Lighthizer defends engagement with Capitol Hill in Ways & Means briefing

Feb 7, 2018 Issues: Trade

U.S. Trade Representative Robert Lighthizer, in a closed-door meeting with House Ways & Means Committee members on Wednesday, defended his efforts to engage with Congress since taking office last year -- which some on Capitol Hill have faulted as insufficient.

Lawmakers and people briefed on the session told Inside U.S. Trade a large part of the meeting dealt with the administration’s engagement efforts with Congress and a lack of senior personnel needed to speed up the ongoing NAFTA negotiations as well as initiate bilateral trade talks with other countries.

“The first 20 minutes he was defending his degree of engagement with Congress,” one GOP member said. “I don't know if someone criticized him. He went on and on about that.”

“He also complained about not having enough staff and how that's more difficult for him,” the lawmaker added.

Trade subcommittee ranking member Bill Pascrell (D-NJ) said Lighthizer “tried to build confidence with us that he will consult closely with Congress going forward.” Pascrell added that he would “continue pressing” the USTR “for positive results” on labor and other priority issues in the talks.

Panel chairman Kevin Brady (R-TX) stressed in a statement after the meeting that “Congress has the Constitutional responsibility over trade – and we’re committed to fulfilling our duty in close coordination with the Administration.”

Brady said Lighthizer shared his panel’s commitment to modernizing NAFTA “and other trade agreements to make sure Americans get the best deal possible.”

Rep. Ron Kind (D-WI) told reporters he was “not too happy” with the status of the NAFTA talks and added that there was “still a lot of work to be done.”

Kind also took issue with Lighthizer’s approach to the talks, faulting the USTR for his insistence that the size of the U.S. market is enough leverage to “muscle anyone to our desire.”

“The ambassador seems inordinately fixated on GDP, relative GDP strength between the countries,” Kind said. “Since we're the biggest dog on the block, everyone should just come to all our wishes. I think that's a lousy negotiating tactic to have because these are always going to be a product of give and take and back and forth and we need to create win-win situations. But he thinks since we've got the biggest GDP we can muscle anyone to our desire.”

Lawmakers said Pascrell brought up a recent letter his caucus sent to Lighthizer asking for stronger labor language in a new NAFTA and making Democratic support for a new deal contingent upon structural labor reforms in Mexico.

Rep. Sandy Levin (D-MI) said he “expressed very clearly to Mr. Lighthizer that I was more than hopeful” that the USTR would put forward a new labor proposal at the seventh round of NAFTA talks later this month. Asked whether he won any commitment from Lighthizer that a new proposal would be tabled in the talks, Levin said “we’ll see.”

“He indicated what his position was and that it was important. And we're going to take steps to really outline that before and during the Mexico City [round],” Levin added.

Sources close to the talks said USTR has indicated to Congress and stakeholders that new language would be crafted to fix language in the May 10th Agreement that resulted in the U.S. losing its first-ever labor dispute against Guatemala last year. They said USTR was also going to ask for a labor consistency plan from Mexico.

Mexican officials, however, have made clear that such an approach is not feasible. “We were not amenable to the idea of a consistency plan in the TPP, and we are not amenable to any possibility of having a consistency plan in NAFTA,” a source said at the sixth round of talks in Montreal last month.

Kind said Lighthizer on Wednesday was “kind of differentiating the negotiating stance between Mexico and Canada right now.”

“He thinks more progress has been made with Mexico and that there might be a way to wrap things up with them and just maintain ongoing negotiations with Canada at that point,” he added. “He would not be dissatisfied with just doing a bilateral with Mexico and continuing negotiations with Canada.”

When pressed for details about whether the USTR intended the negotiations to result in two separate agreements, Kind said “you probably should ask him better to find out what his train of thought is.”

Maintaining NAFTA’s trilateral structure has been a focus for the big four trade leaders on Capitol Hill since the early days of the Trump administration, when administration officials held open the possibility of negotiating two separate bilateral deals.

A draft notice to set up a 90-day clock before negotiations could begin was rejected last year by congressional staff and lawmakers because it did not clearly spell out what the structure of the talks would be, and what objectives the administration was pursuing in reopening the agreement.

USTR insisted then on having the “flexibility” to proceed trilaterally or with bilaterals but clarified later that it was seeking to maintain the existing NAFTA structure.

An approach to wrap up a deal with one country but not the other is unlikely to be agreed to by Mexico or Canada and could jeopardize Democratic support for any new NAFTA deal, sources close to the talks said.

Levin disputed the idea that talks with Mexico had advanced more than those with Canada -- acknowledging that while the administration has “disagreements with Canada,” Mexico was “moving backwards” on labor, the top issue for many Democrats in the negotiations.

Pressed on how wrapping up an agreement with Mexico was realistic given the lack of progress the countries have made to date on labor, Levin said Lighthizer “didn't say that we could wrap it up with Mexico under the present circumstances.”

“So I don't see how when they're moving backwards on this key issue with Mexico that it makes much sense to talk about a separate agreement with Mexico,” he added.

Sources told Inside U.S. Trade the Wednesday meeting was not the first time Lighthizer brought up a potential bifurcated deal. In previous closed-door meetings, they said, the USTR has talked about a potential bilateral with Mexico if Canada maintained its current negotiating stance and did not come to the table and engage.

But those sources also pointed out that Lighthizer was aware that such an approach was not realistic, saying it would nonetheless provoke Canada, and that the USTR likely floated the idea on several occasions to ensure the message got out and reached the Canadians.

A USTR spokeswoman later clarified that “the U.S. objective has been and remains renegotiating and modernizing NAFTA on a trilateral basis.”

“It is our hope that the United States, Mexico and Canada can successfully complete an agreement that benefits workers, farmers and ranchers from all three countries,” the spokeswoman continued. “With six rounds of renegotiations completed, some progress has been made, but not nearly enough. As we said in Montreal, we all must redouble our efforts at this crucial time.”

Kind, an ardent supporter of the Trans-Pacific Partnership, also criticized the administration for what he said was a lack of focus on the Asia-Pacific region. He noted the just-concluded TPP deal that the remaining 11 countries will sign next month and suggested that agreement will impact the relationship between the U.S., Canada and Mexico.

“What I think Congress needs to be aware of is TPP is moving forward without us. That will define the trade relationship between Mexico and Canada now. Not NAFTA,” Kind said.

“And we're outside that agreement. Trying to figure out a way for this administration to save face and figure out how we get back into that game of TPP, and the fastest-growing economic region in the world. They're nowhere close to that mindset.”

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INSIDE TRADE: Lighthizer defends engagement with Capitol Hill in Ways & Means briefing