Hatch on Need for Aggressive Trade Agenda, Trade Promotion Authority
Utah Senator Says, “To harness the opportunities presented, we must aggressively engage with economies other than our own, and TPA is the tool necessary for that engagement. I want to be a partner with the administration in these efforts. I would like to see long-term renewal of Trade Promotion Authority, so that we can take advantage of economic opportunities today and tomorrow.”
WASHINGTON –In a speech today, U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, outlined how trade liberalization will help grow the economy and spur job growth in the U.S. and said it was imperative the Obama Administration work with Congress to renew Trade Promotion Authority (TPA). Hatch delivered his remarks at an event hosted by the American Enterprise Institute (AEI) on the Trans-Pacific Partnership and 21st century trade agreements.
“We know the path to economic growth lies in open trade and economic freedom. We also know that the United States is engaged in two tremendous opportunities to advance these goals through the TPP and T-TIP. What we don’t know is whether our nation, and ultimately our President, will seize these opportunities,” said Hatch.
Hatch continued, “To harness the opportunities presented, we must aggressively engage with economies other than our own, and TPA is the tool necessary for that engagement. I want to be a partner with the administration in these efforts. I would like to see long-term renewal of Trade Promotion Authority, so that we can take advantage of economic opportunities today and tomorrow.”
Hatch delivered the following remarks at today’s event:
This is a pivotal time in U.S. trade policy and I am delighted to have the opportunity to be part of such an important and timely program.
There is certainly a lot to talk about when it comes to trade.
The United States is currently engaged in two of the most ambitious trade negotiations in our country’s history – the Trans-Pacific Partnership, or TPP, and the Transatlantic Trade and Investment Partnership, also known as T-TIP.
Each of these negotiations has the potential to significantly transform world trade patterns and provide unprecedented growth opportunities for the U.S. and the global economy.
The TPP is an Asia-Pacific trade agreement currently being negotiated between the United States and twelve other countries, including some of the world’s largest economies, such as Japan, Canada, and Mexico.
The Asia-Pacific region represents more than forty percent of the world’s trade. And, as a group, TPP countries represent the largest goods and services export market for the United States.
On the other side of the world, the U.S. is negotiating a bilateral trade agreement with the twenty-eight countries of the European Union.
The numbers here are staggering.
Total goods trade alone between the U.S. and EU amounts to over one trillion dollars a year. Investment flows represent another three-hundred billion dollars a year.
Together, the United States and the EU generate over half of the world’s economic output. Yet, liberalization through trade negotiations can help us realize even more economic opportunity between our countries.
Liberalization is the key to success in both of these negotiations.
Without a commitment to economic liberalization from all the negotiating countries, including the United States, these agreements will never generate real economic growth.
And, at its core, that is what international trade is all about.
When governments remove the constraints of unnecessary regulation and protectionism through trade negotiations, individuals are free to exchange goods and services in the most efficient way possible. These efficiencies liberate resources which can then be used in other more productive ways.
This virtuous cycle generates growth. I think all would agree that with our slow recovery and continued lackluster job creation, we need to do everything we can to grow the economy.
We can’t forget that, at the end of the day, trade is driven by individuals.
Every day millions of men and women make economic choices and exercise direct control over their own lives through the purchasing decisions they make at the shopping mall, grocery store, or over the internet.
So, in essence, economic liberalization also fosters individual freedom. It increases opportunity, choices, and standards of living for people around the world.
Economist Barun Mitra said it well: "Traders in the marketplace are like voters in a democracy. If [the] free flow of ideas is essential to sustain political freedom and a democratic polity, then free trade is critical to sustain economic freedom and an efficient marketplace. Liberty, after all, is indivisible."
While economic freedom is the biggest benefit of open markets, there are many other benefits.
The foundation of our trade agreements allows foreign citizens to gain access to the outside world while at the same time encouraging foreign governments to enforce the rule of law in order to attract trade, investment, and overseas businesses.
We know the path to economic growth lies in open trade and economic freedom. We also know that the United States is engaged in two tremendous opportunities to advance these goals through the TPP and T-TIP.
What we don’t know is whether our nation, and ultimately our President, will seize these opportunities.
I, for one, give the Obama Administration a lot of credit.
Despite their campaign rhetoric against trade and their efforts to marginalize the Office of U.S. Trade Representative through an ill-conceived reorganization plan, they seemed to have finally seen the light and landed in a good place.
After a lot cajoling from Congress, they submitted our trade agreements with Colombia, Panama and South Korea for approval. They also selected Michael Froman, a strong and capable candidate, to serve as our trade representative.
The Obama Administration also adopted the Bush-inspired TPP as its own and launched an ambitious negotiation with the European Union.
These are all steps in the right direction.
But, they are only steps.
Much of the hard climb necessary for these negotiations to succeed lies ahead. It remains to be seen whether or not President Obama and his team are really willing and able to make the hard political choices necessary to conclude meaningful trade agreements.
A key test will be whether the President actively seeks Trade Promotion Authority, or TPA, from Congress.
Because of the unique structure of our government, our country needs TPA.
As you all know, our Constitution vests power over taxes and tariffs in the Congress. The power to conduct foreign policy and negotiate treaties lies with the President. In order to negotiate strong trade agreements, our trade negotiators need to be able to exercise both sets of powers.
Our trading partners will not put their best deal on the table unless they know the United States can deliver on what we promise.
No economically significant trade agreement has ever been negotiated by any administration and approved by Congress without Trade Promotion Authority. Yet this Administration’s enthusiasm for TPA seems tepid at best.
This is one area where Congress simply can’t succeed without the President’s active engagement and support.
Almost two years ago Senator McConnell and I led efforts on the Senate floor to renew TPA. Unfortunately, that vote failed, largely because of a lack of Democratic support.
To me, that shows that the Administration must actively engage within the Democratic caucus if we have any chance of seeing TPA succeed.
And we must succeed.
Ninety-five percent of the world’s consumers live outside the United States. These potential customers account for 92 percent of global economic growth and 80 percent of the world’s purchasing power.
To harness the opportunities presented, we must aggressively engage with economies other than our own, and TPA is the tool necessary for that engagement.
I want to be a partner with the administration in these efforts.
I would like to see long-term renewal of Trade Promotion Authority, so that we can take advantage of economic opportunities today and tomorrow.
When it’s passed, I hope that TPA will reflect the priorities of today’s economy, including strong intellectual property rights protections, provisions to address state-owned enterprises, and provisions on digital trade.
Finally, TPA renewal should limit the addition of social issues, such as labor and the environment, to our trade agenda. These issues dilute the economic focus of our trade policy and, more often than not, detract from our ability to reach strong trade agreements at the negotiating table.
I stand ready to work with the Administration and my colleagues in the Senate and House of Representatives to sort through these complex issues. I am committed to working hard to make sure that our trade negotiators are empowered through TPA to conclude strong trade agreements that tear down barriers to American exports and advance economic opportunities.
We have a big trade agenda ahead of us. Working together, I am confident that we can succeed. Thank you, once again, for having me here today.