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Thune: America Needs to Lead on Trade

“A new US-UK trade agreement would build upon the common values and interests of our two countries, and in doing so, help reduce costs for American consumers, improve supply chain resilience with a trusted partner, and open new markets for U.S. producers – including producers in South Dakota."

March 23, 2023

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WASHINGTON — U.S. Sen. John Thune (R-S.D.) today spoke on the Senate floor about the need for a more ambitious U.S. trade agenda for American workers, farmers, ranchers, and businesses. Thune called on the administration to kick-start negotiations on a comprehensive free trade agreement between the United States and the United Kingdom. Thune discussed the Undertaking Negotiations on Investment and Trade for Economic Dynamism (UNITED) Act, his bipartisan legislation that would authorize the administration to negotiate and conclude a trade agreement with the United Kingdom to open export opportunities for businesses of all sizes, increase the resilience of critical supply chains, and advance economic prosperity for people in both countries.

Today, Thune also questioned U.S. Trade Representative Katherine Tai at a Senate Finance Committee hearing on the Biden administration’s 2023 trade policy agenda.

On a U.S.-U.K. trade agreement:

“The UK is America’s fifth largest export market and our largest services trading partner in the world.

 

“The US and UK are also each other’s largest foreign investors.

 

“While our two countries have a substantial foundation in trade and investment, it is clear there is room to strengthen those ties and deepen the special relationship: in particular, with a comprehensive free trade agreement.

 

“A new US-UK trade agreement would build upon the common values and interests of our two countries, and in doing so, help reduce costs for American consumers, improve supply chain resilience with a trusted partner, and open new markets for US producers – including producers in my home state of South Dakota.

 

“Important groundwork has already been laid, including the bilateral negotiations initiated by President Trump toward a trade agreement, and the US-UK Dialogue on the Future of Atlantic Trade initiated by President Biden to improve economic cooperation.

 

“There is also bipartisan support for this effort, as Senator Coons and I recently introduced a bill – the UNITED Act – to kick-start trade negotiations with the UK.

 

“And with the recently announced Windsor Framework – which provides a pathway on post-Brexit trading arrangements in Northern Ireland and which President Biden supports – the timing couldn’t be better to reengage with the UK on a trade agreement.

 

“But as with any trade agreement, it will require presidential leadership and a committed USTR to move the ball forward.”

 

Thune’s floor remarks below (as prepared for delivery):

“Mr. President, this morning the U.S. trade representative is testifying before the Senate Finance Committee on President Biden’s 2023 Trade Policy Agenda.

 

“And I look forward to asking her about the details of the Biden administration’s plans – or lack thereof – to boost trade opportunities for American workers, farmers and ranchers, and businesses.  

 

“Mr. President, trade has been very low on the president’s priority list throughout the first two years of his administration.

 

“To name just one example, it took the president a year and a half to nominate a confirmable chief agricultural negotiator at the U.S. Trade Representative – even though agriculture is a U.S. industry that depends on trade. 

 

“And, Mr. President, if the president has deemphasized trade, he has really deemphasized free trade – that is, removing trade and tariff barriers and increasing market access for American producers.

 

“The administration is currently negotiating exactly zero comprehensive free trade agreements.

 

“And its so-called ‘trade initiative frameworks’ are largely flowery rhetoric with little to nothing in the way of tangible, durable benefits for American workers.

 

“Tariff reduction and increased market access – the hallmarks of free trade agreements – are missing in action from the Biden administration’s trade initiatives.

 

“In fact, President Biden’s trade representative has openly said that the Indo-Pacific Economic Framework, perhaps the president’s signature trade initiative, was designed not to include tariff reduction.

 

“So why is this a problem?

 

“Well, first of all, Mr. President, it’s a problem because trade is essential to our economy. 

 

“More than 41 million U.S. jobs depend on trade.

 

“And that includes a lot of jobs at small businesses.

 

“In fact, 98 percent of U.S. exporters are small businesses – a stat that includes many farmers and ranchers in South Dakota and around the country.

 

“And ignoring or deemphasizing trade puts those jobs in jeopardy.

 

“But, Mr. President, it’s not just that our economy already depends on trade; it’s that trade – specifically, free trade, trade characterized by low or no tariffs and fewer market barriers – is a powerful engine of prosperity and economic growth.

 

“To name just one example, U.S. farm and food product exports grew from $46.1 billion in 1994 to more than $177 billion in 2021, largely due to greater market access opportunities for American exporters.

 

“Free trade helps create economic prosperity.

 

“It opens new jobs and opportunities for American workers.

 

“And it helps grow U.S. businesses – and, by extension, our economy.

 

“President Biden has tended to deemphasize the benefits of trade for our economy and for American workers and suggest that trade and a robust U.S. manufacturing footprint are somehow in competition.

 

“But increased trade actually helps domestic manufacturing.

 

“Sixty percent of U.S. imports are intermediary goods or materials for use in American manufacturing.

 

“Removing unnecessary barriers to trade in those goods would generally lower the prices for those materials, which would help, not hurt, domestic manufacturing.

 

“And while we’re talking about lowering prices, I should note that expanding U.S. free trade would promote lower prices for a lot of the goods Americans buy – and help ease some of the supply chain problems we’ve been experiencing.

 

“That could help alleviate the historic inflation crisis the president and Democrats helped create and improve the economic outlook for Americans.

 

“But, Mr. President, while economic benefits are a leading reason to prioritize increased trade, they are far from the only reason.

 

“Free trade agreements don’t just provide an opportunity for economic growth; they also provide an opportunity to develop important strategic relationships and foster ties with our allies.

 

“Free trade agreements don’t just cement economic ties between countries; they cement friendships.

 

“They also provide an opportunity to advance U.S. priorities abroad – security priorities, economic priorities, diplomatic priorities, and more.

 

“Mr. President, as I said, the president has deemphasized trade during the first two years of his administration.

 

“But while the U.S. has been inactive in the trade space, the rest of the world has not.

 

“For example, China recently joined the Regional Comprehensive Economic Partnership, a trade agreement that will eventually eliminate more than 90 percent of tariffs on commerce in 15 member countries.

 

“China is also negotiating or implementing a number of new trade agreements to add to those of which it is currently a part.

 

“And China is far from the only country pushing ahead with free trade agreements while the United States is sitting on the sidelines.

 

“We may be a world superpower, but we have just 14 free trade agreements currently in effect with 20 countries, meaning that many of our goods and services face significant tariff barriers in most places around the globe.

 

“By comparison, the European Union has 46 trade agreements with 78 countries, meaning that European goods often have a leg up on the global stage.

 

“Under the Biden administration, the United States is getting left behind when it comes to global trade.

 

“And if we don’t meaningfully reenter the trade arena, we are going to slip further and further behind.

 

“Mr. President, I believe that an excellent way to reenter the trade arena would be to conclude a free trade agreement with one of our closest friends and allies, the United Kingdom – something that is long overdue.

 

“Earlier this month, I introduced a bipartisan bill with Senator Chris Coons – the Undertaking Negotiations on Investment and Trade for Economic Dynamism Act, or the UNITED Act – to advance a free trade agreement with the United Kingdom.

 

“Our legislation would authorize the administration to negotiate and conclude a trade agreement with the United Kingdom to open export opportunities for businesses of all sizes, increase the resilience of critical supply chains, and advance economic prosperity for people in both of our countries.

 

“At a time of financial and geopolitical turbulence, cementing our relationships with our allies should be a top priority.

 

“And an agreement with the United Kingdom – our nation’s fifth largest export market and our largest services trading partner in the world – would further strengthen the ties that bind our two nations while resulting in economic gains for both British and American citizens.

 

“Important groundwork toward a comprehensive free trade agreement has already been laid, including the bilateral negotiations initiated by President Trump and President Biden’s attempt to strengthen economic cooperation through his U.S.-UK Dialogue on the Future of Atlantic Trade.

 

“And with the recently announced Windsor Framework, which provides a pathway on post-Brexit trading arrangements in Northern Ireland, the timing is right to kick-start negotiations.

 

“And an agreement with the United Kingdom would further strengthen the ties that bind our two nations while resulting in economic gains for both British and American citizens.

 

“Mr. President, while the administration may have put trade at the bottom of its priority list over the past two years, the president’s trade representative, Ambassador Tai, seems to have at least kept the door open to working on increased market access – that is, tariff reduction – and real trade agreements.

 

“For the sake of our country, I hope the administration will follow through.

 

“The Biden administration may have gotten off to a very slow start on the trade front, but it’s not too late to turn things around.

 

“And I strongly urge the president to turn his focus to a more ambitious trade agenda, one that will provide durable economic and security benefits to American workers and businesses and advance American leadership in the world.

 

“Mr. President, I yield the floor.”