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Senator Marco Rubio
Senate Foreign Relations Committee – Subcommittee on East Asian and Pacific Affairs Hearing: “Rebalance to Asia IV: Economic Engagement in the Asia-Pacific Region”
Washington, D.C.
December 18, 2013
VIDEO: http://youtu.be/utihyhZ76P0

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Senator Marco Rubio: “I wanted to explore, first with you Doctor Scissors, this notion of free trade, and in particular, imports. So, I get resistance from people who believe that free trade is a destroyer of American jobs. Now obviously free trade has to be fair. And there are rules that are important because, as you’ve just described, one scenario, not exactly on point, but you described a scenario that’s a one-way street. Our values of openness have allowed the Chinese to invest here. But when we try to reciprocate, there are all kinds of impediments to that. And that’s always been a challenge for us on multiple fronts, including on the trade front. But in specific, on the issue of imports, there’s this idea that imports into the U.S., in and of themselves, destroy American jobs. But in your written statement, you have outlined why, in fact, that is not potentially the case.  That, in fact, there are also jobs created through imports from offloading. Can you just elaborate on that more? Because that’s an issue I get a lot when I go out and talk about the need to expand trade opportunities, not just with Asia, but with the entire world. Can you elaborate a little bit more on the benefits that imports, obviously we want to be able to export too, but the benefits that imports have for American jobs, particularly stable, middle class jobs.”

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Rubio: “So just to describe the supply chain for this phone for a second. It says here it was innovated, designed in California, but assembled in China. Somebody built this phone over there, and then they had to ship it here. They had to off-load it at a port of entry. Those are American jobs. Then they had to be transported from the port of entry to a distribution center. Again, another set of American jobs. And then from that distribution center, there were jobs there, they were shipped out to the retailers—another group of American jobs. And then at the retail level there’s somebody selling it—another set of American jobs, at the retail level. And then, whoever buys these things is paying less than they normally would, which means whatever money you’re saving on this — the difference between how much it would have cost to do it somewhere else and do it where it’s happening now, and what you actually pay — that difference, is now available to spend somewhere else because you didn’t spend it on this. Is that an accurate description of how it plays out?”

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Rubio: “My guess is that all those jobs down that supply network, that I just described, probably pay better than some of the people that were building this [iPhone].”

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Rubio: “Mr. Goodman, in your testimony, you talked about something that I thought was interesting. And that is you said it was until recently popular in Beijing that TPP is part of an effort by Washington to contain China. But in fact, if they decide not to participate in free enterprise, in free commerce, in free navigation, and the benefits of this sort of barrier reductions, that’s a decision they’ve made to contain themselves. Right? My understanding of the region is that most – if not all – of the countries would like stronger integration with China, but on a set of rules based on freedom: freedom of commerce and freedom of navigation, and mutual reciprocity on rules, etc. Not on the set of rules that China would like to impose. So really, to the extent that there is anybody excluding anyone, it’s Chinese policymakers that have decided to potentially exclude themselves from this and other arrangements, because they don’t like the rules. The rules they want are actually much more one-sided to the benefit of China, and the detriment of their neighbors and perhaps the rest of the world.”

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