Hearing of the Trade Subcommittee of the House Ways and Means Committee - Opening Statement of Rep. Earl Blumenauer, Hearing on US-Japan Trade Agreements

Hearing

(As prepared for delivery)

The subject of today's hearing with Japan's partial agreement with United States has significant consequences for one of our largest trading partners, a strategic ally, and a country with whom we have had a complicated relationship as a relates to trade.

It's also important to note that the United States has assumed a much-reduced role with trade relationships with Japan and Asia. While Trump sidelined the United States with TPP, Japan and the other 10 countries move on, concluding a Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which went into effect last year.

Japan also concluded a comprehensive FTA with the EU 10 months ago.

Japan is currently engaged in the regional comprehensive economic partnership with 14 other countries, including China, hoping to finalize a deal soon.

This is the context in which we are evaluating this partial agreement.

This is also a significant time in the relationship between Congress and this administration. While we have been working productively resolving differences over NAFTA 2.0, the process with Japan is troubling.

Over a year ago, USTR notified Congress of its intent to enter into this agreement but it would do so only based on consultation with Congress… consultation which did not occur. This is despite the fact that the TPA requires USTR to notify and consult before, during and upon completion of trade agreements.

Sadly USTR ignored our repeated request for meaningful consultation while negotiations with Japan were ongoing. Consultation that did occur was perfunctory and after the fact.

It is telling that in September USTR had a last-minute weekend telephone call to assure bipartisan staff there was not a deal while simultaneously the president announced an agreement had been achieved in principle.

While Congress has had virtually no role, the Japanese Diet has been considering the agreement during the last two weeks.

The administration even declined our request to appear before the committee with us today to have this long overdue discussion.

Nonetheless we will move forward helping to highlight the strengths and weaknesses of the U.S. Japan Trade Agreement and the U.S. Japan Digital Trade Agreement.

We need to evaluate how the rest of the TPA objectives outlined in December will be pursued.

There are implications for picking low-hanging fruit in initial trade agreements and deferring the tough subjects for later, and there certainly are difficult elements of the trade relationship with Japan.

There are also implications for the WTO and its central tenet of most favored nation treatment if United States and other countries increasingly negotiate agreements that cut tariffs for a limited array of products. We may be undermining the core principle of multilateralism.

The relationship between USTR and Congress going forward, the implications of negotiating partial agreements, and challenges to WTO rules of trade are all important areas to explore as we examine one of the most important trading relationships in the world at a critical time in international trade, especially relating to Asia.

I look forward to hearing from our witnesses elaborate on these and other items.

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