Advancing America’s Interests at the World Trade Organization’s 14th Ministerial Conference

Thank you to Ranking Member Sánchez, subcommittee members, and our witnesses for being here today. I appreciate you sharing your time. We meet at an important time for international trade. Next week, the world's economies will meet in Cameroon for the World Trade Organization's 14th Ministerial Conference, which will frequently be referred to today as MC14. Today's hearing reflects Congress's support for strong U.S. leadership to advance our interests at the WTO. I also believe there is significant support in Congress for the Trump administration's top priorities for proposed outcomes at MC14 and look forward to discussing these priorities today. The Trump administration has taken on a significant challenge in seeking to rebalance global trade through increased market access for U.S. exports, removing unfair tariff and non-tariff barriers imposed by our trading partners, and encouraging new investment and production in the U.S. For years, the U.S. has pushed for our trading partners at the WTO to work with us to resolve these issues but has continuously faced significant headwinds. But I believe the tide is shifting under the leadership of this administration. We stand at a critical juncture with respect to the relevance of the WTO in U.S. trade policy. We should not concede core American priorities nor accept complacency. At the same time, I believe the WTO can still have a critical role to play in our global trade relationships. I hope this hearing provides an opportunity for members of this committee to have a constructive discussion on how the WTO can meet the needs of a new generation of global trade policy, delivering positive outcomes for American farmers, workers, and businesses. Certainly, not all of the United States' concerns with the WTO can be resolved in Cameroon and we should be realistic about potential outcomes. During this Trade Subcommittee's hearing two years ago, ahead of the last ministerial conference in Abu Dhabi, I stressed the importance of showing strong U.S. leadership at the WTO, something the Biden administration seemed intent on ceding. As I think most of my colleagues here would acknowledge, given the WTO's requirement for consensus-based decisions, real negotiated outcomes are time and time again undermined by a handful of spoiler countries. This undermines progress at the WTO and most importantly does not allow us to address longstanding priorities such as a stronger agriculture agreement or developing standards for emerging industries. Significant reform therefore is required at the WTO for the sake of its long-term durability and relevance in the global trading system. Even so, I believe that the WTO can still provide value to the U.S. and American industries, including at the upcoming ministerial conference. I am grateful for the Trump administration's clear position on issues like the moratorium on the imposition of customs duties on electronic transmissions, and I'm hopeful we can finally agree to a permanent moratorium in Cameroon. This would benefit American businesses of all sizes and in many sectors, and it also would prevent trading partners from leveraging this issue toward other ends in the future. The work should not end in Cameroon. Moving forward, members should focus their efforts on putting forward concrete proposals for reform at the WTO rather than endless scoping exercises that lead to vague and ambiguous negotiating objectives unlikely to result in real outcomes. I remain optimistic that strong U.S. leadership at the WTO, with support and oversight from the U.S. Congress, can deliver. I urge all our trading partners to engage constructively with U.S. delegation to achieve practical and mutually beneficial outcomes at MC14. With that, I yield to Ranking Member Ms. Sánchez for an opening statement.

Thank you, Mr. Chairman, and thank you to our witnesses for being here today. For nearly three decades, the WTO has been the cornerstone of the rules-based international trading system. Core principles such as most favored nation treatment and national treatment have helped ensure that American exporters are treated fairly abroad and that trade takes place under the transparent and predictable standards developed. Yet over the last two years, the Trump administration has attacked the WTO and upended the international legal order which American businesses and consumers rely on. As the Supreme Court recently ruled, President Trump's so-called reciprocal tariffs on our trading partners represented an egregious abuse of the rule of law. When the United States disregards the rules that we helped create, we hurt American businesses, workers, and families, and we weaken our ability to hold other countries accountable when they break those same rules. Instead of taking on the biggest trade cheats, the Trump administration has been working to figure out how to replicate its illegal tariff scheme while also desperately trying to get countries to strike deals with them. The U.S. Trade Representative and Treasury Secretary are currently in Paris negotiating a milk-toast trade deal with China. I don't even need a crystal ball to know that this deal will fail to address China's cheating through market distortions, egregious IP theft, and forced technology transfer and rampant human rights abuses. As the WTO prepares for MC14, addressing unfair non-market practices like these by China or any other country should be a priority for the global trading system. In this context, it is important that WTO members recognize the importance of the institution as a forum to convene, set rules, and resolve disputes. WTO members must seek meaningful WTO reforms that strengthen the system while preserving its core foundations. This includes modernizing WTO rules so they can address today's challenges from forced labor to the clean energy transition. Another issue ministers are likely to confront at MC14 is the moratorium on customs duties on electronic transmissions. I also support extending that moratorium permanently because it strengthens American innovation and helps ensure that U.S. entrepreneurs, especially small businesses, can compete globally. It is also long overdue that the WTO address its failure to incorporate labor standards. The issue of trade and labor has been with the WTO since its inception. While WTO agreements cover a wide range of issues from agricultural subsidies to technical barriers to trade services and intellectual property, there is no requirement for labor standards. The preamble of the Marrakesh Agreement states that the WTO's purpose is to raise living standards and promote full employment. But the WTO has failed and will continue to fail this objective unless it meaningfully recognizes the importance of improving outcomes for workers, not just large corporations. In the 1994 Uruguay Round Agreement Act, Congress required the president to establish a working party at the WTO that examined the link between trade and worker rights. In 1996 at the Singapore Ministerial Conference, the United States tabled a proposal calling for the study of labor rights in the WTO. And in the 1998 Seattle Round, the U.S. proposed the creation of a WTO working group on trade and labor. The WTO must finally establish a working party on trade and labor standards, and the WTO's accession process must include a mandatory review of an acceding country's labor standards. Addressing known labor abuses was not necessary for China to obtain U.S. support for WTO membership, a decision that American workers and workers around the world continue to pay for today. I look forward to hearing from our witnesses on what to expect at the upcoming ministerial conference and how Congress can help ensure the U.S. engagement at the WTO advances the interests of American workers, farmers, and businesses. And lastly, I will say that on a trip to Geneva in the last year, I heard that the United States, if it steps back from its commitment to the WTO, that vacuum is surely being filled now and will be in the future by China. We cannot afford to step back. Thank you, Mr. Chairman, and I yield back.

Thank you. I now have the pleasure of introducing our witnesses for today's hearing. Again, thank you for sharing your time and your insight and expertise. Ms. Kelly Ann Shaw is a partner with Akin and a former deputy assistant to the president for international economic affairs. Welcome. Mr. Stephen Ezell is vice president of global innovation policy at the Information Technology and Innovation Foundation. Again, welcome. Mr. Peter Bachmann is president and CEO of the USA Rice Federation. Welcome. And Mr. Bruce Hirsh is founder of Tailwind Global Strategies LLC. Again, welcome. Appreciate your time here. Your written statement will be made part of the record. You each will have five minutes to deliver your remarks, and you'll see the traffic signal lights there for your appreciation. Ms. Shaw, you may begin when you are ready.

Good morning, Chairman Smith and Ranking Member Sánchez, distinguished members of the committee. Thank you for the opportunity to testify about advancing America's interests at the upcoming MC14. Prior to private practice, I spent a decade representing the United States in trade negotiations, including at the WTO in Geneva. I also served as a lead litigator representing American workers, farmers, and businesses in disputes against trading partners before the WTO. The views I express today are solely my own. Two years ago, I had the privilege of testifying before this committee ahead of the previous ministerial conference, MC13. At that time, I argued that the WTO was stuck in a bygone era and incapable of addressing modern economic challenges, in large part because its negotiating function, its core function, had been largely paralyzed. Two years later, my concerns remain. In fact, the limited agenda of the upcoming ministerial, which includes renewal yet again of the longstanding e-commerce moratorium for a 14th time, is further evidence of the WTO's decline. In my previous testimony, I suggested that the United States faces two choices: either abandon the project altogether and focus on an aggressive strategy of bilateral trade deals to advance American interests, or attempt once again to persuade our trading partners to put real resources into rebuilding a multilateral framework. In today's environment, I would like to offer a third, more realistic, and perhaps better option for the committee's consideration. That is, the United States can simply accept the status quo. Accepting the status quo would mean accepting a more limited role for the WTO moving forward, focused on what it does well, which is committee work, technical discussions, transparency, and maintaining baseline rules that provide practical value to U.S. farmers and producers. But it also means no longer pushing the organization to do something that it cannot, which is negotiate new meaningful trade rules. Let me make three brief points in support of this approach. First, no other member has done more to try to reform the WTO for the past decade than the United States, particularly under the leadership of the Trump administration. Second, the real issues with the WTO are structural and at this point cannot be resolved through additional negotiations or resources. Third, a more limited WTO focused on what it does well is still in America's economic and national security interests. Starting with my first point, no WTO member has done more to reform the organization. Over the past 10 years, the United States has stopped judicial overreach in dispute settlement, pushed members to abide by their basic transparency and notification requirements, and tabled reforms to prevent some of the world's richest economies from misusing developing country status. As a direct result of our efforts, Brazil, Singapore, and South Korea have all declared that they will not seek S&D treatment in future WTO negotiations. Last December, the United States tabled another ambitious set of reforms, this time addressing MFN, the role of the secretariat, and the WTO's essential security exception, among others. In the past year alone, the United States has advanced dozens of WTO-plus reforms through its bilateral trade negotiations. The Indonesia ART deal, for example, included a commitment by Indonesia to drop its longstanding objection to the e-commerce moratorium. Malaysia and Cambodia similarly agreed to implement the WTO's fish subsidies agreements in their ARTs. These and other recent outcomes demonstrate America's continued efforts to strengthen the WTO. No other member has done more, and it's not even close. Second, the real problems facing the WTO are structural. Fundamentally, the organization has become too large and too economically diverse to negotiate. The 166 member economies are not incentivized to reach consensus outcomes; instead, they are rewarded for taking hostages. India in particular has held the e-commerce moratorium hostage for nearly 30 years as leverage to maintain its disruptive public stockholding program. To this end, I support the administration's view that the moratorium must be made permanent at MC14 or we should be prepared to move on. Third and finally, a more limited WTO is still useful for Americans. As a recovering multilateralist who used to work in and strongly believe in the system, my own starting point when evaluating any international organization is simple: what's the business case for it? What are the problems that we're trying to solve? Today's economic and national security challenges are very different from those of the last century. America must preserve the ability to strengthen its supply chains, address market failures, and respond to unfair trade practices, particularly those involving China. An organization driven by consensus and lowest common denominator outcomes is unlikely to be part of that solution. In short, accepting the status quo is not a concession; it's a strategy to better advance American interests. Thank you, happy St. Patrick's Day, and I look forward to your questions.

And likewise, happy St. Patrick's Day. Thank you. Mr. Ezell, you're recognized for five minutes.

Good morning, Chairman Smith, Ranking Member Sánchez, and members of the subcommittee. I appreciate the opportunity to testify today. ITIF commends the subcommittee for debating the role of the World Trade Organization and how it can be reformed to better serve American interests. The WTO continues to play a vital role in shaping the contours of the global trading system. American businesses rely every day on the WTO's multilateral rules and plurilateral instruments to enable their sales of products and services to nations worldwide. As such, ITIF applauds the Trump administration's decision to maintain WTO funding and to appoint Joseph Barloon as America's ambassador to the WTO. At the 14th WTO Ministerial Conference in Yaoundé, Cameroon, the United States has important equities in sustaining and ideally making permanent the WTO e-commerce customs duty moratorium, advancing the WTO Joint Statement Initiative, or JSI, on e-commerce, reaffirming the importance of the Information Technology Agreement, continuing to advocate for high-standard global intellectual property rules, and promoting WTO reforms, especially ones to better address the innovation mercantilist policies practiced by countries like China that have significantly disrupted the rules-based international trade system. The U.S. and global economy are increasingly digital. In 2024, U.S. companies exported $1.15 trillion in services, of which $730 billion, or 64 percent, were digitally delivered. In 2024, America recorded a $282 billion global trade surplus in digital services. America's digital economy now employs nine million American workers. They depend on the ability to export digital services to global markets. Moreover, the digital economy now accounts for at least one-quarter of global GDP, and the value of global e-commerce is expected to increase from $29 trillion today to $83 trillion by decade's end. As such, it's vital that America's foremost priority at MC14 be securing continuation of the WTO moratorium on customs duties on electronic transmissions. This prohibits countries from applying customs duties to digital trade. Ideally, we should push to make this moratorium permanent. A lapse of the moratorium would significantly raise the cost of global digital trade and harm U.S. digital exporters. For instance, the OECD finds that exports from high-income countries would likely fall by 0.5 percent if the moratorium lapses. The OECD further finds that a one percentage point increase in trade policy uncertainty reduces trade in digitalizable goods by up to 0.2 percent. We must make the moratorium permanent. Yet the United States could go further in Yaoundé by formally joining the WTO's Joint Statement Initiative on e-commerce. In doing so, the U.S. should advocate that the JSI include many of the high-standard digital trade rules America has already committed to in the USMCA and which the Trump administration is working hard to get other trade partners to adopt, especially clear commitments to prohibit data localization, to ensure open cross-border data flows, to ensure non-discriminatory treatment for digital services, and to protect source code from forced disclosure. When the U.S. withdrew its support from the JSI in the previous administration, it left room for China and the European Union to assume a greater role in shaping global digital trade rules. We must get back in the lead there. At MC14, the United States should advocate for expanding the geographical coverage and product coverage of the Information Technology Agreement. This is a plurilateral WTO agreement that eliminates tariffs on trade in hundreds of ICT products. My think tank has found that an expansion of the ITA could boost U.S. GDP by $200 billion and create 60,000 U.S. jobs over the next decade. At MC14, the United States should use the WTO as a platform to continue making the case that robust IP rights fundamentally enable innovation, both in the United States and globally. The U.S. should be an advocate for robust IP rights at the WTO that would forestall future incidents such as the organization's acquiescence to the WTO TRIPS COVID-19 IP waiver. Lastly, the U.S. should use MC14 to push for a reformed WTO that actively promotes fair market competition. The U.S. should prioritize improving WTO transparency and members' compliance with notification requirements, especially for industrial subsidies, which countries like China almost never timely notify the U.S. or the World Trade Organization about. In conclusion, the 14th WTO Ministerial will play a pivotal role in charting the future contours of the global trade system, and the United States needs to take an active role in shaping those conversations and ensuring they unfold in America's interest. Thank you.

Thank you. Mr. Bachmann, you're recognized for five minutes.

Good morning, Chairman Smith, Ranking Member Sánchez, and members of the subcommittee. Thank you for the opportunity to testify before you today concerning agriculture and the WTO. I'm honored to serve as president and CEO of USA Rice, the global advocate for the $34 billion U.S. rice industry representing American rice farmers, millers, merchants, allied businesses, and end users. Rice is grown on roughly three million acres and primarily in the Mid-South, the Gulf, and the Sacramento Valley of California. And for well over 100 years, the U.S. has not only produced nearly all of its rice, but it's also exported half of it to more than 120 countries around the world. Unfortunately, over the last 21 years, that import and export ratio has rapidly shifted, putting more than 35 American rice mills and thousands of American family farmers at risk because of trade-distorting practices happening on the other side of the globe. The impact of this distortion of world rice prices on our industry is the main reason we're represented here today. One of the best publicly available resources that outlines the scope and impact of this trade distortion by bad actors, such as India, is the 2025 Section 332 study by the USITC. We commend Chairman Jason Smith for his support and foresight in requesting the commission update that. And to further illustrate the impact bad actors have on the global market, over those last 21 years, rice imports here have grown by 257 percent, and they're displacing more than $1.5 billion in domestic sales for our industry. Without intervention, this trend will force American farmers out of business and send our rice processing jobs offshore. This situation is not because we have inefficient farmers. This situation is not because of President Trump's reciprocal tariff policies. This is because for years administrations have let our competitors get away with subsidies that result in price distortions in nearly all of our export markets. U.S. farmers and exporters are operating at negative margins, but we're still somehow nearly double the price of Indian, Thai, and Vietnamese origin rice because of those policies. The WTO has rules to ensure our industry can compete fairly. Unfortunately, those rules have not been enforced. India has demanded permanent exceptions to market price support at every ministerial since 2013, and this demand has come up repeatedly at negotiating meetings in the lead-up to MC14. India has demonstrated that they're willing to hold ministerials hostage on pet issues, and there's no reason to believe MC14 will be any different. It's not about public stockholding, it's an export industry driven by government interference, and that is pushing farmers in other countries out of business. An American rice farmer isn't competing against an Indian rice farmer, they're competing against the Indian government. We're grateful to USTR and USDA for continuing to hold the line and prevent backsliding. And we know the system has flaws, but on behalf of your constituents who depend on trade, I'd ask what better system could replace it? Outside the WTO, we support bilateral negotiations, and if you look at what's been agreed to, these agreements are all clearly meant to build on, not replace the WTO. Even as the U.S. government is trying to improve the global trading system, the WTO must remain a core part of it. So we in U.S. agriculture need this organization to work effectively. Disputes take too long, have too many hurdles, raising costs of both litigation and exacerbating the economic cost of the policies being challenged. Former administrations have all correctly raised many of these concerns. We commend the Trump-Vance administration for engaging with the WTO and putting forward a thoughtful proposal on reform in December. We hope that work continues with like-minded trading partners at the WTO to deliver meaningful reform. And we're grateful that following the completion of State's report to the President in 2025, the administration opted to backpay 2024 WTO dues and maintain membership of this critical body. Another sign of optimism is Ambassador Greer's participation in the MC14. If the administration had no faith in the future of the WTO, it would likely not invest in nominating an ambassador, a deputy general, or attending the ministerial. We see these as positive steps toward the U.S. helping to reshape the WTO through strategic reforms of the dispute settlement system and the broader WTO in the coming years. In summary, the WTO is an important asset for U.S. ag and rice farmers. It needs to be more effective, not less, and we need stronger compliance to support global trade. It's critical that our competitors abide by the same rules the U.S. has agreed to follow. If they do not, these rules need to be enforced as early and effectively as possible. I'd like to thank the members of this subcommittee for their time and attention and welcome your questions.

Thank you. Mr. Hirsh, you are recognized for five minutes.

Mr. Chairman, Ranking Member Sánchez, and members of the subcommittee, thank you for the opportunity to appear today to discuss the WTO's upcoming ministerial conference. Reform discussions in Geneva since last June have reflected a deeper appreciation of the urgency of the topic and increasing recognition of the challenges facing the global trading system, including those posed by China's economic model. Today I'll discuss some reform topics and touch on what is and isn't working at the WTO and the ongoing value of the organization. Much attention has been paid to the WTO's stalemated negotiating process and broken dispute settlement system. However, this overlooks the WTO's most significant ongoing contribution to global economic activity, its extensive rulebook. While in need of updating, the WTO agreements cover a broad range of topics that go well beyond tariffs, including disciplines on agricultural subsidies, standards, services, and intellectual property. The agreements also serve as the baseline for FTAs and other trade arrangements, including those of the U.S. The WTO rulebook continues to provide a foundation for global trade and benefits U.S. businesses and exporters on a daily basis, particularly in the ag community. WTO disciplines are also the subject of regular committee work at the WTO. The United States has used these committees effectively to put a spotlight on foreign trade barriers and to build coalitions to dismantle them before there is a need for formal dispute settlement. Member notifications of their measures are critical to committee effectiveness, and this will be a subject of discussions at MC14. WTO decision-making will be another key topic at MC14. The WTO and the GATT before it have relied on decision-making by consensus. The United States has long insisted on this, and the WTO ambassador leading reform discussions has noted that no member challenges this approach. Consensus decision-making ensures that all members have a voice and all have consented, so that any agreements that emerge are viewed as legitimate and will be implemented. Having said that, consensus has often been elusive in a membership of 166 members at various stages of development with diverse interests. Many developing countries have been reluctant to take on additional commitments because of the burdens of implementation. The challenge this creates has been magnified by WTO rules that permit members to self-designate as developing, even large economies that play a significant role in global trade. The Doha Round of negotiations illustrates the problem. China, India, Brazil, and South Africa were unwilling to offer market opening commitments based on their self-designation as developing countries, contributing to deadlocks in negotiations. As one African ambassador stated at the time, the elephants are hiding behind the mice. In response, the United States has proposed establishing objective criteria for members to qualify for the special and differential treatment accompanying developing country status. Brazil, Korea, and Singapore have voluntarily announced they will not seek such treatment, and China recently did as well. A separate problem is involved members holding up decisions for unrelated matters. India has been especially prone to using this tactic, including in the decisions to formally adopt the trade facilitation and fish agreements, and also in decisions to extend the e-commerce moratorium. India, South Africa, and Turkey have similarly blocked the widely supported decisions to adopt plurilateral agreements among subsets of the WTO membership on topics such as e-commerce, investment facilitation for development, and services domestic regulation. With respect to the moratorium, there are hopeful signs it will be extended at MC14, as India is increasingly isolated. Many of its past allies have committed to a permanent extension. What all this says is that even without formal reform of WTO decision-making, the organization could have far more success at negotiating at least some topics if India and others were to no longer routinely block progress on widely supported WTO initiatives, and if China were to become an advocate of ambition in the fish and other negotiations. Finally, I would note that reform conversations have provided an opportunity for the United States and others, notably the EU, to raise the particular problems for the global trading system posed by China's state-directed, non-transparent policies. Continued discussions post-MC14 could shape debate both in and out of the WTO on how to address them. I'll stop there. Thank you very much.

Thank you again to all of our witnesses for sharing your perspective. It's important that we have, I think, a thoughtful discussion. These challenges certainly are, I think, very significant. Trade overall around the world requires a good bit of diligence on any country's part. I'd like to remind folks that with 17,000 tariff lines, and that's before you get to any non-tariff trade barriers, it just requires a lot of effort. And so I think we are seeing some engagement now that we haven't seen for some time that I think can be very helpful, has proven helpful already. But when we look at innovation and digital trade, this is what I think sets America apart in terms of what has been created here and innovated here, and that IP-intensive industries account for 41 percent of U.S. GDP and 63 million jobs, including 8.9 million in the U.S. technology sector alone. So like I said, this success is in large part thanks to, I think, robust and fair domestic laws that don't pick winners and losers, but rather incentivize that creativity, innovation, and development. Currently, it seems as though the United States is playing a game of whack-a-mole with discriminatory digital policies proposed by a variety of trading partners. Platform competition and streaming regulations, such as the EU's Digital Markets Act or Canada's Online Streaming Act, continue to be replicated around the world. Mr. Ezell, beyond efforts to make permanent the e-commerce moratorium, what role should the WTO serve in facilitating broader conversations on digital regulations?

Thank you for the question, Representative Smith. Well, as I attempted to indicate in my opening remarks, I think this is why it's so important that the United States rejoin negotiations at the WTO for the Joint Statement Initiative on e-commerce. This is a plurilateral effort at the WTO, which currently involves 90 countries with 71 official co-sponsors. They have already made substantial progress towards stabilized text in a number of areas that would be of importance to U.S. digital exporters, such as consumer protection, spam, e-signatures, e-payments, e-invoicing, cybersecurity cooperation. But if there is a significant problem with the negotiations at the WTO around the JSI, is that it does not include four absolutely critical topics, which the United States has negotiated in USMCA and is currently pushing for in the other bilateral trade agreements we're currently addressing with other nations. And those are commitments to ensure open cross-border data flows, to prohibit forced localization of data storage, to prohibit the forced transfer of technology source code or algorithms, which are absolutely critical to the artificial intelligence solutions and applications that our companies are developing. So what I'm saying is that the WTO does provide a forum in which the United States can attempt to develop rules that would forestall countries' efforts to implement policies like the DMA or Korea's Fairness Act. But so long as we do not have at the WTO this language that we're going to have non-discriminatory treatment for digital products, then the WTO is not going to provide a very effective forum for us to go after those types of digital trade scofflaws we have in Europe or Korea. Again, this is why it's critical that we rejoin these negotiations and shape the rules in a way that is in our interest. But to your point, Representative, we've got to be absolutely clear how damaging policies like the European Union's DMA are to American companies. Our research finds that American tech companies have been fined more than $30 billion globally over the past decade for antitrust or data protection issues. A new study found that over the course of this decade, if the DMA is allowed to persist as currently designed, it will result in revenue losses of up to 114 billion euros for U.S. companies competing in U.S. services markets. So getting a handle on these unfair digital trade practices, which we'll probably need to do through bilateral negotiations or making clear to the Europeans that we're going to bring a heavier stick with like Section 301 action, needs to be a priority for the United States. Let's push for better digital rules as we can in MC14, but know that the solution to that problem is far beyond what we can accomplish in the JSI.

Right, and I appreciate that. You know, we oftentimes think in the theoretical and but also have to be aware of the practical. And so as we have various disputes out there, you know, dispute settlement needs a practical side of it so that it can be so that our enforcement can be robust and and just immediately enforceable and that enforceability mechanism should be swift. American businesses should not have to wait years for disputes enforcing U.S. rights to conclude. And that said, we should not outsource our regulatory sovereignty to international tribunals headed up by career bureaucrats. I think that's important to note. For years, the U.S. has complained of judicial activism at the WTO. Presidents, multiple presidents, Obama, Trump, and Biden blocked appointments to the Appellate Body, all ostensibly to create the leverage needed to reform the dispute settlement system and reduce judicial overreach. Little progress on dispute settlement reform has actually been made. Ms. Shaw, do you see this as a live issue? Does that remain, or have WTO members accepted just accepted that the WTO offers more value as a negotiating forum rather than an international court?

Thank you, Mr. Chairman. I should start by saying that the U.S. has been pursuing dispute settlement reform since 2001. For 25 years, there was this DSU review process. I was a negotiator for the United States for three years between 2011 and 2014. So these are not new issues. But I think the real challenge with dispute settlement is there's not a meeting of the minds between the member states as to what they want. The Europeans want an international court. The United States wants a body that is going to resolve the dispute between the two members and not create this broad precedent that's going to infect negotiations or impair, as you said, our regulatory space. So without a meeting of the minds, I think we probably are in the best position we can be, which is by blocking the reappointment of Appellate Body members, we've really sent the message to the WTO that judicial overreach shouldn't happen. And what we've seen in subsequent reports, both at the panel stage as well as this international appeal mechanism that other countries have created, is much more disciplined reports. So from my perspective, I think we've come as far as we can, but unfortunately we just don't have a meeting of the minds of what this dispute settlement system should really look like.

Okay. Thank you. Ms. Sánchez, you are recognized.

Thank you. Mr. Hirsh, the United States played a central role in creating and shaping the rules-based trading system that has governed global trade for decades. The WTO has provided predictability for American workers, farmers, and businesses, even as we recognize that the system is not perfect and that the reform that reforms are needed to address modern trade challenges. But beyond the headlines like negotiations or disputes, the WTO also performs important day-to-day work that often receives less attention. Could you please talk for a bit about the WTO's convening power and the role it plays in bringing members together? In particular, could you explain how the WTO's regular committee work and technical discussions help surface trade irritants, encourage compliance with WTO rules, and resolve problems before they escalate into formal disputes?

Thank you for the question, Ranking Member Sánchez. You know, the WTO provides a unique opportunity to serve as a location for discussion of all trade issues. There's nothing else available that allows you to talk to 165 members, and in particular, it is doing the work that you identified behind the scenes in its committees where all members are represented. So the committees meet to discuss implementation of the various agreements, how they can be improved, but more importantly, they discuss the specific measures that particular members are taking and whether they are conforming with the rules. So it provides an opportunity to build coalitions. The U.S. has used it very effectively. The U.S. has been urged to use it very effectively by multiple stakeholders, and we've been able to build coalitions against measures that we didn't like. We've been able to actually prevent those measures from going into effect or having them withdrawn before there's dispute settlement, as you mentioned. So they're very active, definitely below the radar screen, but very valuable.

Thank you. Another issue that comes up frequently in discussions about WTO reform is transparency. And as you note in your testimony, WTO rules require members to notify the organization about certain trade-related measures, such as subsidy programs. However, compliance with the notification requirements have been uneven. Improving transparency seems like an area where WTO members could make meaningful progress, even if broader negotiations might prove more difficult. Could you discuss why transparency and notification requirements are so important to the functioning of the WTO, and how reforms in that area, such as stronger notification compliance or improved committee process, could help the WTO better serve its members and strengthen confidence in the system?

Yes, transparency and notifications are critical to the work of the committees. They're also critical for traders, all the members' traders who need to know what members' policies they're undertaking. At the WTO itself, the notifications are theoretically required. You're supposed to be notifying to the committees the measures that you're taking that relate to that committee's work. And without that, it's very difficult for the committees to actually examine those measures, both to address them specifically and to identify future topics of negotiation. At various points, the United States has actually counter-notified when there have not been notifications and actually put in place information on other members' activities. So, you know, the record is uneven. It's not U.S. has been very good with its notifications, many others have as well, but many, including China, sometimes India, have also not been very good. So it is critical that they be improved. The U.S. has submitted a proposal that would try to improve matters, giving technical assistance to developing countries that have had trouble with notifications, but also putting in place administrative penalties for those who just repeatedly refuse and have the capacity to submit. So there are proposals on the table and hopefully they'll make some progress.

Great. Do members of the WTO pay dues to the WTO? Great. Do members of the WTO pay dues to the WTO?

Um, yes they do. Yes, they do.

And has the United States paid its dues recently?

The United States did pay some back dues last year. They still owe the more recent dues.

And what happens when a leader like the United States steps back from helping fund an agency like that?

Well...

Who steps in?

There at this point, nobody. So they are being very cautious with their expenditures as one thing. Certainly there would have to be some consideration of how to backfill those dues, though, if the U.S. were not to in fact pay them.

Because last word I heard was that China was all too willing to fill that void and with it comes staff and other supplements to the work that WTO does, but that don't necessarily share our values. And with that, I will, oh, I will ask one last question. What happens if the United States withdraws from WTO?

Well, if the WTO withdraws from the WTO, it's important to recall that this is a consensus decision-making organization and U.S. interests would not be represented and the U.S. would not be in a position to block a consensus on core interests and values.

And what happens if we leave and then want to come back? How do we get back in?

Well, presumably we would be subject to an accession process, the same as every other member, where every member of the negotiation would be negotiating with us to determine which measures are and are not ones that they would like to see a WTO member holding.

Thank you, and I yield back.

Thank you. I now recognize Chairman of the full committee, Chairman Smith. Thank you, Mr. Chairman. The Trump administration has been breaking down barriers after barriers to American exports and leveling the playing field for American workers, producers, and farmers through bilateral negotiations with multiple nations. President Trump has achieved huge wins against many different types of trade barriers. For instance, he helped end Australia's use of non-tariff barriers to discriminate against U.S. beef. He also eliminated tariffs on U.S. ag exports to Cambodia, to Malaysia, and Indonesia, and he successfully negotiated with Japan to secure a commitment to purchase $8 billion in U.S. agriculture products. And he secured Canada's commitment to drop its digital service tax against American innovators. Donald Trump did that, not the WTO. Even with these successes, I'm still struck by some of the remaining trade imbalances that seem ripe for the WTO to help address with some of its biggest members. At a conference in Sweden last summer, I pointed out to a room of European diplomats, they didn't like what I was about to say, but this is what I pointed out to them, that the EU as a whole purchases less U.S. chicken than the tiny country of Angola and purchase less U.S. pork than the country of Honduras. The EU's GDP is 200 times larger than that of Angola. Honduras is a country of 10 million people compared to the EU that is 450 million people. Ms. Shaw, is it fair to say that the Trump administration has achieved success in opening markets in ways that never would have been achieved through negotiations at the WTO? And to what extent, if any, could the administration deploy the same tactics we've seen achieve success in bilateral negotiations in the multilateral, multilateral arena that is the WTO?

Good morning, Mr. Chairman, and I wholeheartedly agree. I think what the Trump administration has been able to accomplish in less than a year in terms of opening up market access opportunities, resolving long-standing regulatory barriers, legal barriers, other types of programs that disadvantaged U.S. exporters has been incredible. And on top of that, in many of the deals that they've struck through these art programs and framework deals with Indonesia, Malaysia, Cambodia, you talked about Australia and Japan, we've actually seen commitments by other governments to make reforms in Geneva, things that never would have been possible within the context of WTO negotiations themselves. It's really incredible and I think the leverage the President has used has been powerful and smart.

So one of the ongoing and more concerning issues at the WTO is the question of a permanent moratorium on e-commerce tariffs. After the Biden administration foolishly never affirmed the long-standing U.S. support for a permanent moratorium, the Trump administration has restored American leadership and secured individual commitments from several nations to support a permanent moratorium. The current temporary extension of the moratorium will expire at MC14 and it is critical that we settle this once and for all. Mr. Ezell, how significant is it that the Trump administration use bilateral leverage to increase support for a permanent moratorium on e-commerce tariffs?

Thank you for the question. Well, in my opening testimony, I tried to lay out what's at stake for the United States and the global economy if we do not continue and ideally make permanent the WTO e-commerce customs duty moratorium. U.S. digital exports could fall as much as one percent almost immediately thereafter and other countries might implement similar tit-for-tat duties. So it would just be incredibly destructive to the global digital economy and that impacts what is one of America's most successful industries, of course, the digital economy. So I agree that bilateral agreements are a way which we can add pressure with our allies to line up with us on a permanent moratorium. But I also think one thing that's very important is that we have a more responsible conversation with India. Because the reality is if India ever actually got its way and we lapsed the WTO e-commerce moratorium, it would destroy their digital economy, which now accounts for 11 percent of Indian GDP. Two years ago, I wrote a 70-page report about India's attempts to get into the global semiconductor industry. Well, if they could actually impose customs duties on their transportation of blueprints for semiconductors or blueprints for semiconductor fabs, it would completely forestall any ability for India to compete in the global digital economy. And India in fact has already inflicted tremendous damage upon itself by multinational companies not wanting to make semiconductors in India because they know that this is a possibility that the movement of a blueprint for a semiconductor might get taxed. So what I want to say here is, you know, if India wants to become a core U.S. partner, we had the trust initiative with this administration between Trump and Modi, we want to have deeper collaboration with India on semiconductors, on AI, on clean energy, on critical minerals, then it's time the United States has a conversation with India and demonstrates to them that it's time for a more mature approach to trade policy making in the global digital economy if they want to be a critical ally with the United States in advanced technology industries.

So with all the discussion on India, it leads to my next question. I have previously raised countless concerns over India's unfair trade practices that undermine U.S. rice producers. This included requesting a report from the U.S. International Tax Commission which confirmed threats including foreign subsidies that undermine the competitiveness of U.S. rice farmers. A substantial number of these farms operate in my home state of Missouri and specifically in the communities that I represent. In fact, farmers... [Video plays.] [Laughter.] ...was a strange voice of mine. But I represent, in fact, Missouri farmers rank fourth in the nation in rice production and all the rice production in the state of Missouri is solely in my congressional district. So Mr. Bachmann, the truth, the Trump administration has made substantial progress in its initial trade negotiations with India, but India's behavior in the global rice market continues to be a problem. Where do you see the administration being able to secure an advantage in negotiations over U.S. rice exports with India and where in our global trading partnership do you see a model for successful negotiations on this front and or additional work with other nations that is needed?

Thank you, Mr. Chairman. I think that what we see coming down the pike is more opportunity to gain leverage over India through what the administration announced last week with Section 301 investigations into forced labor and global overcapacity. Both of those are targeting India and both of those are areas where India is producing rice with forced labor and they're also overproducing rice and manufacturing and exporting it around the world. We also hope to see a rice-specific Section 301 investigation that would look at India's unfair trade practices and use those as a durable source for protecting the U.S. rice industry and gaining additional leverage over India moving forward. I think we're going to have to see multiple nations come together to address the problem with India when it comes to rice and wheat subsidies. The U.S. announced its latest, its fourth counter-notification at the WTO yesterday for rice and wheat subsidies and we had several co-sponsors. We're going to need to see continued efforts there to take an actual dispute settlement case against India jointly with other countries, but as well we're going to need to see some sort of enforcement through tariff action in the United States to keep that leverage.

Thank you all for being here. Thank you, Mr. Chairman. Thank you. Mr. Panetta, you're recognized for five minutes.

Thank you, Mr. Chairman. I appreciate this opportunity and thank you and Ranking Member Sánchez for having any type of hearing on trade, something that needs to be discussed a lot more here on Capitol Hill, especially considering our constitutional purview over trade and foreign commerce, which needs to be exacerbated and I think encouraged a lot more. I also want to thank Mr. Ezell and Bachmann for your comments to the Chairman Jason Smith's questions about India. I completely agree with you on that and there's definitely something that needs to be done in regard to that country, especially if they want to be a player at the global level, especially with trade. So thanks to both of you. Look, given the circulated WTO reform proposals and the Ambassador Allgeier's memo, it's clear that reform will be a major topic of discussion at the upcoming conference in Abu Dhabi, deliberations that I believe could and should help shape the future of our global trading system. However, the President's approach to trade, I believe, has eroded norms that have benefited our country for decades. His 40-year fixation on tariffs and the tariff policies that he's put in place, I believe, have undermined U.S. trade agreements and hurt our country's credibility when it comes to foreign commerce. As each of you have noted in your testimony, be it written or verbal today, the WTO needs reforms. We get that. The U.S., though, can be an effective part of that reform process. But if we've abdicated our role, especially here in Congress, in the global trading system, we lose the ability to help shape its future. Despite the many, many shortcomings of the WTO that you highlighted, the WTO can still be a forum to address emerging trade issues and advance a fair and open global trading system. The WTO can help deliver important agreements and advance critical trade standards, like the e-commerce moratorium that was mentioned and even the fisheries agreement, which are examples of this. Ultimately, American companies, I believe, benefit when the rules of the road are clear and certain and functional structures exist to enforce those rules. The WTO can provide it with proper reform. Now look, some of the core organizing principles of the WTO are the most favored nation status and non-discrimination amongst members. However, both the United States and Europe have suggested re-examining those trade edicts, which I think would be a significant change to the trading status quo and could lead to more plurilateral agreements outside of the WTO structures. Mr. Bachmann, you know that the United States has a large agricultural sector as you talked about, especially when it comes to rice. Because of that, nations, though, are incentivized to protect their ag against U.S. ag by putting tariffs or non-tariff barriers on our agriculture. Without MFN, the most favored nation status, are there any other rules to prevent those types of nations from doing that?

Yes, I think the SPS agreement within the WTO has been a very strong and useful tool for U.S. agriculture in bilateral agreements to be able to reference that. I think around the world, largely countries abide by the SPS agreement terms and that's been a great example of success for U.S. agriculture, especially specialty crops grown in your district.

Great. Thanks. Appreciate that. Now over the past year, the EU has increased the pace of its engagement on trade and struck several agreements without the United States. It includes agreements with South America, the Mercosur agreement, Indonesia, Mexico, and even EU-India agreement. It's a very fast pace for these types of agreements, not frameworks, agreements that are based on negotiations and not coercion, which seem to be a signal to our global partners that our global partners are hedging against U.S. absence in trade leadership. Mr. Hirsh, what are the strategic risks to the United States when major trading partners like the EU advance large regional agreements without the United States and could these EU-driven agreements incentivize third countries to align more closely with EU regulatory frameworks over United States standards that we've pushed for?

Well, most directly, these agreements potentially will put our exporters at a disadvantage since they do provide for preferential tariffs for EU goods in for those countries with the EU. But yes, they do mean that the EU is very actively involved in setting the global rules of trade through these bilateral agreements and those are not necessarily the same values and the same approaches that we would take.

Great. I'm out of time. Gentlemen, ma'am, thank you for being here. Thank you, Mr. Chairman. I yield back.

Thank you. I now recognize Mrs. Miller for five minutes.

Thank you, Mr. Chairman, for hosting this and thank you all for being here today. The importance of cementing the e-commerce moratorium goes without saying. The U.S. and our companies will unfairly bear the brunt of any tariffs that are imposed on transfers of data and it is important that our negotiators act quickly to ensure this does not occur. U.S. tech companies are already suffering from harmful digital policies outside the scope of the e-commerce moratorium. Our tech companies are facing harmful non-tariff barriers such as exorbitant fines and fees, harmful competition policies, data localization requirements, digital service taxes, and local content requirements. These barriers are imposed by some of our supposed closest allies and fellow WTO members, including the European Union, Korea, and Canada, and they blatantly discriminate against U.S. companies. These policies have already threatened innovation and growth on the global stage and inherently go against the principles of the WTO and the e-commerce moratorium. Mr. Ezell, do you believe there is value in seeking similar moratoriums at the WTO on the imposition digital non-tariff barriers and are there other avenues at the ministerial or post-ministerial to push back against these policies?

Well, I think in Abu Dhabi and at the WTO, it's imperative that our trade policymakers use both instruments as a platform to document and to speak out against these types of discriminatory digital trade practices against U.S. companies. As you said, this is a global contagion. One concern is that when the United States is not taking a leading role in shaping global digital trade rules, as indicated by us in the previous administration pulling out of the JSI, is that we cede leadership to Brussels and Beijing. And we have seen the Brussels effect where countries around the world from Turkey to Brazil to Indonesia are adopting EU-like policies like DMA policies that designate U.S. firms as gatekeepers and subject them to onerous regulatory requirements. So we need to do several things. First, we need to take the lead in setting rules and making it clear at the WTO that you cannot discriminate against digital products. That said, we're going to have to, we could use other formal tools. We could request formal consultations or bring a WTO dispute. So this is a forum where we can bring cases and disputes against foreign companies that are discriminating against our firms. But as I said previously, I think that we're going to have to look outside the WTO if we're going to really make progress against the European Union or Korea in attacking some of these discriminatory digital trade practices. We may need to bring a Section 301 case directly against the European Union saying that their policies like the DMA, the DST are discriminatory against U.S. companies. What I'm saying is we can pursue a WTO track, we should do so, but I think this is going to require bilateral activity by USTR if we're going to get real action from our trade partners to ameliorate these practices.

Thank you so much. I want to highlight Uzbekistan's progress in joining the WTO. I've long advocated for lifting the Jackson-Vanik amendment for Uzbekistan and other Central Asian countries and for granting them permanent normalized trade relations. Granting Uzbekistan and other Central Asian nations PNTR will give American companies surety to invest in the region and move our supply chain away from China in key sectors such as critical minerals. Uzbekistan is eager to partner with the United States and President Trump has already secured key deals with them, including the sale of 22 Boeing aircrafts. A predicate for lifting Jackson-Vanik for Uzbekistan and other Central Asian nations is that these nations join the WTO. Kazakhstan successfully joined the WTO in 2015 and Uzbekistan is making great strides. Uzbekistan has finalized 30 bilateral market access negotiations with the WTO members and has had several meetings with the working group level. This highlights their commitment to following the principles of the WTO and readiness to become players. Ms. Shaw, do you think Uzbekistan's successful accession to the WTO, which is hopefully occur this year, can be used as a pathway to granting PNTR for Uzbekistan and other Central Asian nations?

Very quickly and good morning Congresswoman, thank you for the question. Absolutely for Uzbekistan. I welcome their accession to the World Trade Organization. PNTR comes with meeting the standards of WTO membership and as soon as they are able to meet those standards, I think the United States should move forward in granting them PNTR.

Thank you so much. I yield.

Thank you. I now recognize Ms. DelBene for five minutes.

Thank you, Mr. Chairman, and thanks to all of our witnesses for being here today. For decades, the WTO has set the rules of our global trading system and that there are well-documented bipartisan concerns about how the WTO operates. But American interests are served well by having a common system that allows our businesses to compete globally with a consistent set of rules. I appreciate Mr. Ezell's comments on the importance of the e-commerce moratorium. I'm a supporter of the moratorium. We can't allow it to lapse. It would effectively invite our trading partners to put tariffs on the digital transmissions that increasingly drive small business growth and create jobs. So appreciate your comments on that. And I think as part of our conversation about the importance of WTO reforms, it feels strange to be talking about international norms and standards without also noting that this administration continues to undermine nearly every standard of WTO and U.S. trade policy through reckless tariffs. After the Supreme Court struck down the IEEPA tariffs, Ambassador Greer and the President quickly pivoted to Section 301 with the goal of creating a long-term replacement for the reciprocal tariffs. Just last week, USTR initiated a 16-country excess capacity investigation and a 60, six-zero, country forced labor investigation. To top it off, Ambassador Greer announced he plans to have these investigations concluded in five months. So I have a few questions. Mr. Hirsh, what are the core steps in the process for a Section 301 investigation?

Well, in addition to the hearings and the request for written comments, which USTR's already undertaken in those investigations, they will typically or they're required to consult with the foreign countries that are the targets of the investigations. They're also required to consult with the statutory private sector advisory committees. Then over the course of their investigation, they will develop a retaliation list, but they will ultimately have to determine whether in fact the unfair or discriminatory practices exist, whether they burden or restrict U.S. commerce, and what steps to take if in fact they do find affirmatively.

How does the administration's five-month timeline compare to the typical timeline for a Section 301 investigation?

Well, a typical timeline for one of these investigations would be about a year.

Are you worried that running 76 simultaneous Section 301 investigations would strain the capacity of USTR to perform thorough and fact-based investigations?

Well, it is certainly going to stretch the resources at USTR, though probably they've done some work ahead of time. It'll be really difficult, though, to conduct all of the negotiations that they need to, all the consultations that they need to with all of the targeted countries in that period of time.

The combined breadth and the speed of these investigations is unprecedented. The administration is willing to accelerate this process and unfortunately because it already knows the outcome it wants. So this is not a thoughtful study of how to address industrial overcapacity or forced labor practices. It's clearly a misuse of Section 301 authority aimed at resurrecting the illegal IEEPA tariffs, which added about $1,400 to the expense of the average American family in 2025. Folks are depending on us to uphold the rules and protect them from an administration that thinks it has blank check authority to tax families. Congress has its constitutional role over trade policy to perform real oversight over these Section 301 investigations. We should be doing that work. I appreciate all of you being here and I yield back.

Thank you. Dr. Murphy, you're recognized for five minutes.

Thank you, Mr. Smith. Before I get started, it just kind of reminds me, you know, when I was a kid I got an allowance, but if I didn't act like my parents wanted me to act and after admonishment and cajoling, they didn't pay me my allowance. So maybe the WTO should act like we want it to act and reform like we want it to reform and then we pay. Just a thought out there. I do want to talk about China. China being still classified as a developing country. You look at China, they're our biggest adversary, but they have also made immense progress in infrastructure and technological developments. It's still investing in developing countries through the Belt and Road Initiative, upwards of some people project over a trillion dollars in projects worldwide. I mean, I've been throughout Africa, Central America, and the Chinese are everywhere. So it begs the question, how does a country that is so-called developing have enough money to build ports, roads, etcetera, in other countries? They are by far our biggest global competitor in sectors such as AI, advanced manufacturing, and I can go on and on. And China's making billions of dollars investments in these critical technologies, even outcompeting America in many regards and out-politicizing them just by being present in so many of these countries. China declares itself a developing country despite being the second largest economy in the world and has received special and differential treatment at the WTO as a result. The classification is not only wrong, it undermines the integrity of the WTO itself. Well, September last year, China's Premier Li Qiang announced that China will no longer request this differential treatment but will continue to call itself a developing country. It's kind of ironic. Ms. Shaw, is this a positive step or just a political shenanigans stunt?

Thank you for the question, Congressman. I will say the fact that the second largest economy in the world is allowed to label itself a developing country undermines the credibility of the system. And I think the administration and on a bipartisan basis, other administrations have pushed for objective standards to define who is and who is not developing. I think it is positive that China has said they will not avail themselves of special and differential treatment, but they continue to maintain a label that simply doesn't fit them. I think it undermines the institution's credibility.

Yeah. I think it's done as a political stunt, but what do I know? Mr. Bachmann, could you do you mind if you just could mention about how China's self-declared status in this respect, I just want to talk about China for a second, has impaired global agricultural markets?

Sure, thank you. China has been the largest rice producer in the world for a long time up until last year when India took that role. The United States took two cases against China that were won under they were taken under the Obama administration, one under the Trump administration. Neither of those cases have been able to proceed forward despite the U.S. winning those cases on corn, rice, and wheat subsidies and how they handle their TRQ. And so we see China as still a bad actor out there, somebody that's refusing to play by the rules. They play just enough to keep everybody happy, but we realize that what they're doing is impacting many countries and markets around the world in a negative way.

Well, let me follow up with that question then. How can the U.S. then prioritize advancing data, science, and risk-based approaches, including agricultural policies, human health and safety, environmental factories, when we're facing these things with China?

I think we need to increase our own our own research and our own advancements to be able to combat what the Chinese are doing. And we need our own we need to not let them take the vacuum in the room at the WTO.

So, you know, as tough as sometimes trade policy is, it takes a strong will because truth be told, we've been abused as a country for so long and we've accepted it being the good guys. And I'm glad we're finally just drawing a line and saying we're not going to be abused anymore. It's difficult. It's challenging. There's no doubt about that and there is collateral consequences. But if we look at the at this as a national security measure, we look at as a national economic measure, if not now, when? And if we don't do it now, it will be too late. Thank you, Mr. Chairman, I yield back.

Can I make one comment to that, Representative?

Sure.

It would just be that since China entered the WTO, it has accumulated a $7.2 trillion trade surplus with the United States. In 1990, China had $200 million in foreign currency reserves. By 2016, it had $4 trillion. A great deal of that largesse directly came out of the pocketbooks of Americans.

Right. So don't you think we should do something about that?

Absolutely. Happy to respond further, but I wrote a whole report 20 years after China entered the WTO comprehensively documenting how they simply have not complied with the foundational commitments they made to entering the organization two decades ago.

Yeah, and the WTO should enforce that. Thank you very much, yield back.

Thank you, and I now recognize Mr. Beyer for five minutes.

Mr. Chairman, thank you very much. And thank all of you for for being here. I am deeply opposed to Trump's destructive tariffs. They've jacked up U.S. prices, they've seriously harmed American exporters, they've angered important trading partners and allies, and whatever small benefits have been gained by our trade negotiators leveraging them in the so-called deals that have been struck in recent months, they're more than outweighed by the massive economic costs and the reputational damage that we will bear for years to come. One under-discussed aspect of the President's reciprocal tariff regime was his blatant disregard for our obligations under WTO rules, specifically the most favored nation principle and the idea of non-discrimination. MFN is the bedrock of WTO and a key tool in promoting stable and equitable global trade. The Trump administration expressed a desire to fundamentally revisit MFN in its communication on WTO reform last December. And while it is positive that the administration is engaging at all in the WTO and that it unlocked our paused funding to the organization, I'm concerned about what this communication means for the future. It seems like just another effort to move the world away from a rule-based order that has brought enormous prosperity to all since the end of World War II. I mean, just think about where we were in 1950 or 1948 and where we are now across the world and in the United States. And move it to a world where of rival blocks, high tariffs, and multiplying barriers to trade. Mr. Hirsh, I know that MFN is not absolute. There are plenty of exceptions to the rule, but what would it mean for the WTO and the global trading system if MFN was to adjust in the ways the Trump administration has been signaling?

Well, you know, the the value of MFN you've already note pointed to and, you know, I would just reiterate there that, you know, it's really critical for traders, the simplicity and the predictability that it provides, you know, helps them to navigate global trade especially for small companies. WTO negotiators would have a very difficult time negotiating without it. And as you mentioned, there are certainly exceptions already for MFN, for preferential trade, for FTAs, for various measures, health, security, environmental. So there are already exceptions for MFN. And so the real question really should be when can you take exceptions and are they sufficient? We understand that for China, there are circumstances that may not be well handled at the WTO and therefore they might be might need to have an exception there. But, you know, to your question, if we were to abandon MFN altogether, it would be much more difficult for traders to operate, much more difficult for companies to operate, and as you noted, it would really undermine really some of the foundations of the global trading system.

By the way, just as an aside, there's been so much criticism so far. I think at least one short paragraph about the advantages of trade. You know, since we liberalized international trade things before any of us here were born, we've had the greatest growth in human welfare. We've lifted billions of people out of poverty. America's net worth is hugely ahead of where we were. And yes, there are certainly problems out there, but let's not forget that one of the benefits of trade to the American people is we've been buying low-cost products, often well-made, from around the world that have lifted the lifestyles and the net worth of Americans for decades and decades and decades. Mr. Hirsh, you discussed in your testimony how the WTO's dispute settlement was hobbled in 2019 when they blocked appointments to the appellate body and that creates this situation that persisted the day of appealing into the void or looking through third things. But you've also talked about workarounds. So four fundamental questions. Is the status quo of the non-functional appellate body preferable to its pre-2019 composition? Who have been the beneficiaries since it ceased to exist? What's being lost by its continued absence? And what's needed to revitalize this now dormant reform effort?

Yeah, thank you. So right now the status is that it is broken. You've mentioned the workarounds that members are undertaking, but they still always have the option of appealing into the void. And that means that on difficult issues, there will not be resolution and there will be a limited assistance from the dispute settlement system. I would say that while we absolutely must, before fully restoring the system, ensure that U.S. concerns are addressed, I was very encouraged a few years ago by some of the progress that was being made in Geneva in closing gaps, that others are getting a lot closer to understanding and appreciating U.S. concerns, and a lot of work was being done to close gaps and to respond to U.S. concerns. So hopefully that will continue at some point and that this important tool for enforcing our rights will be restored.

Thank you very much. And Mr. Chairman, I yield back.

Thank you. I now recognize Mr. Moore for five minutes.

Thank you, Mr. Chairman. Mr. Ezell, I have a quick question on, I'm going to add some context, but the question I have is, does the administration have a strategy for using the USMCA model as a template to push other digital trade and data local, data flow localization, to bring that to a more multilateral experience? So American dominance in AI, cloud infrastructure, data services represent one of the most significant growing U.S. capabilities out there and with respect to our trade surplus. Yet it's increasingly threatened by data localization requirements that force U.S. firms to store data within foreign countries or submit to local audits. USMCA contains some of the strongest digital trade and data flow protections that's ever been negotiated, and these include explicit prohibitions on data localization requirements. So simple, but this is just three countries. Our digital services is by far one of our biggest assets right now in the global trade space. Is there thoughts, strategy to expand that out beyond, take what we learned from USMCA good policy and expand it to some of our plural or multilateral partnerships?

To the first point, I want to emphasize how serious of a challenge this is. ITIF research has found that from 2017 to 2021, the number of data localization policies in force globally doubled, such that in 2017, 35 countries had implemented 67 such barriers. By 2021, 62 countries had imposed 144 restrictions, with dozens more under consideration. So this is a global problem that we have to get a handle on. To your second point, yes, absolutely. The USMCA can provide a framework, a structure for the exportation of higher standard digital rules into other agreements. As I said in my opening statement, where the Joint Statement Initiative on e-commerce falls down very severely at the WTO is that it does not include provisions against non-discriminatory treatment for digital products, does not include protections for source code or algorithms that are critical for artificial intelligence, and does not include explicit bans on data localization or making it clear we have to have open cross-border digital trade. So yes, absolutely. The USMCA can serve as a template for what the U.S. should seek with digital rules in other bilateral agreements as well as a plurilateral forum like the WTO. In my testimony, we submitted a comparison of the digital rules that exist under the CPTPP, the RCEP, that's the Regional Comprehensive Economic Partnership, DEPA, USMCA, and the WTO. And yes, right now, the USMCA has the highest standard digital trade rules that are in force worldwide.

And what's your overall feel for how that can continue on even within a renewed USMCA? Are you positive on that? Is there potential of lessening that or where are we just standing with even within USMCA?

Well, I think we can go further in the USMCA. In particular, we need to have the USMCA explicitly ban digital service taxes. So we've got to get rid of DSTs. One thing we should push for as well in the USMCA is ensuring that Canada does not discriminate against our digital companies. In particular, Canada's Online Streaming Act wants to impose a five percent taxes on revenues of American streaming companies to support Canadian local content. That's similar to an Australian law that would demand 10 percent of revenues. So we've got to, in the USMCA, push back against other forms of digital regulation that are specifically discriminatory against U.S. digital tech companies.

Excellent. Thank you very much. Ms. Shaw, briefly, just a question on the administration, do we have a strategy for building a multilateral, plurilateral subsidy discipline within the WTO among some of our market partners just to close the loophole that puts genuine pressure on Chinese malpractice? Their ability to subsidize sectors like solar, steel, EVs, semiconductors, this is the kind of bad behavior that the WTO's agreement on subsidies and countervailing measures was designed to address. Your thoughts on that very briefly.

Sure, and thank you for the question. I think it's great. These are some of the most pressing challenges that American producers are dealing with right now. I do not think the WTO is equipped to handle them. I do think the administration should pursue bilateral and plurilateral negotiations with like-minded trading partners to try to box China out. This is what they're doing in terms of these plurilateral critical mineral negotiations where they're trying to set floor prices, create an alternative market so that we're not overly dependent on China or subject to the chokehold. That's what needs to happen in some of these critical sectors. Unfortunately, the WTO is not equipped to handle it.

Excellent. Thank you so much. Appreciate your perspectives. Yield back.

Thank you. I now recognize Ms. Sewell for five minutes.

First, I want to thank our witnesses for being here today. I think that this topic is pretty timely given ministerial conferences around the corner. I represent the great state of Alabama and my constituents benefit every day from a rules-based trading system that was established by the WTO. Farmers and manufacturers in my district depend upon foreign markets to export Alabama goods. In 2024, Alabama's exports were valued at $26.8 billion. But because of Donald Trump's tariffs, exports from Alabama has dropped over $2 billion last year. We all agree that the reforms are needed for the WTO. The dispute settlement system is broken and the organization has come up short when dealing with issues like forced labor, climate change, and unfair trade practices. However, many of the principles established by the WTO, like the most favored nation treatment, continue to be the foundation of our rules-based trading system. While Donald Trump continues to cause chaos around the globe, we in Congress must stand up for the WTO and the value that it provides to the American consumer. So we must support some reforms. Mr. Hirsh, in your testimony, you stated that while China was traditionally more of an obstructionist when it came to WTO, they are currently repositioning, for example, in the fish subsidies discussions, to becoming a defender of the multilateral trading system. Is China sensing an opportunity to take a leadership position in the WTO as they see President Trump continuing to attack our allies?

They're definitely acting very opportunistically to present themselves as defenders of the system even as their actions really do not support that, yes.

In this current global environment where we see the rise of authoritarianism and growing reliance on industrial policy, is the WTO's consensus-based decision-making process still workable with 160-plus members, Mr. Hirsh?

Well, I think what it's there's really hardly any other way, unfortunately, for them to make decisions because, given what is being negotiated, members really do need to be able to consent to the commitments that they are agreeing to. When they are able to reach agreement, it means that you've got a very strong, durable agreement, and that's really quite important. So again, there have been successes even with those constraints. There have been two multilateral agreements so far concluded on fish subsidies and trade facilitation. These plurilateral agreements offer a lot of opportunity as well for reaching agreement at the WTO. So yes, consensus is important, but it does not mean that you can't do anything constructively or valuable at the WTO.

And so if you had a magic wand and could only do one reform for the WTO, what would that be and why?

Well, the magic wand, frankly, would be...

Be nice to have one, wouldn't it?

Not necessarily even a reform, but as I said in my statement, it would be wonderful if the small handful of members that have been obstructing progress in so many areas would simply recognize the value of the organization, sincerely recognize it, and in doing so step back from obstructing. Because a lot would be getting done right now without that.

Good point. You know, I think that most favored nation treatment is probably one of the core principles of the WTO that has been helpful, but the United States seems to be weakening the most favored nation status and would that strengthen our leverage in trade negotiations or risk unraveling the unilateral trading system if the United States were to abandon it?

Yeah, I mean, to the extent that it would unleash chaos in the global trading system, that would not serve any businesses, any traders, or any countries. So MFN is a simple principle that helps traders and it helps serve as a foundation for meaningful, durable agreements.

If our president continues to pursue this sort of trade war that we're in and he doesn't engage in good faith reform of WTO, what are the likely consequences for the United States economy over the next decade, would you say?

Well, I'm not an economist, but I think that we've already seen that chaos is not friendly for business and that it's not friendly for consumers or for those who need any kind of steady rules, since business really relies on steady rules.

Well, I mean, I think that WTO plays an important role and while there are needed reforms, definitely, I think the U.S. sort of walking away from the WTO is not the answer. But thank you so much all of you for your testimony. I yield back the balance of my time.

Thank you. I now recognize Mrs. Fischbach for five minutes.

Thank you, Mr. Chair, and thank you all for being here today. And it's funny that I'm asking this question right now because it's going to be related to ag and I was literally in the hallway meeting with Minnesota Farm Bureau. And you know what the first question they asked about? Tariffs and trade. And so it's kind of and I said, well, that's what we're talking about in there. So but farmers and ranchers obviously in my district, I have a heavy ag district, depend heavily on export markets. Yet they so often face significant tariff and non-tariff barriers and are forced to compete abroad against producers benefiting from heavy subsidies, challenging their ability to compete on a level playing field in international markets. We've seen the Trump administration find success in negotiating stronger and fairer access for U.S. agricultural products abroad, including addressing tariff and non-tariff barriers, but obviously, and I think you probably all know, there's still work to be done. Mr. Bachmann, as the United States heads into the WTO ministerial conference, what specific priority should the U.S. pursue to ensure the WTO better prevents trade-distorting practices and expands real market access for American producers?

Thank you, Mr. Chair, and thank you all for being here today. And it's funny that I'm asking this question right now because it's going to be related to ag and I was literally in the hallway meeting with Minnesota Farm Bureau. And you know what the first question they asked about? Tariffs and trade. And so it's kind of and I said, well, that's what we're talking about in there. So but farmers and ranchers obviously in my district, I have a heavy ag district, depend heavily on export markets. Yet they so often face significant tariff and non-tariff barriers and are forced to compete abroad against producers benefiting from heavy subsidies, challenging their ability to compete on a level playing field in international markets. We've seen the Trump administration find success in negotiating stronger and fairer access for U.S. agricultural products abroad, including addressing tariff and non-tariff barriers, but obviously, and I think you probably all know, there's still work to be done. Mr. Bachmann, as the United States heads into the WTO ministerial conference, what specific priority should the U.S. pursue to ensure the WTO better prevents trade-distorting practices and expands real market access for American producers?

Thank you, Congresswoman. I think most important to us would just be to hold the line, frankly, is to no backsliding and maybe encourage setting up some sort of a work plan towards reforms that the U.S. could be an effective part of, rather than hoping for some sort of true reform or true progress on ag negotiations this year.

Thank you very much. And anyone else have anyone they want to add to that or anything? I mean, I'll let... Okay. Just checking because someone looked like maybe they... But if the WTO cannot meaningfully address the distortions that are happening, particularly in countries that refuse to address non-tariff barriers, what tools should Congress and the administration consider to protect U.S. farmers while still supporting a rules-based trading system? Mr. Bachmann, do you want to start?

Sure. I think that it would be helpful if Congress continued to support the administration's use of tools like Section 232 and Section 301 investigations to be able to use legally durable tariffs as leverage in order to get better agreements, bilateral agreements, across the finish line. We've already seen the success of some of those over the last year, and I think we're going to continue to see many more in the next couple of months that benefit U.S. agriculture and other manufacturers.

Thank you. Ms. Shaw?

Thank you. I may have looked like I wanted to say something previously because I almost always do. That's my resting face. But I'll add on just to agree with my colleague here as well and just say, look, there are limitations to what we can accomplish at the WTO at this point in time. To Representative Sewell's point, we have 166 member countries, each of whom have a veto. If we want to take action against India, they get to veto it. If we want to take action against China, they get to veto it. So there have to be solutions that the administration has, tools the administration can use to go after trading partners on a bilateral basis or plurilateral basis. And so the tools that my colleague identified, the 232, the 301, these art deals, these negotiations, this leverage that the President has been able to achieve, this is the only thing that has worked in the last decade to try to extract some of these commitments from our trading partners, and I think it's been remarkably successful.

Thank you. Thank you very much. And I am just wondering if, Mr. Bachmann, as we approach obviously the conference, how should the United States approach negotiations on the public stockholding, particularly given that some of the members are seeking permanent protection beyond the current peace clause?

Yes, I think we want to make sure that we push back on any Indian approach towards making permanent the public stockholding provisions. I think public stockholding on its face sounds honorable. You want the government to procure food for food security for their country. But what happens is they're buying billions of dollars worth of food, in this case rice and wheat, and then they sell it to exporters for cents on the dollar, and then that floods not only the U.S. market but the world market, and it makes it difficult for our farmers and ranchers to compete around the world against Indian products or Chinese products or other countries that abuse the public stockholding provisions within the Bali Agreement.

Thank you very much. And I am almost out of time, so I will yield back my eight seconds.

Thank you. I now recognize Mr. Schneider for five minutes.

Thank you, Chairman Smith, and I want to thank you and the Ranking Member for holding this hearing and our witnesses for joining us and sharing your perspectives. The World Trade Organization has helped shape the rules-based trading system and helped remove trade barriers and facilitates strong international relationships and expand access to markets of all sizes. At its core, the WTO aims to limit unfair trade practices and promote strong and diverse trade flows around the world. Mr. Hirsh, a couple of things I've heard in just sitting here. You noted chaos is not good for business. I think that's something we can all agree on. And that reform is needed. Both sides of the aisle recognize that. And to achieve reform, we need clear and shared goals. We need specific details of what we want to accomplish and then obviously agreed-upon metrics and milestones. But there's the issue, and Ms. Shaw, you just touched on it, the veto, the ability of obstruction to rule the day. And there's an obstruction calculus, I believe, that as long as any country believes that they have more to lose than they hope to gain by either getting out of the way or actively engaging in the reform process, reform becomes all but impossible. At the same time, I think it's critical that the U.S. engage and lead. Unfortunately, we've seen President Trump over the past year plus start, lose, and restart trade wars, and this is at a time when trade norms are rapidly changing. I believe the U.S. has to reaffirm its commitment to being an active participant in the WTO and working together with our allies, not against them, to further those shared goals. It's imperative that we have a WTO with a working appellate body that improves the speed and predictability of dispute settlement processes and addresses the needs of the United States and other free and open economies in the 21st century. So I was frustrated to see the United States stop contributing last year to the WTO, but happy to see that the Trump administration has reversed policy and restarted those payments. But I remain concerned about a shifting U.S. trade priorities alienating our country in a forum where our leadership is desperately needed. Let me touch on consensus-based decision-making, and I'll start with you, Mr. Hirsh. What reforms do you see as needed for the WTO to help more members or every member reach decisions in a consensus-based forum? And what are other members doing to help advance this goal?

Well, there have been some proposals that have been made by various members, things like so-called responsible decision consensus and other attempts to at least create norms as to when it is appropriate and guidance as to when it's appropriate to block something that's widely supported. There have been some proposals out there now to take the really basic administrative jobs that are also done by consensus, appointing chairmen and such, and making those something less than a consensus. But I mean, I think that ultimately, what is really required is recognition on the part of the members themselves of the value of the organization and the value of its ability to take decisions and therefore to step back from some of the obstructive behavior that they've taken. They have an opportunity to look at what the world maybe looks like without the WTO and maybe judge that it is in their interest to make progress there.

Ms. Shaw, if we could do one thing, especially for Congress, if you were to give Congress guidance on what we could do to try to move it forward to get to that reform, what would you tell us to do?

Sure. There's no silver bullet. I'd start with that.

There never is.

Yeah. Just to say, reform at the WTO actually takes a lot of work outside of the WTO. So if you look at what the Trump administration did in its negotiations with Indonesia, Malaysia, Cambodia, it got these economies to agree to not stop renewal of the e-commerce moratorium in our bilateral deals. Right? So you have the U.S. exerting pressure to try to fix issues in Geneva. And as a result, United States doesn't actually need a permanent moratorium this year. We want it. It's good for our innovators. It's good for our digital companies. But we already have commitments by Indonesia to not impose tariffs, and we can use Section 301 to have other countries agree to not impose and disadvantage U.S. digital companies too. So I think it's pressure on the outside.

Let me build on that because I think it's an important point in the few seconds we have left. There are many ways to get to the top of the mountain top. But if you are beating up on your friends, going back and forth sometimes arbitrarily, sometimes capriciously, does it make it harder to bring people together to get to the collaborative productive work we need to do to reform the WTO?

What I would say is the United States has been pushing for WTO reform for 25 years. And the other way didn't work. And so while this approach has some benefits, it also has some drawbacks. The other way didn't work. So we have to find a new way forward.

I agree with that and I yield back.

Thank you. I now recognize Mr. Arrington for five minutes.

Mr. Chairman, Ranking Member, witnesses, thank you for your time and insight. We gave permanent normal trading relations to China in the WTO many years ago with great expectation for good things, namely to democratize, if you will, the country of China under the regime of communist control. But also we expected that we would have a rules-based trade order that would be enforced on every member of the trade community, including this new member that was advocated for by the Clinton administration, I believe at the time. It hasn't worked out quite so well. We haven't seen that, the vigilant enforcement to prevent transfer, transferring sensitive intellectual property and other sensitive information around technologies, American technologies, subsidies, all kinds of unfair trade practices, not to go through the litany of them. But it doesn't seem the WTO has been effective or has cared to equally enforce the trade rules to all of its members. So Ms. Shaw, how are things going to address that issue? Because that seems to be the big one for the United States. And we seem to have to be going it alone to address these in a bilateral way when most of the things that we're doing to address the unfair trade practices should be resolved and being resolved by the World Trade Organization. Can you just give me a status on that?

Thank you, Congressman, and I think it's a great question. What I would say is that China takes the view that some of its most egregious unfair trade practices are not covered by WTO rules. And unfortunately, we had an activist appellate body that shared that view and limited the tools the United States had to address the China challenge, the United States and its allied countries. So at the moment, there isn't really a lot we can do at the WTO to address some of these state subsidies, the terrible practices of state-owned enterprises, the technology theft, the excess capacity and overcapacity. We have to address those issues outside of the WTO, unfortunately. That doesn't mean the WTO doesn't have value in terms of the committee structure, the technical level discussions, the body of rules that help U.S. agriculture, farmers, producers, but we can't address China there. So we have to turn outside.

Well, the effects of that, at least in large part, have been millions of manufacturing jobs that we've lost because somehow they've been treated as a developing nation and are allowed some of these privileges in the trading community like mass subsidizing their manufacturing base. We've hollowed out ours, and we've become dangerously dependent on, ironically, on China for things that are important to safety and security of our country and the American people. So the consequences have been grave, and I can't think of anything more important for us in the trade policy space to address then this central, you know, perverting dynamic that is emanating from the WTO.

Representative, could I just comment that I believe, or our think tank believes, that China foundationally rejects the basic principle of the WTO? And that is that nations specialize in areas where they have comparative advantage, like making airplanes or semiconductors, and they trade with other countries for things they make better. China wants absolute advantage across all advanced technology industries. They want autarky and import substitution. We have to recognize that in dealing with China, we're dealing with a nation that fundamentally rejects the basic principles of the WTO.

Well, that's why it's hard to consider WTO as a credible rules-based trade sort of referee, which you have to have. I think in concept, it's great. The principles are only as good as they are enforced. And so I think this is the fundamental problem. I was going to talk about the issues with agriculture specifically and the unfair tariffs there and get your thoughts, Mr. Bachmann, on what we can do to continue to open up access and level the playing field for producers. We were at a three-to-one disadvantage, but I don't have any more time. I think we addressed the most important issue in my mind with respect to WTO. With that, I yield.

The gentleman yields. The gentleman from Texas, Mr. Moran, is recognized.

Thank you, Mr. Chairman. Mr. Chairman, it's clear that the Trump administration has brought to light an issue that has been overlooked, but has disadvantaged the United States for years. U.S. trade relations with our partners around the globe must be realigned in a manner that promotes free and fair trade. And international organizations like the WTO must not stand in the way or make that goal harder to achieve. They need serious reforms and they need to help us in that priority. When you look back several decades, free and fair trade was the priority of one of our finest presidents in American history, that's Ronald Reagan, who in his 1985 State of the Union called for a new multilateral negotiations platform that would lead to true progress in trade relations. His goal was to combat unfair and distortive trade practices, and he also understood, though, that the U.S. needed strong economic markets worldwide for U.S. goods. These goals and these discussions ultimately led to the creation of the World Trade Organization sometime later in 1994. These goals remain the same today: combat unfair and distortive trade practices, ensure strong markets with friends and allies for U.S. goods, and several other great ideals. But we have gotten askew a little bit. When operating correctly, the WTO can be a comprehensive trade negotiations platform that does allow economies from around the world to interact in a manner that was not possible before its creation and that meets these goals. It's a platform that the U.S. can use to pursue free trade and push back against discriminatory trade measures, but reforms, transparency, and accountability must also exist. Ms. Shaw, I want to start with you since you have worked both in Congress and at the Office for the U.S. Trade Representative in Geneva and in D.C. Your perspective on our steps forward with the WTO are very valuable. How do you think the U.S. can use our position at the WTO to promote free trade and work with our trading partners to advance priorities that will benefit all member countries?

Thank you, Congressman. I think it's a great question. Look, I think we've taken the WTO as far as I think the WTO can go in terms of negotiating new trade rules. I think right now it's about monitoring, transparency, and continuing to push our trading partners to abide by the commitments they've already committed to. When it comes to some of the more advanced trade rules, the China challenge, the other issues that we're facing, market failures, overstretched supply chains, we need to address these in other forums through plurilateral negotiations with our trading partners, through these bilateral deals. But I think the WTO is really going to struggle to take some of those issues on. You've got 166 member countries, every single one of which has a veto. That's hard to overcome.

It is. The structure has been very difficult for us to get the results that we need that actually support American ideals, not undermine them. You said, I think you said to Jodey Arrington just a little bit ago, that we've been working on reforms or proposed reforms for 25 years in the WTO without really getting anywhere that we needed to go with those reforms. So I'm curious specifically, what do you think we need to do differently to achieve the results and the changes we need from within the WTO without expanding its scope or what it can handle, but actually the things that it's currently handling, how do we make it do better?

Yeah, I actually think some of the steps the President has taken in the last year have already helped. And we were talking earlier about the fact that the President got other countries through these bilateral negotiations to agree to reforms at the WTO. We've never had leverage like that before. And we've used it to better the institution and the organization. I think that's one way to make progress.

Mr. Ezell, I'm going to ask you the same question. What do you think specifically we need to do to turn the screws to make sure that we get the changes we need in the WTO?

Well, I'd like to associate myself with Kelly Ann's comments, which is that we should use the vehicles that are available to us in the WTO where they're appropriate and effective in advancing our interests, like the Information Technology Agreement, lowering global tariffs on trade in information technology goods. That's probably been the WTO's most successful plurilateral instrument. It's helped our exporters tremendously. Let's use the plurilateral instruments that we have at the WTO to great effect. We could add to that with the Joint Statement Initiative on e-commerce. So defined areas within the WTO we can leverage and make progress on without having to deal with the reality that there is a veto and requires consensus to make new rules.

And for both you, Mr. Ezell and Ms. Shaw, what other nation countries are supporting our efforts to change the things that need to happen in the WTO? Where are we getting support?

So a lot of our like-minded allies are at the point where they recognize the WTO needs serious reform. And on certain issues, they see our point. But I don't think there's a meeting of the minds among all 166 countries on the types of reforms that are necessary. Even with the EU, we see some of the biggest gaps. So it's a challenge.

And I would add that on issues like the intellectual property rights, the COVID-19 IPR waiver, countries like Switzerland and the United Kingdom wanted the United States to stand up against India and South Africa on that waiver. But when the previous administration relented on that issue, the support against it eroded. So there are countries and allies around the world that are counting on the United States to stand up and show leadership in IP and digital trade rules at the WTO.

I agree with your statements there, Mr. Ezell, and I'll finish with this by saying the U.S. has to take a strong role in the WTO to make the reforms necessary to happen. We don't want to step away, let China get more influence in that organization or to push it further in a direction it does not need to go. But certainly we should not let ourselves be run over by the procedures and the structure of the WTO. We must stand with President Trump in his resetting of the trade world these days and make sure that we come out with freer and fairer trade on the back side as Ronald Reagan initially said we should. Thank you. I yield back.

The gentleman from the lower dais yields. And the gentlewoman from the U.S. Virgin Islands, Ms. Plaskett, is recognized.

Thank you very much, Mr. Chairman. I'm not going to be very long. I wanted to ask our witnesses if there was any information or discussion they had with regard to, in particular, labor standards currently for developing countries. We know that some developed country member states have argued that the WTO must take up the issue of worker rights to build confidence in the organization and the global trading system. And some developed countries and most developing countries believe the issue of core labor standards does not belong in the WTO. And I wanted to ask you all what your opinion is on that and how do we combat governments to view the efforts to bring labor standards into the WTO as a way to undermine the comparative advantage of lower-wage developing countries and make a compelling case that the economic growth will lead to better working conditions and improved labor conditions for labor standards for individuals within those states. Does anyone have any thoughts about that?

Well, why don't I start? And that is, as the Ranking Member noted, there have been efforts in the past to push forward labor rights at the WTO. They've met with the same challenge that every other significant decision has, which is the need for consensus. And there has been some skepticism among developing countries as to the intentions there and in general skepticism of just taking on new commitments as a general matter. Having said that, this is obviously a critically important area and it's one which the U.S. should continue to be pushing on. One observation that I would make is that in the time since we first started to push at the WTO on the issue, we've made significant progress in the context of bilateral agreements and FTAs. And as a general matter, not just in the labor area, when we have been able to advance work bilaterally, it's built up a constituency which has made work at the WTO easier. I don't know when we'll reach the tipping point on labor, but it's definitely something that we should be continuing to push on.

Thank you. Another issue that I, does anybody else have an opinion or any thoughts?

It's not about labor standards specifically, but a World Bank study of 99 developing countries found that small businesses, SMEs, accounted for 66 percent of their permanent full-time employment and 86 percent of new jobs created. So the role of international rules like the WTO e-commerce moratorium, $1 trillion of globally digitally delivered services come from developing nations and especially in those cases small businesses. So things like the e-commerce moratorium at the WTO are actually critical to supporting developing country small businesses across the world that are a key driver of employment growth in developing nations.

Thank you for that information, that statistic. I appreciate that. Did you have anything you wanted to add?

Yeah, just to add quickly. The international trading system, so the World Trade Organization, is a trade-based organization. I think we have other forum to address international labor rights. But I will say it is a trade issue when other countries maintain lower wages, lower labor standards that disadvantage U.S. workers and U.S. products. And I think that is something that is relevant for trade discussions. But I'd also note that just the other week, the administration launched a Section 301 investigation into forced labor to address the competitive advantage other countries have in maintaining insufficient laws against forced labor. And I think that's one way the United States can handle it is through these bilateral tools.

Thank you. Before my last question, Mr. Chair and Ranking Member, you know, we have some incredible staffers who work with us here on Ways and Means, the utmost professionals, just absolutely stellar individuals. And myself and my team have had the pleasure of working with Mr. Ruda. Understand that he is going to be leaving his work with the Trade Subcommittee and just want to publicly thank him for his support, particularly of the Caribbean region. And as a fellow Caribbean individual, I want to thank you for your service not just to this committee, but to our nation as a Marine, as a veteran. Thank you so much. And then my last question is related to, I know that the Trade Representative has argued and we've heard discussion from my colleagues on both sides about China's continued embracing a state-led non-market and increasingly predatory model. There was question that was raised about the efficacy and the importance and use of the WTO when one of the major trading components, China, is not moving into a space in which it confines itself to WTO standards. How can we best use and adapt the WTO to address that unique, serious, and constantly evolving challenge for the global trading system? And as you respond, I am finished. Thank you very much.

Very quickly, I would just say that we have been using the WTO to flag the problem of China, and we have used it, I think, effectively in helping to persuade other members that there is a problem there, even if specific actions are difficult to take within the organization, that is shaping the debate.

Countries are supposed to timely notify their subsidies to the WTO. Mark Wu at Harvard found that China notified six to eight years later on average. So we should introduce at the WTO a presumption of harm for subsidies that are not timely notified at the WTO. We should also incorporate that into trade law, like under Section 337 of the United States. If a country is not timely notifying, then the presumption that they harmed the U.S. company should be something we push for at the WTO and within our own trade laws.

Thank you to the gentlewoman from U.S. Virgin Islands. I also echo the congratulations and thank you for his service, Mr. Ruda. The chair now recognizes the gentleman from the Ohio State, Mr. Miller.

Thank you, Mr. Chairman. I appreciate all witnesses being here. I am just going to get right to it. Ms. Shaw, I know it has been probably a long day, I am the last one, I think. So, Ms. Shaw, the administration's 2026 trade policy agenda admits that the WTO is fundamentally flawed. You and others have proposed plurilateral agreements as one potential path forward. Do you see plurilateral agreements as the best way to make progress, and if you do, how should Congress think about strengthening WTO enforcement mechanisms versus working with like-minded partners to pursue alternative approaches?

Thank you, last but not least, Congressman. Thank you, last but not least, Congressman. It is a great question. So, right, the plurilateral approach seems to be the only way to make progress at the WTO when you have so many members with different economies, different views about the future of the global trading system. The problem with doing plurilateral negotiations within the WTO is you actually need consensus from the other members to allow you to negotiate on a plurilateral basis. You can see the catch-22 here. So when I am talking about plurilateral negotiations, I am not talking about pursuing them within the WTO. I think that would have been great if we could have achieved it, but we have been asking for that for years. I do not think it is possible realistically, and I think I want to be realistic with you. I am talking about plurilateral negotiations outside of the WTO, like the administration is doing with respect to critical minerals and working with allies, like-minded partners on issues to address supply chain constraints, excess and overcapacity, and some of the challenges posed by China.

Thank you. I really appreciate that sound and detailed answer. And shocking, it is hard for you guys to get a consensus as well. We do not have that problem at all in Congress when it comes to anything, even partisanly. Thank you for that answer. Mr. Bachmann, the United States is facing a growing agricultural trade deficit, and global agricultural markets continue to be distorted by subsidies and other barriers. What priorities should the United States pursue at the WTO to expand market access for American farmers and address trade-distorting practices such as India's public stockholding programs and continued use of special and differential treatment by relatively advanced economies?

Thank you. I think it is important that the United States continue to press against any efforts by India and others for making permanent the public stockholding provisions. What they are doing and what they want to do is honorable, except for the way that they implement it is not actually following the rules. They are releasing stocks from the public for cents on the dollar to exporters. Those exports then make their way around the world and compete with our ag products: rice, corn, wheat, soy, many other things. In addition to that, we have other players around the world that are filling the void that we have seen in a number of markets where Brazil, for example, has backfilled into China. Something like that is because we are not able to keep up with the rest of the world in terms of subsidies. If we were to try to do that, we would further increase the U.S. deficit significantly. So I think our best-case scenario is to continue to use U.S. tariffs as leverage in order to get countries to play by the rules, get them to come to the table in a meaningful way, whether it is at the WTO or bilateral agreements, like Kelly Ann mentioned earlier. And so it is going to be an uphill battle, and it is not something we are going to win today, but I think we need to continue focusing on that to make sure U.S. ag products continue to be successful around the world.

Thank you very much. It is incredibly important to our district back home in Ohio Seven, as three out of the four counties that I currently represent are ag and rural counties. But I am shocked, Mr. Bachmann, to hear you say that countries like India and others are not following the rules. Wow, that is surprised, and that is why President Trump has taken the stance that he has when it comes to negotiating with other countries to be treated fairly. I am glad and I am grateful for your answer today so everyone can hear it. And I will just wrap up with this, I know it has been a long day. In closing, it is clear very much from today's discussion that the WTO needs meaningful reform to remain effective and credible. At the same time, we should prioritize practical outcomes at MC14, such as securing a permanent extension of the e-commerce moratorium and addressing trade-distorting practices that disadvantage American workers and farmers that we see every single day. I look forward to working with my colleagues and stakeholders to advance these priorities, and I am very grateful for your testimony. Mr. Chairman, I yield back.

Thank you to the gentleman from Ohio. Sincerely would like to thank our witnesses for appearing before us today, for answering many questions on many fronts. I appreciate your dialogue. Please be advised that members have two weeks to submit written questions to be answered later in writing. Those questions and your answers will be made part of the formal hearing record. And with that, the subcommittee stands adjourned.