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USTR Nominee Zoellick Headed for Quick Confirmation

(January 30, 2001) The Senate Finance Committee held a hearing on the nomination of Robert Zoellick to be the next U.S. Trade Representative. Senators praised Zoellick. He advocated granting fast track trade negotiating authority to the President. High tech and IPR issues were hardly touched.

Members of the Senate Finance Committee praised U.S. Trade Representative nominee Robert Zoellick's experience, intelligence, and negotiating skills. None expressed any opposition or criticism. Several predicted speedy approval by the Committee and the full Senate.

Zoellick advocated the benefits of free trade, and stated that he would work "to try to mobilize broad public support for freer trade."

He stated that he wanted the Congress to quickly pass fast track negotiating authority. Sen. Max Baucus (D-MT), the ranking Democrat on the Committee, stated that he would oppose fast track if it did not also include authority regarding labor and environmental issues. Other Democrats, including Sen. John Breaux (D-LA) and Sen. John Kerry (D-MA), also pressed Zoellick on labor and environmental issues. In contrast, Sen. Phil Gramm (R-TX) opposed the inclusion of social issues in trade negotiations.

However, the issues most on the minds of Senators were agriculture related. The Committee includes many members from agriculture and timber producing states. Senators Baucus, Lincoln, Lott, and Snowe complained about Canadian lumber imports. Senators Baucus and Conrad complained about Canadian wheat imports. Senators Baucus, Lincoln, Lott, Conrad, Gramm, and Hatch all addressed European protectionist agriculture policies.

Senators urged Zoellick to be tough with Europe on beef and bananas and other agricultural exports. Sen. Kent Conrad (D-SD), in particular, criticized the Europeans at length for subsidizing farmers to produce and export agricultural products in violation of their WTO agreements, and in defiance of WTO rulings.

Sen. Trent Lott (R-MS), the Senate Majority Leader, said the issue is bigger than beef and bananas: "I'll tell you what is at stake here -- the WTO."

The current disputes between Europe and the U.S. over the European agricultural subsidies, as well as the U.S. foreign sales corporation tax regime, could lead to reciprocal retaliatory trade policies. European representatives have stated that if this were to happen, U.S. high tech exporters, such as Microsoft and Cisco, would be targeted with retaliatory tarriffs.

The Senators also lectured and questioned Zoellick at length on  the American steel industry, China's entry into the WTO, China's compliance with the 1999 bilateral agreement with the U.S., Taiwan's entry into the WTO, and the plight of U.S. catfish farmers.

However, very little time was spent discussing many of the trade issues affecting high tech industries, including intellectual property, TRIPS, Special 301 Reviews, and telecom and Internet provisions in bilateral agreements.

Zoellick read a prepared statement that made one passing reference to intellectual property. "Secretary Evans and I ... will try our best to deliver for America's farmers, service providers, high tech community and intellectual property providers, small businesses, and highly productive manufacturing industries."

His prepared statement also contained a reference to e-commerce. However, he did not read this paragraph at the hearing.

Sen. John Kerry (D-MA) did ask Zoellick about TRIPS, but only in the context of pharmaceutical patents and AIDS treatment in African nations. Zoellick responded that intellectual property "is one of our great competitive edges."

Several Senators expressed concern that China is backtracking on its commitments under the 1999 bilateral agreement with the United States; however, no one raised the telecommunications provisions of the bilateral. Finally, Sen. Baucus spoke at length about the trade barriers, anti-competitiveness, and lack of transparency in Japan. He said these are the cause of Japan's recession. However, he did not specifically address Japan's telecom and Internet access related policies.

The hearing that lasted over three hours. Sen. Frank Murkowski (R-AK) presided for the first half of the hearing, until the new Chairman, Sen. Charles Grassley (R-IA), returned from a meeting at the White House.

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