Levin Opening Statement at Hearing on President Obama’s Trade Policy Agenda with USTR Michael Froman

(Remarks as Prepared)

With negotiations spanning the Atlantic and the Pacific, illustrating that globalization is accelerating, we face major opportunities and challenges.

I believe that this Administration, in which you have played a key role, has on some important occasions demonstrated a broader vision of international trade. 

It has helped to create jobs through exports, while also looking actively at the impact of imports.

It is working to incorporate enforceable worker and environmental standards in trade agreements. 

It has been more active in enforcement --from initiating WTO cases, to applying the China safeguard on tires, to creating the ITEC.

It has responded to a series of tragedies in the factories of Bangladesh – tragedies that have shaken conventional resistance to building some basic standards to shape the human impact of the heightened flow of international trade. 

As USTR, you face many challenges: “forced localization” in China and India, continued concerns about labor rights in Colombia, evasion of antidumping duties, even the future success of the WTO. 

TPP can expand our exports in many sectors, including services – which are also under negotiation in Geneva.  While there are many outstanding issues, Japan’s engagement presents a broader policy question:  whether and how to address one-way trade, a very unlevel playing field. 

The U.S. has had massive trade deficits with Japan for decades, the vast majority in the automotive sector where Japan has taken advantage of a completely open U.S. market while Japan’s has been tightly locked to imports from anywhere. 

If the principle of two-way trade really matters- and I believe it does-- we need to chart a course to achieve it.  What the U.S. negotiates with Japan could have important impacts on the U.S. economy and how TPP would be received in Congress.  I am working with stakeholders to develop a proposal and hope to share it next week.  

The Trans-Atlantic negotiations also provide an opportunity to expand our exports and strengthen our economy.  Just as important, they can establish new rules for global trade, promoting an equitable and market-based economic model over the emerging model of ‘state capitalism.’  These negotiations won’t be easy, but our relationship with Europe is unlike any other.  We should build upon the strength of that relationship and should reflect our many common objectives and values, while also respecting our differences.

The discussion on Trade Promotion Authority has begun and there is widely-shared interest in getting it right.

First, TPA sets the rules for engagement between Congress and the Administration.  A significant, sustained role for Congress is critical.  Today, trade agreements address a broad and growing range of policy areas, so members of Congress must play an active role in their development.  There is also the chance that more effective, broader Congressional involvement would help to establish more common ground in Congress for trade agreements. 

Second, the TPA process must be a vehicle in crafting a broader strategy- as we did in 1988- to tackle the increasing challenges and potential benefits of globalization and enhance U.S. competiveness.

Since we last considered TPA, the United States has experienced the largest trade deficits in our history, contributing to lost jobs.  These imbalances have more than one ingredient. One source often stems from trading partners refusing to play by the rules. 

Currency manipulation is a vivid example.  There is precedent for pairing TPA with currency legislation.  We did so with the very first TPA bill in 1974, and we did it again in the 1988 Act.  The House and Senate have both passed currency legislation, and this issue needs to be part of the TPA, TPP, and TTIP discussions. 

With sequestration, USTR -- like many other agencies – is working under difficult personnel constraints.  We need to help ensure that the Administration can continue to devote the needed resources not only to negotiating new trade rules, but to enforcing those that exist.  We look forward to working with you. 

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