Grassley on Senate Finance Trade Priorities for 116th Congress
Prepared Remarks by U.S. Senator Chuck Grassley of Iowa
On Senate Finance Trade Priorities for the 116th Congress
Thursday, December 20, 2018
I want to speak on the topic of international trade.
During the last two years, there has been more talk about international trade in this town than just about any other point since I have been in Washington.
When I was elected to the Senate in 1980, the General Agreement on Tariffs and Trade, known as GATT, was the main guiding document on international trade.
GATT was signed by 23 nations in Geneva on October 30, 1947, a little more than two years after World War II ended in Europe.
It remained the institutional foundation for global trade until January 1, 1995.
That’s when the World Trade Organization was born with 81 charter members, including the United States.
The WTO has been in place for nearly 24 years, serving as the clearing house for our rules-based international trading system.
Since the start of the WTO, international trade volumes have increased by 250 percent. Countries representing 98 percent of global merchandise trade are currently members of the WTO, with 22 more countries officially working toward joining.
Overall, the WTO is moving global commerce forward.
The rules-based trading system it promotes has been very successful integrating people across the world into the global economy.
I also must acknowledge that international trade can be disruptive.
There are regions of our country that have been disproportionately impacted by job losses, at least in part, to foreign competition over the last several decades.
Those losses become especially problematic when they are the result of market forces being overwhelmed by foreign government intervention.
President Trump has rightly pointed that out and is delivering on his promise to make trade fairer for workers across our country.
For agriculture, international trade is the bridge to the world’s customers.
In Iowa, we export every third row of soybeans. Some people like to say God made Iowa for growing corn and soybeans.
I agree with that statement. Iowa also has significant pork and beef exports. American farmers produce more than we can possibly consume here in the United States.
So we rely on global customers. Export markets are, and will continue to be, vitally important to Iowa’s farmers.
I will make it a priority as Chairman of the Finance Committee to gain access to new markets.
The United States must continue leading the world on trade and economic issues.
The U.S. market is one of the most open in the world. Unfortunately, other countries throw up numerous barriers for our exports.
President Trump and Ambassador Lighthizer are working to correct these injustices.
I intend to assist them with this fight with the understanding that creating market barriers of our own like tariffs is not a long-term solution.
One of the top issues Congress needs to address next year is implementation of the recently signed U.S.-Mexico-Canada Agreement - or USMCA - that updates NAFTA for the modern economy.
The new trade deal with Mexico and Canada makes significant updates to the original NAFTA, with new sections on digital trade, currency manipulation and state owned enterprises.
It goes further than any other trade agreement in protecting intellectual property rights and makes important changes to market access for agriculture products.
While I commend the President for following through on his promise to renegotiate NAFTA, there are a few areas of concern.
As long as Section 232 tariffs on steel and aluminum imports from Canada and Mexico remain, U.S. farmers and others facing retaliation, along with the American businesses that rely on those imports, will be unable to realize the full potential benefits of USMCA.
This is why I urge the Administration to consult with Congress, as intended by Trade Promotion Authority, to ensure a clear path forward for USMCA.
I intend to work with members of the Finance Committee and Senate Leadership to move the USMCA quickly in the new Congress.
But I can’t do it without a strong commitment from the Administration that we will work together.
The Constitution tasks Congress with the authority to regulate trade with foreign countries.
We collectively have a responsibility to ensure that U.S. farmers, ranchers and businesses face minimal uncertainty from updating NAFTA.
Building on the success of USMCA, we must continue to play offense and pursue new market access opportunities.
That’s why I’m happy the Administration is pursuing new agreements with Japan, the European Union and the United Kingdom.
The economies of those countries account for 27.4 percent of global GDP.
Having more access to those markets will help U.S. farmers, ranchers and businesses for generations to come.
I expect the agreement with the European Union – and the UK, when ready – to address agriculture.
The notion that some people in the EU think there could be an agreement that doesn’t address the many ways they block our good agricultural products from being sold in Europe is ridiculous.
While I agree with the President that we must have fair trade that benefits Americans, I’m not a fan of tariffs.
Put simply— tariffs are a tax on U.S. consumers and businesses.
The Constitution grants Congress authority over tariffs and international trade, but Congress has delegated some of this authority to the president through legislation.
I’m no novice when it comes to understanding the delicate balance between congressional and executive authority over international trade.
In fact, I was a leader in renewing Trade Promotion Authority as the ranking member of the Finance Committee in 2002.
I strongly supported its renewal under the leadership of Chairman Orrin Hatch in 2015.
What was important then and remains truer than ever today is that Congress plays a central and pivotal role in crafting trade policy.
Our Founding Fathers were explicit in placing this responsibility with the Congress in Article One of the Constitution.
We must remain vigilant to ensure that the aspects of trade authority that Congress has delegated are used appropriately and in the best interest of our country.
I am certainly not opposed to being creative in negotiations with other countries.
But I strongly disagree with the notion that imports of steel and aluminum, automobiles, and auto parts somehow could pose a national security threat.
I intend to review the President’s use of power under Section 232 of the Trade Act of 1962, which grants the president broad legal authority to impose tariffs in the name of national security.
Senator Portman and others have already introduced legislation to narrow the scope of how an administration can use the power that Congress authorized in 1962 under the influence of the Cold War.
I believe that these efforts serve as a prudent starting point for the discussion we need to have on Section 232 authority in the next Congress.
The tariffs against products from China that were imposed as a result of the U.S. Trade Representative’s findings under the Section 301 investigation are not ideal.
But I agree with the reasons they’ve been applied.
The President is absolutely right to confront China regarding the Section 301 findings.
I’m glad that he had a successful meeting with President Xi at the G20 summit last month.
My hope is that the ensuing negotiations will result in a change in China’s discriminatory policies and practices and an easing of tariffs and tensions.
I recommend everyone read the findings of the Section 301 investigation that were published in March.
That report outlines in detail many of the ways that China abuses American businesses and workers and steals or forces the transfer of U.S. intellectual property.
American businesses that are able to access the Chinese market are often forced to participate in joint ventures with Chinese firms or turn over the details of their technologies.
No one can call that a level playing field.
The Chinese claim is that this simply represents the cost of market access. Hogwash.
That’s not how members of the WTO should act.
I voted in favor of China’s accession to the WTO and in many ways I regret that vote.
China has not lived up to its obligations or honored its promises.
Yet it enjoys many of the benefits that come with membership in the WTO.
Part of the reason, in my view, that China gets away with so much is that the WTO systems that we rely on have failed and are in great need of reform.
The fact that China, the world’s most populous country and second largest economy, can self-certify as a “developing economy” is extremely frustrating to me.
I know many of my colleagues here in Congress share that frustration.
I have a great interest in the WTO reform process that has begun.
Reform and oversight are critical to the proper functioning of institutions.
That is true whether we are talking about a federal agency or the WTO.
I’ll also continue conducting rigorous oversight as chairman of the Finance Committee.
The U.S. has free trade agreements in place with 20 countries.
One problem we’ve had with our agreements is that other countries don’t always live up to the text and spirit of the agreement they signed.
I will work with the administration to hold our partners accountable in order to improve outcomes for American businesses and consumers.
In short, we have our work cut out for us on the Finance Committee next year.
International trade is a force for good.
Farmers and businesses in Iowa and across the country have benefited tremendously from international trade and are better off because they can sell their products around the world.
I’m committed to making sure they have access to open markets with the guarantees of fair treatment and enforceable protections.
I yield the floor.