SENATE FINANCE COMMITTEE CONFIRMATION HEARING FOR FOR USTR & TREASURY NOMINEES
On June 3, the Senate Finance Committee held a hearing to examine the nominations of:
- Joseph Barloon for a Deputy United States Trade Representative (Geneva Office) and U.S. Ambassador to the World Trade Organization (WTO)
- Brian Morrissey, Jr. for General Counsel for the Department of the Treasury
Key Takeaways: U.S. Trade Representative & World Trade Organization
- Chairman Crapo (R-ID) discussed how the World Trade Organization (WTO) needs restored and strengthened U.S. leadership, with necessary WTO reforms. He referenced how the previous administration’s failure to engage in negotiations on digital trade rules weakened existing disciplines, including U.S. intellectual property rights under the WTO TRIPS Agreement.
- Chairman Crapo questioned Barloon on whether he would support pursuing offensive WTO cases where appropriate, particularly to advance the interests of U.S. agriculture industries. Barloon responded that he would support such cases and agreed on a role for the WTO dispute settlement system help U.S. producers and business gain access.
- Barloon outlined how WTO has fallen short in its commitment to market-oriented policies and reciprocal arrangements to reduce trade barriers, predicated on free and fair competition in global markets. He stated that trade policies and practices depended upon a misplaced faith that all trading partners would play by the rules. He also raised how the dispute settlement system drifted from a limited role, as envisioned, to one more akin to a world trade court purporting law.
- Barloon discussed necessary reforms to and benefits of increased WTO Member market access, referencing enforcement of WTO members’ compliance, good faith efforts to advance U.S. interests, and commitment to WTO principles of fairness and reciprocity. He cited his experience as USTR General Counsel and Acting Deputy U.S. Trade Representative under former U.S. Trade Representative Lighthizer and work with U.S. Trade Representative Greer.
- In questioning from Senator Cantwell (D-WA) on potential WTO reforms and the administration’s membership, Barloon emphasized the need to assess the WTO toolbox resolution mechanisms, including dispute settlement and other options. He noted that there have been significant weaknesses and problems with dispute settlement in the past as he called for engaging in good faith with other members to improve the system.
- Senator Cantwell also questioned Barloon on whether he supports rules-based trade and if the White House has been following a rules-based regime. She criticized the administration’s “imperialistic” approach, calling instead for influencing rules and building alliances around them, with WTO implementation giving a U.S. upper hand. Barloon agreed on the importance of rules of the road for trading partners, and to ensure rules are followed, with more efficient resolutions. He said the White House actions were an appropriate response.
- Senator Grassley (R-IA) outlined his frustrations around potentially missing an opportunity for additional agreements with the smaller of the 110 countries that approached the U.S. to negotiate following Liberation Day. He cited the growth of the combined trade surplus since of $7 billion to $56 billion from fifteen countries as proof of positive impact on trade balance beyond the fifteen to twenty currently engaged in serious negotiations.
- Barloon stated that the U.S. has been successful through trade arrangements and agreements with a broad range of countries, including some unexpected partners, particularly in expanding agricultural market access. He committed to prioritizing engagement with all WTO members and respective representatives to advance U.S. market access and secure broader trade agreements to strengthen U.S. trade relations.
- In discussions on China’s range of violations and need for WTO intervention, Senator Blackburn (R-TN) asked Barloon how to best utilize WTO in addressing tariffs and non-tariff trade barriers for market access. Barloon responded that addressing China’s trade violations requires action on many fronts, including at the WTO. He identified two priorities of: ensuring China complies with its notification obligations; and stop taking special or differential treatment to avoid playing by the same rules as other members.
- Senator Cortez Masto (D-NV) outlined recent court decisions regarding the President’s International Emergency Economic Powers Act (IEEPA) tariffs. She asked Barloon for his commitment to following the rule of law and support the removal of global blanket tariffs imposed if the court’s decision requiring their removal is upheld on appeal. Barloon responded that he believes the President did have the authority to take action but needs to wait and see what the courts will do regarding the appeal.
- Ranking Member Wyden (D-OR) discussed the administration’s tariff strategy and erratic trade threats, stating that a better strategy would be fixing the trade system, including the WTO. He also raised concerns about Barloon’s statement on whether he advised a foreign government as a client on potential trade agreements.
Key Takeaways: Treasury
- Chairman Crapo raised the pending expiration of the Tax Cuts and Jobs Act (TCJA) at the end of the year and Morrissey’s prior experience advising Treasury on regulations and guidance, such as programmatic and policy responsibilities under TCJA.
- Morrisey highlighted Treasury’s ability to protect the integrity the U.S. financial system and tax code, advance policies that foster economic growth, and use U.S. economic power to combat national security threats. He discussed how Treasury’s legal authorities may be used to solve challenges while minimizing litigation and risk. Citing his government and private-sector experience, he emphasized Treasury’s duty to ensure legal actions are clearly stated and adequately explained, with durability under the law.
- Senator Blackburn questioned Morrissey on how he would advise Secretary Bessent and others on protecting U.S. companies in global tax negotiations, referencing international tax provisions under Pillar Two and criticizing the disparity between the U.S. and China. Morrissey responded that Treasury must act proactively for U.S. interests in response to proposals in international bodies that could undermine U.S. interests. He emphasized that Treasury’s participation in organizations like the OECD and subsequent actions must respect U.S. sovereignty, particularly Congress’s authority to set tax policy, as well as that the U.S., not international bodies, must retain control over its tax system.
- Morrissey stated that whenever any Treasury bureau exercises enforcement authority, it must act on a bedrock of impartiality based on facts, evidence, and neutral, objective criteria. On rulemaking, he emphasized the importance of responsibly assessing costs and benefits under the Administrative Procedure Act (APA) and ensuring all statutory requirements are supported by a cost-benefit rationale.