Lighthizer promises to step up trade enforcement, employ new tools

14 March 2017. By Ira Teinowitz.

President Trump's nominee for US Trade Representative, Robert Lighthizer, told the Senate Finance Committee on Tuesday he would engage in "very vigorous enforcement" of trade laws and hinted that new enforcement vehicles could be coming.

Speaking at his confirmation hearing, Lighthizer told the committee that the US also needs to examine new ways to more aggressively battle China's overcapacity in a number of sectors where it is flooding world markets.

At the same time, he declined to take any position on the importance of whether quick appointment of new members of the Export-Import Bank is needed. Some trade experts have suggested the bank's inability to make export loans of more than $10 million is damaging US exports.

"At this point I am awaiting instructions," said Lighthizer, noting that there are strong opinions on both sides regarding whether the bank's authority to make big loans should be continued.

Lighthizer's comments came as the committee chairman, Senator Orrin Hatch, warned Democrats about holding Lighthizer's nomination hostage pending renewal of an unrelated mine workers' health care and pension program.

Current law bars anyone who represented a foreign government from serving as USTR, something Lighthizer did years ago in trade fights occurring before the law was enacted.

Democratic Senator Joe Manchin of West Virginia has urged Democrats to oppose any waiver allowing Lighthizer to serve as USTR until the mine bill is considered.

Hatch on Tuesday disputed any need for Lighthizer to get a waiver and called Democrats' move to demand action on the mine bill "legislative hostage-taking" and "ransom."

Lighthizer, who as a private attorney represented US steel companies in their battle against Chinese overcapacity, drew praise from both Democrats and Republicans.

Questioned about what more could be done about the Chinese actions, Lighthizer said that the fight against overcapacity extends beyond steel and aluminum and requires stepped-up enforcement actions using existing tools, as well as the development of new tools.

He called called China's overcapacity in the steel and aluminum industries a "model for Chinese industrial policy" that the US and other countries need to take on.

"What I have said is we have to have a comprehensive approach on this. We have to address the Chinese overcapacity. We have to push back on that. Some can be in a global forum; enforcing own trade laws … get others to enforce their trade laws, all with an objective to make it expensive to add inefficiency."

Lighthizer suggested the World Trade Organization may not be fully able to handle the task.

"I don't believe the WTO is set up to deal effectively with a country like China and their industrial policy," he said. "It was never really intended to deal with those kind of situations. We have to use the tools we have and we have to sit down with members and find a responsible way to deal with the problem by creating some new tools."

He suggested that one idea would be to work more closely with the EU.

"I think we have to engage across the board with the EU. They are a potential ally on a whole variety of areas, particularly in the countervailing duty and antidumping areas."

Lighthizer was questioned by senators about a variety of trade issues during the hearing.

On issues with Canada, Lighthizer said the US will vigorously pursue enforcement procedures in a long-running fight over softwood lumber if Canada won't voluntarily agree to a resolution.

He said that the softwood lumber is at the "top of the list" of issues to be addressed with Canada and also cited drug intellectual property and agricultural issues as among those needing to be addressed.

He said India's unwillingness to fully protect US intellectual property, including protection of US drugs, also needs to be addressed.

"Innovation is the central nervous system of the economy," said Lighthizer. "I expect we are going to have a very rigorous enforcement, I expect to bring as many enforcement actions as are justified both at the WTO and in our bilateral agreements."

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