Washington, D.C.—U.S.
Senator Mike Crapo (R-Idaho), Ranking Member of the U.S. Senate Finance
Committee, delivered the following remarks at a hearing entitled, “The President’s
2021 Trade Policy Agenda.”
The text of Ranking Member
Crapo’s remarks, as prepared, is below.
“Thank
you Mr. Chairman. Welcome Ambassador
Tai.
“The
President’s 2021 Trade Policy Agenda opens with two objectives: ‘[1] ending the
COVID-19 pandemic and [2] strengthening the economy…’
“Significant
progress is being made on the first, with record vaccine development thanks to
Operation Warp Speed and continued efforts by the Biden Administration to get
shots in arms.
“Unfortunately,
with regard to the second objective, the progress is disappointing.
“Last
month, the United States added only 266,000 jobs—far less than the one million
that most economists expected.
“President
Biden’s response is that ‘we have a long way to go.’ Yes, we do.
In fact, more Americans are out of work at the moment than during the
worst point of the Great Recession.
“Of
course, Americans have crossed unimaginable distances before—and they will do
so again.
“But
why counsel Americans to be patient? It’s not in their nature. What we need to do, right now, is to speed up
the journey for everyone by fully reopening the economy, and executing an
ambitious and sound trade policy.
“According
to President Biden’s trade agenda, exports facilitate greater productivity and
wages. In fact, President Obama’s White
House determined that every billion dollars in increased annual exports
supports between 5,300 and 7,300 jobs.
“If
the Biden Administration wants a worker-centered trade policy, then the
logical—and only sensible course—is to adopt a trade policy that creates as
many high paying jobs as possible.
“That
kind of successful trade policy requires at least three components.
“First,
enforcement must be a priority. The
Trade Agenda notes there will be comprehensive enforcement of the labor and
environmental obligations in our free trade agreements.
“I
support that because America’s businesses, workers and farmers need to compete
on a level playing field.
“We
can do that—and also stand up for them by challenging other market access
barriers at the same time. Enforcement
in these areas is complementary, not exclusive.
“Make
no mistake, there is a great deal to enforce.
For example, the United States – Mexico – Canada Agreement (USMCA)
contains groundbreaking market access commitments.
“These
commitments are particularly important to our farmers, who have faced a decline
in demand from restaurants, school systems and hotel customers.
“We
must make sure American farmers get the access to our trading partners to which
they are entitled.
“But
the story on enforcement must become better.
“An
important U.S. tariff-rate quotas case against Canada remains stalled in the
USMCA process. It is time to see
progress on it, or the United States must proceed with a dispute settlement
panel so that American farmers, ranchers and businesses can enjoy the benefits
they bargained for under the agreement.
“Mexico
is adopting a host of measures that undermine our agricultural rights,
including restrictions on biotech crops, glyphosate and unreasonable food
packaging labels.
“Ambassador
Tai, I encourage you to press for action on these barriers at the meeting of
the USMCA Free Trade Commission later this month. If our partners should refuse, you must use
the enforcement tools at your disposal.
“The
second component of an effective trade policy is negotiating new rules and
market access opportunities. To that
end, I support the Biden Administration’s call to work with allies.
“Yet,
the President’s Trade Agenda is silent on whether we will continue to negotiate
with the United Kingdom and Kenya.
“I
encourage you to work the United Kingdom—one of the United States’ oldest
allies—and with Kenya, which can serve as a replicable model for future trade
deals in a country where China has failed to get an FTA, and that will also
establish our commitment to the people of Africa.
“Furthermore,
we must deepen our engagement in the Asia-Pacific, or risk losing U.S. allies
there to China’s predations.
“While
I understand you believe the Trans-Pacific Partnership (TPP) may have become
dated, I see value in an agreement with new disciplines, including on digital
trade.
“However,
that means we must start thinking about how to modernize TPP, or what other
structures we can use for U.S. engagement in the Asia-Pacific. We cannot simply take a ‘timeout’ from the
region.
“Last
month, Japan ratified the Regional Comprehensive Economic Partnership
(R-CEP)—which is China’s model for what trading relationships in the region
should look like. In the absence of U.S.
leadership in the region, our allies will have to look elsewhere.
“If
the United States is to pursue a worker-centered trade policy, we need to be
mindful that American workers lose when China writes the rules.
“The
final—but most important— component of a successful trade policy is
consultation. The Supreme Court noted 60
years ago that the President is strongest when he acts pursuant to an
authorization of Congress—and is potentially powerless when he acts in
defiance.
“The
Administration must be strong when it comes to trade policy, and that requires
a close partnership between Congress and the U.S. Trade Representative.
“We
recently had a test of that partnership: the Administration’s decision to
support a waiver to the intellectual property protections in the WTO TRIPS
Agreement.
“The
WTO TRIPS Agreement was approved by Congress.
The law says Congress’s approval can only be withdrawn ‘if, and only if’
Congress enacts a joint resolution to that effect. Last summer, during the height of the
pandemic, both Houses of Congress declined to act on such a resolution.
“Yet,
without any consultation with this Committee, you announced via a tweet that
the Administration unilaterally supports waiving the patent obligations of the
TRIPS Agreement.
“Chancellor
Merkel of Germany asserts the problem with vaccine distribution is not patents,
but manufacturing capacity and production standards.
“Albert
Bourla, the CEO of Pfizer, said the decision will ‘categorically’ create more
problems for vaccine distribution. He
added that it will ‘disincentivize anyone else in the future from taking a big
risk’ like Pfizer did, laying the groundwork for the classic moral hazard
problem.
“Iconic
American innovators, like Bill Gates, have also said the decision will not
advance vaccine distribution.
“In
short, these observers assert a TRIPS waiver will undermine the very objective
I said the Administration was progressing: ending the pandemic.
“Conversely,
Vladimir Putin, in fact, supports your decision to pursue a waiver. Neither did it surprise me that a bureau
chief for one of China’s propaganda outlets replied to your tweet by asserting
that ‘global pressure works.’
“You
may, of course, have your own good reasons.
But to date, you have not offered an adequate explanation. You will hear more on this subject from me
and my colleagues.
“Ambassador
Tai, I know that you like the expression that ‘USTR can walk, chew gum and play
chess at the same time.’
“But
what we need is a USTR that can enforce, negotiate and consult at the same
time. The American people—and Members of
Congress, including myself—are counting on you to prove that is the case.
“Thank
you Mr. Chairman. I look forward to the
testimony from our witness.
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