In today's Senate Finance Committee hearing on trade policy, Senator Wyden and Ambassador Lighthizer had this exchange (27:42):
Wyden: Let's go on then to another key enforcement issue, and that's China Phase One. The first stage of dispute resolution, there is basically an escalating set of meetings. They get more and more urgent with influential officials. And my understanding is the agreement specifies that this whole process is confidential. So my question here is does this confidentiality arrangement in the China deal phase one mean that nobody including members of this committee will know if the United States is taking enforcement action against China?
Lighthizer: No, it does not mean that.
Wyden: Tell me how there is transparency then, because as I read it, it just looks to me like there isn't, and I think it would be helpful for you to be very specific there.
Ligthhizer: Okay. Absolutely. I'll be happy to do that, Senator. So here's the situation we're faced with. For the first time we have a written agreement, for the first time we have a really, really good enforcement mechanism. One which escalates and then the United States can take an action if we don't get a satisfactory resolution. And we won't be retaliated against. So this is like a historic thing and I want to point that out. Then you have the problem what do you do with a company that comes and says, for example, somebody from -- from Oregon will come and say, listen, I have this problem, USTR I want you to raise it. But don't use my name because if you do, I may be retaliated against, right? I'm giving you a) confidential information but b) I may be retaliated. So what do you do in a situation like that? We agreed to confidentiality. If you said is it confidential from you in that case, no, of course not. But it -- but we are going to bring these -- some of these complaints, depending on the circumstances, as generic complaints rather than individual ones to protect specific American companies. That's the nature of why we put that in there. And that does not mean, other than business confidential information, which we wouldn't share, that does not mean we would keep the -- the appropriate members of the Congress in the dark. We wouldn't do that at all.
Wyden: … I'd like to see in writing how we're actually going to have transparency in a provision that sounds to me like there isn't transparency. ...
I'm skeptical of the enforceability of the China Phase one deal (see here and here), but I am interested in hearing more about how the enforcement mechanism works and I agree with Senator Wyden that transparency would be very useful. Based on what Lighthizer said in his response, it sounds to me like certain members of Congress would get the details, but perhaps the general public would not. I think transparency should go further than this, so we can evaluate how this enforcement mechanism is working.
