The U.S. trade representative appeared before the Senate Finance Committee Tuesday on the first day of congressional hearings on the Trump administration’s trade agenda.
U.S. Trade Representative Robert Lighthizer on Tuesday expressed a strong commitment to working with Democrats on any changes to the U.S.-Mexico-Canada Agreement (USMCA) that might be necessary for the agreement to pass Congress.
For instance, USMCA provides a 10-year data exclusivity period for development of biologic drugs, and if that language were to prevent Congress from passing legislation to make drugs more affordable, the issue should be corrected, Lighthizer said during a Senate Finance Committee hearing.
Sen. Debbie Stabenow, D-Mich., expressed concern that USMCA language could be an obstacle if Congress acted to advance legislation to reduce the data exclusivity period to a shorter time frame. U.S. law currently provides 12 years of data exclusivity for development of biologics.
“You’re locking in something that I believe is going to stop us from doing what could be done to lower prices,” Stabenow said.
Lighthizer said he doesn’t believe that the language stops Congress from changing laws if it sees fit, but added, if necessary, he will correct the issue in the way that lawmakers say it must be corrected.
“We cannot be in a position where, if the United States Congress decides on changing these rules in some way, if you think it’s good to get prices down or for any other reason, if you change those, we should not be in a position where that’s more difficult,” Lighthizer said. “I think I have to satisfy you on that point, and I believe I will.”
Moreover, on enforcement of the trade agreement, Lighthizer said he would work to address any concerns lawmakers have regarding enforcement of the USMCA.
Sen. Sherrod Brown, D-Ohio, said he looked forward to working with Lighthizer on USMCA’s implementation package to ultimately include an enforcement proposal by Brown and Sen. Ron Wyden, D-Ore.
That proposal would provide for U.S. and Mexican officials to inspect Mexican factories accused of violating labor standards. It also would allow the U.S. to deny tariff benefits on goods, as well as bar their entry into U.S. commerce, if forced labor violations are discovered.
Sen. Catherine Cortez-Masto, D-Nev., said she would like to see the Brown-Wyden proposal included in any final USMCA implementation package.
Lighthizer declined to publicly endorse any specific proposal, but added he would work with Wyden, Brown and any other lawmakers to address enforcement concerns.
On the issue of USMCA’s retention of NAFTA’s state-to-state dispute settlement system, he said the U.S. requested that provision carry over to the new deal.
The current dispute mechanism essentially provides for member states to block the formation of panels once their rosters of people to serve on those panels expire.
In 2000, Mexico initiated a proceeding under NAFTA’s state-to-state dispute settlement provisions against the United States’ supply management program for domestic sugar, but the U.S. essentially blocked establishment of a panel. The United States’ roster of potential arbitration panelists already had expired by that time, and the U.S. refused to appoint new members.
The Trump administration asked that the NAFTA mechanism be included in USMCA because it preserves the United States’ ability to act autonomously should Canada and/or Mexico challenge U.S. trade laws, Lighthizer said.
Any lawmaker objectively comparing the NAFTA and USMCA state-to-state dispute settlement provisions couldn’t base a vote against USMCA on the notion that NAFTA has better state-to-state provisions because that language is the same in both agreements, Lighthizer said.
“But this is something I’m perfectly happy to work with members on and see where members draw their line,” Lighthizer said. “It was clearly a U.S. ask. It wasn’t an ask from other sides.”
Lighthizer said he didn’t want to set any deadline for congressional consideration of USMCA and added that House Speaker Nancy Pelosi, D-Calif., has been “completely fair and aboveboard and … constructive” as Congress works with the Trump administration during the USMCA approval process.
“I know, generally, what people want, and I know what we can do — I just need to get somebody that I can sit down there [with] on the other side that’ll say, ‘Yes, this is enough,’ and that’s precisely what it is,” Lighthizer said. “And the speaker is sympathetic to that, and she has facilitated that, and I think we’re making progress in that, and my hope is that over the course of the next couple of weeks, we can make substantial progress.”
In other USMCA news, 23 congressional lawmakers wrote a letter to Lighthizer Friday urging against the inclusion of “seasonality” provisions in USMCA implementing legislation.
“Seasonality, whereby certain agricultural products could be subjected to numerous seasonal and regional dumping duties at various times throughout the year, runs counter to the spirit of a free trade agreement intended to tear down both tariffs and non-tariff barriers to trade,” the lawmakers wrote. “Some fresh fruits and vegetables … simply are not available in sufficient volume from the U.S. in certain months. U.S. companies have found significant value in working with farms in Mexico and Canada to produce and export the foods that contribute to healthful eating habits for U.S. consumers.”