Lighthizer defends China trade deal that Trump has soured on

Lighthizer said Chinese authorities recently bought sizable amounts of U.S. agricultural goods, including $1 billion worth of cotton, and publicly reiterated that they intended to comply with the "phase one" trade deal they had signed with President Donald Trump in January.

"I expect them to live up to the agreement. They have indicated they will," he said.

Appearing before the House Ways and Means Committee, Lighthizer provided a far more upbeat assessment of the deal than the president has in recent weeks. Trump repeatedly has expressed irritation with China, saying last month he had "lost a little flavor" for the trade deal and threatening to "cut off the whole relationship." Trump has blamed the Chinese government for not doing more to prevent the spread of the novel coronavirus, a pandemic that has severely damaged the U.S. economy.

But Lighthizer said the Chinese would comply with the deal's provisions, including the purchase commitments and changes required in their treatment of foreign companies' technology secrets.

In a day-long appearance before House and Senate panels, Lighthizer defended the president's use of tariffs to overhaul U.S. trade policy, cast doubt on prospects for quickly reaching agreements with the European Union and the United Kingdom, and pledged to crack down on any violations of a new North American trade deal that takes effect on July 1.

Lighthizer called the U.S.-Mexico-Canada Agreement (USMCA) "the best trade agreement in U.S. history," but acknowledged that he anticipates issues with its implementation. The pact replaces the 1994 North American Free Trade Agreement (NAFTA), which Trump has blamed for the loss of millions of American factory jobs.

The new deal contains strict labor and environmental standards designed to prevent similar U.S. payroll erosion, which will mark a sharp break with traditional Mexican labor market practices.

"Labor enforcement in Mexico is going to be a problem," Lighthizer said.

Underscoring Trump's revolutionary approach to U.S. global ties, Lighthizer also pointedly assailed the World Trade Organization (WTO). Though the body was established in 1995 under Washington's auspices, the trade chief said it had undermined U.S. interests by failing to police China's trade behavior.

"I think the WTO is a mess. The WTO has failed America and it's failed the international trading system," the trade chief told lawmakers.

Lighthizer has been a longtime critic of the WTO's system for resolving disputes between members, blocking appointments to the appellate body and leaving it without a quorum. Lighthizer escalated his criticism on Wednesday, saying it did not matter whether the panel ever returned to normal operations.

"I don't think the appellate body was working well...I don't feel any compulsion to have it ever come back into effect," he said. "I'm not a fan of the appellate body."

As the WTO searches for a replacement for outgoing Director General Roberto Azevedo, Lighthizer said the organization required "fundamental reform" and he vowed to veto any candidate who had "any whiff of anti-Americanism in their past actions."

He also had harsh words for U.S. trading partners that are eyeing new taxes on American internet companies. After France and other European countries announced plans to tax companies such as Amazon, Facebook and Google, the Trump administration threatened to retaliate with tariffs.

The Organization for Economic Cooperation and Development (OECD) in Paris has been hosting negotiations aimed at brokering a compromise. But Treasury Secretary Steven Mnuchin earlier this month pulled out of the talks, saying they should take a back seat to dealing with economic fallout from the pandemic.

"They all came together and agreed they'd screw America," he said of the talks.

Lighthizer appeared in person in a House hearing room, while most lawmakers questioned him by video link. He offered a vigorous defense of the president's repeated use of tariffs to prod U.S. trading partners into changes, saying that any American company forced to pay higher prices for imported raw materials or other inputs should have shifted by now to alternative suppliers.

"If you have a year or two years to make a change, then you should have made a change," he said. "People have had a substantial period of time to find another source."

Citing the pandemic, Lighthizer also called for using tariffs to support domestic production of critical medical supplies, clashing with lawmakers who have pushed for cutting import fees on medical products made overseas.

Multinational corporations that "thought they were so clever running these supply chains all over the world rather than making the stuff in the United States now realize they were taking on substantially more risk than they thought they were," he said.

With little more than five months before election day, Lighthizer said it was unlikely that a trade deal with the UK could be reached before Americans head to the polls, adding that negotiators also had made "very little headway" with the EU in talks aimed at a broad trade pact.

"It's not looking good in the short run although ultimately we have to get something worked out with Europe," he said.