At a Senate Finance Committee hearing earlier this month, Sen. Chuck Grassley (R-IA) questioned US Trade Representative Katherine Tai about Biden Administration trade policy.
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NewsTranscript
00:00 Ambassador, I'd like to discuss a prime example of this administration's abdication of leadership
00:07 on trade. There's been a bipartisan agreement on this committee on critical issues such as free
00:14 cross-border data flow, data localization, open markets, and intellectual property protection.
00:22 However, this has been undermined by actions of this administration, so other countries then end
00:29 up setting the rules on digital trade. These bipartisan principles are the foundation of the
00:36 digital economy, and U.S. companies enjoy a significant competitive advantage relative
00:42 to foreign competitors. Our competitors repeatedly seek to discriminate against U.S. companies and
00:49 impede access to their markets, yet the Biden administration has pulled back from negotiations
00:56 on digital service trades and rejected long-term, long-held bipartisan principles
01:03 against discriminatory practices of our partners. USTR has abdicated its leadership role in this
01:12 important issue, so why is USTR allowing other countries to set the rules that will put American
01:19 companies at a disadvantage? This can't be consistent with USTR's mission. Senator Grassley,
01:28 it's good to see you. Thank you for the question, and thank you for the opportunity to address this
01:35 concern that you have. I've heard it quite a bit, and I welcome every opportunity to explain
01:40 USTR's approach. You are right with respect to ongoing negotiations around data flows provisions,
01:50 data localization provisions, and source code provisions. We have pulled back these long-standing
01:57 proposals that we have made in those negotiations to make adjustments, in large part because we are
02:04 connecting the dots. And I would like to encourage all of us to connect the dots, because
02:09 in addition to being a Senate Finance Committee leader, you've also been a long-time leader on
02:15 the Senate Judiciary Committee. And I know, for instance, that you are a co-sponsor of the
02:19 American Innovation and Choice Online Act, ICOA, which the administration has expressed support
02:25 for. I also know that you are a co-sponsor, along with many of your colleagues on both sides of the
02:29 aisle here on Senate Finance, of the Kids Online Safety Act, which addresses data security for
02:37 children's data in the digital economy and in the digital sphere. What I wanted to reflect to you
02:45 is, when you look at those long-term developed proposals in the digital trade negotiations on
02:53 data, that those provisions are still largely based on an understanding that what we're dealing
03:00 with is data as a facilitator of traditional trade transactions, goods transactions, data as
03:08 a facilitator of e-commerce, data traveling along with the information that has to be traded
03:14 in order for goods to move across borders. And that was certainly the case 20 years ago.
03:22 But today, in 2024, what we have seen is that data has become the commodity itself,
03:29 that data has become the powerful thing that has value, that enables more innovation, that it
03:37 enables, when you accumulate enormous amounts of it, technological innovation like generative AI.
03:45 The issue is who can have access to that data. And also, where does the data come from?
03:49 It comes from ordinary Americans. It comes from you, it comes from me, it comes from your
03:53 constituents, it comes from our kids. And so, with respect to the security of that data, the
03:58 attempts that we see up here on the Hill to assert the rights of ordinary Americans with respect to
04:05 that data as a trade matter -- >>Can you fill in in writing,
04:09 because I've got to ask one more question. >>All right. Can I just finish? I'll just finish my
04:13 sentence. We feel very strongly that our provisions in our trade negotiations should reflect the
04:21 debates that are happening here and the legislative efforts that you all are making.
04:26 >>Yeah. The last time you appeared before this committee, I urged you to negotiate lower tariffs
04:31 on ethanol with Brazil. Well, I understand that you are currently negotiating this matter.
04:37 The results have been lackluster. Brazil increased its duty on ethanol this year from 16 to 18 percent
04:45 and continue to enjoy importing its ethanol tariffs free. This ethanol competes with homegrown
04:52 ethanol in California's low carbon fuel standard, but also in sustainable aviation fuel. What is the
05:01 administration doing to press Brazil to lower its tariffs, and what concrete measures are the
05:08 administration considering in the negotiations? >>Senator Grassley, your position on ethanol
05:17 has been crystal clear from day one. This is a high priority for the administration as well.
05:24 I'm currently also extremely concerned about Brazilian market access restrictions.
05:30 We are in coordination with USDA, including at political levels, actively engaging with our
05:38 counterparts in Brazil on market access barriers to U.S. ethanol, including those tariffs and
05:43 regulatory barriers that you're talking about. Our objective is to ensure that U.S. ethanol can
05:48 once again compete on a level playing field with domestically produced ethanol in Brazil.
05:54 My latest engagement with my Brazilian counterpart, which happened about a month and a half ago,
06:00 the Brazilians indicated to us that they understood at all levels, including from the White House,
06:06 the prioritization of this issue with them, how important it is to us and our economy,
06:12 and their desire to find a way to accommodate this priority. So we are actively working on it,
06:18 and the strength of your voice on this matter is an asset to us.
06:22 >>Time of my colleagues expired. Senator Cornyn is next.
06:26 >>A little ethanol. You can ask about big oil.
06:29 >>Senator Cornyn.
06:32 >>Oh, I'm sorry.