The Role of Congress in Trade: A Discussion with Congressman Blumenauer
May 8, 2019
WILLIAM ALAN REINSCH: Well, good morning, everybody. Good morning, online people, since we always seem to have more of those than we have live people – which has led me on occasion to suggest maybe we should just scrap the event and go to the online thing. But then, of course, if there were no event – (laughs) – there wouldn’t be any online thing. So thank you for coming and allowing us to put on this show for all the people that are watching on their office computers, one of whom I’ve already heard from, who sent me a question.
(Audio break) – it just seems to me that – you know, I spent 20 years on the Hill, and I’ve watched a lot of people come and go including the four that I worked for. And I think Earl Blumenauer’s example of what I think really people should want and deserve to get in their public servant – someone who cares about people, someone who cares about the issues, someone who is willing to think about the issues, look into them, and try to come to rational solutions.
We all may or may not agree with where he comes out on a given issue. But I think people who – voters, I think, have to appreciate the work that goes into simply being sane and trying to work with others to produce competent solutions. And I think he’s a really excellent example of that.
He’s devoted his entire career to public service, first in Oregon in the legislature, in the Multnomah County Commission, in the Portland City Council, where he was commissioner of public works. He has a long record on infrastructure issues. After he was elected to Congress in 1996, he served for a long time on the Transportation and Infrastructure Committee and has been one of the leaders in Congress on his side of the aisle in urging a significant infrastructure program in this country; not yet successfully urging, but I think he’s led the way to get this on the table. It continues to be a – I know it continues to be a very strong interest of his.
Having said that, I’ll say we’re not here to talk about that, so – because he also, as of January, serves as the chairman of the Trade Subcommittee of the Ways and Means Committee, which is what we are here to talk about. And it is, I think, also a reflection of his longstanding interest in trade and international economic policy issues, which is an area that I think he’ll probably tell you is important to his constituency, as well as to the country.
So I’m delighted he’s here. I think – I hope he’s going to tell us some interesting things. What I plan to do is, having introduced him, turn the podium over to him. He’ll make a few remarks, and then he and I will have a conversation for a while. I’ve got some questions that I want to ask that maybe you want to hear the answers to. And then we’ll leave enough time at the end for questions from you guys as well.
So with that I give you Earl Blumenauer. (Applause.)
REPRESENTATIVE EARL BLUMENAUER (D-OR): Thank you, Bill. I’ve been looking forward to an opportunity to have a conversation with you. I’ve been learning from Bill for 20-some years in Congress and look forward to the conversation here today.
I have spent a fair amount of time in Congress sort of puzzling over how difficult a number of these issues tend to be. We – export controls. The United States is the only major country that doesn’t have a sanctions policy. And, frankly, in terms of so much that we’re doing in international trade, we make it harder, I think, than it should be.
I represent a region that is intensely dependent on trade. Lots of agricultural product moves through the port of Portland. We have the presence of Boeing, Intel, a couple of shoe companies, Nike and Adidas. It has made a big difference in our community.
At the same time, I probably represent a more intense group of trade skeptics. I represent Portlandia, after all. And my tenure has been marked by having an opportunity to listen to that byplay and try and participate in it.
I am hopeful that, over the course of the next two years, the work that I do with the Trade Subcommittee to help encourage a different – help be part of ushering in a new era for dealing with trade in Congress.
Since I’ve been here, I have been disappointed in terms of the tenure. I’ve been disappointed in terms of the failure of our country to aggressively monitor and enforce trade agreements. I was one of those people that walked the plank with China with the WTO. I was under the impression that the United States would be more aggressive in terms of trying to use that leverage to influence what China did. I have been disappointed that subsequent administrations have downplayed that.
I have been frustrated that, in terms of enforcement, the Peru Free Trade Agreement had provisions dealing with logging in the Amazon Basin and changes that Peru agreed, and sadly we’ve watched them not comply fully and we’ve watched administrations fail to move forward. That was – I’ll go to my grave convinced that if the Obama administration had been willing to step up and deal with enforcement with illegal logging in Peru, it could have helped change some of that discussion when we’re dealing with TPP, and the skepticism about whether the agreements would be worth the paper they’re printed on.
We’re in a situation now where Trump is the great disruptor. He has changed some of the attitudes that people have, I think on both sides of the aisle. NAFTA 2.0 scrambles some conventional thinking. It’s fascinating for me to be involved with conversations with labor union presidents who will kind of acknowledge that they don’t want to withdraw from NAFTA, that there is an acknowledgment that NAFTA 2.0 actually represents an improvement. It’s not that they’re comfortable with it, it’s not that they don’t want to make changes, but it’s a different, I think, dynamic than we’ve seen in the past. I find no small amount of irony that NAFTA 2.0, the foundation is what was negotiated with TPP, with a couple of – couple of tweaks.
We’re in the situation now where we’re looking at – we’ve agreed as a committee that there are four major areas that we want to concentrate on. No surprise: enforcement, access to medicine, labor, and environment. Having some interesting conversations with Mr. Lighthizer, I think Democrats in the main have confidence that he is indeed attempting to work with him. He spent – I’ve seen him more on Capitol Hill than I have my colleagues. Every time I turn around he’s meeting with freshmen, or he’s meeting with left-handed people from the Midwest. There is nobody that is interested in this that, it seems to me, Mr. Lighthizer is not willing to sort of sit down, make his case, listen to them, and represent his interest in trying to move to an agreement.
I am – and having the backdrop of what’s happening with China I think is very interesting, where the drive-by tariff policies of the administration are vexing. The notion that we are going to somehow punish some of our closest allies, confusing them and talking to the Canadians – I have no good answers. I just feel like I need to be apologizing. It’s really frustrating. But in the final analysis, I think more and more people are appreciating that having sound trade agreements actually can be vehicles to achieve objectives that historically have been identified with people who have been opposed to trade.
The notion that many in the EU have labor and environmental protections that are as strong or stronger than the United States, the notion that somehow Tennessee would punish Volkswagen, threatening to take away their subsidies, because they had the audacity to have the same sort of worker council that they have in Germany. I mean, that seems, to me, to just sort of fly in the face of not just reason, but in terms of how the trade agreements should work.
I am looking forward this year to taking our time to try and get it right. Speaker Pelosi in the past has indicated that she has no qualms about pulling the plug. We saw that with the May 10th agreement, just going to suspend what was going on with TPA. This is a construct of the House. We’re not going to be bound by an artificial time frame. I’m quite confident that she and the Democratic leadership are willing to do that again, and I think appropriately so. There’s no advantage for us to rush this through, to paper over divisions that we have, when there’s an opportunity perhaps to strengthen the agreement and strengthen the consensus.
And I think in the long run, we are better off doing that, because the international situation is changing dramatically. Trade patterns are shifting more to the developing world. The rest of the world is not waiting for us. China went ahead with their version of TPP as we pulled out with their 16 countries that are not likely to have environmental and worker protection stronger than what we had. The other countries have moved forward on their own and my wine producers in Oregon have noticed it. I’m hopeful that this will be an opportunity for us to do a bit of a reset, to be able to have a different sense of what we’re going to do with these agreements, and to work with Mr. Lighthizer, who I think is sincerely interested in reaching an agreement and accommodating us where we can.
Bill, I’m happy to ramble on. I talk for a living. But I’m looking forward to our conversation.
MR. REINSCH: OK. I’ll get out of the way. You can sit down.
I should begin by saying something that I forgot to say in the beginning, which is – (audio break). And we did invite Mr. Blumenauer’s counterpart, Congressman Buchanan – the ranking member of the subcommittee – to join us for this, but he was unable to attend. So we are not – we are this morning not bipartisan, but not because we didn’t try.
REP. BLUMENAUER: I’m happy to channel my inner Vern Buchanan. (Laughter.) And I will say that the conversations I’ve had with Vern – and we’ve done a lot of work together. And I think there’s some real opportunity for us as a – as a subcommittee to have some very productive bipartisan conversation, and we’re –
MR. REINSCH: Have you talked tomatoes with him at all, Mexican tomatoes perhaps? (Laughter.) Well, there’s – actually, that’s in the news today. But we don’t have to get into that. That’s, I think, not – probably not an Oregon product.
Let me start – I want to drill down a little bit on USMCA, but let me start with sort of a 40,000-foot – or maybe I should say 20,000-meter – (laughter) – issue. Talk to us a little bit, if you would, about what your agenda is for the committee beyond USMCA, beyond NAFTA. I mean, that’s going to take up a lot of time, clearly, but it’s not going to take up all the time. What are your plans? Are you going to have hearings on other things? Are you looking at China? Are you looking at WTO issues? What do you think you’re going to get into?
REP. BLUMENAUER: Well, I am hopeful that the committee’s going to be able to do some – (audio break) – in America. I think what I’m – you know, sort of the post-Brexit, we keep thinking that there will be some sort of resolution in or out, but that sort of scrambles the playing field. And I think there’s real interest in what that area’s going to look at.
I have a personal interest dealing with agricultural issues. We sort of got hung up with the previous Doha Round. Part of what’s going to be necessary if we’re going to save the planet, feed the planet, as well as being able to have some breakthroughs on trade, is dealing with agricultural policies.
The United States is one of the offenders. Think sugar, for instance, which has been a lot of fun over the years. Cotton; I mean, we’re – we are subsidizing production of cotton in the desert on both sides of Highway 10 in Arizona and we’re paying Brazilian cotton farmers for the privilege of violating our commitments. I would – I would love to be able to spend time exploring that as well.
But for the – in the short term it’s China and it’s NAFTA 2.0 that are front and center.
MR. REINSCH: Let me – I was tempted by – your comments about Brazil were intriguing. Just yesterday I gave a speech and I was astonished when somebody in the audience asked me a question about the WTO Appellate Body, which is not what you usually get in an audience of people largely in this case from various parts of the South and West, businesspeople. And I ran into him afterwards and sort of said to him, where did you come up with that question? And he was on the losing side of the cotton case.
REP. BLUMENAUER: OK.
MR. REINSCH: So he knew – he knew the issue very well and knew exactly what we were paying both sides in that issue. It’s a bizarre outcome.
Anyway, you’ve partly answered the next question, but let me ask it anyway – in your comments about Congressman Buchanan. I sense from what you said that you have some optimism about being able to approach some of these things in a bipartisan way and be able to work successfully with the other side. Is that right?
REP. BLUMENAUER: Well, yes. I mean, I – and throughout my career, I start from a perspective of seeing if there is somebody on the other side that I can work with. And almost always, that’s the case. All the legislation I introduce is bipartisan. The trade agenda has areas of agreement. It has not – it has – we, I think, made some progress when we were working, for example, with the trade promotion authority. That I worked with Senator Wyden when we were doing that in the last cycle. We worked well with Paul Ryan and Kevin Brady. Many of these issues, I think, we ought to at least attempt to avoid making them partisan.
I think the advantage here for all concerned, as I mentioned the fact that this has scrambled some of the thinking because of what’s happening with Trump, I continue to think that there are people who are Republican on our committee that – and not just on the committee, but people who are concerned about the impacts of tariff policy, who are – who represent interests in their own districts where issues that in the past have been – have had a partisan hang-up really don’t need to be. Things like environment and labor standards – the work that I’ve done with businesses in my state, that’s not a big deal for them. They don’t want little fingers stitching soccer balls. The reputational problems and, frankly, if you’re in the areas of having stronger environmental standards, it actually oftentimes improves the production process. These are things that I don’t think we have to get hung up on.
MR. REINSCH: And I would think that there’s an area there where the subcommittee can have a role in laying that out and sort of educating both the Congress and the public about how some of these things could be areas where business and labor interests could converge.
On getting back to USMCA, I have to say I was struck – I don’t know if this means anything – but there’s this interesting vocabulary difference. You call it NAFTA 2.0. The president calls it USMCA. The Canadians call it CUSMA. The Mexicans call it MUSCA. Does this make any difference? Why do you call it NAFTA 2.0 when the president says it’s USMCA? I mean, we went through this with trade promotion authority and fast track. Does this make any difference? Do words matter?
REP. BLUMENAUER: I think – I think words matter. And it was – it was, I think, important – it’s like most favored nation. I think words matter. I think being – I think the roots here of NAFTA 2.0 and the history of NAFTA, and what we’re doing with some improvements on it, I think it’s important to make clear that what we are talking about now has very little resemblance to NAFTA 1.0. I think it’s widely acknowledged that there were serious deficiencies with NAFTA. I wasn’t in Congress at the time, but unenforceable environmental sidebars, what happened in terms of Mexican labor actually having inflation-adjusted wages after 20 years that are actually lower than when we started. I mean, I think these things do trouble people. It was – it was a flawed agreement, which I have heard, you know, sort of the theory built up in terms of people being really disappointed with its impact.
And the fact that the proponents of NAFTA 1.0 were slow acknowledge what that was. It’s only been recently that I think there is a broader appreciation of the problems that are associated with it, the environmental disaster along the border, and not having provisions that have been effective.
So for me, that linkage to NAFTA 2.0, I think, is important both in terms of the roots and the differences going forward. And I’m not necessarily going to go along with the president’s branding, although that’s his business. I know we’re finding out that maybe his business was not as successful as he would lead to believe.
MR. REINSCH: (Laughs.) Yes. Well, that one’s ripped from the headlines. That’s certainly true.
Talk to me for a minute about one of the issues that you flagged on NAFTA 2.0. I think the labor, environment and enforcement issues have been well and frequently discussed and are entirely expected, I think, from the Democratic side.
The pharmaceutical issue, the access-to-medicine issue, is an interesting one, partly because you’ve made some public comments about it in the past. And I – a lot of people noticed that in the most – that there – the most recent letter that the committee Democrats sent reflected non-unanimity on this particular question.
Can you talk a little bit about that issue, and particularly tell us why you think that – or why the people that think this believe that the provisions of the agreement have an impact on drug prices domestically? Or is that not the issue?
REP. BLUMENAUER: Well, I will say that getting 21 of 25 to agree to the letter is not insignificant, including the committee leadership, a broad range. There are four people who didn’t. But in part some felt that it went too far and some felt that it didn’t go far enough. So that’s – there may be a sweet spot.
The pharmaceutical issues are a flashpoint in this Congress. It is – the president campaigned on reducing pharmaceutical prices but has blinked when it comes down to it. Pharmaceutical interests are extraordinarily powerful. I mentioned that we started the – with NAFTA 2.0 using the template of TPP. And we were moving with TPP to the eight- and five-. It wasn’t, you know, 10-year exclusivity or 12-year that was embedded in American law.
You talk to, as I have as recently as last night, with the Mexicans, with the Canadians, this was forced upon them. They don’t want it, need it, don’t necessarily agree with it.
MR. REINSCH: But they won’t agree to reopen the agreement to change it. Or will they?
REP. BLUMENAUER: Let’s see what happens. And let’s see what other areas can be explored. I mean, this is something Mr. – I’ve been clear with Mr. Lighthizer that I have trouble with the 10-year period of exclusivity. I think it should have been in the direction of where we were with TPP. It does set an expectation about what we’re going to do domestically with other pharmaceutical. It may not narrowly force compliance, but it is – it does set – definitely set an expectation. It’s used as a rationale.
I am – I am sort of frustrated that we are not and we have not been able to make more progress on the committee. This is an area where we’re going very slowly with drug pricing. And this is an area that I hope more attention is directed. I think it’s going to heat up as we get even further into the presidential election cycle, which I feel has gone on for about eight years now and just ready for it to be over, while there are still some people in Congress who aren’t actually running for president.
But I think this is an important point of departure to be able to push back and to be able – it also illustrates how narrow the participation is with some of the advisory mechanisms. Now, I – the business community should not apologize for being well organized and doing their job, but I don’t think we’ve been able to have the same degree of access and participation and involvement in some of the other areas like concern with access to medicine.
MR. REINSCH: Just for the record, you’re not running for president?
REP. BLUMENAUER: No.
MR. REINSCH: OK. All right. (Laughter.)
REP. BLUMENAUER: No.
MR. REINSCH: There. You heard it here first.
REP. BLUMENAUER: To the great relief, I would say, of many people. (Laughter.)
MR. REINSCH: Last USMCA question. Talk to us a little bit about timing. There’s no clock right now. There will be if – once the bill is submitted. If it’s submitted, the clock starts to tick. But all of the things you’re talking about have to be worked out, we hope, before that happens, which means now. I mean, the ITC report has arrived. You know, things are moving along. Is this something that’s going to wrap up before the August recess this year? Is it going to bleed off into 2020? What do you see happening?
REP. BLUMENAUER: I think if it bleeds off into 2020 it bleeds off into the next Congress and the next administration.
I think as a practical matter we’re not going to be rushed. These are areas that we think there’s some productive discussion to make. Let’s see what the tolerance is for getting agreements, modifications, better understanding. Rushing the SSA (ph) up is – would be a mistake, and I shared that with Ambassador Lighthizer. We’re going to have a hearing with him. I think it’s clear that Speaker Pelosi has demonstrated in the past that she’s not going to move if she’s not comfortable with it, and I see no evidence that she is less determined in this tenure as speaker than before.
MR. REINSCH: But I assume she’s consulting with your committee on that question, isn’t she?
REP. BLUMENAUER: There is a great deal of interaction between the speaker and the committee leadership.
I think – I’m hopeful that we’re going to see more progress in May/June. Getting into the summer it’s real problematic, I think.
MR. REINSCH: Well, on that one I think we will – we will see.
Let me turn to the other major topic certainly this week, which is China. And we’ve seen the sudden sort of reversal of what the situation seemed to be. We seemed to be on track for an agreement and now it seems to be up in the air. Would you give the – what grade would you give the president on his China policy so far, if you had to give him a – be a professor for a minute. What would you give him?
REP. BLUMENAUER: I would suggest some remedial case work if I were his professor. I think it’s – I am just appalled that we are – it seems so scattershot, trade policy by tweet or by how one gets up in the morning or what – I mean, it’s just the failure to harness other allies to work with us.
I mean, China, there’s some vulnerability, I think, at this point in terms of their economy. I think there’s some expectation internally in China that they need to make some of these reforms to be competitive over the course of the next decade or so. It’s not helping them. But to have somebody who is so unpredictable I think runs against the grain in terms of the Chinese leadership. They are – they are – I don’t think they’re going to be cowed by the United States. They’re not going to want to look weak. They have their own internal pressures.
And I think that the way that the president has behaved makes it less likely that they’re going to take us seriously, that this is just sort of a one-off. This is a manifestation of one person’s personality and temporary levers of control. I just – I think it’s counterproductive. I think it undercuts what we’re doing with our allies and makes it harder to have – for us to be taken seriously in the long run.
MR. REINSCH: So supposing it all blows up and there’s no agreement, what happens then? What happens then from – what does Congress do? Does Congress do anything? This wasn’t going to go to Congress anyway. I think Lighthizer made that clear. So you don’t exactly have a role. On the other hand, there’s a lot to be said. But what happens to the economy? Or what happens – what happens if it all falls apart?
REP. BLUMENAUER: Well, part of what the president appears to track his personal success deals with things like the stock market. And I think it’s going to take a hit, to say the very least.
MR. REINSCH: It did yesterday.
REP. BLUMENAUER: But part of this new normal, the gyrations that we see, I think people take that less seriously in terms of how they – how they evaluate their own behaviors. I think it’s unsettling. I think it’s going to make people be leery. But I think it’s losing some of its shock value. I think there may be things that are shocked in terms of what Congress does. There’s, as you know, bipartisan interest in sort of reining in the ability to inflict 232 tariffs. There are – the more that we have this uncertainty and erratic behavior, if it all blows up I think it gives license to some people to at least advance adjustments in policy that normally we would not be seeing.
MR. REINSCH: Well, on that – I’m glad you brought up the 232 question, which is an interesting one, because, as you note, proposals have been introduced in both bodies to rein it in some different ways. Do you think those are going to move? Is this all talk, or is there a serious effort here to actually pass something and send it to the president?
REP. BLUMENAUER: I think that will depend in no small measure on what he does going forward. As you know, there’s some strong sentiment – like Senator Grassley and others. And there, I think, may be interest to try and craft something more narrowly that has less impact on our allies. You know, ironically, China has not been hurt much by the pain that we’ve inflicted on Canada, for instance. It is – I think it’s possible that something will move to make the – adjust in that area. There are certainly strong feelings, right, some of our friends with the steel workers, for instance, that it’s made a difference for them. And they have a very strong case to be made that the Chinese have really hammered them unfairly, and that something needs to be done. But working to see if there’s some way to narrow the impact so that it helps the people who need to be helped and not shield China is something that I think will be explored.
MR. REINSCH: As you’ve commented, Senator Grassley has been outspoken on this particular subject, and has linked it to the NAFTA bill. I haven’t noticed House Democrats saying much about that. This is not on your agenda for a must-item in the NAFTA negotiation, is it? Or is it?
REP. BLUMENAUER: I think our friends in the Senate are taking the lead on that. We will watch. There may be things that we can do to adjust going forward. It is – it is a – it is clear that the president’s notion that tariffs are – somehow impact other people and not consumers and American business is just flat wrong. And we’re watching increased pain and frustration. And I think it’s going to have more political impact as this drags forward. People are willing to give him the benefit of the doubt perhaps in some of the Trump country, but I think that – their patience is wearing thin. And some of these things – you know, there are other people in the world that produce soybeans. And being viewed as an unstable partner, it could be tough to get some of those markets back. And people understand that.
MR. REINSCH: Yes, I think that, I think, relates a little bit to the China problem that we’ve been discussing because the president’s advisors have said, you know, short of short-term pain for long-term gain. And you’ve talked about the pain. The pain is obvious because it’s in the short term. We now may facing – may be facing the possibility of short-term pain and no gain if there’s no agreement. It seems to me that creates a political opportunity for your side of the aisle, not that you would be inclined to exploit that – stoop to that, no.
REP. BLUMENAUER: I don’t think any of our people would. But it’s worth noting that we have inflicted a lot of pain on a number of people. And there were some important objectives, I think. I don’t always agree with the tactics that have been used by the administration, but being rigorous in terms of protecting American interests with intellectual property, the corrosive impact of state-owned enterprises, what prompted this whole steel explosion, being able to push China in those areas I think is important. But it – my fear all along has been that we’re going to end up here with some things that are cosmetic, unenforceable, and then we sell a lot of – you know, that they buy a lot of commodities, which isn’t a permanent solution at all and would not have been worth it.
MR. REINSCH: That was going to be my next question. You know, can an agreement really solve the problems that we’ve got with China?
REP. BLUMENAUER: No. I mean, part of it is just working through these relationships in the long term because there are other things that are caught up in this, as you know. I mean, geopolitical challenges. There is – we haven’t really talked about issues of cybersecurity. The Chinese model in terms of what they’ve done in the developing world. There they’re very aggressive. They’re very focused. They use their leverage and their resources. And it’s sobering to say the very least.
You mentioned infrastructure. I mean, I think – at times I fear the only way we’re going to get high-speed rail in this country is design/build from the Chinese and we pay them for the privilege. It is – it is indeed very sobering. And we’re not going to change this with a trade agreement. Hopefully, there are things that move in the right direction.
But part of it’s going to be an attitude on the part of the United States. I mentioned being able to use the tools that we’ve got, which we’ve been reluctant to do in the past, beyond just tariffs. We still don’t have a procurement agreement with the Chinese.
MR. REINSCH: Exactly.
REP. BLUMENAUER: Well, why are we allowing them to build on Bay Bridge with a(n) inferior product and they haven’t complied to that? Why aren’t we prepared to push back? That’s not a new agreement; that’s actually enforcing the ones we – that we’ve got and using our leverage. I mean, we are the largest market. We do have choices. And I think we ought to be a little more aggressive in asserting it.
And then, last but not least, I think we need to do our job to rebuild and renew America so that we can compete with them on equal footing, not have some of the most mediocre infrastructure in the world.
MR. REINSCH: So you’re not enamored of something that we’ve talked about just from – maybe we should – from time to time: maybe we should get the Chinese to build the wall. You know, that would kill two birds with one stone. Look at it that way. (Laughter.) All right. Enough of that.
REP. BLUMENAUER: I’ll let you go with that, Bill. You can – (laughter) –
MR. REINSCH: That didn’t – that didn’t see the light of day here, for obvious reasons.
Let’s turn to one of my favorite topics and one where we actually have a CSIS project going on right now, which is the WTO. And the administration is in the process of, from one perspective, strangling it – certainly the Appellate Body, which threatens the viability of the dispute settlement system and even some cases where we’re winning. Do you have a – but at the same time, it’s a little bit like China. At the same time I think a lot of people would agree that the problems the administration has identified are legitimate problems. So, I mean, do you see it that way? How do you think this is going to play out? Is the administration playing this out in a way that’s likely to have a happy ending, or are we essentially cutting off our nose to spite our face?
REP. BLUMENAUER: I think there’s – I think the president does not appreciate how we got to where we are today. The United States, in the post-World War II era, helped establish institutions. We played a major role that helped stabilize it, helped our enemies rise from the ashes of World War II, provided some stability. Freer trade, but in a reasonable fashion, benefited those countries; what happened with Japan and Korea, Germany.
The notion that somehow we would turn our back on institutions that we helped create, that helped usher in a sustained period of peace and prosperity, I think, is misguided; I think getting involved, make sure that the WTO functions. If there are things that we disagree with, work on it. Mobilize allies on our behalf. But isolating the United States in areas of trade and economics – the Iran nuclear deal; we’re withdrawing from Paris.
I mean, the things that matter most, not just trade but in terms of world peace and dealing with the threat of climate, all involve international cooperation. And the United States historically has been leader. Sometimes our performance hasn’t been as good as we would like, and we’re not always consistent in terms of what we’ve done destabilizing some other countries. But in the main, we’ve got a pretty good record. In the main, if the United States doesn’t exercise its responsibilities with these international agreements and with the WTO, there’s nobody else who’s going to step up and take our place. And the world is going to be poorer for it.
MR. REINSCH: Is this something where you think Congress has a role? Or are you just – advocate? Or do you see anything concrete that Congress can do in this area?
REP. BLUMENAUER: I think it’s important for us to be aware and be supportive of that international role. There are – I think the Democrats in the House are inclined to do that. I think providing the spotlight is useful. I think the more that we can make clear these international obligations and not use them as demonizing them but taking legitimate concerns and problems that people have and trying to move forward. I’m convinced that there’s no other alternative. I think there is an attitude in the House that can be receptive to that. I think there’s – House leadership is aware of those responsibilities. And I think we can help.
MR. REINSCH: Excellent.
Let’s – I’ve got a few more, but let’s turn to the audience because time is getting on.
The gentleman in the second row here had his hand up first. Please identify yourself and ask a question.
Q: Good morning. I’m Allen Abel from MacLean’s Magazine of Canada.
Wondering within your caucus if you think much of the opposition to new NAFTA is because of the merits of the deal or because it’s Donald Trump’s deal.
REP. BLUMENAUER: I would suspect there may be some residual opposition just because of Mr. Trump and his approach. But I think the concerns that people have are not Trump. The concerns people have are what’s in or not in the agreement.
I think people are deeply concerned about issues that relate to enforcement; what’s going to happen with the sort of promising development with Mexico dealing with labor standards and treatment, but four years. I mean, I understand that renegotiating all these faux contracts takes time, but it – there are people who are concerned about the follow-through. And they remember what happened with NAFTA 1.0. But from my vantage point, I think it is much more the substance of the agreement and not the personality of Trump.
Q: That’s different from what you said about China, so it’s about manifestation of one person’s personality. Do you see the new NAFTA as a manifestation of one person’s personality?
REP. BLUMENAUER: No. I think those are different.
MR. REINSCH: OK, here in the front row – second row, sorry, not the front row.
Q: Mara Lee International Trade Today.
On the environment, besides the problems of car battery recycling in Mexico, what other specifics can you point to that you would like to get addressed concretely in the new NAFTA?
REP. BLUMENAUER: Some of the border pollution, the New River, the Tijuana River. I mean, these are open sewers, cesspools. There were theoretically environmental provisions in NAFTA 1.0 that have not been helpful at all. I think $50 million or something was invested. It was one of the first conversations I had with Mr. Lighthizer on assuming the chairmanship was using the examples of these rivers. How will the NAFTA 2.0, and your understanding of what the administration’s going to do, help us address these serious problems that aren’t just on the Mexican side of the border. They’re encroaching into the United States.
Q: So you think that the U.S. needs to give money to Mexico to help them get the capacity to address it?
REP. BLUMENAUER: I think it’s an issue of negotiation. I don’t know that we need to jump to that – let’s find out what both sides are doing. And what are both sides doing in terms of the enforcement of their own provisions. And then what’s necessary for the polluters, because there are industries that – money-making industries that are a major part of this problem. How much should be the Mexican taxpayer, the American taxpayer, as opposed to people who are polluting? And I think these are areas for negotiation. I’m not opposed to investing in environmental clean-up, but I want to make sure that it’s balanced and I want to make sure that we’re not giving a pass to the people who created the problem.
MR. REINSCH: And here on the second row.
Q: Hung Tran from Atlantic Council.
I want to get back to the WTO problem. What do you think the chance is for the president to act on his threat to withdraw from the WTO, particularly in the context that the WTO panel examining the U.S. tariffs on steel and aluminum may likely rule against the U.S.?
REP. BLUMENAUER: I have no confidence that I, or anybody else, can predict what Trump will do. I think that you read these articles about the crazy uncle theory.
MR. REINSCH: That was Scott Kennedy’s column from here, by the way, at CSIS. Just a plug. Go ahead. (Laughter.)
REP. BLUMENAUER: We’ve watched at times Trump reverse his course in the midst of a televised meeting. He will change positions. I have no doubt that if he felt strongly some morning, he might try and implement that. But I think in the final analysis, withdrawal from NAFTA, withdrawal from the WTO might be a step too far, even for him. But I wouldn’t bet on it, because we’ve been surprised before.
MR. REINSCH: Uri. Hold on, wait for the mic. It’s coming around eventually.
Q: Uri Dadush with the Policy Center for the New South and Bruegel.
What is the likelihood of auto tariffs? What would be the position of the Democratic Party? I mean, I’m enormously reassured when I listen to you, but what would be the position of the Democratic Party, do you think, overall on the auto tariffs?
REP. BLUMENAUER: You know, actually I don’t know that there is a consensus position. There are people – different people, as you know, have different interests that they represent. And we’ve got a lot of churn with the family these days. There’s a lot going on. And one of the reasons we’ve tried to spend a great deal of time just meeting with individual subgroups to try and find out what they think and to raise the awareness, and to have little sessions about trade 1.0. And this is an area that I just don’t know.
MR. REINSCH: OK. Over here.
Q: Congressman, thank you for being here. Isabelle Hoagland with Inside U.S. Trade.
You mentioned productive discussions are underway on USMCA. But how has Ambassador Lighthizer given you assurances that the four areas you pointed out will be addressed? Has he presented specific solutions that you think will give the caucus confidence to support the deal?
And additionally, you mentioned a hearing maybe in the forecast. Can you please elaborate?
REP. BLUMENAUER: There have been lots of warm, fuzzy, encouraging conversations, but specifics we’ve not had a chance to get to. And that’s part of what we’ve tried to do in terms of making sure it was clear to Ambassador Lighthizer the consensus that we have with our – with our committee and use that as a – as a basis for conversation. But it has been – to this point it’s been light on specifics. It’s been heavy on commitment to work together, to be transparent, to try and accommodate, which he’s been terrific on. But I’m hopeful that we be able to shift to do a deeper dive on what it is that he really is willing to do that can be presented and we have a chance to interact with.
MR. REINSCH: OK. Way over there on the side, the third row. We have time for just a couple more.
Q: Thank you. Kat Lisaro (ph) with MLAX (ph).
I just wanted – can you elaborate more on the timing of the NAFTA 2.0, USMCA, this year, and potentially for the next administration/Congress? Thank you.
REP. BLUMENAUER: Yeah. We hope to have a hearing with Ambassador Lighthizer yet this month. But I – until we have the conversations – reference to the previous question, when we get a little deeper dive into the specifics that we’re going to be involved with, I don’t see it moving forward. We’d like to have it happen this summer. I don’t think anybody wants to spill it out into the fall and bleed into – if it goes into the next year, it’s dead in terms of, I think, being caught up in an election and being intensely politicized. The sweet spot here is the next three months to see whether or not we can actually make some progress, have some accord, and then of course get the necessary time to work it through.
MR. REINSCH: Let me follow up on the specifics question. Is it your job to give the administration specifics of what you want, or is it his job to give you specifics of what they intend to do?
REP. BLUMENAUER: I anticipate that there will be some specific feedback from the ambassador first. I mean, people are – we’re having some of those conversations ourselves in terms of what might work. But I think it’s the administration that will provide a framework that will be most productive.
MR. REINSCH: OK. Way, way in the back.
Q: Thank you, Congressman, for doing this. I’m Xian Shi (ph) with China’s Taishi (ph) Media.
So the USTR just filed notice on Federal Register saying that the tariff on China will be increased on Friday to 25 percent. So I’m wondering what’s your position on this? Is, like, Senate Chuck Schumer or Marco Rubio saying, oh, you will support those tariff raise to – just to be tough on China? Or this is not the right approach, you should just keep negotiating with China given, like, Oregon is the first – China is first – the largest market for Oregon state? Thank you very much. (Laughter.)
REP. BLUMENAUER: Get me where I live.
I am reluctant to see us continue the tariff spiral going back and forth. I would urge some moderation and see if we can work some of this out without having retaliatory tariffs. I think everybody ends up losing on that by escalating. And it’s not just the people in Oregon in agriculture or wine or bicycle components, but it’s – it is too easy a solution that has too many unintended consequences or maybe some intended consequences.
I am not a fan of drive-by tariffs. I think this sort of came out of the blue. That underscores the point that I made earlier, where there’s some doubt about how reliable a negotiating partner we are. And I think that’s important to be able to resolve differences, that people have to have some confidence with whom they are negotiating. And I would hope that there’s – that we don’t spring to – the only solution that the administration appears to have are imposition of more tariffs and triggering the cycle. I don’t think that should be the first and the last approach. And so far, I’m not seeing alternatives. And I think that’s a mistake.
MR. REINSCH: OK. Well, I have one last question here, and then time is up, and then we’ll let the Congressman go get back to work.
Q: Hi, Congressman. Brian Bradley with American Shipper.
State-to-state dispute settlement has been cited as sort of a key issue regarding NAFTA 2.0’s enforcement provisions. But the Mexican ambassador to the U.S. has said the issue could be solved just if all the parties keep their panel rosters current. Do you think that’s a commitment that could be solved through writing an aside letter between the three parties, something along those lines?
REP. BLUMENAUER: I don’t know.
Q: Is that something that you’re exploring within –
REP. BLUMENAUER: I’m happy to – I haven’t yet on this one, happy to explore it. But it’s worth doing. It’s worth exploring. We don’t want – I think this is something that should not be an area of being intractable. I think there are approaches that can be advanced here.
MR. REINSCH: Well, on that note, thank you very much, audience. Thank you very much, Congressman. Useful event. I think you said a lot of very helpful things, made some news perhaps. And thank you all for coming. (Applause.)