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tv   U.S. Trade Representative Lighthizer on U.S.- China Trade Relations  CSPAN  February 28, 2019 5:41pm-8:58pm EST

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about three women who went beyond their regular duties to help women in afghanistan. and further the mission. >> one experience that sheena shared with me was there was a time when she felt like there were men who were trying to break her and test her and see if women could actually hack it. so they really had the gear, they had the weapons, they were carrying it on this road march. and she pulled her women aside and said, no matter what happens, don't you dare start crying and you better keep up. because she's like i have a feeling they're going to try to test us. that's exactly what happened. he women kept up step to step. >> eileen rivers, sunday night at 8:00 eastern on c-span's "q&a." >> next, u.s. trade representative robert lighthizer testifies about the ongoing trade negotiations with china. he also look at the u.s.-mexico-canada trade agreement and the impact of trade with china on american
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industries. this house ways and means hearing is a little more than three hours. >> would our guests please take their seats? the committee will come to order. good morning. today we welcome ambassador robert e. lighthizer, united states trade representative, to discuss u.s.-china trade. one of the challenges to the ambassador, members of the committee and the administration indeed is the following, that is trade issues play out there is generally some truth to what everybody says about trade. mr. neal: at the direction of the trump administration there are currently u.s. tariffs of $250 billion in chinese imports. in realuation, chi nazz has
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imposed tariffs on $110 billion of u.s. exports. this is our opportunity to make clear what congress stands for on u.s.-china trade and what the american people need to see in any trade agreement. as the administration concludes its work, memorandums of understanding with china. at the outset i want to acknowledge that ambassador lighthizer is leading negotiations with china and he may want to exercise discretion about the level of detail he gets into as we reach the delicate stage of finishing, hopefully, the agreement. at the same time i encourage the ambassador to be as forthcoming and vigorous as we know he is capable of doing as possible. i've often observed that there is truth again as i noted earlier to what everybody says about china. china has been good for some, it also has been bad for many others. in 2000, when congress voted on
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normalizing trade relations with china, the promise was chi nalled -- china would reform, become market-based, democratic and respect human rights. but the china we trade with and compete with today is different than the one we hoped would emerge. china's economy, cha has taken on some market characteristics, remains fundamentally state directed. china's companies, state owned or not, are called upon to serve the government's interests. china's trade and economic policies are coordinated through five-year and 10-year plans. those plans are backed by china's resources. they are aimed at fostering national champions, advancing china's economic and technological ambitions and ensuring full employment in china. they are implemented at the expense of other economies in the theft of other intellectual property and without regard to the global trade rules for human rights of workers. these are structural economic challenges that american workers and companies face in trading
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and competing with china. while this administration confronts the same challenges with china the previous administrations haves afaced, it's chosen to use tactics and tools that previous administrations of both parties did not. the administration's tariffs have been sweeping, disruptive, controversial and for some sectors painful. the administration's promise is that high-risk approaches will yield high rewards my concern is that we are about to see the administration use the same from time to time ineffective playbook that has been applied in the past. recall that in april, 2017, president trump met with president xi at maher law go as part of a 100-day plan for a big china deal. the commerce secretary declared outcomes from the exercise represents more than has been done in the whole history of u.s.-china relations. when we examined the results we found some of the commitments were not quite as advertised. other commitments that were made promising changes in china were
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in the process of being made. in may of last year, china's trade negotiation seemed like it was about to lead to a package of large purchase commitments for soybeans, natural gas and aircraft. those negotiations clearly were not leading the solution we had hoped for in terms of significant trade challenges. indeed they were put on hold. this time around, in december 1, the president announced a 90-day period to fix our complex trade problems with china. as we near the finish line we are hearing once again about large purchase committees for commodcies -- commodities like soybeans, natural gas and aircraft. there's a primary difference, and that is that ambassador lighthizer is at the helm. he has time and again i think developed a vision that many of us on this committee will support vigorously and we believe that the structural problems that face america as it faces its trade relationship with china are well observed by the am fwass car.
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-- ambassador. this administration has chosen to take a path for confrontation and must hold out far good deal, a structural deal. the future of america's prosperity is in the balance. with that, i recognize the ranking member, mr. brady, for an opening statement. mr. brady: thank you, chairman neal, for holding this hearing and thank you, am bass doctor lighthizer for your leadership and ongoing negotiations with china and for consulting with us today about where those negotiations stand and what comes next. we can all agree that china has cheated on trade for decades, severely harming american businesses. president trump is the first president to confront china's unfair practices head on and insist on a new, fair, trading relationship with the u.s. while we want china to buy more u.s. goods to support farmers, manufacturers and professionals here at home it's even more important for us to hold china accountable to meeting high
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international standards on property rights, overcapacity and other structural ways in which china distorts the global economy. a new era of fair tried between china and the sust in everyone's interest. the solution must be enforceable at every level of chinese government governance, measurable and subject to corrective action should it fall short of commitment. it should provide as much predictability as possible for our american job creators seeking to serve china's market. with the more level playing field and now armed with a competitive 21st century tax code i'm confident that our farmers, workers and local businesses can compete and win anywhere in the world. u.s. companies face a wide range of trade barriers from china and i look forward to a thoughtful discussion of them today. china's unfair treatment of u.s. ambassadors is a huge part of the problem. the u.s. trade representative section 301 report identifies in
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great detail. for example, china's equity caps and joint venture requirements prevent u.s. companies from controlling their own operations as well as their own intellectual property pen when they invest in china. given chinese come -- giving chinese competitors an unfair advantage and costing american jobs. a high standard force bilateral investment treaty with china can help us address in of these issues for the long-term and i'm hopeful the sub staventive talks under way including in washington last week will produce meaningful commitments from china, to lower trade barriers, achieve structural reforms and achieve a newer rah of fair trade. -- a new era of fair tried. no one country can take on china alone. the three-party talks you're taking on with the european union and japan holds great promise. i'm also encouraged the trump administration is showing
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leadership in aggressively challenging china when it violates w.t.o. rules including intellectual property licensing policy, subsidies and quotas for key ag components. at the sametime i'm concerned about the very real impact tariffs on american manufacturers, consumers and farmers, i'll continue to work closely with the president and his team to ensure we minimize impacts of the united states and our allies as we take on china, trading goods that should be excluded from our taff riff -- tariff actions and products otherwise unavailable to u.s. companies and i think having a real, workable excuse process in place for tariffs is essential so we can focus these impacts on the bad behavior of china. in sum, thank you for being here ambassador, i look forward to today's discussions about the challenges we face in china and our demand for china, negotiate in good faith to achieve a
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durable and solution to the structure issues we face. mr. chairman, with that, i yield back. mr. neal: thank you. without objection, all members' opening statements will be made part of the record. today's sole witness is ambassador robert e. lighthizer, united states trade representative. the committee has received your written statement, it will be made part the formal hearing record. you have five minutes to deliver your oral remarks, ambassador lighthizer, again, welcome and you may begin your testimony as you are ready. mr. lighthizer: mr. chairman, ranking member brady and distinguished members of the committee, it's a pleasure to be here today and to discuss this very important issue. as you said at the beginning, i can never hear anybody up there. >> could you speak into the microphone. mr. lighthizer: you can't hear me, i cant hear you.
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i want those 10 seconds back, i have to say that every time i come here. i think at the beginning it is appropriate to take a minute and remind ourselves that with all our pressing problems, we have a very successful economy. under president trump's lead ship we are growing much faster than any g-7 nation, we have created millions of new jobs, significantly to me 500,000 manufacturing jobs. and we have seen two million people join the work force. these are people who were not in it before. these are real working people moving from despair to hope and their kids from insecurity to a future. a lot needs to be done and i salute all members of both parties who are working so diligently on issues of worker training, opiate addiction as well as trade and other issues. we are here to talk about china. i agree with those who see our large and growing trade deficit
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and their unfair trade practices including technology transfer issues, failure to protect intellectual property, large subsidies, cyber theft of commercial secrets and other problems as major threats to our economy. we can compete with anyone in the world but we must have rules, enforced rules, that make ure market outcomes, not capitalism and technology theft determine winners. president trump has for years recognized this very serious and i would say exiss ten rble problem and he is determined to take action to defend our workers, farmers, and ranchers and our economic system. he directed me to conduct a study under section 301 after months of hard work, the president ordered that certain tariffs be put in place because of his insight and grit, we are
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in a position to deal with this problem. for the first time after decades of governmental inaction. i would like to note that as with many extremely important issues facing our country,s preyens has been bipartisan. the speaker was an early, forceful, leader on this issue. i have admired her perception and hard work over the years and have counseled with her regularly in my current position. i would just like to read something briefly. faced with a pntr vote in april of 2000, the speaker said it is incumbent upon all of us in the public and private sectors to work for free and open trade with china, that is real. the u.s.-china bilateral w.t.o. agreement is seriously deficient in substance, implementation and enforcement. this issue is too important for our economy to be based on a pattern of broken promises, not
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proven performance. china can become a member of the w.t.o. without congress having to surrender its right to u.s.-china trade review annually there is no reason why we should permanently surrender that leverage at this time. i ask if her position had prevailed how different would things be right now? there are many other examples of bipartisan leadership including a lot of people on this committee and i'm going to get into them in answering questions if it's relevant. let me close by saying that we ave engaged in a very intense, extremely serious and very specific negotiation with china on crucial structural issues for several months now. we are making real progress. if we can complete this effort nd again i say if, and can reach a satisfactory solutions
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to the all-important outstanding issue of enforceability as well as some other concerns, we might be able to have an agreement that helps us turn the corner in our economic relationship with china. let me be clear. much still needs to be done. beth before an agreement is reached and -- both before an agreement is reached and more important, after it is reached if one is reached. i want to thank all members for your bipartisan approach on this seminal effort and i look forward to continuing our work together. i want to say that if this was not a bipartisan view we would not be having the success we're having. thank you, mr. chairman. thank you, ranking member. i look forward to your questions. mr. neal: thank you, mr. ambassador. we now move to questioning. without objection, members will have four mins to question the witness today in order to ensure that all members have an opportunity to inquire before the ambassador's schedule requires him to depart.
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i'll begin by recognizing myself. members will be acknowledged in the order of what we call the gibbons rule, that is when the member took their seat. mr. ambassador, in my opening i referenced some of the earlier administration efforts to negotiate trade with china. those efforts seem to overlook the deep and complex structural problems underlying our trade relationship my question is this, what will be different this time and what can we expect next? mr. lighthizer: thank you, mr. chairman. that's the fundamental question. what the president wants is an agreement that number one is enforceable, but the changes, pattern -- but that changes pattern of practice, technology transfer, intellectual property protection, large industrial policy subsidies, and then a hole variety of specific
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impediments to trade and unfair practices in the area of agriculture, in the area of services. what we want is fair trade that requires structural change and it has to be enforceable. we have had and i can go through for the member, many, many examples of the chinese agreeing to specific, not this specific ut agreeing to take steps to forego certain unfair trade practices and in very few cases have they actually kept their obligations. we have to in this case engage in -- approach this with the view that there are reformers in china who want to change these practices and we're working together with them. that has to be our approach. if that is the case, our hope is to have specific language on specific issues that is enforceable through a very clear
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process. >> do you envision one negotiated package in the next few weeks that's going to resan francisco all these structural issues? foolish hizer: i'm not enough to think there's going to be one negotiation that's going to change all the practices of china or our relationship with them, i don't believe that. i think that we have to take on the major issues, the ones that i just praised and -- that i just raised and we have to specifically preclude anti-market practices and practices that are unfair to our workers and ranchers and farmers and there are lots of them. at the end of this negotiation, if we're successful, there'll be a signing and then there's going to be a long process of me working with the members of the committee and the finance committee in the senate and other members to ensure that we live up to this and i believe other problems will arise and
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they're going to have to be dealt. with i view this as a process. but this is the -- i use the term turning the corner, thises the first time i believe that it's been approached in this way and the result, it's really the result of the creation of enormous amount of leverage by the president. mr. neal: as you reach an accord, do you envision putting hold?riff threat on mr. lighthizer: so, this may not be the first time or last time i say this in this hearing, absent specific provisions, i want to hold off as the chairman knows well, i'm happy to talk to him about whatever is on my mind. i love it when you said there has to be some discretion. that is not my strongest suit, discretion. but i'm trying to do it.
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i will talk to you about that. it is an objective of the chinese that tariffs go away and i should add a footnote that means antidumping normal trade law. that is a separate enforcement process. i'm dealing with section 301 in this agreement. mr. neal: let me recognize mr. brady. r. brady: you and ambassador lighthizer have raised this is the first attempt to change china's misbehavior and not one issue. you are challenging china at the world trade organization in cases. aligning with europe and japan on the w.t.o. reforms. implementing the investment restrictions congress put in place last year and amendment
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301, the issue you are dealing with right now. this is the first come prepares i have approach i have seen and the one that holds the most likelihood for success. as people look at what is a successful win for america, you ought to focus as you just mentioned the section 301 area where you pulled back the curtain on china's practices and tread da tower trade practices and laid out that case. in texas, we have huntsman corporation, nearly 1,000 employees, they are an example of employees have no recourse when intellectual rights are violated because they don't uphold the rule of law. not only did they throw out this intellectual property case based on the expiration case, but
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who ted a panel to resue stole the intellectual property. it is that hard. let's taug about 301. i think these are the key issues here. you mentioned this earlier, will the agreement that you are negotiating with china have measurable commitments in them? ill they be enforceable in old levels of china's governance. they present tend to protect intellectual property, the central government level but not at the local court and community levels? and will there be an avenue for corrective action if china doesn't live up to its commitments in what we hope will be an agreement. measurable, forceful at all
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levels of governance and make sure they live by those commitments? mr. lighthizer: thank you. i appreciate that. in terms of what is successful, i have been doing this a long time, but nonetheless over the course of the last few months, i went to every state that business groups have met and agriculture groups have made, groups have made, members have made, some cases and my immediate staff, tell me what that woman said is successful. and that is my guide and i'm assumeing that down. it's one of these things, but it's all right in a ban. so that's what i am measuring myself by and that is what i
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have as my objective. not what i just think. i distill down what the people have thought about this. so the huntsman example is one of many, many thousands. and i could go on about that. i only have 108g seconds to go. number one, it has been to be specific and measurable and enforceable. some things are not appropriate for that, but 99%, and in the agreement it will say central, subcentral, local and it has to be across the board like that and we have to have the ability take proportional actions unilaterally to make sure that have a situation -- mr. neal: thank you, mr. brady. the chair recognizes the gentleman from georgia, mr.
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lewis. mr. lewis: thank you, mr. chairman and holding this hearing. i have said it before and i will say it again, there's no way to compete in the race to the bottom. like our friend and colleague, ms. sewell, i gue up in alabama. she gue up in a big city and i grew up in rural alabama and i watched american jobs disappear throughout my life and career. in my home state of georgia, many manufacturers, workers continue to struggle and find good liveable wage jobs. over the years, many of those businesses move oversees in search of cheap labor and without environmental protection. my witness opposed the permanent
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normal trade relationship, almost 20 years ago. at the same time, my congressional district is also home to a large number of manufacturers, both large and small, who rely on aluminum. i do not to tell you, mr. ambassador, that china plays by its own rules and focuses on the long gains. while we differ on the tactics, everyone in this room agrees we need a level playing field and we don't have it. we could do much better. as you note, this is not an easy matter and must be thoughtful and mindful and must get it right. and mr. ambassador, i thank you for being here and thatching you for your service. the current negotiation focuses on a number of issues.
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i want to know for the lay people the environmental protection is part of the iscussion. mr. lighthizer: first of all, the principal reason i'm standing my time for doing this now is for the same reason is we have all laws not just china but since china joined the w.t.o., we lost five million manufacturing jobs and millions of additional jobs. and it would distress me if that was the result of economic forces but it's not. it's the result of state capitalism. immotivated by the same thing that you are. and i want to be judged by that. on the alume number question, we
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have a global problem in aluminum because china doesn't operate on an economic system they have created through controlling their market access and subsidies and other practices and extraordinary amount of excess capacity that is basically wiped out the aluminum industry across the world. he issues that we are focusing on in this negotiation are not -- they are labor and environment to the extent those are unfair trade practices, but it's not the same as we are -- as you well know where those are specific objectives that we are requiring change in. to the extent there are unfair trade practices, we are constrained by the limits of 301 and by the statute we have to work with.
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but those are high priorities or me. mr. neal: mr. nunez is recognized. mr. nunes: ambassador, thanks for being here and i want to congratulate you for being the first and part of the first administration in 20 years of complaining about china to actually do something. i associate myself with a lot of the comments that mr. lewis made and i know it's tough because i know the chinese are trying to be targeted in how the tariffs are being implemented on our side. i can tell you from the intelligence angle we have been studying here in the congress for several years, the chinese have moved into taking over the communications systems around the world and building strategic military locations around the
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world and targeted major industries for either takeover through banks, energy sectors and others around the globe including here in the united states. so i would like to give you an opportunity, ambassador, to get into how the chinese use the regulatory angle to encourage abuse and theft of intellectual property, because it's not something that a lot of americans understand, but they are actively on a daily basis newly property to compete with our allies around the globe. , number one, : so i think the u.s. has the best
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technology. robably our single biggest competitive advantage and why we'll be number one for a long time if we protect our intellectual properties. it is steel and these combines. if you get into a modern combine, it's like a spaceship was in the 1960's, how they drive these things. they have these computer and satellite operations. technology is our biggest advantage and runs across every part of our economy. it is the key and that's why the president had my focus on it right here and the china suggests and china knows it's the key. chinese practices are -- you could break them down into two-fold and one is what they do
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there and one is what they do here. we are negotiating provisions , make l, if enforced more specific and clarify commitments against cyber theft, against physical theft and against using investment practices to get technology. what happens now, i don't want to go through a lot of specific examples and you know far more because this is part of your responsibility in the intelligence committee, but what happens very often is, china omes in and they invest in a company, the company develops technology and that technology ends up in china and could end up through investment and end up through cyber theft or employees working for that company or leaving and going to china,
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there are a whole group of things and trying to deal it as much as we can in one agreement. that's one side. on the whole other side is how they get technology from us through noneconomic means in china. that is another thing we are trying to deal with.
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>> i'm referring to your precise words last friday that you would no longer use the term member rapid umh of understanding and hat this is a trade agreement. mr. lighthizer: pardon. mr. doggett: turn your microphone up. we are having trouble hearing you, mr. ambassador. no mr. lighthizer: is that better now? i actually felt pretty good when you couldn't hear me good. i thought it was fairly a fair system. there will be -- i'm not quite sure i know where you are going on this, but this will be a binding agreement. i should take a step back to the
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extent any agreement between nations are binding. i always have to make that clear. degaulle quote all nations are updated to the current situations. flowers and children last while they last. a bipeding it is trade agreement, a contrast as the president referred to it. and as a bipeding trade agreement given the statutory authority that you and the president have to negotiate, can you outline to us what you would anticipate would be the timetable for submitting it to congress for approval? mr. lighthizer: we have no intentions. mr. doggett: if it is a trade agreement under 103. mr. lighthizer: it is an executive agreement.
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the president -- mr. doggett: you gee with the president, it is a bipeding trade agreement that you are seeking, you can seek it through congressional authority and you are required to submit by agreements which would appear to be the case. mr. lighthizer: we are no way -- this a settlement of the 301 action and the president using his power under section 301 which is delegated and the constitution gives the president the right to enter into. we are not using c.p.a. we wouldn't have gone through the process. this is not a t.p.p. process but a settlement of the 301 action and it is the president's authority. mr. doggett: we may not agree on that. unless you get meaningful structural changes to address the stealing of our intellectual
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property and the other issues that are out there that you outline in your testimony, if all we get is the sale of few more soy beans and other agreements, this isn't an agreement not worth having. the goal is meaningful structural changes and if we don't get them, this isn't an agreement not worth having. mr. lighthizer: i agree. mr. doggett: given -- and i realize this is not in yourl direct jurisdiction but i agree with senator cornyn who expressed concern about the threat. and any bargaining away to get this agreement, it would be debate harm to our country, thank you. mr. lighthizer: i agree with you on 50% of the things. mr. doggett: that's progress. mr. lighthizer: usual usually
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90%. i agree with you completely on the law enforcement provisions are outside of my purview. mr. neal: the chair recognizes r. buick can and to -- buchanan. mr. buchanan: i appreciate you do this on a bipartisan basis and i want to echo what many of my colleagues said in terms of enforcement. i happened to be in beijing in 20 years ago, intellectual properties was a big issue 20 years ago in terms of the theft. and i'm not sure how far -- there hasn't bench progress on that and still a big challenge. the thought is whether the agreements is 150 pages or 1,000 pages. what i have learned, the agreement is only good as the two parties involved. i want to go on record concerned about the enforcement.
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i'm for free trade and has to be fair and level the playing field. i want to touch base with you the other day and big issue in florida and across the country. fentanyl. st year, 77% increase in deaths in florida-p china is one of the leading sources for fentanyl. the president said he had some commitments. can you expand on that on fentanyl and the chipe ease's ability to produce that and part of this document idealy. mr. lighthizer: first of all. ere is a long history of failure by china to protect newly property. the first modern example was a fair one that was brought in 1991 during the the gentlewoman
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is recognized herbert walker bush administration and between 2010 to 2016, there were 10 different commitments where they depreed to do different things which commitments were not livend up and enforcement is the biggest sort of thing. the president completely agrees with you on the issue of fentanyl and brought it up with president xi. i don't want to suggest this is my area of expertise, but agreed that he would treat it as whatever the equivalent of a controlled substance in china and this is something that the president views he has a commitment on. we may have disagreement but it is something that the president has a commitment on and seeing if there are changes. very important to the country.
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for all the reasons you said. allusion to it. >> the ag committee in florida, forestry did 8.4 billion and big industry and in terms of exports to china. that has dried up. i want to make sure that is what you are considering as well? mr. lighthizer: i am. i have a list of specific issues that have been raised by members that are appropriate for the agreement and something that we have raised and will continue to raise. r. buchanan: i yield back. mr. neal: recognize the gentleman from california, mr. thompson.
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mr. thompson: ambassador, thank you for being here and your willingness to work with us and meet with us. you have been very open and helpful. i have three issues you have heard from me on a couple of them before. i would like to rerate those and raise one new one and let you respond accordingly. as you know, my district produces the finest world in the world and china is the fast test growing wine marketplace in the world. the 232 and 301 tariffs put a 31% tariff on our product and having to compete with other new orld wine areas with other areas. are you doing everything that high-added high specialty products have the enhanced entrance or enhanced access to
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the market. i know you are working on all agricultural issues and products. and the other ag issue is rice. milled rice in california has been waiting for the promised access to the chinese market ever since china joined the w.t.o. and they have been very, very helpful and very understanding. i would like to have some idea as to how much longer they are going to have to wait and whether or not we are close to that promised access. and then the new issue that i want to raise today are the tariffs on building and construction materials. the national homebuilders suggest that these tariffs equal about a billion dollar worth of tax on residential construction. and as you know, affordable
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housing, lack of affordable housing impacts all of our districts, every district in the country ap makes it harder to build homes and get people into homes. and in my district, we just went through a horrific fire where we lost about 7,000 homes and homeowners are trying to rebuild and they have seen the cost of building materials coupled with the shortage of supply and shortage of labor just drive the cost of replacement to the point that they can't rebuild the cost of their home in the fire and 7,000 homes in my district and new fires up in the northern part of the state in congressman lamalfa's area and down the southern part of the state, there are thousands more. this is really a setback for homeowners who have been through
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a lot. is that $1 billion tax really the best way to hold china accountable? and i concur we need to hold them accountable, but is this the best way as people are trying to rebuild and move into their homes? mr. lighthizer: first of all on the wine issue, yes that is very important. this negotiation as we have all said is about structural change and enforcement, but it is important we have purchases because the purchases will be good for specific people and i think it's an important thing to do direction neal for sure. and in that context, we very much talked about high value added sperget crops and wine is a great example of one.
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it is a product that the united states makes. so i can attest to that personally. the second thing, rice is complicated. we are talking about rice in the context of the purchases, number one. number two, we have w.t.o. cases -- we have one that we have won and one is in the process and will become public at some point. so trying toll resolve those in the context of this agreement is something we are trying to do and something we have raised. rice is a funny issue in china. it has a different political context than a lot of these other things we are talking about. in terms of the billion dollars, yp the letter. i presume they are talking about soft wood lumber, which i would
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say is a litigation matter and i presume steel and aluminum. i presume those are the things you are talking about. and each of them has their own context. lumber is asoftwood litigation lumber. steel and aluminum and work out with mexico and canada. mr. thompson: any information ou could get back to me.
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remember the sacrifices being made by our producers in our daily discussions. in addition to china, we need to move forward. we need to bring the 332 tariffs and eliminate the retaliation that our producers continue to endure. i'm grateful for the progress made. every day our producers face tariff rates higher than their competitors. and lost opportunity to expand their market share. time is of the essence. with the president's commitment to u.s. agriculture, i would appreciate your thoughts on the 332 tariffs on canada and mexico and the japan negotiations. mr. lighthizer: first of all on the context of china, it is not
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just about purchases, we had many, many hours of discussion about a whole variety of issues -- most members vr interest from biotechnology to specific issues involving the poultry, aquatics, meats. a lot on rice and beyond the purchase. beyond the s.p.s. issues. we actually had long discussions on those who are from the meat -producing areas. so having said that, i want to go to japan very soon that dates will be in the next month. i want to have a bilateral meeting and i want to start on negotiations. we have gone through the process with t.p.a. and we are beyond
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our 90 days. we feel a certain urgency because of the combination of market access from t.p.p. and europe and the certain thing you alluded to and will have a real effect on our farmers. and in the context of maintaining the steel and aluminum agreement, we want to work out an agreement with cappeda and mexico. whether we succeed, i don't know. but it is certainly my hope we will do that. mr. neal: let me recognize the gentleman from connecticut, mr. arson. loorsloors my question and hope -- mr. larson: hope to give you as much time as you can answer, that the bipartisan nature of our concern as it relates to
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china. and my question would be pretty straight tord, how will you define success with our meeting with china and the standpoint from a number of us here on both labor standards and environmental standard and how will that play into whether or not you feel pending negotiations will be successful? mr. lighthizer: thank you, congressman. i would say what we are doing and what we have to remind ourselves in this context is settling the 301's. how i would define success and i would repeat, i went through to distill what everyone else, members, business groups and farm groups and experts who actually study these things. and for me, success is number one enforceable.
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number two, real rules on forced technology transfers, which mr. brady said and minimal intellectual property requirements and this section is probably going to be -- if we have an agreement, it will be about 27 or 28 pages. this is long and detailed. but every one of you would say normal i.t. protections to be. we have a series of items involving services. there are sesk specific provisions that china has to keep us out of banking, out of the electronic payment, out of a whole variety of things like that and on many of those we made substantial progress and i would consider that to be another chapter, and nontariff barriers and that is how we
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negotiated this thing. what is that? these industrial subsidies that have the effect of making it impossible for our family to negotiate in china but compete around the world. there are a whole lot of things we expect to galt they are on agriculture and we have made progress on a number of those. one thing we haven't mentioned is we are negotiating currency restraints. a lot of members, a lot of members are very concerned about currency manipulation and that's another part of these negotiations. and to be honest, there are more and i could make it more detailed. but that's how i'm going to determine whether or not this is a trade agreement. keep in mind, it's not like an
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f.t.a. in the accepts we are going across the board. we are focused on what was raised by our 301. and if we do all of those things and the speaker said this, and she said in the then it's not valuable. we have to have it valuable and i think we will have and enforceable agreement. mr. neal: let me recognize the the gentleman from texas, mr. arch chand to inquire. mr. marchant: when you land at worth, it is th the national headquarters for kimberly-clark.
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so i have a district that the major employers are vitally interested in what you are doing appreciate your hard work on behalf of the country. f.w. airport facilitates $35 billion worth of trade and the ranking member, mr. brady has an airport of similar stature in his district. to us in texas, our ports are not only houston, but the ports are the airports. nd because of that, trade is very important in my district. i have a letter here from our governor, greg and boat that is full life throated support of
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your negotiations and i would like to put that into the record, mr. chairman. mr. neal: without objection. mr. marchant: it is support of your work on the usmca and recognizes the importance of that and we would like to make sure this goes in the record and make sure that he -- that you know that he is in full support of the work that you're doing. because i have such an interest in my district, when i go to town hall meetings, what am i go go to be able to tell my constituents that is being accomplished in the china agreements and the china discussions that will be very important that gets changed for my district? mr. lighthizer: thank you,
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congressman. i have spent a lot of time at d.f.w. and that entire airport in your district, you have a very large district, because i think that airport is bigger than some districts than members have. it's the biggest thing i have ever seen and i appreciate the governor's support and your mp a.t for u smpmmp c if it doesn't pass, it would be catastrophe across the country and texas. it would be very bad on every level, very bad on economics. you know what i'm talking about. i'm very appreciative of the governor. so when i look at this -- and this is not just your district -- i don't know if you have -- you must have a district if you have that airport in it, but if
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you have any agricultural products, there will be a substantial increase no those and substantial decrease in barriers. when i talk to members germly, the most important single thing that we are going to do is stop the amount of economic transfer of technology and technology is what separates us from the rest of the woled. and it is for me and what is going to ensure that our kids have the kind of jobs that we have and better jobs. if we independent up losing that technological edge where we are number two in technology, then the world is going to look different for our children. and that is -- i could talk about the various specific provisions, but if we make headway to stop this unfair trade by this trading partner, will have a huge impact
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between high-end jobs in america. mr. neal: let my recognize mr. blumenauer to inquire. mr. blumenauer: mr. ambassador, you have one of the toughest jobs in the administration. we prashte you being here and your discussions that you have had with me and so many members of the committee on both sides of the aisle. i'mal little concerned about the 301 tariffs. it is a tax on everyday americans and most businesses and i'm concerned that we have some sort of agreement that will results in just purchasing soy beans and airplanes, that is not sustainable. i'm hopeful that using the tariffs and the negotiations results in some structural changes in order to be termed a success. and i'm confident that is your
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goal as well. any meaningful field, i feel, must effectively deal with another long-term problem that has been vexing us for the last couple of decades, currency manipulation. the president said he would have bel china a currency manipulator on day one. i'm not so much concerned about that broken promise as i am whether or not we are moving forward. it doesn't appear as though china has been actually manipulating in the last 25 months. i'm concerned whether the administration is focusing on ensuring china commits to transparency regarding its currency practices, addressing potential that china will resume currency manipulation damaging
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our economy. in the past you testified before this committee regarding the detrimental impact on our economy and manufacturing in particular. you have even called for the united states to change our trade remedy laws. i have four questions. it's been claimed that there is already a deal reached on currency. is that true? if so, can you tell us anything about the substance of that agreement? in the past, i made a point in my support for trade agreements that we need to have our trading partners commit to stronger worker protections, environmental standards, currency disciplines and the commitments to be meaningful. are you seeking enforceable commitments from china. and if you see that china is
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manipulating, what is the united states to do? does enforcement mean more across the board tariffs? mr. lighthizer: thank you, mr. chairman. i would say, as you say, currency problems is something i spent a fair amount of my time, not necessarily in my current job but in previous jobs, and it's not just a problem with china, it's a problem with a lot of other areas like asian reasonable case to be made it is a serious problem with japan and those in the car industry realize that and also other areas. but it has been a problem from time to time. there are costs in being the reserve currency but we can't lose the good people that go to
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work every day. something we have to focus on. is there agreement? there is no agreement. you know that from how these things work. but we have spent a lot of time on currency and it will be enforceable. the agreement will be enforceable. but i'll talk to you about that. mr. neal: the chair recognizes the gentlelady from independent indiana. mrs. walorski: mr. chairman, i ask permission to insert into the record a letter signed by 150 trade associations that formally delays from 10% to 25%. mr. neal: without objection. mrs. walorski: mr. ambassador, great to see you again. when can we expect that federal register notice?
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mr. lighthizer: it it being worked on right now. the president has made a decision and sort in process. in the next day or so. the president made the announcement and we are following the legal process. we have a process that we go through and the process with other agencies and there are steps we have to go through. but that is something that will happen and will happen according to the normal course. mrs. walorski: when do you anticipate to see more decisions for exclusion requests from lists one or two from the 302 process? mr. lighthizer: we are in the process of doing that night. we granted more than 1,000, as you know. and things have slowed down because of the government closure. but we are in the process of doing that. we expect another traump to come
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out soon. mrs. walorski: i ask permission to insert into the record a letter from myself and mr. kind that was signed by 167 colleagues to list three of the 301 tariffs. mr. chairman. mr. neal: without objection. mrs. walorski: thank you. mr. ambassador, there is great support in congress for this process and the most recent spending bill wanted to establish a process and almost halfway through that deadline, do you expect to meet that 30-day deadline? thank you. mr. lighthizer: first of all,
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that was the report from the appropriations committee. i understand there are people in congress who want us to have an exclusion process. and it's something we are looking at. our view up until now we would have the exclusion process which is at 25% and 10% that you are referring to there wouldn't be an exclusion process. i would note that since the date we put that into place has been a seven or eight when you stop the devaluation of the chinese currency. the effect has been less significant than those people affected. and i hope we can deal with this in the context of our negotiations with the chinese. rs. walorski: i know you and i chatted that the constraints on
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resources and the exclusion process. i recognize that the process for lists 1 and 2 and moving slowly and list 3 is out there and four times the size. could i ask you this, is there a way to take a load off of your agency? what about companies are hurt and only able to export finished products to the u.s.? mr. lighthizer: we have a process that we think is fair and looks at the competitive effect whether the products are available in other areas and whether or not it is a focus of china 2025. we are happy with the current process but it's a big, big process. mrs. walorski: mr. chairman, thank you, i yield back. mr. neal: i yield the gentleman from wisconsin, mr. kind. mr. kind: thank you for the
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outreach that you have been making so far this year. i'm going to ask you to respond to a few questions, one of which is the level of cooperation and coordination you have with other nations in regards what you are trying to accomplish as it relates to china. and the second one is in regards to the concern i have, that the longer this trade war with china lasts, the more we lose and how difficult it will be to regain the market share because back home in my district in wisconsin, my family farmers are getting hammered. record bankruptcy for family farmers, close to well over 800. i'm not saying the trade war is the sole cause. those are the two questions. i think it's safe toll assume and you have probably heard it there is bipartisan consensus on the challenges which face with china, i.p. theft, forced joint
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ventures and what you are trying to accomplish and there is bipartisan agreement on where we need to go on how we need to resolve this. there is a difference of opinion on the tactics being used. there was another approach. multi lateral effort. still believe that our rejecting the trade agreement is oing to be one of the greatest mistakes. 12 nations and the largest and fastest growing region came up with a standards and rules that elevate up to where we are, that china would have been on the outside looking in, would have isolated them and put great pressure on them, whether prohibition on i.p. theft, on forced technology transfers, joint ventures, strong and labor environmental transfers,
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e-commerce, everything we are trying to elevate. the prohibition against localization rules, was contained in the trans-pacific partnership. moving forward would have put incredible leverage on china. and now we are on the outside looking in and china is being able to accomplish those rules of trade. at some point we hope to find a way to get back in that agreement instead of disadvantaging us. going back to the original questions in regards to the level of cooperation and coordination with other nations. there is strength in numbers and i think china will respond to the international community much better than the unilateral action we are taking against them and finally the lost market issue. mr. lighthizer: i think getting out of t.p.p. was the right
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decision and that agreement was negotiated and the costs was 45% in vietnam and 55% in china. didn't get much on currency and in any event to get to your geo political problem. as you know, we have f.t.a.'s with six of the 11 countries in it already. ive others, they are in japan. in terms of cooperation, we are trying to do it on two tracks and want to cooperate with two countries. we are trying your approach. your approach by itself is less likely to be successful and so what we want to do is continue that approach and put in place the unilateral action that the president has taken and that
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unilateral action is what has brought us to the point where we are now and hopefully on the point to turn the corner. in terms of -- mr. neal: if the gentleman will finish. mr. lighthizer: in terms of trade with chipe, we hope to get these barriers down and do it with our supply chains and our customers. mr. neal: let me recognize the the gentleman from ohio, mr. wenstrup. mr. wenstrup: thank you for being here with us today. little off china. my colleague, terry sewell have steppeded the caribbean base and trade partnership act for another 10 years from 2020 to 2030. it's an important program cause it requires the use of u.s.-made yarns and this allows
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haiti to compete with large asian partners such as china and vietnam. with the program to expire, certainty is important. and important to u.s. companies but especially when doing business in a least developed business like haiti, do you foresee support for re-authorization of this act? mr. lighthizer: i'm not prepared to say. i don't have an idea. the fact that you and congresswoman sewell are in favor of this is a positive indicator from my point of view. i want to look at it and want to say the requirements for u.s.-made yarn is something that i have supported as a matter of policy and applied in other areas. but i want to look at that so i
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can give you an informed opinion. mr. wenstrup: hasn't come up in ny conversations with china as how it might affect them? mr. lighthizer: it has not. mr. wenstrup: one other question, when it comes to chipe's retaliation and some of the effects on agriculture and access to markets, you talk about some of the nontariff barriers and one of the things is inspection requirements, can you elaborate on some of the things they are doing in that arena, if you will. mr. lighthizer: i would be happy to do that. something that we spent an awful lot of time on. there is a whole lot of technical barriers to trade depending on what term you want to use. one of the most single time is the whole issue of biotechnology and their approval processes.
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. the u.s., it's 18-24 months and in china, seven to eight years. it's a very complicated process and it is one that has a very, very negative effect on the united states because u.s. farmers will not introduce the technology themselves in the u.s. until it is approved in one of their major markets, such as china. we wanted to change things and put in time limits. i don't want to suggest we will be successful. but there be science-based decision making because right now there isn't in many cases. that there be time. and we have a long pipeline of things that have been stacked up for years and years and years and years.
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we understand how important this is. they are changing the process and getting it really more in line with the international norms and have it be science -based. we'll see how it turns out. we spent a lot of time and realize how important it is. mr. wenstrup: thank you very much. mr. neal: thank the gentleman. let me recognize the gentleman from new jersey, mr. pascrell. mr. pascrell: thank you for fulfilling that congress has a major role under article 1 in trade negotiations and i thank you for appearing before us. china needs to provide greater access for u.s. services firms and allowing the ability to invest and operate independently from state-owned enterprises and
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come pennsylvania in audio-visual sectors. beyond the scope of the 301 report, i want to ask you about two things quickly. one, it is reported there will be a memorandum of agreement on currency in this deal. i have read your comments from security s.-china economic commission where you laid it out. you laid them out very clearly. you argued in that presentation that china's practice of currency manipulation is it constitutes a countervaluable subsidy under our law. i agree. i have a bill that would treat it as such. you argued that we should be quote, unquote, imaginetive in dealing with this issue inlewding restricting imports or
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even requesting compensation did the terms you have reached with china live up to your own standards? i'm not very good at that. all, theay first of president has been imaginative. i feel very comfortable i have passed my own standard and i might say in the case of the currency, in terms of it is certainly objective and agreed to that there be commitments not to do
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competitive evaluations. complicated what has happened in the last couple of years and i could argue that those kinds of decisions are not made by me some a but the secretary of treasury. past -- without question, china has used currency manipulation in the past. >> we will talk about the your jobhip between and the treasuries drop and where exactly the [indiscernible] they are in the scope of the 301 negotiations? >> i would say to the extent that they are involved to the
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unfair trade practices, they are , but this is not like a free trade agreement. because it isrrow based on 301 and by the way, i would love to work with you and other members who want to sit .ack and figure out another way i would love to sit down and talk. >> can i just add one sentence? if your answer is not, i would point out the market access is not in the scope of the 301 report. we are negotiating these anyway. i wanted you to take a look at that because it has caused some confusion and i would like some
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clarity on it if possible. >> let me recognize the gentleman from kansas. >> thank you for joining us today. , trade is antative critical issue. support is -- jobs supports over 800,000 and $17 billion for the economy in our state. i focus on trade relations with china, i want to thank you or your work with nafta and the free trade agreement.
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[no audio] the agreement did need some upgrading and reform effort. thank you for doing that. hopefully we can get that ratified quickly so we can move forward with some of the other issues. let's go back to the focus on china. retaliation has , led by a lot of soybeans, cotton, beef as well as aircraft manufacturing and other manufacturing. as a big supporter of trade, i believe a trade war is not what any of us want. , ii talked to kansas farmers
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have heard over and over have a support the president in getting a better trade deal. one of the things i would think that both colleagues agree with harming trade.en in 2013, chinese nationals were arrested in kansas for attempting to steal intellectual this andand research that to you. -- and send that to china. since we have introduced negotiations with china, a lot a positive step and we want to make sure we continue to move forward. >> i don't want to stop there. , china'sioned earlier
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exports are worth [no audio] constituents, particularly in the farming community, as well as aerospace, hopefully we can work on making retaliatory and regulatory processes are fixed -- practices are fixed. >> thank you congressman for your support. it is our top priority and if congress does not see fit to pass that, everything else we are talking about is a footnote. it would be such an omission of failure by all of us, song very grateful-- so i'm very .
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we have talked about manufacturing jobs being lost. market.a huge the reality is they should be buying much much more agriculture and my hope is that these purchases, while not central, will lead to new markets that will go on for years. >> thank you. recognize the gentleman. me thank you for the work you have done in the work you and for responding to inquiries and questions. i represent an area of chicago called chinatown and i'm trying to figure out what it is i say
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to the chinese-american chamber congress when i go and meet. i would like to know as specifically as i could when it comes to disregard for intellectual properties, protection, currency manipulation and market access for u.s. businesses that are trying to do businesses -- trying to do business in china, given the fact it is an enormous market. to the chamber of congress -- chamber of commerce in chinatown? >> thank you. i would say first of all,
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chinese-americans and many chinese businessmen themselves, universally have said to the , hang tough, this is really important. we have to do things that the to reform in china. we are not forcing reform in china, we are working with nobody knows better how important it is than chinese-american businesspeople. they know what the problem is and they realize what the takes al is if china step forward. i would say the potential for china is enormous. that is why china has reformers.
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is all of our and probably there's more than any are afraid to do business in china because they will not -- lose not only technology, but just know how, that they won't have intellectual property protected and respected. there are huge markets that could be opened up if we get .his reformed to knowbe interested what their reaction is to what we are doing. i find the people that follow this stuff a lot closer than most americans and when i talked to them, they are like hang , don't go for the
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structural change. i would be really interested to get your feedback. >> we will make sure we do that. thank you very much. >> would say that some of the best questions have already been asked. how do we future proof? let's say you have amazing success. the angels thing, whatever happens. proofo we do to future success? here have ahose serious discussion on streamlining the wto? filings when we read through them a decade later
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and it's week has been made, what we do so we are not -- what do we do so we are not back having the same discussion into her three years? >> after the number of hearings i have done, whenever i think of the future, i think of you. you are always going to ask the question about the future. we all have a tendency to think of the here and now more than we should. one, having amber real enforcement process. issues, we will be resolving issues in ways that turn up new problems and trends
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and i think you have to be able to deal with that process and as i don'tried to say, believe this is going to solve all the problems between the united states and china. they are in a process of reform. headway, but i think there is a role for the international volleys -- bodies and i think the wto is part of that. the timeline, the ability to actualor is it the adjudication process itself? what can we do to help so we are not doing this all the time? all, tryd say first of to look to the future and reduce
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problems is a healthy an important process. i believe we will have problems anyway. this in fortress -- enforcement process will be very specific. and working layers ish congress on wto reform something that i'm eager to .ngage in i think there are problems that with respectdress to the economies. to that point, one of my great interest, i believe there disruptions,y
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financing, technology that will create disruption and weibel need some type of dispute mechanism. had that havewe said we are part of this wto complaint, but by the time the fees, aears, -- lawyer decade later, we gave up. with that, i yield back. thank you and thank you to ambassador light hauser. haveber of my colleagues mentioned enforcement mechanisms and i'm wondering if you're able to share with any specific the how you intend any agreements
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with china to be enforced? much,nk you very congresswoman. i will do it with little specifically -- sp y --ifi there will be quarterly meetings .nd semiannual meetings is individual companies will come to us and we will be able to work through the process . in many cases, those will have to be anonymous because companies are afraid to come forward and addition to that,
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problems where we will see patterns developing and a series of things we disagree with. hopefully in most cases, they orl be resolved in the first second level. if not, they will be resolved at my level. that, this is not something that has a lot of precedents. that is helpful because many say if there's no enforceability , then the trade agreements are not worth the paper they are written on. one sector of want to call to , is the creative industry.
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95% of people involved in the creative industry in lar union qualitywho have negotiated benefits and retirement plans. china,iovisual sector in i want to call your attention to , a commitment made by the chinese in 2012. they said in 2017, they would provide additional meaningful conversation -- compensation and increase revenue shares the u.s. studios and it seems clear revenues of 40% at the box thece would be international norm. can you confirm that it is a
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priority in a trade deal with china. >> absolutely it is a priority. it is something we spend a fair amount of time talking about. point is that revenue sharing is not that complicated. the distribution becomes more complicated and there should be more changes their. something we want to bring in, the idea of challenge and control. , i don't want to get into the details, but i think you know as well as i do, it is something that has not been resolved. we understand the importance. lome recognize the gentleman
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from texas. >> i was going to refrain from bragging about texas, but i have many colleagues [no audio] we feed and close the american people -- we beat and close the cloth thed and american people. , good work, hard work and i know this is a long-term proposition, a long-term game changer. nobody knows about the equities andfairness and the chinese their bad actions and on fair -- unfair trade practices. keep up the great work.
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for the last two years, we have inn a decline of over 50% the united states agriculture industry. that is the steepest decline since the great depression. 40% roughly increase in bankruptcies and i'm sad to report that farmers have the highest suicide rate of any profession in the united states. despite of that, farmers and ranchers stand with the president 100%. they will stand with him until they have to sell the family farm. they know he is fighting for them. let me talk about cotton. when you land at the airport, you'll land in the largest
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cotton patch in the world. we have lost 50% of our market share in china and it is a big market. we want reforms. we want the enforceable and structural reforms. we want that for every american job creator, manufacturer and producer. you mentioned the purpose commitment and we talked about soybeans. talk about cotton. produced the most and best cotton in the world, but result,ese market as a our guys are suffering. can you talk about cotton being mentioned? >> first of all, thank you for
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that. as you know, we cannot talk to the president about trade without farmers coming up. perdue, i don't know all the secretary of -- secretaries of agriculture. in terms of the purchase commitment, cotton is certainly a factor. it is easy to buy more of, so we understand these people have suffered and it is in the list of things we expect to have substantial increases on and something the president keeps us very focused on.
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i have gone with the president on various items. i've had a lot of members asked me about it will stop you are doing a great job. we will now move to two democrats and recognize one republican. >> thank you for being with us here today. i was pleased last month, we saw .6 countries however, i'm concerned that china in these talks could weaken those overall efforts and lead to a watered down agreement since the current regime is radically different than ours.
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in your talks with the chinese, are you pushing them to address likecal issues restrictions on cloud service providers? this would not only help many american companies, but also be a more constructive partner. if we don't address these issues immediately, we risk creating borders and those could create massive disruptions in the supply chain we have. i would love your thoughts and how we are addressing these issues. something ithis is care about. agree one, i completely that we should have a small group on e-commerce and then
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expand. the more people you bring into the negotiation, the harder it is to get world-class kind of rules. i would point to the mca. it is probably the gold standard. number two, are we dealing with these issues in china? absolutely. i mean, down to the most minute detail, i'm happy to sit down and go through so you can get some actual appreciation, but it is me sitting down among the
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most senior officials there talking about where there are circumstances to enforce those codes. had -- we have made headway. it is not going to be what you and i think as a model agreement, but we will make substantial progress. i agree that this is one of those things that we should lock in goals that stop barriers in the beginning of an industry. all of the world, it is much harder to change then have people adopt best practices at the beginning. it is also an issue for us
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colloquially. >> u.s. technology companies and specifically cloud service providers, significant market restrictions. the 301 terrorists also impact -- other datar centers are subject to these tariffs. i would like to know your commitment, but also are you looking at eliminating foreign equity caps so that u.s. companies don't have to rely on chinese companies to operate? >> yes. >> i know where at a time. we can follow up. now recognize the gentlelady from california. los angeles, the heart of the television and film industry.
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i wanted to follow-up on what he about the unfair practices affecting the film industry. part of the unfair practices has revenue-sharing. for the filming in china, the revenue-sharing is 40%, but for the rest of the country it is 20%. the wto for the film industry was entered into by both parties and in that in the leu, the chinese committed to engaging in consultations and 2017 and providing additional meaningful conversation in terms of revenue-sharing.
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my question is, have they engaged in the consultations which were supposed to be done and 2017 and if not, what is your plan for enforceability in this regard? we have had discussions that predate the current 301 process, but now we have insufficient theress and it is one of issues. also, trying to make some improvement on the distribution side because the reality is -- thereon helps their also. i don't know if i could predict but your industry is very well represented did by you and others. itare focused very much on
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increase is the likelihood of the successful outcome, but it is a difficult issue. you find philosophically all those areas you dig in and you say why this or that and it is almost a situation where there's an interest this -- interest in the other country that is getting rich off of it. people case, there are who make money on squeezing us. you know the reasons why we have this problem, but it is something we are focused on. we are not asking for the moon. we are asking for what is normal. >> i thank you for continuing to press on that issue in these trade negotiations.
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, also, i wanted to make a andement about a company which develop the famous rumba. it employs so many people in my district, but the rumba is manufactured in china and the i robot is on that third list of , but it may goow up to 25% if a deal is not reached and so, they are very some way tot having apply for exclusions and i hope you can make that process happen. >> if we go to 25%, we will.
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short of that, i want to see where we are and think about ways to manufacturer in the u.s.. >> now that we recognize the gentleman from north carolina. .> it is always a pleasure i'm glad to see the administration is willing to tackle unfair trade practices and set of talking about it and whining about it. enough support that theym to agree play by the rules when it behooves them, but otherwise ignores them. not only has the best barbecue in the country, we are also one of the leading pork producing states in the country. i'm glad i did not hear any objections to that. [laughter] >> we won't subtract that from
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the gentleman's time. tariffs, over 50% of exports have slowed to a trickle. they lose eight dollars per hog and i know you have made soy and, especially for i appreciate your work on behalf of farmers, but there is demand -- it seems like there is time for [indiscernible] which would put a dent in the trade imbalance. could you give us any indication as to where you are for the negotiations?
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>> you are absolutely right. pork is one of the issues that is very important to us. before we talk about the , we have specific say lackwith i would of a scientific basis, so that is another area. we would expect if we have a deal, there would be extensive improvements, given the fact that china has issues with their own for production right now that are substantial and it is something we have talked about. i'm happy to talk to you about it off-line. if there's a package, i'm
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confident there will be substantial good news for our pork producers. >> switching to tariffs, we are for theto find ways exclusion process. is excluding progress were regulation already constrains the ability of importers to access the products. example, the fda when the consumer cannot ship to all the suppliers. i believe we have an opportunity to address these products and minimize consumer impact. i hope we cana work on together in the future.
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that is not really require an answer. i'm out of time. i yield back. >> with that, we recognize the gentlelady from wisconsin. >> i want to thank the ambassador for his patience and indulgence. already, been covered so i won't regale you with repetition. i want to say that while the on all have had impacts of our constituents, they are having an impact on china's as well, but many economists seem to think china is adapting and they are recovering. one of the things they are doing is by expanding their export market. a question that has not been asked, we don't have a functioning export import bank
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now. do you think that is having an adverse impact on our trade position? >> thank you for that question. the answer is yes, it is having an impact and it is way beyond china and it is costing us jobs and there'sfor it in my opinion. i don't know what else to say. >> you have talked a lot about science-based decision-making. that is also one of the things our companies have leaned into, where companies would report and --rain from using complex .onflict minimum is that a consideration in terms of unfair trade practices, undercutting the prices of their products?
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it is not something we have talked about and if there is a specific action that we should be thinking about, i would be happy to work with you on it. you would love to work with on it because that could productsundercut our and we want to make sure they are not being taken from countries where people are being murdered. i want to follow up with my colleague on the republican side . i know my colleague from wisconsin will probably wax on about how this is hurting those in wisconsin. i have a mission to try to sudden infant death syndrome.
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one of the products we have found to be very effective and cost-effective, especially for poor women, something that is ,arketed in the united states .t is only made in china it is subject to the tariffs and if we were to continue these tariffs, it would be out of the reach of many consumers. i was wondering how to get that , don't touch these items. >> make you. i cannot say how important it is for wisconsin. that, my guess is why is the manufacturing campaign here? >> before my great grand
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daughter was born march 23. >> unsympathetic. be bottom line is we have to manufacturing these things in united states. 10% tariff on that product does not go up. the devaluation of the chinese currency, it is probably 2% or 3% in price and if the cost of that two or 3% is a bunch of people have jobs they would not otherwise have, that is a trade i would make. >> let me recognize the
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gentleman from michigan. thank you mr. chairman for holding this hearing. thank you for your willingness to engage with us on a regular basis. it makes a difference and i very much appreciate that. . have a question before i get into that, i want to note how much i appreciate issue.nging up the it is important that we address the retaliatory tariffs in response to legitimate trade remedies. it is important to my district and i appreciate your efforts in that regard. obviously, the congress and administration need to work together to deal with china and hold china accountable for -- unfairresses
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practices. it was a moreh multilateral approach. it,area that has to do with president trump promised to currencyna a manipulator during his first day on the campaign. obviously, that did not happen. i know you agree with the president's general assessment that china manipulates and currency. in fact, back in 2010 you testified that china should be labeled a currency manipulator. you outlined a list of actions tot the u.s. needs to take address the currency manipulation, but i would like to hear your perspective on the president announcing the
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currency issues in your previous testimony. simply put, does this meet the standards you laid out in 2010? all,would say first of whether or not china is manipulating currency right now is something we could talk about. they are in a different position than in 2010. that is one thing i would say is not a foregone conclusion. -- i do not think you can make a case that right intervening. or they done it in the past
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when i made that testimony, that is absolutely true. >> i don't think you could rule out the possibility that we could see that happen again. that is why the structural importance is -- structural appearances are important. i completely agree with your statement 100%. what we want to get is commitment to not have competitive devaluation in the future and a certain level of transparency. you can guard against that problem in the future and the other point i made, this is an issue beyond china. it has beenot where a problem in the past and a lot right now because of this issue,
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and a lot of people were told you did not do a good job. i appreciate your attention to these issues. that, we recognize the gentleman from missouri. >> thank you for taking the time to be here. we are here to talk about china. they have been taking advantage of u.s. workers for long time and i think the president, along with yourself deserve a lot of credit for sticking your neck issue this very difficult . it is clear that progress is being made and there's real afterial for changes years of false promises from china. a lot has been reported on the recent negotiations. you are able to shed light on the process. resumes that china will
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purchasing u.s. soybeans is a huge announcement. i'm hoping we can achieve more that go beyond current market assess. i would like to reiterate by the gentleman from texas in regards to cotton. the only thing i would agree with is that missouri cotton is better, but we are definitely my client -- like-minded when it comes to open a -- open markets. rice farmers have been fighting for over a decade for access to chinese markets. while the administration has , since 2017, china has been displacing u.s. rice in our territories.
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are you and administration investigating the situation and what you doing to address it? >> absolutely. to your first point, structural issues are fundamental and i tried to make that point. today in the new york times we were not making headway. contacts of lighthizer. it is a source, a contact. that is another issue. is we arent, the fact making headway on structural central tothey are
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would have inyone a great agreement. issue of rice, [no audio] cases, the other of which has not become public. those are two cases and resolving those cases in the context of this agreement is something else we are talking about, so whether weeks even .hat, we will see if there are issues or someone has a case that they want to , as you knowffice
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very well i'm for enforcement. if we don't enforce it, then it breaks down. >> i have several other questions for the record. appreciate your response. >> let me recognize the gentleman from virginia. >> we have been discussing and your compelling on the issue that china refuses an unlawful -- a lawful trading system. monday, deputy attorney general rosenstein spoke about what he process towards the law. this is not how our justice
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system works. [no wall way -- wal audio] meeting, the president discussed talking to the u.s. attorneys and u.s. attorney general. he added this would be a subject for trade talks. you are responsible for the trade deal. are you familiar of any further discussions regarding this case or leverage? are you not concerned that posting a transactional will undermine our own legal system as we have a ready seen?
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>> i'm not aware of anything on this. i don't get involved with it. >> thank you. the popular discourse centers -- 75% of americans work in services. you really focus on the trade deficit goods. -- want to ensure make sure you know we run a surplus. companies face significant barriers across a number of sectors. it is safe to assume it could be a lot [indiscernible] on you provide us a detail
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how it is addressed in your current talks and can we expect changes by the chinese in this sector? >> i'm remiss in not making that point clearly. services are the crucial point of what we have talked about. here it is. we spent a lot of time on cloud computing services, delivery. i will not go through all of them. we spent a lot of time getting subsectionl to the on pages and pages of services
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and you are exactly right. service jobs are equally good jobs. it is very important and millions of people work on them and we should be doing much areas, weause in many are by far the most competitive in the world. an enormous amount of time spent magicand it is less the and more specific, but there is progress that was made on a .umber of these threats thank you fore to coming to the committee today. there are 100 chinese firms operating in pennsylvania, supporting over 3000 jobs. $17sylvania imports almost
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billion from china. mandarin is the third most in philadelphia. the question that keeps coming up is the issue around intellectual property when it comes to investment. this question has already been .robably asked the issue about intellectual long-term, protect can you speak specifically to that again? first of all, i will repeat one thing i said before and that is i have found almost toericans are a person -- don't cave, don't sellout for soybeans.
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chinese-americans will be people who, number one that have a change in that system and number two, babel the beneficiaries. front, very little ip protection. what we did and i will talk to you later, we went through section by section by section of what we would consider to be some of the best practices and we negotiated those. things on what a proper definition of intellectual property is. sure you haveke
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current level penalties because if you don't have that, you make sure you have neutral people making decisions. there is variation and we didn't get all of that, but the people in china want to reform this process. i think they legitimately want to reform it. i think they view themselves as craters of intellectual property. when that changes, people will have a different attitude. we have an enormous amount of see, this was can an extremely important discussion.
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it is something they seem to want to do. >> real quick, you raised the issue about making. the restrictions on capital is a concern for the investment. wants chinesent investment just like he wants everybody else, so that creates jobs. we don't want investments in areas where they will end up it in certain areas. and people want technology the secretary position is quite clear. we don't want to lose technologies because it will hurt us. there's a balance there and it is important that we balance
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properly. >> thank you. >> we recognize the gentleman from illinois. and thank you for your toughness on china. we are lucky to have you on our negotiator -- as our negotiator going up against china. in terms of corn and soybean production, there's a lot of anxiety. wall street journal came out with an article and the down 30%al economy is directly related to the trade war with china, so a lot of stress and concern. however, most of my constituents support the president in going after china.
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you made a statement that technology will rule the future and how the change behavior with china seems to be their crocks at where you are getting at. historically in the last 25 years have been able to do anything, whether it is cyber , stealing intellectual property, we have not been able to change that behavior to put china on the same playing you've talked a little bit about art of leverage in this negotiating process. as i look at what you're trying to do, i'm wondering what's going to be different in changing the behavior in china. this is an article from reuters. and the title is china says u.s. accusations of unfair trade practices are groundless. the spokesman goes on to say
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they made groundless accusations and that's from their spokesperson. i'll sun mitt that, mr. choirm. how -- mr. chairman. >> how do we have a structural base? how do we have a more laws-based system? first on the ag side, as we begin planting season for our farmers, what assurances can you give my corn and soy bean farmers and pork producers that the market share will be there? and secondly, as we look at this different approach that you're confidence gives you that it's going to be different? and what if it's not? what are the consequences if we're not able to hold them accountable and changing that bad behavior? thank you.
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>> thank you very much, congressman for that question. it covered a lot of territory. and i have one minute now. but i'll do it as quickly as i can. first of all, in terms of soy and corn we're trying to get more sales, it's a question of ethanol in corn. a huge user of corn producters. of corn. i believe if we have a deal, we've seen a substantial amount of purchases and we've seen it moving together of soy prices back to traditional levels in terms of the foreign competition. so we've seen some impact particularly with the most recent, 10 million metric ton purchases that china has gone into the market for. so if we have a deal, i think, you know, we will see substantial new sales there and hopefully some other improvements in terms of s.p.s.
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stuff. how is this different? it has to be enforceable. it's got to be specific. we're covering many more areas that anyone has ever covered. but it requires the grit and determination of the president and it really requires a corporation of people who want to reform in china and there are people in that. and the alternative is what's been going on and that's for sure failed. we know that approach doesn't fail. hopefully ours will succeed. >> thank you, mr. ambassador. > from that let me ask the gentlemen from illinois. >> thank you for your time and the availability you've given us throughout this whole process. being from illinois, i share the concerns of my colleague for our farmers and our state. i represent the constituents of chicago. they were working on some product designs trying to get the company in
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china was delaying and we started seeing the products showing up, a clear theft of intellectual property. i agree with you that china is a bad actor and that we can't let their deefs you behavior go unchecked. we need to have a level playing field so that we can absolutely succeed. i have a real concern with the way the administration has caused a treated war that has caused damage to businesses throughout my district. last summer, i visited a number of districts to talk about the impacts the tariffs were having on them. and everyone was having their concern that it was hurting their ability to compete. but a local school district in any district had to spend $2 million in contingency funding to cover the increased cost of materials for a remodeling project. so i was pleased to hear that you made progress in the
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discussions. in your testimony, you mentioned that the administration is pressing for significant structural changes to allow for a more level playing field. what speck structural reforms are you pursuing to help our businesss that are experiencing hardships and can you insure that they will be meaningful and long lasting and looking towards the long-term. what outcomes have you secured to help my constituents that have been harmed by these chinese companies? >> thank you, congressman. first of all, your example of intellectual property theft hearing from your constituents, i've got many, many more. we could exchange stories at some point. that's real people losing money, losing market share not only overseas but in china and actually in the united states. i mean, they'll literally are
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competing against the people here in the united states. a blunt. tariffs are if you want to create new tools, i would love to do it. we're using the tools that we have. we know that just sitting around blathering hasn't worked so. we have to try something new. we've gotten to a point where we might have success. hopefully we'll have success. how will it be long lasting? we'll see. this is going to be a challenge because for a long, long time my guess is it goes long after i've left and hopefully by the time you'll be sitting in the chair hopefully the people in my chair are continuing to do that because enforcement tends to be about people. and if we're not going to enforce this agreement they'll figure it out pretty quickly. and that will be the end of it. what all we can do is try to set up a situation where we have the potential that if people go in here and have the right attitude
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the tools can be there so they can be successful. and that's our objective. we're using the tools that congress has given us as imaginatively as possible. i testified in 2010, i thought we have to have imagination. i think that's what the president has shown here imagination and grit. >> if i could use my last couple of seconds to emphasize something as well. thank you for that. you mentioned that technology is our biggest asset. we have to protect that. it's more than that, it's application of that techology. it's the continued innovation to think about the next technology and it's the y alliances that we built to apply those. i appreciate that. i yield my time back. >> with that let me recognize the gentleman from new york, mr. waze. >> thank you so much for your public service. we appreciate that on behalf of
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the country. secretary kissinger and the u.s. has operated under the assumption that with increased economic integration and our exposure of capitalism and democracy that china would adopt some of our systems at least in part. that simply hasn't happened. not only has communist china es cued democracy and engaged in awful human rights abuses, epression and abuse of their people, not only have they treated their workers poorly but they have not transitioned to capitalism. they cheat restricting access to their markets. but the chinese government zes their industry. -- subsidizes their companies.
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they are viewed to be 50% or more owned by the state. could you share with us your sense of what the long-term poll so i the united states is and the goals that you have as part of this negotiation to have long-term structural change on this relationship? >> thank you for that question. i hope lite hauzer is short winded. there was a myth that grew up. and if you look at my 2010 testimony which i think is really quite good testimony. it's been heard in the past. the myth was that if you open up a market, if you have an economy, you will become democratic, small d democratic. that is the myth. you'll open up that that will lead to an open economy and an open political system and all of a sudden, we're a bunch of
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people from ohio where i'm from, right? that's the myth. and that was -- that was professed by all the smart people, all the clever people. and that really is what led us to - to really -- to -- pntr. i read the speaker's quote which is very pressing saying this ain't so. she said it. and she was right. all those smart people were wrong. the reality is that it doesn't. you can have a very good economy and not have any freedom or have very little freedom, right? we made this up -- well i didn't. assumptions were made that were incorrect. i completely agree. and the tone of your remarks without saying every specific part of it is why we have a bipartisan view on this and why we're making success. it's because of people like you that we have success. the fact that it's baurnl is why we're making success on this. >> so what's the goals of this
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negotiation specifically to try to have long-term structural impact? and will we ever get to a place where we think china represents closer to what our system of capitalism is? i'm not going to put democracy on your done on yoush should -- your shoulders too. >> you're younger than i am. you're more likely to have a better view and see it. i don't know. our objectives are to foster reform in china which there's a group of people that want to do, to lead to structural reforms on the kind of things where we can on the confines of the statute that you given us and the report that we did. here's our report and here's -- if you haven't seen it, here's our supplement. >> well, we can't get to the whole report in the last three seconds. i'm going to work with you to see if there are other tools that congress can help to give you and people like you to be more effective in the future.
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>> thank the gentleman with that. let me recognize the pament are pennsylvania, mr. chelly. >> thank you. we get a chance to go around our direct and talk to people when we're back home during our district workweek. last summer i stopped in blair steel. it started in 21800's when pittsburgh was known as the iron city when it became the product of choice and how it took off. so i asked mr. kenny, i said mr. kenny, looking at what's going on right now what could we have done differently. and he looked at me and said, i'll tell you what we could have done differently, we should have elected this guy 39 years ago. no, that's exactly what happened because we've taken a backseat and somehow we think that if we're just nice other people will play by the rules. mr. swaze is on top of this. we have to be damn fools if we
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don't think we've been in a trade war for decades and we're afraid of a trade war today that's taken place and have taken heavy casualties. we just never stood up to it saying, you've taken advantage of us. but we're so damn nice, we're not going to call you out on this. other than what you're doing right now -- because i thought maybe congress could help out. this administration and your tireless efforts to make sure that everybody's playing if the role -- i'm so damn tired of forfeiting the game and crying because we lost. this is absolutely stupid. we've allowed ourselfs to get into this position. what could we do differently? stand 100% behind the administration and don't let these people get away with what they've been say. this is very crude. if you're in a peeing contest th a skunk the only way to
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have i'm so offended to not being offended with intellectual property. we've been game so badly for so long. anything we can help you, mr. ambassador? >> first of all, it really is important. i've said this -- this is my theme. it's been my theme for two years that this has to be bipartisan. it cannot be bipartisan. this is different than a lot of other stuff we deal. with and hearing the last two questions shows why exactly it is bipartisan why this is a fundamental both intellectual and gut reaction to what is going on. and i think sub porting us, supporting the president when we get this package together if there is a package. and i'm not there yet as i say all the time that we have to look at it and get behind it. and say this is a great step forward. but you have to keep your --
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your eye on making sure that -- that -- that we enforce it and i that i enforce it and that my successors enforce it and that years down the road that new presidents enforce it. the second thing i would suggest which i said, i would love to work with members with new tools. i think we need new tools. i won't go through it here but what's happened to 301 is troubling. i don't want to go through it. >> just because we talked about go back homewhen i people don't ask me what happened with 301. it's because of discriminatory unfair trade practices. these are things that happened under the executive branch. i believe it's going to take eternal vigilance. i think that our trade agreements are like children, they last as long as they last, we're in grave dange inner this
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country of thinking that somehow people will play fair us because we're nice as opposed to being vigilant. i know you don't sleep very often. you're doing one hell of a job. thank you. >> you bet. >> thank the gentleman. with that let me ask mr. panetta to inquire. >> thank you very much for being here. i think in the 116th just on the ways and means committee alone, you've been here three times within the last two months and i think that says a lot about you and your commitment to working with us. and we look forward to continuing to work with you not m.c.a. this but the u.s. trade with china is very important to me and my district. as you know well, california is the number one ag-producing state in the nation. although, i appreciate the questions from my other members here in the dais. california is what it's about when it comes to agriculture
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being the salad bowl of the world is what it's about when it comes to being agriculture. and we are the number one ag producing state. but obviously, these tariffs, these tariffs have affected our farmers. you have over 800 food anding a ultural degree and agriculture products that are being taxed. and unfortunately, a lot of those products can be obtained from other nonu.s. trading partners. and so what we are seeing is a closing of certain markets. . what we've heard that it's not about aid,it's about trade. it's nottability short-term bailouts. it's about long-term business. and so my question to you in regards to these markets that are potentially being shut-off
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that are being closed, what are we doing to recoup those markets in regards to your negotiations with china? >> you know, thank you, congressman. first of all, the problem on retalltory tariffs goes beyond china, i should say that. and one of the things we're doing is having negotiate where we're in a bit of a stalemate with others. we have us mca and the 232. u.s. looking to pass m.c.a. because it's important for california an everyone else. now, in terms of china, which is what's unfortunately, is only part of where we've had retalltory tariffs, if we get an agreement, those tariffs will
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come off and then the president's hope is although, it's not the purpose of the negotiation that the purchases will have the effect of not only giving short-term sales. and by the way we're looking at numbers that goes out several years. it's not like i should make this point. even within the purchases which is con trire what's in the newspaper is not the function, the purpose of this. those purchases are going to have targets and amounts that go out for several years. but our hope is that if you increase those agriculture sales you will create new customers that will have results that go on years and years and years into the future. so this is -- it's a very real thing that the president is worried about. when you get into an situation where you're drying to bring change about it's going to have cost. one has been more treated less fairly than the farmers running. they are in a position where
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they should have enormous markets in china. china's a big market for us. as i said they're our second or third depending on the year market excluding 2018. but there's a much bigger market there. there's a lot of people there. and with any kind of fair trade farmers would be beneficiaries too. >> thank you for bringing this understanding into these negotiations. i yield back. >> we will revert on one for one. the chair will recognize the gentleman from new york, mr. reid. >> well, thank youers mr. chairman and ambassador. it's always greats to be with you. i do echo what my colleagues have said about you. i think you're the right person at the right time to take on this much-needed negotiation with china. one of the things i want to bring to your attention and maybe your thoughts on as well as my colleagues to focus on a little bit as we deal with these tariffs and the future as we negotiate this agreement.
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i do believe we're going negotiate an agreement. you have one chance, very limited runway to do this, right, to make a fundamental shift in our trade relation with china. one of the things i see and i see the chinechie -- chinese position. they're thinking long-term. they're always thinking long-term. they're not looking transaction nal. and so as i see the negotiations proceed and the tariffs that are on the books and reaction in china, i seer that commitment as a co-chair of the u.s. manufacture caucus to build-up excess capacity and excess inventory of certain products, so that when that new marketplace is created, what are we going to do to protect american markets from that excess caps tip and inventory that would then be dumped and thrown into the u.s. market in a very dangerous way, in my opinion. do you understand what i'm getting to? because i as i see advanced
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manufacturing, i see china reacting to this transaction of what we're dealing with these negotiations. but as these tariffs come off, as we operate under this new agreement, how are we going minimize the adverse potential impact of what the chinese 2025 long-term vision of positioning us -- positioning them as a world leader in manufacturing to protect our manufacturing bases here in domestic soil? >> that's a fundamental question. i want to make one point clearly and that is i think the united states has been guilt of short-term thinking and short term view for sure. president trump, that's why he's going down these structural changes -- >> amen. >> he wants to know what's going on way down the road and still have the united states be at an advantage. we have to stay number one. most people in the world want us to be number one. >> i totally agree with you.
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so what are you going to do when that valve is opened up? are their going to be district negotiations? >> no matter what happens we have to remain on laws, strong on counter of duty laws. >> so if that inventory is dumped on the u.s. market, what are we going to make sure that that enforcement is there and easily executeable? >> number one, we have provisions if it's agreed to subsidies. imit that is to say if there's there problem with excess capacity. what's happening in steel, aluminum, solar panels? on and on and on and on. there's an agreement to limit subsidies in those kind of cases? there are unfair trade laws and there's the enforcement provisions rights here -- this is a pattern.
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and by the way, it's not always a plan. sometimes -- it's they start this and the provincial governments and the local governments all kind of get into it and they don't have a way to put their own breaks on. >> so do we at least agree that that potential threat is there? >> i absolutely think it's there. >> and we want to -- >> it's undeniable that it's there. >> and we want to put enforcement mechanisms ready available -- readyly that are easy deployable. we need to make it clear to china that we're ready to use those? >> absolutely. absolutely. >> i yield back. >> thank the gentleman. jendlelaidynize the from florida. >> presumely the goal of section 301 is to cause them enough economic pain to persuade their leadership to negotiate an enforceable agreement curtailing it's abuse of trade practices.
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you noted that tariffs are a blunt instrument. not only are they not precision guided. they can have unintended consequences often for u.s. consumers and small businesses. and i imagine that before you made the union lateral tariffs you waked -- weighed the cost d benefits and minimize to companies in the u.s. and to the broader american economy. whatever your intentions were, i have -- i have to tell you the evidence on the ground is really grim. i've had small business owners in my community in central florida break down when they talk to me about the impact the tariffs are having on the companys that they've spent a lifetime building and the work thears they view like family more than employees. for example, david, he's the ner of a 30-person company
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with electronics. his business has been upended by this 10% tariffs that took effect on september 24th. when he went to work, he had to pay $280,000 to release his goods from china from -- that had already landed at a u.s. port. no notice from his government, no time to adjust. and since september, david has paid over $800,000 in tariffs. so a lot of money for a small business. so what he's had to do is raise the cost of his products. some of the big retailers have agreed to pay more. but they're just passing those costs on to consumers. and some smaller retailers won't accept the price increase. and that means david has lost business. these tariffs have decimated his cash flow, jeopardized his financing and made him unprofitable playing his workers jobs, my constituents' jobs at
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risk. david doesn't always have ways to mitigate the harm. so if this 10% tariff endures this damage could be severe, and if it increases the damage could be fatal in 40 years as a business owner, he tells me he's never seen government action interfere so directly -- i know you're not insensitive to this issue. but what do i tell these small business owners like david whose lifelyhoods are on the line? when will this end? do you think you're going to be trying to accept a deal that falls short of what you've indicated you wanted to achieve in order to end this trade war? all, we are of sympathetic to situations like david's. although i don't por port to know the details of it. but there clearly are people who import products who are negatively affected. i would suggest that this is a
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10% tariff and that with the deappreciation of the chinese currency it's about 23rs or percent on three his business. we go through a noticing process. this process of putting these tariffs in place was r was -- months going through the hearings. so i don't want to let anybody have the impression that this is something that we woke up and did this. no, there are laws. and we followed them. and there were months and months and months and months of process going through here. i always thought with the proposition that do we have a problem with china? if you don't think we have one, then all of this is crazy. if you think we have a problem with china, then we have to weigh what is necessary to move forward. in terms of what we're willing to accept, no, i don't think we should accept anything that doesn't have structural changes, absolutely not. >> thank you, and i yield back. >> thank the gentlelady.
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let me recognize the gentleman from karl:, mr. rice to eninquire. >> thank you so much for being here. i have told you represented that one of the things that gives me the greatest confidence is people like you and secretary ross that have taken on these jobs to lift up american -- ers, heartnd by your heartened by your observation and doing something about that and lifting up our middle-class. i believe that our middle-class -- that american workers can compete with anybody in the world on a level playing field. and that we here in washington have allowed that playing field have been tilted against them for far too long. beginning around 1990, i am proud of what the president
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has done restructuring our tax code, restructuring our regulatory system in a think the next most important thing we can do is to balance our trade agreements. progress on that is so important . progress with china gives us great hope, although i've heard you say at least a dozen times today that it is not done yet. farnt to applaud you on how we have come, because i don't think there is anything more important after tax and regulatory reform that we can use to make our economy competitive and allow our workers to compete on a level playing field. once we get through this, we need to move to infrastructure.
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i want to tell you that i had a town hall in south carolina last week and a group of farmers came to my town hall and they are worried. they grow peanuts and tobacco and cotton and soybeans primarily. , we're worried about this disruption with china. it is certainly affecting our business. what can we expect and when can we expect it? , and ied about all that promised them i would raise these issues with you. they are watching you right now. hello, everybody back on. that being said, when we got through, they asked me to tell you they are behind you and they are rooting for this president and they recognize this has to be done and how important it is. in my last minute, i'm going to turn it over to you and ask you to tell my farmers back home as
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best you can what they can expect. thank you very much, congressman. thank you for your comments. i am grateful for that. i would just make the obvious statement that people in my position are inspired by and empowered by the president. if it wasn't for the president, i would have no power and no inspiration. i am happy to have this opportunity to fight for the things we care about. we will see how that turns out. farmerssay to these that they have been victims as much as anybody in america of what goes on in china. they are more vulnerable than a lot of other people for a variety of reasons that we all know about. if we have an agreement, there is a likelihood that we will begin the process of the payoff. we don't keep on
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it, it is not going to happen. fortunately, we are not in a world where good things happen automatically. if we do our job and get an agreement, there will be payoff with the president, who is very grateful of their support and understand these are real people putting it on the line for him. with that, let me recognize the gentleman from nevada. mr.hank you very much chairman, and to the ranking member for this opportunity. that though these negotiations have been ongoing and fraught, that our congressional committee is finally getting an opportunity to a dress concerns that we have heard from our constituents about and that directly impact each of our districts. wantted to first say, we you to be successful. on behalf of the american worker, the american business owner, the american consumer,
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all of whom are depending upon the successful outcome of your negotiations. i wanted to share with you that in nevada, it is estimated that $107 million worth of exports are threatened by new tariffs. nevada's exports to china totaled $20.7 million and these exports affect an estimated 367,000 jobs in nevada. as the price of steel rises, so does the construction cost across our state. there is currently an estimated $25 billion of planned, proposed and under construction major in nevada. the stadium, and public projects including expansion in our universities. all have become more expensive.
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food is a big component of exports threatened by the trade deal. everything from bread, pastries, condiments and milk. companies that make everything from metal castings to appliances to the gary sector and a curious are impacted. since last march, the administration embark on a series of terrorist actions that true retaliation from trading partners. about the have talked need to focus on enforcement and structural changes as part of this process. givehope and relief can we to our constituents about some of these pressing impacts that we see right now based on this ongoing trade war with china? >> thank you, congressman. first of all, in these
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circumstances, one has to begin the analysis, as i said, is there a problem? if you believe there is a problem where we are right now between the united states and china and that that problem threatens our future and our kids future and all of those people who we are concerned about, if you don't believe those people are potentially very seriously affected unless we change policies there, then there is no point in this. if you do think those people's futures are threatened, then you have to go through this process and our objective has been to minimize the effect. as the congress lady said, we have to minimize our affect on our own consumers and maximize the effects on others and we tried to go through that process. when we get out the other end, we have to be in a position where we have defended our workers and we have the potential for structural change in china.
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i think we have done a reasonably good job of minimizing the effect on our consumers. we have a process to help that out. and in termshetic of steel, i would say generally, i want to get a steel agreement, the president wants to get an agreement if i can, with canada and mexico. that will alleviate some of that problem. >> thank you very much. i yelled back. >> let me recognize the gentlelady from alabama. >> last but not least. think you, mr. chairman. i want to thank you, mr. ambassador, for being here. this discussion is long overdue. since the last time you appeared before the ways and means committee, this administration has opposed a tariff on imports from china and another 10% billion of200
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chinese imports. the chinese retaliated with a tariff of $100 billion on u.s. exports. we are aware of china's unfair trade practices and the not justal question is do we believe there is a problem with china and trading? we do. i think we will all agree with that. the more fundamental question is what do we do about it? it is important that we do something, but i can tell you that the tariffs have had a devastating effect on the folks in alabama. i have three concerns about the 301 tariffs as enforcement mechanisms. it is a go it alone strategy that i am concerned about this ministry should taking, when i think we could have put to use our alliances and created multilateral pressure on china and probably been more effective quicker.
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while we in alabama do believe that trade works for us, we believe that retaliatory tariffs don't. that has theon most impact on my district has been with farmers as well as manufacturers. according to a brookings study, birmingham, alabama has the fifth highest exposure to retaliatory tariffs on the country. since the tray were begun, al-anon exports have faced over $254 million in retaliatory tariffs and my soybean and cotton growers have been affected. the longer tariffs are in place, the more likely the shifts in the supply chain will become permanent, causing concern by lots of my decisions. the forest industry in my district is suffering from a 25% tariff on southern pine logs and
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10% on softwood lumber. ofquestion is one fundamental belief that while there is definitely a trade is the with china, enforceability of tariffs the way we are doing them the best way to get at that problem? especially given the fact that we are looking toward section 301 tariffs as a tool to enforce other trade tariffs, my question is, do you see section 301 tariffs as an enforcement tool of last resort when all of our options have been exhausted or a weapon that can be destroyed -- deployed regularly to exert concessions from other economic rivals and allies? all, i don't want to conflate tariffs with other tariffs. as you know, the softwood lumber is a litigation matter brought
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by private people and steel and aluminum are different. i think 301 is an effective tool. we should be working with members to find more effective tools. i want to take you through the history of 301 sometime when you are ready to go to sleep and can't get to sleep. committee, the intel too. many speakers nights for me. >> i guess that is right. there is a history there. we need better tools, but in terms of whether we should have done what we did or done a multilateral approach, i honestly believe that good people tried for 20 years the multilateral approach and the let's all get along approach and i can tell you, i have a chart here that shows the trade deficit. there it is. deficit andrade here is every one of those come along type things. and demonstrably failed when you are in a situation
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where something really matters and our kids lives and jobs depend on it and he tried something and it failed, you have to be crazy not to try something else. is this perfect? i'm not going to say it perfect, but it leads to results when everything austin. >> i just want to say thank you for allowing the ambassador to complete his answer and i wanted closing, your success is our success. a better balance when it comes to trade with china and i want to thank you for being open enough to come and talk to us on a regular basis with respect to these tariffs. >> we think the gentlelady and we will conclude with the gentleman from georgia. >> thank you for being here today. ishas been fascinating linked above sides recognize a few common threads. inna has been participating
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unfair practices for years and has hurt american business, american innovation, most importantly, it has hurt the american worker. consistently, i hear throughout my district the support for these efforts to put china into a new trading position with the u.s. across the board, republican or democrat, small business, large business, they all understand the need to do this and the need because we have not done in the past, that there is going to be a rough transition while this fight takes place but it will be worth it. i want to commend you and the administration for fighting so hard on behalf of the american worker. as i look at this, another thing -- and i havee heard a couple comments along these lines, talking about the context of the china deal with everything else going on in trade. could you speak, because we all
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recognize the problem with china , and we all recognize that it is a very large problem to deal with. can you speak to the importance of getting the usmca deal done on the heels of the south korean deal and bringing japan into the fold and then moving to the europeans? can you speak to how important it is that we all develop these trade deals so that we can collectively work to change the chinese behavior? >> thank you very much. thank you for your comments about the president's program, which i think is working. i'm going to pass along to him the comments people have made about what we're trying to do. you are right. i said this at one point and i will say it again, there is no trade program in the united states if we don't pass usmca. what it says is, we don't have a
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consensus and we don't want to stand up for our workers. i think there is no less than that at stake. we have an agreement. it is clearly better than its predecessor. itss $1.3 trillion worth business. millions of people are affected in a has to pass. if it doesn't, you have no credibility with china and no credibility on any deals with your other trading partners. i have members come to me everyday and is always constructive ideas and thoughts and all this and i always in the back of my head think if we don't pass usmca, don't bother. just sit down and say we will wait a few years. >> i want to thank you for addressing that, but i want to switch gears. in my hometown, we have an seen the, we have
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benefits of having a good trade agreement with south korea. we want to continue to see that. one concern i have, and if you could address it quickly, the timelines on the usmca and potentially any trade deal, 3-5 years for implementation, that to me sounds like a relatively tight timeline. opportunity if companies are moving in the right direction to give some leeway as they tried to bring jobs back to america? >> usmca requires a very short transition. they get an additional two years of their meeting certain requirements. manufacturers.e is it a tight timeframe?
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yes. is it a doable timeframe? yes. by extending this out, we are postponing new americans getting jobs. i don't want to do that. we want people employed as soon as possible. this is doable and we want them to manufacture more engines and transmissions in georgia and i think they are going to. they're going to use korean engines and transmissions to a large extent. this is going to be a big win for you, but i want to push it out as far as i'm going to. who knows where i'm going to be in five years? >> mr. ambassador, thank you for joining us today. as always, your accessibility is appreciated by the committee. please be advised that members have two weeks to submit written questions. they will be made part of a formal hearing record. with that, the committee stands adjourned.
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>> where's the relationship with treasury? >> he is going to testify with ways and means first. that is what treasury does. component of these agreements, that is ready greatest suspicion rests with the american people, that when you have the agreement, there has always been a suspicion that
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geopolitics might interfere with some enforcement mechanisms. i think there was a healthy suspicion shared by both sides that for a long time, the idea of enforcement with china because of constant ever to rein in north korea. that is one example but there are other considerations. >> [indiscernible] >> he has taken a vigorous position on china. his background reinforces what we said. i think there is consensus on the committee that a tougher line with china is good for america. >> what do you think about his repeated comments that congress can't pass usmca, there is no other treaty? >> it is a little broader in terms of what he was trying to describe.
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he was saying you could vote for a new -- what he described as an improved nafta. if you go back to the status quo , which everybody agrees has to be revived, you could also acknowledge the threat the president has offered that if you don't do the new and improved one, you end up coming out of nafta. ishink what he is saying that there are three options. two of which don't seem to be very plausible. youerman, one of the things brought up is there is a lot of work that needs to be done. do you think it is premature for the president to be talking about the chinese president? >> i don't think me telling the president was premature in terms of commentary is going to have much impact. >> do you see a deal happening in the month? do you see a deal coming together? >> you have to consider that the chinese have at least as big a
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stake in this as we do. sometimes, the threat of tariffs are as important as the use of tariffs. you recall during my opening about tariffked bands after an agreement was reached and he asked for discretion on that, which is possible. usmca andked about how important it is, and yet, the administration still has tariffs on canada and mexico, which preclude them from ratifying. he was asked about that today. >> he was less than specific. >> what is your take on that? >> i think we have to wait and see. the part of bargaining is, when something is concluded, everything has got to be done. if you keep revisiting it in
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segments, it is not going to reach a final deal. the other thing i've urged committee members to embrace is that once something is agreed to, you can't say you will go back and revisit it. that is an important part of this hearing. >> do think that is true for usmca? >> i do. once it is agreed to, we can't say -- you do what is agreed to. if something happens that you did not anticipate, that is fair game. but if you say this is the agreement and go back, then that is not the agreement. the other thing that has come out of this, i would give you a bit of news, once we proceed down the road here, brandon and i and staff were talking about it, it is probably time to have a wto hearing. that is the news piece you just got. people are talking about
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reopening what has been signed. is that an option for people who are dissatisfied? >> there is ample opportunity once the agreement is sent to us conversation. that is the best way to handle it. >> thanks, everyone. >> what is your take on this enforcement mechanism that clearly means more talking before unilateral action? is --hink the whole idea c-span's washington journal, lives every day with news and policy issues that impact you. , kaiserp friday morning health news discussions this week's senate finance committee hearing on drug prices, which included seven major jet makers. then paul, a former senior counsel in the whitewater investigation talks about the
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future of the robert mueller investigation. be sure to watch c-span's washington journal, live at 7:00 eastern friday morning. join the discussion. saturday morning, american history tv has lived all day coverage of the american civil war museum annual ofposium, from the library virginia in richmond, starting at 9:30 a.m. eastern, featuring speakers including pulitzer prize-winning authors. elizabeth barron on the southern unionists. the importance of african-americans in the civil war. catherine looks at military history. studies tech civil war professor questions why the war took place, followed by closing remarks by the board president of the american civil war is he him. watch the american civil war museum annual symposium live at
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saturday morning on american history tv on the c-span3. announcer 1: earlier today, house speaker nancy pelosi held her weekly briefing with reporters at the capital. she spoke about president trump's summit with kim jong-un and yesterday's testimony from president trump's former personal attorney michael cohen. this is 20 minutes. ms. pelosi: good morning. with all the excitement going on around here and in the world, thank you for being here this morning. we talk about while that's all going on, keeping the house running here. very proud of joaquin castro's legislation to overturn the president's ill-conceived idea about undermining the constitution of the united


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