USTR Defends IPEF Approach, Says Mexican Ag Irritants May Require Dispute Panel
Senators on the committee that oversees trade pressed U.S. Trade Representative Katherine Tai repeatedly on why the administration isn't engaged in negotiations with other countries to get them to lower their tariffs, so that U. S.exporters, particularly agricultural producers, can gain more market share. Both Democrats and Republicans questioned the decision to pursue the Indo-Pacific Economic Framework as something other than a traditional free trade agreement.
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Sen Pat. Toomey, R-Pa., told Tai during the Senate Finance Committee hearing March 31 that aside from reversing the previous administration's trade wars in Europe, "you really haven't done anything to lower tariffs." He asked her point-blank, "Do you think it’s in America’s best interest to pursue free trade agreements with other countries?"
Tai responded, "We are interested in pursuing trade agreements with our partners. But we are committed that our trade agreements practice evolves with time."
Toomey referred to comments Tai made at a press conference earlier in the month with the United Kingdom trade minister. "You recently seemed to be suggesting that you think FTAs are a 20th-century tool, but the fact is, China has eight currently being negotiated; the EU has 14 in the process of being negotiated. You may think this is a 20th-century tool -- looks like the rest of the world thinks this is a 21st-century tool."
He said that as a result, those countries will get market share through those FTAs that "we're going to miss out on."
But Tai was not moved by Toomey or by senators from her own party who argued that the USTR's role is to expand access for exports.
"I take very seriously the lessons that we have learned in the last five [to] seven years," Tai told Sen. Maria Cantwell, D-Wash., who also argued that FTAs are not outmoded. Tai said when the administration negotiates free trade agreements that are "so big and so uneven in terms of the wins and the losses they are going to deliver for our economy that they have collapsed under their own weight," that is not useful.
Tai was asked repeatedly about enforcement of USMCA commitments with Mexico and with Canada. She was asked about Mexico's commitments to give a fair shake to biotech products and to open their markets to U.S. potatoes.
She told Sen. Debbie Stabenow, D-Mich., that she and Agriculture Secretary Tom Vilsack had been trying a strategy of cooperation and consultation with their Mexican counterparts to move biotech approvals along. "I do think at this point, we are reassessing where we are and the kinds of tools we need to bring to there."
Senate Finance Committee ranking member Mike Crapo, R-Idaho, asked Tai why the agency had not initiated a dispute with Mexico over its barriers to potato exports. She told him that on potatoes, "We have not given up hope even though we have taken one step forward and two steps back for many months now. All options are on the table if we are not able to secure that win [through consultations]."
Stabenow also asked Tai about how the office would proceed after the USTR won a dispute on Canadian compliance with its promises to adjust its tariff-rate-quota system for American dairy exports. Tai said she has a very good collaborative relationship with her Canadian counterpart, and she talks with her often about the issue. She said they will not give up until Canada offers more access to its market for American dairy exports.
Among the questions on the IPEF, Sen. Bob Menendez, D-N.J., asked if Taiwan would be allowed to participate. Tai initially avoided answering, and Menendez asked a second time. Taiwan's "participation in the IPEF is still under consideration, and as far as I’m aware, no decisions have been made," she replied. Menendez said he interpreted that answer as a no.