Dear Mr. President:
Tomorrow, as required by law, your Administration will release the “National Trade Estimate" report (NTE). The NTE contains an inventory of barriers to U.S. exports of goods and services, investment, and intellectual property rights. As in previous years, this year’s NTE report will identify numerous barriers that have blocked or obstructed American exports for years, have facilitated or allowed theft to American intellectual property rights, and have yet to be effectively addressed.
We hope this year that the Administration will use the opportunity of the issuance of the NTE report to move beyond cataloguing these barriers and to begin enforcing U.S. rights. Too often in the past, this Administration has devoted its resources to negotiating new rules - at the expense of ensuring that our trading partners play by the rules already in place. Failure to enforce vigorously existing agreements undercuts the value of those agreements. In the six years that this Administration has been in office, USTR has brought an average of less than three WTO cases per year. By contrast, the Clinton Administration brought an average of 11 WTO cases per year.
The United States cannot afford to continue down this path. Last year, the U.S. trade deficit continued to grow at a record-breaking pace, setting another record for the fifth straight year. In 2006, the U.S. trade deficit reached
$765 billion - the highest ever in history and almost six percent of the U.S. economy. Manufacturing has borne the highest cost, with the manufacturing deficit increasing by 70 percent between 2001 and 2006, and the loss of almost three million jobs during that period. But manufacturing is not alone. Over the same period, the U.S. services surplus has dropped 10 percent, and the U.S. agricultural surplus has fallen by 61 percent in the last five years.
These massive trade deficits come at another steep price; over the past five years alone, foreign-owned debt has more than doubled. It currently stands at
$2.2 trillion, or 17 percent of U.S. GDP. This Administration has accumulated more debt to foreigners than all previous Administrations combined.
These deficit and debt levels are unsustainable. The right trade policies and priorities can help fix the problem. We urge you to take two concrete steps.
First, we urge you to direct the USTR to request immediate consultations with eight key U.S. trading partners - Canada, China, the European Union, Japan, Korea, Mexico, Russia, and the United Kingdom - and to take action (whether under WTO rules, under U.S. law, or in bilateral negotiations), unless during a “consultation" period the problem in each case is successfully resolved. The matters raised are ones that involve critical U.S. manufacturing sectors (including steel, steel pipe, commercial aircraft engines, and automotive products), key services sectors (including electronic payments), and intellectual property rights. USTR has, in its NTE reports for the years 2001 through 2007, carefully documented many of these problems, but taken little or no effective action to redress or eliminate them.
In the past year, we were pleased to see the Administration initiate cases on spirits from India and on export subsidies in China. We believe these cases will succeed - China has already eliminated one export subsidy targeted by the Administration’s case - and urge the Administration to take similar action on the remaining issues we have identified. The details of these additional cases are set forth in an Appendix to this letter.
Second, we ask you to support legislation to be introduced next month that strengthens the enforcement of trade agreements and the preservation of U.S. rights under those agreements. The legislation will seek to pry open foreign markets to U.S. goods and services by ensuring that our trading partners play by the rules. It also will address a number of problems with the WTO dispute settlement system. A growing number of trade experts - including trade officials in your Administration - are expressing serious concerns that the WTO Appellate Body is imposing obligations on WTO Members, including the United States, that were not agreed to by those Members in the negotiations. According to a former Deputy USTR from the Reagan Administration, “the WTO dispute settlement system is veering off course and is increasingly a threat to the legitimacy of the entire body." We would like to work with your Administration to re-establish the legitimacy and integrity of that system - a linchpin in the multilateral trading system.
Without vigorous and responsible enforcement, trade agreements will increasingly be seen as part of the problem. Americans deserve a trade policy that produces real results. The issuance of this year’s NTE report presents an important opportunity to announce a new, proactive approach to enforcing vigorously U.S. trade agreements. We hope that your Administration takes advantage of this opportunity and stand ready to work with you to restore credibility to American trade policy and the trading system.
Sincerely,
Charles B. Rangel
Sander M. Levin
Jim McDermott
John Lewis
Richard E. Neal
Stephanie Tubbs Jones
John B. Larson
Bill Pascrell Jr.
Shelley Berkley
Chris Van Hollen
Kendrick B. Meek
Lois Capps
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The.pdf version of the appendix can be found here.
