▶ 0:25:54Chair Crapo: This hearing will come to order. Thank you all for joining us today for this timely hearing on the U.S.-mexico-kennett ag -- U.S.-mexico- canada agreement. Senator wyden and senator grassley and senator hatch were very instrumental in negotiating and help bring that to the finish line.
▶ 0:26:21Chair Crapo: The senate overwhelmingly endorsed this agreement 89-10, the most bipartisan vote ever taken in the senate on a free trade agreement demonstrating the broad support for the trade deals that expand jobs, wealth, and growth in the united states. Six years later we are on the road to the agreements first joint review. Or we can assess if the usmca commitments deliver as intended.
▶ 0:26:52Chair Crapo: The answer is largely yes. Overall the usmca protects american jobs, strengthens domestic manufacturing, and continues to grow the U.S. economy. For example, trade with canada and mexico supports 13 million american jobs, roughly the population of the entire pacific northwest.
▶ 0:27:18Chair Crapo: Moreover, since the enactment of the usmca $775 billion were invested into the united states from canada and mexico, which is a 50 5% increase from pre-usmca levels. The usmca propelled the united states to export 60 billion dollars in agricultural goods to canada and mexico, which represents one third of all U.S. agricultural exports.
▶ 0:27:49Chair Crapo: Is usmca a perfect agreement? No. But, no agreement ever is. For instance, I have long called for more robust enforcement of usmca commitments, including but not limited to, act biotech -- ag-biotech, digital trade, financial services, and intellectual property.
▶ 0:28:18Chair Crapo: Both chambers of commerce approved usmca with large bipartisan majorities largely because of its strong rules and mechanisms necessary to enforce those rules. It is therefore critical for the united states to ensure that all of its stakeholders, including U.S. farmers, businesses, and workers, fully benefit from the usmca.
▶ 0:28:45Chair Crapo: I appreciate and commend president, investor greer's unwavering commitment to enforce the agreement and look forward to working with them in that effort. As the usmca review process proceeds it is also wise to remember to not let the perfect become the enemy of the good. Mexico and canada are two of our most important trading partners.
▶ 0:29:11Chair Crapo: That strong partnership will continue to drive forward america's economic competitiveness. This trilateral relationship should not be taken for granted. This message is generally reflected in the 1500 comments submitted to the U.S.
▶ 0:29:26Chair Crapo: Trade representative in december as ambassador greer recently acknowledged during a finance briefing on the usmca, many stakeholders express support for the usmca and many explicitly call for the agreement to be extended in those comments. Many of those public comments convey the singular importance of business certainty best achieved by timely conclusion of the review and extension of the agreement.
▶ 0:29:57Chair Crapo: Today's hearing is an opportunity to continue conversations necessary to deliver on usmca and business certainty in the united states. I look forward to hearing what our knowledgeable witnesses have to say as we evaluate the issues underlying this first joint review.
▶ 0:30:14Chair Crapo: And with that I want to say I also -- again, I want to thank senator wyden for the work he did when he was in the leadership of this committee with senators grassley and hatch as you put this agreement over the finish line in the senate, and look forward to working with you as we try to move forward on this review process. Senator wyden.
▶ 0:30:41Sen. Wyden: I thank my colleague. He knows and we talk about often, in the pacific northwest, where we are from, this is an enormously important issue and I look forward very much to the review with all of our colleagues. I am going to start, though, by noting that the house last night voted to repeal donald trump's tariffs on canada. Tariffs imposed in spite of the usmca, and most notably without the support of congress.
▶ 0:31:13Sen. Wyden: Trump's chaotic tariffs are losing support across the political spectrum. Now the senate needs to get that legislation to the president's desk and deliver some relief to american workers and businesses as soon as possible. With respect to today's topic, let me start by talking about the facts as noted. The usmca is a good agreement that passed with extraordinary bipartisan support.
▶ 0:31:42Sen. Wyden: Senators who, as my colleagues know, had never voted for a trade agreement, and they joined forces for a bipartisan agreement here. That agreement promised to open export opportunities for american farmers and businesses, and a promise to strong standards on labor and the environment.
▶ 0:31:59Sen. Wyden: Let me tell my colleagues this morning that at some point I will be shouting this from the rooftops, but today I will be a little bit quieter, but I want people to know that without strong trade enforcement trade agreements are not worth the paper they are written on. A trade agreement cannot achieve its intended goals unless it is strongly enforced.
▶ 0:32:26Sen. Wyden: Since donald trump took office last year, his U.S. trade representative has not begun a single enforcement case under usmca. It hasn't even taken the first step. As a direct result, there are real, legitimate concerns about usmca not living up to its promises.
▶ 0:32:50Sen. Wyden: The biggest culprit is an administration and president who is more concerned with settling personal scores than putting american workers and our businesses first. If the executive branch won't do its job, then the united states congress needs to take back its constitutional power over trade.
▶ 0:33:10Sen. Wyden: I want to make it clear that I believe congress should have a bigger say on trade and tariffs and holding the executive branch accountable for actually enforcing trade deals, which is not getting done now. For the first four years after the usmca was implemented things were looking up. Trilateral trade reach 1.9 trillion dollars in 2024 come up nearly 400 billion dollars. U.S.
▶ 0:33:37Sen. Wyden: Manufacturing hit an all-time high of nearly $3 trillion in 2024. Usmca fueled over $60 billion in agricultural exports, something senator crapo and I feel very strongly about as a priority in the northwest. Finally, there was an opening in the mexican market for american fresh potatoes, which the market will show are better coming from oregon and idaho.
▶ 0:34:05Sen. Wyden: This is a big deal after two decades of unsuccessful talks. Then donald trump took office. Since then, the random slapping of tariffs everywhere insight. Havoc on our supply chains, chilled investment, and driving our allies towards our enemies. U.S. manufacturing contracted for the 10th straight time in december with slumping orders and higher input costs.
▶ 0:34:31Sen. Wyden: Exports to canada, a hugely important trading partner, fell 23%. Canada is instead strengthening its economic partnership with china, which could have enormous impacts on americans and car manufacturers. The finance committee is meeting today to talk, and I look forward to working with all my colleagues, to talk about what comes next. Early signs indicate that donald trump is considering tearing up usmca. Why would that be?
▶ 0:35:01Sen. Wyden: Yes, he wants to throw out tariff threats and bully other countries no matter the damage to national jobs, trade, or security. If donald trump wants to yell at someone for not doing their job on usmca, my own take is he out to look in the mirror.
▶ 0:35:19Sen. Wyden: The fact is, usmca delivered real wins for americans delivering rules on labor and advisement and enforcement tools with special credit to our colleagues who sat down there, senator sherrod brown, I was pleased to join him when he put together the rapid response mechanism to actually enforce trade laws. He created new opportunities for jobs, economic growth in innovative sectors like digital trade and services, another area where the chairman and I have some joint interest.
▶ 0:35:50Sen. Wyden: It strengthens supply chains and political alliances with our neighbors promoting north american competitiveness in global markets. Without you without y -- without usmca in place american alliances unravel and north american businesses, workers, farmers, ranchers are less able to compete with china. That's why usmca was backed by such a broad alliance.
▶ 0:36:15Sen. Wyden: Stakeholders across the political spectrum, from labor to business, the college professors, pushed for the passage of the bill. As was noted, 80 nine votes. You can't normally get -- I see chairman brady here. Normally you can get 89 votes here for ordering a soda. That was a big, big deal. Usmca can only reach its full potential if the U.S. enforces strong rules.
▶ 0:36:40Sen. Wyden: If colleagues think I'm getting repetitive with respect to enforcement, guess what, you haven't seen anything, because it's absolutely critical to getting this job done. Let me close by saying ustr should use the six year review to deliver for farmers and workers and small businesses, high-scale, high-wage jobs that gives families an opportunity to prosper. Give americans what they bargained for and it will take a partnership with congress, a commitment to enforcement and transparency with the public.
▶ 0:37:12Sen. Wyden: I will close by saying, I will work with anybody on all sides of the aisle in order to get a trade agreement that does those things. I yield back.
▶ 0:37:27Chair Crapo: Thank you, senator wyden. Although we cannot ever agree on potatoes, everyone knows where the best potatoes come from, we do agree on how critical enforcement of trade agreement is. That's something where I think we can make a lot of progress together. In a moment our witnesses will share their opening statements. Before that, I will provide a short introduction of each witness. Chairman brady is a senior consultant at aikn and cochair for the coalition of north american trade.
▶ 0:37:55Chair Crapo: He served as the chairman of the house committee on ways and means where he authored the tax cuts and jobs act of 2017. We thank you for that great work. And he secured the passage of the usmca. Chairman brady represented the eighth congressional district of texas from 1997-2023. Mr.
▶ 0:38:17Chair Crapo: Gottwald is a policy specialist for trade and international economics at the afl-cio, where he is an expert on the promotion of international labor standards and trade agreements and global supply chains. Prior to joining the afl-cio he was deputy director of the international labor rights forum . Mr.
▶ 0:38:38Chair Crapo: Mccarthy is president and ceo of mema, mema, which serves as the north american vehicle suppliers' voice. He has 39 years in the auto industry and previously led the automotive and industrial product strategy practice at pricewaterhousecoopers. Last but best of all, from idaho , Mr.
▶ 0:39:03Chair Crapo: Venter scott is a third-generation dairy man who along with his wife owns and operates vendors golf farms in idaho. In addition to managing daily farm operations he serves on the board of the operations for the idaho man's association. We will begin with chairman brady's opening statement followed by Mr. gottwald, Mr. mccarthy, and then Mr. vander schaaf.
▶ 0:39:36Mr. Brady: Thank you for the opportunity to appear before you today to testify to strong support of the U.S.-mexico canada agreement. It is truly terrific to be here. In congress it was an honor to work alongside you, then chairman grassley, ranking member wyden, ambassador leite heiser, now ambassador greer, to develop and secure bipartisan support for the agreement. It is the gold standard for U.S.
▶ 0:40:04Mr. Brady: Trade agreements and a signature achievement of his first term. It was viewed correctly is a major win for U.S. workers, manufacturers, services, and business and secured the unprecedented bipartisan support of 300 85 lawmakers in the house and 89 in the senate.
▶ 0:40:22Mr. Brady: Due to the smart design of zero tariffs and low trade barriers on crucial products its exemptions from tariff levies and integrated supply chains, the chair resourced across three nations, the united states is economically stronger, more secure, and strategically positioned to compete and win against aggressive foreign adversaries in the future, like china. Here is remarkable perspective.
▶ 0:40:48Mr. Brady: As a result of president trump's usmca, today canada and mexico together are now america's top customers, top investors, and major suppliers all in one. This is an unprecedented commitment to america' a success that no other countries can claim. As customers, together they buy five times more made in america products and services than any other country in the world supporting 13 million jobs. They are coming together, the largest investors in america.
▶ 0:41:18Mr. Brady: Since president trump's agreement took effect, annual investment by our two neighbors has surged 42%, approaching $900 billion last year. Investment by mexico and canada in U.S.-based manufacturing has grown nearly 20%. Investment in U.S. technology production has nearly doubled. Mexico and canada are already delivering a president trumps mission to attract foreign investment in the jobs -- and the jobs it brings to america.
▶ 0:41:47Mr. Brady: Today, they are america's most important suppliers, delivering on president trump's charge to strengthen supply chains for america's national economic security. Together, they leave the world and helping the U.S. establish a reliable, resilient industrial base that runs on nearby, trusted materials.
▶ 0:42:04Mr. Brady: The ready access to critical minerals, energy resources, and manufacturing inputs are crucial to competing globally in advance to sectors like ai, semiconductors, medical technology, and manufacturing. By incentivizing investment in north america, usmca's reducing reliance on china and other state-driven supply chains, limiting exposure to hostile or unreliable actors.
▶ 0:42:31Mr. Brady: Looking to the future, I think the most powerful economic argument for strengthening, preserving, extending the usmca is that this proven partnership ensures america can compete and win against the most aggressive foreign competitors in the world. Make no doubt the success of the usmca is a result of congress's bipartisan leadership in shaping and improving the agreement.
▶ 0:42:56Mr. Brady: The bipartisan work -- that bipartisan work is reflected in overwhelming public support with three quarters of americans today viewing usmca as good for america's economy and good for their standard of living. Usmca is clearly benefiting america, but as the chairman said, no trade relationship of this magnitude is perfect.
▶ 0:43:17Mr. Brady: The six-year review process offers important opportunities for the U.S., canada, mexico to build upon the strong, enduring relationship starting with fully enforcing existing commitments. This review and bass or light heiser assured us at the time is a critical tool to ensure increased oversight and input from congress to the executive branch.
▶ 0:43:38Mr. Brady: The usmca is the most consequential trade agreement in the world and will only grow in importance in global competition intensifies, especially from china. Mr. chairman, let me close with the question I think is at the heart of this review.
▶ 0:43:55Mr. Brady: If your country was a successful company, and america is, and you had a business partner that was your largest customer by far, your biggest investor, and your most important supplier, would you scrap the partnership or strengthen it? Especially as china prepares to pounce.
▶ 0:44:16Mr. Brady: If america wants to win, and we do, we would strengthen it, improve it, preserve the special design that works, and extend it for the longest term possible to continue to keep winning. That is what I think a successful review will accomplish. Thank you, sir.
▶ 0:44:32Chair Crapo: Thank you, chairman brady. Mr. gottwald.
▶ 0:44:37Mr. Gottwald: Good morning. Thank you to chairman crapo, ranking member wyden for the opportunity to testify on the future of the united states-mexico-canada agreement. I am eric gottwald here to represent the afl-cio, federation of 64 unions representing over 50 million workers across our country.
▶ 0:44:59Mr. Gottwald: In 2019, the afl-cio endorsed the usmca after working with congressional allies to ensure the agreement represented a substantial improvement over the deeply flawed north american free trade agreement.usmca promised a different economic model for north american trade. One based on fair competition and respect for workers rights rather than nafta's corporate-driven race to the bottom.
▶ 0:45:24Mr. Gottwald: Unfortunately, more than five years since usmca entered into force, it's clear the agreement is failing to deliver for workers in all three countries. The vast majority of workers in mexico continue to make unconscionably low wages and do not enjoy the right to organize, while american and canadian workers face unfair competition and the constant threat of corporate off shoring. As we approach the 2026 joint review, our position is clear.
▶ 0:45:52Mr. Gottwald: The agreement should not be granted a 16-year extension without major reforms.let me share a few areas where the agreement is feeling workers followed by recommendations to improve its performance. The usmca was supposed to rebalance north american trade flows and narrow the united states' is chronically large trade deficit with mexico. The opposite happened. Since usmca came into force the united states' bilateral trade deficit with mexico exploded from 120 five to $263 billion.
▶ 0:46:24Mr. Gottwald: This alarming data point tracks with an announcements by major multinationals like stellantis and john deere to close U.S. plants and offshore production to mexico. The usmca also required mexico to address its corrupt system of protection contracts where employers sign bogus collective bargaining agreements with illegitimate trade unions that don't represent workers interests.
▶ 0:46:52Mr. Gottwald: Today, protection unions continue to thrive and represent a majority of uniting -- unionized workers in mexico. The usmca labor tractor required mexico to enforce his labor laws, but there's no evidence this is happening in practice. For example, the newly created federal center for conciliation and labor registration is badly underfunded and does not have the legal authority to issue fines on employers that violate labor laws. On top of this, the mexican government has cut the budget of the newly created labor courts.
▶ 0:47:24Mr. Gottwald: Given these failures, there has been no progress on closing the wage gap between mexican workers and their north american counterparts. According to the economic policy institute, the mexican manufacturing wages under the usmca averaged $2.76 per hour, roughly 1/10 of with their U.S. counterparts are in. New challenges have arisen since usmca came into effect.
▶ 0:47:48Mr. Gottwald: For example, chinese investment into mexico has more than doubled, raising concerns that the agreement is being used as a back for unfairly traded goods to enter the north american market -- backdoor for unfairly traded goods to enter the american market. We recommend the following reforms to address these challenges. Negotiate a labor action plan with clear time-bound implementation benchmarks to bring mexico into compliance with the usmca's labor chapter.
▶ 0:48:16Mr. Gottwald: Adopt a more bold, direct measure to raise the wages of mexican workers in their export and manufacturing sector. For example, north american auto unions have recommended establishing a regional minimum wage for the auto sector to lift mexican workers' wages and help close the wage gap. Adopt measures to strengthen agreements rapid response mechanism by assuring that it addresses mexican companies refusing to bargain in good faith and reduces delays in cases that go to arbitration.
▶ 0:48:48Mr. Gottwald: Restore technical assistance funding from the department of labor to support independent mexican unions seeking to exercise their right to organize workers. Address the economics and security threats posed by china, including by adopting common border measures to address unfairly traded electric vehicles, steel, and aluminum. Strengthen the agreements of origin and expand their scope to additional case sectors like aerospace. Finally, strengthen the agreements' as weak environmental provisions and mechanisms.
▶ 0:49:17Mr. Gottwald: We agree with ustr jamieson greer that the usmca shortcomings are serious and that a rubberstamp of the agreement is not in the national interest. We strongly encourage congress and the administration to use the leverage created by the sunset clause and the joint review to insist on improvements to the agreements that delivers to workers across north america. Thank you again for the opportunity to testify and I welcome any questions the committee may have.
▶ 0:49:43Chair Crapo: Mr. mccarthy.
▶ 0:49:45Mr. Mccarthy: Chairman crapo, ranking number widen, distinguish members of the committee, thank you for the opportunity to testify on the value of the usmca, to the motor vehicle supplier sector. My name is paul mccarthy president and ceo of mema, the vehicle suppliers association. It is my honor to appear on behalf of the supplier industry, which employs over 930,000 americans, which makes us the largest manufacturing sector in the U.S.
▶ 0:50:18Mr. Mccarthy: Vehicle supplier's design and manufacture the components and technologies that make up 70% of the value of every vehicle. Suppliers have added 61,000 jobs in the U.S. since 2015. The message I want to leave you with today is that usmca is working. It's preservation is essential to U.S. competitiveness, job growth, and supply chain resilience.
▶ 0:50:42Mr. Mccarthy: Mema is grateful for president trumps vision in creating the usmca to strengthen important economic security and industrial connections. The president's strategic goal of establishing a more comprehensive and modern framework has resulted in the most stringent automotive agreement in the world. Since the agreement came into force, it has strengthened domestic manufacturing and driven growth for suppliers. A july 2020 five idc report found U.S.
▶ 0:51:12Mr. Mccarthy: Parts production increased by over $37 billion from 2019 to 20 24. The idc also predicted that additional benefits would emerge as our sector fully adjusted to the usmca's provisions. The usmca has delivered stability and I cannot overemphasize the agreement's importance for supplier operations.
▶ 0:51:39Mr. Mccarthy: Suppliers are capital intensive, are indeed driven, with long return on investment cycles and this demands certainty to support investment decisions and job growth. This is particularly true for our small and medium manufacturers. Many of them have told me that the usmca gave them the confidence to expand operations, add capacity, and hire more workers. We have seen that in states like indiana, missouri, tennessee, and arkansas.
▶ 0:52:07Mr. Mccarthy: It is driving growth from member companies and enabling them to compete and win in this highly competitive global market. Let me share two examples. First, an indiana-headquartered supplier accelerated U.S. investment since the agreement's implementation. The company established a new manufacturing center to serve the commercial vehicle market in the U.S. and mexico.
▶ 0:52:36Mr. Mccarthy: Because of the certainty provided under usmca, the company has invested over $20 million in its U.S. plants. In 2026 they will achieve a 25% increase in employment at their sentry-old U.S. facility -- century-old U.S. facility. A family owned supplier in michigan grew over 20% between 2019-2020 five, expanding production and jobs in the U.S. thanks to the agreement. The company is a net exporter and has invested more than $1 million in a michigan manufacturing facility to support this growth.
▶ 0:53:06Mr. Mccarthy: This is a player's texas plant depends on customers in mexico for two thirds of its sales. If it failed the business would shift to a mexican competitor. The usmca has strength and supply chain resilience. The itc found the U.S. dependence on imported vehicle parts outside north america fell by 25% between 2020 two and 2024. Our members truly build here.
▶ 0:53:37Mr. Mccarthy: Over 80% of mema members who supply core usmca components identify north america as the primary sourcing and manufacturing region. The usmca also gives the U.S. additional leverage to counterbalance increasing chinese influence over global trade and its power and scale in the auto industry. Lastly, mema is supportive of the administration's enforcement with respect to illegal transshipment.
▶ 0:54:06Mr. Mccarthy: Companies cannot be disadvantaged by entities that disregard the rules. In closing, the usmca has delivered what we want. More american jobs, more investment, stronger supply chains, and increased global competitiveness. For vehicle suppliers and for the communities that we support, it is a cornerstone of future growth.
▶ 0:54:28Mr. Mccarthy: Mema and our members stand ready to work with you to build on this success and we urge you to preserve usmca and provide the certainty that american manufacturers need to keep investing, innovating, and winning at home. Thank you.
▶ 0:54:43Chair Crapo: Thank you, Mr. mccarthy. Mr. vander schaaf.
▶ 0:54:49Mr. Vander Schaaf: Good morning, chairman crapo, ranking member wyden, members of the committee, thank you for inviting me to testify. I am ted vander schaaf to discuss the importance of exports, in particular the U.S.-mexico-canada agreement for my industry and targeted improvements we are counting on for U.S. dairy farmers.
▶ 0:55:13Mr. Vander Schaaf: I'm a third-generation dairy man and a member of the northwest dairy association that owns derry gold in the pacific northwest. For the last 26 years my wife and I have owned and operated vander schaaf farms in iowa where we milked just over 1200 cows. It is on this pharma we raised our six children and hope to one day pass it on to the next generation.
▶ 0:55:37Mr. Vander Schaaf: For the past decade I have served in a number of agricultural leadership roles including my current position as the secretary of the idaho dairymen's association. As a farmer and agricultural leader I want to share the importance of exports and usmca for american dairy producers and the elements that must be strengthened as the agreement enters its upcoming review. Strong enforceable trade agreements are essential to the U.S. dairy industry.
▶ 0:56:03Mr. Vander Schaaf: The united states exported approximately 9 billion in dairy products in 2025, including a record 550 9000 metric tons of cheese last year through november. Mexico and canada account for 44% of all of those exports, making usmca essential to my livelihood and millions of jobs across rural america.
▶ 0:56:31Mr. Vander Schaaf: When it went into effect in 2020, the agreement was designed to improve dairy trade by establishing new, U.S.-specific tariff rate quotas across dairy products for accessing the canadian market and by limiting harmful canadian export policies. Unfortunately, canada sidestepped some of these obligations.
▶ 0:56:54Mr. Vander Schaaf: Canada continues to administer its dairy tr cues in a manner that restricts imports by reserving the vast majority of quota volumes for domestic processors, who lack incentives to import your distributors get minimal amount of quota while retailers, restaurants, and foodservice service operators are excluded entirely. As a result, tr q utilization remains below negotiated levels denying U.S. dairy farmers real market access and undermining the agreement.
▶ 0:57:17Mr. Vander Schaaf: Additionally, canada skirted its usmca dairy export disciplines by adopting new workarounds that continue to allow the export of artificially low-priced dairy proteins, undercutting U.S. dairy processors, here at home and abroad. Looking south, mexico remains U.S. dairy's most valuable partner. Our industries frequently work together on a number of fronts to support farmers and consumers to increase consumption.
▶ 0:57:42Mr. Vander Schaaf: For me personally, losing mexico as a market would result in dire consequences for my apartment co-op. Although mexico has been a clear success story under nafta and usmca, one clear obligation remains unfulfilled. Under the agreement, mexico committed to protect the use of common cheese names like parmesan and feta, however, mexico has not fully implemented those protections for common names, putting U.S.
▶ 0:58:10Mr. Vander Schaaf: Exporters at risk. This is particularly concerning is the european union expands its presence in the market and pressures mexican intellectual property officials to restrict american usage of common names. For U.S. dairy producers, exports are critical, not just for growth but for survival. We agree it must continue, but a firm base depends on canada upholding their end of the bargain and preserving our fully open trade flows with mexico.
▶ 0:58:45Mr. Vander Schaaf: The U.S. dairy industry is counting on congress and the administration to help us fix these issues that I have laid out today and to secure a better, stronger, usmca for american dairy farmers. Thank you. I look forward to your questions.
▶ 0:58:54Chair Crapo: I will start my questions with you. Idaho's dairy industry is highly competitive and is expanding. Exports are essential and nowhere more so than in the usmca partners.yet canada 's continued failure to comply with its usmca dairy commitments limits the market access that usmca should give our exporters. You have already described this pretty well in your testimony, but frankly I would like you to go over it again.
▶ 0:59:25Chair Crapo: Described to me in your words, how does the usmca provide critical market access to the U.S. dairy industry? What are the mechanisms?
▶ 0:59:34Mr. Vander Schaaf: Thank you, Mr. chairman. I appreciate your focus and time on these efforts and the industry appreciates your work. As I mentioned, the agreement is incredibly important to dairy. Our free trade agreements with mexico enable us to move a lot of products that might not have a home. We are ever-expanding in idaho, rowing, building plants. The pacific northwest, we built a plant.
▶ 1:00:04Mr. Vander Schaaf: We are expecting a lot of those products to go overseas into mexico. They are our biggest customer. 2.5 billion dollars go directly to mexico. So, you know, on the canada front, you know, we move a lot of products into there as well. A little less, but our second largest trading partner.
▶ 1:00:29Mr. Vander Schaaf: Continental he they are our closest neighbors and it would make sense to do business with them. We have issues with how they are addressing the agreement. We think there needs to be modifications. We hope through the review process those adjustments can be made and they would come into compliance with our desires.
▶ 1:00:49Chair Crapo: Thank you very much. You have discussed this quite well in your testimony, but could you give me detail on what types of fixes we ought to put into place?
▶ 1:01:00Mr. Vander Schaaf: Canada specifically, we are looking at two issues. One of them is regarding their tariff rate quotas and how they are allocating those to their processors and retailers. It seems they will hand those out to people that basically, frankly, can't use them. Our exports never get exported because no one is requesting them. We need modifications to the language of that agreement so it will be fully utilized.
▶ 1:01:33Mr. Vander Schaaf: As well, we have issue with how canada is producing a lot of low-cost proteins that get dumped onto our market, which depresses the market for everyone. We would like additional language put into the agreement that would modify it to where they are not able to lower their costs below our costs and depress our markets.
▶ 1:01:59Mr. Vander Schaaf: Mexico, in particular with their common name cheese, we would like to see language put in that would modify that so we have the ability to keep sending our common names. The eu seems like they want to monopolize on some of these names, and we don't feel that is proper. If that would to go into effect it would greatly harm our dairy industry.
▶ 1:02:20Chair Crapo: Thank you very much. With a minute and a half I have left, chairman brady. Farmers overwhelmingly tell me it is essential to maintain the usmca as a trilateral agreement. What impact does this have in our trading relationship with our closest neighbors have at the state and local level and why does usmca matter to the north american competitiveness?
▶ 1:02:47Mr. Brady: The secret sauce in usmca, the reason it works so well for the U.S., is, one, it keeps zero tariff for most of what we buy and produce here in the U.S. it has exemptions from the other tariff levies. It is integrated.
▶ 1:03:08Mr. Brady: In the 1500 comments to ustr about this agreement, certainty and keeping that integration across all three countries was cited over and over as key to the success of the agreement.
▶ 1:03:24Mr. Brady: That integration not only creates affordable sourcing across all countries, encourages that investment, definitely into the united states but our north american partners as well, makes us more competitive, clearly come against china going forward. I think it is the key to making north american trade work for the united states.
▶ 1:03:48Chair Crapo: Thank you, Mr. chairman. Senator wyden.
▶ 1:03:52Sen. Wyden: Thank you, chairman. Mr. vander schaaf, one last question on dairy. Canada has never come into compliance with its market access commitments under the law, keeping exports, our exports out of the canadian market. Bring this home for everybody.
▶ 1:04:14Sen. Wyden: I have town hall meetings in my counties. So many farmers talk about this. Bring it home for a second. What would it mean to you and your farm if we got fully what we bargained for?
▶ 1:04:26Mr. Vander Schaaf: First of all, senator wyden, I want to go to your earlier comments about potatoes. Those are fighting words in idaho, I wanted to let you know. I am not a potato farmer but I will stand up for my idaho boys. I just wanted to let you know.
▶ 1:04:46Chair Crapo: I almost asked you that question. [laughter]
▶ 1:04:52Mr. Vander Schaaf: I appreciate your efforts in these matters. I know your long-standing work on this agreement. It has been appreciated by the dairy industry. It has benefited us greatly. To your question about how does it benefit rural communities, if we were to lose this agreement it would be devastating to our rural communities. This agreement allows many dollars to come back into the rural economics of america.
▶ 1:05:19Mr. Vander Schaaf: So, it would be no different in your rural counties or idaho' as rural counties. If we lost this it would be devastating. We benefit from this agreement. Currently 19% of national dairy production goes overseas. As we already said, $9 billion of dairy is going overseas. A lot of dots pacific northwest is going overseas.
▶ 1:05:46Mr. Vander Schaaf: Oregon specifically would be hurt very deeply financially if we lost this agreement.
▶ 1:05:50Sen. Wyden: A question for you, chairman brady. I remember putting in the hours. We would go back and forth from the senate and house putting in the time to get this done, working the trenches. That is how you get trade bills passed.
▶ 1:06:09Sen. Wyden: Six years later, president trump is calling usmca "irrelevant." saying, I quote, "it provides no real advantage to us." what do you think of that?
▶ 1:06:26Mr. Brady: Well, I will say that I think even a great country needs allies. That's how we become greater. Combining the strengths of our allies is how we become stronger. Them as well. You want your allies to be strong, not weak. This agreement is a partnership with two strong allies that have made america stronger. Certainly in jobs. Clearly in the investment.
▶ 1:06:57Mr. Brady: It has driven our economy in such a powerful way. A result of this agreement and our partnership with canada and mexico, we have weathered global recessions better than any other region. Certainly now we are seeing companies moving back, reshoring, in the U.S. and our trading partners. I look at countries like canada.
▶ 1:07:24Mr. Brady: We have a manufacturing surplus with canada. We have a services surplus with canada. But for their willingness to sell us the energy, critical minerals, uranium for our nuclear facilities, all those resources, we would have a good surplus with them as well. They are, along with mexico, our largest investor.
▶ 1:07:52Mr. Brady: Certainly, for all our states and local economies looking to sell made in america products, canada and mexico together are our biggest customers by far. I think the president, as you know, has a negotiating style that is not for the faint of heart. It can be tough and harsh. No doubt I think it causes trading partners to think about the relationship with the U.S. in positive and negative ways.
▶ 1:08:23Mr. Brady: I know in the end his goal is to rebalance trade. In a way that continues to boost the U.S. economy here. My view is canada and mexico, as those trading partners, have proven to help us compete and win here and around the world.
▶ 1:08:43Sen. Wyden: Mr. gottwald, we worked together with sherrod brown and folks who really understand across the country what this issue means to working people on really tough enforcement. I want to make sure we lock in again on tough enforcement. One of the areas I am concerned about, particularly because there is so much interest in this, it looks like the trump administration is cutting the programs that monitor labor rights in mexico.
▶ 1:09:14Sen. Wyden: Is that your assessment of what is going on? What do we need to do to ensure that we build on rapid response and go even further?
▶ 1:09:21Mr. Gottwald: Thank you, senator. Yes, the cuts the labor secretary made are really puzzling. She cut all the grant funding that supports independent trade unions in mexico, supports the government of mexico's efforts to modernize their labor enforcement machinery. That was very puzzling. It took us backwards.
▶ 1:09:52Mr. Gottwald: It is essential on supporting independent unions and mexico. Why is that important? It's critical because the unions are the folks with the eyes and ears in the factories in mexico. They know exactly what is happening there. If mexico is playing by the rules, if employers are honoring commitments. We have seen the best rapid response mechanism cases are coming from independent unions in mexico.
▶ 1:10:20Mr. Gottwald: Very puzzling and congress needs to push back on this.
▶ 1:10:25Chair Crapo: Senator cornyn.
▶ 1:10:28Sen. Cornyn: Thank you, Mr. chairman. Chairman brady, obviously you and I call texas home, a border state, and our relationship with mexico is important to our economy as well as our national security, which I want to ask about a little bit. There are bones of contention, certainly, from time to time. One of them is water. In 1944 the united states and mexico entered into a water treaty.
▶ 1:11:00Sen. Cornyn: The enforcement of that has been fraught with problems and resulted in tremendous hardship and loss of jobs in the rio grande valley. Thanks to president trump and secretary rawlins now I think we are in a better place than we were in terms of the delivery of water to our south texas farmers. How can the U.S.
▶ 1:11:21Sen. Cornyn: Use the usmca joint review process to help reinforce compliance and accountability with mexico to help safeguard texas agricultural jobs?
▶ 1:11:36Mr. Brady: Thank you for your leadership on the water treaty. This has been an issue that has been troubling for texas for decades. Your leadership, along with senator cruz and our congressional delegation, seeing mexico step forward on the agreement unleashed the water to texas, pay back what was owed in the past, working with the administration. I can't tell you how important that is to our state.
▶ 1:12:06Mr. Brady: The usmca is a huge part of our economy. We have nearly one million jobs tied to trade in texas. A large part of them are tied to mexico and canada in every community. In our state we can drive down the road and look at the acres planted for export to mexico. We can see the manufacturing plants that are selling to mexico and canada as well.
▶ 1:12:29Mr. Brady: I think here the review I think is a key role, plays a key role for congress. You hold the constitutional authority over trade, foreign commerce. This is an opportunity to work with the administration to make sure their commitments are being cap to, that this is being enforced across the board -- being kept, that this is being enforced across the board.
▶ 1:12:59Mr. Brady: Working with mexico and canada in a whole range of areas. Making sure the agreement itself is working for texas workers and manufacturers and farmers, and it is, but the point is there is an opportunity here. If you look at the list, when investor greer met with senate finance about this agreement, identify the number of areas that mexico has begun already to come to the table to stress would be helpful to texas and the U.S..
▶ 1:13:29Mr. Brady: Also, I think it's an opportunity to go beyond that to improve the agreement. Certainly for texas. Economic security, transshipment from china, investment in china, making sure that screening is done not just at the U.S. border but our neighbors as well I think is key. Infrastructure continues to be an issue. Facilitation across our borders.
▶ 1:13:55Mr. Brady: Our ag products and others have trouble going through the border crossings as -- as well. In ag and manufacturing, energy certainly.
▶ 1:14:10Mr. Brady: I was disappointed that the biden administration did not pursue strong enforcement on a dramatic energy you turn that makes good on commitments, while there was initial call on that, the U.S. really did not follow up. In an area that many members of this delegation voted for this agreement because that energy sector.
▶ 1:14:37Mr. Brady: For us, and not just energy, we sell energy equipment, transportation equipment. All has been affected by a lack of equipment. There is plenty of improvement to be made in the agreement. >> the covid-19 exposed vulnerabilities of international supply chains and globalism in a way that nothing else is done.
▶ 1:15:05Mr. Brady: Demonstrating the chinese approach of hydra motives and by your time allowed them to create a situation where we are dependent on them for a number of things, including critical mineral processing and active ingredients and medications and the like.
▶ 1:15:29Mr. Brady: But now china has figured out how to game the usmca in mexico through trend -- transshipment and foreign direct investment. What else do we need to do to prevent china from gaming the usmca through these avenues? >> that should be a priority for the review. Congress has already let ideas on what should be done.
▶ 1:15:53Mr. Brady: But there is a review, angles of origin, ways to make sure it only benefits mexico, canada, and the U.S. I think the agreement itself could not have come, the renegotiation in 2020 could not have come at a better time for the U.S..
▶ 1:16:14Mr. Brady: In this new design, and this new approach, companies have been able to move away from china, the china-centric controlled atmosphere and back. Not just nearshore to mexico and canada, but because we can work across three countries and facilitate even better, they can anchor their supply chains in america, all which positions us in a much stronger way against china going forward.
▶ 1:16:45Mr. Brady: My sense is mexico and canada are coming to the table. Not just open, but eager to work with with the shipments are stopped. Making sure there is investment screening. At the end of the day, the economic security approaches agreements in this review may be the most valuable improvement being made. >> senator tillis.
▶ 1:17:16Mr. Brady: >> Mr. vander schaaf. Dairy industry. How long -- how much do you rely on seasonal workers -- >> appreciate the question. We in the dairy industry don't have access to seasonal workers, to be quite frank about it. >> which program do you use right now are hard you supplement labor?
▶ 1:17:41Mr. Brady: >> we only have access to domestic labor, no type of imported or a foreign -- how do >>? You get people to show up? >> it is a struggle I will admit. On the crop side I'm able to use h to use h2 a labor for the farm only. On the dairy side because we are not seasonal, we don't have access to any of the age two programs -- h2 a programs.
▶ 1:18:10Mr. Brady: >> to cover dairy, but you have no hope right now. I can't imagine your label pool will grow over time. >> I am a dairyman, so I always have hope. But I would say from our prospects looking right now, it is a challenge looking forward. >> chair brady. I admired your work on ways and means.
▶ 1:18:38Mr. Brady: Back when I was speaker shortly after, we had a lot of people trying to file a lot of not really smart bills. I was inspired by the powerful committee on ways and means and congress. The only difference was it never met. When I refer to bill, I tell the member, there ain't no way and you have no means. You did an extraordinary job as chair.
▶ 1:19:04Mr. Brady: The question I have for you is not only do I think we need to update and reinforce our commitment to canada and mexico markets, but what more should we do? What should we put our accelerator on and to what extent -- Mr. mccarthy, you can chime in on this one.
▶ 1:19:26Mr. Brady: To what extent are these other tariffs -- we know the noise goes this way because the usmca exams a lot of it. To use the analogy in your opening statement that these are our biggest customers, what happens? Extending that analogy, if we continue to impose tariffs outside of that agreement, how well is our customer going to receive that over time? I get using it as a device over there.
▶ 1:19:54Mr. Brady: But for the long term, how does it make it more difficult to negotiate anything productive in the usmca? >> I think we all recognize the president's imposing maximum leverage on a number of issues. Including on trying to rebalance these trade relations. Absolutely getting that. But in usmca, those tariffs are devastating.
▶ 1:20:22Mr. Brady: Because they break up the integration that comes across the country. >> I feel like china and other players win if we don't get that right. These are our key customers. >> I agree. In the review, those exemptions that have been there in the past are no longer there. You have really seriously harmed incentive for companies to nearshore and re-sure.
▶ 1:20:52Mr. Brady: Not just mexico and canada, but in the U.S. -- >> I think that we may be making a mistake if we think all of these jobs and operations can come back into the U.S. but getting into this hemisphere and getting into some of our closest trading partners that also have similar rule of law and democratic underpinnings for their governmental systems seems to make sense to me.
▶ 1:21:18Mr. Brady: If we create more barriers, I think it will have a perverse, negative impact on on shoring or near shoring operations that we do want to bring back home. >> it does, and I think it makes it tougher for us all to achieve the president's goal of streamlined supply chains, critical minerals moving to the U.S. for a growing economy. It would have a serious effect.
▶ 1:21:44Mr. Brady: >> in 32 seconds, I don't want to make senator blackburn mad. >> first, thank you senator tillis. North carolina is a very big source of supplier jobs over 38,000 supplier jobs. One of the top 10 states in the U.S. when we speak with our members, one of the biggest whys is it fundamentally gives us those economies of scale and scope so we can compete with global competition.
▶ 1:22:13Mr. Brady: We can compete with global competitors who often have higher skill, who often may be pursuing unfair business practices. This is all about strengthening U.S. manufacturing. That is their argument about why we need to see that continuation and that certainty about the future. >> thank you. >> thank you very much, senator blackburn. >> thank you Mr. chairman. Thank you to each of you for being here. Mr.
▶ 1:22:43Mr. Brady: Mccarthy, I will stay with you. We've got about 56,000 motor vehicle parts manufacturing jobs in tennessee. I think you are very familiar and they have done a good bit of investment to communities like athens, tennessee and maryville, tennessee. We appreciate the fact that they are there.
▶ 1:23:12Mr. Brady: But as we look at usmca, one of the questions we have to ask is has this agreement increased opportunities? Has it increased competitiveness for companies, and are there changes that we should be making in order to help preserve those jobs and that ability for exports from power companies?
▶ 1:23:43Mr. Brady: >> thank you very much, senator blackburn. Tennessee, big source of jobs, one of the top five states of supplier manufacturing in the U.S. to your question, it has absolutely created opportunities for suppliers. The numbers speak to that. The idc study talked about a 12% increase in the U.S. supplier economy as a result of this. They also pointed out there is more to come.
▶ 1:24:13Mr. Brady: That our supply base, we take a long time to make significant changes because of our quality orientation and they expect further growth in states like tennessee as a result of what we have seen with usmca and how it has forced us to adapt and change and really modernize our supply chains.
▶ 1:24:37Mr. Brady: In terms of making us more competitive, what it has done is given us more resilient supply chains, one of the other findings of the itc is reduced U.S. imports from other parts of the world outside of the agreement. And I think that speaks to the overall goal that is important to our industry strategically going forward is to have resilient secure supply chains. >> I agree, thank you. Mr. vander schaaf.
▶ 1:25:08Mr. Brady: I hear from our farmers and dairy farmers in tennessee. According to our commissioner of agriculture in tennessee, are dairy farmers in east tennessee by doing about 100 $2 million in dairy product with canada. What they feel is if the canadians are not living up to their quotas, and that they have not seen an adjustment with the terror rate quotas. What are you seeing from that?
▶ 1:25:41Mr. Brady: We like exporting our ag product, whether it is beef, soy , or dairy. We are quite concerned about that. >> senator blackburn, thank you for the question. U.S. dairy sees the same thing you are seeing. I think and they don't fully live up to the agreement. That is what we are asking today, that we modify language or bring canada to the table to discuss their shortfalls. And to try and improve the language within the agreement.
▶ 1:26:11Mr. Brady: >> it is helpful to hear that you feel the same thing. When I asked the commissioner for the top issues, this was one of those. On the fact these quotas are not being fulfilled. Chair brady, good to see you. So appreciate if for your good work. In tennessee, we have four volkswagen, toyota, gm, nissan. Auto manufacturing is important.
▶ 1:26:44Mr. Brady: As I was just talking with Mr. mccarthy, supply chains are something that are complicated. Sometimes we will see with these manufacturers one of our parts crossing the border, coming back, and you've got that back and forth. Talk about how we can simplify this administrative and compliance burden that are on these companies so we are preserving that manufacturing.
▶ 1:27:13Mr. Brady: >> and I'm hopeful the review takes steps to simplify -- to really streamline that process. Rules of origin are working. It is extremely burdensome. I think what our industries are looking for is consistent interpretation across borders. An effort to modernize it, digitize, standardize it.
▶ 1:27:42Mr. Brady: Have one playbook for our companies to work. >> one set of rules for the whole ecosystem? >> yeah, -- >> Mr. mccarthy, you agree with that? >> yes, we would agree. Again, we emphasize how stringent those requirements are. They have been effective as the growth in the job supplier sector has shown. >> thank. Senator marshall.
▶ 1:28:08Mr. Brady: >> welcome to our guests as well. In my humble opinion, the usmca trade agreement has been the most important and most successful trade agreement of my lifetime. Chairman brady, it is hard to believe it was a years ago we were in mexico city negotiating, darting some eyes and crossing some teas. Maybe just briefly comment -- has the agreement on what you expected it to be?
▶ 1:28:41Mr. Brady: What would happen to rule america, texas, kansas if usmca trade agreement -- if the review doesn't go well? >> thank you for your leadership on this agreement. Kansas, like texas, is one of those states in tennessee where if you put our usmca jobs together, they would be the largest single employer in the state.
▶ 1:29:06Mr. Brady: From an economic standpoint, jobs, sales, competitiveness, there is no question the president's agreement has delivered on all of those fronts. Are there areas where commitments need to be enforced? Absolutely in the review is a perfect time for congress. And the administration joined together to improve it and strengthen it going forward.
▶ 1:29:28Mr. Brady: I think the key for manufacturing, for states like ours is to ensure the design of usmca, zero tariffs, exemptions from other terrorists, levies like 232's, the three country integration. That is what drives the growth. Certainly in your state and mine as well. I would say top priorities to maintain that design.
▶ 1:29:57Mr. Brady: It is unique around the world, really proven to be the secret sauce. Which means strengthening it. A look at ways to modernize it, including with china. But look to extend it longer-term. Because those investments are helping us. >> you probably went through the stats.
▶ 1:30:20Mr. Brady: This trade agreement before, versus, after 1.2 two 2 trillion dollars, exports from kansas, up 50%. To mexico based upon this treaty. This agreement as well. I just did a trip to mexico city. It is easy to keep a good customer than find a new one. Mexico has been a great customer for kansas.
▶ 1:30:49Mr. Brady: The great things mexico is trying to do to improve this relationship that seldom are reported in our national media, that president sheinbaum sent 10,000 of her own troops to the border to help secure the border. Turned over to us multiple drug cartel leaders. Cooperating with law and order, surely mexico has benefited from these tariffs on other countries -- so they have taken advantage in a good way.
▶ 1:31:18Mr. Brady: Tariffs on 1400 some items coming to their country as well. Chairman brady, do you feel like mexico has been a good partner in this agreement? That they are going beyond what is going across the border? >> I do. They were quick response, we have to secure the border, shut it down. We need to address the fentanyl trade. They came to the table immediately.
▶ 1:31:47Mr. Brady: Not just with proposals, but real actions. As the president has talked about trade deficits, more jobs in the U.S., more industries here. They have brought solutions to the table. It seems to me they are eager to address the president's priorities. President sheinbaum has developed a good working relationship with the president.
▶ 1:32:14Mr. Brady: And I feel they are being good partners and good-faith partners in this review. >> I think going on, there is a deficit. How can we address that? I think two opportunities are ethanol and dairy. A big challenge we have is rail. That we have maxed out the current rail system. They need to address that. But will you talk about the opportunities for dairy, more exports? Specifically to mexico and dairy?
▶ 1:32:43Mr. Brady: >> with our agreement currently in place, mexico is our greatest trading partner we can have. We can only expand on that. We have production coming online with new processors and plants. We just built a plant and dairy gold, we expect to grow our business in mexico. We are worried about the common name issue, monopolizing of those names. Like that address.
▶ 1:33:12Mr. Brady: Mexico say a wide vast canvas for us to grow. >> some of the great things about milk is the ingredients, not to mention good fats that help brain development. The protein in it which helps decrease the appetite. There's a huge opportunity for dairy. There's is a huge opportunity for ethanol going into that state as well. I guess my time has ran out. Does anybody have any insight on the ethanol part of this?
▶ 1:33:44Mr. Brady: Thank you, chairman. >> congressman brady, we have worked together on stuff like this for a long time, on usmca about six years ago. It seems to me we have great congressional input. At that time it made usmca stronger, fairer, and more stable than it could otherwise be.
▶ 1:34:14Mr. Brady: I would like to have you explain the importance of congressional consultation and trade negotiations. >> senator, thank you for your key role in developing this agreement and disagreement marking across the aisle, and the white house on it. It is proven to be extremely important to the U.S.
▶ 1:34:44Mr. Brady: The key here is we almost have a battle around the world for global superpowers and others, the economic leadership, this renegotiation could not have come at a better time for america. But by preserving those zero tariffs and low trade barriers, not perfect, but very low.
▶ 1:35:11Mr. Brady: Creating the exemption against other tariff levies and the three countries integration has repositioned us not just to grow economically, but we are in such a better position to compute against the china's of the world going forward. Those elements are critical, but I think the greatest benefit for you and me has been the growth in sales to mexico and canada. Especially in that area.
▶ 1:35:41Mr. Brady: It has been a huge win for the industry. That is up by more than 50% and growing. It is crucial to jobs. It is also the agreement has caused a surge of investment from mexico and canada into the U.S. and in missing an american manufacturing across the country. I think 42 percent, their investment in technology production in the U.S.
▶ 1:36:10Mr. Brady: Has more than doubled. They are making investments in agriculture and the supply chain as well. In some ways, I don't think that was anticipated, it would seem more jobs coming our direction as a result of the integration, low tariffs. It has really worked out from a made in america sales to new investment for american jobs in almost every industry.
▶ 1:36:40Mr. Brady: And going forward, there's no question the agreement has put us in a better position to compete against china. >> also to you in your testimony, you talked about how the usmca has strengthened the united states for supply chains against unfair competition. -- pardon me -- particularly from china.
▶ 1:37:07Mr. Brady: Could you please explain some of the chapters have protected the U.S. from unfair practices and the benefits that could result from repeating those chapters and the new agreement?
▶ 1:37:24Mr. Brady: >> what we saw in president trump's negotiation of the agreement was a major effort to improve the quality of the agreement and make sure industries in america that had blossomed since the original nafta was part of the agreement. We saw chapters in an did a trade, financial services, much better reforms and access for small business.
▶ 1:37:56Mr. Brady: But it created the foundation for companies that felt like they needed to be around the world to compete and win and we are far too reliant on china to create exactly the right incentives, along with a new tax code letter also made us much more competitive and create incentives to bring back manufacturing and research, intellectual property, the agreement at the time, along with the new more modern tax
▶ 1:38:27Mr. Brady: Code, has really driven this growth and positioned it. I think going forward, this is one of the most important benefits of this agreement to compete with competitors like china. >> I've got time to get this question in. If the U.S. were to get fair treatment for our access under the trade rate quotas, would there be additional issues you would like to see addressed?
▶ 1:38:59Mr. Brady: >> in relation to that, on top of that, we still have issues with the protein. They are producing a lot of low cost protein, that they are undercutting our market with. We would like that address as well. It has been an issue for six years and still has not been resolved. >> thank you. >> senator cortez masto. >> thank you to the panelists. Congressman brady. I would like to start with you to talk about tourism.
▶ 1:39:33Mr. Brady: As you know, tourism is one of america's top exports, accounting for over 200 billion dollars in value per year. Unfortunately, what we are seeing in nevada and across the country, because of some of the rhetoric and policies of this administration, the number of international visitors who traveled to the U.S. in 2025 fell by 4.2%. That is the first decline since covid-19.
▶ 1:40:00Mr. Brady: We have seen a particularly sharp decline in visitors coming from canada because of the trade wars as well as the rhetoric coming out of this administration. I recently introduced with senator moran the usmca travel and tourism resiliency act two at a travel working group to the agreement to break down barriers to travel and improve coordination on travel policies in north america.
▶ 1:40:29Mr. Brady: What we are asking is the trade representative is part of looking at the usmca, consider a working group that focuses on tourism and travel as well with these countries and how important it is for the united states. Do you think that this review represents an opportunity to reset and strengthen ties with canada and mexico and support U.S. services exports like tourism? >> I would hope so.
▶ 1:40:56Mr. Brady: International tourism is a big driver in many of our communities. Certainly where I live in texas. I grew up in the black hills of south dakota, international tourism from around the world was a big part of our economy. Along with the military and agriculture.
▶ 1:41:19Mr. Brady: I would hope those types of discussions initiated by congress through your constitutional authority in this review, I think that is an important opportunity. Hoping to gain back those visitors and to grow from there. We are a great place to visit. This is important to our economies and states where we rely on property taxes.
▶ 1:41:47Mr. Brady: Most visitors taxes and restaurants help offset some of that. It is a great part of our economy. I hope we can continue to grow. >> I would appreciate because of your work, thank you so much in your knowledge. I know senator moran and I would welcome any input you have with respect to creating this working group. It will be something new as part of the negotiations or renegotiations as we look at usmca.
▶ 1:42:17Mr. Brady: It is also a marker that this trade agreement and others should also have something similar. Travel and tourism. Because I think many ignore the impacts of travel and tourism to our economy. It is something important for many of our states, it creates jobs, it helps our small businesses, and it promotes the united states. Whatever thoughts you have in the future, I would appreciate. Mr. mccarthy, let me ask you.
▶ 1:42:48Mr. Brady: When the U.S. agreed to the usmca, part of the agreement we memorialized in a letter was the united states would exclude most vehicles at auto parts from future section 232 tariffs. The letters were signed by president comes former trade representative robert leite heiser, to which our current trade representative was chief. The current 200 32 imposed by the auto tariffs completely ignores these binding agreements they signed in the first term.
▶ 1:43:19Mr. Brady: I'm curious how these actions have affected business certainty, sourcing decisions and investment planning? >> thank you -- it is a concern for us -- >> thank you very much.
▶ 1:43:42Mr. Brady: We do rely on inputs to produce in the U.S., and that is one of the reasons I speak with our members, the issue talk about certainty, their number one priority is 2026, the usmca. Having that certainty going forward and having that continuity. We have incredibly long investment cycles. Three years as yesterday. Forward is yesterday for us.
▶ 1:44:07Mr. Brady: The usmca has enabled us to build secure and local resilient supply chains, has been an enabler to be more competitive globally. We did it with our board, our ceo councils, our number one priority is they need the continuation of usmca. To continue the job growth I talked about and the investment going forward. >> thank you, Mr. chairman.
▶ 1:44:34Mr. Brady: >> thank you, senator whitehouse. >> we welcome chairman brady back to congress. >> >sorry you have to be here durig these days. My questions are primarily for Mr. gottwald.
▶ 1:45:04Mr. Brady: I know in your testimony, let me start in a different place -- just in trade strategy, are lower environmental standards in one concrete used for competitive advantage against countries with higher environmental standards? >> absolutely. We talk about a level playing field for workers. The environment comes into that as well.
▶ 1:45:32Mr. Brady: >> when that field isn't level, is a proper occasion for the country who is disadvantaged to engage in other tariffs and trade consequences to balance the field? >> absolutely. It is key to maintain fair competition. >> in your testimony, you recommended extending the rapid response mechanism.
▶ 1:46:02Mr. Brady: Two environmental violations. Could you explain your rationale for that? >> yes. We see in mexico in particular, lower environmental standards provide a competitive advantage. We also see companies not compound environmental laws. Including the air and water.
▶ 1:46:24Mr. Brady: And I from facility specific enforcement approach, which has been successful under our labor chapter, could be extended to the environment to really target the bad actors and use pressure to get things fixed.
▶ 1:46:44Mr. Brady: >> if a company knows or can predict that a certain trade provision will not be enforced, will they pay much attention to that trade provision? >> no. >> for obvious reasons.
▶ 1:47:06Mr. Brady: So I hope we can get together on trying to move to a rapid response mechanism for environmental violations. It is not just republican administrations that ignore the environmental components of our trade agreements, democrat administrations have been equally negligent and culpable. And I think we should fix it.
▶ 1:47:32Mr. Brady: With respect to isds, the ability for industries to sue companies, former U.S. trade representative robert leite heiser described it as the U.S. government providing what he called political risk insurance to multinational corporations who are thinking of moving jobs and investment and manufacturing overseas.
▶ 1:48:02Mr. Brady: Is that an incentive for a company deciding whether or not to move manufacturing investment or jobs overseas to know it can have that political risk insurance? >> absolutely. Just like you described it, sds is a form of political risk. Insurance companies are able to access it without approval from either government.
▶ 1:48:33Mr. Brady: I do think it is an incentive to offshore. >> I just conclude on that by pointing out some of the really grotesque abuses of the isds system. One of the smallest and poorest countries in the world is togo, on the west coast of africa.
▶ 1:48:58Mr. Brady: Togo had the temerity to advertise on it cigarette packages that cigarette smoking was dangerous. So the tobacco industry with billions of dollars behind it pounded togo into submission with isds lawsuits simply because they had the money and togo was such a small target that they cannot weather the battering.
▶ 1:49:28Mr. Brady: It is one thing to go after the U.S. or the european union, but these abuses of the isds by industry in truly inappropriate ways just might -- is yet another reason to be rid of these isds's. >> thank you. Senator daines. >> thank you. Think about that great -- talked about god shed his grace on the.
▶ 1:50:01Mr. Brady: And we woke up this morning with an ocean on one side, an ocean on the other side, canada to the north and mexico to the south. How many countries would dreams you have that geography sitting here looking at the usmca. Very grateful that we have our partners to the north and the south. I also see this partnership through the lens of montana.
▶ 1:50:27Mr. Brady: Because in this agreement is vital for montana ag producers, for manufacturers and consumers alike. President trump was correct when he stopped to modernize nafta in 2017. Better for farmers, businesses, and supply chains in the western hemisphere. As I'm reminded, spending time in texas, the largest sport in america is laredo, texas.
▶ 1:50:55Mr. Brady: The traffic coming across that important port. I've heard quite often that usmca created businesses and investment certainty for companies who sought to get out of east asia. This has been a key driver of innovation and growth both here and nearby. Increased trade, mexico has been crucial for montana, which has grown steadily since the usmca was ratified.
▶ 1:51:27Mr. Brady: In fact, canada is montana's most important trading partner. We share a border with canada accounting for nearly half of our exports and almost all of our imports. Farmers use fertilizer tomorrow barley that goes to mexico, which comes back is imported beer. Manufacturers use imports from both countries for value-added industrial processing. Our supply chains are interconnected. If montana producers are better for it.
▶ 1:51:56Mr. Brady: However, president trump and ambassador greer are right. To point out there is room for improvement for the current agreement. The joint with you is not -- is an opportunity to address issues discrimination against montana, electricity exports to alberta. Improper digital trade regulations. And strengthening rules of origin so usmca benefits only flow to member countries.
▶ 1:52:26Mr. Brady: Chairman brady, do you think the joint routing could be used as an effective tool to strengthen the current and secure better terms for producers? >> it is good to see you. There is no question -- this is with the review was designed to do. If you remember at the time during the usmca, the sunset and the six year review was unique and at times controversial.
▶ 1:52:54Mr. Brady: But as it was laid out to members of congress, it is an opportunity for increased oversight for congress to work with the administration to see how the agreement has worked. And where it needs to be improved. These are the types of discussions that are needs to be bringing to the table. It is an opportunity to strengthen through improving these divisions. >> we have been very impressed with our U.S. trade.
▶ 1:53:24Mr. Brady: I travel around the world. A tough negotiator, a broker. And he's doing a great job. I appreciate ambassador greer's views, the rubberstamp of the agreement is not the only way to proceed. It is a chance for us to make it better. There's always room for improvement in any trade agreement. These are some of the most complex agreements we have.
▶ 1:53:49Mr. Brady: Any path forward for usmca should focus on certainty for american producers, manufacturing and consumers. Chairman brady, one final question. What would potentially 10 years of annual revisitation's without an extension room for american stakeholders? >> it wouldn't come at a worse time. It would lower the economic value of that agreement certainly to america.
▶ 1:54:20Mr. Brady: Right now, this agreement is working for the U.S., mexico, and canada because it incentivizes long-term investment in north america. That is driving the job, competitiveness. The longer this agreement is extended, the more long-term investment we are going to see right here in the U.S. in north america. I am hopeful that is not the outcome of this.
▶ 1:54:47Mr. Brady: I think that, long-term strengthening preserving the key design of it will make president trump's trade agreement even more effective. >> we will see you up here, but thank you for your input. >> I walked in the back door, I saw a bald head, I said it looks like kevin brady. It turns out it was kevin brady. It's good to see the back of you. >> you are a sweet talker senator, thank you. >> thank you all for being here.
▶ 1:55:22Mr. Brady: This review is coming increased awareness of chinese surveillance of american society using its software. These that can be manufactured and cars manufactured in mexico's to the U.S. to be thoroughly equipped with things we report back to the ccp. This is not against the chinese people, it is the effort of the ccp.
▶ 1:55:51Mr. Brady: Should we have explicit restrictions on chinese manufactured connected vehicle components and autonomous vehicle software? >> this seems to be one of the highest priorities of the president. In the ambassador's law it reflects concerns from congress in this area.
▶ 1:56:14Mr. Brady: I predict the improvements in this discussion and review will be of the highest priority may well be the most significant improvements in this agreement going forward. I expect china issues a trade shipment of investment screening on those issues you raised. I think it will be one of the most consequential discussions we have in the review.
▶ 1:56:41Mr. Brady: >> should the trilateral agreement include agreement upon export controls? Semiconductors and ai chips? >> I have certainly seen that raised by members of congress during this review. This is the opportunity to bring that to the table. Obviously to have those conversations.
▶ 1:56:59Mr. Brady: >> if we are going to be concerned about the supply-side, stuff which may come through mexico and the U.S., but we think is a threat to our national security, how do you implement those protections? >> very good question. First thing I hear from our members when we talk about this, because we develop a lot of technology available here in the U.S.
▶ 1:57:27Mr. Brady: In those areas, is the need for strong enforcement and the importance of continuing this trilateral agreement so that we have this framework to ensure that strong enforcement. I would also mention you mentioned about connected vehicles. The administration has already taken steps on this. Commerce has been quite aggressive to prevent technology from connected vehicles being able to come into the U.S. from those countries.
▶ 1:57:58Mr. Brady: And we worked hard to comply with that. That supersedes usmca, that protection. >> not sure I understand, if I'm building something in mexico, how do we make sure that is implanted? As you bring things across the border, you have to have a complete manifest if you are at a land border, but not if you are shipping by sea.
▶ 1:58:23Mr. Brady: Is it a loophole, or we are going to cover it because somehow we will expand -- plants and capture the data? >> on vehicles it is largely not because it eventually goes to the supply chain and the vehicles that come in. You raise an interesting issue I would like to emphasize, the legal trade shipment. It is a big concern of our members. We have been very welcome of the strong enforcement that has been there on that front. Our members are business people, pro-competition, we must have a level playing field.
▶ 1:58:54Mr. Brady: Very encouraged with the efforts to strongly enforce our laws on a trade shipments. >> Mr. chairman, this is -- you are from texas. It is an issue affecting gulf states. Mexican launches -- red snapper from U.S. waters.
▶ 1:59:19Mr. Brady: Last month, I had let a letter to know documenting the seas red snapper volumes rose almost 30% last year. The department of homeland security found coast guard only introduce one -- incursions. We are told cartels -- managing this. Another way to do this. Noah has the ability to restrict related imports because it never used it. But for Mr.
▶ 1:59:46Mr. Brady: Evander schaefer, do you agree that tax agreements should prevent a legally harvested products from accessing U.S. markets. After that, should the 2026 review and corporate cooperation between the U.S. and mexico? >> thank you for that question. I don't know if you're prepared to answer that question. I don't want they have enough information.
▶ 2:00:12Mr. Brady: >> I would agree the issues certainly not to the degree you are. If you think the review is an opportunity to bring these issues of ambassador administration and these conversations. >> thank you all. >> senator warnock. >> thank you very much, brother chair.
▶ 2:00:34Mr. Brady: This review is an opportunity to keep american workers and american farmers and business is competitive while reducing costs for american families. As a ranking member on the subcommittee on trade, constantly hearing from folks across georgia, two big reasons why the usmca matters, georgia's farmers on to sell their products abroad and compete on a level playing field.
▶ 2:01:07Mr. Brady: And georgia's businesses want certainty about where the supplies will come from. And at what cost. The nonpartisan tax foundation estimated in 2025, president trump's tariffs already cost the average american family $1000. If we pull out from usmca, the price tag will only go up because businesses may have to raise prices amid new tariffs or uncertainty.
▶ 2:01:38Mr. Brady: Congressman brady, for more than 30 years, businesses have relied on trade agreements between the united states, mexico, and canada. They have invested in the united states as a result. You work closely with businesses that rely on usmca. How has uncertainty around the future of usmca affected their investment decisions? >> first, thank you for your leadership. This when I held as well, thank you for that.
▶ 2:02:10Mr. Brady: The question certainly matters in the trade agreements. If you saw the 1500 plus comments received about usmca, certainly I think it was the highest point, the most frequent point made by agriculture, manufacturing, technology and georgia, texas, around the world. The review gives us an opportunity. The president understands the importance of this agreement. It is his.
▶ 2:02:40Mr. Brady: He has succeeded -- succeeded in a big way. There is room for improvements, he wants the strongest terms possible going forward. It is an opportunity in my opinion to reset that certainty because it has driven investment into the united states from mexico and canada and the greatest supply chains and innovation for advanced manufacturing all across the board. It is one of the strikes of the agreement.
▶ 2:03:07Mr. Brady: It will be important, we hope successfully that that certainty especially for long-term investment allows to compete against china, for example. I think that will be one of the strengths coming out of this. >> there is no question usmca is not perfect. The review gives us a chance to make it stronger. But I worry greatly about this uncertainty. Farming, for example is a tough business.
▶ 2:03:38Mr. Brady: I spent a lot of time with farmers across georgia. There is so much about the business that is unpredictable. This additional uncertainty can be very problematic for farmers or small businesses, or suppliers. According to the business roundtable, 450,000 jobs in georgia are directly tied to trade with canada and mexico.
▶ 2:04:08Mr. Brady: If the U.S. were to unilaterally withdraw from usmca, how do you think that would affect investment in the U.S.? Would it go up or down? >> first, georgia is like texas. If you put our U.S.-mexico-canada jobs together in our state, it will be our single largest employer. It is crucial to our states. >> jobs would go down? >> I don't think there's any question.
▶ 2:04:36Mr. Brady: Fewer jobs, slower economic growth. We would be put at a disadvantage in our competition against china. >> this is deeply concerning. It is concerning the administration in my view is -- has made undisciplined statements about withdrawing. We are in the midst of this review.
▶ 2:05:00Mr. Brady: I hope we can make usmca stronger, stronger than georgia farmers, our businesses and workers. I look forward to working with the committee and with ustr to ensure usmca is strengthened and it continues. Thank you very much for your service. >> thank you. Senator welch. >> thank you very much. Welcome to our witnesses and Mr. brady. I thought we were going to win a few baseball games after you left.
▶ 2:05:31Mr. Brady: They did not have your back any longer. The democrats are struggling. >> it is good to see you, senator. >> there is consensus about the incredible benefit of usmca. I take it one of the extraordinary benefits is the certainty to be able to sell back and forth across borders. Does each of you agree?
▶ 2:05:57Mr. Brady: That included on what expenses would be. So we are all in agreement that certainty is absolutely essential to congress. If there are tariffs that are imposed on the basis of a person, the executive deciding to impose the tariff for whatever reason, and then those tariffs are changed without any forewarning up or down, doesn't
▶ 2:06:30Mr. Brady: Make it harder to do business? >> certainly drives investment, short and long-term. It is key to our growth and competitiveness. In this review in the final product -- it really matters. >> it really does. I've had a lot of roundtables. Vermont is very close to canada, both emotionally and in business. And we also do a fair amount of business with mexico.
▶ 2:06:58Mr. Brady: But the roundtables I've had, our businesses are saying they cannot deal with the uncertainty. The tariff itself adds to expense. But when that changes week to week or month to month, they cannot plan. Are my business is any different than businesses in texas or idaho or any place you can imagine? >> Mr. brady? >> I don't think so.
▶ 2:07:31Mr. Brady: I think the secret sauce in usmca's we have a to zero tariffs, that we are exempt from these others -- >> we don't have the tariffs, we have certainty. >> innovation has driven growth. >> my plea here is these arbitrary tariffs are really causing havoc on -- in vermont and from everybody here it makes it tough for businesses no matter where you are from.
▶ 2:08:03Mr. Brady: Another reason why we saw the house vote against the executives passing tariffs, and we had a resolution in the senate where that is subjected to as well. One of the things -- it is really tough in farm country right now. I know a lot of the markets for the midwest farmers, have compromised as a result of reactions by china to some of our trade policies.
▶ 2:08:35Mr. Brady: But one of the expenses is the cost of equipment, the cost to repair equipment. In my experience with farmers, you guys can fix anything. And you are cheap. Like a vermonter. Energy can fix it but not pay a lot of money. That is what my farmers tell me. I've got legislation that would give a farmer the right to repair equipment that the farmer buys.
▶ 2:09:01Mr. Brady: And with technology now, it is like you can't fix a headlight without getting a software program and you have to wait until somebody -- it can be days until somebody comes out. Do you have any point of view of legislation that would enable you legally as a farmer to fix your own equipment? >> first, senator.
▶ 2:09:24Mr. Brady: I would like to thank you for the question and for your work on the whole milk for healthy kids act you cosponsored with senator marshall. I do not have the opportunity to thank him. It is a champion move for darien america's kids. >> thank you. Senator marshall did a great job. >> and you asked me about repairing. I actually went to school to be a diesel mechanic starting out.
▶ 2:09:55Mr. Brady: Farmers and dairy men are frugal by nature. We have to be to make ends meet. When it comes to repairing our equipment, it is imperative we have the ability to do so. As technology is improved, and equipment has become more technological, more difficult to repair our equipment as we buy it. More e missions and more computers on them.
▶ 2:10:20Mr. Brady: It has been disappointing the manufacturers have taken some of the information and made it proprietary and impossible for us to fix our stuff. >> that certainly makes sense to me. I just know how much pressure you're under. The equipment you are buying can be a quarter million dollars. >> or more. >> thank you very much. >> senator cantwell. >> thank you, Mr. chairman.
▶ 2:10:52Mr. Brady: Thanks to the witnesses and for holding this important hearing. I think the three of us represent a view of the world that is very much about trade. While we appreciate the U.S. market and selling products into the U.S. market, will hear a lot about selling products internationally and making sure that we have the opportunities to compete in what is an ever growing middle class the world. I wanted to say I appreciate Mr.
▶ 2:11:23Mr. Brady: Brady, congressman brady, your comments to senator cornyn that we have the constitutional authority over trade. Thank you for reminding us of all of that. That is the big challenge. Senator grassley and I are saying we should assert ourselves in this issue. But on this hearing, usmca, we think it is a very important agreement.
▶ 2:11:48Mr. Brady: Many colleagues on my side of the aisle who don't usually support trade agreements supporting trade agreements because it was also about capacity building. Capacity building is like getting trading partners that follow the rules. The committee here has done a lot of work over the years. Following these rules and creating an even better trading partner. So there is still work to be done on that. I think it is a signature agreement.
▶ 2:12:15Mr. Brady: Now I'm worried president trump is doing to undermine that my 100% tariffs on canadian goods. Threatening to block the opening of the detroit windsor bridge and closing tariffs on steel, aluminum, and automobiles. There 50% tariff on canadian made aircraft. It goes on and on. Canada for us in washington is our number two export market. Mexico is our number five market.
▶ 2:12:44Mr. Brady: I look at this and say we are trying to reposition -- obviously we want a stronger relationship with india, between the U.S. and india, but we want our closest neighbor to be a stronger competitor to some of the things china is doing. You think this rhetoric is undermining our ability to get a signature achievement? If you consider usmca a signature achievement, do you consider that rhetoric a threat to that?
▶ 2:13:14Mr. Brady: >> I think the president is a tough negotiator, he is all in for america. He wants to get the best possible deal for the U.S. for usmca, he starts in a much different position. His agreement has delivered on jobs and growth, competitiveness in a serious way for us.
▶ 2:13:37Mr. Brady: As we have talked about, can our biggest customers, investors, and suppliers, that is a unique partnership. There's areas for growth and improvement in the agreement as well. But he's a businessman who understands how his partnership has positioned america from small business to agriculture to the advanced technology to be able to not just grow, but to compete and win against china in the future.
▶ 2:14:07Mr. Brady: I believe he sees the value of this agreement. His style has always been aggressive and tough in these agreements. But it shouldn't -- it shouldn't interfere with these three countries strengthening this. >> I could comment on that rhetoric. But it is the strategy I'm disagreeing with. I'm disagreeing with the strategy. The U.S. is 30% of global trade.
▶ 2:14:40Mr. Brady: That means 70% is outside the U.S., that means you have to win the battles. The difference between the last 20 years as everyone is moving faster. The point is Mr. navarro, the pressing the letter to nafta and usmca to get into our markets and ways essentially is a terrible avoidance. I cannot tell what he's calling on it.
▶ 2:15:09Mr. Brady: Or the most leveraged in going after -- I'm not sure why we are doing a bigger america's agreement, why we want to counter the chinese, why are we passing a U.S. south america free trade agreement? All of the street agreements we did pay dividends to us now. I think they are collectively the fifth-largest trading partner with the U.S. because we grew that market. But isn't there work to be done on usmca?
▶ 2:15:39Mr. Brady: Instead of resolving the capacity building issues. >> there is a lot of work to do. A lot has been raised about labor and environment across the board. It is a delicate dance, and there is leverage. Congress and the administration need to lean on mexico and canada to fix the issue. At the same time, when everyone here is talking about.
▶ 2:16:10Mr. Brady: >> thank you, Mr. chairman. >> senator young. >> I think our witnesses -- I think our witnesses for being here today. >> one of the reasons president trump was elected, I believe in this administration given its charge for a focused trade policy was because of the perception shared by the
▶ 2:16:40Mr. Brady: President that china has been ripping off the american people, stealing intellectual property, forcing technology transfer, flooding our market with below cost goods, and many other affronts to long-standing trade rules and the chinese have agreed to.
▶ 2:17:03Mr. Brady: Seems to me, I articulate it every time given an opportunity, that the best way to deal with that is to unify our friends and allies who mostly play by the rules as it relates to the international trade environment and collectively bring our leverage to bear vis-a-vis china. It is not to suggest we can't optimize existing trade relations along the way, I don't hold that we follow that meta-strategy over the last 12 plus months to be candid.
▶ 2:17:34Mr. Brady: I share that with the administration at every turn. With that predicate laid, I want to acknowledge the handiwork of president trump as it relates to usmca. It is a signature achievement, a more durable version of nafta. It accomplished what he aimed to, bringing production closer to home to places like indiana. And it has secured better terms for workers and made the agreement more sustainable.
▶ 2:18:05Mr. Brady: I want to commend trump 1.0 on that. And trump 2.0 as ambassador greer works hard to make sure we strengthen that agreement and as he and others focus on modernizing critical minerals approach. I commend ambassador greer in particular for launching the U.S.-mexico action plan.
▶ 2:18:30Mr. Brady: For years I pushed for single sector deals with teeth that are codified in bonding and binding trade agreements. Sanctioned by congress. And my hope is we can take his good work on the action plan and run it through congress and get bipartisan agreement. It is clear to investors and all stakeholders where we are going to source are critical minerals from to run a modern economy in the coming years.
▶ 2:19:02Mr. Brady: Mr. mccarthy, as you know, we in the state of indiana have more than 80,000 hoosier manufacturing jobs tied to the vehicle parts industry. What must the usmca review deliver on critical minerals to keep north american vehicle production stable and competitive? >> thank you very much for that question. And thank you again, over 87,000 jobs in indiana in the supplier sector.
▶ 2:19:30Mr. Brady: We appreciate your support for that industry. When I speak with our member executives, the potential to leverage this framework to ensure that we address this critical issue around critical materials is one of the things that makes me most excited about the continuation and strengthening of usmca.
▶ 2:19:53Mr. Brady: We have heard some creative ideas from the administration, ambassador greer, from congress, to take steps to leverage this region. So we have the secure supply chains. Let me tell you we've had an incredible experience as an industry in terms of supply chain bullets over the last decade. We had semiconductor issues for example.
▶ 2:20:21Mr. Brady: Simply not having that one part and shut down all of our industry. And we are reliant on critical inputs and materials. And when I speak with our member executives, the greatest strategic priority, one of them is having these resilient, secure supply chains. There is these developments and ideas I think the community sees is very positive.
▶ 2:20:47Mr. Brady: And we are very excited about the potential of this framework to strengthen our positioning on this. And again, protect U.S. manufacturing. >> there's always a lot more I would like to ask. Mr. mccarthy, you mentioned semiconductors.
▶ 2:21:02Mr. Brady: In the state of indiana during the global pandemic, we still had some market absolutist lamenting the government intended to take action and incentivize more reassuring of semiconductor production. We had all the workers in indiana who could not go to work because of the sourcing challenge getting semiconductors. You can't run a modern economy without the semiconductors.
▶ 2:21:33Mr. Brady: And I'm glad the trump administration has boldly taken the handiwork of the chips and science act and is implementing it with fidelity. >> senator warren. >> thank you, Mr. chairman. President trump campaign for office on a promise to "lower costs on day one." those were his words. Here we are a year later. Cost of groceries is up, the cost of utilities is up. The cost to build a home is up.
▶ 2:22:03Mr. Brady: Health care premiums are skyrocketing. Trump also promised to create "millions and millions of new manufacturing jobs." he also promised his tariffs would bring factories "growing back." here you are biweekly -- a year later. I believe in tariffs as a tool.
▶ 2:22:28Mr. Brady: But trump's reckless across-the-board tariffs are not aimed at building up strategic sectors. And to the extent they've created leverage with trading partners, he has frittered it away doing favors for giant multinational corporations not helping out american workers. Today we are talking about how the U.S. should approach renegotiation of the U.S.-mexico-canada agreement. The successor to nafta.
▶ 2:22:58Mr. Brady: But based on the last year, I'm worried the administration will not use U.S. leverage to negotiate on the behalf of american workers. You are a trade expert with the afl-cio, are the trump across-the-board tariffs bringing back manufacturing jobs to the U.S.? >> thank you for the question. The short answer is no.
▶ 2:23:25Mr. Brady: The tariffs that he imposed in april, the liberation day across the board tariffs, we have not seen the reassuring manufacturing jobs due to those. The latest data year-over-year, we lost 70,000 manufacturing jobs. >> we lost 7000 -- 70,000 manufacturing jobs over the last year of trump's I have to say, I wish it were surprising, but it is not. When we see how trump is using tariffs as leverage in talks with trading partners.
▶ 2:23:56Mr. Brady: Here is an example. Trump hiked tariffs on european steel. I get that. Allegedly it was going to be a boost to U.S. steel manufacturing. Then his administration said they would roll back those steel tariffs if the eu weakened its laws regulating big tech.
▶ 2:24:19Mr. Brady: Mind you, the european laws are commonsense regulations about consumer protection and privacy and breaking up monopoly. When trump said he would be willing to reduce tariffs on steel imports, if the eu repealed regulations on big tech , it did that help american workers? And that is just one example. Again and again, slapping on tariffs, hiking prices.
▶ 2:24:49Mr. Brady: But then turned around and turned some of them off because some billionaire ceo coupled or made a donation and wanted some tariff relief. Now the usmca is scheduled to expire in july, meaning we have real average. If the U.S.
▶ 2:25:08Mr. Brady: Is going to sign back on, we need to tighten the rules so american workers are not competing with workers in countries that treat their workers like dirt and trash the environment as well. One way to do that would be to strengthen usmca's rapid response enforcement mechanism that lets us put tariffs on specific facilities when they violate collective bargaining laws. How could the U.S.
▶ 2:25:35Mr. Brady: Use our leverage to improve this tool and actually help workers? >> the rapid response mechanism has been an incredible advance in labor enforcement and trade agreements. It is not perfect. We can make it better. Here are some ideas. One, we cannot just address currently focusing freedom of association and collective bargaining, two very important fundamental worker rights.
▶ 2:26:06Mr. Brady: But we can expand that to other worker rights, think about occupational safety and, being free from discrimination. Other things that affect competitive analysts so can broaden the scope of rights affected. The other thing we can do is make sure the mechanism is delivering on time. The rapid part of it at times we have seen when cases go to arbitration under the mechanism, they have dragged on a little too long. We would like to explore ways to keep it. >> I appreciate that.
▶ 2:26:38Mr. Brady: Right now, big tech is paying millions to lobby for more giveaways in the usmca, including provisions that can make it harder for the U.S. government to be able to protect american citizens misuse of data. Instead of going to bat for these billionaire companies, donald trump should be using our leverage in these trade negotiations to improve conditions for american workers. Thank you. >> thank you, senator warren.
▶ 2:27:08Mr. Brady: That concludes the witness questioning for today. I want to again thank our witnesses for appearing before us today. As you can see from the questions and the discussion happening, there is intense focus by the members of this committee on both sides of the aisle making sure we get this done right. Senator wyden, do you want to make any final comments? >> I want to come full circle where we started. Once again, this is all about enforcement. Mr. gottwald just brought it home again.
▶ 2:27:41Mr. Brady: I think of the areas you are talking about are well-suited for expansion. The bottom line is we have been talking about farmers, small business, it comes back on every one of those causes enforcing the laws. If you don't enforce the laws, everything else goes by the boards. I want to understand we talked about it, around three hours ago. It is just as important now as three hours ago.
▶ 2:28:10Mr. Brady: I want everybody to understand how we will be talking from the rooftops, because we cannot make the progress we want high scale, high wage jobs for our country unless we enforce the trade laws. >> I agree on that. I would say to every president I served with we need to have bilateral -- we need to have bilateral trade negotiations with strong export -- enforcement provisions.
▶ 2:28:39Mr. Brady: The center has just shown up, you got in right under the wire. We will go to you. There will be one more round of five minutes of questioning, and then we will wrap up. >> I appreciate that. Sorry for my tardiness. We were in a carmer's hearing. There was some airspace the faa shut down in southern new mexico and el paso yesterday. No one can tell us why.
▶ 2:29:09Mr. Brady: That is the hearing I was coming from trying to get answers. Chairman brady, good to see you. All the witnesses, thank you for being here. I have some concerns about what has been happening over the last many months surrounding how this administration has been engaging with mexico and canada. It is appropriate where talking about a trade agreement.
▶ 2:29:40Mr. Brady: I think trade agreements are often done with allies you work with. Chairman brady, your testimony that canada and mexico has surged 42% since usmca -- 873 billion dollars. Canada and mexico are america's top customers, investors, and suppliers all in one.
▶ 2:30:07Mr. Brady: Chairman brady, the question I have, no disrespect, are canada and mexico are geopolitical rivals? >> know, senator. They are our strongest economic allies. >> do you believe mistreating countries we work with -- however it is, as a country, does it help or hurt U.S. businesses and consumers?
▶ 2:30:41Mr. Brady: >> I think the larger question is in america's interest to be reliable trading partner? The short answer is absolutely it is. Especially in arrive late beneficial trading relationship. At the end of the day, that is what president trump wants. A better more beneficial trading relationship throughout the world in the united states.
▶ 2:31:09Mr. Brady: The good news with usmca, he has exactly that and there is room tomorrow. >> I appreciate that. One thing you reminded us of, chairman brady, you described the usmca as the gold standard for trade agreements due to its smart design. Zero tariffs, low trade barriers, and uncertainty it provides to integrating north american supply chains.
▶ 2:31:35Mr. Brady: Down in that area I was chatting about where the airspace was closed, one of the ports of entry that has benefited very much associated with some of the trade engagements and growth opportunities in that particular space. Chairman brady with the work you do to us chairman of the ways and means can become a I'd be honored to serve with you in the house. Tariff policy was used in a targeted way.
▶ 2:32:07Mr. Brady: When we were able to engage in whatever the policy was. Democrats and republicans had a difference of opinion. Ultimately during the time you were there, whether it is as chair or ranking member, you were able to bring agreement and people together to find a path forward.
▶ 2:32:25Mr. Brady: Do you have any advice with how we can be better engage one another, working with one another trying to find a way to have the kinds of conversations you led when you were there -- there is still difference of opinion. But you were able to bring people together to have the important conversations and bridge differences to land a trade agreement. Any thoughts? You don't have to respond to that one. >> I think it is a great question.
▶ 2:32:55Mr. Brady: You and I saw an unprecedented level of bipartisan support in this agreement. In all my years, 13 and 15 trade agreements I have worked on. It wasn't by accident. The president and ambassador set out to create bipartisan support. They gave and included provisions on the environment that had been dreamed about for a decade. That they worked with congress to do that.
▶ 2:33:25Mr. Brady: There is no question the success of this agreement economically for america is because the president and his team work with members of congress. The view is another opportunity. It was sold to congress as more oversight input. This is the opportunity to raise waste, improve this agreement.
▶ 2:33:49Mr. Brady: Please approve that smart design because it is working and the integration here between three countries are so important to our future. >> I appreciate that. Mr. chairman, I will submit other questions into the record. I want to respect the time you gave me. The last thing -- one observation I am often reminded of, there were students visiting my office momentarily before I was in my previous hearing. They were asking general questions about arithmetic and mathematics.
▶ 2:34:21Mr. Brady: I have been tempted to buy my colleagues abacus to remind them how to count. You knew how to count. At a time when you need votes, you bring people together. Should any wisdom you have done the way chatting with us, remind us of the power of the lessons learned in kindergarten or head start when one plus one. You have to get to 60. The numbers are different. And you're good at that.
▶ 2:34:50Mr. Brady: Unfortunately too good at that as well. I look forward to chatting with you more. I will get the other questions. I apologize for not asking direct questions. But thank you. >> you should expect that there will be some follow-on questions from senators for the record. And we ask you respond promptly. With that in mind, I remind my colleagues the deadline for submitting the questions for the record is 5:00 p.m. On thursday, february 19th. A vote has been called on the senate floor.
▶ 2:35:18Mr. Brady: And we are going to run to that boat. So this finance committee stands adjourned.