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Source: Congress.gov
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Thank you. Thank you. Good morning, everyone. The Subcommittee on East Asia and the Pacific will come to order. The purpose of this hearing is to discuss how the United States could prioritize economic statecraft more effectively and efficiently, taking special notice of the role of the Department of State.
So let me now recognize myself for an opening statement. Let's see. Good morning and welcome to the East Asia and the Pacific subcommittees, national security, national economic security, advancing U.S. interests abroad. In 2019, William Burns, one of our most decorated diplomats and former CIA director, described the Department of State as adrift.
Over the years, the department has had trouble finding its purpose as functions and authorities have been stripped away or observed by the National Security Council, Department of Defense, and even agencies traditionally focused on domestic issues. For more than 170 years, economic statecraft was led by the Department of State. This changed in 1961 when President Kennedy sought to expand the administrative state, pulling functions and authorities out of the department to create new agencies and organizations, including the United States Trade Representative, which would be responsible for conducting all US trade and investment diplomacy. The justification for pulling these trade and investment functions out of the department was to improve the government's capacity to prioritize and support U.S. businesses, strengthen the export performance of U.S. industry, and assure fair international trade practices. However, it has effectively split our economic interest from our diplomatic priorities, which has resulted in several challenges. First challenge is that it has not helped increase the ability of U.S. businesses to access foreign markets. In practice, the Foreign Commercial Service and Foreign Agriculture Service officers are few in number and often positioned at U.S. embassies without alignment to our foreign policy priorities. When I travel abroad, I routinely meet with FCS personnel who explain that they spend most of their time engaged in trade shows and organizing events with minimal direct work on increasing and securing market access for American businesses.
Because they are siloed off from our diplomatic efforts of the Department of State, they are restricted in leveraging the other tools in our diplomatic toolkit to assist American companies. Second challenge is that the American market has been left susceptible to predatory foreign competition. Our ability to protect American businesses and workers has been severely hampered, leading to calls from across the country for the executive to act and repatriate entire industries and sectors. President Trump, like his predecessors, has repeatedly said that economic security, economic policy is foreign policy. Unfortunately, we have not implemented the structural reforms needed to mobilize that sentiment. Even President Obama asked Congress for the authority to consolidate six agencies with trade and investment functions in 2012. This request was not supported by Congress. Bipartisan administrations have independently come to the same conclusion. The current alignment of functions and agencies charged with leading our economic statecraft effort is in need of structural reform. I agree that economic security is national security, and the key question we'll be asking today is, what structural reforms are necessary to reflect this prioritization? So we intend to answer that questions in our committee's first comprehensive state authorization legislation that we will be doing in more than 20 years. So let me now recognize ranking member Ami Berra for your opening remarks. Thank you, Madam Chairwoman.
And I also just want to recognize and appreciate that in our conversation setting at this hearing that we set up a bipartisan panel. So do you appreciate that? Because again, market access Helping our companies be successful around the world is not a Democratic or Republican agenda item. It's something that I think we all care about. I appreciate the witnesses. Obviously, we've gotten to know Wendy Cutler and Matt Goodman over the years, and I've had the pleasure of working with you and certainly look forward to hearing from the Republican witnesses. I've said this a lot. Had I had a magic wand, we'd go back to 2014 and we would have had TPP in place and we would have had a framework for the movement of goods and services. We're not there yet, so we are where we are. I do think it's incredibly important for us, as we go through a State Department authorization process, this is not exactly how I would have gone about reorganizing the State Department. I would have done it a slightly different way than President Trump has chosen to do it, but we find ourselves with an opportunity to think about what a 21st century State Department would look like, what 21st century tools of economic engagement, economic development, of trade, of tariffs would look like, and where that's best housed. I know in our analysis as we've talked to others, I do think it is incredibly important to have economics as part of the State Department, to have representatives around the world within our embassies out there promoting U.S. goods, products, working with our companies to help them navigate foreign markets and so forth. I also think it's very important as we watch these tariff conversations unfold, that we take it as an opportunity perhaps to remove tariff barriers.
Again, this isn't exactly how I would have gone about doing it. I certainly would not have targeted countries like Australia, where we actually have a trade surplus, close allies like Japan and Korea.
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