Ways & Means Democrats lament a lack of clarity after meeting with Lighthizer

Jun 7, 2018 Issues: Trade

Democrats on the House Ways & Means Committee are frustrated that a bipartisan meeting with U.S. Trade Representative Robert Lighthizer on Thursday did not yield clarity on range of issues, including next steps on China, NAFTA and the Section 232 tariffs on steel and aluminum.

Republicans on the panel said they too made their concerns about the Trump administration’s trade policy clear to Lighthizer during the closed-door session on Capitol Hill.

The ranking member of the Ways & Means trade subcommittee, Rep. Bill Pascrell (D-NJ), said after the meeting that the administration’s trade policy was more chaotic than clear.

“This is an appearance of clarity cloaked by total chaos,” Pascrell said. “I think [Lighthizer] sensed the frustration on both sides. I still believe he is a good negotiator if he’s allowed to do his job.”

“And we have major problems now, because we are distancing ourselves from out allies for no reason whatsoever,” Pascrell continued. “Not only in terms of the tariffs issue, that issue, but in terms of how we treat our allies compared to who we know the major culprit is in all of this: China.”

One source said Lighthizer opened the meeting by telling members of the committee that “change requires disruption.” The source said Lighthizer acknowledged concerns about the economic risks stemming from U.S. and retaliatory tariffs, but said it was clear that the USTR “would not be swayed on anything.”

That source added that complaints about “trade chaos” and what many lawmakers see as the lack of a clear trade strategy came from both sides of the aisle, and members were dismayed at the prospect of an unproductive G7 meeting set to take place Friday and Saturday in Canada.

Chairman Kevin Brady (R-TX) called the back-and-forth with Lighthizer a “good dialogue” overall, but reiterated concerns that some of the administration’s trade actions were misguided.

“My message remains the same: Our trade practices need to hit the right target, which is China and its unfair trade practices, not our allies, and certainly not Americans,” he said in a June 7 statement. “But the Administration’s recent actions don’t achieve that goal. I continue to urge the Administration to extend tariff exemptions to Canada, Mexico, the EU, and other important partners while fixing the broken product exclusion process needed by our manufacturers and workers to remain competitive.”

Brady also urged the administration to “stay at the table” in aiming to modernize NAFTA, which he said should include a binding dispute settlement mechanism and should not include an automatic sunset provision. Lighthizer has advocated doing away with investor-state dispute settlement and the inclusion of a five-year sunset clause.

House Ways & Means trade subcommittee chairman Dave Reichert (R-WA) cited “uncertainty surrounding NAFTA” and the Section 232 tariffs on key allies as the primary concerns he brought up to Lighthizer. The tariffs, he continued, serve only to hurt U.S. consumers and manufacturers and expose “our exporters to retaliation from our trading partners,” he said in a June 7 statement. “I look forward to continued work with the Administration to modernize NAFTA, to negotiate solutions to the tariffs on steel and aluminum with our key allies, and to fix the product exclusion process.”

Rep. Ron Kind (D-WI) said committee members used the meeting as a chance to convey “the sense of chaos and confusion and uncertainty about where the trade policy is ultimately going and how disruptive this is getting for folks back home.”

“I think most members are just trying to convey to him that we get a sense of chaos here, that most of us were surprised with last week’s announcements moving forward on the [Section 232] tariffs, with no reports to Congress, no heads up, no basis for the underlying justification for doing it, but just suddenly saying ‘Alright, we are going to lift the temporary halt on it and just move forward.’ It caught a lot of people by surprise,” he told reporters following the meeting.

He added that Lighthizer did not provide clarity on issues with China and in the NAFTA talks.

“There wasn’t a lot of clarity as far as what the timing was in dealing with China,” he said. “But there was a lot of sentiment from us members that the more practical approach is forming a multinational coalition to stand up against China.”

The administration’s China policy goals remain unclear and ineffective, Kind continued.

“We are not tolerating the [intellectual property] violations, the technology transfers, the requirement for joint ventures, [but] we should do that more in a multinational setting rather than the isolated way while the administration is declaring a trade war against some of our closest friends and allies. So, if the goal here is to change China’s behavior -- I think many of us disagree with the administration’s strategy about how best to accomplish it.”

Asked whether Lighthizer gave an update on a “game plan” for NAFTA, Kind said “No, they weren’t exactly clear.”

Sen. Chuck Grassley (R-IA), following a meeting with the president and Lighthizer this week, said on Thursday that the U.S. would secure a deal with Canada and Mexico by July. Kind, however, said such a goal was “doubtful” and added that “reality” suggested “we are looking at some time next year, best-case scenario.”

Rep. Sandy Levin (D-MI) said Democrats left the meeting “feeling that there just is no clear strategy.”

“At this point there is more chaos than there is clarity,” he said. “And I think again Bob Lighthizer lays out urgency of a new trade policy but I think the Republicans never wanted one. And as to Democrats, I think it’s really not clear where they’re going.”

Both Levin and Kind said follow-up hearings and meetings were necessary.

“You just get the sense that this is shifting from day to day, almost minute to minute even,” Kind said. “But we’re going to be rescheduling another meeting because there were more questions than there was time to get answers for. So, we are going to be reaching out to him and getting another one scheduled as soon as possible.”

Levin concurred and said it was up to Brady to push for another meeting, which he said should be scheduled soon.

“As to China, it isn’t clear whether the [Section 232] tariffs are mainly a means to an end or whether there’s an effort to trying to get an effort to a global answer,” Levin said. “He says China wants to dominate -- that’s true. But at this point are the tariffs working to gather people to take on China on those issues? And in terms of Mexico he said maybe there is a window of opportunity after the election for the outgoing government to take action, but there is really no realism that that can happen.”

Lighthizer’s appearance before the committee came after Brady requested “answers” from the administration following its decision to let steel and aluminum tariff exemptions expire for Canada, Mexico and the European Union. Neal and Pascrell have also made multiple requests to hear from administration officials on the administration’s China trade strategy and other trade issues. Pascrell has repeatedly called for a public hearing on NAFTA as well.

Lighthizer’s visit to Capitol Hill also came ahead of a series of deadlines the administration is facing on trade. It has said it will unveil on July 15 a final list of Chinese products it will be subject to a 25 percent tariff following its Section 301 investigation, while related investment restrictions on China will be released on July 30. The White House has said implementation of the tariffs and investment restrictions will follow shortly thereafter.

The White House also is eyeing the conclusion of NAFTA negotiations around July 1, when Mexico will hold its presidential election, Sen. John Barrasso (R-WY), who met with President Trump this week along with Grassley and other GOP senators, told Inside U.S. Trade. At the same time, there is renewed speculation that the administration could break the talks into negotiations for two separate deals, one with Canada and one with Mexico, following comments made on Monday by National Economic Council Director Larry Kudlow.

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INSIDE TRADE: Ways & Means Democrats lament a lack of clarity after meeting with Lighthizer