Rob Portman

09/12/2017 | Press release | Distributed by Public on 09/12/2017 11:14

Portman Discusses Jobs, Trade & the Future of NAFTA at Center for Strategic & International Studies

WASHINGTON, D.C. - U.S. Senator Rob Portman today delivered remarks at an event titled 'NAFTA Renegotiation: Strengthening North American Prosperity and Competitiveness' sponsored by the George W. Bush Institute and the Center for Strategic International Studies (CSIS). Portman, a former United States Trade Representative, discussed the importance of trade to jobs and our economy, his support for expanding markets for American-made products and holding countries accountable who violate our trade laws, andthe future of the North American Free Trade Agreement (NAFTA).

Portman has said consistentlythat NAFTA should be modernized and updated in order to expand market access, create more jobs, and boost wages. He has indicatedthat he will continue to work closely with the administration as they work to promote U.S. exports and protect against unfair imports by updating NAFTA for the 21st century.

Transcript of his remarks can be found below and a video of the event can be found here.

… 'It seems like not a week that goes by where there is not a headline about trade these days-and I think it's for a couple of reasons. One, I do think there is a realization around the country that we need to expand our exports. It's not always couched that way. A lot of times it's couched in different ways saying we need to bring back the manufacturing jobs that have been lost. And certainly in my home state of Ohio there is a passionate cry for that. But that's really in part about exports, because when you bring back those manufacturing jobs, you are creating new export markets overseas. I'll give you an example. When the Ford Motor Company recently decided to bring jobs back to Ohio from Mexico, many of those trucks are now being exported to Mexico from Ohio. And that's something the Trump administration has really focused on is how to bring back manufacturing jobs and in effect bring back more exports.

'We do not export in this country to the extent other countries do. It's one of our great potential opportunities to give the economy a shot in the arm, including now. Our exports per capita are somewhere between Tonga and Ethiopia-about 200 down in the list of countries. Other countries are just much more dependent on export markets than we are. So this has always been something, since Carla Hills' time to my time to today, that U.S. Trade Representatives are promoting which is how to meet that potential and take advantage of the opportunity to export more.

'So we're hearing a lot about that, and second, we're hearing a lot about unfair trade. I think we have a half dozen big unfair trade cases that are already launched or being investigated, including with regard to China on intellectual property-something that I worked a lot on when I was a USTR through the investigation we did under the TRIPS Agreement and then later a couple of cases that were actually filed with the WTO with regard to non-compliance on the laws in effect with regard to intellectual property protection. But there are other cases, too. A lot we've heard about-the steel cases that we won last summer were certainly something that got a lot of headlines back in my home state of Ohio. So trade is out there as a political issue today, as Miles has suggested maybe more than in the recent past. I will say that I disagreed a little bit with Miles on his implication that somehow the NAFTA accord was always uncontroversial and a great bipartisan effort. It was hard. And again, I think Carla can attest to this, in 1994 the agreement did not sail through. In fact, it was very difficult on both sides of the aisle. President Clinton, and later President Bush, and others had to work very hard to get members of their own party to support it. It was bipartisan, that's true, and that's changed with regard to trade agreements. The level of bipartisanship has decreased consistently since then. But it wasn't easy, it was very hard. And it continues to be hard and there's some good reasons for that. Again, my home state of Ohio being a manufacturing state that's lost jobs, there are a lot of concerns and some significant concerns.

'I think we've got to get back to the basics, and to me it's pretty simple: it's expanding exports. Both of these by the way are about leveling the playing field, you hear that term a lot. Expanding exports is really about knocking down barriers to our products. To try to evel that playing field. We're a relatively open country. Our average tariff is about 4 to 4.5 percent. Our non-tariff barriers are less than those of our trading partners. Significantly less than some of them as you know. So it's about leveling the playing field on the export side. And of course it's about leveling the playing field on the inbound side-being sure that when imports are sold in this country they're sold fairly. And a number of these trade cases I talked about are about anti-dumping or selling it below the cost, it's about subsidizing counter-veiling duties that are put in place because other countries are subsidizing exports almost as a loss leader to the United States market.

'So, that should be our focus. One, expanding exports, and two, being sure that our imports are fairly traded. In doing that, we benefit everyone. Level the Playing Field is actually law now, legislation passed last year called the Level the Playing Field Act. We came up with a very creative name. I was the co-author of that legislation and it's resulted in winning some cases that otherwise would have been difficult to win, at least in a timely way before a company in the United States finds it has to start laying off workers or even go through bankruptcy. To give them the ability to have a decision more quickly, to me, has always been incredibly important. I'm a recovering trade lawyer myself, having mostly represented U.S. companies and there's frustration often in the U.S., particularly among smaller companies that can't afford the professional help, because it just takes so long to win a case, and when you win it, sometimes, the remedy is not very effective. So we're trying to improve that with the Level the Playing Field Act.

'In this context of the pushing for more exports and ensuring that our imports are more fairly traded, I want to talk about trade agreements. I think we're missing the boat when we see our FTAs and our agreements with 20 countries now around the world as the problem. I say this with facts behind me, which is that, and this is a surprise to many people, those 20 countries with whom we have about a dozen or 13 trade agreements, those 20 countries in the United States actually have a slight trade surplus. So the notion that with a $500 billion trade deficit, which roughly are numbers from last year, that somehow our problem is with regard to the trade agreements misses the boat if you're going to focus on deficits. In the aggregate, we have a slight surplus with these countries.

'Second, and maybe most importantly, all these countries together represent about 10 percent of the global GDP. Think about it, we don't have a trade agreement with China, or Japan, or Europe. But the countries with whom we have trade agreements like Canada and Mexico comprise about 10 percent of global GDP. And yet we send 47 percent of our exports to that 10 percent of the world. 47 percent of our exports, nearly half goes to only 10 percent of the world. So do trade agreements work to knock down the barriers to trade that I talked about earlier? Yes, they do. And it goes beyond that. It goes to what kind of rules we can put in place out of market reforms that have happened in these countries. But the important thing to remember here is that when people are pointing to trade agreements as the problem, and they point to deficits as the issue, that finger pointing is misplaced when it comes to trade agreements. By the way, in Ohio, we send 60 percent of our exports to 10 percent of the world. And with regard to Mexico and Canada, together comprising of about-Mexico's about one percent of global GDP, Canada's closer to two-so we send 50 percent of our exports to about three percent of the world from Ohio. And that's because we're heavily dependent on exports including manufacturing products to those two countries.

'One out of every three acres planted in Ohio, from an agricultural perspective, is exported. Those two markets are incredibly important for our agriculture exports as well, and Ohio is about seventh in the country in agriculture so it means a lot to us. What does this mean? More exports means more jobs. Twenty-five percent of factory workers in Ohio have their jobs because of exports. So we have to be careful not to throw the baby out with the bath water, as they say, because these jobs are really important. We want them. And by the way, the jobs in these export-intensive industries pay more. So export jobs pay on average over fifteen percent more than other jobs. They have better benefits. So with regard to the health care debate ongoing and the skyrocketing costs of health care, having good benefits having a job that pays better is really important right now. With the middle class squeeze we're facing right now in my home state and others, where expenses are up and wages are flat, again a need for us to continue to ensure we have the exports that we currently have and to expand those exports. So, that's the context for me. Let's fight for a level playing field, of course, and that goes on both sides, and we need be tougher on our trade enforcement, in my view. But also let's be sure that we are properly viewing where the problem lies. And not, perhaps inadvertently, hurting workers in my home state and other states who are benefitting from this expansion of exports.

'As important as it is for Ohio, I've also been out there supporting updating NAFTA. Why? Well, it's 23 years old and in the subsequent trade agreements we've made a lot of changes. When you think about it, 23 years ago, if you had asked me or Ambassador Hills or others of us who were involved at that time on these issues about e-commerce, we probably would have looked at you like you were crazy. There was no e-commerce title in NAFTA because there was virtually no e-commerce. And so of course you need to update it for e-commerce. We can and should. As we do that we have to be sure we do it properly. I think it's importance that in a trade agreement, it's important that we exports our ideas as well as our goods and services. We believe in free markets. We believe that people can be better off with more transparency, less corruption. That's part of what we do in trade agreements, it's a very important part of it.

'Particularly in e-commerce, I've been very focused on the relationship between Mexico and the United States and Canada and the United States as it relates to what's called the Communications Decency Act and particularly Section 230. This is a special interest of mine, but it's an example of where we have to be careful. While we want to export our ideas that make sense, we don't want to export laws that don't make sense. With regard to Section 230 here in this country, under our laws, we are permitting sex traffickers to work online with immunity. I think it's inadvertent, I don't think it was intended that way. This law goes back to the 1990s as well. But there's been some discussion of promoting that legislation with regard to our NAFTA re-negotiation. So, we're watching that very carefully. We want to be sure that we are exporting our good ideas but not, perhaps inadvertently, exporting our bad ideas. The explosion of trafficking online is the reason we see an increase of trafficking in this country and we have to be sure that we have a narrow but effective way to remove that immunity to allow prosecutors to go after these folks online who are selling women, selling girls, selling boys, so that's an example I think of where we need to be careful. Again, not a trade discussion in particular but it's amazing how many things end up being part of a trade agreement.

'Digital trade we talked about. There are also other opportunities with regard to re-negotiating the NAFTA accord that are important to Ohio and to all of our states. The rules of origin is going to be something that is discussed quite a bit. There are other aspects of trade that have changed a lot since the NAFTA accord. In the subsequent agreements we focused a lot, of course, on environmental and labor provisions. Not in NAFTA. So there's an opportunity to update in that regard. And frankly in my discussions with Bob Lighthizer, who's the current Trade Representative, it has never been about withdrawing from NAFTA, it's always been about improving NAFTA. And by necessity, that means improving it for all three parties, because that's what a negotiation is about. And that example I use about labor and environmental standards, just to give you one example, is one where I think there is frankly a lot of agreement, as I understand it. So, there's some opportunities here to do some things that can improve the agreement.

'One that I think is important is that we put into the new NAFTA accord, the updated NAFTA accord, some provisions that might not apply to Mexico and Canada as much as it applies to other countries, but this is an opportunity for us to have a template that works for other countries. And I would put in that category currency manipulation. I don't believe that Canada or Mexico is manipulating their currency, I don't think that's an issue between us, but I do think based off the congressional authorization of a couple of years ago, that it's an opportunity for us to put in place some provisions that make sense as a template to use with other countries, particularly trading partners in Asia, with whom we would like to have more agreements. There's discussion, as you know, of a U.S.-Japan trade agreements as an example. These are opportunities for us to use the NAFTA accord as a way to ensure accountability with our foreign trading partners in future agreements. Not all these issues, again, directly affect North American trade, but establishing policies and bolstering enforcement abilities in NAFTA will send a message to our partners around the world.

'The result of a successfully re-negotiated agreement, in my view, is simply strengthen the North American market. Here in the United States, we can see a stronger economy that grows from that. As I said our opportunity to export can be enhanced even further. We've got an incredibly efficient work force in this country now. I look at manufacturing in Ohio as an example. It has changed dramatically since the days of the 1994 debate over the North American Free Trade Agreement. We're competitive, we have some of the best trained workers, some of the best technology in the world. Of course in Ohio, we have the best workers in the world. We really do, it's amazing to see what they're doing. We just have to be sure we give them that level playing field I talked about earlier to be able to compete. If so, they'll do fine. They'll compete and they'll win and trade, which is about goods and service going across borders to enhance everybody's ability to have more opportunities, to improve the quality of life and standard of living, is something that we have to continue to focus on as a country. So, I'm more optimistic maybe then some folks here in the room with regard to what can happen in this accord. I think it's an opportunity to update, it's an opportunity to re-establish that strong relationship that goes well beyond trade between two of our most important allies in the world right here in our neighborhood.'