Pacific 
Northwest seafood producers and exporters?

    More generally, can you provide an update on USTR's section 301 
tariff review?

    Answer. The China section 301 tariffs are currently undergoing a 4-
year statutory review. As part of this review, USTR requested public 
views on the effectiveness of the actions in achieving the objectives 
of the investigation into China's acts, policies and practices related 
to technology transfer, intellectual property and innovation, other 
actions that could be taken: and the effects of the actions on the 
United States economy, including U.S. consumers. USTR also sought views 
on the impact of the actions on U.S. workers, U.S. small businesses, 
U.S. manufacturing, critical supply chains, U.S. technological 
leadership, and possible tariff inversions. USTR expects to complete 
the 4-year review in the fall of this year.

    More generally, USTR is committed to using all available trade 
tools to ensure that U.S. fishers and other workers in the fisheries 
sector can compete on a level playing field. For example, we know our 
fishers have to compete with significant subsidization by other 
countries, particularly China. Through extensive U.S. engagement and 
leadership, WTO members were able to achieve the WTO Agreement on 
Fisheries Subsidies in 2022. The agreement contains several important 
disciplines, including prohibitions on subsidies to vessels or 
operators engaged in illegal, unreported, and unregulated (IUU) 
fishing; for fishing regarding overfished stocks; and for fishing on 
the unregulated high seas. The United States was among the first WTO 
members to accept the agreement, and USTR will continue to pursue 
additional, ambitious disciplines through the continuing negotiations 
to help improve the lives of our fishers and workers.

    Question. As you know, I am totally focused on reopening and making 
gains in huge markets like India. When our delegation met with Prime 
Minister Modi earlier this month, he expressed interest in a free trade 
agreement with the U.S. He's concluded FTAs with Australia and UAE.

    I understand that there is no appetite to start such a process, and 
doing so would be a longer-term impact. But the U.S. has taken steps in 
other markets to reduce section 232 tariffs on steel and aluminum, such 
as the imposition of quotas under 232 as a way to reduce tariffs.

    With the steel and aluminum tariffs on the table, in addition to 
GSP, you would have some options to resolving retaliatory tariffs on 
our agriculture.

    What does the U.S. need to do to get India to eliminate its 
retaliatory tariffs against U.S. products? Could you see the U.S. 
negotiating a reduction of 232 tariffs, or the use of quotas?

    In the process of working through India's retaliatory tariffs and 
other barriers to U.S. trade, could the U.S. negotiate a tariff-rate 
quota or use a similar tool to make our point about steel and aluminum 
overcapacity, but work towards increasing trade--especially 
agricultural trade?

    Answer. On June 22nd, I announced that the United States and India 
have finalized an agreement resolving several outstanding trade issues, 
including the termination of six WTO disputes and the removal of 
retaliatory tariffs on certain U.S. agricultural products, including 
chickpeas, lentils, almonds, walnuts, apples, boric acid, and 
diagnostic reagents.

    The agreement, which was reached during the Official State Visit of 
Prime Minister Narendra Modi of the Republic of India, reflects the 
growing strength of the U.S.-India bilateral economic and trade 
relationship.

    As the U.S. Department of Commerce administers the section 232 
process, I would encourage you to engage Secretary Raimondo on this 
matter. USTR is working to address the market distorting measures that 
have led to non-market excess capacity in the global steel and aluminum 
markets, including through a new Global Arrangement on Sustainable 
Steel and Aluminum that we are currently discussing with the European 
Union. We continue to push India to help address the actions that have 
led to non-market excess capacity, including reengaging in the work of 
the Global Forum on Steel Excess Capacity.

                                 ______
                                 
              Questions Submitted by Hon. Robert Menendez
    Question. It is my understanding that the U.S. International Trade 
Commission (USITC) will provide a report to USTR on its investigation 
entitled, ``COVID-19 Diagnostics and Therapeutics: Supply, Demand, and 
TRIPS Agreement Flexibilities'' (Inv. No. 332-596) on October 17, 2023.

    Will you share a copy of the report with the committee as soon as 
you receive it from the USITC?

    At what point do you expect the report to be made public?

    Will you consult with the committee prior to making a decision on 
whether to expand the TRIPS waiver to diagnostics and therapeutics?

    Answer. We expect that, in accordance with its established 
practice, the USITC will transmit the report to USTR on October 17, 
2023 and then post it online 30 days later. USTR will continue to 
consult with Congress, as well as a wide range of stakeholders, as we 
continue to gather the necessary facts to inform our position on the 
question presently at the WTO, whether or not to extend the ministerial 
decision on the TRIPS Agreement that covered COVID-19 vaccines to also 
cover COVID-19 diagnostics and therapeutics.

    Question. I understand U.S. companies are facing an issue in 
Japan's gaming market, where Sony appears to be blocking competition 
through exclusive deals and payments to game publishers not to 
distribute their games on other platforms. Japan's equivalent of the 
Federal Trade Commission has failed to investigate this conduct, which 
appears to act as a non-tariff barrier to entry to Japan's market. This 
is particularly troubling because Sony has not adopted policies 
committing to non-interference in workers' right to organize like those 
at Microsoft, which has enabled Microsoft employees to freely and 
fairly organize to form unions.

    Consistent with your focus on advancing fair trade conditions that 
benefit workers and create good jobs, will you bring this matter to 
Japan's attention?

    Answer. We will continue to raise concerns with our trade partners 
on issues that may have a negative impact on our workers. In our 2023 
National Trade Estimate report on foreign barriers, we noted that 
``U.S. unions and companies have expressed concern with regard to the 
enforcement of Japan's existing competition laws in digital market and 
technology sectors in which Japanese companies are significant 
participants.''

    We have encouraged companies to also raise these concerns directly 
with the Government of Japan, in particular the Japan Fair Trade 
Commission.

                                 ______
                                 
              Questions Submitted by Hon. Thomas R. Carper
    Question. As the world leader in services, the U.S. services sector 
employs 80 percent of the American workforce, accounts for over 80 
percent of U.S. GDP and U.S. exports of services directly supported 3.4 
million jobs in 2021. However, U.S. services firms still face 
substantial barriers in foreign markets that hurt U.S. workers and the 
U.S. economy. Many services industries, including the financial 
services industry, face measures like limitations on the free flow of 
data across borders, bans on the use of cloud services, regulations 
that discriminate against U.S. firms and restrictions on a company's 
ownership in a given market.

    How is USTR working to address these issues to help American 
companies compete on a more level playing field?

    Answer. USTR is engaged globally to ensure that services and 
digital trade continue to fuel the growth and dynamism of the U.S. 
economy, and that workers and companies of all sizes benefit from and 
share in this growth.

    Question. China's influence in the Western Hemisphere--including in 
expanded diplomatic ties and critical areas like infrastructure 
investment and critical mineral mining--continues to be an issue of 
concern.

    How can we develop a more cohesive regional economic strategy, 
including a proactive plan to meaningfully counter China's activities 
and support sustainable investment in the region?

    Answer. In USTR's engagements in the Americas, we consistently 
share our concern about China's influence and the risk it poses for the 
United States and our allies and partners. In the Americas, we have a 
strong network of existing agreements, including TIFAs and free trade 
agreements, to reinforce our economic ties and shared values. We are 
working with our regional partners to use these existing tools and 
develop new initiatives, including regional approaches like the 
Americas Partnership for Economic Prosperity, to build resilience and 
competitiveness in this hemisphere.

    Question. Last year I joined Senator Portman and 39 of our 
colleagues on a bipartisan letter calling for the administration to 
establish a more comprehensive exclusion process for imports from China 
subject to tariffs under section 301 of the Trade Act of 1974. The 
letter was a follow up to an April 2021 letter in which Senator Portman 
and I joined 38 of our colleagues in requesting that the administration 
restart the tariff exclusion process.

    We continue to hear from American businesses, including many who 
are working to implement key priorities, such as the Bipartisan 
Infrastructure Law and the Inflation Reduction Act, with concerns that 
the lack of an exclusions process is driving up costs, especially for 
products manufactured domestically using imported materials and 
components, and seemingly not achieving their original intended purpose 
in countering China's unfair trade practices.

    In your opinion, would it be worthwhile to reevaluate the use of 
these tariffs to support the robust goals of the Bipartisan 
Infrastructure Law and Inflation Reduction Act, including tariffs 
impacting sectors and products that are contributing to the 
revitalization of our Nation's infrastructure and clean energy 
transformation?

    Answer. As part of the 4-year review of the section 301 tariffs, 
USTR is reviewing the effectiveness of the tariffs in achieving the 
objectives of the investigation, as well as the effect of the tariffs 
on consumers, workers, and the U.S. economy at large. As part of this 
review, we are considering the existing tariffs structure and how to 
make the tariffs more strategic in light of impacts on sectors of the 
U.S. economy as well the goal of increasing domestic manufacturing. 
USTR continues to consider additional exclusion processes, as 
warranted.

    Question. As WTO member countries continue to weigh a TRIPS waiver 
for COVID therapeutics and diagnostics, how are you considering the 
impact of a possible waiver on American jobs and competitiveness?

    Answer. On December 16, 2022, I asked the U.S. International Trade 
Commission to launch an investigation into COVID-19 diagnostics and 
therapeutics and to solicit information on issues such as the 
relationship between intellectual property protection and corporate 
research and development expenditures, as well as the location of jobs 
associated with the manufacturing of diagnostics and therapeutics. We 
will take into account the USITC report, the information solicited by 
the USITC, and other information gathered through consultations with 
Congress, as well as a wide range of other stakeholders, to inform our 
position on the question presently at the WTO, whether or not to extend 
the Ministerial Decision on the TRIPS Agreement that covered COVID-19 
vaccines to also cover COVID-19 diagnostics and therapeutics.

                                 ______
                                 
            Questions Submitted by Hon. Robert P. Casey, Jr.
    Question. Bolstering the U.S.'s supply chain resilience is a key 
element of the 2023 trade policy agenda. As noted within, ``the 
concentration of our supply chains in China contributes to our 
vulnerability, especially for critical technologies.'' In your written 
testimony, under the topic of trade enforcement, you stated that ``many 
of our existing trade tools may not adequately address the challenges 
posed by today's economy, so we will continue to work with Congress to 
identify areas where new tools may be needed.''

    Are there specific areas of trade enforcement that are of biggest 
concern to you, and where can Congress be of most help in your pursuit 
of enforcing trade agreements, combating unfair, non-market practices, 
and leveling the playing field for American workers?

    As USTR engages with foreign trading partners to advance the U.S.'s 
resilience in critical supply chains, what is USTR doing to ensure 
pending trade agreements reflect U.S. national security interests, 
particularly regarding investments in critical capability sectors?

    Answer. We would welcome an opportunity to engage further with 
Congress around priority areas of trade enforcement. We are actively 
reviewing our existing trade tools in this space and identifying ways 
to strengthen them, with the recognition that historically, trade 
agreements and tools might not have addressed the challenges we now 
face. We look forward to continued exchanges on this topic and to 
working together to craft solutions to these pressing challenges.

    The Biden administration is committed to protecting our national 
security interests. More resilient supply chains can protect the United 
States from shortages of critical products and encourage investments to 
strengthen our national security, and resilience is a key part of our 
engagement with foreign trading partners. IPEF, for example, includes a 
pillar on supply chains, and the Japan Critical Minerals Agreement 
requires the parties to confer regarding best practices in investment 
reviews.

    Question. The Global Arrangement on Sustainable Steel and Aluminum 
is one of the most consequential initiatives between the U.S. and the 
EU. It could be the umbrella under which the global steel and aluminum 
market operates for generations to come. Pennsylvanians know all too 
well the lengths to which non-market economies will go to manipulate 
and skirt U.S. trade enforcement. When non-market economies don't play 
by the rules, it costs American jobs and American industry-- which 
produces some of the cleanest steel on this planet. Thousands of steel 
workers in the Commonwealth have lost their jobs as a result of China's 
unfair practices and hundreds of thousands of jobs nationwide are at 
risk if we cannot find a way to work with our allies to create a system 
that meaningfully and sustainably combats unfair trade. In some cases, 
non-market economies have found back doors into our Free Trade 
Agreements, importing goods free of duties that have a high percentage 
of inputs from non-market economies.

    What kind of commitments will you be proposing in this agreement to 
ensure participants cannot overproduce steel and aluminum, leverage 
state subsidies, use forced labor, and artificially depress global 
steel price? How will you ensure there is not a back door into this 
agreement by creating strong rules of origin?

    Answer. Under the Joint U.S.-EU Statement on Trade in Steel and 
Aluminum, the United States and the EU recognized their shared 
commitment to take ``joint steps to defend workers, industries and 
communities from global overcapacity and climate change, including 
through a new arrangement to discourage trade in high-carbon steel and 
aluminum that contributes to global excess capacity from other 
countries and ensure that domestic policies support lowering the carbon 
intensity of these industries.'' As envisioned by the administration, 
membership in the global arrangement would depend, in part, on a 
country's policies with regard to restricting market access for steel 
and aluminum imports from sources of non-market excess capacity (NMEC). 
We are also envisioning membership criteria that take into account 
issues such as whether countries are, or at risk of becoming, sources 
of NMEC; the extent to which state-owned or state-controlled 
enterprises operate in a prospective member's economy; whether sources 
of NMEC are investing in a country; the extent to which countries are 
taking appropriate and effective measures to address the market 
distortive effects of NMEC; and the extent to which a potential member 
affords internationally recognized labor rights.

    Question. Pillar 1 of the Indo-Pacific Economic Framework for 
Prosperity is expansive, containing language that will create the rules 
of the road on trade for one of the most sensitive and fastest growing 
regions on the global stage. I am encouraged that you and your staff 
have repeatedly expressed that the U.S. is seeking a high standards 
agreement, using the United States-Mexico-Canada Agreement as the basis 
upon which you will build. Meanwhile, the public, workers, and even 
some congressional staff have been unable to confirm this. I am 
particularly concerned with provisions contained in the digital chapter 
of Pillar 1. I am particularly concerned that rules surrounding cross 
border data flows may not consider implications for the full gamut of 
data types, such as data collected on employees by employers.

    How is USTR planning to ensure rules around cross border data flows 
and data localization fully consider sensitive types of data? How have 
you engaged with the interagency and Congress on parallel efforts to 
address concerns regarding data collected on workers?

    Answer. USTR recognizes that both Congress and regulators seek to 
preserve policy space to address questions around data, including 
privacy. We have worked closely with labor unions, including through 
our Labor Advisory Committee, to ensure that any digital provisions are 
consistent with advancing a worker-centered trade agenda. We look 
forward to continuing to work with members of Congress and the labor 
community on these issues at the same time as we follow the debates 
taking place in the Congress.

                                 ______
                                 
                Question Submitted by Hon. Maggie Hassan
    Question. As part of its goal to revitalize domestic manufacturing 
and combat the climate crisis, the administration has been in 
discussions with the European Union to develop a partnership known as 
the Global Arrangement on Sustainable Steel and Aluminum. However, 
experts expect that most of the growth in global steel capacity in the 
coming years will come from producers in countries such as China that 
fail to meet the same kinds of emissions standards, that overproduce 
steel and aluminum, and have state-owned companies involved in 
producing these goods.

    What steps does USTR plan to take to protect American manufacturers 
and curb global excess steel capacity originating from those countries?

    Answer. Under the Joint U.S.-EU Statement on Trade in Steel and 
Aluminum, the United States and the EU recognized their shared 
commitment to take ``joint steps to defend workers, industries and 
communities from global overcapacity and climate change, including 
through a new arrangement to discourage trade in high-carbon steel and 
aluminum that contributes to global excess capacity from other 
countries and ensure that domestic policies support lowering the carbon 
intensity of these industries.'' As envisioned by the administration, 
membership in the global arrangement would depend, in part, on a 
country's policies with regard to restricting market access for steel 
and aluminum imports from sources of non-market excess capacity (NMEC). 
We are also envisioning membership criteria that take into account 
issues such as whether countries are, or at risk of becoming, sources 
of NMEC; the extent to which state-owned or state-controlled 
enterprises operate in a prospective member's economy; whether sources 
of NMEC are investing in a country; the extent to which countries are 
taking appropriate and effective measures to address the market 
distortive effects of NMEC; and the extent to which a potential member 
affords internationally recognized labor rights.

                                 ______
                                 
           Questions Submitted by Hon. Catherine Cortez Masto
    Question. During the hearing, I asked you if it was still the 
administration's position to support maintaining a 2-year pause on 
solar tariffs as the Department of Commerce conducts a circumvention 
investigation in the Auxin petition case. You indicated you would 
consult with that department and report back.

    Can you please confirm that the administration's position remains 
the same?

    Answer. In May, President Biden vetoed legislation passed by 
Congress that would have repealed the suspension of duties on solar 
cells and modules pursuant to the President's proclamation of June 6, 
2022.

    Question. As I am sure you hear a lot, there are a number of 
concerns that businesses are having with the 301 tariff exclusion 
process. A fair and efficient exclusion process can be a valuable part 
of our strategy to counter China's unfair trade practices.

    As part of USTR's 301 review, do you have any additional thoughts 
on how the exclusion process can be improved?

    Answer. As part of the 4-year review, we are considering whether 
adjustments to tariff structure may be appropriate, and this could 
include consideration of an exclusion process. We received a number of 
comments from the public on ways a future exclusion could be altered to 
be more effective, and USTR continues to consider additional exclusion 
processes, as warranted.

                                 ______
                                 
               Questions Submitted by Hon. Chuck Grassley
    Question. The Mexican Government has sent no signal that they 
intend to return to a science-based biotech risk assessment. What are 
you hoping to accomplish in the technical consultations?

    Answer. In these consultations and in all our engagement with 
Mexico, we continue to work to avoid any disruption to U.S. exports of 
corn or other agricultural products to Mexico and to urge Mexico to 
return to a science-based approach for all biotech products.

    Question. If they do not commit to withdrawing their decree, will 
you file a formal dispute settlement?

    Answer. If these issues regarding agricultural biotechnology are 
not resolved, we will consider all options, including taking further 
steps to enforce U.S. rights under the USMCA. On June 2nd, I requested 
dispute settlement consultations with Mexico under the United States-
Mexico-Canada Agreement (USMCA).

    Question. In your testimony, you say ``our existing trade tools may 
not adequately address the challenges posed by today's economy, so we 
will continue to work with Congress to identify areas where new tools 
may be needed.''

    As you conduct the USTR's statutory 4-year review of section 301 
actions taken to combat discriminatory Chinese trade practices, I 
encourage you to consider the important of the American Amino Acids 
industry.

    Do you believe China's non-market practices in the amino acids 
industry warrant maintaining section 301 tariffs on existing amino acid 
imports from China, and expanding these tariffs to include lysine and 
threonine?

    Answer. As part of the 4-year review, we are reviewing the overall 
product coverage to understand, among other things, the impact of the 
tariffs on consumers, workers, and sectors of the U.S. economy and 
industries. Our review will consider suggestions made during the public 
comment period to include products not currently covered by the action.

    Question. By using its regulatory system to potentially 
discriminate against U.S. technology, China can limit U.S. farmers' 
access to new biotech products; products that can help our farmers 
address the challenges of a changing climate while enhancing global 
food security. This is not in the spirit of what was agreed upon in the 
Phase One commitments. It will be important to ensure China lives up to 
its Phase One commitments. If not, China's behavior could have profound 
negative impacts on the speed of deploying much needed agricultural 
innovation to U.S. farmers, the stability of U.S. agricultural exports 
and the American jobs that support them, the health of commodity 
markets and the ability of U.S. farmers to maintain their competitive 
advantage in the global market.

    What is the administration's strategy with respect to Phase One 
enforcement, and specifically the implementation on the Phase One 
agreement as it relates to agricultural biotechnology?

    Answer. The Chinese regulatory approval process for products of 
agricultural biotechnology creates significant uncertainty among U.S. 
farmers, developers, and traders, impeding farmers' access to 
innovative technologies and creating adverse trade impacts. China's 
commitments relating to agricultural biotechnology remain among the 
most significant commitments under the Phase One agreement for which 
China has yet to demonstrate full implementation. In our bilateral 
engagement with China, we continue to use the consultation mechanism 
set forth in the Phase One agreement as well as other bilateral 
engagement in an effort to secure China's full implementation of its 
commitments, including with regard to agricultural biotechnology.

    Question. I have heard concerns that section 301 tariffs have put 
American manufacturers at an unfair disadvantage to foreign 
manufacturers in some situations. For example, a household appliance 
produced in Vietnam or Thailand using Chinese parts is not subject to 
301 tariffs, while a U.S. manufacturer--such as Whirlpool that has 
nearly 3,000 employees in Amana, IA--must pay 301 tariffs if it imports 
those Chinese components and uses them in American manufactured 
products.

    You acknowledged in your testimony that USTR's statutory review of 
the 301 tariffs on goods imported from China is ongoing. You've given 
no time estimate on when the review may be completed.

    Is USTR still reviewing all comments received prior to the January 
deadline from all stakeholders? Have you received comments from harmed 
U.S. manufacturers indicating these tariffs may be having the opposite 
effect as originally intended? How are those situations being 
considered as the review continues?

    Answer. The China section 301 tariffs are currently undergoing a 4-
year statutory review. As part of this review, USTR requested public 
views on the effectiveness of the actions in achieving the objectives 
of the investigation into China's acts, policies, and practices related 
to technology transfer, intellectual property, and innovation; other 
actions that could be taken; and the effects of the actions on the 
United States economy, including U.S. consumers. USTR also sought views 
on the impact of the actions on U.S. workers, U.S. small businesses, 
U.S. manufacturing, critical supply chains, U.S. technological 
leadership, and possible tariff inversions. All comments submitted 
through the 4-year review are available on USTR's comment portal and 
will be given full consideration. USTR expects to complete the 4-year 
review in the fall of this year.

                                 ______
                                 
                Questions Submitted by Hon. John Cornyn
    Question. This month we learned from the International Trade 
Commission that U.S. importers bore nearly the full cost of the section 
301 tariffs because import prices increased at the same rate as the 
tariffs. Specifically, the International Trade Commission estimated 
that prices increased by about 1 percent for each 1-percent increase in 
the tariffs under sections 232 and 301. In fact, the more than $173 
billion in taxes collected by these tariffs effectively fell directly 
on American businesses, workers, and consumers.

    I've previously joined my colleagues on a bipartisan basis on 
letters to your office urging you to restart and reform the section 301 
exclusions process. I understand the administration is currently 
reviewing the use of these tariffs.

    What will it take to restart an exclusions process?

    Answer. With respect to the USITC report:

          The USITC report estimates at the impact on the prices faced 
        by importers and downstream buyers, which are often businesses 
        rather than consumers. The USITC's model does not address 
        whether those businesses raised consumer prices in response to 
        the tariffs.

          The price increases that the report attributes to the tariff 
        actions tend to be relatively small on average.

          The report found certain benefits of the tariff actions, 
        including outcomes consistent with the objectives of the 
        investigations. The section 301 tariffs were estimated to have 
        reduced the value of U.S. imports of covered products from 
        China.

          The ITC identified 10 industries directly and most affected 
        by the 301 tariffs. For all 10 industries, the report estimates 
        that section 301 suppressed the value of imports from China by 
        as much as 72.3 percent (semiconductors) and increased the 
        value of U.S. production by as much as 7.5 percent (household 
        furniture and kitchen cabinets).

    Within the 4-year review, USTR is reviewing the overall structure 
of the tariffs, including which products should be subject to 
additional duties. As part of the public comment process, submitters 
were requested to submit comments on whether certain tariff headings 
should remain covered by the actions or removed. USTR continues to 
consider whether additional exclusion processes may be appropriate.

    Question. According to the 83rd Annual Foreign-Trade Zone Board 
report, Texas continues to rank at the top in terms of merchandise 
received and exported out of FTZs. This valuable tool plays a vital 
role in promoting economic development in communities, not just in 
Texas, but throughout the U.S.

    How can we bolster trade programs such as the American FTZ program 
which is designed for trusted partners and securing the supply chain to 
create and retain American jobs in manufacturing and distribution?

    How can the American FTZ program's rigorous compliance process help 
companies diversify their supply chains and avoid offshoring American 
jobs?

    Answer. The Foreign Trade Zone program supports manufacturing 
production and jobs throughout the United States by giving users of the 
program the opportunity to reduce import duty liability under certain 
circumstances. The program is administered by the Foreign Trade Zone 
Board, and USTR is committed to working with the Board and its member 
agencies to assist in advancing its mission. USTR notes that a newly 
issued report from the U.S. International Trade Commission confirms 
that FTZ-based duty savings can be substantial for firms producing in 
U.S. FTZs. For some such firms, cost savings from their FTZ usage drive 
decisions to increase production in the United States, thereby 
increasing investment, manufacturing output and employment.

    Question. Electrical steel is a fundamental input to the 
distribution transformers required to power America's homes. The 
current supply of distribution transformers is critically low and is 
stalling or, in some cases, completely halting development. I've heard 
reports from constituents that lead times on distribution transformers 
range between 10 and 24 months. I'm concerned this is a result of 
restrictive trade policies with respect to electrical steel.

    Electrical steel is a critical component in distribution 
transformers. As you know, there is only one remaining U.S. 
manufacturer of the specialty steel, grain-oriented electrical steel 
(GOES), used in distribution transformers.

    Why have imports of GOES from our allies, particularly South Korea 
and Japan, fallen so precipitously in recent years?

    Answer. The Biden-Harris administration is committed to working 
with U.S. trading partners to address the immediate supply chain 
challenges from this unprecedented economic recovery and building long-
term supply chain resilience for the future. USTR is aware of the 
concerns you note regarding the availability of grain-oriented 
electrical steel for distribution transformers and will continue to 
work with the U.S. Department of Energy, the U.S. Department of 
Commerce, and other U.S. Government agencies, as appropriate, to ensure 
that U.S. stakeholders' views on this important issue are taken into 
consideration. The U.S. Department of Energy has been assessing the 
supply chain risks for grain-oriented electrical steel and other 
transformer inputs and is considering new rules to raise the minimum 
efficiency standards for certain types of distribution transformers.

    Question. In July 2020, the U.S. Assistant Attorney General for 
National Security indicted Chinese hackers attempting to steal trade 
secrets from technology and biotech companies, including firms working 
on COVID-19-related treatment, testing, and vaccines. The U.S. 
described those intrusions as examples of China's ``brazen willingness 
to engage in theft'' of IP to advance their competitive edge. You 
yourself have acknowledged China's well-established track record of 
using unfair practices to acquire U.S. technology, to the detriment of 
U.S. innovators and workers. I remain concerned that last June's TRIPS 
waiver for COVID-19 vaccines is a giveaway of U.S. Government and 
private-sector-funded biomedical research to countries like China for 
free. I understand China is supposedly carved out, but I am not 
convinced. Now there are discussions to extend this misguided decision 
to COVID-19 therapeutics and diagnostics, and I understand that China 
has said that it would not be carved out.

    Will you commit to not agreeing to any extension of the TRIPS 
waiver to COVID-19 therapeutics and diagnostics that could transfer 
U.S. technology to China or otherwise benefit China?

    Answer. I appreciate your concern and will continue to consult with 
Congress on this issue. Under the June 2022 Ministerial Decision on the 
TRIPS Agreement, developed countries, a group that includes Russia, and 
countries with existing capacity to manufacture COVID-19 vaccines who 
have opted out from the decision, including China, are not eligible to 
benefit from this decision. In the discussions at the WTO, I will 
continue to be clear-eyed about potential risks.

                                 ______
                                 
                 Questions Submitted by Hon. Tim Scott
    Question. A recent report from the International Trade Commission 
(ITC) concluded that the financial burden of sections 232- and 301-
related tariffs are borne predominantly by U.S. consumers. Treasury 
Secretary Yellen at the G7 Summit in June 2022 said some section 301 
tariffs harm American consumers and businesses and are not very 
strategic in the sense of addressing real issues we have with China; 
however, the Biden administration has signaled no change in course in 
its tariff policy--in fact, its trade agenda as a whole appears to be 
put on ice with respect to economic matters of any real consequence.

    Do you agree with the ITC's and Secretary Yellen's comments?

    Answer. The China section 301 tariffs are currently undergoing a 4-
year statutory review. As part of this review, USTR requested public 
views on the effectiveness of the actions in achieving the objectives 
of the investigation into China's acts, policies, and practices related 
to technology transfer, intellectual property, and innovation; other 
actions that could be taken; and the effects of the actions on the 
United States economy, including U.S. consumers. USTR also sought views 
on the impact of the actions on U.S. workers, U.S. small businesses, 
U.S. manufacturing, critical supply chains, U.S. technological 
leadership, and possible tariff inversions.

    With respect to the USITC report:

          The USITC report estimates at the impact on the prices faced 
        by importers and downstream buyers, which are often businesses 
        rather than consumers. The USITC's model does not address 
        whether those businesses raised consumer prices in response to 
        the tariffs.

          The price increases that the report attributes to the tariff 
        actions tend to be relatively small on average.

          The report found certain benefits of the tariff actions, 
        including outcomes consistent with the objectives of the 
        investigations. The section 301 tariffs were estimated to have 
        reduced the value of U.S. imports of covered products from 
        China.

          The ITC identified 10 industries directly and most affected 
        by the 301 tariffs. For all 10 industries, the report estimates 
        that section 301 suppressed the value of imports from China by 
        as much as 72.3 percent (semiconductors) and increased the 
        value of U.S. production by as much as 7.5 percent (household 
        furniture and kitchen cabinets).

    Question. Will the Office of the United States Trade Representative 
(USTR) work with the Department of Commerce and other agencies to 
ensure that the interests of key U.S. steel producers and motor vehicle 
and component manufacturers are well-represented in U.S. trade policy 
to ensure sufficient U.S. production of key products like electrical 
steel?

    Answer. The Biden-Harris administration is committed to working 
with U.S. trading partners to address the immediate supply chain 
challenges from this unprecedented economic recovery and building long-
term supply chain resilience for the future. USTR is aware of the 
concerns regarding the availability of grain-oriented electrical steel 
for distribution transformers and will continue to work with the U.S. 
Department of Energy, the U.S. Department of Commerce, and other U.S. 
Government agencies, as appropriate, to ensure that U.S. stakeholders' 
views on this important issue are taken into consideration. The U.S. 
Department of Energy has been assessing the supply chain risks for 
grain-oriented electrical steel and other transformer inputs and is 
considering new rules to raise the minimum efficiency standards for 
certain types of distribution transformers.

    Question. In 2020, the Department of Agriculture (USDA) and China's 
General Administration of Customs China (GACC) reached an agreement on 
a protocol for handling outbreaks of avian influenza, limiting China's 
highly pathogenic avian influenza (HPAI) bans for impacted U.S. States 
to 90-days post-virus elimination, disinfection, and cleaning. This was 
a huge win for the U.S. chicken industry, with China becoming its 
second-largest export market. However, China has failed to honor the 
2020 agreement since August 2022, preventing eligible States such as 
Arkansas, Kentucky, New Jersey, Oklahoma, Delaware, and North Carolina 
from resuming exports. I am not aware of any real substantive concerns 
raised by GACC. Additionally, other leading chicken producing States 
are on track to become eligible in the next couple of months, and there 
are serious concerns that they will receive the same unfair treatment 
from China. This issue is critical for the industry, with many of the 
products exported from these States flowing through South Carolina's 
export infrastructure. It is concerning that the Office of the United 
States Trade Representative (USTR) may not be willing to fight for 
proper enforcement of our trade agreements and support constituents in 
this critical industry.

    Can you tell me if you and other senior leaders have engaged China 
directly on this issue? If not, what is the plan moving forward with 
USTR and other agencies, including collaboration with USDA, to engage 
your Chinese counterparts?

    Answer. In our bilateral engagement of China, we have been using 
the consultation mechanism set forth in the Phase One agreement as well 
as other bilateral engagement in an effort to secure China's adherence 
to its obligations relating to HPAI, including specifically the need 
for GACC to permit the resumption of imports of poultry from HPAI-free 
states, consistent with the terms of the Phase One agreement. USTR and 
other relevant U.S. Government agencies at various levels have 
participated in this engagement, which has focused on multiple Chinese 
Government agencies, including GACC.

    Question. European leaders have made clear in public statements 
their intention to use the European Union (EU) digital regulatory 
agenda to preference European companies at the expense of American 
companies. This includes new rules and penalties that affect only a 
handful of U.S. companies while excluding EU competitors, new 
requirements that will prohibit U.S. cloud service providers from 
participating in the EU Government cloud services market--simply based 
on their headquarters location, and proposed rules to force U.S. 
companies to share sensitive and proprietary data with EU regulators 
and competitors. At a high level, the U.S. Government should demand the 
EU regulate its own companies in the same manner as American companies, 
such as in the Digital Markets Act and Digital Services Act and 
eliminate discriminatory aspects of pending measures, such as the EU 
Cloud Services Scheme and DATA Act.

    What are you doing to secure commitments from the EU to ensure 
American companies can compete on a level playing field in Europe?

    Answer. The Office of the U.S. Trade Representative has worked 
closely with the National Security Council and other Federal agencies 
to engage with the European Union on a range of issues related to EU 
digital economy regulation. One of the primary objectives of the Biden-
Harris administration is to ensure that the transatlantic marketplace 
remains open and that both U.S. and EU digital service providers can 
continue to offer their services in each other's markets. We are also 
working to ensure that the EU honors relevant commitments that it has 
made within the World Trade Organization. My team and I will continue 
to engage with the European Union on these important matters.

    Question. Americans for years have been shouldering the price 
burden of innovation for new prescription drugs while other countries 
around the world get a free ride.

    Does the Biden administration see a role for the Office of the 
United States Trade Representative (USTR) in addressing imbalances on 
this front? What tools does USTR have to curb international free riding 
when it comes to prescription drug pricing, and how is USTR currently 
engaging other nations on this issue?

    Answer. Access to health-care products can be hindered by domestic 
measures, particularly those that lack transparency, lack opportunities 
for meaningful stakeholder engagement, or appear to exempt domestically 
developed and manufactured medicines. USTR encourages trading partners 
to provide appropriate mechanisms for transparency, procedural and due 
process protections, and opportunities for public engagement in the 
context of their relevant health-care systems.

    Question. According to the National Institute of Health's National 
Institute on Drug Abuse, the fentanyl trade into the U.S. resulted in 
70,601 deaths in 2021. With the flow of fentanyl only increasing and 
the current public health emergency tied to opioids, I believe we need 
a whole-of-government approach to address this crisis.

    Does the Biden administration see a role for the Office of the 
United States Trade Representative (USTR) in disrupting the 
international fentanyl trade? What tools does USTR have to bring to the 
international fight against fentanyl financing and flows, and how is 
USTR currently engaging other nations (including China) on this issue?

    Answer. USTR recognizes that the illicit fentanyl drug trade 
constitutes an unusual and extraordinary threat to the national 
security, foreign policy, and economy of the United States and is 
committed to contribute to the U.S. government's holistic strategy to 
halt the rising toll of this epidemic on the American people.

    USTR is working with interagency partners, including the Office of 
National Drug Control Policy, to support the Federal Government's 
response to illicit fentanyl trade. USTR is committed to using existing 
tools to target key vulnerabilities in the illicit fentanyl supply 
chain and is engaged, along with partner government agencies, to halt 
the flow of illicit fentanyl in close cooperation with private industry 
and international partners.

                                 ______
                                 
               Questions Submitted by Hon. James Lankford
    Question. As I read the text of the critical minerals agreement 
with Japan, I am concerned that much of the content of this agreement 
simply reaffirms existing commitments and will have little substantive 
impact on our supply chain vulnerabilities vis-a-vis China. In order to 
pivot from China and diversify our sourcing of rare earths, we need to 
invest in alternative markets alongside our allies--not just sign 
documents about our intentions to work together. I recently introduced 
the Quad Critical Minerals Partnership Act with Senators Warner, 
Cornyn, and King in order to make those investments alongside Japan, 
India, and Australia.

    What coordination is USTR doing within the interagency, including 
with the Department of Commerce and the Development Finance 
Corporation, to complement this new trade agreement with substantive 
economic development policies that will incentivize and accelerate 
alternatives to China for critical minerals?

    In addition to this bilateral initiative with Japan, how does USTR 
plan to leverage the Quad to advance the President's trade agenda in 
the Indo-Pacific?

    What are the administration's goals within the context of IPEF 
negotiations to bolster supply chain resiliency for critical minerals 
and rare earth elements?

    Answer. Building on the 2019 United States-Japan Trade Agreement, 
the Japan Critical Minerals Agreement will strengthen and diversify 
critical minerals supply chains and promote the adoption of electric 
vehicle battery technologies. USTR coordinated closely with other 
agencies during negotiation of the Japan Critical Minerals Agreement, 
and we look forward to coordinating with Congress regarding economic 
policies that would increase our supply of critical minerals.

    We are also coordinating with Quad members to align on trade 
priorities, including in the context of IPEF negotiations.

    The IPEF seeks to advance resilience, sustainability, 
inclusiveness, economic growth, fairness, and competitiveness for the 
14 IPEF economies. We look forward to working with like-minded partners 
on developing secure, resilient supply chains that will withstand 
shocks such as pandemics, but also wars and shipping bottlenecks. The 
Department of Commerce is leading negotiations for the supply chains 
pillar, while USTR is also working to bolster supply chain resiliency 
through the trade pillar. The smooth movement of goods and services 
across borders needed to create resilient supply chains among IPEF 
countries requires enhanced disciplines related to trade facilitation, 
transparency measures, and widely accepted good regulatory practices.

    Question. The COVID-19 pandemic exposed our dependence on China for 
critical medical goods, including medical devices and personal 
protective equipment (PPE). One area of continued risk exposure is 
manufacturing for prescription drugs--both finished pharmaceuticals and 
pharmaceutical components, in some cases, more than 90 percent of those 
manufactured. This gives China undue leverage over the health security 
of the United States--and it also limits our ability to respond to any 
acts of aggression by the PRC in the days ahead.

    What are the administration's goals within the context of IPEF 
negotiations to bolster supply chain resiliency for prescription drugs 
and active pharmaceutical ingredients?

    What is the administration's strategy to leverage our existing free 
trade agreements and trade and investment framework agreements to 
reduce our risk exposure to China for pharmaceuticals and APIs?

    Answer. The IPEF seeks to advance resilience, sustainability, 
inclusiveness, economic growth, fairness, and competitiveness for the 
14 IPEF economies. We look forward to working with like- minded 
partners on developing secure, resilient supply chains that will 
withstand shocks such as pandemics, but also wars and shipping 
bottlenecks. The Department of Commerce is leading negotiations for the 
supply chains pillar, while USTR is also working to bolster supply 
chain resiliency through the trade pillar. Specifically, the smooth 
movement of goods and services across borders needed to create 
resilient supply chains among IPEF countries requires enhanced 
disciplines related to trade facilitation, transparency measures, and 
widely accepted good regulatory practices.

    USTR is currently engaged in discussions pursuant to various trade 
and investment framework agreements (TIFAs) with different trading 
partners with a goal to increase supply chain resiliency in the 
pharmaceutical sector by enhancing regulatory alignment, decrease 
technical barriers to trade, and increase transparency with our trading 
partners. Additionally, USTR is reviewing its existing free trade 
agreements to identify ways to further create a trading environment 
that is more resilient and sustainable and with sources of goods that 
come from diversified locations.

    Question. This administration has raised concerns about trade 
agreements because of jobs being shipped overseas to countries with low 
labor standards. While I understand those concerns, I do not believe 
they are relevant to a potential FTA with the United Kingdom. The UK 
has high labor standards and more restrictive climate standards than we 
do, so there is not that same risk of losing industry to a low-wage, 
low-standard partner after brokering a market access arrangement. If 
anything, an FTA would provide an opportunity to negotiate market 
access for our agricultural goods that the UK is currently blocking.

    How do you square this concern about low-wage, low-standard 
economies with the UK's solid track record in these areas?

    Why do you not view the UK as a natural fit for a trade agreement?

    Answer. The United States Trade Representative (USTR) has been 
actively engaging with the UK on ways the United States and UK can 
advance our mutual international trade priorities and deepen our trade 
relationship in a more inclusive, resilient and sustainable manner. 
Under the U.S.-UK trade dialogues we have been discussing a range of 
issues, including labor, as well as the environment, trade 
facilitation, supply chains, and addressing China's non-market policies 
and practices and economic coercion. I remain open to the best 
mechanism to formalize this bilateral trade engagement between the 
United States and the UK, whether through a trade agreement or other 
tools.

    Question. The administration has made ``rebuilding alliances'' a 
major focus of its foreign policy, yet I don't see anything in this 
trade agenda focused on negotiating new trade agreements as part of 
those alliances. I view USTR's task as twofold: negotiating new trade 
agreements, and enforcing the trade agreements we have on the books to 
make sure they're working. This administration has been weak on the 
negotiating side, which I think is a missed opportunity--particularly 
in regions with high levels of engagement by China, which has been 
identified in the administration's National Security Strategy and 
National Defense Strategy as our primary national security threat.

    How does the 2023 trade agenda advance the objectives of the 
National Security Strategy and the National Defense Strategy?

    Answer. The pandemic, followed by the unprovoked Russian invasion 
of Ukraine, exposed flaws in the traditional approach to trade. That 
approach prioritized trade liberalization, particularly through tariff 
elimination, and led to concentrated supply chains that failed to take 
into account geopolitical risk. In the United States, manufacturing had 
been deprioritized. As a result, Americans confronted shortages of a 
range of goods, including personal protective equipment for frontline 
workers. In response to the exposure of these flaws, the United States 
is leading the way in working with partners and allies to advance an 
approach to trade that prioritizes sustainability, resilience, and 
inclusion. This approach supports our national security and national 
defense strategies by recognizing geopolitical risk, diversifying 
concentrated supply chains, and building better economic relations with 
like-minded countries. In addition, USTR's trade engagements--including 
the U.S.-EU Trade and Technology Council, the U.S.-UK Dialogue on the 
Future of Transatlantic Trade, the Indo-Pacific Economic Framework, and 
the Global Sustainable Steel and Aluminum arrangement--are 
strengthening our relationships with our allies and are helping build 
new bridges in regions that are important to our economic and national 
security interests.

    Question. The administration made the decision to not include 
Taiwan in IPEF negotiations, which was disappointing. However, USTR has 
pursued the U.S.-
Taiwan 21st-Century Trade Initiative, which recently concluded its 
third round of negotiations.

    What outcomes can you share from the latest negotiating round with 
Taiwan?

    Answer. The United States and Taiwan, under the auspices of the 
American Institute in Taiwan (AIT) and the Taipei Economic and Cultural 
Representative Office in the United States (TECRO), have held one 
negotiating round for the U.S.-Taiwan Initiative on 21st-Century Trade 
in Taipei, Taiwan, from January 14-17, 2023. The negotiations were 
productive and on May 18, 2023, USTR announced that the United States 
and Taiwan, under the auspices of AIT and TECRO, had concluded 
negotiations on a number of chapters outlined in our negotiating 
mandate, and published the proposed agreement text. Those chapters are 
Customs and Trade Facilitation, Good Regulatory Practices, Services 
Domestic Regulation, Anticorruption, and Small and Medium-Sized 
Enterprises. The proposed agreement was signed by AIT and TECRO on June 
1, 2023.

    Moving forward, U.S. and Taiwanese officials, under the auspices of 
AIT and TECRO, will continue negotiations on other chapters under our 
negotiating mandate.

    Question. Last week, Honduras became the latest country to end 
diplomatic relations with Taiwan in favor of the PRC.

    What is your plan to include Taiwan in international trade forums 
alongside other nations to ensure our friends in Taiwan have a seat at 
the table?

    Answer. The administration is committed to finding ways to deepen 
our economic and trade relationship with Taiwan and to negotiate trade 
agreements with Taiwan, just like the United States does with other 
trade partners. The administration also continues to be highly 
supportive of Taiwan's participation in international trade forums, 
including at the WTO and in APEC.

    Question. Following Russia's invasion of Ukraine, the United States 
revoked Russia's most favored nation trade status.

    If China were to invade Taiwan in the future, would the 
administration support revoking China's preferential trade status as 
well?

    Answer. The administration supports cross-Strait peace and 
stability and opposes any unilateral changes to the status quo. In the 
event of a unilateral change in the status quo, the administration has 
a wide range of responsive actions to consider.

    Question. The International Trade Commission submitted a report to 
Congress earlier this month finding that nearly all of the costs of 
tariffs imposed during the Trump administration--both the 232 tariffs 
on steel and aluminum and the 301 tariffs on Chinese imports--were 
passed along to U.S. importers and had little to no effect on the 
exporter.

    Does the administration agree with this finding? Why or why not?

    Answer. The Commission's modeling suggests that the tariffs were 
passed along to U.S. importers in the short term. The model also finds 
that as those prices rose, the quantity of affected imports from China 
declined, leading to a significant decrease in their import value.

    The ITC identified 10 industries directly and most affected by the 
301 tariffs. For all 10 industries, the report estimates that section 
301 suppressed the value of imports from China by as much as 72.3 
percent (semiconductors) and increased the value of U.S. production by 
as much as 7.5 percent (household furniture and kitchen cabinets).

    Question. The biggest challenge we've faced since the 
administration took over is the migrant crisis at our southern border. 
CBP encountered more than 300,000 migrants last month.

    What strikes me is that many of the migrants coming to our border 
are from countries with whom we have a free trade agreement. For 
example, all three Northern Triangle countries are parties to the 
Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), 
which was negotiated by the Bush administration. Clearly, the potential 
of this partnership has not been fully realized.

    What mistakes have we made over the last 15 years that have 
inhibited CAFTA from having a bigger impact on the prosperity and 
stability of the Northern Triangle countries?

    How can we better utilize CAFTA as presently written to promote 
stable and resilient economic development in this region?

    During the Trump administration, we renegotiated NAFTA to update 
the provisions and adapt to modern challenges. Is the Biden 
administration open to renegotiating CAFTA and seeking to revise it as 
part of our strategy to get to the root causes of migration in the 
Northern Triangle?

    Does the administration support preserving Nicaragua's preferential 
trade status under CAFTA in light of human rights abuses committed by 
the Ortega regime?

    Answer: While trade has increased under the CAFTA-DR, global 
economic downturns--most recently from the pandemic--frequent natural 
disasters, and security issues such as narcotrafficking and gang 
violence have had severe negative impacts on the economies and 
development of partners in the region. Several CAFTA-DR countries, 
particularly in northern Central America, suffer from protracted social 
crises, extreme violence, and inadequate investment in education and 
infrastructure.

    Trade policy alone cannot deliver sustainable economic development, 
poverty alleviation, and social stability, but the CAFTA-DR is an 
integral part of the administration's efforts to address the root 
causes of migration.

    USTR is contributing to the Biden administration's whole-of-
government effort to address irregular migration at our southern 
border, to improve security, governance, human rights, and economic 
development in the region to meet longer-term challenges and create 
hope for a better future for Central Americans in their home countries.

    USTR engagement with CAFTA-DR partner countries has focused on 
trade capacity building (primarily in the areas of textiles and apparel 
and agricultural trade and climate resiliency) to strengthen regional 
supply chains, build sustainable and inclusive trade and economic 
opportunities and formal sector employment in the region. Capacity 
building and promoting better CAFTA-DR implementation help address 
shortcomings in Central American trade infrastructure and policy 
implementation that have undermined the CAFTA-DR benefits for the 
region. Through Central America Forward, USTR is also working with the 
Department of Labor and other agencies to advance protection of labor 
rights in the region to more comprehensively address the root causes of 
migration.

    With respect to Nicaragua, we share concerns about the crisis of 
democracy under the Ortega regime and have taken a number of actions, 
including withholding support for Nicaragua's participation in trade 
capacity building and technical assistance initiatives, and will 
continue to exclude Nicaragua from these benefits of CAFTA-DR and other 
initiatives.

    In addition, President Biden's October 2022 executive order 
provides new authority to sanction any person who operates or has 
operated in the gold sector of the Nicaraguan economy and any other 
sector as may be determined by the Secretary of the Treasury, in 
consultation with the Secretary of State. The EO also provides a 
framework to implement future measures that prohibit new U.S. 
investment in certain sectors in Nicaragua, the importation of certain 
products of Nicaraguan origin into the United States, or the 
exportation of certain items to Nicaragua.

    USTR has been and will continue to be an active participant in 
interagency deliberations on trade-related aspects of our approach to 
Nicaragua. We will continue to actively monitor the situation in 
Nicaragua, while also recognizing that the CAFTA-DR is critical to the 
well-being of the people of Central America.

    Question. When considering Trade Promotion Authority legislation in 
2015, the Senate unanimously passed an amendment requiring USTR to 
raise religious liberty issues as part of trade negotiations conducted 
under TPA auspices. Although TPA has expired, I hope USTR is continuing 
to prioritize the promotion of religious freedom for all in its 
engagements with trading partners--including in multilateral forums 
such as IPEF. Of the countries involved in IPEF, at least one of these 
countries is on the Special Watch List for religious freedom concerns 
by the State Department.

    How is your team raising religious freedom with countries that are 
part of IPEF?

    How is USTR advocating for religious freedom with countries 
holistically?

    Answer. The Ministerial Statement for IPEF Pillar 1 (Trade) 
establishes that the partners will pursue provisions and initiatives 
that benefit workers and ensure free and fair trade that contributes to 
promoting sustainable and inclusive growth for IPEF countries and the 
Indo-Pacific region. For the United States, inclusive trade discussions 
comprise advancing the benefits of the IPEF for underserved 
communities, including religious and ethnic minorities.

    Consistent with the President's trade agenda and USTR's strategic 
plan, USTR strives to ``develop equitable trade policy through 
inclusive processes.'' This entails identifying and striving to address 
barriers in order to achieve the consistent and systematic fair, just, 
and impartial treatment of all individuals, including those who belong 
to underserved communities. For the United States, ``underserved 
communities'' includes religious and ethnic minorities. In addition, 
USTR's expanded engagement includes building relationships and 
listening to the concerns of faith-based, community-based 
organizations.

    USTR also continues to monitor and fully enforce laws prohibiting 
the importation of goods made by forced labor and remains committed to 
fighting against the economic exploitation and human rights abuses 
committed against Uyghurs and other ethnic and religious minorities in 
the People's Republic of China (PRC).

                                 ______
                                 
                Questions Submitted by Hon. Steve Daines
                           protecting u.s. ip
    Question. In May of 2021, I joined my colleagues in expressing our 
concern to you over the TRIPS waiver for COVID-19 vaccines. This 
waiver--which you supported--gave China, Russia, Iran, and other 
countries access to highly advanced U.S. IP without the consent of U.S. 
companies.

    Your support of this waiver gives me serious concerns about your 
regard for the long-term health of our Nation's innovations across 
industries, particularly in biopharmaceutical innovations, and your 
dedication to protecting sensitive U.S. IP as you consider expanding 
the TRIPS waiver to include additional products.

    What specific industries and products are you considering including 
in a proposed expansion?

    What data are you collecting to inform this decision?

    What specific analyses are you conducting to ensure that any 
expansion of this waiver would not threaten our country's economy, our 
biopharmaceutical innovation, and our national security?

    What steps are you taking to protect American IP, whether from 
pharmaceuticals and defense, to small innovators and universities, from 
being stolen and abused by foreign adversaries?

    Answer. Under the June 2022 ministerial decision on the TRIPS 
Agreement, developed countries, a group that includes Russia, and 
countries with existing capacity to manufacture COVID-19 vaccines who 
have opted out from the decision, including China, are not eligible to 
benefit from this decision. The ministerial decision also does not 
apply to Iran, as Iran is not a member of the World Trade Organization 
(WTO).

    The ministerial decision, included a commitment to decide by 
December 17, 2022, whether or not to extend the decision to the 
production and supply of COVID-19 diagnostics and therapeutics. The WTO 
General Council later extended this deadline at its December 2022 
meeting.

    Over the course of the 5 months after the ministerial decision, 
USTR officials held robust and constructive conversations with 
Congress, government experts, a wide range of stakeholders, 
multilateral institutions, and WTO members. USTR published a summary of 
the diverse views heard during the 5-month consultation period on 
December 6, 2022. In addition, on December 16, 2022, I asked the U.S. 
International Trade Commission (USITC) to conduct an investigation and 
prepare a report of available data and information regarding access to 
COVID-19 diagnostics and therapeutics.

    My request to the USITC specifically asks that they solicit 
information on issues such as the relationship between intellectual 
property protection and corporate research and development 
expenditures, as well as the location of jobs associated with the 
manufacturing of diagnostics and therapeutics.

    With respect to advancing the interests of America's innovators and 
creators, among other things, USTR issues a Special 301 report each 
year. This report provides an opportunity to put a spotlight on foreign 
countries and the laws, policies, and practices that fail to provide 
adequate and effective IP protection and enforcement for U.S. 
inventors, creators, brands, manufacturers, and service providers, 
which, in turn, harm American workers whose livelihoods are tied to 
America's innovation- and creativity-driven sectors.
                                 india
    Question. What is USTR doing through the U.S.-India Trade Policy 
Forum or otherwise to address longstanding agricultural market access 
issues with India, including pulse crops?

    Answer. Addressing barriers to agricultural trade continues to be a 
priority for U.S. engagement with India. Through the U.S.-India Trade 
Policy Forum's Working Group on Agricultural Goods we are seeking to 
address a broad range of trade barriers in order to expand access to 
the Indian market for U.S. agricultural products, including pulse 
crops. The United States also continues to raise pulse crop access 
issues alongside other trading partners at the WTO.

                                 ______
                                 
                 Questions Submitted by Hon. Todd Young
    Question. The Government of Mexico's action to ban genetically 
modified corn and other biotech products is concerning for a host of 
reasons. The U.S. exported 15 million metric tons of corn to Mexico 
last year, and nearly all of it was genetically modified. This has 
implications not only for row crop farmers, but for livestock producers 
who depend on a grain supply to feed their animals, and then rely on 
stable market access. Jeopardizing access to the Mexican market will 
have rippling and detrimental effects on agriculture in Indiana, 
particularly in the corn and hog sectors.

    With the announcement of formal technical consultations with Mexico 
to address this action, how will you ensure that American farmers can 
depend on access to the Mexican market?

    How will you convey what is at stake with ignoring the science 
around biotechnology?

    Have you considered how other countries will look at Mexico's lack 
of science-based decision-making and decide to follow suit?

    Answer. On June 2nd, I requested dispute settlement consultations 
with Mexico under the United States-Mexico-Canada Agreement (USMCA). We 
continue to press for a science-based approach for all biotech products 
and transparent and predictable market access in Mexico. Products of 
agricultural biotechnology, including corn, have been safely used for 
human consumption and animal feed around the world, including in 
Mexico, for decades. We urge all our trading partners to follow a 
science-based approach to biotech products, which help farmers respond 
to pressing climate and food security challenges.

    Question. Related to supporting agricultural biotechnology, I am 
concerned with South Korea's regulations. Korea is the U.S.'s fifth 
largest agricultural export market, last year importing over $10.2 
billion worth of American corn, rice, wheat, soybeans, beef, dairy, 
pork, and other food and feed products. Korea has a history of an 
inefficient risk assessment system for biotechnology, and is extremely 
unpredictable. Because of this, South Korea is positioning to be the 
preeminent global threat to the introduction of new biotechnology 
traits and the adoption of new agricultural technologies.

    Under the U.S.-Korea Free Trade Agreement, how are you compelling 
South Korea to reform its current biotech risk assessment process, and 
to put in place a rational regulatory framework for gene-edited 
products?

    Answer. USTR has been engaging with Korea on biotechnology for 
several years through various channels, including the KORUS Committee 
on Sanitary and Phytosanitary Measures. USTR has consistently raised 
concerns over Korea's burdensome biotechnology approval process and 
urged Korea to adopt a more science-based, risk-proportionate approach 
to genome editing. USTR will continue to engage with Korea to enhance 
transparency, predictability, reliability, and efficiency, and to 
ensure its regulatory approval process is science- and risk-based.

    Question. I continue to hear concerns from my constituents 
regarding China's incessant circumvention, and all the tactics they use 
to mask the true origin of inputs and products so they can continue 
transnational subsidies. Luckily, the United States has an AD-CVD 
process to crack down on circumvention and help domestic enterprises 
compete with unfairly subsidized products. Unfortunately, our current 
process has limits and circumvention still occurs. I am currently 
working with Senator Brown on legislation to provide more tools to the 
Commerce Department so that we can more efficiently stop bad actors 
before their products are released into U.S. commerce.

    Do you agree that our current AD-CVD process has limits? What tools 
would enable agencies to better assist with exposing and limiting 
circumvention?

    Answer. USTR acknowledges that both circumvention and duty evasion 
schemes deployed by producers and exporters subject to U.S. AD-CVD 
measures are challenging to address in the U.S. system. Both the U.S. 
Department of Commerce and U.S. Customs and Border Protection have 
taken vital steps to enhance their efforts to combat these schemes, and 
USTR has also been supportive of those agencies efforts and using its 
negotiating authority to ensure that they have the necessary resources 
to address these issues. For example, in USMCA, the United States was 
successful in negotiating first-in-kind provisions regarding duty 
evasion cooperation, which allow U.S. Customs and Border Protection to 
conduct duty evasion verification visits in Canada and Mexico. USTR is 
actively involved in expanding this capability with other trading 
partners and looks forward to announcing future endeavors once 
negotiations are completed.

    Question. The proposed waiver of TRIPS protections for American-
made COVID-19 treatments and diagnostics will hand valuable U.S. 
technologies and IP to China and other foreign adversaries. China 
claimed that it will not avail itself of the TRIPS waiver for COVID-19 
vaccines, and you have unfortunately trusted this claim. Regardless, 
China has made no such promise with respect to the proposed waiver for 
treatments and diagnostics.

    How will you ensure that the administration will reject any 
expansion of the TRIPS waiver that includes China or other major 
foreign competitors as a beneficiary?

    Further, how can you guarantee that waiving TRIPS protections for 
COVID-19 therapeutics and diagnostics would never result in any 
indirect transfer of U.S. intellectual property (IP) to Chinese- or 
Russian-owned entities in developing countries, thus opening a backdoor 
for China and Russia to access American IP?

    Answer. I appreciate your concern and will continue to consult with 
Congress on this issue. Under the June 2022 ministerial decision on the 
TRIPS Agreement, developed countries, a group that includes Russia, and 
countries with existing capacity to manufacture COVID-19 vaccines who 
have opted out from the Decision, including China, are not eligible to 
benefit from this Decision. In the discussions at the WTO, I will 
continue to be clear-eyed about potential risks.

    Question. I welcome your work on the Indo-Pacific Economic 
Framework but remain concerned that the end product will have very 
limited benefits for the United States if market access is excluded. 
Our exporters will continue to fall further behind their competitors 
from the many countries still actively negotiating tariff reduction 
agreements in the region, and the ambition level of IPEF's non-tariff 
provisions may suffer if market access is excluded.

    Do you contemplate IPEF leading to market access negotiations? If 
so, why not have those negotiations now?

    Answer. At this time, the administration is not seeking to address 
tariff liberalization. However, in the trade pillar, we are working to 
include a mix of high-standard commitments and principles to address 
many longstanding non-tariff barriers that can, in practice, affect 
market access for U.S. enterprises, including MSMEs, seeking to operate 
abroad. We intend for the trade pillar to include clear and strong 
regional rules and standards that reflect our common interests and 
values and that promote our competitiveness and inclusive prosperity.

    Question. The issue of critical mineral supply is becoming 
increasingly more important as countries around the globe are putting 
in place strategies and policies to maximize their production or 
procurement. While the United States has a well-developed framework 
focusing on the security of critical minerals and rare earth elements, 
more needs to be done to lower China's hold on the entire value chain.

    How are you working with other Federal agencies, such as the 
Department of Energy, Department of Defense, and Department of the 
Interior, to develop a coordinated strategy to address critical mineral 
supply chain vulnerabilities?

    Answer. We coordinated with other agencies, including the agencies 
identified above, when negotiating the recently concluded Japan 
Critical Minerals Agreement, and have also sought their input in the 
negotiations with the EU announced by the White House on March 10, 
2023.

    We will continue to liaise with other agencies in any critical 
minerals-related efforts that may implicate U.S. trade policy or 
engagement with our trading partners.

    Question. While I welcome your recent work and coordination with 
Japan to sign a critical minerals agreement on March 28th, I want to 
stress the importance of expanding our reach.

    How are you collaborating with allies and trading partners to 
establish a more secure and sustainable global supply chain for 
critical minerals? Are there other ongoing efforts to establish or 
participate in multilateral forums or initiatives aimed at addressing 
critical mineral supply chain challenges?

    Answer. We are mindful of the importance of diversifying our global 
critical minerals supply chains, given China's present dominance. The 
Japan Critical Minerals Agreement is an important step, and is meant to 
complement other bilateral and plurilateral efforts. For instance, both 
Japan and the United States are members of the Minerals Security 
Partnership, an initiative launched in 2022 that aims to strengthen 
critical minerals supply chains. Additionally, as the White House 
announced on March 10, 2023, we are now engaged in negotiations with 
the EU regarding a critical minerals agreement.

                                 ______
                                 
               Questions Submitted by Hon. John Barrasso
    Question. The administration is currently engaged in a number of 
trade initiatives: the Indo-Pacific Economic Framework; the Americas 
Partnership for Economic Prosperity; the U.S.-Taiwan Initiative on 
21st-Century Trade; the U.S.-Kenya Strategic Trade and Investment 
Partnership; expansion of the World Trade Organization TRIPS Waiver; 
and the Critical Minerals Agreements with Japan and the EU.

    Article I, section 8 of the Constitution gives Congress clear 
authority over international trade. Despite Congress's clear 
constitutional authority over trade matters, the administration does 
not intend to seek congressional approval for any of these initiatives.

    Can you confirm that none of these initiatives will come before 
Congress for approval?

    Why doesn't Congress's constitutional authority over international 
trade apply to any of these initiatives?

    And do you believe partisan executive agreements are more durable 
and meaningful than bipartisan initiatives approved by Congress?

    Answer. USTR does not anticipate concluding our negotiation in any 
of these initiatives in a way that would require Congress to change 
U.S. law. As such, USTR plans on following its longstanding practice of 
relying on its authority granted by Congress in 19 U.S.C. 2171 to 
negotiate and enter into agreements with these foreign partners on 
behalf of the United States as USTR has done on numerous occasions 
across administrations for at least the last 30 years.

    Congress is USTR's constitutional partner on trade, and I am 
committed to working with Congress on all of these initiatives. In this 
regard, USTR has embarked on an unprecedented level of transparency and 
consultation with Congress with regard to all of these initiatives. In 
particular, USTR has consistently engaged--on a bipartisan basis--with 
Congress throughout the development of all these initiatives with 
members, their staff, and the staff of our congressional committees of 
jurisdiction. USTR has further consulted with our congressional 
committees of jurisdiction on all draft U.S. negotiating text proposals 
prior to sharing them with stakeholders outside the U.S. Government and 
with foreign partners. USTR has continued to consult with Congress 
during the course of negotiations so Congress is engaged as USTR 
negotiates with partners.

    In conjunction with working with Congress on these initiatives, 
USTR has regularly engaged with the public, including by: seeking 
public comment from Federal Register notices; publishing ministerial 
statements and public summaries of proposed U.S. texts; and holding 
public stakeholder engagement sessions during negotiating rounds. We 
will continue outreach to the public, encouraging, in particular, the 
participation of stakeholders who have not traditionally had a voice in 
trade and economic policy.

    We seek such extensive input from Congress, stakeholders, and the 
general public not just because it is an important thing to do but 
because these agreements will be durable and meaningful only if they 
are the product of broad-based input.

    Question. The President's 2023 trade agenda is full of dialogues, 
frameworks, and lofty aspirational goals. But there's no mention of 
seeking new free trade agreements (FTAs) with our allies despite their 
clear benefits to U.S. farmers, ranchers, manufacturers and consumers. 
Instead of exporting American beef, energy, agriculture products or 
technology.

    The administration continues to be hyper-focused on exporting 
labor, social, and environmental policies via frameworks and dialogues. 
Just like last year, a very notable omission from the trade agenda is 
market access reform. Members on both sides of the aisle have raised 
concerns about market access reform, but those concerns have been 
routinely ignored.

    Why does the administration refuse to seek market access reform?

    And are members of Congress wrong in calling on the President to do 
so?

    Answer. USTR has produced agreements that increase market access 
for American manufacturers, farmers, and ranchers and continues to work 
on new initiatives that will support American businesses access 
markets.

    For agricultural producers, USTR has secured real wins over the 
past few years, and U.S. agricultural exports reached a record $202 
billion in 2022. Recent tangible market access outcomes for agriculture 
include bringing into force an agreement with Japan to export more U.S. 
beef, signing a tariff-rate quota agreement with the EU to open markets 
for rice, wheat, corn shellfish, and beef and opening access for pork 
and pecan exports to India.

    In addition, USTR reached agreement in 2021 with the European Union 
(EU) related to the section 232 steel and aluminum tariffs which 
resulted in the EU suspending tariffs on U.S. products. USTR also 
reached agreement with the EU and the United Kingdom on the 17-year-old 
large civil aircraft dispute, which protected American jobs and 
addressed distortive practices non-market practices that undermine the 
aviation sector.

    USTR has launched the Indo-Pacific Economic Framework, the U.S.-
Taiwan Initiative on 21st-Century Trade, and the U.S.-Kenya Strategic 
Trade and Investment Partnership, among other initiatives. Tariff 
liberalization is not currently being considered as part of these 
initiatives but these new engagements present opportunities to enhance 
trade and investment. In addition, USTR is negotiating to include 
provisions in these agreements to combat non-tariff and regulatory 
barriers that limit access to markets. To address specific barriers of 
concern and produce tangible benefits for U.S. agricultural producers, 
USTR will seek to promote the use of science- and risk-based decision 
making to maintain and expand market access for U.S. agricultural 
exports.

    Moving forward, USTR will continue expanding market access for 
American manufacturers, farmers, and ranchers.

    Question. Russia's illegal, unprovoked invasion of Ukraine showed 
the world how energy can be wielded as a geopolitical weapon. Countries 
around the globe continue to scramble to find new energy supplies to 
replace Russian oil, coal, natural gas, and nuclear fuel. President 
Biden's 2023 Trade Agenda once again fails to outline a strategy to 
help our allies be more energy secure.

    America is a global energy superpower. We should act like it, 
especially through trade. Wyoming has an abundance of coal, oil, 
natural gas, and uranium. The U.S. can provide our allies around the 
world with reliable, affordable, and secure energy resources. I see no 
plan or urgency to do this in the President's Trade Agenda. This is a 
mistake.

    How can we leverage American energy in international trade to 
counter our adversaries like Russia who use their own energy exports as 
a weapon?

    Answer. USTR shares your concern about the effects of Russia's 
illegal, unprovoked invasion of Ukraine on our energy security and the 
energy security of our allies. We actively support the growth of the 
U.S. energy industry and the export of U.S. energy products, 
technologies, and services all over the world to help our trading 
partners meet their energy security, energy access, and climate goals. 
Coordinated policy actions, strategies and response mechanisms can 
effectively help in ensuring and promoting diversified, risk-free, 
resilient, and secure supply of energy sources and critical raw 
materials. Universal energy access, accelerating adoption of innovative 
and zero-emission energy technologies, promoting domestic and overseas 
investments, and enhancing transnational grid connectivity and 
mitigating market volatility are key to reducing market volatility, 
improving energy security, and leveraging American energy to counter 
our adversaries.

    Question. Thank you for initiating consultations with Mexico on 
energy issues affecting American companies. As you know, Mexico started 
discriminating against American private energy investment in Mexico 
almost as soon as the U.S.-Mexico-Canada Agreement (USMCA) was enacted. 
Mexico's actions deliberately disadvantage American energy investments 
and jobs. To me, these are clear, flagrant violations of USMCA. It is 
my understanding that the U.S. was able to request a dispute resolution 
panel in October but that has not happened. At this point, it seems 
clear to me that Mexico has no intention of changing their behavior and 
I believe the time to request a formal dispute resolution panel is 
overdue.

    Why haven't you requested a dispute resolution panel with respect 
to Mexico's actions against American energy?

    And is this a step you intend to take in the near future?

    Answer. I share your concerns that certain of Mexico's energy 
measures undermine U.S. companies and U.S.-produced energy in favor of 
Mexico's state-owned electrical utility and state-owned oil and gas 
company. That is why in July 2022 I requested USMCA chapter 31 
consultations with Mexico regarding those measures. We are engaging 
with Mexico on specific and concrete steps Mexico must take to address 
the concerns set out in our consultations request. It remains our goal 
to seek a solution with Mexico that addresses our serious concerns. 
However, should Mexico prove unable or unwilling to address our 
concerns through these consultations, the United States can make use of 
enforcement options under the USMCA.

    Question. I have long been skeptical of the effectiveness of the 
section 301 tariffs on over $300 billion in Chinese goods. American 
families and businesses are all struggling with inflation and the high 
cost of goods and services. While I understand the need to crack down 
on unfair Chinese trade practices, I believe these tariffs are simply 
making a bad situation worse for all Americans. I don't see where these 
tariffs have significantly altered Chinese behavior.

    When will USTR's statutory review of the section 301 tariffs be 
complete?

    Answer. As part of the 4-year review, USTR requested public views 
on the effectiveness of the actions in achieving the objectives of the 
investigation into China's acts, policies and practices related to 
technology transfer, intellectual property, and innovation; other 
actions that could be taken; and the effects of the actions on the 
United States economy, including U.S. consumers. USTR expects to 
complete the 4-year review in the fall of this year.

    Question. Why hasn't USTR reopened an exclusion process for these 
tariffs?

    Answer. Within the 4-year review, USTR is reviewing the overall 
structure of the tariffs, including which products should be subject to 
additional duties. As part of the public comment process, submitters 
were requested to submit comments on whether certain tariff headings 
should remain covered by the actions or removed. USTR continues to 
consider additional exclusion processes, as warranted.

    Question. The U.S. imports more beef from Brazil than any other 
country according to the U.S. Department of Agriculture. In January 
2023, U.S. beef imports from Brazil are already up 4.83 percent from 
2022. On February 22, 2023, there was a confirmed case of atypical 
bovine spongiform encephalopathy (BSE) in the northern state of Para, 
Brazil. BSE in the U.S. is still heavily regulated to assure consumers 
and our international trade partners that U.S. beef is safe. The test 
samples were submitted to the World Organization for Animal Health 
(WOAH) but the World Organization for Animal Health report indicates 
that the event started on January 18, 2023. That is a difference of 35 
days where BSE was not confirmed in Brazil. Brazil has a history of 
delayed reporting of atypical BSE cases, with two other instances in 
2021. This delay in reporting of BSE cases raises serious concerns over 
the credibility of Brazil's food safety and animal health systems. 
Especially with an increase of Brazilian beef imports into the U.S. in 
the last year. The impacts that these concerns can have on U.S. cattle 
herds and public health are severe.

    Has the United States addressed this issue with the government of 
Brazil?

    How is the administration holding Brazil accountable for its 
failure to comply with World Organization for Animal Health standards?

    How is Brazil's Government working with the U.S. on beef products 
imported into the U.S. since their case of atypical BSE on February 22, 
2023?

    Answer. It is critical that beef imported from Brazil meets U.S. 
requirements. We will continue working with the U.S. Department of 
Agriculture (USDA) Animal Plant Health Inspection Service (APHIS) and 
the Food Safety Inspection Service (FSIS) to ensure that Brazil follows 
relevant international standards and guidelines and that the beef it 
exports to the United States complies with U.S. animal health and food 
safety requirements.

    Question. With the rising costs of health care and the continued 
need to secure our medical supply chain, U.S. policies should not 
contribute to making these two ideals harder to achieve. Under your 
leadership, USTR has extended 301 exclusions for certain medical 
devices and components related to the COVID-19 pandemic.

    Is USTR doing anything to ensure medical devices and medical device 
components unrelated to COVID-19 are granted exclusions from these 
tariffs?

    Answer. The China section 301 tariffs are currently undergoing a 4-
year statutory review. As part of this review, USTR requested public 
views on the effectiveness of the actions in achieving the objectives 
of the investigation into China's acts, policies, and practices related 
to technology transfer, intellectual property, and innovation; other 
actions that could be taken; and the effects of the actions on the 
United States economy, including U.S. consumers. Within the 4-year 
review, USTR is reviewing the overall structure of the tariffs, 
including which products should be subject to additional duties. To 
that end, through the public comment process, submitters were requested 
to submit comments on whether certain tariff headings should remain 
covered by the actions or removed. Additionally, USTR continues to 
consider additional exclusion processes, as warranted.

                                 ______
                                 
              Questions Submitted by Hon. Marsha Blackburn
    Question. In May 2022, the USTR began its statutory 4-year review 
of the section 301 actions taken against China. As part of this review, 
the USTR solicited responses from the domestic industry as to whether 
the tariffs should be continued. A portal was also opened to allow 
other interested parties to submit comments regarding the effectiveness 
of the tariffs, the effect on the economy and consumers, and other 
potential actions that could be taken.

    Will you provide a detailed timeline on when you expect this review 
to be completed?

    Answer. USTR expects to complete the 4-year review in the fall of 
this year.

    Question. Companies granted another exclusion in March 2022 could 
only receive tariffs reimbursements back to October 12, 2021, even 
though the tariffs had been reimposed on January 1, 2021.

    Do you, or this administration, have any thoughts on including 
retroactivity provisions in future rounds of exclusions?

    Answer. As part of the 4-year review, we are considering the 
effectiveness of the tariffs and their current structure. We are also 
looking at the impacts of the tariffs on consumers, U.S. workers, and 
the economy, among others. If appropriate, we will consider whether an 
additional exclusions process may be warranted, and what that process 
might look like based on the findings during the review on impacts to 
consumers, workers, and U.S. industries.

    Question. Does Customs and Border Protection have the 
administrative authority to suspend liquidations and provide full 
retroactively for 301 tariffs?

    Answer. For this question, I would have to refer to CBP and to the 
Department of Justice. The question is subject to litigation regarding 
the section 301 tariffs.

    Question. Can you provide a timeline on when USTR plans to 
implement the USMCA Dispute Settlement Panel's unanimous decision on 
Automotive ROO/RVC Calculations?

    Answer. We are actively engaging with Mexico and Canada regarding 
the panel's decision in the USMCA Autos ROOs dispute. Among other 
issues, we are discussing ways to gain insight into the impact that 
implementation of the panel's decision would have on investment and 
jobs in North America. Our discussions with Mexico and Canada on these 
issues will progress.

    Question. In 2018, Meco, a charcoal grill manufacturer located in 
Greenville, TN, submitted a comment to the USTR to levy a 25-percent 
duty on charcoal grills in response to the announcement of the 301 
tariffs. In response, duties were levied on two components Meco 
purchased to produce the Americana Walk-A-Bout grill. However, duties 
were not levied on finished charcoal grills being imported from China. 
A 25-percent duty was put on gas grills and electric grills. In 2022, 
during the USTR's 4-year statutory review of the section 301 tariffs, 
Meco again submitted a comment asking for a 25-percent duty to be 
levied on imported charcoal grills. Furthermore, Meco has been subject 
to intellectual property theft since 1999 and has filed multiple suits 
against intellectual property right thefts. To make matters worse, they 
have provided evidence of their grills being shown in showrooms in 
China and online retailers such as Alibaba.

    How are you addressing this situation as you continue your 4-year 
review?

    Answer. China has a well-established track record of conducting 
unfair trade practices to acquire U.S. technologies and intellectual 
properties. The 4-year review will include an examination of the 
effectiveness of the actions in achieving the objectives of the 
investigation into China's acts, policies, and practices related to 
technology transfer, intellectual property, and innovation. USTR will 
also consider other actions that could be taken to achieve the 
objectives of the investigation. Additionally, USTR is reviewing the 
overall structure of the tariffs, including which products should be 
subject to additional duties. To that end, as part of the public 
comment process, submitters were requested to submit comments on 
whether certain tariff headings should remain covered by the actions, 
removed, or added.

    Question. How are you dealing with intellectual property theft from 
Chinese companies, and what are your plans to curb this ongoing abuse?

    Answer. We continue to press China to address a range of 
intellectual property (IP) enforcement concerns, including forced or 
pressured technology transfer and trade secret theft. China remains on 
the Special 301 Priority Watch List in 2023 and is subject to 
continuing monitoring pursuant to section 306 of the Trade Act of 1974, 
as amended (19 U.S.C. Sec. 2416). Under section 301 of the Trade Act of 
1974, as amended (19 U.S.C. Sec. 2411), we have been taking action to 
address a range of unfair and harmful Chinese acts, policies, and 
practices related to technology transfer, IP, and innovation. We intend 
to use the full range of tools we have and develop new tools as needed 
to defend American economic interests from harmful policies and 
practices.

    Question. Do you commit to reviewing Meco's comments thoroughly and 
providing them with complete and detailed answers to their questions?

    Answer. All comments submitted as part of the public comment 
process will be reviewed and given full consideration.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    This morning the Finance Committee is joined by Ambassador Tai to 
discuss the trade agenda for the year ahead.

    The Biden administration, from the get-go, had a difficult job to 
do with respect to trade. The Trump administration's chaotic approach 
turned some of our trade rivals into outright adversaries, and many of 
our friends into rivals. Now the United States needs to kick into a 
higher gear with smarter, more innovative approaches to trade, which 
will deliver real results for American workers, farmers, and 
businesses.

    There are big issues to address. For example, China continues to 
put up barriers to American products and American values, while ripping 
off jobs using forced labor and undermining free speech. Its 
discriminatory model is spreading. Even our allies in the European 
Union and Canada are drafting laws intended to limit our digital 
companies' ability to do business in their jurisdictions while 
shielding their own companies.

    Today, I'm outlining a three-part strategy to get more Americans 
back in the winner's circle. First, the administration needs to ramp up 
enforcement of the trade laws that are already on the books--across the 
board.

    Let's start with USMCA. Senator Brown and I fought for stronger, 
faster-acting enforcement tools like the rapid response mechanism. 
That's part of what makes USMCA the most pro-labor trade agreement in 
U.S. history. Ambassador Tai has used the Brown-Wyden mechanism to get 
some key wins to stop labor violations in Mexico. And she's worked to 
help Pacific Northwest dairy farmers get into the Canadian market.

    Now Ambassador Tai needs to go further and enforce every provision 
of every chapter of USMCA. An example: Mexico is flouting its USMCA 
obligations by shutting out American renewable energy providers. It's 
bad for the economy and the environment. During last year's trade 
agenda hearing, I asked Ambassador Tai to take action. The U.S. did 
request consultations with Mexico in July 2022, but 8 months have 
passed. American clean energy producers are still waiting for access. 
In my view, it's long past time to say enough is enough and escalate 
this into a real dispute settlement case.

    The administration also needs to step up enforcement beyond USMCA 
to defend American workers and businesses from unfair trade practices, 
wherever they are happening. To that end, the Biden administration has 
yet to bring a single case before the WTO. There's no question that the 
WTO needs reform, but if the U.S. doesn't press its case, we're stuck 
on defense. I want this country playing offense on trade.

    Second, the administration needs to make opening export markets a 
priority. USMCA is proof that U.S. trade policy can raise the bar on 
labor and environmental standards--and bust down barriers to American 
exports at the same time.

    However, I have real concerns that USTR isn't doing enough to break 
down barriers our exporters face. For example, there's old red tape 
preventing eastern Oregon potato farmers from shipping fresh potatoes 
into Japan. That's an estimated $150 million market. Pacific Northwest 
apples and pears are blocked from the behemoth Australian market. 
Oregon wheat--upwards of 90 percent of which is exported--suffers from 
high tariffs in markets around the Pacific Rim. Vietnam has a litany of 
restrictive digital practices that hurt Oregon start-ups. The 
administration should be taking every opportunity to fix these issues--
but it isn't clear USTR is even discussing them as part of its Indo-
Pacific Economic Framework.

    I'll draw a line here: the U.S. cannot conclude agreements with 
Japan, Indonesia, or the EU that leave issues facing our exporters 
unaddressed.

    Third, getting trade done right will require creative approaches to 
new challenges. Whether it's shoring up our supply chains, promoting 
access to critical minerals, or addressing climate impacts of leading 
industries, smart trade policies can be part of the solution. I'm glad 
Ambassador Tai and her team are thinking outside the box, but what's 
needed are real answers on how her proposals will work in practice.

    The administration must deliver new markets--like the Middle East 
and Africa--and trade in new products--like renewable technology and 
digital services--in a way that quickly pushes the American economy 
forward. Meeting that challenge will require strategy with our allies 
and partnership with Congress.

    That brings me to my final point. The executive branch has begun to 
embrace a go-it-alone trade policy. Let me be clear: Congress's 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. It's my 
expectation that Ambassador Tai and this committee can begin to chart a 
new path forward when it comes to transparency, consultation, and 
ultimately, approval of trade agreements. I appreciate Senator 
Menendez's leadership to get us there.

    I want to thank Ambassador Tai for joining the committee today, and 
I look forward to our discussion.

                                 ______
                                 

                             Communications

                              ----------                              

                    ACT | The App Association et al.
March 20, 2023

The President
The White House
1600 Pennsylvania Ave., NW
Washington, DC 20500

Dear Mr. President:

    We write to you in advance of your upcoming visit to Ottawa to 
express our concerns about several measures that will undermine the 
ability of U.S. companies to fairly compete in the Canadian market. We 
urge you to raise these issues during your visit, with a view toward 
ensuring that Canada fully honors its international commitments.

    The undersigned organizations strongly support the U.S.-Canada 
economic relationship. The United States, through many of our member 
companies, is Canada's largest investor, accounting for 44 percent of 
total FDI ($420 billion as of 2020).\1\ Furthermore, Canada has long 
been a strong U.S. partner and ally, like-minded in its approach to 
evidence-based regulation and market-economy principles.
---------------------------------------------------------------------------
    \1\ https://www.state.gov/reports/2022-investment-climate-
statements/canada/.

    The United States-Mexico-Canada Agreement (USMCA) was a signature 
bipartisan effort, and your Administration has rightly called USMCA 
enforcement a top priority. This is particularly true with respect to 
modernized enforcement mechanisms and a robust digital trade chapter. 
We strongly believe that the USMCA can raise standards in many areas--
agricultural market access, digital trade, environmental standards, 
---------------------------------------------------------------------------
labor rights, and services access.

    However, we are concerned that Canada is pursuing a number of 
problematic proposals and actions that could significantly limit the 
ability of U.S. companies to export their goods and services and fairly 
compete in the Canadian market. It is critical for the United States to 
hold Canada accountable to its USMCA commitments to ensure the 
continued success of this important agreement. Relatedly, Canada's 
proposed policy approaches would impede ongoing efforts to drive North 
American economic competitiveness, including the North American 
Leaders' Summit and the Americas Partnership for Economic Prosperity 
(APEP).

Digital Services

    Canada is a key market for U.S. digital services exports, as it 
generated $45.8 billion in 2020--which represented 86.7% of U.S. 
services exports to Canada that year.

    Unfortunately, Canadian policymakers continue to threaten the 
introduction of a discriminatory and retroactive digital services tax 
(DST) targeted at U.S. companies, despite its endorsement of the 
Organisation for Economic Co-operation and Development (OECD)/G20 
Inclusive Framework, where 138 countries have agreed not to enact 
unilateral DSTs while negotiations on international taxation of digital 
services are ongoing (the ``standstill''). If passed, this DST is 
estimated to collect upwards of $4 billion over five years, primarily 
from U.S. companies.\2\ Canada's pursuit of a DST would set a harmful 
precedent for other Inclusive Framework participants to adopt similarly 
targeted taxes on U.S. digital services.
---------------------------------------------------------------------------
    \2\ https://www.pbo-dpb.ca/en/publications/LEG-2122-007-S--digital-
services-tax--taxe-services-numeriques.

    In addition to the DST, Canada has advanced other domestic 
initiatives that target U.S. technology companies and raise concerns 
under the USMCA, such as the Online Streaming Act (C-11), which seeks 
to compel U.S. streaming services and social media platforms to fund 
and/or promote Canadian content on their platforms via extraterritorial 
regulatory agency actions. Consequently, U.S. content creators--
regardless of whether the content creator is an established publisher 
or an individual content creator--will be disadvantaged on platforms. 
Depending on the regulatory requirements for funding and technical 
requirements for promoting Canadian content, the cost of doing business 
in Canada will increase for U.S. online streaming services and social 
media platforms. This cost will ultimately trickle down to Canadian 
consumers, who will also experience less choice and personalization on 
---------------------------------------------------------------------------
the platforms.

    Furthermore, by expanding regulatory schemes designed for the 
traditionally restricted world of broadcasting to the inherently open 
nature of the Internet, C-11 could have disastrous consequences for 
content production and distribution and could inspire other countries 
to implement similar content-preference schemes. This would have 
negative consequences for Canadian creators themselves who are prime 
beneficiaries of the investment and global distribution platform 
offered by U.S. suppliers. For these reasons, we are especially 
concerned with the Canadian government's insistence on including user-
generated content within the scope of C-11.

    Another bill, the Online News Act (C-18), likely would require a 
narrow range of U.S. digital companies to pay Canadian news 
organizations and broadcasters for the right to display news stories, 
headlines, snippets, and links. Canada's Parliamentary Budget Office 
estimates that in-scope companies would need to pay over $320 million 
annually to Canadian firms under this legislation, primarily to 
broadcasters.\3\ There has been no indication that any Canadian, 
Chinese, or other non-U.S. digital companies will be subject to this 
measure. Therefore, this policy raises significant national treatment 
and performance requirement concerns under the USMCA.
---------------------------------------------------------------------------
    \3\ https://www.pbo-dpb.ca/en/publications/RP-2223-017-M--cost-
estimate-bill-c-18-online-news-act--estimation-couts-lies-projet-loi-c-
18-loi-nouvelles-ligne.

    Given the momentum behind each of these three proposed pieces of 
legislation, which could pass this year, urgent action is needed to 
review and mitigate any potential discriminatory effects on U.S. 
technology companies. As bipartisan members of Congress have argued, 
the U.S. government should ensure that the USMCA is enforced to avoid 
---------------------------------------------------------------------------
these negative outcomes for North American strategic interests.

Customs and Trade Facilitation

    The Canadian Border Services Agency (CBSA) is pursuing several 
concerning changes to customs procedures and practices that may 
conflict with Canada's customs and trade facilitation obligations in 
the USMCA and the World Trade Organization's Trade Facilitation 
Agreement.

    The CBSA Assessment and Revenue Management project, better known as 
CARM, is a multi-year initiative to change the Canadian importation 
process. While ostensibly implemented to streamline the border process, 
several aspects of the new CARM system require more complicated 
processes and increase the customs formalities required for informal 
entries. Canada is pursuing an aggressive implementation time frame 
(Oct. 2023) that could increase complexity at the border, with policies 
for low-value shipment clearance still largely undefined. The United 
States should encourage CBSA to extend the rollout and continue working 
with various stakeholders, especially U.S. small and medium-sized (SME) 
traders, with an eye toward truly simplifying customs procedures.

    Last year's budget implementation bill (Bill C-19) made changes to 
Canada's Customs Act that will, among other things, require express 
carriers to take on new obligations and potential liabilities when 
delivering goods into Canada. These changes will have significant 
impacts, particularly for SME traders such as those who infrequently 
import small numbers of e-commerce shipments into Canada. For example, 
carriers in those instances could be liable for any additional taxes, 
duties, penalties, and other costs for up to four years after 
importation and would have to seek reimbursement from the shipper. As a 
result, shifting such significant financial and legal risk to carriers 
is likely to raise costs and cause unintended consequences for SMEs 
that rely heavily on these services. Taken together, in their current 
form these changes could further disrupt supply chains and increase 
costs for traders of all sizes on both sides of the border.

USMCA Implementation

    We join with Senate Finance Committee Chairman Wyden and Ranking 
Member Crapo in commending USTR for its continued effort under the 
USMCA dispute settlement system to open Canada's dairy market to U.S. 
producers. The United States, Canada, and Mexico should work together 
to achieve full and timely compliance on other the full range of 
implementation issues so that the full potential of USMCA can be 
achieved. We encourage the Administration to continue to consult with 
industry and other stakeholders to identify implementation issues, 
develop an enforcement plan, and assess progress in addressing 
measures.

Regulatory Cooperation

    Discussions with Canada should focus on enhancing regulatory 
compatibility, especially in how Parties are implementing related USMCA 
provisions. Such discussions should focus on risk-based approaches to 
the assessment of regulations, including assessment and risk management 
methodologies, tools, and models, and on the development of specific 
risk assessments. Stronger cooperation in this area would make an 
outsized impact relative to national approaches and would support 
further trade and investment in the North American economy. For 
example, last year Canada proposed new regulations on a type of flame-
retardant (DBDPE) commonly used in a wide range of products including 
vehicles, aircraft, information and communications technology (ICT) 
equipment, and appliances. The restrictiveness of Canada's regulatory 
approach is not supported by the available science and would 
significantly disrupt U.S.-Canadian trade and impair supply chain 
resiliency in several critical sectors. In addition, further regulatory 
cooperation between the U.S. and Canada is necessary to ensure full 
implementation of USMCA provisions on combating marine litter, 
including plastics and microplastics. The principles of the risk-based 
approach need to be the prism through which both countries approach the 
international negotiations relating to plastic waste.

Conclusion

    Timely engagement from U.S. political leadership is also 
particularly critical as Canada seeks to join the U.S.-led Indo-Pacific 
Economic Framework for Prosperity, and as work advances on APEP. 
Industry appreciates the work of the Administration to pursue high-
standard agreements and reinvigorate multilateral initiatives to 
deliver the benefits of free and fair trade to workers and believes 
Canada could play a positive role in this initiative. Addressing these 
measures now will ensure that the United States and Canada can work 
together to model desired policy approaches in IPEF, APEP, and other 
multilateral efforts.

    It is critical for the United States Government to hold Canada to 
its trade commitments and to underscore the negative global precedent 
that would be set if Canada implements these measures in their current 
form.

            Sincerely,

ACT | The App Association
American Chemistry Council (ACC)
Coalition of Services Industries (CSI)
Computer and Communications Industry Association (CCIA)
Express Association of America (EAA)
Information Technology Industry Council (ITI)
National Foreign Trade Council (NFTC)
Software and Information Industry Association (SIIA)
TechNet
United States Chamber of Commerce
                  American Coatings Association, Inc.

                   901 New York Avenue, NW, Suite 300

                          Washington, DC 20001

                             T 202-462-6272

                             F 202-462-8549

                         https://www.paint.org/

March 27, 2023

The Honorable Ron Wyden
Chair
U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510

The Honorable Mike Crapo
Ranking Member
U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510

Re: Hearing on the Biden Administration's 2023 Trade Policy Agenda with 
United States Trade Representative Ambassador Tai on March 23, 2023 
from American Coatings Association, Inc. (Heidi K. McAuliffe, Vice 
President of Government Affairs)

Dear Chairman Wyden and Ranking Member Crapo:

As you evaluate testimony from U.S. Trade Representative, Ambassador 
Katherine Tai on the Administration's 2023 Trade Policy agenda, the 
American Coatings Association (ACA) and the more than 315,000 employees 
in the paint and coatings industry, would like to highlight the 
importance of the ``Miscellaneous Tariff Bill'' (MTB) package. The MTB 
process has been stalled too long, and ACA urges Congress to take 
legislative action on the MTB package.

ACA is the premier trade association dedicated to advancing the 
interests of the coatings industry and represents paint and coatings 
manufacturers, suppliers, distributors, and technical professionals. 
Many of today's paints and coatings may go unnoticed by the consumer, 
but they play immeasurably valuable roles in delivering high-quality 
foodstuffs, durable goods, housing, furniture and thousands of other 
products to market.

As you know, the MTB will temporarily eliminate and reduce border taxes 
on a set of products that have been found through a transparent and 
rigorous process at the U.S. International Trade Commission (USITC) to 
not to be produced at all or in sufficient capacity in the United 
States. Many raw materials used in paint and coatings formulas are 
produced solely outside of the United States. Without passage of the 
MTB, American consumers will pay directly and/or indirectly hundreds of 
millions of dollars each year in government-imposed import taxes on 
products not made or available in the United States, including those 
needed by the paint industry.

Based on analyses by the National Association of Manufacturers, the MTB 
would eliminate import tariffs of more than $1.5 billion over three 
years (with full retroactivity to January 2021), bolstering 
manufacturers and other businesses in the United States, especially 
small and medium-sized manufacturers. This tariff relief translates 
into U.S. economic growth, as shown by the USITC, which reported that 
tariff relief under the previous MTB boosted U.S. GDP annually by as 
much as $3.3 billion and output annually by as much as $6.3 billion.

Thank you in advance for your consideration of this request. Should you 
or your staff have any questions or require additional information, do 
not hesitate to contact me at hmcauliffe@paint.org.

With kind regards,

Heidi K. McAuliffe
Vice President, Government Affairs

                                 ______
                                 
                    American Farm Bureau Federation

                  600 Maryland Avenue, SW, Suite 1000W

                          Washington, DC 20024

                            p. 202-406-3600

                            f. 202-406-3606

                          https://www.fb.org/

The American Farm Bureau Federation, the nation's largest general farm 
organization, submits this statement for the Senate Committee on 
Finance hearing on the President's 2023 trade policy agenda. Trade is 
critically important to the current welfare and future prosperity of 
U.S. farmers and ranchers. America's farmers and ranchers depend on 
growing and stable export markets for the success of their businesses.

President's Trade Agenda for 2023

The Administration's approach on trade includes pursuing the Indo-
Pacific Economic Framework; reducing trade barriers with Taiwan and 
Kenya; supporting agriculture; reducing trade barriers; promoting 
sustainable environmental practices; focusing on supply chain 
improvements; and promoting stability.

The Indo-Pacific Economic Framework (IPEF) was introduced as a part of 
the overall Indo-Pacific Strategy. It is a strong start to improve 
relationships and reach agreements with the region's countries. It 
should also be used to reach science-based standards that will assist 
exports. The inclusion of sanitary and phytosanitary (SPS) standards 
will reduce barriers and expand opportunities for our agricultural 
exports.

The IPEF can be significantly improved. It should include a strategy of 
expanding market access for agriculture by working to reduce tariff 
barriers. The Administration is also not proposing a reauthorization of 
Trade Promotion Authority nor a commitment to pursuing trade 
negotiations with binding and enforceable commitments. Farm Bureau 
supports trade agreements in the region as the most durable and 
effective means to improve market opportunities for farmers and 
ranchers.

The U.S.-Taiwan Initiative on 21st Century Trade was launched in 2022. 
For agriculture, this effort needs to resolve standards barriers by 
Taiwan that restrict U.S. exports. In 2022, $4.2 billion in 
agricultural products were exported to Taiwan.

Indo-Pacific Region Agricultural Trade

Current agreements in the region show the importance of moving forward 
with additional efforts to improve opportunities for U.S. agricultural 
exports.
U.S.-China
The U.S.-China Phase 1 Agreement resulted in improved agricultural 
trade and progress in the removal of barriers that impact the 
competitiveness of U.S. products in this market. In the Phase 1 
Agreement, China committed to increase purchases of U.S. agricultural 
products.

While the purchase commitment has ended, the outlook for Chinese 
purchases of soybeans, corn, wheat, sorghum, beef, pork, and other 
products remains strong. China bought $36 billion of U.S. agricultural 
products in 2022.

China has also been addressing the commitments they made to improve and 
reform many standards in the Agreement. Long-standing barriers to the 
export of U.S. beef, pork, poultry, and other products have been or are 
being resolved, pursuant to the Agreement. As these barriers go down, 
the opportunity for increased U.S. commodity sales improves.

An ongoing trade relationship with China is critical for U.S. farmers 
and ranchers.
U.S.-South Korea
The U.S.-South Korea Free Trade Agreement (KORUS) entered in force on 
March 25, 2012. The agreement eliminated or reduced tariff and non-
tariff barriers on agricultural and other products. U.S. agricultural 
exports to South Korea reached an all-time high in 2022 at $9.5 
billion.
U.S.-Japan
The U.S.-Japan Trade Agreement went into effect on Jan. 1, 2020. The 
tariffs applied to U.S. products are now the same as those applied to 
the products of the other countries with a trade agreement with Japan. 
Tariffs are being reduced or eliminated on a variety of U.S. 
agricultural exports to Japan. The U.S. and Japan should continue talks 
on the remaining issues, such as SPS rules, which would help lead to a 
comprehensive FTA between the U.S. and Japan. The agreement on the 
operation of Japan's beef safeguard mechanism will help increase sales 
of U.S. beef products.

U.S. agricultural exports to Japan were over $15 billion in 2022.

USMCA

The U.S.-Mexico-Canada Agreement is important for the continuation and 
improvement of trade among the nations of North America. Canada ($28.3 
billion) and Mexico ($28 billion) are the second and third largest 
export markets for U.S. agriculture. The implementation and enforcement 
of this Agreement will yield future growth for our exports.

Issues between the U.S. and Canada on dairy imports, and between the 
U.S. and Mexico on biotech corn, are currently in the dispute 
settlement system.

U.S.-United Kingdom

The U.S. and the United Kingdom (UK) reached an agreement to resolve 
the steel tariffs dispute between the two countries. This agreement 
removed the retaliatory tariffs on U.S. agricultural products placed by 
the UK after the U.S. placed tariffs on UK steel and aluminum.

We support a resumption of trade negotiations between the U.S. and the 
UK to deal with non-science-based barriers to our agricultural exports.

Trade Promotion Authority

The Bipartisan Congressional Trade Priorities and Accountability Act of 
2015 (Trade Promotion Authority) ended on July 1, 2021. Farm Bureau 
recognizes the crucial importance of Trade Promotion Authority and 
supports its reauthorization. The negotiating objectives set by 
Congress, the consultation requirements of the Administration with 
Congress and the voting procedures established under TPA are important 
to the successful negotiation and conclusion of trade discussions.

World Trade Organization

The Biden Administration will need to deal with various WTO reform 
issues such as the operation of the Appellate Body. For agriculture, we 
support working toward increased transparency through an improved 
notifications process. We do not support discussion of subsidy levels 
without a full discussion of market access initiatives.

Sustainability

U.S. farmers and ranchers look to be partners in addressing the 
challenges of our changing climate. Not only are agriculture's 
emissions low, American farmers and ranchers are taking active steps to 
make their footprint even smaller. This is best accomplished through 
policies that provide voluntary, incentive-based tools for farmers, 
ranchers, and forest owners to maximize the sequestration of carbon. 
This approach will also help achieve a reduction in greenhouse gas 
emissions; increase the resilience of the land; advance science-based 
outcomes and help rural economies adapt.

Conclusion

U.S. farmers and ranchers rely on export markets for over twenty 
percent of agricultural production. As Congress considers future 
discussions with the nations that are our most important export 
destinations, and those that have the potential to grow in importance, 
we need to consider how the proposed Indo-Pacific Economic Framework, 
and other initiatives, can most effectively expand agricultural exports 
to the benefit of the nation's farmers and ranchers.

                                 ______
                                 
                        Americans for Free Trade
April 6, 2023

The Honorable Ron Wyden             The Honorable Mike Crapo
Chairman                            Ranking Member
U.S. Senate                         U.S. Senate
Committee on Finance                Committee on Finance
Washington, DC 20510                Washington, DC 20510

The Honorable Jason Smith           The Honorable Richard Neal
Chairman                            Ranking Member
U.S. House                          U.S. House
Committee on Ways and Means         Committee on Ways and Means
Washington, DC 20515                Washington, DC 20515

RE: Statement for the Hearing Record: The President's 2023 Trade Policy 
Agenda

Dear Chairman Wyden, Ranking Member Crapo, Chairman Smith, and Ranking 
Member Neal,

The Americans for Free Trade coalition, a broad alliance of American 
businesses, trade organizations, and workers united against tariffs, 
respectfully submits this written statement to include in the public 
record of the Senate Finance Committee and House Ways and Means 
Committee's (``the Committees'') 2023 Trade Policy Agenda hearings, 
which took place on March 23 and 24, respectively. We appreciate the 
Committees holding hearings on this important matter.

By way of background, Americans for Free Trade represents every part of 
the U.S. economy including manufacturers, farmers and agribusinesses, 
powersports, retailers, technology companies, service suppliers, 
natural gas and oil companies, importers, exporters, and other supply 
chain stakeholders. Collectively, we employ tens of millions of 
Americans through our vast supply chains.

For more than 4 years, AFT has called for an end to the China 301 
tariffs which have had a disproportionate economic impact on American 
companies, consumers, and workers and that have failed to change 
China's unfair trade practices relating to intellectual property 
rights, forced technology transfers, and innovation. We have also 
repeatedly called for the administration to find a new path forward to 
address the ongoing China trade issues. We believe it is time for a 
strategic realignment of the tariffs to focus on the original intent of 
the 301 investigation and seek alternate measures, including working 
with our allies, to achieve the necessary changes in China's behavior.

Until that time, we also believe that USTR should relaunch a fair and 
transparent exclusion process that is available to all HTS lines 
impacted by the 301 tariffs. Members of Congress have repeatedly urged 
USTR to institute a robust process, including through letters sent by 
House and Senate members to Ambassador Tai last year as well as through 
appropriations language. Yet, USTR has refused to reestablish such an 
exclusions process and, in fact, stated in its fiscal year 2024 budget 
request that it anticipates work relating to product exclusion requests 
to decrease. This suggests that USTR has no intention of administering 
a robust exclusions process in the next fiscal year. We therefore 
believe it is important for Congress to insist that USTR make a 
products exclusions process available immediately and for as long as 
section 301 tariffs remain in place.

I. American Businesses Pay the 301 Tariffs, Not China

Since April 2018, U.S. Customs and Border Protection has assessed more 
than $173 billion \1\ in section 301 tariffs on American companies who 
import products from China. These taxes continue to create tremendous 
uncertainty, increase the cost of doing business in the United States, 
and place a financial burden on American businesses--negatively 
impacting their ability to invest in their companies, hire more 
American workers, innovate new technologies, and remain competitive 
globally. The tariffs also have an impact on consumers. While many 
companies have tried to absorb the costs of the tariffs, many have had 
to share the costs with final consumers.
---------------------------------------------------------------------------
    \1\ CBP Trade Statistics, https://www.cbp.gov/newsroom/stats/trade.

AFT has argued for years that American companies, not Chinese 
companies, bear the economic brunt of the tariffs. Those who argue 
otherwise are simply ignoring reality. This was confirmed by the non-
partisan, independent U.S. International Trade Commission (USITC) in 
its recent report entitled ``Certain Effects of Section 232 and 301 
Tariffs Reduced Imports and Increased Prices and Production in Many 
U.S. Industries.'' \2\ The report states: ``U.S. importers bore nearly 
the full cost of these tariffs because import prices increased at the 
same rate as the tariffs. The USITC estimated that prices increased by 
about 1 percent for each 1 percent increase in the tariffs under 
sections 232 and 301.''
---------------------------------------------------------------------------
    \2\ Economic Impact of Section 232 and 301 Tariffs on U.S. 
Industries, https://www.usitc.gov/publications/332/pub5405.pdf, March 
15, 2023.

While we would have liked to have seen a more fulsome discussion in the 
USITC report regarding the 301 tariffs' impact on downstream industries 
and consumers, we welcomed the report and were pleased that it 
confirmed the economic impact of the 301 tariffs that we have been 
discussing for years. As part of the study, AFT shared materials, 
including a list of Studies on Economic Impact of Tariffs--2018-2022 
and a list of Articles on the Impact of Tariffs, which we have also 
---------------------------------------------------------------------------
included as part of this statement for the record.

During her testimony at the trade agenda hearings, Ambassador Tai noted 
that USTR is currently undertaking its statutory 4-year review of the 
China 301 tariffs. We continue to believe this review needs to be fair 
and transparent. We are disappointed that the review has not included a 
public hearing--something USTR offered when promulgating Lists 1-4 
tariffs and that the USITC offered in crafting its recent economic 
impact report. While written comments are extremely important, they 
alone do not provide the same opportunity for companies to tell their 
story about the ongoing impact of the tariffs and answer questions from 
the Section 301 Committee as a public hearing would provide. That said, 
we encourage Members of Congress to insist that USTR use the 4-year 
review process to conduct a holistic assessment of whether the tariffs 
have achieved their stated objectives, as identified in the underlying 
section 301 report, and provide a full picture of the impact the 
tariffs have had to the U.S. economy, as well as American businesses, 
workers, and consumers. USTR should seriously consider whether the 301 
tariffs truly provide leverage to elicit a change in behavior by China 
or whether they represent the best path forward given the current state 
of the U.S. economy.

II. 301 Tariffs' Impacts on American Businesses and Consumers

As part of the 301 4-year review, AFT provided USTR with feedback from 
a number of coalition partners regarding the negative impacts that the 
tariffs have had on their businesses, workers and consumers. We have 
provided some of those stories below.
            a. Tariffs Make U.S. Manufacturers Less Competitive
Proponents of the section 301 tariffs claim that lifting them--and even 
offering a targeted product exclusions process--would harm domestic 
manufacturing. We strongly disagree with that sentiment. While 
protecting domestic manufacturing was never the stated purpose of the 
section 301 tariffs, they have been harmful to manufacturers by taxing 
inputs they need to produce more products domestically.

Consider the case of one manufacturer who has been producing speakers 
in the United States since 1949. This manufacturer produces speakers 
for nearly every audio application--mass transit, aerospace, medical 
equipment, professional audio, motorcycles, home audio, etc.

Because it is one of the last companies that still builds speakers in 
the United States, the company has been unable to find domestic 
suppliers who can produce the specialty parts required for the 
speakers. To be globally competitive, the company must buy its 
components primarily from China where their global competitors purchase 
their parts. Unfortunately, these parts are on List 3 and are subject 
to an additional 25% tariff. The company described this as ``a direct 
addition of 25% to our cost of goods sold.'' The company further stated 
that its competitors who import completed speakers made in China only 
pay a 7.5% tariff. The company said this makes it ``less competitive 
than [its] USA competitors who import complete products made in China 
with no USA labor content'' and that it is essentially ``penalized for 
building speakers in America.''

Because of the significant impact to its ability to compete, the 
company said it is now ``moving more manufacturing out of the USA.'' In 
other words, the tariffs have disincentivized manufacturing in the 
United States.

An information technology company told us something similar. This 
American business pays tariffs on parts and components listed on Lists 
3 and 4a and initially paid over $350 million per year in section 301 
tariffs. The company moved some of its supply chain from China to 
Mexico to reduce this duty burden by a little more than half, but these 
increased costs were eventually passed along to customers through price 
increases. The company previously sought product exclusions on key 
parts and components under the Trump Administration--a process which no 
longer exists--but was denied. Because the company cannot source the 
parts and components from anywhere other than China, it is now 
considering whether to move its manufacturing to Mexico and then import 
the products into the United States duty-free--putting 1,300 American 
jobs in jeopardy.

The tariffs have also prevented small American businesses from growing. 
We spoke with a company that produces home theater accessories, and it 
described the impact of the tariffs on its products--which are on List 
3--as follows:

        The tariff impacted us in three major ways. 1. The best 
        manufacturers are all located in China for our products. 
        Finding new manufacturers, even here in the US, was difficult 
        to secure due to the premium level of our technology and 
        design. Also with COVID happening immediately after List 3 was 
        released, traveling abroad to find other manufacturers was 
        impossible. 2. If we did find a manufacturer that was at our 
        standard, the additional cost of building new tools, that had 
        already been made and paid for in China, was a very hard burden 
        on our small company. Also, we have to certify a good portion 
        of our goods and any new product created from a new tool has to 
        go through recertification at a cost that was also unbearable 
        to our small business. 3. Being a brand new business, we 
        secured funding to build and grow our brand, and immediately 
        20% of the funding went to a cost via the tariff that I had 
        slated for new technology and product development, employees, 
        and programs with our retail partners. It stunted our growth. 
        Though there are more, these three actions have cost us in 
        multiple ways the ability to grow and compete with businesses 
        that have been around much longer.

Another small business we spoke with imports industrial magnets from 
China that are incorporated into devices that work in vehicle engines 
to conserve fuel. The business owner produces these devices in the 
United States. The business owner told us that the section 301 tariffs 
have added a million dollars to his costs in the past several years. He 
described the impact as follows: ``With this money I could have added 
at least one more engineer and support staff in the US. I also have 
European competitors who don't have the extra 25% cost. It's throwing 
money down a hole and makes no sense.''

We spoke with another American manufacturer that produces a plastic 
material used in the development of U.S.-made parts for autos, farm 
equipment, transportation equipment and more. The value of the material 
comes largely from two key properties--hardness and rigidity. But to 
achieve these two key properties, the material must first be mixed with 
a specific chemistry that cures, or hardens, the final product. That 
essential hardening chemistry is not produced in the United States; it 
must be imported. Approximately 40 to 80 percent of the import is 
produced in China, with the balance produced in Japan and Taiwan. But 
there is not enough capacity in Japan and Taiwan to supplant the supply 
from China. Therefore, applying the section 301 tariff to this import 
does not hurt China--it hurts U.S. businesses which have no choice but 
to pay the tariff anyway to continue to enhance the competitiveness of 
their American made products.

These examples illustrate how the tariffs have both impacted small 
businesses and will continue to impact American businesses for as long 
as they remain in place. Consider the example of a small flower seed 
business that has paid ``nearly $1.5 million in tariffs for seed 
produced in China.'' The company said that this money could have been 
used ``for further investment in our technology, improving customer 
service or increasing seed quality.'' Because the seeds they cultivate 
``need that environment for cultivation purposes'' (China), the 
business cannot readily shift production of additional seed to other 
locations to accommodate the tariffs. This small business also has 
European and Asian competitors who do not pay the tariffs, so it has 
been forced to absorb most of the costs to remain competitive. Most 
concerning, the business is considering moving jobs to China, which 
would also require transferring proprietary technology, to cope with 
the increased costs:

        We have been exploring options to make better use of the farm 
        and are looking at shipping seed that is produced in China to 
        other markets to avoid the tariffs. This is rather cumbersome 
        because we need to manage separate inventories, we need to much 
        more carefully plan what we can place in China and it has 
        caused us to move some jobs from the US to China to deal with 
        this. If we ramp the activity up we will need to transfer some 
        proprietary technology from the US to China or other countries 
        which we prefer not to do.

The section 301 tariffs have harmed, and continue to harm, U.S. 
manufacturers and make them less competitive vis-a-vis their 
competitors and China. They should be lifted immediately.
            b. Tariffs Increase Costs for American Consumers and 
                    Contribute to Inflation
Proponents of the tariffs also ignore the very real contribution 
tariffs have had on inflation. While there are various contributing 
factors to inflation, lifting tariffs is one of the few tools that the 
Administration could utilize to bring down inflation. At a time when 
inflation is at a 4-decade high, the Administration should be 
leveraging every tool at its disposal to combat this crisis, which is 
squeezing hard-working American families and businesses. Time and 
again, we have heard from businesses of all kinds that they were forced 
to pass along the increased costs associated with the section 301 
tariffs directly to their customers. Consider the statements we 
received from coalition members below:

        There's a 25% supplemental tariff on our new product, [a type 
        of lamp], we have to pass on the cost to customers (total 
        tariff of 28%). We would lower the price right away if the 
        Trump tariff were removed.

                     --Consumer Electronics Company

        We were impacted by Lists 3 and 4a, initially paying over $350M 
        per year in tariffs. Supply chain moves--mostly from China to 
        Mexico--cut that to where we are paying just over $150M per 
        year today (2022). We immediately passed on the costs to our 
        customers through price increases, which of course, is 
        inflationary.

                   --Information Technology Company

        The 25% tariff (tax) has been nothing but that, a tax or 
        penalty on us as a small US based business. The Chinese do not 
        pay the tariff or any portion of it! We do not have the gross 
        profit margins to absorb this tariff so as a result we need to 
        incorporate this into what we charge our customer--more US 
        based small businesses harmed by these tariffs/taxes.

            --Lighting Manufacturer and Distributor

        The tariffs on our China origin goods has [sic] directly 
        impacted or [sic] business strategy regarding the place of 
        production for certain vegetable seed crops such as Cucumber, 
        Melon, Tomato and Watermelon seeds. Producing hybrid vegetable 
        seeds takes years of experience and knowledge. Weather, 
        climate, and drought conditions are major factors especially as 
        we are facing the global climate crisis. There are very few 
        options for qualified and trusted growers. Our Chinese 
        suppliers have an excellent reputation and service levels 
        sealed with production contracts that are reviewed by legal and 
        signed each year. Who pays the price for these high tariff 
        rates on China origin seeds? It is the American people who pay 
        in the form of higher prices for healthy food in the US market 
        place.

                          --Vegetable Seed Business
            c. Tariffs Disproportionately Harm Low-Income American 
                    Families
Tariffs harm American families by raising prices on consumer products, 
and this is felt most acutely by low-income families. A report by the 
Progressive Policy Institute found that tariffs on consumer goods are 
discriminatory and regressive because low-income Americans are 
disproportionately impacted by these tariffs, especially single-parent 
families and people of color.

We spoke with a small American business that produces baby products, 
including a portable crib that it developed to promote a safe sleeping 
environment for infants and that is also subject to the section 301 
tariffs. The company has distributed thousands of these cribs to low-
income families for over 20 years through a non-profit organization, 
directly contributing to the reduction in infant deaths from Sudden 
Infant Death Syndrome (SIDS) and Accidental Suffocation and 
Strangulation in Bed (ASSB). The company stated that all proceeds from 
the sales of these cribs go back into the non-profit so that it can 
continue to provide its ``partners with the tools to educate their 
communities about the importance of infant safe sleep.'' When asked 
about the impact of the tariffs on its mission, the company said this:

        Until the tariffs were imposed, we prided ourselves on 
        providing a safety approved crib . . . to our partners for 
        under $50. Because of the 25% tariff and the increase in 
        shipping from China, that was imposed on the [crib], we had to 
        raise the price of our unit from $49.99 to $69.99, resulting in 
        a decrease in the number of [cribs] that our partners were able 
        to purchase since 2019 by well over 25%. What that means is 25% 
        fewer infants have been able to sleep in a safe sleeping 
        environment and babies lives have been put at risk. We know you 
        can not effect immediate change in the high cost of shipping, 
        however, by relieving us of the $25% tariff on our [crib] we 
        will be able to reduce its price and assure that more babies 
        lives will be saved from SIDS or ASSB.

This baby products company ended its testimonial with a plea that the 
Administration consider the request that the tariffs be lifted to help 
``low-income parents throughout the country, and of course, the 
babies!''

This example could not be starker. The tariffs are harming U.S. 
businesses and Americans in ways large and small, including impacting 
the ability of small businesses and non-profits to get life-saving baby 
products into the hands of low-income families.

III. China Strategy Moving Forward

We urge Members of Congress to call upon the Biden-Harris 
Administration to provide a clear and transparent China trade strategy. 
We know that this strategy goes well beyond the China 301 tariffs, but 
we believe addressing the tariff issues and China's unfair trade 
practices associated with them are important for the reasons we 
discussed above.

As a near-term path forward, with regards to the tariffs specifically, 
AFT suggests the following:

    (1)  Realign the Section 301 Tariffs--Through the strategic 4-year 
review process, USTR and the administration should strategically 
realign the tariffs away from consumer goods and manufacturing inputs 
and equipment that are currently unavailable in sufficient quantities 
from sources other than China. These tariffs harm American companies 
and consumers and are not related to China's Made in 2025 program or 
critical sectors. The realignment should provide the opportunity for 
the administration to refocus the tariffs and create better leverage to 
achieve changes in China's unfair trade practices regarding forced 
technology transfer and intellectual property theft. As part of this 
realignment, USTR should also include a new, fair, predictable, and 
transparent exclusion process available to all products subject to the 
301 tariffs to ensure that American companies are not unduly harmed.

    (2)  Use Targeted Tools to Hold Bad Actors Accountable--There has 
been ongoing discussion about what tools other than tariffs can be used 
to achieve success regarding China's trade practices. USTR has 
discussed other ``tools in the toolbox'' and potentially the 
development of ``new tools'' but has stopped short of articulating what 
those might be. We believe these discussions are incredibly important 
and need to continue, with stakeholder input. We need to find the right 
set of tools that address China's unfair trade practices in a targeted 
way without causing disproportionate economic harm to American 
businesses, workers and consumers.

    (3)  Support U.S. Supply Chain Resiliency and Competitiveness by 
Partnering with Allies--AFT continues to call upon the administration 
to work with allies to address China's unfair trade practices. This 
includes work at the G20, G7, World Trade Organization, and other 
multilateral and regional institutions. The U.S. can be much more 
effective in addressing China's unfair trade practices by working in 
concert with allies.

    (4)  Support Efforts on Supply Chain Diversification--Congress and 
the Biden-Harris Administration should support the U.S. business 
community's efforts to further diversify supply chains. This includes 
developing an offensive trade agenda that supports supply chain 
diversification and ensures the U.S. does not cede global economic 
influence and international rulemaking to China. This should also 
include seeking new free trade agreements with our allies. Congress 
should also quickly act to retroactively renew expired trade preference 
programs including the Generalized System of Preferences (GSP), which 
provide sourcing alternatives to China, as well as the Miscellaneous 
Tariff Program (MTB), which provides temporary duty benefits for U.S. 
manufacturers and businesses.

IV. Conclusion

We appreciate the Committees' continued engagement and focus on 
ensuring that U.S. trade policy advances American values and boosts 
U.S. competitiveness. We urge the Committees to continue weighing in 
with the Biden-Harris Administration to ensure that destructive tariffs 
are lifted, and that a new and more effective approach to addressing 
China's unfair trading practices is adopted. We thank the Committees 
for holding this year's trade agenda hearings and look forward to 
continuing to work with you.

            Sincerely,

Accessories Council                  Licensing Industry Merchandisers'
                                      Association
ACT | The App Association            Los Angeles Customs Brokers and
                                      Freight Forwarders Association
Agriculture Transportation           Louisiana Retailers Association
 Coalition (AgTC)
ALMA, International (Association of  Maine Grocers and Food Producers
 Loudspeaker Manufacturing and        Association
 Acoustics)
American Apparel and Footwear        Maine Lobster Dealers' Association
 Association (AAFA)
American Association of Exporters    Maritime Exchange for the Delaware
 and Importers (AAEI)                 River and Bay
American Association of Port         Maryland Retailers Association
 Authorities
American Bakers Association          MEMA, The Vehicle Suppliers
                                      Association
American Bridal and Prom Industry    Michigan Chemistry Council
 Association (ABPIA)
American Chemistry Council           Michigan Retailers Association
American Clean Power Association     Minnesota Retailers Association
American Down and Feather Council    Missouri Retailers Association
American Fly Fishing Trade           Motorcycle Industry Council
 Association
American Home Furnishings Alliance   NAPIM (National Association of
                                      Printing Ink Manufacturers)
American Lighting Association        National Association of Chain Drug
                                      Stores (NACDS)
American Petroleum Institute         National Association of Chemical
                                      Distributors (NACD)
American Pyrotechnics Association    National Association of Foreign-
                                      Trade Zones (NAFTZ)
American Rental Association          National Association of Home
                                      Builders
American Seed Trade Association      National Association of Music
                                      Merchants
American Specialty Toy Retailing     National Association of Trailer
 Association                          Manufacturers (NATM)
American Trucking Association        National Confectioners Association
Arizona Technology Council           National Council of Chain
                                      Restaurants
Arkansas Grocers and Retail          National Electrical Manufacturers
 Merchants Association                Association (NEMA)
Association For Creative Industries  National Fisheries Institute
Association for PRINT Technologies   National Foreign Trade Council
Association of American Publishers   National Grocers Association
Association of Equipment             National Industrial Transportation
 Manufacturers (AEM)                  League (NITL)
Association of Home Appliance        National Lumber and Building
 Manufacturers                        Material Dealers Association
Auto Care Association                National Marine Manufacturers
                                      Association
Beer Institute                       National Restaurant Association
BSA | The Software Alliance          National Retail Federation
Building Service Contractors         National Ski and Snowboard
 Association International (BSCAI)    Retailers Association
Business Alliance for Customs        National Sporting Goods Association
 Modernization
California Retailers Association     Natural Products Association
Can Manufacturers Institute          New Jersey Retail Merchants
                                      Association
Chemical Industry Council of         North American Association of Food
 Delaware (CICD)                      Equipment Manufacturers (NAFEM)
Coalition of New England Companies   North American Association of
 for Trade (CONECT)                   Uniform Manufacturers and
                                      Distributors (NAUMD)
Coalition of Services Industries     North Carolina Retail Merchants
 (CSI)                                Association
Colorado Retail Council              Ohio Council of Retail Merchants
Columbia River Customs Brokers and   Outdoor Industry Association
 Forwarders Association
Computer and Communications          Pacific Coast Council of Customs
 Industry Association (CCIA)          Brokers and Freight Forwarders
                                      Associations Inc.
Computing Technology Industry        Pennsylvania Retailers' Association
 Association (CompTIA)
Consumer Brands Association          PeopleforBikes
Consumer Technology Association      Personal Care Products Council
Council of Fashion Designers of      Pet Food Institute
 America (CFDA)
CropLife America                     Pet Advocacy Network
Customs Brokers and Freight          Plumbing Manufacturers
 Forwarders Association of            International
 Washington State
Customs Brokers and Freight          Power Tool Institute (PTI)
 Forwarders of Northern California
Electronic Transactions Association  PRINTING United Alliance
Energy Workforce and Technology      Promotional Products Association
 Council                              International
Experiential Designers and           Recreational Off-Highway Vehicle
 Producers Association                Association
Exhibitions and Conferences          Retail Association of Maine
 Alliance
Fashion Accessories Shippers         Retail Council of New York State
 Association (FASA)
Fashion Jewelry and Accessories      Retail Industry Leaders Association
 Trade Association
Flexible Packaging Association       Retailers Association of
                                      Massachusetts
Florida Ports Council                RISE (Responsible Industry for a
                                      Sound Environment)
Florida Retail Federation            RV Industry Association
Footwear Distributors and Retailers  San Diego Customs Brokers and
 of America (FDRA)                    Forwarders Association
Fragrance Creators Association       Semiconductor Industry Association
                                      (SIA)
Game Manufacturers Association       Snowsports Industries America
Gemini Shippers Association          Software and Information Industry
                                      Association (SIIA)
Georgia Retailers                    South Dakota Retailers Association
Global Business Alliance             Specialty Equipment Market
                                      Association
Global Chamber                      Specialty Vehicle Institute of
                                      America
Global Cold Chain Alliance           Sports and Fitness Industry
                                      Association
Greeting Card Association            TechNet
Halloween and Costume Association    Telecommunications Industry
 (HCA)                                Association (TIA)
Home Fashion Products Association    Texas Retailers Association
Home Furnishings Association         Texas Water Infrastructure Network
Household and Commercial Products    The Airforwarders Association
 Association
Housing Affordability Coalition      The Fertilizer Institute
Idaho Retailers Association          The Hardwood Federation
Illinois Retail Merchants            The Vinyl Institute
 Association
Independent Office Products and      Toy Association
 Furniture Dealers Association
 (IOPFDA)
Indiana Retail Council               Travel Goods Association
Information Technology Industry      Truck and Engine Manufacturers
 Council (ITI)                        Association (EMA)
International Association of         United States Council for
 Amusement Parks and Attractions      International Business
 (IAAPA)
International Bottled Water          United States Fashion Industry
 Association (IBWA)                   Association
International Foodservice            U.S. Global Value Chain Coalition
 Distributors Association
International Housewares             U.S.-China Business Council
 Association
International Warehouse Logistics    Virginia Association of Chain Drug
 Association                          Stores
International Wood Products          Virginia Retail Federation
 Association
ISSA--The Worldwide Cleaning         Virginia-DC District Export Council
 Industry Association                 (VA-DC DEC)
Jeweler's Vigilance Committee        Washington Retail Association
Juice Products Association (JPA)     Water Quality Association
Juvenile Products Manufacturers      Window and Door Manufacturers
 Association                          Association
Leather and Hide Council of America  World Pet Association, Inc. (WPA)
 

Attachment 1--Studies on Economic Impact of Tariffs--2018-2022

     1.  May 2022, American Action Forum: The Total Cost of U.S. 
Tariffs; Tom Lee and Jacqueline Varas.

     2.  April 2022, Tax Foundation: Tracking the Economic Impact of 
U.S. Tariffs and Retaliatory Actions; Erica York.

     3.  March 2022, Peterson Institute of International Economics: For 
Inflation Relief, the United States Should Look to Trade 
Liberalization; Gary Clyde Hufbauer, Megan Hogan, and Yilin Wang.

     4.  January 2022, USDA Economic Research Service: The Economic 
Impacts of Retaliatory Tariffs on U.S. Agriculture; Stephen Morgan, 
Shawn Arita, Jayson Beckman, Saquib Ahsan, Dylan Russell, Philip 
Jarrell, and Bart Kenner.

     5.  December 2021, Tax Foundation: Who Really Pays the Tariffs? 
U.S. Firms and Consumers, Through Higher Prices; Alex Durante and Alex 
Muresianu.

     6.  October 2021, National Bureau of Economic Research: 
Illuminating the Effects of the US-China Tariff War on China's Economy; 
Davin Chor and Bingjing Li.

     7.  May 2021, Moody's Investor Service Report, as reported in 
``U.S. companies are bearing the brunt of Trump's China tariffs,'' says 
Moody's, CNBC, Yen Nee Lee.

     8.  January 2021, IHS Markit: Did the U.S. section 301 tariffs 
work?; Yacine Rouimi.

     9.  May 2020, National Bureau of Economic Research: The Effect of 
the U.S.-China Trade War on U.S. Investment; Mary Amiti, Sang Hoon Kong 
and David Weinstein.

    10.  January 2020, National Bureau of Economic Research: Who's 
Paying for the US Tariffs? A Longer-Term Perspective; Mary Amiti, 
Stephen J. Redding, David E. Weinstein.

    11.  January 2020, National Bureau of Economic Research: Rising 
Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet 
Old-Style Protectionism; Kyle Handley, Fariha Kamal, Ryan Monarch.

    12.  January 2020, Congressional Budget Office: The Budget and 
Economic Outlook 2020 to 2030.

    13.  December 2019, Federal Reserve Board: Disentangling the 
Effects of the 2018-2019 Tariffs on a Globally Connected U.S. 
Manufacturing Sector; Aaron Flaaen and Justin Pierce.

    14.  November 2019, United Nations Conference on Trade and 
Development, Trade and Trade Diversion Effects of United States Tariffs 
on China; Alessandro Nicita.

    15.  October 2019, Revised December 2019, National Bureau of 
Economic Research: The Consumption Response to Trade Shocks: Evidence 
from the US-China Trade War; Michael E. Waugh.

    16.  October 2019, National Bureau of Economic Research: Tariff 
Passthrough at the Border and at the Store: Evidence from US Trade 
Policy; Alberto Cavallo, Gita Gopinath, Brent Neiman, Jenny Tang.

    17.  September 2019, Board of Governors of the Federal Reserve 
System, The Economic Effects of Trade Policy Uncertainty; Dario 
Caldara, Matteo Iacoviello, Patrick Molligo, Andrea Prestipino, Andrea 
Raffo.

    18.  September 2019, Moody's Analytics: Trade War Chicken: The 
Tariffs and the Damage Done; Mark Zandi, Jesse Rogers and Maria Cosma.

    19.  March 2019, Revised October 2019, National Bureau of Economic 
Research: The Return to Protectionism; Pablo D. Fajgelbaum, Pinelopi K. 
Goldberg, Patrick J. Kennedy, Amit K. Khandelwal.

    20.  March 2019, National Bureau of Economic Research: The Impact 
of the 2018 Trade War on U.S. Prices and Welfare; Mary Amiti, Stephen 
J. Redding, David E. Weinstein.

    21.  February 2019, Trade Partnership Worldwide, LLC: Estimated 
Impacts of Tariffs on the U.S. Economy and Workers; Laura Baughman and 
Joseph Francois.

    22.  December 2018, National Bureau of Economic Research: 
Macroeconomic Consequences of Tariffs; Davide Furceri, Swarnali A. 
Hannan, Jonathan D. Ostry, Andrew K. Rose.

             Attachment 2--Articles on the Impact of Tariffs
------------------------------------------------------------------------
     Date                    Headline                       Outlet
------------------------------------------------------------------------
6/7/2022       Biden Must Roll Back the Tariffs      RealClearMarkets
                Weighing So Heavily On the Economy
------------------------------------------------------------------------
5/17/2022       As Businesses Struggle, Tariffs      The Well News
                Create Avoidable Challenges
------------------------------------------------------------------------
4/15/2022      End China trade war                   Times-Tribune
------------------------------------------------------------------------
3/26/2022      Supply Chain Issues Continue to Hurt  RealClearPolitics,
                Businesses. Lifting Tariffs Can       The Center Square,
                Help.                                 Livingston Parish
                                                      News
------------------------------------------------------------------------
3/24/2022      To Help Revive the U.S. Economy, the  RealClearMarkets
                Biden Administration Must Lift the
                Tariffs
------------------------------------------------------------------------
3/20/2022      Tariffs Hurt Virginia Businesses      The Gazette-
                                                      Virginian
------------------------------------------------------------------------
2/25/2022      To Fulfill His Economic Vision,       The Well News
                President Biden Must End Trump's
                Tariffs
------------------------------------------------------------------------
2/14/2022      Want to Stem Inflation? End the       RedState
                Trade War
------------------------------------------------------------------------
2/14/2022      Trade War Continues to Batter New     NH Journal
                Hampshire Businesses
------------------------------------------------------------------------
2/11/2022      2 Years Since Trade Deal with China,  Entrepreneur.com,
                Tariffs Aren't Working for American   MSN
                Businesses
------------------------------------------------------------------------
2/8/2022       Cutting Chinese tariffs would help    Delaware Business
                Del. businesses                       Times
------------------------------------------------------------------------
1/25/2022      Keep Wisconsin moving forward         WisPolitics
------------------------------------------------------------------------
12/13/2021     Amid Pressing Economic Crises, Biden  Townhall
                Administration Must Lift Tariffs
------------------------------------------------------------------------
12/9/2021      Biden must end failed trade policy    Tribune-Review
                that has hurt Pennsylvanians
------------------------------------------------------------------------
11/10/2021     It's Time to End the Trade War With   Newsweek
                China
------------------------------------------------------------------------
11/3/2021      Post-Covid, the Federal Government    Entrepreneur.com
                Must Remain Committed to Helping
                Businesses
------------------------------------------------------------------------
10/12/2021     U.S. tariffs on Chinese goods hurts   Arizona Daily Star
                Arizona's economic growth
------------------------------------------------------------------------
9/29/2021      For Washington's Economy to Fully     Kirkland Patch
                Recover, Biden Administration Must
                End Tariffs
------------------------------------------------------------------------
9/14/2021      Duane Garfoot: Continued tariffs      WisPolitics
                still loom large following Biden's
                Wisconsin visit
------------------------------------------------------------------------
9/7/2021       Trade Wars Worsen Shipping Crisis     Townhall
------------------------------------------------------------------------
7/22/2021      The time has come for Biden to        News Journal
                repeal Trump's tariffs
------------------------------------------------------------------------
7/12/2021      Biden can help American workers and   Washington Times
                protect U.S. jobs by ending trade
                wars
------------------------------------------------------------------------
6/23/2021      Ongoing trade war limits recovery     Tribune-Review
                for U.S. businesses
------------------------------------------------------------------------
5/19/2021      As COVID-19 recovery begins, Granite  Manchester Ink Link
                State needs tariff relief
------------------------------------------------------------------------
5/7/2021       Oregon businesses bear the brunt of   The Oregonian
                the U.S. tariffs on China
------------------------------------------------------------------------
4/5/2021       Repealing Trump-era trade tariffs     Crain's New York
                would throw a lifeline to             Business
                struggling businesses
------------------------------------------------------------------------
3/25/2021      Repeal Tariffs to Boost the Economy,  RealClearMarkets
                Help Small Businesses
------------------------------------------------------------------------
3/3/2021       Tariff relief must play a central     Des Moines Register
                role in Biden trade agenda
------------------------------------------------------------------------
2/24/2021      Removing tariffs is key to economic   Washington Examiner
                relief
------------------------------------------------------------------------
2/12/2021      Repealing tariffs should be one of    Wisconsin State
                Biden's first acts                    Journal, Herald
                                                      Times Reporter
------------------------------------------------------------------------
2/7/2021       Biden can save Americans billions of  Business Insider
                dollars by ending Trump's trade war
                with China now
------------------------------------------------------------------------
12/21/2020     Trump Must Repeal Tariffs to Provide  Inside Sources
                Americans Relief
------------------------------------------------------------------------
12/12/2020     If Biden Wants to Help Middle         RealClearPolitics
                America, He'll Lift Tariffs
------------------------------------------------------------------------
11/21/2020     Prospect of Tariffs on Vietnamese     RedState
                Imports Jeopardizes American
                Recovery
------------------------------------------------------------------------
10/31/2020     A Pledge To Repeal Tariffs Is         Townhall
                Crucial For Both Candidates
------------------------------------------------------------------------
10/29/2020     Tariffs Continue to Hurt Wisconsin    The Baraboo News
                                                      Republic
------------------------------------------------------------------------
10/29/2020     Tariffs Must Take Center Stage in     NH Journal
                Leadup to Election Day
------------------------------------------------------------------------
10/28/2020     WTO ruling and domestic lawsuits may  WisPolitics
                boost Biden's chances of winning
------------------------------------------------------------------------
9/24/2020      Floridians Are Frustrated With The    The Floridian
                Trade War
------------------------------------------------------------------------
9/22/2020      Trump's trade war has punished        Laconia Daily Sun
                Americans more than China
------------------------------------------------------------------------
9/17/2020      Mike Duerst: Tariffs Prove to be a    WisPolitics
                Key Issue for Wisconsin Voters
------------------------------------------------------------------------
9/16/2020      Path to White House Includes          RedState
                Repealing Tariffs
------------------------------------------------------------------------
6/1/2020       President Trump's Tariffs Put         RedState
                Economic Recovery at Risk
------------------------------------------------------------------------
5/26/2020      One Big Way To Help US Businesses     Townhall
                Come Back After Coronavirus
------------------------------------------------------------------------
5/26/2020      More tariffs would bring Missouri to  Missouri Times
                its breaking point
------------------------------------------------------------------------
5/7/2020       Stimulus is helpful, but tariffs are  MinnPost
                still threatening our livelihoods
------------------------------------------------------------------------
4/4/2020       Trade War Damage Worsened by Global   RealClearPolitics
                Health Pandemic
------------------------------------------------------------------------
3/6/2020       Trump's trade war threatens S.C.'s    Charleston City
                economy and workers--Democratic       Paper
                presidential candidates should vow
                to end it
------------------------------------------------------------------------
3/3/2020       Trade War Could Unravel President     RedState
                Trump's Economic Accomplishments
------------------------------------------------------------------------
2/10/2020      The trade war with China has hurt my  Boston Globe
                small business in Massachusetts
------------------------------------------------------------------------
2/10/2020      The Trade War Hurts President         NH Journal
                Trump's Re-Election Chances in New
                Hampshire
------------------------------------------------------------------------
2/1/2020       The Trade War is Undoing President    Save Jersey
                Trump's Economic Achievements |
                Cucciniello
------------------------------------------------------------------------
1/29/2020      Democratic candidates should talk     Sioux City Journal
                more about Trump's trade war
------------------------------------------------------------------------
1/19/2020      I supported Trump's trade war. But    Star Ledger
                now it's driving my industry out of
                business
------------------------------------------------------------------------
1/18/2020      Trump can win Wisconsin if he ends    Wisconsin State
                tariffs                               Journal
------------------------------------------------------------------------
12/31/2019     The trade war has cost us over        PennLive
                $500,000 dollars
------------------------------------------------------------------------
12/19/2019     In the Next Debate, Democrats Must    LA Focus
                Highlight Damage Trump's Tariffs
                Have Caused
------------------------------------------------------------------------
12/4/2019      Trade war undermines strong Texas     Houston Chronicle
                economy and Trump's reelection
                chances
------------------------------------------------------------------------
12/3/2019      Trump has been great for Black        The State
                Americans, but the trade war could
                hinder the progress
------------------------------------------------------------------------
11/25/2019     Tariffs are slowly driving me out of  Concord Monitor
                business
------------------------------------------------------------------------
11/7/2019      Tariffs Could Hurt the Holidays--and  Iowa Standard
                President Trump's Re-Election in
                2020
------------------------------------------------------------------------
10/15/2019     Enough Is Enough: Tariffs Are         RealClearPolitics
                Damaging Ohio's Economy
------------------------------------------------------------------------
10/4/2019      How Tariffs Are Hurting Trump's       Save Jersey
                Base--and His Chances of Re-
                election
------------------------------------------------------------------------
9/20/2019      Tariffs Could Hurt President Trump's  Townhall
                Chances in North Carolina
------------------------------------------------------------------------
8/25/2019      How Tariffs Are Hurting My Business-- NY Observer
                And Your Wallet
------------------------------------------------------------------------
8/14/2019      Tariffs Are Taxes Paid by New         NH Journal
                Hampshire Businesses and Consumers
------------------------------------------------------------------------
8/4/2019       Trump's economy is booming--          The Hill
                repealing tariffs will boost it
                even more
------------------------------------------------------------------------
8/2/2019       Tariffs Looming over 2020 Election    RedState
------------------------------------------------------------------------
7/10/2019      Rohn Bishop: Wisconsin needs 4 more   WisPolitics
                years of Trump's economic policies--
                minus tariffs
------------------------------------------------------------------------
7/9/2019       LTE: Tariffs should be removed        Gettysburg Times
------------------------------------------------------------------------
6/19/2019      Tariffs hurting same Floridians       Sun Sentinel
                Trymp is trying to help
------------------------------------------------------------------------
6/19/2019      Trump's tariffs endanger Wisconsin's  The Cap Times
                booming economy
------------------------------------------------------------------------
6/13/2019      A Quick End to the Trade War Is the   Townhall
                Key to Victory for President Trump
                in 2020
------------------------------------------------------------------------

                                 ______
                                 
                        Center for Fiscal Equity

                        14448 Parkvale Road, #6

                          Rockville, MD 20853

                      fiscalequitycenter@yahoo.com

                    Statement of Michael G. Bindner

Chairman Wyden and Ranking Member Crapo, thank you for the opportunity 
to submit comments to the committee.

Within the past week, Chinese President Xi met with Vladimir Putin to 
strengthen economic ties, although any direct help with the Russian 
aggression in Ukraine (not a regional conflict) was not disclosed. If 
such aid is found to exist, it is news to no one that this would be 
very bad for our trade relationship with China.

Barring such stupidity, an agreement between Russia and China on energy 
and resources is geographically inevitable, although its instigation by 
authoritarian regimes is problematic for anyone outside the ruling 
oligarchy on one side and the Communist Party on the other. Revolution 
in both countries is inevitable and may occur sooner than later--which 
would be good news for the Mongols, the Uyghurs and the Ukranians (and 
many others).

The continuing conflict in Ukraine is not good for the Belt Road 
initiative. If China acts in their own interests in this matter, rather 
than in the interests of the strongmen, development will be good for 
all.

Until sanity returns, a rapprochement between Russia and China is all 
the more reason to dust off plans for the Trans-Pacific Partnership (or 
whatever Ambassador Tai wishes to call it). We made our feelings about 
extra-legal provisions of trade treaties in regard to local law last 
year--and the years before. Global capitalism is bad enough. Global 
authoritarian capitalism is worse. Using right to work laws to leave 
American workers naked in the face of such power (including migrants to 
the United States) is a practice that must be ended if we wish to claim 
moral high ground in dealing with the Chinese.

The crisis on the border continues. The President is finding that 
dealing with it is not so easy as evicting Stephen Miller from the West 
Wing, which is why immigration reform must be part of the trade policy 
agenda. Workers who do not have documentation problems cannot be easily 
exploited--especially if they are able to unionize. This will also help 
level the playing field for American workers.

An analysis of how consumption taxes can improve our trade policy is 
found in our first attachment, as it was last year. We have updated our 
tax reform and debt papers, which are also attached.

Congress has recently passed corporate minimum taxes to come into 
compliance with the OECD's agreement on this subject. The President's 
budget includes further proposals in this area. I am no fan of 
corporate income taxation when value-added taxes (both GST/Invoice VAT 
and Subtraction VAT) are available.

Our proposal for an Asset Value-Added Tax will require international 
cooperation. Part of trade is moving money around--including financial 
assets. An asset VAT as a replacement for capital gains taxes and 
capital returns must go farther than the border. It is too easy to 
shift to offshore stock exchanges where such taxes do not exist. 
International agreements on rates and enforcement structures are vital 
for such a tax to work. The model for negotiating the CMT on a multi-
national basis can be used for this effort. Again, please see the third 
attachment, which has been recently updated.

Given that there is still no agreement on extending (or eliminating) 
the debt limit, our national debt attachment is a must read for members 
of the Republican Conference. It turns out that much of the national 
debt is held by managed fund accounts and bonds held by the wealthiest 
households. GOP donors need to make some phone calls, as they are the 
ones who will lose the most money the fastest in the event of a 
default.

For more information on the debt, please see our study: Settling (and 
Squaring) Accounts: Who Really Owes the National Debt? Who Owns It? 
available from Amazon at https://www.amazon.com/dp/B08FRQFF8S. I can 
provide free copies of the prior version upon request and will 
distribute the latest edition once it is completed. The most recent 
bottom line estimates can be found in the second attachment. This shows 
who is on the hook for the debt and who benefits from it.

A main conclusion of our analyses is that the national debt is the 
leverage for capitalism to the extent that debt securities allow Wall 
Street to offer riskier assets, such as mortgage backed securities 
embedded in Exchange Traded Funds, as well as more traditional 
offerings. Wealth held by the few (and the attachment shows how very 
few we mean), provides management absolute control of most workplaces. 
Employee-owned firms would not need such an unbalanced economy 
leveraged by American Treasury holdings.

Thank you for the opportunity to address the committee. We are, of 
course, available for direct testimony or to answer questions by 
members and staff.

Attachment One--Trade Policy

Consumption taxes could have a big impact on workers, industry and 
consumers. Enacting an I-VAT is far superior to a tariff. The more 
government costs are loaded onto an I-VAT the better.

If the employer portion of Old-Age and Survivors Insurance, as well as 
all of disability and hospital insurance are decoupled from income and 
credited equally and personal retirement accounts are not used, there 
is no reason not to load them onto an I-VAT. This tax is zero rated at 
export and fully burdens imports.

Seen another way, to not put as much taxation into VAT as possible is 
to enact an unconstitutional export tax. Adopting an I-VAT is superior 
to it's weak sister, the Destination Based Cash Flow Tax that was 
contemplated for inclusion in the TCJA. It would have run afoul of WTO 
rules on taxing corporate income. I-VAT, which taxes both labor and 
profit, does not.

The second tax applicable to trade is a Subtraction VAT or S-VAT. This 
tax is designed to benefit the families of workers through direct 
subsidies, such as an enlarged child tax credit, or indirect subsidies 
used by employers to provide health insurance or tuition reimbursement, 
even including direct medical care and elementary school tuition. As 
such, S-VAT cannot be border adjustable. Doing so would take away 
needed family benefits. As such, it is really part of compensation. 
While we could run all compensation through the public sector.

The S-VAT could have a huge impact on long term trade policy, probably 
much more than trade treaties, if one of the deductions from the tax is 
purchase of employer voting stock (in equal dollar amounts for each 
worker). Over a fairly short period of time, much of American industry, 
if not employee-owned outright (and there are other policies to 
accelerate this, like ESOP conversion) will give workers enough of a 
share to greatly impact wages, management hiring and compensation and 
dealing with overseas subsidiaries and the supply chain--as well as 
impacting certain legal provisions that limit the fiduciary impact of 
management decision to improving short-term profitability (at least 
that is the excuse managers give for not privileging job retention).

Employee owners will find it in their own interest to give their 
overseas subsidiaries and their supply chain's employees the same deal 
that they get as far as employee ownership plus an equivalent standard 
of living. The same pay is not necessary, currency markets will adjust 
once worker standards of living rise. Attachment Three further 
discusses employee ownership.

Over time, ownership will change the economies of the nations we trade 
with, as working in employee-owned companies will become the market 
preference and force other firms to adopt similar policies (in much the 
same way that, even without a tax benefit for purchasing stock, 
employee-owned companies that become more democratic or even more 
socialistic, will force all other employers to adopt similar measures 
to compete for the best workers and professionals).

In the long run, trade will no longer be an issue. Internal company 
dynamics will replace the need for trade agreements as capitalists lose 
the ability to pit the interest of one nation's workers against the 
others. This approach is also the most effective way to deal with the 
advance of robotics. If the workers own the robots, wages are swapped 
for profits with the profits going where they will enhance consumption 
without such devices as a guaranteed income.

Attachment Two--Tax Reform, Center for Fiscal Equity, March 24, 2023

Synergy: The President's Budget for 2024 proposes a 25% minimum tax on 
high incomes. Because most high income households make their money on 
capital gains, rather than salaries, an asset value-added tax replacing 
capital gains taxes (both long and short term) would be set to that 
rate. The top rate for a subtraction VAT surtax on high incomes (wages, 
dividends and interest paid) would be set to 25%, as would the top rate 
for income surtaxes paid by very high-income earners. Surtaxes 
collected by businesses would begin for any individual payee receiving 
$75,000 from any source at a 6.25% rate and top out at 25% at all such 
income over $375,000. At $450,000, individuals would pay an additional 
6.25% on the next $75,000 with brackets increasing until a top rate of 
25% on income over $750,000. This structure assures that no one games 
the system by changing how income is earned to lower their tax burden.

Individual payroll taxes. A floor of $20,000 would be instituted for 
paying these taxes, with a ceiling of $75,000. This lower ceiling 
reduces the amount of benefits received in retirement for higher income 
individuals. The logic of the $20,000 floor reflects full-time work at 
a $10 per hour minimum wage offered by the Republican caucus in 
response to proposals for a $15 wage. The majority needs to take the 
deal. Doing so in relation to a floor on contributions makes adopting 
the minimum wage germane in the Senate for purposes of Reconciliation. 
The rate would be set at 6.25%.

Employer payroll taxes. Unless taxes are diverted to a personal 
retirement account holding voting and preferred stock in the employer, 
the employer levy would be replaced by a goods and receipts tax of 
6.25%. Every worker who meets a minimum hour threshold would be 
credited for having paid into the system, regardless of wage level. All 
employees would be credited on an equal dollar basis, rather than as a 
match to their individual payroll tax. The tax rate would be adjusted 
to assure adequacy of benefits for all program beneficiaries.

High-income Surtaxes. As above, taxes would be collected on all 
individual income taxes from salaries, income and dividends, which 
exclude business taxes filed separately, starting at $400,00 per year. 
This tax will fund net interest on the debt (which will no longer be 
rolled over into new borrowing), redemption of the Social Security 
Trust Fund, strategic, sea and non-continental U.S. military 
deployments, veterans' health benefits as the result of battlefield 
injuries, including mental health and addiction and eventual debt 
reduction.

Asset Value-Added Tax (A-VAT). A replacement for capital gains taxes 
and the estate tax. It will apply to asset sales, exercised options, 
inherited and gifted assets and the profits from short sales. Tax 
payments for option exercises, IPOs, inherited, gifted and donated 
assets will be marked to market, with prior tax payments for that asset 
eliminated so that the seller gets no benefit from them. In this 
perspective, it is the owner's increase in value that is taxed. As with 
any sale of liquid or real assets, sales to a qualified broad-based 
Employee Stock Ownership Plan will be tax-free. These taxes will fund 
the same spending items as high income and subtraction VAT surtaxes. 
There will be no requirement to hold assets for a year to use this 
rate. This also implies that this tax will be levied on all eligible 
transactions.

The 3.8% ACA-SM tax will be repealed as a separate tax, with health 
care funding coming through a subtraction value-added tax levied on all 
employment and other gross profit. The 25% rate is meant to be a 
permanent compromise, as above. Any changes to this rate would be used 
to adjust subtraction VAT surtax and high income surtax rates 
accordingly. This rate would be negotiated on a world-wide basis to 
prevent venue seeking for stock trading.

Subtraction Value-Added Tax (S-VAT). Corporate income taxes and 
collection of business and farm income taxes will be replaced by this 
tax, which is an employer paid Net Business Receipts Tax. S-VAT is a 
vehicle for tax benefits, including

      Health insurance or direct care, including veterans' health care 
for non-
battlefield injuries and long-term care.
      Employer paid educational costs in lieu of taxes are provided as 
either 
employee-directed contributions to the public or private unionized 
school of their choice or direct tuition payments for employee children 
or for workers (including ESL and remedial skills). Wages will be paid 
to students to meet opportunity costs.
      Most importantly, a refundable child tax credit at median income 
levels (with inflation adjustments) distributed with pay.

Subsistence-level benefits force the poor into servile labor. Wages and 
benefits must be high enough to provide justice and human dignity. This 
allows the ending of state administered subsidy programs and 
discourages abortions, and as such enactment must be scored as a must 
pass in voting rankings by pro-life organizations (and feminist 
organizations as well). To assure child subsidies are distributed, S-
VAT will not be border adjustable.

As above, S-VAT surtaxes are collected on all income distributed over 
$75,000, with a beginning rate of 6.25%. replace income tax levies 
collected on the first surtaxes in the same range. Some will use 
corporations to avoid these taxes, but that corporation would then pay 
all invoice and subtraction VAT payments (which would distribute tax 
benefits). Distributions from such corporations will be considered 
salary, not dividends.

Invoice Value-Added Tax (I-VAT). Border-adjustable taxes will appear on 
purchase invoices. The rate varies according to what is being financed. 
If Medicare for All does not contain offsets for employers who fund 
their own medical personnel or for personal retirement accounts, both 
of which would otherwise be funded by an S-VAT, then they would be 
funded by the I-VAT to take advantage of border adjustability.

I-VAT forces everyone, from the working poor to the beneficiaries of 
inherited wealth, to pay taxes and share in the cost of government. As 
part of enactment, gross wages will be reduced to take into account the 
shift to S-VAT and I-VAT, however net income will be increased by the 
same percentage as the I-VAT. Inherited assets will be taxed under A-
VAT when sold. Any inherited cash, or funds borrowed against the value 
of shares, will face the I-VAT when sold or the A-VAT if invested.

I-VAT will fund domestic discretionary spending, equal dollar employer 
OASI contributions, and non-nuclear, non-deployed military spending, 
possibly on a regional basis. Regional I-VAT would both require a 
constitutional amendment to change the requirement that all excises be 
national and to discourage unnecessary spending, especially when 
allocated for electoral reasons rather than program needs. The latter 
could also be funded by the asset VAT (decreasing the rate by from 
19.25% to 13%).

Carbon Added Tax (C-AT). A Carbon tax with receipt visibility, which 
allows comparison shopping based on carbon content, even if it means a 
more expensive item with lower carbon is purchased. C-AT would also 
replace fuel taxes. It will fund transportation costs, including mass 
transit, and research into alternative fuels. This tax would not be 
border adjustable unless it is in other nations, however in this case 
the imposition of this tax at the border will be noted, with the U.S. 
tax applied to the overseas base.

Attachment Three--Debt Ownership as Class Warfare, February 16, 2022

Visibility into how the national debt, held by both the public and the 
government at the household level, sheds light on why Social Security, 
rather than payments for interest on the debt, are a concern of so many 
sponsored advocacy institutions across the political spectrum.

Direct household attribution can be made by calculating direct bond 
holdings, income provided by Social Security payments and secondary 
financial instruments backed with debt assets for each income quintile.

Responsibility to repay the debt is attributed based on personal income 
tax collection. Payroll taxes create an asset for the payer, so they 
are not included in the calculation of who owes the debt. Using 2019 
tax data and the national debt as of COB February 15th, 2022. the ratio 
is $19 of debt owed for every dollar of income tax paid. Note well that 
the adjusted gross income of the bottom 80% is just over that garnered 
by the top 10%.

[GRAPHIC] [TIFF OMITTED] T2323.003

.epsThe bottom 80% of taxpaying units hold few, if any, public debt 
assets in the form of Treasury Bonds or Securities or in accounts 
holding such assets and only take home one-third of adjusted gross 
income. Their main national debt assets are held on their behalf by the 
Government. They are owed more debt than they owe through taxes. The 
next 10% (the middle class), hold more in terms of long term 
investments and mutual fund and bond assets. They hold a bit under a 
fifth of social insurance assets.

The top 10% pay more than half of income taxes (the dividing line is 
about 97.5%--and has been for a while). Asset shares within the top 10% 
are estimated using the same breakdown as the entire population, that 
is, the top 1% hold 54% of Federal Reserve and Long Term Investment 
Assets and 77% of mutual funds and bonds as held by the top 10%. A 
similar fraction is used to estimate holdings by the top 0.01%--which 
is consistent to how much income they receive (note that I did not say 
earn).

This illustration shows who benefits the most from having a national 
debt, therefore who has the most to lose through default. The relative 
shares of debt ownership, however, are current as reflected in the 2019 
Federal Reserve Survey.

                                 ______
                                 
                    Consumer Technology Association

                            1919 S. Eads St.

                          Arlington, VA 22202

                              703-907-7600

                         https://www.cta.tech/

In response to the March 23 and March 24 congressional hearings on the 
2023 U.S. Trade Policy Agenda, the Consumer Technology Association 
(CTA)' respectfully submits this statement for the record on 
increasing the positive impact and ambition of U.S. trade policy.

CTA represents the $505 billion U.S. consumer technology industry, 
which supports more than 18 million U.S. jobs. Our industry appreciates 
the Office of the U.S. Trade Representative's (USTR's) efforts to 
strengthen U.S. trade relationships with allies and key trading 
partners, deploy U.S. trade policy as a tool for supporting Ukraine 
against Russia, establish a worker-centric trade policy, and address 
important U.S. objectives like eliminating forced labor from supply 
chains. around the world.

The Biden-Harris Administration has created a solid foundation. 
However, it must adopt a more proactive and market-opening U.S. trade 
policy that strengthens U.S. ties with its allies. Ahead of Ambassador 
Tai's testimony and responses to questions, CTA urges USTR to work with 
the Congress and U.S. stakeholders on prioritizing the negotiation of 
free trade agreements and opening new markets to U.S. technology goods 
and services through tariff elimination.

CTA's statement offers recommendations to the Congress and the 
Administration to support American businesses and workers and create 
durable, beneficial, and resilient economic and trade ties with its 
allies. They also call for an honest reckoning of current policy that 
has caused more harm than good (e.g., the section 301 tariffs on 
imports from China).

1.  CTA Recommendations on a better trade policy to support U.S. 
                    technology, trade, and economic leadership in the 
                    face of competition with China

Our relationship with China is complex: China is our third-largest 
trading partner, our second-largest debt holder, and a key source of 
inputs for CTA members. More, China is also a world power with whom we 
must maintain peaceful relations and cooperate on global challenges 
like climate change.

At the same time, China is our main economic rival and has vowed to 
overtake us as the world technology leader. They routinely ignore and 
exploit international trade norms. They engage in sophisticated efforts 
to steal US intellectual property and national security secrets. They 
are a potential military threat to the United States and neighboring 
economies like Taiwan, and they aggressively repress their own people 
and ethnic minorities.

U.S. policies toward China should recognize this nuanced 
``competition'' dynamic with China, and disincentive Chinese bad 
behavior without unduly harming our businesses, consumers, or U.S. 
innovation. Our policies should:

      Strengthen the international rule of law and the multilateral 
trading system, including through modernization of the World Trade 
Organization (WTO);

      Avoid tariffs on imported goods from China or other markets. As 
the U.S. International Trade Commission demonstrated in its March 2023 
authoritative report,\1\ tariffs are taxes paid by Americans that drive 
inflation and harm US businesses, not China;
---------------------------------------------------------------------------
    \1\ https://www.usitc.gov/publications/332/
pub5405.pdf?source=govdelivery&utm_medium=
email&utm_source=govdelivery.

      Promote trade agreements and economic cooperation between the 
U.S. and our allies and democratic societies. We should contain trade 
misbehavior by the Chinese Communist Party (CCP) and state-owned or 
controlled enterprises by leading and participating in regional trade 
agreements networks like the Comprehensive and Progressive Trans-
---------------------------------------------------------------------------
Pacific Partnership (CPTPP);

      Ensure that any export and investment restrictions are narrowly 
tailored to address national security issues, and do not unduly impact 
commercial export opportunities for U.S. businesses;

      Avoid sweeping product and company bans unless they are the 
final resort to address legitimate national security threats to U.S. 
businesses or consumers;

      Ensure any import restrictions based on forced labor practices 
in China or other markets are clear, transparent, and enable compliance 
by law-abiding American businesses;

      Support and adhere to the rulings of the WTO and other bodies 
that maintain international trade rules and norms; and

      Prioritize robust and sustained consultations with stakeholders 
on all trade and investment initiatives, negotiations, and proposed 
measures, consistent with U.S. agency obligations under the 
Administrative Procedure Act as appropriate.

2. CTA Recommendations on a better trade policy to support U.S. friends 
                    and allies

Our planet's history tells us that friendship among nations is to be 
cherished and nurtured. Too often countries have not served as good 
friends to others, particularly in the area of international trade, 
when we prioritize competition over friendship. In our view, we should 
view trade friendships as a means of protecting the future of our 
children and successive generations, who will inherit our planet and 
the promise of humanity.

We must act to ensure not only their economic health but their freedom 
and liberty. If free market liberty-loving countries increasingly 
isolate themselves from each other via trade barriers, we are hurting 
our ability to compete both economically and in innovation. Free trade 
among friends and allies is important as it greatly benefits each 
nation and gives us the best chance at staying ahead of authoritarian 
governments.

With these perspectives in mind, CTA launched a new white paper at CES 
2023: ``Top Ten Ways for Turning Trade Friends into Trade Best Friends 
Forever (Trade BFFs).'' (Footnote: https://cdn.cta.tech/cta/media/
media/advocacy/pdfs/tradebff.pdf)

We hope these ideas, which we excerpt from the white paper below, spark 
a necessary conversation among democratic and liberty-loving nations on 
leaving the self-serving measures of the 20th century behind and 
forging a stronger and like-minded free trade future for our children 
and successive generations. And we welcome ideas from the 
Administration, the Congress, and our friends and allies on what it 
takes to be a ``Trade BFF'' in our era of fierce global competition.

Trade BFFs should:

     1.  Honor their commitments to each other. Friendships are built 
on trust, which means Trade BFFs should bind and enforce their 
commitments to each other (trade pinky promises) through comprehensive, 
binding, and enforceable free trade agreements (trade friendship 
bracelets).

     2.  Have each other's backs. You look out for someone by helping 
them--not putting up barriers to their success. True friendships embody 
selflessness--not selfishness. For example, they should promise to 
spare their Trade BFFs from disruptive and harmful unilateral 
enforcement actions, including tariffs and import prohibitions.

     3.  Work together. Friends make each other better and push each 
other to live up to or surpass expectations. One way to do that is to 
collaborate on strengthening the World Trade Organization and on 
multilateral and regional trade and investment efforts.

     4.  Share common values--and stick to them. We value freedom, 
democracy, and the power of the free market. We can maintain and 
promote market economies by avoiding policies that intentionally 
displace or injure foreign competitors and making any incentives 
available to their domestic industries also available to industries in 
their Trade BFFs.

     5.  Compete hard--but fairly. Trade BFFs develop and implement 
regulations that allow companies located in their fellow Trade BFFs to 
compete fairly on a level playing field while encouraging a race to the 
top through high performance.

     6.  Be empathetic and open to mutual, voluntary support. Trade 
BFFs take measures to encourage but not coerce industries located in 
their fellow Trade BFFs to trade with or invest in their economies.

     7.  Invest in and support each other's successes. If one friend is 
an expert or good at something, they use that skill or expertise to 
help their friends. Trade BFFs invest in and support each other's 
successes, avoiding irritating and disruptive investment reviews or 
other restrictions on investment.

     8.  Share openly with each other. Trade BFFs take steps to allow 
data to flow freely across borders. They prioritize transparency and 
participation by interested persons in policymaking, including in their 
fellow Trade BFFs.

     9.  Join forces to fight for their shared futures. All countries 
sharing the values of democracy and liberty should work together and 
rip out trade barriers among like-minded friends. They can work 
together to confront trade bullies and provide more market access to 
each other in the face of bullying. They avoid policies that bully 
their fellow Trade BFFs.

    10.  Communicate with each other clearly and often. One key to any 
friendship is an open and honest level of communication. For example, 
Trade BFFs talk to each other regularly about issues like IP protection 
and enforcement and new trade rules that benefit our people and planet. 
They avoid unilateral measures, which can have unintended consequences 
on their friendships, companies, workers, and people.

3. CTA Recommendations on the Section 301 Tariffs on Imports from China

On January 17, 2023, CTA submitted comprehensive comments to USTR \2\ 
in response to its request for stakeholder input under the statutorily 
mandated ``necessity review'' at the 4-year anniversary of the 
imposition of the Section 301 tariffs on imports from China. CTA's 
comments offered significant input on the negative economic impact of 
the tariffs, their ineffectiveness in meeting their stated and unstated 
objectives, and the possible alternatives to the tariffs that together 
or individually may be more effective in meeting those objectives.
---------------------------------------------------------------------------
    \2\ https://cdn.cta.tech/cta/media/media/pdfs/final-cta-comments-
to-ustr-for-four-year-review-of-china-section-301-tariffs-20230117.pdf.

In summary, CTA respectfully requested that USTR fully remove the HTS 
codes for consumer technology products and inputs in Annexes 1, 2, and 
4 to this submission from Lists 1, 2, 3, and 4A. We urge USTR to avoid 
imposing tariffs on the HTS codes in Annexes 3 and 4 that are included 
on List 4B and on any consumer technology product or input not yet 
included on a Section 301 tariff list. Finally, CTA encouraged USTR 
complete the necessity review as quickly as possible and advocates for 
the initiation of comprehensive, transparent, and fair exclusions 
---------------------------------------------------------------------------
process with due process until the tariffs are removed.

Additionally, CTA made the following key points in its comment:

      The tariff actions are not now, and will never be, an effective 
tool for achieving the objectives of Section 301 to eliminate China's 
problematic acts, policies and practices.
      The tariff actions adversely affect the U.S. economy, including 
consumers.
      The tariff actions make the U.S. technology sector, and 
particularly the thousands of startups and small businesses in the 
sector, less competitive at home and abroad.
      It is counterproductive and inconsistent with other policies to 
maintain increased duty rates on consumer technology products and 
inputs.
      It is paramount that USTR permanently remove consumer technology 
products and inputs from the Section 301 actions and not target them or 
use them as pawns in future actions.
      Other actions would be more effective in addressing China's 
problematic acts, policies, and practices.
      USTR must be consistent in its policymaking and abide by its 
statutory procedural and transparency obligations during this review 
and any future use of its Section 301 authority.

Conclusion

CTA greatly appreciates the opportunity to submit these comments for 
the record. We look forward to continuing to work with the House Ways 
and Means and Senate Finance Committees and with the Administration to 
fight inflation, strengthen U.S. trade and economic ties with allies by 
opening new markets and negotiating high standard, binding and 
enforceable trade rules, and bolstering U.S. technology leadership and 
the innovation economy.

                                 ______
                                 
                            Engine Advocacy

                       700 Pennsylvania Ave., SE

                          Washington, DC 20003

April 6, 2023

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg. Rm. SD-219
Washington, DC 20510-6200

Dear Chairman Wyden, Ranking Member Crapo, and Honorable Members of the 
Committee on Finance:

Engine is a non-profit technology policy, research, and advocacy 
organization that bridges the gap between policymakers and startups. 
Engine works with government and a community of thousands of high-
technology, growth-oriented startups across the nation to support the 
development of technology entrepreneurship. Lowering barriers to trade 
unlocks markets for U.S. startups to expand, compete, and find success 
and is a vital part of promoting domestic technology entrepreneurship. 
Accordingly, we appreciate the Committee holding a hearing to examine 
the President's Trade Agenda.

The Internet and digitization of world economies has enabled startups 
to reach markets beyond their borders. Through digital trade, startups 
are able to further the outsized contributions they make to domestic 
economic growth and job creation. And startups help others reach 
markets abroad too, whether they be artists, farmers, manufacturers, or 
others. As digital trade has grown,\1\ barriers to digital trade have 
grown along with it. Startups encounter these barriers as they grow and 
scale beyond U.S. borders to serve users and clients abroad, and such 
barriers dictate where startups can feasibly reach users.\2\ Startups 
accordingly need policymakers to pursue smart digital trade policies to 
lower barriers to entry, facilitate cross-border transfers of data, and 
promote uniform regulatory environments across jurisdictions.
---------------------------------------------------------------------------
    \1\ See, e.g., Table 3.1. U.S. Trade in ICT and Potentially ICT-
Enabled Services, by Type of Service, Bureau of Economic Analysis (July 
7, 2022), https://apps.bea.gov/iTable/iTable.cfm?
reqid=62&step=9&isuri=1&6210=4#reqid=62&step=9&isuri=1&6210=4.
    \2\ See e.g., Comments of Engine Advocacy Regarding Foreign Trade 
Barriers to U.S. Exports for 2023 Reporting, Engine (October 28, 2022), 
https://engine.is/s/2022-Transatlantic-Business-Statement-on-EU-US-
Data-Privacy-Framework.pdf.

Policymakers on the Committee and at the Office of the U.S. Trade 
Representative must recognize and harness the benefits of smart digital 
trade policies that enable startups to succeed by ensuring these 
provisions are included in current negotiations. Unfortunately, digital 
trade policies that lower trade barriers for U.S. businesses appear to 
be facing increasing skepticism from U.S. policymakers and others that 
claim forward-thinking digital trade policies only serve large 
incumbent companies.\3\ Reducing barriers to digital trade helps all 
U.S. businesses, including ``big tech,'' but it arguably stands to help 
startups the most.
---------------------------------------------------------------------------
    \3\ See e.g., Hearing on The President's 2023 Trade Policy Agenda: 
Hearing Before the Senate Committee on Finance, 118th Congress (2023) 
(Remarks of Senator Warren); Hearing on Opportunities and Challenges 
for Trade Policy in the Digital Economy: Hearing Before the Senate 
Subcommittee on International Trade, Customs, and Global 
Competitiveness, 117th Congress (2022) (remarks of Senator Warren); 
Cristiano Lima, Advocates urge U.S. not to offer `Big-Tech-favored 
terms' in trade talks, Washington Post (March 15, 2023), https://
www.washington
post.com/politics/2023/03/15/advocates-urge-us-not-offer-big-tech-
favored-terms-trade-talks/; Webinar: Big Tech's Ploy to Undermine AI 
Accountability, Privacy and Anti-Monopoly Policies with Senator Warren, 
Representative Schakowsky, and Representative Takano, Rethink Trade 
(March 16, 2023), https://rethinktrade.org/videos/webinar-big-techs-
ploy-to-undermine-ai-accountability-privacy-and-anti-monopoly-policies-
with-sen-warren-rep-schakowsky-and-rep-takano/.

Take, for instance, the invalidation of Privacy Shield in 2020, which 
created barriers to cross-border data transfers between the U.S. and 
Europe. This impacted all transatlantic businesses, but large companies 
were able to turn to other methods for transferring data, like Standard 
Contractual Clauses, while startups faced more existential business 
disruptions, increased costs, and lost clients.\4\ Indeed, small 
businesses and startups comprised the overwhelming majority of 
companies that relied on free flows of data through Privacy Shield.\5\
---------------------------------------------------------------------------
    \4\ See e.g., Sean Davis, New Transatlantic Data Deal Can Reopen EU 
Opportunities for Startups, Engine (April 20, 2022), https://
engineadvocacyfoundation.medium.com/new-transatlantic-data-deal-can-
reopen-eu-opportunities-for-startups-4a25e454572f; #StartupsEverywhere 
profile: Mikel Carmenes Cavia, Co-Founder and VP of Engineering, 
Onfleet, Engine (May 7, 2021), https://www.engine.is/news/
startupseverywhere-sanfrancisco-ca-onfleet.
    \5\ See generally Privacy Shield Participants, https://
www.privacyshield.gov/list.

Similarly, the EU's Digital Services Act will impact all content-
hosting companies operating or looking to operate in Europe. Large U.S. 
technology companies will face significant new obligations under the 
law, but none of them are likely to exit the EU market or significantly 
revise plans to operate there. U.S. startups on the other hand will 
encounter elevated barriers to entering the EU market, significant new 
obligations, and compliance costs.\6\
---------------------------------------------------------------------------
    \6\ Lauren Koop, The EU's Digital Services Act is one step closer 
to becoming law. How will it impact U.S. startups?, Engine (July 28, 
2022), https://engineadvocacyfoundation.medium.
com/the-eus-digital-services-act-is-one-step-closer-to-becoming-law-
how-will-it-impact-u-s-startups
-7be702180582; Daphne Keller, The EU's new Digital Services Act and the 
Rest of the World, Verfassungsblog (November 7, 2022), https://
verfassungsblog.de/dsa-rest-of-world/ (Explaining the comparative 
impacts of the DSA on small entities: ``The other predictable global 
harm will be to competition. The DSA burdens even very small platforms 
with obligations that today's incumbents never shouldered, or else took 
on only much later in their development. Facebook, for example, first 
released a transparency report in 2013, when it was worth $139 billion. 
It first allowed users to appeal removals of photos, videos, and posts 
(but not comments) in 2018, when the company was worth $374 billion and 
had some 35,000 employees. Newer market entrants will take on similar 
obligations at a much earlier stage: once they reach just =10 million 
and fifty employees.'').

In each of these examples, U.S. policymakers have intervened to try to 
reach solutions with their EU counterparts.\7\ This work advances the 
interests of U.S. startups and should not be foregone merely because it 
also helps or is supported by ``big tech.'' Likewise, trade frameworks 
that are currently being pursued and negotiated must advance the 
interests of U.S. startups, including through strong digital trade 
provisions.
---------------------------------------------------------------------------
    \7\ See, e.g., Fact Sheet: President Biden Signs Executive Order to 
Implement the European Union-U.S. Data Privacy Framework, White House 
(October 7, 2022), https://www.whitehouse
.gov/briefing-room/statements-releases/2022/10/07/fact-sheet-president-
biden-signs-executive-order-to-implement-the-european-union-u-s-data-
privacy-framework/ (on resolving transatlantic data transfer issues); 
Chamber of Progress (@ProgressChamber), Twitter (December 8, 2021) 
(Remarks of Secretary Raimondo on the DSA: ``We have serious concerns 
that these proposals will disproportionately impact U.S.-based tech 
firms and their ability to adequately serve EU customers and uphold 
security and privacy standards.'').

Smart digital trade policy that promotes a free, open, and global 
Internet is needed to lower and keep low barriers to trade for 
startups. The recent U.S.-Mexico-Canada and U.S.-Japan Agreements 
enshrined commonsense digital frameworks and provide a template for 
smart digital trade policy that should be built upon in future trade 
negotiations, including the Indo-Pacific Economic Framework, for 
example. Inspired by these agreements, digital trade policy should 
embrace the following principles, which can support the success of U.S. 
startups looking to expand into foreign markets and engage customers 
abroad:

Facilitate cross-border data flows.

        The Internet is inherently borderless and allows startups to 
        reach foreign markets with little additional investment. 
        Conversely, policies that restrict how and when data can be 
        transferred across borders erect barriers to trade and increase 
        costs that startups with limited resources have difficulty 
        overcoming compared to their larger rivals.

Provide proportionate, tailored, and certain intermediary liability 
                    frameworks.

        Balanced intermediary liability frameworks, like those found in 
        the U.S. law (i.e., 47 U.S.C. Sec. 230 and 17 U.S.C. Sec. 512), 
        provide the legal certainty needed for startups with business 
        models that rely on user content--whether it's comments, 
        photos, reviews, etc.--to grow and thrive. Around the world, 
        however, common methods for governing intermediaries are taking 
        root that undermine a startup-friendly environment and create 
        new uncertainties and costs for U.S. companies. Laws that 
        subject startups to the same standards as their much larger 
        competitors, require the appointment of local representatives, 
        impose tight content takedown timelines, require automated 
        filtering, require the removal of content that is not otherwise 
        illegal, and threaten heavy fines create barriers to entry for 
        startups and reduce the number of foreign markets reasonably 
        available to them.

Foster innovation and regulatory consistency.

        Extraterritorial regulations adopted in other jurisdictions, 
        including around data privacy and emerging technologies, can 
        limit innovation opportunities and market access for American 
        startups. Because they often apply any time a business 
        encounters a user in or from that jurisdiction, startups with 
        relatively few users there are likely to forgo serving that 
        jurisdiction because of the regulatory structure. U.S. 
        policymakers should work through the appropriate fora to ensure 
        American startups encounter a consistent and level playing 
        field.

Avoid technology sector-specific levies.

        While startups are rarely subject to digital services taxes 
        (DSTs) themselves, they rely on the services of larger 
        companies who are, to build their products and reach 
        customers.\8\ DSTs increase the price of these services, 
        putting startups at a disadvantage in jurisdictions with them. 
        Working through multinational fora to reach a global solution 
        promises the best step toward a uniform tax environment, and 
        Congress must do its part to advance the solutions arising from 
        these negotiations.\9\
---------------------------------------------------------------------------
    \8\ See, e.g., Tools to Compete: Lower Costs, More Resources, and 
the Symbiosis of the Tech Ecosystem, Engine and CCIA Research Center 
(January 2023), https://static1.squarespace.com/static/
571681753c44d835a440c8b5/t/63d2b8d5bec96f502264fd1f/1674754266044/
FINAL_CCIA
-Engine_Tools-To-Compete.pdf.
    \9\ See, e.g., Jennifer Weinhart, Global tax deal continues to face 
hurdles, Engine (May 24, 2022), https://
engineadvocacyfoundation.medium.com/global-tax-deal-continues-to-face-
hurdles-cbe2ddf71cd1.
---------------------------------------------------------------------------

Prohibit duties on digital transactions.

        The WTO moratorium on e-commerce is critical to fostering 
        digital trade, and it is especially important for startups. 
        Since 1998, member countries have agreed to not impose customs 
        duties on electronic transmissions, but some countries have 
        recently expressed interest in limiting or ending the 
        moratorium.

As U.S. startups have previously told Congress,\10\ smart digital trade 
policies are ``critical to bolster the global competitiveness of U.S. 
startups,'' are necessary ``to `unlock' America's renowned startup 
ecosystem,'' and will further ``the deployment of software and services 
around the world.'' U.S. trade policymakers must heed the advice of 
startups and pursue strong digital trade provisions in current and 
future negotiations and defend the ability of U.S. startups to provide 
their services to end users around the globe.
---------------------------------------------------------------------------
    \10\ See, e.g., Statement for the Record of PILOT Inc. regarding 
hearing on Opportunities and Challenges for Trade Policy in the Digital 
Economy held November 30, 2022, PILOT, Inc. (December 14, 2022), 
https://static1.squarespace.com/static/571681753c44d835a440c8b5/t/
639b26
7a1041a9585ced9704/1671112314829/Statement+for+the+record+-
+Ben+Brooks%2C+PILOT.
pdf.

Engine appreciates the opportunity to submit this statement for the 
hearing record and the Committee's attention to digital trade issues 
important to startups. We look forward to being a resource for the 
---------------------------------------------------------------------------
committee on these and other issues in the future.

Sincerely,

Engine

                                 ______
                                 
                     Flexible Packaging Association

                 185 Admiral Cochrane Drive, Suite 105

                          Annapolis, MD 21401

                           Tel (410) 694-0800

                           Fax (410) 694-0900

                            www.flexpack.org

      Statement of Alison Keane, Esq., IOM, CAE, President and CEO

My name is Alison Keane, and I am the President and CEO of the Flexible 
Packaging Association (FPA). FPA, which is the voice of U.S. 
manufacturers of flexible packaging and their suppliers, continues to 
be troubled by the President's Trade Policy, specifically with regard 
to aluminum foil tariffs.

At a time when sterile packaging for food, health and hygiene, and 
medical equipment is more important than ever, and as U.S. 
manufacturers are continuing to suffer from the worst economy in 
decades, the Administration should be looking at ways to alleviate 
supply chain burdens, not increase them. The flexible packaging 
industry is once again unfairly targeted with unwarranted trade actions 
on aluminum foil that not only threatens food, pharmaceutical, and 
medical security in the U.S.; but will also negatively impact domestic 
jobs and increase prices during a time of unprecedented inflation. A 
``self-initiated'' case by the Department of Commerce (DOC) against 
suppliers of aluminum foil from South Korea and Thailand threatens 
manufacturers of flexible packaging with unwarranted duties on 
necessary aluminum foil for food, pharmaceuticals, and medical device 
packaging. On March 16, 2023, The U.S. Department of Commerce issued a 
preliminarily determination that imports of aluminum foil from South 
Korea and Thailand, using inputs manufactured in China, are 
circumventing the antidumping duty (AD) and countervailing duty (CVD) 
orders on aluminum foil from China.

Flexible packaging represents $39 billion in annual sales in the U.S. 
and is the second largest and one of the fastest growing segments of 
the packaging industry. The industry employs approximately 85,000 
workers in the United States and is deemed an Essential Critical 
Infrastructure Workforce by the Department of Homeland Security. 
Flexible packaging is produced from paper, plastic, film, aluminum 
foil, or any combination of these materials, and includes bags, 
pouches, labels, liners, wraps, rollstock, and other flexible products. 
Concerning the tariff impacts, aluminum foil is used for packaging as 
it provides the barrier protection needed from oxygen, light, moisture, 
and bacteria that food, health and hygiene, and medical supplies need 
to ensure stable shelf life, freshness, and sterility.

Additional duties are not appropriate as the thin gauge foil used in 
these applications cannot be supplied by U.S. manufacturers. In 2017, 
the U.S. Government-
imposed duties on aluminum products coming from China, including 
aluminum foil. In 2018, yet another administrative action was taken 
under Section 232 of the Trade Expansion Act and additional worldwide 
tariffs were imposed on aluminum products, including foil. Now, the 
DOC's preliminary determination of additional fees on imports of 
aluminum foil from S. Korea and Thailand is even more destructive, as 
the foil targeted by these duties and tariffs is not manufactured in 
the U.S. in the quantities needed, and flexible packaging manufacturers 
have no choice but to import it. In fact, the DOC already stipulated 
this truth by granting hundreds of exemptions to these manufacturers 
from the Section 232 tariffs.

The Section 232 investigation on aluminum, which resulted in the 10% 
tariff on aluminum, including foils produced from that aluminum, was 
initiated under the Trade Expansion Act of 1962, and was to determine 
what, if any, effects imports of aluminum have on national security. 
FPA is not aware of any impacts aluminum foil imports for use in the 
packaging industry has on U.S. national security and the Department of 
Commerce Report entitled ``Effects of Aluminum Imports on the National 
Security,'' (report) did not specify any. Nevertheless, the tariffs 
were imposed and these import restrictions have had a significant 
negative impact on the flexible packaging industry and its employment 
in the U.S.

While FPA supported the adoption of exclusions from the tariffs where 
aluminum articles are not produced in the U.S. ``in a sufficient and 
reasonably available amount or of satisfactory quality,'' the process 
for exclusions is arduous and slow, and in some cases, results in 
conflicting approvals and denials. Additionally, manufacturers must 
apply for the exclusion annually, regardless of whether or not there 
has been a change in circumstances. In the case of fine gauge aluminum 
foil used by flexible packaging manufacturers, the domestic supply of 
the product has only gotten scarcer. Despite the Section 232 tariffs, 
as well as the significant Anti-dumping and Countervailing (AD/CVD) 
duties placed on Chinese aluminum foil imports, one of the only 
companies in the U.S. supplying light gauge foil chose to close its 
doors.

As FPA stated in numerous letters and in its testimony to the 
Department, there was never sufficient supply in the U.S. of aluminum 
foil for flexible packaging to begin with, which is why imports were 
necessary. Instead of production moving back to the U.S., it simply 
moved out of China to other parts of the world. Flexible packaging 
manufacturers have in some cases moved away from foil, substituting 
non-foil barrier structures, which also does nothing to assist the 
aluminum industry in the United States. Given that there is not enough 
supply or quality of the foil to meet flexible packaging manufacturers 
need in the U.S. As a result, the exclusionary process is the only 
avenue with which to secure aluminum foil for the packaging that 
requires its use, especially at this time of national emergency when 
the public's health and safety are more important than ever.

Aluminum foil is critical to the flexible packaging industry, as it 
creates the ideal barrier to bacteria, odor, sunlight, and 
contamination and is essential to protect the domestic food, health, 
and medical product supply. Many of these products are ones that 
consumers use or purchase every day, whether in grocery stores, pet 
stores, retail stores, or restaurants, but also found in doctors' 
offices, hospitals, pharmacies, and universities.

Additional duties on aluminum foil will negatively impact consumers and 
the economy by:

      Threatening Food and Medical Product Security: When it comes to 
packaging for medical devices, food, and healthcare, sterility is 
critical--literally a matter of life and death. There is no ideal 
substitution for the barrier protection aluminum foil provides. 
Additional costs on these goods will increase supply chain disruptions 
and could result in a scarcity of these products.

      Negatively Impacting the U.S. Domestic Jobs: Many U.S. 
converting jobs have already gone offshore with the imposition of the 
Chinese and Section 232 duties and tariffs. If additional fees are 
imposed on foil from S. Korea and Thailand, more jobs and manufacturing 
will move out of the U.S. as foreign suppliers of finished goods do not 
have to pay the tariffs.

      Increasing Prices During a Time of Unprecedented Inflation: The 
loss of jobs to the American economy will not be the only negative 
consequence; the costs of goods and the increase in prices for 
consumers for products used daily, during this time of unprecedented 
inflation will be damaging. Products include food and beverage 
applications such as yogurt, ingredients, juices, pet food, and candy; 
health applications, such as over the counter drugs and nutraceuticals 
and COVID-19 testing kits; and medical device packaging, such as 
absorbable sutures and surgery kits.

The Flexible Packaging Association (FPA) and its members support 
efforts to protect domestic manufacturing and ensure national security. 
As such, the Administration should not continue to unfairly target 
domestic flexible packaging manufacturers. Imposing new duties on 
imports of aluminum foil is simply not the answer. Everybody loses in 
unfair trade cases, especially the American consumer. Just as in the 
initial Chinese foil case, new duties and costs to domestic flexible 
packaging manufacturers are not going to result in any benefit to 
domestic aluminum foil producers. However, the consequences will be 
huge for food and medical product insecurity, loss of jobs, and ever-
increasing prices on the goods consumers use every day.

                                 ______
                                 
                     National Foreign Trade Council

                   1225 New York Ave., NW, Suite 650B

                          Washington, DC 20005

                          Phone: 202-887-0278

                           Fax: 202-452-8160

                         https://www.nftc.org/

U.S. Senate
Committee on Finance

INTRODUCTION

The National Foreign Trade Council (``NFTC'') is pleased to provide the 
statement below on behalf of the Tariff Reform Coalition as part of the 
Senate Finance Committee hearing record for its hearing on the 
President's 2023 Trade Agenda.

About the Tariff Reform Coalition

The Tariff Reform Coalition (``the Coalition'') is a broad-based 
coalition of more than 100 companies and associations, (whose member 
companies number at 1,000+) led by NFTC, which is dedicated to working 
with the Administration and Congress to ensure greater oversight and 
review of the Executive Branch's use of tariff authority. The Coalition 
brings together a broad array, large and small, of U.S. manufacturers, 
retailers, agricultural and food producers, and other supply chain 
stakeholders who have been adversely affected by the increasing use of 
tariffs in pursuit of various policy objectives. We welcome the 
opportunity to provide input on the impacts caused by the tariffs 
imposed under section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 
1862) (``Section 232 tariffs'') and section 301 of the Trade Act of 
1974 (19 U.S.C. 2411 et seq.) (``Section 301 tariffs'').

About NFTC

NFTC is a broad-based business association for leadership, expertise, 
and influence on international tax and trade policy issues. We believe 
trade and tax policies should foster fair access to the opportunities 
of the global economy and advance global commerce for good.

 SECTION 232 AND 301 TARIFFS HARM U.S. CONSUMERS AND PRODUCERS, ARE 
                    INEFFECTIVE AND SHOULD BE ELIMINATED

            A. Section 232 and 301 Tariffs Raise Prices
Since March 23, 2018, additional tariffs of 25% and 10% have been 
imposed on certain imports of steel and aluminum, respectively under 
Section 232, which allows the President to take actions to adjust 
imports of goods if the Department of Commerce (``Commerce'') finds 
that imports threaten U.S. national security.

Beginning in July of 2018, the prior Administration imposed tariffs in 
tranches on a series of Chinese-origin goods under Section 301, ranging 
from 7.5% (List 4a) up to 25% (Lists 1, 2, and 3). Section 301 
authorizes the President to impose tariffs or take other trade actions 
when the United States Trade Representative (``USTR'') finds that a 
trade partner is engaging in unfair trade practices. In this case, USTR 
found that China had been engaging in industrial policy which has 
resulted in the transfer and theft of intellectual property and 
technology to the detriment of the U.S. economy.\1\
---------------------------------------------------------------------------
    \1\ Press Release, Statement By U.S. Trade Representative Robert 
Lighthizer on Section 301 Action, July 10, 2018, https://ustr.gov/
about-us/policy-offices/press-office/press-releases/2018/july/
statement-us-trade-representative.

Between March 23, 2018, and March 8, 2023, U.S. Customs and Border 
Protection (``CBP) collected over $188 billion in duties assessed under 
Sections 232 and 301.\2\
---------------------------------------------------------------------------
    \2\ U.S. Customs and Border Protection, Trade Statistics, https://
www.cbp.gov/newsroom/stats/trade, Trade Remedy Enforcement.

------------------------------------------------------------------------
          Category                              Amount
------------------------------------------------------------------------
Aluminum 232                                               $3.62 billion
------------------------------------------------------------------------
Steel 232                                                 $12.05 billion
------------------------------------------------------------------------
China 301                                                $173.07 billion
------------------------------------------------------------------------
Total                                                    $188.74 billion
------------------------------------------------------------------------

By way of comparison, the combined tariff cost imposed under Sections 
232 and 301 exceeds:

      The annual cost of care for the 15 most prevalent types of 
cancer in the U.S. ($156.2 billion);\3\
---------------------------------------------------------------------------
    \3\ Swayne, Matthew, ``Cancer costs U.S. more than $156 billion, 
with drugs a leading expense,'' Penn State College of Medicine (October 
6, 2021), https://www.psu.edu/news/research/story/cancer-costs-us-more-
156-billion-drugs-leading-expense/.

      Total U.S. Federal spending on transportation in 2021 ($154.8 
billion);\4\
---------------------------------------------------------------------------
    \4\ https://datalab.usaspending.gov/americas-finance-guide/
spending/categories/.

      The annual gross domestic product of Morocco ($133 billion);\5\ 
and
---------------------------------------------------------------------------
    \5\ https://en.wikipedia.org/wiki/
List_of_countries_by_GDP_(nominal).

      The net worth of Bill Gates ($115.1 billion).\6\
---------------------------------------------------------------------------
    \6\ Forbes, The Real-Time Billionaires List, https://
www.forbes.com/real-time-billionaires/#7a3171783d78.

According to one estimate, the combined cost of the 232 and 301 tariffs 
amounts to an estimated $50 billion additional tax on U.S. consumers 
each year.\7\ A recent study of the economic impacts of the 232 and 301 
tariffs by the U.S. International Trade Commission (USITC) found that 
U.S. importers bore nearly the full cost of these tariffs because 
import prices increased at the same rate as the tariffs. The USITC 
estimated that prices increased by about 1 percent for each 1 percent 
increase in the tariffs under Sections 232 and 301.\8\
---------------------------------------------------------------------------
    \7\ Tom Lee and Jacqueline Varas, ``The Total Cost of US Tariffs,'' 
American Action Forum (May 10, 2022) (``AAF''), https://
www.americanactionforum.org/research/the-total-cost-of-tariffs/.
    \8\ U.S. International Trade Commission, ``Certain Effects of 
Section 232 and 301 Tariffs Reduced Imports and Increased Prices and 
Production in Many U.S. Industries,'' Inv. 332-591, Press Release 
(March 15, 2023), https://usitc.gov/press_room/news_release/2023/
er0315_63679.htm (ITC 232-301 Investigation).

The Section 232 and Section 301 tariffs have also impacted key U.S. 
---------------------------------------------------------------------------
industry sectors:

      The American beverage industry has paid nearly $1.9 billion in 
Section 232 aluminum tariffs since 2018;

      U.S. consumer technology companies paid approximately $43 
billion in Section 301 tariffs between June 2018 and November 2022;

      Ford and General Motors disclosed that the 232 tariffs in just 
the first year they were in effect cost each company an estimated $1 
billion (or $700 for each vehicle produced in North America);\9\
---------------------------------------------------------------------------
    \9\ Michael Shultz, et al. ``U.S. Consumer and Economic Impacts of 
US Automotive Trade Policies.'' Center for Automotive Research, 
February 2019, https://www.cargroup.org/publication/trade-briefing-u-s-
consumer-economic-impacts-of-u-s-automotive-trade-policies/
?gclid=CjwKCAjw
o_KXBhAaEiwA2RZ8hHoDteEBuInJuS1-rbqIrMi2EJ20IYXhNpOLwNPHNKJVhiOdmHswHRo
CnDIQAvD_BwE.

      U.S. chemical manufacturers paid $8.5 billion in Section 301 
---------------------------------------------------------------------------
tariffs between June 2018 and December 2021; and

      U.S. apparel and related goods manufacturers paid $5 billion in 
Section 301 tariffs between 2019 and April 2022.

The Section 232 and Section 301 tariffs have distorted the market for 
products subject to the tariffs and increased the price of goods for 
consumers in the U.S. The price effect arises in part from the cost of 
duties themselves, which, as the data above shows, is significant. But 
prices of goods produced in the U.S. and third markets have risen as 
well.

Coalition members report record-high steel prices that have more than 
doubled since 2018 when the Section 232 tariffs were imposed.\10\ 
Indeed, the 232 tariffs have even generated price effects for domestic 
steel as the protection afforded by the 25% tariff has allowed U.S. 
steel producers to increase prices well above those found in other 
markets. Manufacturers in some industries report that prices are 
increasing at such substantial rates they must purchase steel based on 
the price at delivery, not the price available at purchase.
---------------------------------------------------------------------------
    \10\ Lance Lambert, ``Steel prices are up 200%. When will the 
bubble pop?'', Fortune (July 8, 2021), https://fortune.com/2021/07/08/
steel-prices-2021-going-up-bubble/.

In addition, the 232 tariffs have artificially increased the price of 
all aluminum sold in the U.S. market because of the unique way in which 
aluminum prices are set. Aluminum contracts are priced based on a 
benchmark known as the ``Midwest Premium'' price. Since the 232 duties 
on aluminum were put in place, the Midwest Premium price has been set 
as a ``duty paid'' price. That means all aluminum contracts in the U.S. 
are priced assuming the 232 duty applies--even if the imported material 
was covered by an exclusion or tariff rate quota (``TRQ''). The duty 
paid Midwest Premium price also applies even when a substantial portion 
---------------------------------------------------------------------------
of the aluminum product was sourced from scrap or recycled material.

It is also worth noting there have been price effects (e.g., pass-
through of higher material costs to intermediate users (e.g., auto, 
beverage, and appliance manufacturers, etc.) and higher costs for 
consumers) from the 232 duties even for imports from countries no 
longer subject to the tariffs.

Price increases have also affected goods subject to Section 301 
tariffs. While harder to quantify, companies have reported cost 
increases even when they have relocated production outside of China. 
Shifting production to new suppliers is often affected by reduced 
economies of scale, higher qualification and conformity assessment 
costs, duplicate tooling costs, production capacity limitations, and 
additional logistics costs, all of which increase prices to consumers.

In sum, prices have risen across the board in response to the 232 and 
301 duties and those price increases are causing significant, negative 
effects felt by many Coalition members and U.S. consumers.
            B. Price Increases Harm U.S. Manufacturing Competitiveness
The price increases associated with the 232 and 301 tariffs are making 
U.S.-
produced goods less competitive than products from other markets. 
Manufacturers outside the U.S. can source primary steel and aluminum 
products at prices set on the global market, which (as explained above) 
are much more favorable than those available in the U.S. Compounding 
this competitive disadvantage is the fact that 232 tariffs do not apply 
to imported downstream products. That leaves U.S. manufacturers of a 
wide range of metal products doubly exposed to competitive 
disadvantage: their raw material prices are higher and foreign-made end 
products can be sold in the U.S. without any impact from the 232 
tariffs. Indeed, the ITC 232-301 Investigation confirmed that the 
Section 232 duties ``reduced production in downstream industries in the 
United States that use steel and aluminum products as inputs because of 
increased prices.''\11\
---------------------------------------------------------------------------
    \11\ ITC 232-301 Investigation, Press Release.

Several Coalition members noted lost sales to producers in third 
markets because of higher materials costs in the U.S. and that once 
customers have qualified suppliers outside the U.S. they rarely come 
back. Another member stated that the Section 301 tariffs are 
encouraging U.S. manufacturers in their sector to move production to 
third countries where they can purchase Chinese inputs at a lower cost 
and sell the final, assembled products and more value-added inputs back 
---------------------------------------------------------------------------
into the United States.

By imposing additional costs on U.S. manufacturers, the 232 and 301 
tariffs are distorting the market and picking winners and losers. While 
primary metals producers may be enjoying higher prices under the 232 
tariffs, it is coming at the expense of downstream industries. 
According to one study, for each new steel producer job, steel firms 
earned $270,000 of additional pre-tax profits but steel users paid an 
extra $650,000 for each job created.\12\
---------------------------------------------------------------------------
    \12\ ``Steel Profits Gain, But Steel Users Pay, Under Trump's 
Protectionism,'' Peterson Institute for International Economics, 
December 2018, https://www.piie.com/blogs/trade-and-investment-policy-
watch/steel-profits-gain-steel-users-pay-under-
trumps#::text=Steel%20Profits%20Gain%2C
%20but%20Steel%20Users%20Pay%2C%20under%20Trump's%20Protectionism,-
Gary%20Clyde%
20Hufbauer&text=At%20the%20center%20of%20President,on%20nearly%20all%20s
teel%20im
ports (``PIIE Report'').
---------------------------------------------------------------------------
            C. Other Economic Impacts of the 232 and 301 Tariffs
In addition to price increases and competitiveness challenges, the 232 
and 301 tariffs have had a range of other impacts that adversely affect 
Coalition members.

Availability: Among the most frequent concerns raised is the impact 232 
tariffs have had on the availability of products subject to the 
tariffs. For purposes of obtaining an exclusion from the 232 duties, 
the Commerce Department defines a steel or aluminum product as 
``reasonably available'' if a domestic producer can deliver the product 
within 8 weeks. However, current delivery time quotes for many steel 
materials are 16-20 weeks with some products not promised for delivery 
until 2023. Moreover, steel is not a monolithic market and for every 
type of steel in the market, there is a different profile of global 
production and a different level of capacity globally and within the 
U.S. As a result, the availability of products varies widely across 
different product lines.

For certain types of products, such as food-grade stainless steel, the 
lack of availability has been particularly acute. As demand for steel 
and aluminum grows, at least one Coalition member is predicting that it 
will become much more difficult to obtain specialty steel products as 
U.S. mills and service centers focus on supplying significant 
quantities of non-specialty steel to larger industry sectors like the 
automotive and aerospace industries.

Finding available supply is particularly difficult for small, family-
owned businesses, which report that domestic steel suppliers often are 
unwilling to quote or fulfill orders because they do not meet minimum 
order requirements. Small companies--particularly those in underserved 
areas--are less able to hold significant quantities of material in 
inventory and do not have the resources to invest extensive time and 
money required to find suppliers who will fulfill their orders. In many 
instances, domestic producers have told Commerce they are capable of 
producing a particular product when opposing an exclusion request only 
to refuse to sell the material in a small quantity when it is 
subsequently requested.

Alternative Sourcing: Changing suppliers when materials are not 
available is not as easy as it may seem. The process for changing raw 
material suppliers varies depending on the type of product and end use. 
In the Section 232 context, some aluminum extruders use as many as 250 
unique profiles (extrusion shapes) in their manufacturing process. To 
move the dies that are used to extrude those aluminum profiles would 
cost at least $7,500 per die alone. For products that are highly 
regulated for safety reasons, the raw material supplier is routinely 
specified in the contract based on testing performed to the customer's 
requirements. During the term of a contract, raw material suppliers 
typically cannot be changed without agreement from the customer and any 
potential new supplier must undergo a qualification testing and 
approval process that can take 12-18 months.

For Section 301 tariffs, some Chinese-origin inputs may be available 
from other markets but Coalition members have invested in complex 
supply chains that have taken years to develop and maintain. Requiring 
U.S. manufacturers to rebuild these supply chains drains vital 
resources and will take many years to source around these tariffs. 
Moreover, realigning supply chains is not without its own costs. Where 
alternative sources of supply can be found, often the total cost 
(price, quantity, quality) is higher than the price available in China, 
even when the 301 tariff is added to the Chinese good. Furthermore, 
goods subject to safety approvals like UL standards would be subject to 
retesting and relisting when the country of origin changed, which is an 
extraordinary expense that most companies, especially small businesses, 
cannot afford. As a result, many U.S. companies decided to pay the 301 
tariffs, especially during the pandemic, rather than face the higher 
costs and uncertainty of realigning their supply chains.

More, with the expiry of the Generalized System of Preferences (GSP) 
program, U.S. companies now must pay higher tariffs to import from 
developing country markets that could be good alternatives to China. In 
fact, some companies found that even with the Section 301 tariffs in 
place, it was still less expensive to import from China. The Coalition 
for GSP has detailed instances where sourcing moved back to China AFTER 
GSP expiry.

Exclusions: The Commerce Department's Section 232 Tariff Exclusion 
Process cannot mitigate the economic harm to U.S. steel- and aluminum-
using manufacturers caused by the 232 tariffs. The exclusion process is 
supposed to allow companies to obtain exclusions to the tariffs if the 
product they need is not available in the U.S. in the quantities, 
quality, or form needed. However, the process has been broken from the 
start. It is lengthy and cumbersome and regardless of the numerous 
comments provided to the Commerce Department on ways to improve the 
process, it continues to favor domestic producers over consumers. Many 
Coalition members report an overall lack of transparency, 
predictability, and responsiveness to requests for information about 
why an exclusion request was not granted (in some instances despite 
having been previously granted and renewed). Commerce also counts 
imports covered by a duty exclusion against any available absolute 
quota volume or TRQ quantity until the allowed quantity is exhausted. 
In effect, importers are unable to use an exclusion unless the absolute 
quota or TRQ has already been filled. This requirement greatly limits 
the utility of the duty exclusion and should be terminated.

The 301 exclusions, when they were available, also generated 
significant internal and external costs for companies requesting an 
exclusion. These costs included administrative costs of filing the 
request, reviewing the requests that were granted to ensure they could 
be applied to the relevant goods, and broker costs for filing for duty 
refunds. Unfortunately, the 301 exclusions on the vast majority of 
products have expired and are no longer available to provide any relief 
from the duties, even though USTR had previously agreed the products 
were not available in the United States.

Uncertainty: The uncertainty that has surrounded the Section 232 and 
301 since their inception adds to the expense of the tariffs and their 
ultimate costs to consumers. Businesses prioritize certainty because it 
allows them to adequately assess and account for risk. A growing body 
of economic literature has found there are real economic costs 
associated with trade policy uncertainty equivalent to a level of 
tariffs between 1.7 and 8.7 percentage points.\13\ When considered in 
the context of the $500 million in trade subject to the 301 duties the 
``uncertainty cost'' would amount to between $9.35 and $47.85 million 
annually. The uncertainty cost reflects money companies are not 
investing in innovation, research, wages, skill-building and many other 
critical areas.
---------------------------------------------------------------------------
    \13\ Alberto Osnago, Roberta Piermartini and Nadia Rocha, ``Trade 
Policy Uncertainty as a Barrier to Trade,'' WTO Working Paper ERSD-
2015-05 (May 26, 2015), https://www.wto.org/english/res_e/reser_e/
ersd201505_e.pdf.

Retaliation: In addition to raising costs for U.S. consumers, the 
Section 301 and 232 tariffs resulted in significant retaliation against 
U.S. exports by other governments. Canada, China, the European Union, 
India, Mexico, and Turkey imposed retaliatory tariffs ranging from 4 to 
70 percent on many U.S. exports.\14\ The retaliatory tariffs increased 
the price of U.S. exports in these markets relative to alternatives 
that were either domestically produced or imported from other 
international sources. In the agriculture sector alone, the retaliatory 
tariffs led to a reduction in U.S. agricultural exports to retaliating 
partners of more than $27 billion from the time the tariffs were 
imposed in 2018 through the end of 2019.\15\ China accounted for 
approximately 95 percent of these losses ($25.7 billion).\16\
---------------------------------------------------------------------------
    \14\ AAF, Table 5.
    \15\ Stephen Morgan, et al., January 2022. ``The Economic Impacts 
of Retaliatory Tariffs on U.S. Agriculture,'' ERR-304, U.S. Department 
of Agriculture, Economic Research Service (January 2022), https://
www.ers.usda.gov/publications/pub-details/?pubid=102979.
    \16\ Id.
---------------------------------------------------------------------------
            D. Economic Effects That Have Not Materialized
It is also important to note the anticipated direct economic effects 
that have not materialized as a result of the 232 and 301 tariffs. 
Under Section 232 an action taken by the President ``must be taken to 
adjust the imports of the article and its derivatives so that such 
imports will not threaten to impair the national security.''\17\ 
Similarly, Section 301 provides that USTR is authorized to take action, 
including imposing tariffs, ``to obtain the elimination of'' the ``act, 
policy, or practice'' that was the subject of the investigation.\18\ 
There is no evidence that either the 232 or 301 tariffs are actually 
solving the problems they were adopted to address.
---------------------------------------------------------------------------
    \17\ 19 U.S.C. Sec. 1862(c).
    \18\ 19 U.S.C. Sec. 2411(a).

Steel producers have not significantly increased domestic production to 
ensure a reliable supply in a national security emergency. The ITC 232-
301 Investigation reported an increase in domestic steel production of 
only 1.9 percent. Indeed, for certain categories of steel, domestic 
steel producers are shutting down, rather than expanding production. 
For example, the number of tin mill production lines in the U.S. 
continues to fall as U.S. Steel has idled its Gary Works mill and plans 
to close its Pittsburg, CA facility at the end of the year. Similarly, 
the domestic steel and aluminum industries are not seeing significant 
new job creation--by one estimate only 8,700 jobs have been created or 
saved as a result of the tariffs.\19\ Further, the Federal Reserve's 
comprehensive estimate of U.S. steel and aluminum jobs remains lower 
than the pre-tariff baseline.\20\ Moreover, imposing additional tariffs 
on U.S. imports does nothing to address the problem of global 
overcapacity.
---------------------------------------------------------------------------
    \19\ PIIE report.
    \20\ St. Louis Federal Reserve Bank, ``Employment for 
Manufacturing: Iron and Steel Mills and Ferroalloy Production (NAICS 
3311) in the United States,'' FRED (accessed August 23, 2022), https://
fred.stlouisfed.org/series/IPUEN3311W200000000.

A similar fact pattern emerges with respect to the Section 301 tariffs. 
The additional duties imposed on imports from China have had no 
identifiable effect on persuading China to abandon the kinds of 
intellectual property rights (``IPR'') theft and forced technology 
transfer practices that were identified in USTR's Section 301 report. 
Moreover, there is no indication that the cost of the tariffs is 
affecting the Chinese government or Chinese companies. Rather, the 
burden of these tariffs is falling on US businesses and their customers 
---------------------------------------------------------------------------
who are effectively being punished for China's bad behavior.

If Chinese government IPR and technology theft is the crux of the 
problem targeted by the Section 301 investigation, then the remedy 
should focus on limiting export opportunities for those Chinese-origin 
products that have benefited from the government's actions (e.g., 
through Section 337 actions to prohibit imports of those products). 
Instead, the Section 301 tariffs apply to nearly all products sourced 
from China.

By virtually any measure the 232 and 301 tariffs have failed to achieve 
their stated purpose.

CONCLUSION

Coalition members believe that neither the 232 nor 301 tariffs have 
been effective at achieving their intended objective and the President 
should eliminate them. At least some officials in the Biden 
Administration agree, calling the tariffs ``poorly designed'' and 
confirming they have increased costs for American families and small 
businesses.\21\ One study showing that trade liberalization could 
deliver a one-time reduction in consumer price index (CPI) inflation of 
around 1.3 percentage points amounting to $797 per US household.\22\
---------------------------------------------------------------------------
    \21\ Sebastian Smith, ``Biden Undecided on China Tariffs Ahead of 
Xi Call: W. House,'' Barron's (July 26, 2022), https://www.barrons.com/
news/biden-undecided-on-china-tariffs-ahead-of-xi-call-w-house-
01658867406.
    \22\ Gary Hufbauer, Megan Hogan, and Yilin Wang. ``For Inflation 
Relief, the United States Should Look to Trade Liberalization,'' 
Peterson Institute for International Economics (May 2022), https://
www.piie.com/publications/policy-briefs/inflation-relief-united-states-
should-look-trade-
liberalization#::text=For%20inflation%20relief%2C%20the%20United%20Stat
es%20should
%20look%20to%20trade%20liberalization,-
Gary%20Clyde%20Hufbauer&text=With%20US%20in
flation%20running%20at,calls%20anticompetitive%20behavior%20by%20corpora
tions.

Congress has provided for the automatic termination of Section 301 
actions at the end of 4 years absent a determination that continuing 
them is still necessary. USTR has initiated the statutory review of the 
301 tariffs, but the process and timetable for reaching a decision have 
dragged on for nearly a year. The Administration should accelerate this 
---------------------------------------------------------------------------
review and take bold action to end the 301 tariffs as soon as possible.

Unlike Section 301, there is no statutory process for ending or even 
reviewing the 232 tariffs. Absent efforts by both the government and 
U.S. steel and aluminum producers to increase the domestic supply of 
products needed for national security purposes, the continuation of the 
232 duties simply amounts to a subsidy to domestic producers provided 
by consumers and U.S. manufacturers of downstream products.

            Sincerely,

            Tiffany Smith
            Chair, Tariff Reform Coalition and
            Vice President of Global Trade Policy, NFTC

                                 ______
                                 
                          Nathan's Papers, LLC

                    12725 SW Millikan Way, Suite 307

                          Beaverton, OR 97005

                         Phone: (541) 936-2896

                       https://nathanspapers.com/

March 21, 2023

The Hon. Ron Wyden                  The Hon. Jason Smith
Chairman                            Chairman
U.S. Senate                         U.S. House
Committee on Finance                Committee on Ways and Means
219 Dirksen SOB                     1139 Longworth HOB
Washington, DC 20510                Washington, DC 20515

The Hon. Mike Crapo                 The Hon. Richard Neal
Ranking Member                      Ranking Member
U.S. Senate                         U.S. House
Committee on Finance                Committee on Ways and Means
219 Dirksen SOB                     1139 Longworth HOB
Washington, DC 20510                Washington, DC 20515

        Re: Hearing on the Biden Administration's 2023 Trade Policy 
        Agenda with United States Trade Representative, Ambassador 
        Katherine Tai

Dear Chairmen Wyden and Smith, and Ranking Members Crapo and Neal:

Please accept this letter as a written public submission from Nathan's 
Papers, LLC for the record for the U.S. Senate Committee on Finance and 
U.S. House Committee on Ways and Means, Hearing on the Biden 
Administration's Trade Policy Agenda with United States Trade 
Representative, Ambassador Katherine Tai.

Nathan's Papers is an Oregon-based company dedicated to researching and 
writing and planning events under the header In CONGRESSTM 
about the American Founding and governance. We are particularly focused 
on the foundations of American governing that were established in the 
years 1774 and 1775 prior to declaring independence. The critical 
actions that took place during this time period were the key elements 
that were necessary to put in place before the United Colonies could 
issue the Declaration of Independence. They were primarily related to 
trade, fiscal policy and establishing a treasury, setting up a system 
of defense, establishing lines of communication via a postal service, 
and international diplomacy.

This comment highlights the initial debates on trade from the First 
Continental Congress in 1774 and early days of the Second Continental 
Congress. We feel this important context can help inform the 118th 
Congress's work in collaboration with President Joe Biden's 
Administration on a trade policy agenda that will strengthen the United 
States' opportunities for international commerce in a highly 
competitive environment.

The future of American trade has been a top concern since the inception 
of Congress. The First Continental Congress included Delegates from 
twelve of the British colonies in North America that met in 
Philadelphia, Pennsylvania to discuss the growing tensions between the 
Colonies and the British government prior to the start of the kinetic 
phase of the American Revolution. The Congress convened on September 5, 
1774 and adjourned on October 26, 1774. On September 6, 1774, the 
Congress created two committees--one to draw up rules and the other to 
``examine and report the several Statutes, which affect the trade and 
Manufactures of the colonies.''\1\
---------------------------------------------------------------------------
    \1\ Continental Congress 1774, 1:26.

The early debates on trade are illustrated through the diaries of the 
Delegates to the Congress, particularly Massachusetts Delegate and 
eventual first Vice-President and second President of the United 
States, John Adams. Delegates struggled with the disproportionate 
impact that a trade embargo would have on various colonies and whether 
the British government should have the authority to regulate the 
Colonies' trade. The question then became if not the British government 
who should regulate trade?\2\ It was in the interest of trade that 
Delegates conceived the idea of an American legislature.\3\
---------------------------------------------------------------------------
    \2\ ``[Notes of Debates in the Continental Congress, 28 September 
1774] ,'' Founders Online, National Archives, https://
founders.archives.gov/documents/Adams/01-02-02-0004-0006-0031. 
[Original source: The Adams Papers, Diary and Autobiography of John 
Adams, vol. 2, 1771-1781, ed. L. H. Butterfield. Cambridge, MA: Harvard 
University Press, 1961, pp. 141-144.]
    \3\ Id.

The Colonies were split on whether they should cede the power to 
regulate trade during the First Continental Congress. Five colonies 
supported it, 5 were against it, and the Massachusetts and Rhode Island 
Delegates divided.\4\ Delegate James Duane from New York outlined the 
reasons for allowing Great Britain to regulate trade. He noted it would 
be a gesture of peace and remove any concerns the Colonies sought 
independence. Those opposed to the regulation argued that the Colonies 
would be giving up a right and the British government may abuse the 
authority for taxation and oppression or as justification for assuming 
power in all matters.\5\
---------------------------------------------------------------------------
    \4\ ``1774 Thursday. October 13th,'' Founders Online, National 
Archives, https://founders.archives.gov/documents/Adams/01-02-02-0004-
0007-0014. [Original source: The Adams Papers, Diary and Autobiography 
of John Adams, vol. 2, 1771-1781, ed. L. H. Butterfield. Cambridge, MA: 
Harvard University Press, 1961, pp. 151-152.]
    \5\ James Duane's Notes for a Speech in Congress. Letters of 
Delegates to Congress, 1774-1789. 1:189-191. Washington, DC: Library of 
Congress, 1976-2000.

The Colonies ultimately decided to enter the Continental Association, 
the precursor to the Declaration of Independence. They agreed to 
implement a non-importation, consumption, and exportation agreement 
against goods from Great Britain that would begin in December 1775.\6\ 
They also agreed to stop consuming certain luxury items and begin 
encouraging internal governance and manufacturing so that the Colonies 
would be less dependent on British goods. The Continental Association 
recognized the need to start putting processes in place so that the 
Colonies could begin to self-govern. The Delegates were not yet 
prepared to declare independence, but this formal association document 
expressed their intent to stand firm with the people of the 
Massachusetts Bay colony, which was under military government and 
extreme economic restrictions in retaliation for the Boston Tea Party, 
among other things, and not back down from their demands for fair and 
just treatment.
---------------------------------------------------------------------------
    \6\ Continental Congress 1774, 1:75-80.

As the December embargo date approached, the Second Continental 
Congress reignited the trade debate. It convened on May 10, 1775 and 
would stay in session until the ratification of the Articles of 
Confederation in 1781. Wearied from prosecuting the war by printing a 
new paper currency called the ``Continental Dollar,'' several Delegates 
advocated for trade. John Adams wrote in his notes ``The Q. is whether 
we must have Trade or not. We cant do without Trade. We must have 
Trade.''\7\ Trade would support the credit worthiness of the 
Continental Dollar.\8\ Despite this sentiment, the Congress voted to 
suspend all trade until March 1776.\9\ John Adams indicated that he 
hoped this would allow more time to build defenses.\10\ The Congress 
was also in the process of building out a naval fleet.
---------------------------------------------------------------------------
    \7\ ``[Notes of Debates, Continued] October 5th,'' Founders Online, 
National Archives, https://founders.archives.gov/documents/Adams/01-02-
02-0005-0004-0002. [Original source: The Adams Papers, Diary and 
Autobiography of John Adams, vol. 2, 1771-1781, ed. L. H. Butterfield. 
Cambridge, MA: Harvard University Press, 1961, pp. 192-194.]
    \8\ ``[Notes of Debates, Continued] October 12th,'' Founders 
Online, National Archives, https://founders.archives.gov/documents/
Adams/01-02-02-0005-0004-0006. [Original source: The Adams Papers, 
Diary and Autobiography of John Adams, vol. 2, 1771-1781, ed. L. H. 
Butterfield. Cambridge, MA: Harvard University Press, 1961, pp. 204-
208.]
    \9\ Continental Congress 1775, 3:314-15.
    \10\ ``From John Adams to Joseph Ward, 14 November 1775,'' Founders 
Online, National Archives, https://founders.archives.gov/documents/
Adams/06-03-02-0159. [Original source: The Adams Papers, Papers of John 
Adams, vol. 3, May 1775-January 1776, ed. Robert J. Taylor. Cambridge, 
MA: Harvard University Press, 1979, pp. 296-297.]

---------------------------------------------------------------------------
Thank you for your consideration.

Sincerely,

Lynn White

                                 ______
                                 
                         Pitts Enterprises Inc.

                         5734 Pittsview Highway

                          Pittsview, AL 36871

                              334-855-4754

                       https://pittstrailers.com/

Hon. Ron Wyden, Chairman
Hon. Mike Crapo, Ranking Member
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

  Re: Urgent Help to Protect our Company and the American Supply Chain 
            from an Attack by a Chinese State-Owned Competitor

Dear Senators Wyden and Crapo:

As an American businessman who is personally affected by an attack by a 
massive Chinese State-Owned entity, CIMC Intermodal Equipment--a unit 
of COSCO, I respectfully and urgently request your help to save our 
company.

I work for Pitts Enterprises, an American employee-owned and operated 
manufacturer based in Alabama. We are a significant supplier of truck 
trailer chassis (i.e., cargo container-sized truck chassis) through our 
facilities in Alabama and with our manufacturing partner in Vietnam. 
However, our business has been stopped for over six months due to a 
meritless Customs and Border Protection (CBP) import evasion 
investigation, under the Enforce and Protect Act (EAPA) of 2015, 
against Pitts instigated by a massive Chinese State-Owned entity. This 
stoppage has cost us over $270,000,000.00 in sales and stopped shipping 
over 10,000 finished chassis to ports in America, all of which are 
needed to ensure the smooth and timely transport of American imports 
and exports. I am writing today in a desperate attempt to save the 
company I work for and to right a terrible wrong that has happened to 
us.

This same Chinese State-Owned company was found guilty of dumping by 
selling significantly below production cost and receiving Chinese 
government subsidies to put all American manufacturers out of business. 
Our accuser reports directly to the State Council of China, the highest 
level of China's government.

Our Chinese government-controlled accuser is using a distorted reading 
of the anti-dumping order from Commerce as their basis for the 
allegations. We are confident that this is a distorted reading as we 
have written support from the entire Coalition of American Chassis 
manufacturers, the companies along with ours that came together with us 
to maintain America's chassis manufacturing base, so that America does 
not become totally dependent on China for this critical equipment as we 
already are for ocean containers. The intent and purpose of the AD and 
CVD orders in this case for which we successfully petitioned was to 
stop the predatory business practices of a Chinese State-controlled 
organization so as to protect American businesses. China has 
historically killed American businesses through low pricing, driving 
out the competition, and having us at their mercy. Make no mistake; if 
this is not corrected, it will kill our company, our 275 American jobs, 
and the families they support, including my own.

As stated, we worked to implement the anti-dumping rules, the same ones 
being used against us by our Chinese government-controlled accuser. 
These rules were developed to stop the importation of Chinese 
subsidized chassis and prevent our accuser from skirting/circumventing 
these orders by manufacturing chassis in China and bringing them in 
subassemblies/multiple parts for final assembly in the U.S. Why, in 
God's name, would we spend hundreds of thousands of dollars to convince 
our government to impose trade rules that we purportedly violated 
ourselves? This misrepresentation of this ruling has caused CBP to 
investigate our company, and we are cooperating with the CBP 
investigation. This cooperation includes hosting a delegation of ten 
people from CBP to visit our partner's factory in the preferred trading 
nation of Vietnam, where it was demonstrated that all claims against 
Pitts are unfounded and that our products are outside of the scope of 
the AD and CVD order or evasion process.

Our products are not within the scope of the evasion process because 
Pitts products are manufactured in Vietnam. Pitts has provided 
countless pages of proof, including the video found at this link: 
https://drive.google.com/file/d/13KKf5q1i-424LvXw
2eKqFreBif6-cP5L/view?usp=drive_web. The video shows over 100 steps to 
produce the chassis manufacturing for the Port of Charleston. This same 
port, with over 2,300 of these chassis sitting on their port, is now on 
customs hold. These chassis are needed badly, and I dare to estimate 
the cost to their port and state.

The manufacturing process demonstrated in the video is used to produce 
the chassis we have offered for use in many ports. Clearly, these 
chassis are manufactured from raw steel to complete marine chassis in 
the Vietnam factory, making them not covered merchandise subject to the 
anti-dumping duties.

Last week, on March 15, DOC accepted our request to clarify the scope 
of the anti-dumping order on chassis. Notably, DOC initiated this scope 
proceeding after requesting and receiving evidence that the components 
used in Vietnam are not sub-assemblies subject to the anti-dumping 
order. We are confident that DOC will confirm this clarification based 
on the mountains of evidence available to the Federal government.

Yet CBP continues with its EAPA investigation (1) despite the fact that 
DOC has primary authority over the anti-dumping and countervailing duty 
laws, (2) despite the clearly erroneous interpretation of the anti-
dumping order scope language alleged by our Chinese government-
controlled accuser, which was the basis for the initiation of the EAPA 
investigation, and (3) despite DOC's initiation of the scope 
proceeding.

This is critical, and I respectfully ask for your consideration and 
support. I am certain that the rules set by DOC to stop the dumping of 
Chinese products were never meant to cripple an American company and 
its American customers, and thusly the American supply chain. Yet if 
CBP does not recognize the primacy of DOC in matters of interpreting 
the scope of anti-dumping orders, our Chinese government-
controlled accuser will indeed cripple us by using American trade laws 
against Americans. The EAPA procedure needs both immediate and long-
term corrections to end what is happening to us and prevent it from 
being inflicted on others.

My company and I are ready and willing to cooperate with the Committee 
in any way and look forward to hearing from you.

Sincerely,

Ed Gill
Vice President--Sales
Dorsey Intermodal
Kingwood, TX 77345
317-376-2088
ed@dorseyintermodal.com

cc: Jeff Pitts--Owner and CEO, Pitts Enterprises
     JP Pierson--President, Pitts Trailers and Dorsey Intermodal
     Senator John Cornyn
     Senator Ted Cruz
     Senator Tim Scott
     Senator Tommy Tuberville
     Senator Katie Britt
     Senator Cory Booker
     Senator Robert Menendez
     Senator Raphael Warnock
     Representative Mike Rogers
     Representative Bill Pascrell

                                  [all]
```