International Trade

Floor Speech

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Mr. GRASSLEY. Mr. President, now I would like to speak to the issue and several issues that deal with international trade.

During the last 2 years, there has been more talk about international trade in this town than at just about any other point since this President has been President or, you might say, over a long period of time 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 2 years after the destruction of World War II. It remained the institutional foundation for global trade until January 1, 1995. That day is when the World Trade Organization--we refer to it as WTO--was born with 81 charter members, including this great country of the United States. The WTO has been in place now for 24 years, serving as the clearinghouse 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. Over all, the WTO is moving global commerce forward just as planned. 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, at times, be disruptive. There are regions of the 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--any foreign government, as far as that is concerned. President Trump has rightly pointed that out and has delivered on his promise to make trade fairer for workers across our country, for agriculture and international trade is the bridge to the world's customers.

In Iowa, we export every third row of soybeans. Some people like to say that God made Iowa for the growing of corn and soybeans, and I agree. Iowa also has significant pork and beef exports as well. American farmers produce more than we can possibly consume here in the United States, so we understand then why the ability to trade and the freer trade, as well, is very important to us. 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 I resume chairmanship of the Finance Committee. After about 12 years of not being the chairman, I am going to concentrate on gaining 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 to our exports.

President Trump and Ambassador Lighthizer are working to correct these injustices. I intend to assist them in 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 United States-Mexico-Canada agreement, which updates NAFTA for the modern economy.

The new trade deal with Mexico and Canada make 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 agricultural products.

While I commend the President for following through on his promise to renegotiate NAFTA, there are a few areas of concern. Those concerns go beyond just the Canada-Mexico agreement. As long as 232 tariffs on steel and aluminum imports from Canada and Mexico remain, the 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 the United States-Mexico-Canada agreement.

This is why I urge the administration to consult with Congress, as intended by the trade promotion authority, to ensure a clear path forward for the United States-Mexico-Canada agreement.

I intend to work with members of the Finance Committee and, of course, with the Senate leadership to move the United States-Mexico- Canada agreement quickly in the new Congress as soon as the President submits it. 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--meaning the President and Congress--have a responsibility to ensure that U.S. farmers, ranchers, and businesses face minimal uncertainty from the updating of the United States-Mexico-Canada agreement.

Building on the success of this new agreement, we must continue to play offense and pursue new market access opportunities. That is why I am happy the administration is pursuing new agreements with Japan, the European Union, and the United Kingdom. The economies of those countries account for 27 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 with the UK, when ready, to address agriculture. There is some talk that the Europeans don't want to talk about making any agreements on 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 outright ridiculous.

While I agree with the President that we must have fair trade that benefits Americans, I want him to know, as well--and I have told him-- that I am not a fan of tariffs. Put simply, tariffs are taxes on U.S. consumers and businesses.

The Constitution grants Congress authority over tariffs and international trade, but Congress has delegated some of its authority to the President through legislation. To some extent, I think, particularly in the 1963 legislation, too much authority was delegated.

I am no novice when it comes to understanding the delicate balance between congressional and executive authority over international trade. In fact, I was the leader in renewing trade promotion authority as the ranking member of the Finance Committee in 2002. In addition to that, and more recently, I strongly supported its renewal under the leadership of Chairman Orrin Hatch in 2015.

What was important then and remains truer now is that Congress plays a central and pivotal role in crafting trade policy. Our Founding Fathers were very explicit in placing this responsibility with Congress in article I 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 interests 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 automobile parts somehow could pose a national security threat, as the President's actions have stated.

So 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 my colleague, Senator Ernst, 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. Maybe, considering 1962 and the issue of the now- forgotten Cold War, there may have been reasons for Congress at that point to overdelegate power to the President, but I am not sure that those conditions exist today.

I believe these efforts to restrain delegation of the authority to the President serve as a prudent starting point for the discussions 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 U.S. Trade Representatives' findings under section 301 investigations are not ideal, but I do agree with the reasons that have been applied.

The President is absolutely right to confront China regarding section 301 findings. I am glad that he had a successful meeting with President Xi at the G20 summits 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 that everyone read the findings of the section 301 investigation that were published in March of this year. 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, as a result of these Chinese policies, often forced to participate in joint ventures with Chinese firms and 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. My answer to that is hogwash. That is not how members of the WTO should act. It is an organization you join based upon respect for other people's rights, but the most important thing is to respect the rules of trade.

I voted in favor of China's accession into the WTO. 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 we rely on have failed and are in great need of reform. The fact that China, the world's most populous country and the second largest economy on Earth, can self-certify as a developing economy--that is a term used in the WTO documents--is extremely frustrating to me. Can you imagine the world's most populous country and the second largest economy in the world is still somehow a developing country?

I know many of my colleagues here in the Congress share that frustration.

I have 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 will also continue conducting rigorous oversight as chairman of the Finance Committee.

The United States has free-trade agreements in place with 20 countries. One problem we have 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, but most important to American businesses and consumers is to get the proper respect for the rules of trade that come as a result of the WTO.

In short, the Finance Committee has its work cut out for it and for us on the 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 am committed to making sure they have access to open markets with the guarantees of fair treatment and enforceable protections.

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