Two things in particular struck us about Mr. Dempsey's statement at the ITC. The first was what he had to say about NAFTA. In Congress, the first battle - and as we recall the larger one - was in the House. Ironically, this week's ITC hearing took place on the 22nd anniversary of the House vote, which was held on November 17, 1993. The House approved the NAFTA implementing bill 234 to 200. The Senate did so a few days later by the more comfortable margin of 61 to 38. Those who opposed NAFTA didn't give up then or even after President Clinton signed the implementing bill into law on December 8. They kept up a steady stream of attacks, while NAFTA supporters, for the most part, moved on to other things. The unhappy result was that NAFTA, a success by numerous measures, nevertheless wound up on the list of policy pariahs in the dictionary of American politics.
Presumably, Congress has asked for this study because in trade policy, as in other areas, it helps to know what works and what doesn't. Kudos to Mr. Dempsey for helping to set the record straight on NAFTA.
STEEL AND THE CHINA CHALLENGE.We also give Mr. Dempsey high marks for highlighting the steel industry's China challenge. No, there is no agreement with China for the ITC to consider in this "historical," exercise. Mr. Dempsey got to China through the side door of the Uruguay Round and the subsequent WTO constraints on U.S. trade remedies. The important thing is he got there, and here are some of the points he made:
"Since 2000, Chinese government industrial and trade policies have produced a dramatic increase in the size of the Chinese steel industry, to the point that it today represents almost half of all global steel production."
"[At] 823 million metric tons in 2014 ... the Chinese steel industry is now almost ten times the size of the U.S. industry."
"The vast majority of the Chinese steel industry is government owned and controlled. .... And this model is increasingly being adopted by other governments such as India, Vietnam and Turkey."
"The domestic steel industry ... urges trade policymakers to refocus their attention on these critical issues for the industry and its workers."
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We have read some of the testimonies from the ITC's hearing on November 17, and in each of those cases the witnesses were as concerned with the implications for future policy - notably TPP - as they were with a better understanding of past agreements. We expect that assessment will hold up for all nine witnesses.
The only point that needs to be added here is that China - now America's top trading partner - is implicitly part of every U.S. trade agreement, past and present. That is certainly true for NAFTA, which helped Mexico compete with China in the U.S. market, and it is true for TPP, which, though it does not include China, has rules that speak to the issues Mr. Dempsey raised on Tuesday, namely those dealing with state-owned enterprises.
