tv Sen. Toomey on USMCA Trade Agreement CSPAN December 20, 2019 11:57am-12:58pm EST
information in different points of view, things being confused about what is truth and what is not. educated people should have the skills to ask questions that lead to evidence that will determine what is truth. >> watch booktv this weekend and every weekend on c-span2. >> the us/mexico/canada trade agreement is awaiting action in the senate after the house passed it with a large bipartisan majority but pennsylvania republican senator passed to me doesn't like the trade deal and explained his opposition at an event hosted by the american enterprise institute. senator to me to questions from the audience. >> thanks for that kind introduction and most of all thanks to you and derek for hosting this and giving me this chance to share my thoughts and have a conversation about what
i think is an important topic and i appreciate everybody who came out this morning as well. i can tell you i take seriously the advice i get from my staff and one of the messages i get repeatedly from my staff, they like to take me aside and remember just because you can't give a good speech doesn't mean you can't give a short speech. i will keep that in mind as i work my way through my remarks and look forward to the exchange with derek. let's talk about us mca. when we talk about this, it is worth having a starting point, a question about nafta. why is it the administration felt it was necessary to renegotiate nafta. that is starting point for us mca. was it nafta was an unfair,
unbalanced agreement, or tariffs that were unacceptable obstacles to trade? now to all those questions. nafta is a free-trade agreement. 0 tariffs on 97% of agricultural goods, no quotas, no obstacles, the epitome of a free, fair, reciprocal trade agreement and since nafta was implemented, american exports from mexico are up 500%. pennsylvania exports have grown 500%. i think you can make a case that since nafta was signed in 1993 a lot has changed in the economy since then so we have a
whole digital sector that didn't even exist and so modernizing. certainly made sense but that is not the reason the administration wanted to renegotiate nafta. the reason in my view the administrator wanted to renegotiate nafta was despite the increase in our exports, imports from mexico have grown even more. .. i would argue that was the central motivating fact. that's why we have a lot of bad outcomes because it was the wrong intent in the first place. the actual purpose was to diminish trade with mexico, and
i'm afraid that might happen. i don't think it's going to be severe but on the margins it's going to cost us an opportunity to exchange goods with mexico and therein lies the heart of my objection. let me walk through some of the specifics or the way i think about the difference between usmca and nafta. you could look at usmca as nafta with two two categories of cha. first category i would consider the constructive modernizing changes, mostly modest i think but they're not unimportant. it's about digital trade, cross-border, data transfers, ip protection for software, data storage, localization is not mandated. mostly my understand is that these items mostly now in the usmca will be a codification of existing practices. that's all right. that's good. much of it was taken from tpp. so what was it terribly
controversial or difficult to get there, and that's all fine. there's a very, very modest opening of some agricultural sector, marketing canada, particular americans probably will be able to sell more every products, are back at the envelope estimate that's on the order of half of 1% of our dairy production. so not really large but not a bad thing. that's category one. what a think of as the constructive changes and modernizing features. category two is where have my objections. these are changes that are protectionist in nature and are designed to inhibit trade. the first big category is the auto sector. as you may know, the source of the big majority of our trade deficit with mexico is in the auto sector.
unsurprisingly, that is the focus of really completely unprecedented provisions for a trade agreement. it's really the end of free trade in autos between the united states and mexico. let's be clear about that. what the administration could've done they could've had a straightforward limitation like a quota or tariffs. they i guess decided that would be maybe too obvious. instead they create this complicated but nevertheless, onerous minimum wage requirement that is designed to force wages on mexican factories that are well above the prevailing rates of wages because mexico is of course a developing country with a low cost of living and much lower wages. this is designed to make mexican auto production less productive and raise the cost. the advocates of this agreement and the administration think that is a good thing. i don't think it's a good thing.
i think imposing this minimum wage that's much i've been prevailing wages will make the north american automotive industry as a whole less competitive. it's an integrated supply chain to raising the cost of components from one source are going to tend to show up as higher costs in many cars that are produced in the country. it means higher prices for consumers, let's be clear. this is a tax that american consumers will pay on autos and auto parts that come across our border if the tariffs which are the alternative to the higher minimum wage, one way it will be a higher cost by design. probably on the margin increases pressure to shift to more automation, or to just sourcing parts and cars in other countries altogether. that means i think over time fewer american jobs in this space, not more, and that's one of the difficult consequences of protectionist policy.
that's the auto sector. a second area i find very troubling is there's an expiration date on this. we've never had an expiration date on a trade agreement or an investment agreement for the obvious reason that if you put an expiration date, you introduce uncertainty about what the world looks like after that date. in order to extend the expiration date which is 16 years from the date of enactment or the date that signing, about 16 years out, the three parties have to simultaneously come together and agree to add as they designed six years at a time to the end of this. that might happen but it might not. if somebody is contemplating a cross-border investment they have to ask, what is the trading environment going to look like when we no longer have a trade agreement that governs it, or at least we might not? so again it has to be detrimental to economic growth
and trade across the border because we are needlessly injecting a new level of uncertainty in these rules. third category that i i find objectionable is the virtual elimination of the investor state dispute settlement mechanism. this is the mechanism by which -- really, let's be honest, it's american investors who make use of this and it is because american investors and it could be a multinational corporation headquartered in the united states, it could be a group of investors making a purchase in another country. it is sometimes the case that an american investor in a foreign country doesn't get a fair adjudication and a local court. that happens sometimes. every country in the world has some level of protectionist tendencies and in some places at some moments local indigenous competitors will be able to influence the local adjudication process, the local courts, local regulators to put the foreigner
come in this case the american investor, at a competitive disadvantage. we know this is always a risk and so we have created this investor state dispute settlement mechanism where we, and our trading partners, can have confidence that would be a fair adjudication. we almost always win. in fact, i think the record is we have one every case we have brought to an investor state dispute settlement mechanism. we have 50 bilateral investment and trade agreements and free-trade agreements that have this mechanism. in march of last year, 22 republican senators sent a letter to the administration saying it is important that you not watered down the investor state dispute settlement mechanism. what happens? got it. in mexico they cut it back so there would only be five sectors that have access to the investor state dispute some mechanism, and that was under pressure from
members of congress, frankly and intended its gone completely, con. there is no investor state dispute settlement mechanism in canada. so this probably makes mexicans quite happy. they do not have to deal with this. and i think it reflects an underlying view in the administration at least by some in the administration that's very misguided, for the classic protections you that it's a good idea to discourage direct foreign direct investment by american investors and introducing new risk whether by a sunset provision or whether it's elimination of a dispute adjudication mechanism, that's a good thing because, and this is mistaken view of the world, if overseas investment are less attractive, that money will then be invested in the united states instead. i think that completely misses the reality of the vast majority of american foreign direct
investment. most of which is made to serve local markets and undermining that doesn't make us richer. doesn't create more opportunities. the companies i know in pennsylvania that has subsidiaries in other countries also have jobs in pennsylvania serving and relating to those subsidiaries overseas, managerial, financial services, planning, administration, all kinds of services. i completely reject the notion that we sum up to discourage american investors from investing overseas. let me get to that two things that changed late in the game because the provisions i went to work early features of this agreement but two things that change late in the game in my view made this agreement even worse. the first is the new set of labor provisions, and the way this began was with the u.s. negotiators a green to signing
that we are going to force mexico to adopt new labor laws. we did that in mexico has passed these laws, and they have to do with facilitating that unionization of their factories generally. but we didn't stop there. on previous trade agreements we have historically taken the view at least implicitly that a countries labor law is their business, now we've made it our business. the usmca we create this adjudicating body paid for by americans, $45 million a year a year expense for american taxpayers to enforce mexican labor laws in mexico. like, why is that our responsibility not only that, but if a look at the details of this, the way it is designed, it is designed such that an accusation of a violation of the mexican labor laws in mexico is presumptively deemed to have an
adverse impact on trade, and creates a process whereby, you guessed it, new tariffs, new obstacles to trade including embargoes from the presumed to be offending factories can be imposed. the head of the afl-cio said, and i quote, for the first time the would be truly enforceable labor standards including a process that allows for inspections to factors of the soul is not living up to their obligations. there are on-site inspections, will have five americans living in mexico. this has not come over very well with the mexicans by the way and the job will be to do this enforcement. here's the thing, this agreement is reciprocal. it's fully reciprocal. our trade agreement -- our trade representative says don't worry, we've make sure that the mexicans can't send folks to inspect american factories. let's see how that works out
when that gets litigated because this is supposed to be a reciprocal agreement, and it allows americans to inspect mexican factories. i think it's worth asking the question, what is it that organized labor felt so strongly about this provision? why is it the ultimately protectionist members of congress felt so strongly about this provision? it could be that they just have this passionate concerned about the well-being of mexican workers i suppose. but it could be it serves their own economic interest as well. specifically of course there's the obvious way it serves the interest i forcing the unionization of these plants. you will make them less productive and less efficient and less able to compete. i think there's more going on the net. there's a huge opportunity for mischief given that there are a lot of american company that has subsidiaries in mexico, and now there's a mechanism to accuse
them of violating mexican labor laws and a process by which they can then be punished for having done so with these tariffs and embargoes and such. i think that leads to some bad developments. last thing i want to make it in terms of the policy provisions of the usmca is the -- by the way, this category, , this whole labor title, this whole approach is something that bob lighthizer, the u.s. trade rep, is very proud of your cases this makes the agreement better. i think that sheds a light on how he thinks about this. the last provision going to mention is one that he acknowledges makes the agreement worse, and that is he had negotiated ten years of intellectual property protection for biologics, and at the insistence of speaker pelosi that goes to zero. in my view this is a very, very exciting new category of medicines, biologics.
really some stunning, breathtaking therapies that are for illnesses that are very, very serious. and our u.s. law is 12 years of protection to create the incented, the billy to recoup a massive investment in developing these new biologics in mexico and canada. that goes to zero. two of the things i want to touch a really good one is the international trade commission did report in which they did an economic evaluation. some of my colleagues and supporters site the social be good for the economy. it's nonsense. so the data point that's that s often cite this one instead of 6000 new jobs created by usmca. first of all, if you believe that that number is true, it's a trivial number. we have been cranking out 200,000 roughly new jobs a month in this country.
usmca according to this data point will produce 176,000 new jobs over the next 72 months. so it's extremely small in scale. scale. if even believe it to be true, and i don't, the report, their argument that the trade restriction policies will diminish economic growth and cost those jobs but it will be offset by the added certainty of having codified the practices of digital trade that i i referreo at the beginning. all right, maybe that's how that works out, but they acknowledge that they don't even attempt to quantify the adverse impact of the sunset clause because they don't know how to do it. we know that's got to be negative. it can't possibly be positive in my view. we just don't know exactly the magnitude, and there's been no analysis done whatsoever on the provisions, the whole labor sector was written after the ipc report was done, and the concession on biologics was
likewise also additional tightening and more restrictive rule of fortune about steel and aluminum is in this as well, and the itc acknowledged in the report the more strict you make the country specific rules of origin the more the damage growth. we don't have a quantification of this but directionally we know it's going to diminish growth and jobs. so bottom line i think it's very unlikely that this produces any net new jobs and i think most likely probably, very small but probably a net negative economic growth relative where we are today. last point on substance here. we have cbo score that came out this week, humana's unit that is relatively new. cbo comes to the conclusion that the labor rules, i should say than minimum wage rules on auto production in mexico cannot be
complied with, and so they won't be complied with and so the alternative under usmca is that autos and auto parts that don't comply will be hit with a tariff. the cbo analysis that will go into effect and, of course, that's a tax on a consumers and it's about $3 billion. on top of everything else, usmca is a $3 billion tax increase increase, $3 billion is not an enormous number but it is what it is. let me wrap up how we think about this. the way i look at this is we talk a free trade agreement and added some constructive features, taken largely from tpp, but then we slept on an expiration date. we imposed costly new restrictions on the trading partner. we limited the dispute mechanism celibate for u.s. investors. we dropped the intellectual property protection for the most innovative new medicines and give a big gift to organized labor in the form of a process designed to allow protectionist to impose further restrictions down the road.
we will get little or no extra economic growth out of it. maybe a modest tip. it shouldn't be terribly surprising that speaker pelosi, a lifetime protectionist and other protections in congress were spiking the football that the afl-cio has endorsed this deal, it's been two decades since they've endorsed the tracheal. is my final thought. this will almost certainly passed probably by a big margin in both houses. i just want to stress that this should not be a template for further teacher agreement. they should not be the way we approach trade in the future. we should not be looking to restrict trade. we should be looking to expand trade. thank you very much. [applause] >> this would be a great time for the 20 some people who are standing up to sit that if they want to. otherwise you get a little tired
and i would love for you to have questions. i also noticed i am to the left of the senator toomey as i'm sitting, which is definitely not true. but we could, thank you for your remarks, and i couldn't agree with him. he could spend the next 20 minutes agree with you. i agree with you on most trade, the general approach to treatment i agree on the intent of key people in initiation with regard to usmca. i agree with your intervening in mexican and labor market speedy i have a feeling there's a butt coming still. let's talk about what we might disagree on at least disagree partly on. i'll start with a key element of this for you, and i'm not sure it is for me. the president originally wanted a much shorter review period. he wanted a review. and his second term so he could have the option of bailey out of usmca while he was still present if the one reelection.
i don't find 16 years to be a problem. trade agreements change in 16 years. we should be evaluating almost every trade agreement after a while to see as you mentioned correctly with digital trade, the situation is change, the technology, new trade patterns, new issues that come up. i find the review period at 16 used to be an excellent enforcement. don't start cheating because we will be looking at this 16 years later in this case 16 years later a lot better cut of enforcement some of the other information which i also object to. let me come back to you about the review mechanism and say, 16 years isn't six years witches ws what restarted it is a reasonable amount of time. it creates some uncertainty at the end of the cycle but the will be uncertainty because the world changes, politics change and the participating countries and i prefer to have a review mechanism that is general rather than somebody enforcement mechanisms that i know you and i both have problems with in the
agreement. >> yeah, so i would disagree with that. the point about the fact that the world changes and you need to be able to reflect those changes in the trade agreement i think is a valid point. the way i think about is you can always revisit the trade agreement anytime you get the three parties together at any date of the week, in the year. you can revisit it for really any reason, if you have a collective will to do so. the question for me as what's the presumption? what is the default setting? is the default setting that all goes away unless and until you get all three to agree, or is the default setting it will continue this what i would hope would be to liberalize free trading environment and we will make changes when all agree what those changes should be? i think it's a question of what is the better default setting to have. >> this is a bit of a dirty question but do you read this particular -- i agree, that's the right would have a review
mechanism but you think this particular one with regard to usmca is the default setting is to rip it up in the text but we feel like the default setting is to rip it up because there's protectionist both in administration and the congress who supported and if they're the still around for 16 years and in other words, is at the agreement that's doing this wrong or is it the political supporters of the agreement for thinking about the review mechanism and the harmful fashion? >> i think it's both. i think it's both. i think the administration would have taken this and it even more protectionist direction if they thought they could and still hold republicans, so i think that's part of their motivation is to create an opportunity to do that. but i think it is fundamental to have it in their. >> second question. i'm 100% with you on this. -- on u.s. intervention on the
u.s. labor markets. my instinct about investor state dispute settlement is that u.s. intervention into four judiciaries. when i think a free trade i don't think of giving extra protection to multinationals. you make the terms of the agreement, have enforcement, you don't have a special clause for companies just like you don't have a special clause that was added to usmca for all this intervention into labor. i understand that we win the cases, completely agree with you and i can see it being to the benefit of american companies to have this provision. i don't see it as a free trade provision. see it as it's to our advantage provision. do you think you could make that a pro-trade provision for this extra set of authority that has to do with protecting companies the legal rights in foreign countries? >> i get that argument but we've got a global infrastructure in the united states and we have a state department that sets up shop in every single country around the world.
we patrol the oceans and keep the sea lanes open with very expensive navy. we do things outside of our borders, part of which is designed to facilitate commerce. so creating a mechanism to adjudicate a dispute in a place that can't be relied on necessarily to do it fairly strikes me as a modest step. it's eminently fair. i don't think it's a system that's designed to stack the deck in our favor but rather to get a fair outcome. and by the way, most foreigners who invest in the united states tend to feel like they would get a fair shake in the u.s. federal court and so they don't opt for the isds mechanism as often as we might. i think it's a very reasonable provision and to think of it differently from this taxpayer mechanism to enforce mexican labor law.
i think that's a creation to serve the u.s. organized labor. >> let me ask you a specific question. biologics are important issue because we don't know -- it's a growing industry and it could be very important to the american economy. putting that aside and realize that's a big thing to put aside, what do you think of the ip protection in the agreement? ip is an american competitive advantage. it's important both in this agreement and future agreement draft good ip protection. i'm not trying to minimize biologics. that's a very controversial issue you brought up. other than biologics do think the ip provisions are pretty good? >> yes. i have instead that as in much in-depth as other things because my sense is that's all moving in the right direction. i do think there should be strong intellectual property protections and i think the administration, that this agreement does improve it.
>> let me ask you about, and i'm happy to talk more about the agreement itself and maybe we'll have more specific questions about the agreement but a keyboard you meet at the end and at the beginning was you don't want this to be a template. look, we have a template with canada and mexico already that was working well. i agree with you 100%. so going backwards toward protectionism seems like a bad idea. what if we extended usmca two countries we don't have a free-trade agreement with but what if we extended it to the medicaid or taiwan? we agree we could do better but i'm asking if we took the usmca template which is partly a step backwards with regard to nafta but use for country we don't have free-trade agreements, would you still see that as a step backward or forward. >> was the question i think you're asking is, is this what we have to settle for?
>> right. >> i think we have a huge moment, a huge opportunity with the uk right now. they need a free-trade agreement with the trend. they need one with the european union as well. they will need one with the united states, and so i kind of like the prospects for getting a really good one. i wouldn't want to start with the assumption this is the best we could do. how many industries are going to pick over there and impose some kind of restrictions, whether it's a minimum-wage proxy or other forms, and are we going to have the expiration date which you may not object to but i would? and the underlying principle of it. we've had administration officials come in to a republican senators lunch and make the argument that we are better off if we diminish the competitiveness of our neighbors and of the countries fear we're better off if we can find a way to raise the costs of production because then they can't compete with us as well. that is a complete misunderstanding of the merits
and benefits of trade. let's not accept that premise and use it to launch negotiations with countries like japan and the uk what we have big opportunities to have really good trade agreement. >> my second question is a question that i would try to duck. i'm going to ask you because i get asked the questions in this particular case. let's say usmca is the template going forward but you can change one provision, only one. if the template you're stuck with it, we will be negotiating with britain or taiwan, whoever, you can say i want this one provision changed to a free-trade provision, once the provision? >> well, so i will interpret that question to me what do i find most objectionable, and i would say that the treatment of the auto sector is the most disturbing part of it, the
willful systematic mechanism to take away the only advantage, one of our neighboring countries and her counterpart has to diminish their productivity, to raise the cost of their products to american consumers. that just so goes to the heart of this. that to me goes to the heart of trade more than the expiration date does, more than the investor state dispute settlement mechanism. so if i had to pick one thing, that would be the last thing i would want to see replicated in that. >> whenever governments pay cut sectors and decide there's favoritism for or punishment or whatever that cuts against peoples were open markets on with you. i want to open it up to the audience, not that i don't have more questions but want to follow up on that. one of the key elements to the treatment of the auto sector has to do with rules origin which are personally with. most people here are for me with because you are familiar with
the tray but i will just explained. it basically israel on how much has to come from inside the trade agreement versus how much can come from outside the trade agreement. there are advantages to loose le rules of origin. there are advantages to tighten rules because it means people have more incentive to join a trade agreement if they were going to expand. on the outer side, or general as you prefer, where d.c. usmca rules of origin? may have gotten tired and i see vanish to that but there's also a disadvantage. do you see that as a minor issue, a big issue? >> i see that as a small issue than what is completely new in the rules of origin which is country specific rules of origin. this is a multilateral car to know free-trade agreement where previously when rules of origin that pertained to requiring the origins from one of these three countries. i take your point. you can argue both ways there's some merit to that and there's
some opportunities kind of defeat the purpose of it if you don't have that. this goes to a new level of will origin and makes it country specific within three countries. they don't name countries. instead they use the wage rate as the proxy that 40% of car parts have to be made in a country with wages that they over $16 an hour. that is meant to force the mexican auto and auto parts makers to import from the united states in canada at least 40% of the content, and that is completely arbitrary unnecessary and runs counter to the idea of a continental free-trade agreement. >> i will just say before it opened up to questions, i asked that question in particular because we may disagree rules of origin will be completely agree on that point. the idea for rules of origin is within to be simple and easy to understand come otherwise you don't have a trade agreement because you don't know where you can make the product and under what rules it would qualify for the trade agreement. you can have a reasonable debate as you can over many free-trade
issues where you can decide i think this is good for open trade or not, but there are some parts of this agreement that are interventionist and not meant to promote trade as the senator said so well, they are meant to restrict it. i have more questions but i would love to hear from the audience, so please, yes, that center table is making me very nervous. claude, my colleague claude orfield was safer than these people right here. >> i want to switch to politics. assuming for a moment that the president trump is not reelected. what will be the stance of the republican party in 2021 2021 d after, do you think? is trumpism there permanently? what the republicans revert to a more free trade, free market
position? where do you think the party is going to be post trump? >> it's a great question and it's something many of us are wondering and, frankly, trying to influence. there has been a republican consensus for free trade for a long time but it's not universal among republicans. there's always been some dissent among republican voters about the merits of free trade, but the consensus has been in its favor. the question had an opening caveat that's a very, very important one, and that is the outcome of the election. i think that's a huge impact on the direction that the party takes. our reelection would be seen as a validation and a political validation of all of the presidency positions. and on domestic policy, most of which i agree with, the tax reform was very constructive.
the rollback of excessive regulation has been very, very constructive. the judicial appointments and confirmations have been terrific. i disagree with the president on trade as a general matter. i don't know the answer i guess is the short answer is i don't know. certainly if the president is reelected that's going to be a serious question about the republican commitment to trade. >> i'm going to ask for more questions. we have 20 more. let me follow up on that anymore pointed fashion which is my role after claude speaks, i ask a nastier version of this question. the democrats are very likely to win the house anyway. as we know it's not just the presidency. i agree with you, speaker pelosi's is a committed longtime protections. she returned on trade authority under president obama. she's a protectionist. when do you think, which is it,
you are fighting, and soe direct aei, we fire for that may not win for some years but it's not just president trump. when do you think were going to get a a more pro-trade orientation? gc that three years or more like eight? i don't mean to be depressing because it's depressing for a lot of people in this room but i would add, even if republicans go back to a more pro-trade position, democrats are very likely to control house and you will not get better trade agreements through speaker pelosi. >> that's the problem, no doubt about it. we look at it historically the way we passed free-trade agreements has been very narrowly in the house with mostly republican support and very few democrats. but then with a big vote in the senate and invariably with the president supporting it, whether he's a democrat or republican. we've always had pro-trade presidents. this this is a first least
pro-trade president since i i don't know, 100 years maybe. interestingly because american politics is so partisan and polarized, support for trait is much higher among democrats that it's evident because democrats see president trump as anti-trade so, therefore, trade must be good. republic is a consummate in in the other direction. maybe this is an opportunity to speak to some democrats and to bring them on board. i think one of the fundamental challenges that we have is trade is one of those things where the benefits are dispersed and the dislocations and the costs are concentrated. if we have free-trade agreement with another country and they have a competitive advantage in a in a particular industry and an american factory closes, that's an acute problem for everybody who works at the factory. it's on the front page of the paper in that community for an extended time. everybody is aware of this really adverse outcome, and
maybe every american gets to save 100 100 bucks or 1000 buca year from lower-cost and more choices. on a net basis that has a much bigger positive economic impact, but how do you put to it? how do you illustrated and demonstrated improved? it's one of the challenges that we have. >> editorial comment. people may not be aware but with all the discussion about nafta cost factors to close, the u.s. manufactured upon rows for five years after nafta. i'm not saying that is because of nafta. i'm saying manufacturing employment rose for five straight years after nafta and yet we have a lot of people around the country who say this fact to close in our neighborhood. >> and protectionist tariffs that this president has impose have resulted in a modest manufacturing recession and job loss in manufacturing. it is supposed to be the exact opposite but the fact is protectionism doesn't work well.
>> please identify yourself. [inaudible] >> you've spoke about how this agreement should be a model for the future and i agree with you. could you speak about what this means for the future of authorities and the second part of the question is the current authority represents much of what occurred during the may 10 tenth agreement and that moved the needle from less protectionists trade agreements to more. do you think this to agreement with democrats to be the next may 10 agreement? >> well, here's one of my big concerns on the process because you going to the process of how we adopt them. we are in the process of violating the process. tpa is pretty good about some
things and one of them is that the administration is obligated when they have finalized an agreement to submit a draft of the implement the legislation. let's keep in mind that i think we lose sight of the sometimes in congress. this is our responsibility. they constitution is very unambiguous about this. it assigns to congress the responsibility to regulate trade with other countries, to establish terrorist and we delegated this executive is and we delegated to the point will let them trapped the law. like, not kind by definition what we are supposed be doing. within tpa the contemplation is they sent us the draft once they have completed agreement, , then they have to give us 30 days for us to manifest our concerns. that is usually an ascent has taken the form of a mock markup we don't literally mark up the legislation but we vote on amendments that would change the
legislation. the point of that exercise is that that is supposed to inform the administration which is exercising a delegated authority and then they're supposed to come back and give us the final agreement which is been subject to an up or down vote. none of that is happening. none of that is happening. they reached their agreement and the house will vote today. when did they reach their agreement? last week. the house is going to vote today. then we will be stuck in the senate with that. this i think is the big process problem. we are dramatically undermining tpa in a way that further diminishes congress is already limited ability to influence legislation which is entirely our purview. i would make the argument that given the violation of process, implementing legislation that comes over from the house should enjoy a privileged status in the senate because the privileged status arises only through
compliance with the dp. that's an argument we will have to have with the parliamentarian. i don't know that it matters very much because i think they have more than 60 votes for it. even if they can't use tpa they will be able to pass it. i'm really concerned about undermining just not following the law here and undermining a really important process and principal. >> i agree with that 100%. 100%. i will add to it that if something goes wrong as perceived by u.s. politics, anyone can decide that in ten years something has gone wrong we'll hear from protectionists that we did the fall file tpa. even though it was protectionists who didn't want to follow tpa. so when you move away from process you open yourself up to criticism when any group in the trend as a legitimate or illegitimate grievance about the agreement. for those of us who are pro-trade and want more trade
agreements, and i support usmca, this is still a drawback because it's going to be turned against trade later and we're just talking about when and how. okay, here. go ahead. right here, yes. >> thank you. a non-nafta question. you have policy rider now to get the section 232 car report out t in the open. can you explain more about that and whether that particular provision would hold up any type of enactment from the president? >> i doubt it will block the bill. this is a reference to a provision that i put in one of the appropriations bill, i think defense -- no, the other one. right. cgs which is rolled up with defense, right? we have two what we call minibuses, not a full on the bus
so that several of the appropriation bills that showed up in the package and here's the thing. existing law before a before tt can post 232 requires the be an investigation, a study to determine whether or not there's a threat to american national security. that's the criteria the administration has to meet in order to justify imposing tariffs under section 232. the commerce department did this analysis respect to automobiles. the law requires a be published and disclosed. the, department has refused to disclose it. they have told us they had come to the conclusion that volkswagens and audis and bmws or, in fact, the threat to american national security. but they refuse to show us how this come to the conclusion and have documented. in fairness to them along the requires the disclosure doesn't put a date on it. it doesn't say by wind and so
their answer has been we will get to that. what i did is i put in a provision to says 30 days of enactment you have to disclose the report. i don't think that's going to stop this ominous appropriation bill from getting passing and from signed into law. within 30 days were likely to see this and it should shed some light on the thought process that went into that conclusion. >> usmca question? yes, thank you. >> absolutely appreciate your engagement on the issue and appreciate your comments on biologics, of the tpa process which there was no consultation i know, no transparency when you go to room with nine people and renegotiate the deal. my question is if you're looking towards the future and looking for protection from biologics innovation in some most exciting new technologies in medicines as you put it, what are your alternatives if you're not stand
up for those agreements and forr the ip in a trade agreement? is your alternative the wto where the president opposes the btl? -- wto? is it a section 301 process one process under u.s. law? echoic aye effective it is witht to china. we have a care for. have we done anything on ip? we administration announced some of the early provisions of this inmate of what they were looking at to do an ip, they were taught but taking a step back on biologics. what's our alternative and what's are effective protection? what we sing to the rest of the world and the future if the administration saying this wasn't a bad deal on innovation because we are silent on biologics. no, we went from 12 to ten to you, as you put 20 additional years of protection. what are we saying and what can we expect?
>> i think the question answers itself, right? >> shockingly. >> this this is a problem. the problem we have is a consensus on the democratic side of the aisle is that u.s. law should be here also. i this is very disturbing. i don't have an answer. this is what i thought it's important to have in the agreement. >> i'll just say i don't like taking on biologics. innovation is the core american comparative advantage. the argument over should the world, although up to use standard, is used into perfect? that misses the point of free trade agreement. the world is way below your standards. we can bring them up toward us and not bring them to our level and not have to settle with exact right level is and we would be benefiting the united states.
if we don't protect innovation in our trade agreements we are giving away most of the benefit which means the american people will say what is the point of this? we're not going to get gains out of it if we don't protect our own comparative advantage which means people will say these trade agreements are a bad idea and they will be right. i don't want to get hung up on biologics. i would say across the board ip issue is the approach this is u.s. law is wrong, is harming the united states and these trade agreements and that something we should be fighting forward. this site of the room. go ahead. wait for the mic, please. >> i'm reported for congressional corley. you live in allentown and by chemistry from you there's a mack truck plant that is a uaw play. the truck business id out of business faces a lot of competitive pressure. that's just the modern world. the workers fear low-wage competition from mexico in part
because effectively mexican workers have no collective-bargaining rights. you recognized yourself when you're talking about an investor state dispute settlement that sometimes in other countries the court processes and other processes don't really work the way they do in the united states. what would you say to workers in that mack truck plant who fear the fact that mexican workers work at much, much lower wages and effectively have no real opportunity to bargain with a company over wages because something bad could happen? >> first of all i think the level of wages is probably more a function of the economic status of the country than it is the prevalence of collective bargaining. mexico is a developing country. it's a low cost of living. it is going to have low wages, regardless of whether your collective-bargaining. collective-bargaining might increase wages, i acknowledge
that. we have been able to compete, remember we were told that when japanese car started coming to america it was the end of american out of production. not really. what american auto companies figured out how to do was to compete with a really tough new competitor that came in and required that we just opt our game. so we became more productive and were more responsive to consumers. i don't accept the premise that we can't compete because mexico has lower wages. >> i will add the inconsistency of the wage driven argument with the bilateral deficit argument the senator has focused on before, if the key thing about our partners is the level wages. mexico has lower wages. we can expect mexicans to buy the same quantity of goods from the united states that we buy from mexico. you can't combine those which is to say wages are the key to trade and bilateral deficits mean the other country is cheating. no, it means mexico is not going
to buy the same quantity and value of goods from the united states as we're going to buy from mexico. there's going to be a bilateral deficit. if you want to focus on wages you can focus on deficits and yet those are the cornerstones of many protectionist arguments, the we can't compete with countries with low wages and then we run these trade deficits because you're cheating. we run trade deficits with most of these countries because they are poor and they cannot buy the same goods that we can. we are very lucky in the united states of so much consumer buying power. more questions. yes, go ahead. we have a couple more minutes. please keep your questions brie brief. >> senator, you have said repeatedly that you want a fair process as the impeachment moves to the senate. your speedy senator, you have
absolutely no obligation to answer this question. go ahead. >> it's a news question. as the senate moves forward, your leader, senator mitch mcconnell, has said that he's not going to be an impartial juror. he said that he's coordinating with the the president's of la. >> asked the question please. >> how do you expect a fair process of leadership making these types of remarks? >> and again if you want to move on, i would be happy to. >> yeah, i talked about this a lot. i'd like to focus on trade this morning. >> please, please, if the trade event. talk about china if you want to. there's point think to talk about on trade. any more questions? go ahead, doug. [inaudible] >> i understand that and i ignored a number of people entire time but i i'm glad you think you're important. please move on. yes. >> doug palmer with political.
this may seem like an obvious. the answer may seem obvious but, i mean, you're up here making sort of the standard, what i think would be like a standard republican critique of this agreement if it were presented to congress by say the obama administration. so why are you the only republican that speaking out and making this critique? >> i think you would have to ask my colleagues that. >> okay. if you have a trick question, i'll be happy to take it. >> okay. i am a member of the united auto workers local 1981, otherwise known as the national writers union. what it want to know is why you didn't mention the u.s. chamber of commerce and its position on the sole agreement on what it tried to change and what it failed? >> so the u.s. chamber, i think
has endorsed the agreement. i'm not sure, there's a lot the provisions. they probably would agree with much of my critique of the individual items that i've objected to, but on balance they have advocated for it. i will just come i'm not going to say anything -- i'm going to add to the this to the chamber of commerce but unless i know for fact there are of the usmca whose support is rooted in the a concern that the underlying nafta could be destroyed in the absence of the usmca. the president has said he will withdraw from nafta unilaterally if usmca is not passed, and so it's not shocking that some people might think that an alternative. i don't think that's what we ought to look at this because i don't think the the president s the legal authority to withdraw from nafta. nafta was implemented through laws that were passed by congress and signed by a president, and no president can
unilaterally withdraw any law, and that includes the intermittent legislation of nafta. i do know that there are some supporters who are significantly influenced by what they perceive as a risk that the underlying nafta could be abrogated. >> thank you for the excellent question and thank you for all the good question on usmca and trade. we are done. i would ask everyone to sit and pleased that the senator walked out first. this is washington and the yes, senator is, in fact, more important than everyone else in the room. >> that's not true. [applause] [inaudible conversations]
>> the speedway was kind of the big event that start this place off in terms of worldwide fame. people indianapolis because of raising and with a healthy sport, with a healthy track i don't think that will ever change. >> one of the most famous authors to come out of indiana really up until i would say kurt vonnegut. i describe them is really helping to define the rest of the country what the hoosier was. so we helped introduce indiana to the rest of the country and indiana left him for that. >> c-span's cities tour is on
the road exploring the american story. this we weekend we take you to indianapolis available with a spectrum cable partners. this saturday at noon eastern on c-span2's booktv local office, on the students history including the speech robert f. kennedy made to an indianapolis crowd following the death of martin luther king. >> martin luther king dedicated his life. >> kennedy had no prepared text, and what am i going to say? can the islamist who could speak to people directly and give them bad news and be counted upon to do the right thing. so we decided that kennedy would come to 17th and broadway streets to address the crowd that had gathered there. >> sunday at two p.m. on american history tv on c-span3 we will visit different historic sites including the home of
president benjamin harrison. >> the great since that you as you walk through the space is how understated it is. it's not ostentatious but if anything it speaks deeply of quality and i think that is his character through and through, understated but of quality. >> watch c-span's cities tour of indianapolis as we take in its history and literary scene. working with our cable affiliates as we explore the american story. >> education secretary betsy devos went before the house lay between sets question about her departments student loan debt forgiveness program. it targets students who took out loans at institutions that misrepresent chances for jobs, potential sellers after graduation leaving students unable to pay back large loans. >> the meeting will come to order.