January 30,2015

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Hatch Calls for TPA Passage, Seeks Strong Outcomes on Trade Deals in Speech at American Enterprise Institute

In Speech Utah Senator Says, “With two of the most ambitious trade agreements in our nation’s history, the Trans-Pacific Partnership, or TPP, and the Trans-Atlantic Trade and Investment Partnership, or TTIP, under active negotiation, the U.S. trade agenda is truly at the precipice of opportunity. The only question is whether the administration and both parties in Congress can work together to seize this opportunity.”

WASHINGTON – In a speech at the American Enterprise Institute today, Finance Committee Chairman Orrin Hatch (R-Utah) highlighted his long-standing efforts to renew Trade Promotion Authority (TPA) and detailed what the Administration needs to achieve in on-going trade negotiations such as the Trans Pacific Partnership (TPP) or the Transatlantic Trade and Investment Partnership (TTIP) in order to have these agreements successfully enacted by Congress. 

We have been without TPA, our most important tool to open markets, for far too long. And, while we sit back, other countries forge ahead, cutting tariffs and other barriers for their exporters, hurting our ability to fairly compete and access opportunities.  The U.S. needs to lead on trade.  We need to establish rules that hold other nations accountable for their unfair trade practices. And we need to tear down barriers that block our goods from foreign markets. We can only do that if we renew TPA and do so soon,” said Hatch.

Below is the text of Hatch’s full speech delivered at the American Enterprise Institute today:

I really appreciate AEI for giving me this chance to share my thoughts about our nation’s trade agenda, where it is today, and where I think it should be going in the future. 


This is an especially exciting time to be discussing U.S. trade policy. 


With two of the most ambitious trade agreements in our nation’s history, the Trans-Pacific Partnership, or TPP, and the Trans-Atlantic Trade and Investment Partnership, or TTIP, under active negotiation, the U.S. trade agenda is truly at the precipice of opportunity. The only question is whether the administration and both parties in Congress can work together to seize this opportunity. 


I know that, these days, there are many – probably even some in this audience – who view bipartisanship in the same way others view winning the lottery.  Sure, it’d be nice if it happened, but there’s no use waiting around for it. 


And, on many issues, they’d be right.


But, fortunately, trade is one area where there does seem to be a broad, and increasing, bipartisan consensus to get something done. 


How refreshing is that? 


Today I want to talk about what we need to do to get these two agreements across the finish line and what those agreements must look like to gain my active support once they’re submitted to Congress.  


First, I want to assure all of you that, as the new Chairman of the Senate Finance Committee, my goal is to advance a broad and ambitious trade agenda, including renewing the Generalized System of Preferences, extending the African Growth and Opportunity Act, passing legislation to enable enactment of Miscellaneous Tariff Bills, and reauthorizing our Customs and Border Patrol.


All of these are priorities for me and for the Finance Committee in this new Congress. 

Today, however, I want to focus on two things: Trade Promotion Authority, or TPA, and how it sets out what TPP and TTIP must achieve to gain my active support. 


Last year, I, along with the two former chairmen – Max Baucus and Dave Camp – introduced the Bipartisan Congressional Trade Priorities Act of 2014.   Our bill would have renewed TPA, and it outlined the objectives our trade negotiators must meet in order for a final agreement to be approved by Congress. 


That bill, in my opinion, represents the best starting point for our efforts in this Congress.  So, much of my comments today will be focused on the substance of that legislation. 


As many of you know, I am currently working with Ranking Member Wyden and House Ways and Means Chairman Ryan to introduce a TPA bill for this Congress.  While there may be some changes, I think the fundamentals we will be discussing today will be substantially the same. 


Let’s start by discussing some of the principles that guided our efforts last year as we worked on legislation to renew TPA.  


In developing the 2014 bill, I had several major objectives in mind.  


First, I wanted to preserve the fundamental principles of U.S. trade and economic policy that have enabled our country to grow and thrive over the past century.


Second, I wanted to make sure we recognized and addressed new opportunities and challenges that our job creators and workers face when doing business around the globe.


And, finally, I wanted to rebalance the relationship between Congress and the Executive Branch when negotiating, implementing, and enforcing international trade agreements.


These continue to be my main objectives as I work with my colleagues on new TPA legislation in the 114th Congress. 


To provide more detail, let’s delve a little deeper into each of these objectives.


Objective Number One is: Preserving the fundamental principles of U.S. trade and economic policy. 


With our bill, the first fundamental principle I sought to preserve was strong intellectual property rights protection.  Intellectual property is the backbone of our economy. It affects large and small companies across America.


In my home state of Utah, for example, half a million jobs and 67 percent of our exports are connected to intellectual property.


Unfortunately, intellectual property protections around the globe are continually at risk.  The U.S. Government has an obligation to ensure that the creative capital of our artists and innovators is protected.


This is a long-standing principle. In fact, our Founding Fathers believed intellectual property to be so fundamental to America’s future prosperity that they explicitly granted Congress the constitutional authority to protect it. 


That’s what I wanted to do with our legislation. 


So I worked hard to make sure that our 2014 bill maintained the strong intellectual property standards found in the prior 2002 Trade Promotion Authority law.  This included requiring that trade agreements meet the high standards found in U.S. law, particularly the enforcement obligations.  It also included requiring the elimination of price controls and reference pricing, which are used by many countries to deny full market access to innovative pharmaceuticals and medical devices. 


Our bill then went further than the 2002 law by calling for an end to government involvement in intellectual property rights violations, including piracy and cyber theft.  This was the first time TPA legislation addressed these issues.  We also sought to stop foreign-government theft of trade secrets, by including provisions that governments limit the unnecessary collection of trade secret information and protect any information that they do collect from disclosure. 


Our legislation further directed the administration to ensure that regulatory reimbursement regimes that make pricing and reimbursement decisions are transparent, provide procedural fairness, are non-discriminatory, and provide full market access for American products. 


The bill also called for the elimination of measures that require U.S. companies to locate their intellectual property abroad as a market-access or investment condition. 


Finally, the bill included an expanded capacity-building objective directing the administration to work with U.S. trading partners to strengthen not only their labor laws, as was provided for in 2002, but also their intellectual property rights laws.


Put simply, for any future trade agreement to win my approval, it must meet these standards. And, I expect that they will. 


For TPP, I fully expect to see intellectual property provisions that are similar to the standards found in U.S. law, resulting in an agreement containing a very high standard of intellectual property rights protection.  This includes twelve years of regulatory data protection for biologics and strong copyright and trademark protections. 


The intellectual property provisions of TPP must also effectively address the theft of trade secrets and ensure effective implementation and enforcement of IP obligations.  In addition, we must ensure that U.S. innovators are able to monetize the fruits of their labor when they export them to other markets.  That is why it is critical for TPP to ensure transparency and procedural fairness in the process by which reimbursement decisions are made regarding medical devices and pharmaceuticals. 


Strong intellectual property protections in the context of our TTIP negotiations with Europe are also a priority.


Most European countries already have a very high standard of IP protection. Because the U.S. and the E.U. are two of the most innovative economies in the world, any successful TTIP agreement must promote the highest standards of intellectual property protection.


In addition, our negotiators must strongly promote and protect the interests of our citizens with respect to Europe’s approach to geographical indications, the improper use of which impedes our ability to compete not only in Europe, but in many parts of the world.


As you can probably tell, intellectual property rights are a high priority for me.  But they are not the only priority I have when it comes to trade. 


Another fundamental principle of trade policy that I wanted to protect with our legislation was strong support of services and investment, including maintaining strong investor-state dispute settlement provisions.


Our 2014 bill sought fair, non-discriminatory treatment for U.S. investors pursuing opportunities overseas.   It would have required trade agreements to ensure that U.S. investors overseas receive the same basic protections that the United States gives to investors, foreign and domestic, here at home. 


All of these elements foster stronger legal regimes and more secure economic environments around the world, which is necessary for U.S. businesses to pursue opportunities abroad and to be treated fairly when doing so.


Investor-state dispute settlement provisions are subject to a lot of overheated and misguided criticism.  So let me be clear: The investor-state rules I am talking about simply ensure that other countries adopt and implement the basic, fundamental protections that underpin U.S. commercial law, including protection against discrimination, protection against repudiation of contracts, and protection against expropriation without due process and compensation.


Because I believe that these principles are the foundation on which American businesses can build opportunities overseas, I will continue to insist that investor-state disciplines not be weakened in any of our trade agreements.  That means both TPP and TTIP must have strong investor-state dispute settlement mechanisms. 


No trading partner should be given a pass to violate these fundamental legal principles for investors without enforcement.  Nor should any U.S. industry, including tobacco, be excluded from receiving these basic protections. 


A third fundamental principle I sought to maintain in our bill – and the last one I’ll talk about today – was real and comprehensive market access opportunities for U.S. goods and services.  That means significant reduction, and ultimately, elimination of tariffs on U.S. exports of goods, services and agricultural products.


Several countries who are parties to TPP are resisting our efforts to open agricultural markets, including Japan and Canada.


Let me be clear: If Japan, Canada and our other TPP partners are not willing to open their markets to our exports, the final agreement will never receive support in Congress. 

In our negotiations with the European Union we should also strive for complete elimination of tariffs. While tariff levels may already be low, the gains to be achieved from total elimination of tariffs would be significant, as total goods trade alone between the U.S. and E.U. is over one trillion dollars a year. 


We also need to see a comprehensive agreement in TTIP, with no sectors excluded from coverage, including audiovisual and financial services. The agreement should also work towards regulatory coherence of financial regulations.


I think that’ll about cover my first objective.  And, I think you all get the point: It is vital that, in our future trade agreements, we preserve the fundamentals of U.S. trade and economic policy. 


So, let’s turn to Objective Number Two: Recognizing and addressing the opportunities and challenges our job creators and workers face doing business around the world. 


The world has changed since the last time Congress passed a TPA bill.  The world of 2015 is, in many ways, vastly different than the world of 2002. 


Let’s start with digital trade.


Here, we have a complete revision of the 2002 law, reflecting the increasing importance of digital trade to the U.S. economy, and the central role the internet plays as a platform in international commerce. 


In our bill, we included language to ensure that all trade agreement obligations relating to trade in goods and services apply equally to goods and services traded digitally.  The bill also would have directed our negotiators to ensure that foreign governments do not impede cross-border data flows and refrain from instituting other impediments to digital trade.  Finally, we specifically addressed the need for the U.S. government to pursue policies that eliminate forced localization requirements, including requirements for local storage or processing of data.


Although many of these issues are new, I fully expect agreements reached through the TPP and TTIP negotiations to reflect these priorities.


Another increasingly difficult problem our companies face is unfair competition from state-owned enterprises.  So, for the first time, our TPA bill sought the elimination of trade distortions and unfair competition by state-owned enterprises, and to ensure that they act based solely on commercial considerations. 


I want American businesses to be able to compete anywhere in the world.  But we can’t expect our businesses to go head-to-head and win against state-owned enterprises that are protected from competition and market forces by their governments.  That is why it is essential for TPP, and future U.S. trade agreements, to take this issue head on and to ensure that if foreign governments are going to maintain state-owned enterprises, those entities must act on a commercial basis.


Our job creators and workers also need to have confidence that their hard work is not being unfairly harmed by currency manipulation. 


The Obama Administration has done such a poor job here that many members of Congress simply don’t have confidence that this problem is being properly addressed.

Frankly, I understand their frustration. 


That is why we included within our TPA bill, for the first time, a new principal negotiating objective addressing currency manipulation.


We need to see commitments from our partners in ongoing trade negotiations to avoid manipulating exchange rates to gain an unfair competitive advantage over other parties to the agreement, a standard reflecting commitments parties have made in the International Monetary Fund. 


It is essential that Congress know how the administration intends to address this problem in ongoing negotiations. Pretending these concerns don’t exist will not suffice.   The administration must engage much more effectively with Congress on this issue if they want to receive strong support for TPA and any subsequent trade agreements.


This brings us to the third major objective I had drafting our bill in 2014: Rebalancing the relationship between Congress and the Executive Branch in trade negotiations. 


Of course, the first step here is to renew Trade Promotion Authority. Our trade negotiators and trading partners need clear objectives from Congress.  The best way to communicate those objectives and give them force is TPA. 


I am perplexed by arguments some make that TPA gives away Congress’ power. The reality is quite the opposite – TPA empowers Congress, expanding and enhancing its role in ongoing international trade negotiations. 


I’ve just gone through a number of very specific policies that Congress should insist upon in our trade agreements – from intellectual property rights protection to protections against currency manipulation.  The only way Congress can direct the administration to address these policies in their trade negotiations is through TPA.


In developing the 2014 bill, I insisted upon including a number of new provisions that substantially enhance Congress’ role without jeopardizing the ability of our country to negotiate and enact strong trade agreements.


For example, the bill tightened the scope of qualifying implementing bills to “only such provisions as are strictly necessary or appropriate to implement” trade agreements. It provided that any commitments that are not disclosed to the Congress before an implementing bill is introduced are not to be considered part of the agreement and have no force of law. 


We also included new provisions to ensure that the agreements be concluded within the time frame provided by Congress and that substantial modifications or additions after that date are not eligible for approval under the trade authorities procedures provided by TPA.  The bill included a number of new elements to enhance consultation and oversight throughout the negotiating and implementation process.


All in all, we crafted a very strong bill, building and improving upon decades of precedent found in prior TPA bills.


Like I said, I believe the bill we introduced in the last Congress should be the starting point for our efforts to pass TPA this year.  The objectives that I’ve laid out today are every bit as relevant to my efforts to work with my colleagues to produce new legislation for this Congress.  I am very hopeful that we will be able to accommodate some of the issues raised by Ranking Member Wyden and get a new TPA bill introduced in short order.  


Once that is achieved, I plan to move very quickly to get the bill out of the Finance Committee and onto the Senate floor.


We have been without TPA, our most important tool to open markets, for far too long. 

And, while we sit back, other countries forge ahead, cutting tariffs and other barriers for their exporters, hurting our ability to fairly compete and access opportunities. 


The U.S. needs to lead on trade.  We need to establish rules that hold other nations accountable for their unfair trade practices. And we need to tear down barriers that block our goods from foreign markets.


We can only do that if we renew TPA and do so soon. 


It’s going to take a lot of work.  As I said at the beginning of my remarks, it’s going to take no small amount of bipartisanship – from Capitol Hill all the way to the White House – to get this done.  


With your help and support, I know we can be successful.


Thank you, once again, to AEI for having me here today.  It’s always a privilege to be here. 


And, thank you all for taking the time to listen.


God bless you all.