[CTC] Senate Finance Republicans confront Navarro on China, talk NAFTA and bilaterals

[Arthur Stamoulis]

INSIDE US TRADE

Senate Finance Republicans confront Navarro on China, talk NAFTA and bilaterals

February 14, 2017

Senate Finance Committee Republicans and White House National Trade Council Director Peter Navarro on Tuesday held initial but frank talks about China, whether to negotiate more trade agreements or focus on existing deals, and other trade issues during the first group meeting between administration officials and the panel's GOP members.

Leaving the Feb. 14 meeting on Capitol Hill, Republican Finance panel members described the meeting as wide-ranging and generally the beginning of broader conversation on trade policy with the Trump administration. Most members said they left the meeting with something of a better idea of the Trump administration’s vision for trade policy.

Committee Chairman Orrin Hatch (R-UT), who invited Navarro and Jason Greenblatt, White House special representative for international negotiations, to come before the panel’s Republicans, told Inside U.S. Trade the meeting was “very good” but also noted that “there were some tense moments because every state has their own problems and some of our senators, if not all of them, raised their problems. So it was a good interchange.”

Several members described the meeting as a back-and-forth, with the administration seeking input rather than laying out an agenda.

The North American Free Trade Agreement also came up in discussions but administration officials offered no concrete time line for renegotiation, members said. President Trump’s representatives did, however, say that certain aspects of the deal could be improved, and that the Finance meeting could get the ball rolling on renegotiations, Hatch and Sen. John Thune (R-SD) said after the meeting.

Asked whether the administration officials signaled they would begin the process of reopening NAFTA soon, Hatch said “they really can’t until they establish this 90-day period,” and added “but this is part of that and that will get them going.”

Under the Trade Promotion Authority law, the administration has to consult with the Finance panel as well as the House Ways & Means Committee before it can notify Congress at least 90 calendar days prior to initiating negotiations with a country.

Thune, asked whether he got the sense that the Trump team would wait until a U.S. Trade Representative is in place before proceeding with NAFTA and other bilateral talks, said “it kinda sounded like they're moving forward.”

At the same time, Thune added, “they indicated that the USTR is going to be the lead, as they always have been, trade diplomat or trade negotiator for the U.S.”

Sen. Pat Toomey (R-PA) characterized the meeting as “the start of a long conversation.” He told Inside U.S. Trade that he left the meeting with a better idea of where the administration is headed on trade policy, but said he still has “many, many unanswered questions.”

One thing Navarro stressed was that multilateral trade agreements will not be pursued by the Trump administration, senators said after the meeting -- something Trump made clear throughout his campaign and has maintained since taking office. Trump on Jan. 23 withdrew the U.S. from the Trans-Pacific Partnership, and on Feb. 2 he announced that he wanted to speed up the process of renegotiating NAFTA.

Hatch has been holding out hope that TPP could be salvaged by kicking it off it as a bilateral with Japan – something he said he told Navarro and Greenblatt during the meeting. Asked about Navarro's response, Hatch said “he didn't ignore it. That's what they intend to do.”

“They’ll probably go straight to Japan; and once they have Japan other nations are going to come on board, and then they’re going to have to do the same thing over in Europe,” Hatch told Inside U.S. Trade. “Everybody wants good trade, so it’s a matter of just diving in and getting it done and we had a good discussion about it, so I felt good about it.”

Thune added that the administration officials did not lay out a time line for beginning bilateral negotiations with Japan, but said senators during the meeting stressed that talks must begin soon.

“I think the message they got was ‘start now.’ And that was kind of delivered loudly and clearly that we can't afford to wait because the longer we wait the more likely it is that China or somebody else moves into the vacuum,” Thune told Inside U.S. Trade, adding that “we've gotta get bilaterals going right away” with Asia.

He also noted that Japan represents a large agricultural export market, as do other TPP countries. Sen. Rob Portman (R-OH) said Navarro told attendees that the administration is “ready to move forward with some bilaterals.”

Overall, Thune said, the priorities laid out by the administration’s representatives in the meeting “kind of synced up with the things we want to see happen.”

But Navarro faced some pushback from members – especially from those with substantial agriculture industries in their states – on his views on China. Navarro has taken a hard line on China’s trade practices, accusing the country of currency manipulation and of policies aimed at gutting U.S. manufacturing.

Sen. Tim Scott (R-NC), who left the meeting at about its midway point, said members who had significant agriculture industries in their states had a large number of questions for Navarro on China due to the importance of the Chinese market to agriculture exporters.

Thune said members made clear that when trading partners retaliate against the U.S., agriculture often is singled out. He noted that he, Sen. Chuck Grassley (R-IA) and Sen. Pat Roberts (R-KS) – the chairman of the Senate Agriculture Committee – stressed the importance of agricultural exports in the meeting with Navarro and Greenblatt.

Thune added that there were concerns expressed about “going backward” on NAFTA and other trade agreements, and said the best way to ensure markets stay open for exports is to negotiate new trade deals.

In that vein, Scott noted that the central debate while he was in the meeting was over “whether or not we are suffering from bad trade agreements or are we suffering from not having more trade agreements.”

Scott added that there was a “short conversation” on currency manipulation before Portman departed the meeting just before Scott. That conversation, Scott said, did not delve into issues relating to border adjustments, the World Trade Organization, or whether countervailing duties are an appropriate response to currency manipulation. -- Jack Caporal (jcaporal at iwpnews.com <mailto:jcaporal at iwpnews.com>) and Jenny Leonard (jleonard at iwpnews.com <mailto:jleonard at iwpnews.com>)

 
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