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Chairman Roberts, Ranking Member Stabenow, and all Members of the Committee. Thank you for the opportunity to join my colleagues from the Department of Agriculture this morning in testifying on the Administration’s agricultural trade policy agenda on behalf of President Trump and Ambassador Lighthizer.
It is impossible to testify today without first mentioning the renegotiation of NAFTA and the benefits for U.S. agriculture. We are working diligently to bring a successful closure to NAFTA that fulfills our Trade Promotion Authority requirements.
We have recently reached an agreement with Mexico that improves on NAFTA in almost every way. On agriculture, it maintains our farmers’ and ranchers’ tariff-free access to the Mexican market and modernizes the agreement in important ways that will cut red tape on our southern border. Currently, Ambassador Lighthizer and my colleagues at USTR are working to improve our agricultural situation with Canada, particularly in the areas of dairy, poultry, eggs, grain, wine, and other products.
When I first testified at the Senate Finance committee during my confirmation process, I discussed how, in terms of U.S. agricultural, we play offense. Since the confirmation of my fellow Deputies and myself, we are undergoing thorough analyses of future FTA partners.
We are looking into the benefits of potential partners in Southeast Asia and Africa. And I look forward to working with Congress through the TPA process as these considerations evolve.
Increasingly, our dialogue with Japan continues to be a priority for us at USTR. A high-level delegation of Japanese officials came to USTR last month to discuss ways to expand and improve our bilateral trade.
These discussions are continuing, and we fully recognize the importance to U.S. agriculture of expanding market access into Japan. We are determined to put our producers and agribusinesses on a level playing field with other countries, such as Australia, Canada, and the European Union.
In July, President Trump and European Commission President Juncker launched an initiative to promote more free, fair, and reciprocal trade. We understand that there are many sensitivities surrounding agricultural trade, but including agriculture in any negotiations with the EU remains a priority for this Administration. Currently, the United States runs an agricultural trade deficit of over $15 billion with the EU; which is partly indicative of the scope of market access issues and non-tariff barriers for U.S. agriculture into the EU.
In May, I traveled to Geneva to deliver the United States’ first ever counter notification to the WTO’s Committee on Agriculture concerning India’s market price support for rice and wheat. Every rice- and wheat-producing country around the world should be concerned about the trade effects of India’s trade distorting domestic support.
At the WTO, we are pushing forward the largest agricultural disputes in history against China for its market price support policies and unfair administration of its tariff rate quotas. We estimate that China has exceeded its de minimis levels of domestic support for rice, wheat and corn by some $100 billion. We also estimate that if China had administered its TRQs for rice, wheat and corn according to its WTO commitments, they would have imported billions more in rice, wheat, and corn from all sources. We currently have seven offensive WTO disputes exclusively for U.S. agriculture and six more on retaliatory duties by our trading partners on agriculture and other products.
Under Section 301 of the ’74 Trade Act, USTR launched an investigation into China’s unfair technology transfer regime. In response, USTR implemented tariffs on $50 billion of Chinese imports, while another $200 billion is under active consideration. These tariffs are intended to address longstanding unfair and discriminatory Chinese trade and investment practices with respect to intellectual property and to encourage China to eliminate its harmful behavior and adopt policies that will lead to fairer markets for all citizens.
The correct response would be for China to change its unfair and discriminatory IP practices and until then, the President is committed to having the backs of our farmers and ranchers by working to address the damage inflicted by China’s unjustified retaliatory actions.
Finally, I am disappointed that in recent months our trading partners have decided to retaliate against nearly $30 billion of our $143 billion in agricultural exports following necessary actions taken under our trade laws to defend our national security or to respond to unfair trade practices. We are taking action at the WTO to counter this unjustified retaliation.
I often tell people that the easy issues in agricultural were resolved a long time ago. For example, earlier this year USTR and USDA announced access for U.S. pork to Argentina, and poultry to Morocco. These were long-standing issues. Under Secretary McKinney and I will continue to work closely together to coordinate our effort to expand upon our $143 billion in ag exports, and I thank this Members of the Committee for their time today and look forward to answering your questions.