Thank you for that introduction. It certainly was inflationary. I¹d like to congratulate Fred for all his work to inform the trade and economic discussion. He¹s really made an invaluable contribution toward trade and economic policy.
What is very impressive is that the National Foreign Trade Council will soon be turning 100. Founded in 1914, the NFTC was really ahead of its time. It wasn¹t until 1947 when the GATT was finally achieved, and its central principle of non-discrimination was realized. The GATT and and the WTO¹s achievement of enmeshing the principle of non-discrimination in international trade enabled global poverty to shrink as the world economy grew.
Those principles are important firewalls against the protectionist instincts that grow strong during times of economic turmoil. Today these rules, coupled with advances in technology, enable even the smallest businesses to compete across world markets.
But it¹s not just some of the trade policies the NFTC promotes that contribute to unprecedented global economic growth. It is also the NFTC¹s advocacy for a tax code that encourages the domestic innovation and global competitiveness that create good-paying jobs.
The Obama Administration is advancing a multi-front trade agenda. The President is pushing to complete TPP negotiations. Ambassadors Punke and Froman are making headway on TISA, T-TIP, ITA-2, and a Bali Package.
Congress is working to rewrite TPA and the tax code, and renew TAA, AGOA, and GSP.
That¹s an active agenda, and the NFTC will have a role in shaping the outcome of these efforts so that American businesses, and the workers upon which they rely, can compete and win.
And that¹s what it¹s really all about, isn¹t it? The goal of the government is to provide opportunities for its citizens to pursue better living standards. Its goal is to Expand the Winners Circle.
Like most of you, I know that breaking down barriers to trade and developing a more competitive tax code are ways that enable workers and businesses to reach that Winners Circle and succeed in an increasingly global economy.
But we also know that there are Americans that are hurt by unfair trading practices that harm their businesses, threaten their jobs, and cast a cloud on their futures.
I see it in Oregon, where high skilled workers at SolarWorld have lost their jobs because of China¹s dumping. The trading system let down workers in Oregon¹s paper and softwood lumber mills and those who used to produce D-RAM semiconductors. Laid off workers from those factories like these thank me for supporting Trade Adjustment Assistance, which may be their only lifeline, but they also question my 30-year record in Congress of supporting free trade agreements. It¹s a good question.
I can defend that record when the nation¹s trade remedy laws are followed and enforced, and when there is a strong safety net for workers harmed by surging imports. A safety net that not only catches displaced workers but provides workers and firms with a springboard then enable them to move up.
I can tout a trade record like mine when I see the thousands of workers, farmers, and innovators who are growing, creating, and adding value to things, and sending these goods and services overseas. Oregon workers at Intel and Google, Oracle and Nike, the vintners of the Willamette Valley and farmers around the state all rely on the rules-based trading system and the effort to reduce barriers to their products.
This juxtaposition is evident throughout the country, which is why the consideration of any trade-related legislation will be informed by Congress¹ confidence that the trade laws, and our trading partners¹ commitments, will be followed.
So as the administration and the Congress approach critical junctures in trade let¹s determine how to Expand the Winners Circle, so that more workers gain and fewer businesses lose as a result of the decisions made.
A new Trade Promotion Authority framework is one such opportunity. If the goal of TPA renewal is to establish trade objectives that enable more people to win from trade, then the process of its renewal, as NFTC members know, can benefit from broad input.
The American economy is much different than it was in 2002, when TPA was last written, and there are new opportunities and challenges related to international trade and investment.
Today, the Internet represents the shipping lane of 21st Century goods and services. It is reshaping global commerce just like social media is reshaping societies. But right now the trade rules don¹t neatly apply to the digital economy, despite the growing number of protectionist barriers popping up. The most recent WTO rules were written before the Internet.
It¹s time for the digital economy to be within the Winners Circle by keeping data flows open and ensuring that foreign markets aren¹t more legally hazardous than the U.S.
Other 21st Century challenges include forced localization, currency manipulation, and State-Owned Enterprises, all of which are major impediments to innovation and competition. TPA should reflect these challenges, and its renewal must be informed by that which enabled the unprecedented support for trade accords with Peru, Colombia, Korea, and Panama.
What is clear and exciting to me is that there are new constituencies with equities in trade agreements. Last year, when the Net Roots successfully organized to kill IP legislation in the Congress and the ACTA treaty in the E.U., it was wake-up call. TPA can draw upon the lessons of these experiences and address the legitimate criticisms about the policy formulation process. And by that I mean ensuring that the government cannot shut-out valuable people and perspectives out of process just because they are not well-connected, or because they are a lobbyist.
We can broaden the participation in the development of trade policies, and improve the understanding of them, without blowing up the existing system.
It just takes a willingness to listen, to be creative, and be open minded.
An agenda to Expand the Winners Circle must also include measures that plug the holes in laws and practices that are intended to combat unfair
trade, and respond to its impacts. The Baucus-Hatch ³Trade Facilitation and Enforcement Act,² is an excellent place to start. In a nutshell, the proposal will simply get Customs to do its job in facilitating trade and enforce the trade remedy laws.
But let¹s not fool ourselves. There will still be firms and workers that, through no fault of their own, lose-out because of foreign imports. These folks deserve a springboard just as those that preceded them and which has existed since President Kennedy.
It¹s my view that the debate about trade policy should go hand-in-glove with other economic choices. Trade is just one tactic of a pro-growth strategy. Such a strategy must also include fundamental tax reform. There isn¹t a better example of how the rules are rigged for the few at the expense of the many than the Internal Revenue Code.
The ongoing effort in Congress to work toward fundamental tax reform is central to economic growth that lifts the Middle Class and to Americans¹ ability to compete for business in foreign markets. The tax code is riddled with special-interest junk that prevents everyone — and especially the middle class — from enjoying the benefits of competitive tax rates and a level playing field. Good tax policy does not pick, nor should it alone create, winners and losers. Unfortunately, our current tax code fails to meet even that minimum standard.
Over the last quarter century, the well-connected in Washington have,in effect, drawn a Winners Circle around themselves. It¹s time for
Congress to redraw and broaden that circle to include all Americans, not to reinforce the biases and favoritism that are choking the current framework.
If firms expect R&D subsidies and the strength of the American government to protect their IP, they shouldn¹t expect the tax system to allow them to move the IP overseas in order to reduce their taxes.
If firms expect the benefits of transparent and well-regulated capital markets, if they expect a developed judicial system that enforces contracts and the rule of law, if they expect a government that promotes competition and a global free-market economy, and if they expect the government to negotiate and enforce international accords that help them do business, they should pay their fair share of taxes to the country that consistently delivers on these expectations.
As the Congress pursues tax reform with this in mind, it must also be mindful of other efforts overseas. It will be especially important to make certain that OECD efforts to address base erosion are not a stalking horse to discriminate against successful American companies.
Now, I understand that it¹s getting late, so let me offer two welcome words to you: in conclusion.
There¹s been some discussion lately about the idea of American Exceptionalism. I think the American Experiment is exceptional and I think its role in the world right now is, too.
What endures about our country is that there remains a consensus that it has a special place in the small-L league of nations. To lead. And despite the cacophony of noise that exists right now, America remains the global leader on trade and the economy.
In Geneva, in the Asia-Pacific, in Europe and elsewhere, the U.S. is aggressively shaping the terms of international commerce. And all of us
play a role in that effort. That¹s worth celebrating.
But America doesn¹t just advance objectives that benefit itself. It advances policies that help the women of the sewing factories of Lesotho, the workers in Haiti, and the innovators in Indonesia climb the economic ladder. That¹s why programs like GSP and AGOA are so important to us.
The trade rules that work for America, the most powerful country on the planet, are even more important for developing countries. And that¹s why America won¹t give up on the WTO and all that we can achieve in that forum.
After all, it¹s the rules-based trading system that just may be the single most important contributor to Expanding the Global Winners Circle.