policies with russia and china. this is a little over two and a half hours. [gavel] sen. wyden: the committee will come to order. today we are focused on russia and china because those are the big national security and economic developments in our world. their governments are united in

putting up barriers to american products and american values. since putin launched his invasion of ukraine, the u.s. and our allies have hit russia, putin and the oligarchs with the most powerful sanctions in history. it's not just about yanking away super-yachts and private jets. putin is now the head of a pariah state. the senate and my colleague, senator crapo and i, are working hard to designate russia as a pariah state by revoking its permanent normal trade relations status. our country is showing russia that taking this abusive totalitarian road is a bad bet. the u.s. and our allies must prove the same to china. china's government is a human-rights abusing, jobs- and tech-stealing behemoth at the head of an economic superpower. one of my top concerns about the

chinese government's economic model is censorship. when the internet took off, american innovators were first out of the gate with big ideas. the chinese government responded by using its great firewall to block those companies, and allowing chinese firms to rip off their ideas instead of -- ideas. even worse, chinese tech comes with chinese censorship, and it censors american people and our businesses. the chinese model of censorship is popping up all over the world. it fractures the internet and it is something we see in russia where the people are being fed lies about what's going on in ukraine. the u.s. must stand up to that kind of censorship, and ustr has a big role in fighting for a free and open internet through smart digital trade policy.

the chinese government wants to dominate the technologies that will dominate the rest of the 21st century, such as semiconductors, ev batteries and artificial intelligence. it continues its horrendous record of abusing human rights and trampling on workers. again, this is where ustr comes in. it has responsibility to take on china's anticompetitive and antifreedom practices, and we will be working closely with them as they do. the u.s. and our allies have shown our collective economic power is certainly anything but soft. a big reason the u.s. was able to marshal such strength was because of the biden administration and ustr has worked to mend relationships in europe. the united states has racked up significant wins which don't seem to get a lot of discussion.

ustr brokered a deal in an aircraft dispute with the eu and u.k. that had been unresolved for nearly two decades. ustr and the commerce department reached deals with the eu, u.k. and japan on steel and aluminum. it will help us remove existing tariffs, bring down prices for americans and fight carbon emissions. american firms had been in the crossfire with tariffs on everything from airplanes to cranberries to wine. eu tariffs endangered oregon's craft beverage industry. ambassador tai's work eliminated significant threats and helped to ensure that americans would grow good paying jobs and more exports. ustr convinced japan to bring in more beef, which is big news for

ranchers. american fishers are exporting live oysters, clams and muscles to europe for. decades. finally, the committee held a hearing on the indo pacific economic framework. another opportunity to strengthen our economic ties and marginalized the russia-china model. the indo pacific effort is especially important to folks in our part of the world, the pacific northwest because the pacific northwest is the gateway to the pacific. a good agreement will build overseas barriers from columbia gorge pear to beef. reducing barriers means better market access for farmers and manufacturers. this is so important for our state where the trade related jobs often pay better than the

non-trade jobs because there can be a higher value-added component. it is an important opportunity to raise standards for labor rights and a free and open internet. i will close with one last point that is especially important to senator crapo and i. this is a positive development with respect to transparency in government. ambassador tai has made it clear to us there are going to be new transparency and consultation efforts to make sure there is a broader debate about how to get more american workers and small businesses in the winners circle. thank you for joining us. our friend, senator crapo. sen. crapo: thank you and welcome, ambassador tai. i read with the issues senator wyden raised and the progress he has identified. i'm going to issue a strong statement today.

on your drive here, ambassador tai you probably passed an inscription engraved on the national archives which says passed his prolonged. president reagan's address to the nation on international free trade, which was founded on his personal commitment to free market principles both at home and abroad. he explained as americans, we must insist on sound domestic policies at home that bring down inflation, provide opportunity for free world countries to go forward and sustain the drive towards more open markets, such as the meeting he organized in geneva which eventually led to the creation of the wto. and most importantly, negotiate. particularly for free trade agreements, like the united states' first two trade agreements with israel and canada that were led by president reagan. president reagan's policies

helped to break inflation and restore american leadership on trade, but it seems president biden's trade policy takes the opposite stance. at a time when inflation has soared to 7.9%, president biden says he will not pursue trade agreements until his domestic agenda is complete. if ever enacted, this reckless spending agenda would not only make inflation worse, it would undercut u.s. leadership on trade by promoting a china style industrial policy. proposed electric vehicle provisions will discriminate against 48 of the 50 models available for sale in the united states. it is no wonder why 25 foreign ambassadors told congress these provisions breached our international trade obligations. i'm disappointed that the administration continues to pursue this agenda. instead of focusing on negotiations for new trade agreements. this is a shame because the

blighted administration knows better. its 2022 trade agenda opens on the very point -- "the biden administration recognizes that trade can and should be a force for good." absolutely. my home state of idaho is proof positive of that proposition. in 2019, international trade supported over 200,000 jobs in idaho. we're almost 20% of the state's employment. trade liberalization saves the average idaho family of four more than $10,000 per year. the problem here is that president biden's recognition of trade's overall importance is not matched with an agenda that contains the requisite ambition to succeed. there is not a single free-trade agreement under consideration in this agenda. free-trade agreements open opportunities. we have seen it over and over in the past -- and the past really

is prolonged. idaho's exports to korea increased by more than 250% since our free-trade agreement in 2012. but in lieu of trade agreements, this administration is proposing dialogues and frameworks, including the new indo pacific economic framework. ipef may be a positive first step to engagement in asia, but it is no substitute for comprehensive trade agreements. the center for strategic and international studies will soon release its upcoming analysis on ipef based on conversations with over a dozen governments in the indo pacific. two points per minutes analysisare instructive. first, u.s. engagement is welcome in the indo pacific. one diplomat stressed in particular that his country wants the united states to lay out an economic strategy that complements its security presence in the region. second, our partners see it as a

proposal with many u.s. asks, few u.s. offers and a variety of credible alternatives to the framework that could provide more tangible benefits. if the u.s. is to meet and exceed china's challenge, than the u.s. must make stronger commitments than china. if the administration's negotiation ambitions are low, its consultations with congress on the few negotiations taking place is even lower. at last year's trade hearing, you stated you would brief this committee before and after every negotiating session with respect to a waiver of the wto agreement. that has not happened. ustr recently issued a press release confirming it reached a compromised outcome on the trip's waiver and discussion with south africa, india and the european union. ustr refuses to share the text

of that outcome with this committee. while members may have different views on the merits of this waiver, every member should agree the administration cannot withhold documents concerning u.s. rights under a congressionally approved trade agreement. we need to see the documents and we need to ask questions because that is what respect for the constitution requires. there are serious questions to be asked. for example, last week south africa and india joined with russia and china to establish the vaccine rnd center on vaccine cooperation. congress should know whether the text allow south africa and india to share insights on u.s. intellectual property with russia and china. ustr's transparency is also poor. the american innovators who developed the vaccines provided plenty of evidence on why a waiver is unnecessary, including the 20 billion doses will be produced this year, more than

enough to achieve the world health organization's vaccination target. the administration has not shared with the public any evidence as to why a waiver will get shots into the arms any faster. i'm disappointed about negotiations and congressional consultation, but i also have concerns about enforcement. americans need to compete on a level playing field and i appreciate the administration's prosecution of two disputes. yet, much more can be done. with respect to the usmca, agricultural market challenges remain. mexico continues to restrict potatoes and delay approval of biotech crops. discriminatory practices targeting our technology companies are increasing. rather than launch cases, the administration appears to be in retreat. the trade agenda highlights terminating the

investigations across countries. let's be clear about what this means. those countries are going to continue imposing discriminatory taxes on u.s. firms. they may give a credit one day, but only if congress approves the biden administration's international tax deal. the administration's blessing foreign governments which discriminate against americans as long as congress refuses to go along with its plan for taxing rights and revenue to competitors. past being prolonged. history proves americans do not fear competition but rise to it. now is the time to go further on trade, not stray from it. thank you. sen. wyden: thank you. i know we will be working closely together on many of his issues. ambassador, please proceed. amb. tai: thank you, chairman,

ranking member and members of this committee. i appreciate the opportunity to be here today to discuss the president's trade agenda. president biden believes trade can be a force for good. that grows the middle class and addresses inequality. he believes we are at our strongest when we work with others around the world. over the last year in coordination with my colleagues across the administration, we have worked to repair strained relationships and recommitted the u.s. to the world's institution. these partnerships have led to the united response to russia's unjustified attack on ukraine. turning specifically to our work at ustr, our agenda begins with putting workers at the center of our trade policy. when we defend the rights of workers at home and abroad, labor standards go up and we race to the top. farmers, ranchers, fissures and food manufacturers are key to our trade agenda and we have delivered real, economically

meaningful wins for them. the 232 tariff arrangements and civil aircraft frameworks with you and u.k. lifted retaliatory tariffs on billions of dollars on u.s. agricultural exports. the agreement with japan will allow exporters to me japan's growing beef demand. we regain access to the eu for the shellfish industry and open access for u.s. pork exports to india. we are realigning the u.s.-china trade relationship. we launched a discussion with the phase one pitfalls and market practices. those discussions have been unduly difficult and it is time for us to turn the page on the old playbook. that starts with developing new domestic tools and making strategic investments to maintain our global competitive edge. we have made progress on this effort through the american rescue plan. the administration's focus on

supply-chain resilience. and the bipartisan infrastructure law. passing the bipartisan innovation act will build on this significant progress. we have renewed our engagement with partners and allies and are developing innovative engagements that strengthen our resilience and address the china challenge. the global arrangement we are negotiating with the eu will be the world's first sectoral arrangement on steel and aluminum trade to tackle both emissions and nonmarket excess capacity. beyond this cooperation, we have deepened our relations with trading partners. we launched u.s. and eu trade and technology council. we relaunched the united states-india trade policy forum to enhance our relationship. we hosted the first dialogue on the future of atlantic trade in baltimore last week with the united kingdom. we will meet again in scotland

next month to consider what concrete, economically meaningful steps we could take. we are also committed to intensifying economic engagement in the indo pacific. ustr will lead efforts to craft a trade agreement that includes high standard labor commitment, environmental sustainability, the digital economy, sustainable food systems and science-based agricultural regulations, good regulatory practices, and trade facilitation. on the multilateral front, the biden administration has continued efforts to make the wto a force for good. we are working towards an intellectual property outcome to help end the pandemic. we will continue to engage with wto members to get safe and effective vaccines to as many people as possible, and we are committed to bringing reform to the organization. the biden administration also

knows that enforcement is key to trade policy delivering on its promises. we have used the usmca rapid response mechanism twice to defend workers rights in mexico, which helps workers here by driving a race to the top. we have insured u.s. theory farmers are treated fairly. we also initiated environmental consultations with mexico to prevent unreported and unregulated fishing. a final important part of our trade agenda is promoting trade policy that is equitable, inclusive, and durable. and the president's trade agenda includes objectives to advance racial and gender equity. we will continue to pair these values with sustained stakeholder engagement. i want to close with one final point. congress is our constitutional partner on trade and collaboration is critical to our agenda and america's success.

in an increasingly complicated world, i'm more confident than ever that we can walk, chew gum and play chess at the same time. i look forward to continuing this work in the year ahead with you. thank you and i look forward to answering your questions. sen. wyden: thank you very much. let me start by focusing on what you said in your trade agenda with respect to environmental issues being front and center. you highlighted your goals of promoting sustainability, addressing carbon emissions, and enforcing environmental commitments on trade agreements. i want to focus on a concern that hits on all of these issues. mexico is a key partner in the usmca and it sure looks to me like they are slamming the brakes on renewable energy reform. in recent years, mexico made substantial efforts to modernize to green the electricity market.

they gave the green light to foreign investment and they opened their market, particularly to innovative american providers of renewable electricity. but as i just indicated, now it looks like they are in retreat. they're considering laws that concentrate market power and regulatory authority in the hands of the state owned electric company. that result will mean a bigger focus on fossil fuels with limited opportunities for clean energy providers. so, mexico's new reforms are a 1-2 punch against environmental progress in america. not only are they a setback in the fight against the climate crisis, but they are denying american companies, companies in the pacific northwest, a fair shake in the mexican market. my view is what mexico is doing now looks to me like it is

running opposite from the promises mexico made in the usmca. so, ambassador, as we have talked about, the united states needs to make sure every chapter of usmca is fully implemented and paid off for american workers and businesses, and a cleaner climate in the americas. that was what was pursued in the usmca. what are you doing to address mexico's actions in the energy market that i have described? amb. tai: thank you for answering this and -- asking this important question. let me start by confirming my commitment that the usmca must be enforced and implemented across all chapters. that is an organizing principle of our work. i'm deeply concerned with the legislative and regulatory developments in the mexican energy industry that we have seen in recent months. my team and i, along with much

of the u.s. government, have expressed these concerns regularly and directly to our counterparts in the mexican government. just last week, i convened a roundtable with members of congress, with members from our environmental organization community, from our energy industry that includes renewable energy companies, as well as our more traditional energy companies. the testimony i heard from them was palpable. they have been unified in expressing concerns with what is happening in mexico, specifically with respect to the competitiveness of this north american energy market, as well as the competitiveness of mexico's own energy industry. i have informed mexico, and i assure you that we at ustr are looking at all available options under the usmca to address these issues so that the usmca can

work for our stakeholders and protect our environment across all three countries. sen. wyden: we will want to work very closely with you because it seems to me that mexico on one area after another as it relates to greener energy and the challenge of environmental reform is walking back what they pledged in usmca, and we can't sit by. let me ask you one other question. it deals with russia and china, and the challenge of today. we all remember the searing image at the opening ceremony of the olympics. president xi and president putin standing together, asserting their friendship has "no limits." xi was flexing his power to expand his authoritarian orbit. basically thumbing his nose at the american-led international order. that was before putin's brutal invasion of ukraine.

how are you working with our allies to ensure that when the united states confronts china's anticompetitive behavior and theft of homegrown innovation, it's got the allies on board? amb. tai: chairman wyden, let me begin by saying working with our allies is a key component of the biden administration's approach to a smarter strategy towards china and this has been the case since day one. i have invested a lot of time personally, as have my colleagues in the cabinet to rebuild relationships and trust that were at the beginning of our administration badly damaged. this has involved finding creative, sometimes unconventional, but ultimately effective solutions to long-standing problems and irritations we have had with our strongest partners and allies, like the wto aircraft dispute or steel and aluminum tariffs.

we have worked to establish new cooperative mechanisms like the u.s.-eu trade council and frameworks and dialogue so that we can focus with our allies on effectively addressing the massive distortion being caused by other economies like china, but frankly in more recent weeks , like the challenges we are facing with russia's invasion of ukraine. as i have mentioned, it is high time for us to turn the page on the old playbook with respect to china. that old playbook had us focused exclusively on changing china's behavior. we must now expand our work to include a strategy, vigorously defend our values. sen. crapo: i want to follow up first with regard to the issue senator wyden raised. the enforcement in mexico of our usmca agreement. you have indicated, and senator wyden pointed out, that on the

environmental and labor front, you are actively pursuing efforts to enforce the agreement. i see no activity to enforce the market access parts of the agreement. let me focus my question specifically on potatoes. i think it is a little over a year ago now, both you and i were in mexico and we both raised the potato issue. both you and i got a response from the mexican government that they were going to resolve it. the mexican supreme court is ruling in our favor on this issue. yet, i don't see any enforcement action against mexico on usmca with regard to potato access. can you respond to that? amb. tai: mr. crapo, i know how important the potatoes are to you and you know how much i love potatoes. with respect to usmca enforcement, let me reiterate my commitment to enforcing all aspects. on market access, i want to raise the dairy case.

on potatoes in particular, i just spoke to the usda secretary vilsack yesterday about this issue. we have not given up hope even though we have been taking two steps forward and one step backward for many months now. i want to let you know how high on our radar this is and how focused we are on trying to secure a win, and to let you know all options are on the table if we are not able to secure that win. sen. crapo: i appreciate that. with regard to the ipef, the administration is clear that ipef will not include market access initiatives. given that the administration wants to raise our trading partners' labor and environmental standards, which i don't disagree, why take the carrot of market access off the table? amb. tai: so, i appreciate this opportunity to talk more about the approach that we are contemplating and consulting with all of you on with respect

to the indo pacific economic framework. it is true that market access, strictly speaking as a trade terminology, is not on the table at this time in the framework. but i want to distinguish between what we mean by market access in trade vocabulary versus market access in ordinary english. market access as we talk about it in trade discussions typically means tariff utilization. we are not starting these conversations with tariff liberalization. our traditional models have led us to a place where we are facing a considerable backlash that we are listening to from our own people about concerns about the off shoring and outsourcing of american jobs through these arrangements. that does not mean, however, that we are not bringing an economic engagement to this region. that does not have economically meaningful outcomes.

in the sense of market access in ordinary english, which is to enhance our access to each other's markets, that is very much a part of what we are doing. in terms of the high labor and environment standards, i want to thank you for affirming your commitment to the standards in u.s. trade policy practice because that is exactly the kind of practice that we want to bring to our trading partners in order to counteract those forces that have tended to bleed out our industries to other regions. we would like to use trade to raise standards around the world, to raise standards to the standards we have here so we can all enjoy the kinds of lives and opportunities we would like. sen. crapo: i agree with that, but i define market access as free-trade agreements. and i just don't see why we cannot engage -- we've got

nations in the indo pacific who are crying out for free-trade negotiations with us so that they can strengthen the relationship to us economically rather than being tied to china. so, i just want to state that i believe we need to engage on free-trade negotiations in terms of market access and not define market access as some kind of framework or something else. one last quick question. this is regarding our china policy. in your opening statement, you report china failed to live up to its phase i agreement. it's easy for the public to see china's unfulfilled purchase commitments but harder for anyone to know where china fell for on -- short on these structural commitments. why doesn't the ustr provide this committee with its assessment on which obligations china failed to ambassador tai: ranking member,

you are right in terms of purchase commitments. those are the most transparent because everybody has access to the trade data. i would be happy to engage with you beyond public statements i made with respect to our assessment of china's performance under the facebook and one agreement. however, with respect to the commitments china signed up for, there are different kinds. there are purchase commitments, commitments on laws and regulations china had to pass and over time, especially with respect intellectual property and transfer commitments, chin'' is compliant is going to need to be measured by the experience of our industries seeking to do business in china. so, it is a dynamic picture, but i am all for having that conversation with you and others. senator: thank you. chair: i thank my colleague.

senator stabenow and senator grassley are in discussion and, senator cantwell. senator: thank you, and ambassador, thank you for being here. i know you are a representative of the biden administration dog reflecting the views of the biden just ration. i agree with my colleagues from the northwest, particularly my colleague rob idaho -- my colleague from idaho. i don't find where we are and you said we are trying to reset the table with china, so we give you more time. and now, we are doing this focus that we are not saying that opening market access and getting rid of tariffs is a priority. that is what the people in my state want to hear. as a trade-dependent state, they

want to know we are fighting to increase market access. when you think about wheat, potatoes, other products, it is more than 70% of the product in an export market. and when you look at the impacts of the 301 tariffs and how bad apples have been parts, we want revolution to be the issues. we are not even getting exclusion at this point. it is hard to look at this equation and this is not specific to the biden administration. i did not agree with the last administration on this. i don't agree that just throwing down tariffs as we did on the solar industry and 10-plus years later we have no resolution of this issue, i don't think that is the path forward so, i have wholeheartedly supported enforcement. i got ustr money out of the customs agency so you can hire more lawyers and beef up ustr so

it could go around the globe and do enforcement. and it is working. i lead the charge for more money for capacity building in mexico. something to be wants to say, they don't want to say our government is paying to help build capacity in mexico so that we can enforce trade agreements. i will say that, because i believe in trade. so, i am time to understand this notion that trade agreements are 20th-century choose -- 20th-century tools, and that they are something we are not going to do anymore. and that the indo pacific agreement will not have a mechanism focused on opening market. so, people in the state of washington, doing business, growing crops, want to know always, what are we going to increase market access? that is what they want to know? i want to understand exactly how

this -- i hear what you're saying to my colleague, that it is kind of on the table, but not really on the table. and with these tariffs and the impacts in india and other places, there was no place to go. this whole effort, i blame a lot on the trump administration at their policies. and do you get any bills done? no. i am for the labor rights. i am for enforcement. i am for capacity building. but why can't we before opening market access right now, getting rid of tariffs or at least getting the exclusions done on time? ambassador tai: senator cantwell, your views on trade are well known to me and i know the state of washington is an export powerhouse.

let me clarify my remarks. we have been opening markets. when we began our administration, we began in what i would describe as a tariff rich environment. in the last year, we lifted or averted over $20 billion worth of tariffs, just between the u.s. and europe, $7 billion of which was applied or was going to be applied to agricultural products. so, we are opening markets. we are also opening rockets in other ways -- opening markets in other ways without trading partners through agreements with india. is there more work to do? there is. in my comments about free-trade agreements being 20th-century tools, that really is a statement of fact. free-trade agreements are something we did a lot of it the late 1900s, 1980-2010 or so.

there is a place for free-trade agreements in our toolbox. but even there, i feel like our approach to free-trade agreements needs to be updated. we need to update our toolbox to reflect the realities of today, and that has to do with bringing along all our economy for the u.s. in these trade policies so that we can continue to trade. i take very seriously the lessons we have learned in the past five years around trade agreements we pursued that have been so big and have been so uneven in terms of wins and losses they are going to deliver for our economy, that they collapsed under their own weight. our approach is guided the principle that we need to be able to trade in a way where we bring along our stakeholders instead of pitting them against each other. your stakeholders are important to me, as are the stakeholders of your colleagues on this

committee. senator: i don't see these issues as an exclusion to one or the other end people here have been working to update the tools we have. i can see the difference here. we have a president that has a great global presence. he should be advocating for global economic opportunity for the united states. we are working hard to get a bill to increase export capacity as it relates to the supply chain we are going to build in the u.s. and build great products. we are going to do everything we can. but trade changes culture. trade helps us build partnerships around the globe. but it is not just us. the biggest economic opportunity for the united states is to sell things outside the united states paid that means you have to have market access and trade. thank you. chair: i think my colleague, who knows so much about this subject. let me see if i can bring the two points together and then we will go on quickly. i am all in, in the fight for

market access, and senator cantwell nexen important point about why it is urgent to focus on the pacific northwest. part of our challenge is building modern market -- building a modern market access toolbox that needs to have all the tools we are talking about and then, we work on a bipartisan basis to apply the appropriate tool to the appropriate situation. my north west colleagues note a lot about trade and we will be working together. next is senator grassley. senator: thank you. thank you for coming. it hasn't always been easy getting people in your position to do what the law requires by being here for these oversight things. when you met with us last year, you were getting started. i am happy to have you as our trade representative. however, i am extremely

concerned that more than a year into this administration, and it seems to me you will protest this, but the white house is not allowing you to use your talents to be an advocate for free and fair trade. agriculture markets access is a locomotive that drives any trade negotiations, and i believe the administration is falling behind china and other competitors by not negotiating market access in the indo pacific. we also see the administration falling behind on confirming very important, key trading posts, particularly chief agriculture negotiator. and even outside of your department, we don't have an undersecretary for trade, foreign affairs and agriculture. i have got at least three

questions. you could probably eat up all the time on this question, but try to save some time. could you tell us if you have a strategy to increase market access for u.s. agricultural products? ambassador tai: yes, senator grassley. let me begin with a statement of values that i think our american farmers are some of the most abril americans and hardest workers i have met. market access for our farmers is absolutely important to me and to our ability to conduct trade policy. i work with secretary vilsack extremely closely. i consider him to be an exemplar of leadership at the usda, and a good, personal friend.

i want you to know i care deeply about our farmers and about allowing them to have opportunities to compete and also to diverse if either opportunities. senator: thank you. we have seen the suffering from russia's invasion of ukraine. a product of this invasion is disrupting our grain markets. apart from the ukrainians, president biden has said this invasion will lead to rising food prices and human suffering in the poorest countries. the president also said the administration has been talking to the you about ending trade restrictions. the -- talking to the eu about ending trade restrictions pick what engagements has your agency had with the you about a waiver for biotech crops? at what your agency engage with the eu moving forward to enable

sites-based regulations for biotechnology so farmers in our country and around the world that use biotech to increase production? ambassador tai: we are continually engaging with our eu counterparts on trade issues between the u.s. and the eu, including biotech trade. this has been a difficult area between the u.s. of the european union traditionally. i saw that through the course of last year as well, working with sec. vilsack. i do believe the current disruptions to trade created by rush's invasion of ukraine may provide us new opportunities for collaboration with the you, which we are also seeking to capitalize on. senator: well, it appears the eu might be moving in the right direction along this line. it also appears mexico is going the other way.

it seems like mexico is blatantly violating commit its mate under the usmca regarding treatment of biotech product. what is your strategy to encourage mexico to implement a transparent and science-based risk assessment process for agricultural biotechnology? and do you plan to use usmca aid to engage with the mexican government and resolve its treatment of biotechnology? ambassador tai: this is another area where i have been colossally -- closely cooperated with sec. vilsack. and yes, we are looking at all our tools under the usmca and thinking through our strategy. senator: in regard to what you said about otay toes, desks about potatoes -- sad about potatoes, i know the u.s.

secretary of agriculture is committed. thank you. chair: next is senator stabenow. senator: thank you. welcome back. we are glad to have you and appreciate, ambassador tai, your hard thank you for being with us today. a busy week on the hill. i first want to mention, it is critical we get a chief agricultural negotiator at ustr. it is absolutely important. markets are critical for agriculture. so, we need to get this across the finish line as soon as. please let me know how i can help to make that happen. i know you have been focused on a number of fronts, including usmca enforcement as well as negotiations with china, as well as new challenge as we face, holding russia accountable for

their brutal invasion of ukraine. so, a lot of important work to do. let me start with usmca. and thank you for your leadership and your team's leadership to hold canada accountable for failing to meet their dairy markets access commitment under usmca. this is something i worked on as part of usmca. and congratulations on the first successful dispute settlement panel verdict you secured this year. it is critical for dairy farmers in michigan and the country that we make sure canada comes into compliance. it is absolutely critical. i hear concerns all the time that canada is good to -- canada is going to continue to play games and limit carry market access. we need your continued focus in this area. could you speak about your plan

for ensuring that canada lives up to their commitments under usmca so that our dairy farmers see the full benefits promised? chair: we will continue to use our tools under usmca, hard tools and soft tools. i have had conversations with my canadian counterpart and have a great relationship with her, but we will not give up until we see

those promises realized. senator: thank you. in michigan, we have wonderful friendships with our canadian friends, but this area is important or us in pushing back on. you have been asked about biotech issues. let me say that biotechnology has enormous potential to help us increase productivity while farmers address the climate crisis. we need regulatory systems that are effective, science-based and transparent. so, i am concerned mexico seems to be making decisions that are not founded in science and causing long delays in biotech approval that could have real world consequences on farmers and future innovation in the industry. and importantly, these decisions are in violation of commitments mexico made under the usmca. so, what is your strategy to

engage with mexico and encourage them to implement transparent, science-based approval process for agriculture biotechnology that they agreed to? ambassador tai: sec. vilsack and i have been working hand and glove on u.s.-mexico agricultural generally is that we have been pursuing a strategy of cooperation -- agricultural challenges that we have been pursuing a strategy of cooperation with, with our counterparts in mexico. at this point, we are reassessing where we aren't the kind of tools we need to bring to bear. so, at ustr, we are looking at the full range of tools and close coordination with partners at usmca and with you and others, we will look at next steps. senator: the race to be a leader in research and development and

manufacturing of next-generation technology is an important part of our future in an economy that is not just limited to agriculture. we need to make things and grow things and in my opinion, we have not lost on this issue to china or anyplace else. we are working to pass important investments in clean energy and advancements in manufacturing competition, innovation and important legislation in front of us right now. senator manchin and senator daines and i have legislation to advance -- invest in clean energy manufacturing. could you speak about what we need to do in this competition at what role our trade policies can play? ambassador tai: senator, i am delighted to hear about all the efforts that are being undertaken in congress. we have been tracking them closely. they are sometimes inside the trade lane and often

adjacent trade, and in order to continue to be the competitor that's competitive powerhouse the u.s. has been at once to continue to become a we need to coordinate our trade policies with these types of investments and do it on a sustained basis. i commend you and your colleagues for this work and look forward to continuing our work and connecting your efforts with our trade policies. senator: thank you. chair: thank you. senator: thank you. welcome back to the committee. when does the administration planted nominate a chief agricultural negotiator? ambassador tai: we have nominated one. i am grateful for elaine trevino's willingness to serve and look over to working with her. at the moment, i am working very hard with our administration to name a new chief agricultural negotiator nominee.

what to assure you that your interests and mine are absolutely aligned. senator: it is an expression of priorities. there are a lot of farmers and ranchers and agricultural producers and growers around this country who are very concerned that the promotion of agricultural exports would be a priority and it doesn't seem like it is. is the administration planning on submitting trade promotion authority, the proposal request? ambassador tai: with all the respect, in terms of trade promotion authority, that is legislation. i am happy to speak with you and work with you on it if it is something you are interested in. senator: i am interested but typically what happens is that an administration requested.

in the obama administration, there were many republicans willing to work with a president from another party on a big priority for america's economic vitality, and economic security and i would argue, and the parts of the world we are talking about, national security. as the administration pursuing any trade agreements in the indo pacific, specially closely -- specifically the cptpp? ambassador tai: we are pursuing economic engagement in the indo pacific right now. that does not mean the cptpp. and let me draw together a point on cptpp and the tpa. i lived through the fights in congress over tpa and tpp in 2014, 2015 at 2016. i feel strongly that american trade policy is at its best when we are acting in the most

bipartisan way, so my commitment to you respect to trade policy is promoting trade and working with the congress, and i am looking forward -- looking for strong bipartisanship and a unified american voice. and i'm happy to engage with you on those issues from that viewpoint. senator: that is great. and because you know your subject well, the 2022 trade policy that that supports a worker-center trade policy may be a convenient political slogan, but not a serious trade strategy. we are the leading economy for a reason at a major part of that is because american exporters -- farmers, businessmen, women, business leaders and entrepreneurs -- boldly glove --

boldly go into global markets and succeed. exports grew to more than $170 billion last year. u.s. exports support good-paying jobs and spread the reach of american influence abroad. i am trying to get your focus. i understand this framework, what because there isn't market access there, it is flowery rhetoric. i am trying to see where this does anything to open markets for our farmers and ranchers in areas of the world where america needs to be a presence and to be competitive and needs to be leading the way. if we are going to isolate china, doing business with a lot of countries in the region makes sense. do you agree that farmers,

producers and others that rely on experts at lower-cost imports are part of the backbone of our economy? ambassador tai: i do agree that they are. senator: will the administration work to build upon the success of uxo -- u.s. >> will the administration work to build upon the success of u.s. exports in the context of any new trade agreements or initiatives? >> we are doing so across everything in trade policy that we are pursuing right now. >> i think a lot of us would differ with that and i would hope that your clear-eyed focus would be market access-y, creating opportunities that are real, that are meaningful, that are tangible. and working with us in a bipartisan way to do that. you've expressed a willingness to do that, i certainly hope that you would. starting with nominating an ad

negotiator. thank you. thank you, mister chairman. >> thank, you senator thune. you and i have worked often on trade issues and look forward to doing that again. senator menendez? >> thank you mister chairman. as chairman of the foreign relations committee i regular hear from ambassadors from some of the countries that may participate in ipef that is not sufficiently ambitious. what is the administration's response to that criticism? and how, if all, has the scope of the negotiations change based on requests from other potential partners? >> senator menendez, i disagree with the sense that it is not sufficiently ambitious. in a lot of our interactions and conversations with our trading partners in the indo-pacific, we have been making the case that what we are trying to do in the economic framework for the endo pacific's new. it will include innovative elements. some innovative for the region, some innovative for the trade policy conversation overall, because of the evolving challenges that we are facing.

so, that's where i would begin. which is new things, requires time for socialization and where the economic meaning is going to come. but we are committed to this region, to our partners and to you engaging and influencing -- >> appreciate that. >> i appreciate that, let me just say my own observation is i don't think it is as robust as we need. i think we missed an opportunity with tpp. that has happened, we are not going to revisit it. at the same time when we are thinking with our challenge with china, what the administration has adopted as their number one geostrategic challenge. the geo economic strategy to compete with china. i hope you will pursue an ambitious agreement that sets high standards across the breath of our economic relationships across the region. it is critical that the ipef make real standards across the indo-pacific. to first

satisfy the economic rule space for this regime. let me ask you this, taiwan as a key trading partner with the united states. one with which we have a strategic relationship which is intertwined with our economic security, particularly as it comes to trade with semiconductors. it is a key trade holder in the indo-pacific economic community. it's a vibrant community that respects the rule of law. and exactly the kind of partner that we should work to strive to have high value trade agreements with. several weeks ago, the taiwan government officially requested to be part of the ipef negotiation. what has been the administration's response to that request? >> senator menendez that is an essential trading partner for us and an essential partner overall. the indo-pacific economic framework, i do want to emphasize this for everyone on this committee and publicly, as well, it is a framework that

we are developing. it is something that must reflect, also, the view of all of you and our stakeholders. on the point of taiwan, we are in general in conversation with those who are interested in joining this framework. i do also want to emphasize and recall that in the last year we have revived the trade and framework in taiwan, including at my level. it had been idle for five years. we will continue to look at. when we get back to my original question. what has been the administration's response to that request? are you going to invite taiwan to be part of the i p e f negotiation or not? >> participation in the i p e f is still under consideration, as far as i'm aware no decisions have been made. >> okay, well, i hope we do and i get a sense from that answer that we will not include taiwan

within the ipef which is missing an opportunity, both through the vision we have for taiwan and for the regional architecture of trade. if it is not invited to join the negotiations i hope the administration considers an agreement with taiwan that extends the benefits on a bilateral basis, which would certainly be the next runner-up. finally, at last year's trade agenda hearing i ask you to commit to brief the hearing before and after ease negotiating setting with regards to the trip waiver. you agreed to do that. do you believe that you kept that agreement? >> i do. >> well about three weeks ago press reported on a proposed text that appeared to be a detailed compromise on the issue. u.s. dr in fact released a statement confirming that a compromise had been reached. yet no one on this committee appears to have known anything

about the details of that agreement before it was announced. we were kept in the dark. and so to me this is an example, you know, there is a difference between notification and consultation. notification is when we got that. consultation is when there is an engagement about what it is you may be considering agreeing to, so you can have input from congress. that is why, you know, i had real concerns. in your testimony he said congress as a constitutional partner in trade. from my perspective you have an adult that way. >> if i may respond to that because i think it is important for the overall conversation. and for the sense for my integrity as the u.s. trade representative. senator menendez, my testimony from the house ways and means committee i made the point, and i want to make up for you here as well, there have been no agreements made at the w. geo. with respect to whatever maybe on

the table, i consider these hearings to be a part of a consultation process. i continue to want to hear from all of you. in fact you and others on this committee have made herself very clear to me in terms of your positions. i want you to know that i have heard your concerns. i have also heard the concerns of the other members of the committee. >> miss chairman, i'm sorry, just to say that -- u.s. tr put out a statement that there had been a compromise agreement before anyone was invoked. having come to talk to us after you have the compromise agreement is not input. i don't think you're gonna change the compromise agreement based on anything you hear. i don't think it is a fulfillment. i hope we can get to a better place. thank you. >> my colleague is raising this issue consultation. i think the point, ambassador, is it can bring us altogether. we need consultation, apart from hearing otherwise i think it just needs to be ongoing. thank you. all right we are now we portman, carper, toomey, cardin,

will be the next four in order of appearance. >> thank you chair. ambassador, good to have you back before us. as you know i feel strongly that you need to have the ability to trade negotiation agreements. that would make your job a lot more interesting as well as the job of your associates. so that is a broader topic but i think in the topic of the compete act, also known about five other names, i think there is an opportunity for us to do something. you and i have talked about it. we have spoke with secretaries in congress about it. i hope that you will be working with us on that. if there's gonna be trade adjustment assistant typically that is with trade promotion authority. my view is that, these agreements before us, including the uk agreement. it has virtually no issues at the results to labor or the environment, it's a low hanging fruit. it would be great to get america back in the game. with regard to china and your discussion and your testimony

in the need to use existing tools you revert -- the phase one agreement as part of the old playbook. china has not lived up to its agreements. i get that, it is frustrating when china doesn't live up to its agreements. i don't think we can just move along and say let's start to work in other ways. you know, where we can open more opportunities. instead i think we have to stick with that agreement and use what's in the agreement, which is dispute resolution. i think if we just say, forget! that make that part of the old playbook i think it sounds terrible message. i think when china makes an agreement with us and they don't fulfill it obligation we have to exercise our legal rights under that agreement. i think it's going to be much more difficult to make progress on china with subsidies and state run enterprises with labor rights and other things if we don't insist that the agreement be adhered to. i guess my question to you would be, are you willing to move forward with dispute resolution? are you

willing to be commit to utilizing the dispute resolution process that the u. s. enjoys as part of that phase one agreement? culminating in -- as necessary to enforce the agreement. >> senator portman it is always a pleasure to see you. on your question on china i appreciate the opportunity to clarify my position and what i have said. i have seen a reported, perhaps a bit inaccurately. which is to say it is time to turn the page on the old playbook. which focused exclusively on pressuring china and seeking china to change its ways. or pressing china for compliance. we are not giving up on pressing china on compliance or changing its ways. yes, old tools remain on the table with respect to, dispute settlement and enforcement. but my main point is that is not the only thing we can do now. we have to expand our strategy to include

developing the tools that we need to defend the interests of our economy. in fact what i'm saying is we are committing to doing more work. a strategy needs to expand. >> thank, you i appreciate that. using those existing tools we have our important setting a precedent of not using dispute resolution tools that would be problematic for china and others. let me talk to you about new tools. it's the other point that you make. we talked about this a lot, we just don't have the tools to keep up with china in my view as they try to undermine our national competitiveness. they are subsidizing manufacturing in many countries through the belt and road initiative. our trade enforcement are powerless to combat the subsidies. level the playing field two point oh can pains new tools to deal with that reality. it is what is happening out there. trade shipments, particularly the belt and road subsidies. that bill is something that is very hard to include in the -- hot

>> thank you for your support of this approach. can you explain to this committee how the legislation would help to combat china's unfair trade practices? >> senator portman, let me begin by commanding you and senator brown for working in a bipartisan way and -- on this legislation inhi in terms of how it would help us, i just want to emphasize that most of our trade enforcement tools date back to the 1970s in the 19 80s. it is critical that we retain those tools. overtime, as the global economy has evolved around us are tools have not kept up. the updates in the enhancements that are in the leveling the playing field act two point oh are exactly in the spirit of what we need right now. the tailoring of a tool set, and expansion no tools that that is going to be up to the task of meeting the challenges that we are facing today. >> with china in particular,

would you agree? >> yes. >> thank you ms. chairman. >> i think my colleague. i always like the exchanges of you kind of nba all-stars of u. s. trade history. senator toomey's next. >> thank you mister chairman. ambassador tai, welcome. i supported your nomination because i knew you had the knowledge and the competence and the ability to do the job. also, because you stated in your nomination hearing and i quote, you stated well -- your intention in the nomination hearing to pursue trade policies that support american innovation and enhance our competitive edge. a year later i'm still kind of waiting to see that. one of the reasons i say that is because i just don't see a focus on expanding market access. one of the major areas of responsibility for the

u.s. do your coronation website is, and i quote, expansion of market access of american goods and services. of course that is a two way street. the phrase expanding market access is not in your testimony today. it is not a part of the i p e f aside from dialing back the previous administration's most heinous trade wars, to my knowledge you have not been pursuing terrified action. every single presidential initiation since reagan has initiated negotiations on a new fta we've done this to increase market access allowing workers to grow and thrive the u.s. kenya taiwan in the pacific countries are just view of the countries that reach out to us. they want to strengthen their ration relationship they want to have more market access, thus far we have yet to take them up on it. i get that president biden ultimately makes this decision. it is not yours. but you wore

the u.s. trade wrap, you are the presidents primary trade adviser. let me ask you this? do you think it is in america's best interest to pursue free trade agreement with other countries? >> so, senator toomey, if you will allow me to back up just a little bit. >> just a little bit? do it quickly, i will run out of time. >> okay. if by market access, you mean economical meaningful outcomes, if i market access you mean the removal of tariffs, we have accomplished quite a bit in the first year. i mentioned this to senator cantwell, but we began in a very tariff rich environment. if we have removed $20 million worth of tariffs in our first year. to your point about free trade agreements. let me say this, i encounter this quite a bit, including from white members of congress on these two committees, which is that trade policy, market access,

trade enforcement takes lots of different forms. and i know that trade agreements are maybe the most fun form, and with our traditional agreements, let me put it this way. we are interested in pursuing trade agreements with our partners. but we are also interested in ensuring just like, our toolbox on enforcement, we are committed to ensuring that our trade agreement practices evolves with the times. >> okay, but here is the thing. my understanding is the u.s. currently has 14 ftas with 20 countries. you recently seem to be suggesting that you think ftas are 20th century tools. but the fact is china has eight currently being negotiated. the eu has 14 in the process of being negotiated. you don't think this is a 20th century tool? looks like the rest of

the world thinks it is a 21st century tool. what this means is that china and the european union are expanding market access for their product producers, and competition for their consumers, and they are getting a market share that we will miss out on. i think that the data is very, very clear. those are all kinds of studies that show that these lead to more jobs, higher pay, increased economic growth, more options, lower cost reductions. it's all kinds of great net outcomes, foreign trade supports over 40 million u.s. jobs. i think that you know this data. but without putting market access on the table, lowering tariffs, eliminating barriers, we will just not make the progress we could be making, that other countries make, that we should want to make. in my understanding, in the 40 years since the u.s. began negotiating our first trade agreement with israel, every single trade rep has worked on or completed negotiations of an

fta. my concern is that you might be on track to be the first trade rep, not to continue that streak, and that would come as a big cost to our country. i would just hope that you would be an advocate for this really important tool to expand trade. time is expired. senator carper, then senator >> time of the gentleman has expired. i think senator harper is online, and then senator cardin. senator carper, are you online? >> i am right here. can you hear me, sir? >> great. so senator carper, and senator cardin. >> welcome aboard, great to see you for your leadership, and your service. my question is i want to talk about, an approach to a digital trade policy. second, the form of the 301

trade exclusion process, that we were heavily focused on, and the intellectual property wavered. [inaudible] first, is the worker-centric approach to digital trade policy? ambassador, i want to thank you for testifying, not just before the committee today, but thank you for your service, way, way back. going back. weighs and means committee and even before that. i applaud the biden administration's commitment to engage with our ally, through the creation of the indo-pacific economic framework. one area of bipartisan interest is to promote openness and transparency in the digital economy, something which we talked about through digital trade, we have the opportunity to uplift workers, how small businesses compete, with entrepreneurship, here's my question. ambassador tai, what

approach should we take, we'll is wide in the biden administration's ability for trade policy? please go ahead. >> senator carper, thank you so much, it is always a pleasure to see you. i am appreciating this question in particular. i think it gets lost in the shuffle, some. when we talk about digital trade, that's actually a really inclusive topic. so much of our lives are becoming digitalized every single day. so in terms of an approach to digital trade, we get a comprehensive, holistic approach with respect to how we think about digital trade, and the fact that digital trade at this point affects everyone. and therefore, our engagement with our stakeholders needs to be holistic, robust, comprehensive. our concerns we hear from our stakeholders

around the offshoring, outsourcing of our jobs extends increasingly beyond the manufacturing sector to the services sector. and we take this very serious at ustr, the necessity to conduct our trade policy in a way that brings along all of the u.s. economy and our stakeholders. so, a worker-centric approach to digital trade is one that is comprehensive, meaningful, that recognizes the limits of our congress has acted, spoken, and where it has not. and also reflects the views, aspirations and also the anxieties of our stakeholders across our economy. >> great, thank you, ma'am. if i can now spend section 31, tariff exclusion process, since 2018, the trade war initiative by president trump, was on businesses, manufacturers,

farmers, consumers. we have long advocated from a relief from section 301, especially for imported goods only available from china. i appreciate the reason [inaudible] would be reinstated that's good news. however, our main concern with the impact to the existing tariffs, interesting, my question is this. moving forward, are you considering more comprehensive sections in the 301 tariff exclusions? how do these work with biden's larger china strategy? >> senator carper, we need, and i think there is very broad bipartisan support for this particular view, we need a realignment in our trade relationship with china. we need for our relationship to be more strategic, and in favor of our ability to compete. tariffs do have a role. nevertheless, in this realignment, we need to take a strategic look at our tariffs, we need to recognize

that the realignment is something that requires a transition, it cannot be accomplished overnight. so i committed in my speech on the biden administration's china trade policy last october, that we would start the first exclusions process that we did, and just concluded last week, and that we would consider additional exclusion processes as warranted, which continues to be true today. >> my time is about to expire. i just wanted to mention, my third question, as per the ambassador, to respond, i understand the administration has been working with some of our wto partners to develop a possible intellectual property for the covid vaccine, it remains unclear. my question for the record is how does the administration tend to increase its engagement with congress, and outside stakeholders as this process continues. great to see you, thanks for your good work. >> thank you, senator carper. i

am going to recognize myself, and if i complete my question, senator cassidy would be an act. and ambassador tai, thank you for coming from baltimore. it's an incredible occasion. you can see firsthand, the investment made, to be as competitive as we can globally. we have the super max capacities in our cranes, in our berths, and you got to see some of the container ships actually come in, in time for your visit, which i thought was good. the uk is a critically important trade partner to the united states, and certainly to the port of baltimore. i'm glad to see that you can see we are engaged in conversations with our partners, to expand opportunities for both countries. there will be more jobs for people in maryland. so thank you for that initiative, thank you for coming to baltimore. first i want to cover the indo-pacific framework and i watched every

word that you say, so i did want to critique, if i might, that in your list of objectives, you included, rightly so, workers issues, promoting workers, businesses, advancing strong labor standards, tackling climate change. all of which i completely agree. but i was disappointed knowing the countries that are in the framework it did not include one of the areas that is been very high priority to this committee. advancing good governance and anti-corruption. i know that you are committed to that but i would ask that there is sensitivity when that is not included in the list of our objectives. >> senator cardin, your leadership on those issues, is very, very clear. good governance issues are included in the trade pillar under what we call good regulatory

practices. again, this gets lost in our jargon. if i were to translate it into ordinary english, it is in our regulations, engaging with our partners, ensuring that there is a notice in comment process which allows for participation. so that part is in the trade pillar on anti corruption. that is in our organization, in a separate pillar on anti corruption and tax. that is a pillar that secretary -- we'll be meeting. it does not mean that the u.s. will not be involved, but will lead the trade pillar, and that pillar, she and her team will lead. >> thank you for the explanation. i would assume that the environmental issues will also be in the regulatory framework. so the more that you could put a spotlight on, it is our expectation. i know you were not using tpa, i know that is expired, but we made that a

principal trading objective. so i would appreciate keeping us engaged, this progress is made of several countries which are included in the framework. let me talk about one country which is in this discussion, and that is japan. congratulations on being able to complete some really difficult issues with the beef industry, and others with japan. it looks like it has been extremely positive. quite frankly, japan is a major trading partner in the port of baltimore, as well as with our country. it does not go unnoticed that japan was extremely aggressive in supporting the sanctions against russia, and helping provide important equipment to the ukrainians. so they have been true partners. it seems to me, japan is one of the easier

partners we have in the indo-pacific area. i was curious to see how you see the next chapter in our trade relations unfolding? >> so senator cardin, i would agree with you that japan is an absolutely important partner with whom we have a really strong relationship. i would not necessarily pick the adjective easy to describe japan, in my list of first five adjectives. i will agree with you that in terms of the -- administration, we are creating momentum in terms of our work. i think really on a bilateral basis, at the u.s. tr, we have begun a new bilateral trade communication channel with japan to address our bilateral issues. we have a trilateral discussion and form that we

have reignited with japan and the eu on new subsidies rules, and also new tools for addressing the challenges that we face in this 21st century, and also we look forward with working with japan in a very robust way, in the indo-pacific economic framework. thank you. senator cassidy is recognized. >> madame ambassador, thank you for being here. madam ambassador, thank you for being here. first, as contexts, this will be along the lines of what we've discussed in the past we -- >> we are going to leave this record a program and go live to capitol hill where the director of defense intelligence agency will testify about global threats facing the u.s.. this is live coverage from the senate armed services committee on c-span 3.

[inaudible] >> it's gonna come out in the wrong way -- >> whatever you want, it's what they want -- [inaudible]

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