Democrats on this Committee have been actively working to shape a new trade policy responsive to the changing dynamics of a global economy. We rejected the passive, hands-off approach that earlier characterized American trade policy, and embraced actively shaping expansion of trade in ways that grappled with the impact of trade and broadened its benefits and minimized its downsides.
These principles have been reflected in our work on this Committee for several decades now.
They drove our work to ensure incorporating enforceable core labor rights and environmental standards in trade agreements, working with the Clinton Administration to adopt worker standards in the pioneering Cambodia bilateral clothing agreement and in the Jordan FTA, opposing CAFTA because of the Bush Administration's rejection of that standard, and -- when in the majority -- developing the May 10, 2007 agreement, incorporating the five basic international labor and significant environment standards into the Peru FTA.
These principles guided our refusal to approve the FTA's negotiated by the Bush Administration with Korea, Panama and Colombia until significant shortcomings were addressed. Working with you, Ambassador Kirk, and others in the Administration, together we helped importantly improve those agreements:
* Ending the one-way street of Korea’s historically closed auto market.
* Ensuring that U.S. taxpayers could not use Panama as a tax haven.
* Developing an Action Plan to improve labor conditions and address violence against workers in Colombia.
We are beginning to see tangible results from these efforts. Ford has already begun shipping cars to South Korea. And work continues with Colombia to ensure full, meaningful implementation of the Action Plan Related to Labor Rights.
Today’s hearing will focus in part on potential new agreements to open new markets for U.S. goods and services, the Trans-Pacific Partnership, Russia’s WTO accession, the possibility of a U.S.-EU FTA and the promise of a WTO services plurilateral.
As important as these new opportunities are, they cannot be our sole focus. A defining trade issue continues to be our imbalanced trading relationship with China. Unfortunately, the Bush Administration too often adopted a hands-off approach to this imbalance. It failed to actively implement the special provision provided for in China’s WTO accession for an annual review of whether China was meeting its obligations. The Bush Administration refused in all four cases presented to it to use the 421 safeguard against surges in Chinese imports that harm U.S. industries and workers.
Our trade with China affects myriad U.S. industries in their efforts to compete in this market, in China, and globally - and it is fundamentally affecting the structure and composition of our economy. A trade policy that ignores or fails to actively address this reality is incomplete, and ultimately, will prove ineffective.
Once again, China set a new record last year, as our trade deficit reached a new high of $295 billion. For every four dollars in Chinese exports to the United States, we export just $1 in goods to China.
I applaud the President’s decision to create a new Interagency Trade Enforcement Center (ITEC) to enhance the administration’s ability to aggressively challenge unfair trade practices in China and elsewhere. I urge the administration to ensure that the ITEC is designed and equipped to fundamentally alter the way trade cases are developed and prosecuted. I also urge the ITEC to focus immediately on China’s duties on auto exports, its practices in rare earth restraints, its export credit program, its forced technology transfer, and its lack of transparency and use of intimidation as a trade policy tool.
The need to actively shape the contents of trade agreements, and not to assume simply that more is always better applies to the important Trans-Pacific Partnership talks. We must closely evaluate:
* The challenges presented by unfair competition from state-owned enterprises
* The unique circumstances presented by a communist, non-market economy like Vietnam; and
* The opportunities and the challenges presented by prospective new entrants, especially Japan; whether with its long-standing rigid exclusionary structures it presents real, new market access opportunities for U.S. companies and workers, and creates a net benefit for our economy, including our manufacturers.
With respect to Russia and the WTO, there is a need to approach key outstanding issues in an active - rather than passive - way, ranging from IPR enforcement to the rule of law.
Finally, we also urge an active approach to bilateral investment treaties, which can promote economic development and the rule of law and help protect U.S. investors abroad. But a BIT with China raises special considerations. We cannot ignore that fact. A cookie-cutter approach is simply not appropriate to address the challenges we face with China’s laws and its economy.
So I look forward to hearing from Ambassador Kirk and the other panelists how we can craft a trade policy that can meet the challenges of today and anticipate those of tomorrow.
