important hearing one way will organize is by turning up all the cell phones then if ever buddy i just would like to do the same and it would help so there are four panels and we thought we would proceed this way with the panel of our three colleagues for us and they i think have have been informed and i think they are pleased about this that we will very much look forward and hear their testimony but since we see all of you on the floor  later i will withhold our questions in bombard you on the floor during quiet moments there so that should by in a half an hour or so allow us to go on to the second panel of government people from the administration and we would have the testimony and try to finish that if we could by panel at around say the tween one and one fifteen at the latest and we're notifying everybody who are on the third and fourth panel that come here but well i never never so with all of your deep involvement in these issues going back many many years and some of these programs as to wrangle would not be in place if it weren't for you show let me just briefly summarize have an opening statement and i think there are copies if anybody would like to take take a look at it this is indeed an extensive hearings these issues really reflect relate to the overall trade challenge that we face in this century new century and that is how to craft sound trade policies that reflect both the need for expanding trade and i'll  show to shape its course to do both in order to maximize its benefits and to address the adverse consequences so within that general framework of a modern trade policy in favor of its expansion but on terms that spread its benefits we turn today to the preference programs that focus in on developing nations in our relations with them in trade in this committee and subcommittee under your leadership and the predecessors on both sides of the aisle have been really devoted to this issue it's crossed party lines with your leadership mr chairman phil crane we should remember that and the leadership of many others including our colleague jim  lot of detail this morning it's in my opening statement and our witnesses are going to comment on this but for example under go there's been a substantial increase in nine or oil exports since it exception c v i has seen since the early years eighty four a very major growth from five hundred seventy six million it for us to most five billion and the same with the andean trade preference act and recently with the hope program and it's also important to understand that these programs support u s economic interests and our exports to these various countries have been growing rather substantially and also what is sometimes forgotten in that is that a substantial portion of the imports from countries help to sustain us manufacturing shape the terms of trade based on the principles it very much believe is true that it's not enough to expand trade you have to expand it in ways that are mutually beneficial trade isn't an end in of itself after all it's a means to the end to help people come out of poverty and help people move up the ladder and so as a result we have placed criteria in preference programs and they include respective rule of law respect for fundamental labor rights and others including rules social issues there are indeed economic issues and the notion is that you know order for the benefits of expanded trade to be spread into work one of the elements is that  workers need to have their basic international rights and indeed to help workers in developing countries join the middle class and that's mutually beneficial for those countries and for us for those countries as they develop the strengths that come from middle class growth and for us having middle classes in other countries to  to buy goods so today will be discussing those issues and i finish with this in i think mr brady agree the preference programs are an important part of the constellation of our trade agenda but no one says they're perfect there is room for improvement and indeed there are as would expect be expected from expanded traits and issues that need to be addressed so what we're doing today is looking at the past looking at the present and also looking at the future and we are going to hear a variety of points of view the past record the present situation and also some issues relating to changes or improvements in our programs as we sit here i'm not sure as a result of this i feel strongly the administration does think it's true in the senate that the programs that have deadlines the end of the year that there need to be extensions the purpose of this hearing is to give us the information so that we can make some decisions regarding extensions and improvements and changes and how that and how they met so mr brady if you'll take over in then we'll turn to our three distinguished colleagues will thank you mr chairman chairman rangle international trade is a powerful engine for economic growth and job creation as our experience here at home demonstrates one out of every five american jobs depends on trade u s trade representative and bastard kirk notes jobs supported by exports pay higher wages than other jobs and for that reason i commend you for holding this hearing the global economic downturn has hurt workers all over the world international trade will be a vital tool for promoting economic recovery and creating jobs everywhere the indisputable benefits of trade liberalization are why i strongly support open markets both here in united states trade preference programs we're discussing today can be a key tool to help developing countries break market as you and chairman rangle have noted congress has worked on a bipartisan basis developed preference programs to provide a vital economic boost to many developing countries congresses also demonstrate its willingness to regularly revisit our programs to make them more effective congresses amended the african growth and opportunity act several times to spur the creation of thousands of jobs in africa without creating adverse effects on u s workers here at home the benefits are provided us consumers with better prices and more choices effective trade preferences are one stop on a country's journey to becoming a full player in the international market the trade preferences cannot be in unto themselves in fact a truly successful trade preference program is one that makes itself ultimately obsolete for example malaysian south korea successfully use g s p as a tool for economic development exceeding the need for continued benefits in thriving once those benefits were removed till a singapore the cast of countries improved all graduated from trade preferences into permanent bilateral trade agreement relationship showing that trade preferences are a stepping stone to full engagement in the international market these trade agreements offered vantages for both parties over trade preference relationship partner countries achieve full permanent duty free access to the u s market a significant benefit over the partial temporary access provided by preference this relationship also sends a strong signal to track investment in capital the capacity building enforceable labor commitments to help improve standards significantly for the united states the benefits are obvious american workers and businesses finally enjoy a level playing field because these markets are open to our exports supporting more american jobs when the cap to countries in peru went from a one way preference relationship to a two way free trade relationship united states went from a trade deficit to a trade surplus with these countries in the case of cap that we saw our deficit over one point two billion dollars shift to a trade surplus of over six billion dollars in american workers have benefited these examples demonstrate the importance of having developing countries become full partners in the international market we can quickly realize similar benefits by implementing the free trade agreements with colombia and panama two countries anxious to move from a one way relationship to a permanent mature relationship leveling the playing field for u s workers there are many countries that aren't yet ready to move from preferences to free trade relationship for these countries effective trade preference programs are the right policy to that and we must design our preference programs to ensure that developing countries can take full advantage of the assuming they meet certain key conditions that means having eligibility criteria that challenge countries to improve their lot but at same time encourage investment after all a developing country can have the best labor laws in the world that will make the difference if there aren't any jobs the eligibility criteria currently  and in our preference programs to provide the right balance in incentives as has noted we have successfully used these criteria to prompt improvement and even for the least developed countries our preference programs must not become a disincentive to take that next critical step to becoming full members in the international market through enthusiastic participation in the doha round the ultimate goal of duty free quota free access to the u s market for the least developed through the round will provide incentives for those countries to push the emerging developing countries to make concessions we need to bring the round to a successful close not close with this engagement in the international market is a key development tool many countries have benefited from this engagement and u s trade preference programs can help countries take advantage of opportunities to export their goods create jobs and eventually join the global market that mr chairman i yield back and look forward to hearing from our about our relations with the developing countries so that's a good segue to our distinguished panel two members of our committee and chairman thank you and the committee for inviting me to testify on my views on this preference review the excellent group of witnesses you have called today to work with us  will cover very important issues that confront our trade policy and i look forward to crafting a policy with the committee in difficult economic times like these developed countries sometimes pull back they pull back from international engagement and pull back from thinking long term and that's quite understandable but i think that in these times and in this globalized economy now is the time to push forward on improving trade with the poor countries of the world our preference programs have important issues that need addressing but while we think about all of the things we need to fix we should also keep in mind that our preference programs have done enormous good for the poor of the world and for america they provided jobs which of fed and millions of the poor and been a boon to the american businesses we shouldn't forget that i think it's also important to keep in mind that our work is far from over as congressman brady mentioned when we passed a goal in two thousand it was not perfect and it was a big step forward but we've amended  since then in the nine years africans have made huge progress in growing trade but we know that for development to really accelerate we need to get more countries involved in trading more products we know that the trade capacity building is important as extending more preferences it's not simply enough to open the simple enough to open the door we know that sustained long term help we can make a big difference i don't think we're close to the finish line on that i think we're just beginning to members of the committee have worked hard on encouraging development through trade and i think we should focus on a few things in particular while there are details to work out i think there is broad agreement that our trade programs need to be stable they need to be simplified they need to be effective and they need to help poor people first i think we need to agree that the stability of our programs is a stench essential to them being effective our largest program  is weeks away from expiring other agreements partially expire in two thousand and twelve and others in two thousand and fifteen when we extend our program sometimes we do it for only a few months or year no one ever run a business would want to invest in a climate that is so unstable our programs need to be long term second our programs are too complicated too hard to use our rules of origin prevent commonsense business from happening we impose regulations that poor countries cannot meet without our help we need to fix this simplifying our programs and doing more to help partners meet the important standards we set our keys the third we need to build the capacity we need to address the capacity building program we all know the wisdom of trade not aid but i think we need to make for trade and equally now we can do this in a targeted way preferences help our trading partners quite a bit but without thoughtful capacity building we can only help so much with over twenty four federal agencies giving our fo r we don't always coordinate our efforts we need to pull together to help poor countries grow and to give american business more customers finally we need to find a way to strengthen the programs we have while at the same time helping more people trade is not a zero sum we can strengthen our current programs while also helping other countries who right now get no benefit help countries different countries like and push forward not the moral thing to do for the poor of the world good for american consumers and we know it's good for america's security and i want to thank you for taking the time to listen  to assist developing countries in their efforts to build up domestic industry increase exports and alleviate poverty and in some cases the preferences appear to have been wildly successful as mr brady mentioned some countries including south korea singapore bahrain and slovenia have graduated from the program and no longer qualify for preferences in other cases however the preferences have been less than successful at least from the point of view of working families a case in point is the republic of philippines  beneficiary of the general systems of system of preferences according to a petition filed with the united states trade representative the government of the republic of philippines has engaged in policies that deny workers freedom of association as guaranteed under international labor organization ilo convention eighty seven and has undermined the ability of workers to form and join unions in violation of the ilo convention ninety eight the petition also accuses the philippine government of involvement in extrajudicial killings and leaders members organizers and supporters through elements of the armed forces of the philippine national police local police forces and private security forces given these reports which are not limited to the philippines i strongly believe that is it is appropriate and necessary to reexamine our approach to preference system creation and renewal encouraging and rewarding such important human rights policies with trade benefits is contrary to what america stands for and not only harms brought but also those struggling to make a living here at home ecuador is another nation in which our trade policies may be leaving working families behind chevron may have approached some of you before this hearing to ask that you consider limiting or limiting altogether benefits for ecuador under the andean trade promotion and drug this effort arises from a private law between thousands of  indigenous ecuadorian peasants and chevron the plaintiffs some of whom suffer from cancer physical deformities and multiple miscarriages allege that chevron is responsible for illegally dumping billions of gallons of toxic oil waste into rivers and streams causing extraordinary environmental and human damage texaco now chevron began its oil operations roughly forty years ago in a pristine region of the amazon today this region which is roughly the size of rhode island struggles to deal with an environmental and humanitarian crisis more than fourteen hundred residents have died from cancer birth defects are prevalent and the region still suffers from water  contamination and eco system degradation the inhabitants of the region still drink and bathe and the polluted water there are innumerable stories that i could share from the two hundred thirty thousand people who live along the oil fields in northern ecuador consumption levels too many children have cancer and as a result too many parents have to experience the ultimate heartbreak which is the death of a child instead of allowing this case to come to conclusion in a court of law in working on cleanup efforts or to the demands of multibillion dollar corporation as a private entity certainly has the right to take action to advance its own interests however it is congress's job to take a wider view it's well past time to reform our trade policies so the work for working families as we reexamine our trade preference i urge the committee to explore options for holding nations accountable for protecting the rights of working families i hope that we also consider whether to add environmental standards and to reform programs to promote labor rights and a clean environment without dictating the outcome of cases pending through the civil justice system of developing nation finally i think we have to abandon the naive view that free trade alone is the only right to work with to freely associate to organize for safer working conditions better wages and a secure retirement tried preferences can be combined with other forms of assistance that will help countries sustain themselves and develop the infrastructure and capacity they need to fully take advantage of trade program that the u s offers the world market large thank you for your patience in hearing my perspective but i really think now is the time that we should be subcommittee thank you for the opportunity to testify at today's hearing on u s trade preference programs through democratic and republican administrations and congresses the ending interest trade promotion and drug eradication akhtar a has been one of the cornerstones of u s policy toward latin america providing the united states with an opportunity to make a real difference in the politically and economically fragile andean region as chairman of the western hemisphere subcommittee of the house foreign affairs committee i've seen firsthand the benefits of a t b d n a in ecuador for example i visited with producers of flowers broccoli coffee and cow without the end in free trade preferences work as a me sectors would undoubtedly lose their jobs leaving them with little outside option other than the illegal drug trade or illegal immigration to the united states unfortunately too often a t b d has been extended for only short time periods creating uncertainty and an unstable investment climate in the beneficiary countries to make a real impact i believe we must immediately extend a t b d a for at least two years as this subcommittee considers the renewal of the any in trade preferences and future trade preference bipartisan bill would be a catalyst for economic development in paraguayan while also supporting essential u s geopolitical goals paraguayans the second poorest country in south america thirty percent of paraguayans live in poverty and according to the two thousand and eight world development indicators fourteen percent of paraguayans live on less than a dollar per day paralyzing couzin is an andean trade preference beneficiary country would be fundamental in helping to reduce these poverty levels november and he expressed to me is interest in a strong relationship with the united states paraguay is a small landlocked country that is often left out of discussions of u s policy to our latin america but it's a critical partner in so many areas according to the state department's february two thousand and nine international narcotics control strategy report in two thousand and eight paraguayans national anti drug secretariat seized a record hundred seventy two metric tons of marijuana paraguayan also works closely with the u s and its neighbors argentina and brazil is a three pronged plus one process to curb illicit activities in the so called tri border area where the borders of paraguayan argentina and brazil meet and by the way that's also we believe a source of terrorism funding as well so it's an important place the u s paraguayan partnership act of two thousand and nine as i said which i've introduced is a bipartisan bill which i introduced with my good friend congressman dan bur of indiana there's also a bipartisan companion bill in the senate s seven eighty introduced by senator nelson of florida and senator cornyn of texas and my bill is supported by an extremely wide ranging number of chanst including oxfam the national foreign trade council the washington office on latin america and even the american apparel and footwear association mr brady mentioned before in his opening statement that his national trade is an engine of economic growth and job creation i agree i also want to add that enhanced is good feeling and good relationships with the u s so it's good policy for us and good politics as well in april i led the official congressional delegation to the summit of the americas in trinidad and tobago at the summit president obama pledged a new chapter of engagement that will be sustained throughout my administration that's a quote in less than a year the president made impressive strides hansing hemispheric relations as chairman of the western hemisphere subcommittee i believe it's crucial for members of congress to support the president and re engaging the hemisphere this hemisphere is so important to us it's right in our backyard the u s power why partnership back in two thousand and nine will do just that and will be extremely positive for both of our countries again it's good policy and it's good politics it helps these countries become closer to us and that's the way we win back the hemisphere from the chavez's and the others that would go in a different direction i thank you again for the opportunity to testify today so thank you very much and as stated to beginning  we'll be in close touch with all of you with a lot of back and forth we won't do it today but we'll do it on the floor and as we work on making decisions as to extension and his two forms i know i speak on behalf of all of us here to thank you for your critical involvement in in these issues so thanks again and if any of you want to come up here feel free to do that and we will now go on to the second panel and we will ask the four witnesses to come forth arrived yet but i guess i should ask without objection we'll enter it into the record any objection once it arrives and of course it will be distributed we welcome all of you distinguished panel some of you have been very much here before i think your your involvement here does symbolize how with issue ministration there is a determination that there be the fullest back and forth between the executive and members of congress and  that's going to be true as to all trade policy issues so your presence really is important let me go from left to right and introduce and then take over tim rice is now general console u s t r and it's all you know served here with total distinction as chief of the trades staff for the now majority and earlier for the he has a long career in government is now deputy undersecretary in the us department of labor the bureau of international labor affairs and is a shed brings years of background on work with developing nations was with carnegie before he agreed to join the administration as he has been in previous  economic growth agriculture and tray when i was in a few years ago there was no such bureau it was differently constructed and now we have the agriculture pays plays in work with developing nations this goes back fifty sixty years anyway show each of you follow your statement do so if you would like to summarize if you would like to take to key issues that you know be of interest as you can see there's a lot of interest among the members in moving ahead in delving into these issues so tim great appreciation to you for convening this important hearing on this vital subject u s trade preference programs are a critical component about u s trade and development policy u s trade preference programs of help to spur economic growth and provide benefits to countries that need them the most each of you joined by your colleagues and predecessors on the subcommittee and the committee has played a central role in maintaining and enhancing the strain of these programs to the lasting benefit of both developing and least developed countries around the world and to american workers farmers ranchers and businesses in addition on a personal knowledge this is a subject on which i was privileged to spend many enjoyable challenging and productive hours working with your majority and minority chief counsels over the last decade i had the good fortune to learn a great deal from both of them and i'm not telling anything telling you anything you don't know to say that you are very fortunate to have them at your side as you examine ways to improve these programs even further in the coming months my statement for the record addresses ten subjects i would like to briefly address five points first the conduct an expansion of u s trade preference programs over the last thirty five years and particularly over the last decade has been a bipartisan by cameral congressional executive collaboration excess story as the chart before you shows in the last ten years alone congress has passed an executive has signed into law on twenty three separate occasions improvements expansions and extensions to the five pillar u s trade preference program this track record is remarkable and reflects the strong and sustained commitment of this committee the house the congress and the executive to expanding economic opportunity for developing countries and least developed countries and in the united states through these programs as we face the challenging issues ahead we can take particular confidence that we will meet them successfully based on the strong track record second us trade preference programs have achieved and continue to achieve important successes to expand trade boost economic growth and reduce in an income inequality thereby providing people living in developing and least developed countries with greater hope and confidence for their economic future my testimony contains a number of examples from afghan exports of dried plums and prunes and figs and gold jewelry to tunisian exports of sauces and condiments and electrical switching apparatus to georgian exports of jams and jellies and getting hungry at the same time not for the electrical switching apparatus at the same time these programs are a major source of imports and products for u s businesses and in particular small and medium sized companies and provide important partnership opportunities between s workers and businesses and workers and businesses in developing countries third the administration strongly supports the immediate renewal of the g f p program set to expire just six weeks from now on december thirty first administration is of course aware of the range of issues that are under discussion and the voices for reform a number of whom you will be hearing from later in the hearing we stand ready to work with the members of this committee others in congress and interested stakeholders to address these issues for now we urge the speedy renewal of g s t and stand ready to work with you for us the second preference program that expires at the end of the year is the andean trade preference program as you know this program has continued to achieve a key goal established at its creation in one thousand nine hundred by president bush to provide sustainable economic alternatives to drug crop production and form a key element in u s counter narcotics strategy the administration supports an extension of this program and looks forward to continuing to work with you on how best to use the program and to respond to the specific circumstances presented by each of the andean countries my statement also addresses the critical role that a i and hope are playing for those critical regions and countries to promote development and economic growth i won't dwell on that now but would be happy to answer any questions you may have in closing for more than thirty years republican democratic administrations and republican and democratic congresses have worked shoulder to shoulder and tirelessly to craft an employment preference programs that will promote development and economic growth in developing countries turn providing a stronger multilateral trading system by expanding opportunities for american workers farmers and ranchers and businesses your collective efforts have resulted in a strong and steady growth in trade with our developing country labor affairs at the department of labor i thank you for the opportunity to testify here today as you the leaders of the committee have already said of the subcommittee have already said and chairman wrangle as well the trade preference programs were created by congress in order to contribute to economic growth and development by providing new trade opportunities for developing countries at the department of labor we focus on helping to ensure that this additional access to the u s market created by the preference program should translate into bro opportunities for the workforce is of those countries so that the benefits of trade are broadly shared and gradually contribute to poverty alleviation and the growth of the middle class this is one of the key channels through which preference programs can achieve the broad goal of development for which congress created them in addition to benefiting development the effort to broadly distribute the benefits of trade is also one of the most promising paths to expand markets for u s exports my testimony goes into detail on those issues but i would like to focus here on the labor criteria of the preference programs which constitute one of the key mechanism through which the increased market access can lead to this broad based distribution of opportunities that arise from trade those criteria are meant to ensure that children are kept in schools rather than toiling on plantations or in factories that the labor that goes into export products is free of coersion such as dead bondage or prison labor that workers can choose freely to join unions and engage in collective bargaining and that the conditions of work in export sectors are acceptable and don't offend human decency these criteria contribute both directly and indirectly to the broader distribution of the benefits and opportunities of trade they help to put the recipient countries on a virtuous circle of sustainable development it is important that our preference programs include these criteria because labor markets in many developing countries are characterized by numerous shortcomings or market failures for example economic power is often highly consolidated with large segments of the population and workforce excluded the institutions that would allow workers to claim their rights under law are often very weak this may include weak labor inspectorate or weak or nonexistent protections for the rights of workers to take action on their own behalf  example through collective bargaining in some countries these problems are compounded by pervasive corruption under such conditions the likelihood that trade preferences alone will translate into significant and sustained benefits for workers and their families is unfortunately low therefore the labor criteria that congress has created can provide a needed balancing force as i mentioned earlier the effect is also good for us workers and firms because the broader distribution of gains through the economies of our trading partners spurs their domestic consumption and global aggregate demand in addition by helping to build a more level playing field in the global economy the program shore up support for free trade both at home and in the recipient countries we have numerous examples of success in achieving progress on labor rights through our application of the labor eligibility criteria for example the us accepted for review a petition from the public to remove uganda's eligibility for g s t benefits based on alleged serious ugandan labor law in an foresman following high level u s government engagement on the issues uganda committed to expedite passage of a long overdue labor law to improve the situation and with their later followed through in this in many other cases we were able to make progress on labor rights through the review process and engagement with the relevant governments without interrupting benefits indeed the goal of a country labor eligibility reviews is not to remove benefits but rather to encourage compliance analogous to labor inspections in our own country that is why where engagement did not produce positive involvement we did ok generally remove eligibility for incentives in our preference programs to be effective they must be credible just as our own domestic law enforcement must be credible over the years we have suspended eligibility twelve times due to failures by beneficiary countries to address abuses of worker rights trade preferences have also been used to provide additional incentives to countries to make improvements in worker rights this approach has great potential because it can closely aligned the incentives that face the private export sector with the public goal of improving worker rights and living standards an excellent example of this is the hundred ninety nine textile agreement with cambodia that offered additional textile quoted to cambodia on an annual basis in response to improvement in worker rights and working conditions more details of the success of that program are in my testimony and i would be happy to answer questions on it the program was so successful that the cambodian government and government sector decided to continue it even after the expiration of the multi fiber agreements we are now implementing similar programs in haiti and we are launching a similar program  photos thank you again for inviting me to participate in this hearing chairman eleven ranking member brady and distinguished members of the subcommittee at the department of labor we share your goal of making preference programs more effective tools for development and poverty alleviation and we stand ready to provide any irman levin ranking member brady rangle distinguished members of the subcommittee on behalf of the u s agency for international development i thank you for the opportunity to present in implementing trade capacity building programs that my written statement the included into the record and will take this time to highlight some of the key points of my statement as to how effective trade capacity building activity can advance both the objectives of our trade programs and the long term population but account for less than one percent of global trade expanding trade with and among developing countries is a critical driver of growth and poverty reduction work to encourage entrepreneurship human resource development technology transfer technological innovation innovation and good governance we see the relationship between trade and development all the more clearly today as reduced trade flows due to the global economic downturn have contributed not only to lost jobs in the united states but also to rising poverty developing countries trade capacity building assistance is a priority of work to promote rapid and broad based growth in developing countries countries in all regions of the world we support implementation of free trade agreements trade and investment framework agreement trade preference programs such as a goal and hope and regional economic integration  in southern africa to implement a single administrative document which allows transit consignments to pass through all border post document transport through the corridor is now faster more efficient and cheaper workers take advantage of the opportunity presented by hope by improving the quality of the apparel industry sourcing production and marketing for example you providing financial and technical assistance for an apparel industry training center  in collaboration with the government of haiti and the textile industry significant experience and knowledge of best practices for trade capacity building some lessons learned include first t c b projects should seek large and systemic impact implementing programmes directed toward enabling just a few firms to export to the us is not a sufficient to achieve the objectives of our preference program t c b efforts produce better results in reform minded partner countries support for trade policy improvements requires partnerships with reform minded governments willing to tackle corruption in the vested interest from the status quo third there is no single model for effective delivery of trade capacity building provides effective t c b activities on a bilateral basis through regional trade hubs through original associations and through multilateral form the particular technical assistance stablished position specialized technical advice is also coordinated with our colleagues at the department of agriculture labor and commerce and many other departments and thank you again for inviting me to participate in the hearing  an ranking member brady and chairman wrangle and distinguished members of the subcommittee stands ready to provide any assistance or support to you and your staff as you continue your deliberations thank you in particular focus on the united states department of agriculture perspective on the african growth and opportunity act trade preferences support the administration's goal for improved food security in sub africa u s d a both in washington and abroad plays an important role in accomplishing our goal was objectives of expanding u s sub saharan african trade investment stimulating economic growth and facilitating sub saharan africa's integration into the global economy u s d a is committed to providing capacity building technical assistance and training and research programs that will enhance africa's ability to trade in agricultural products sense ago was implementation in two thousand and one this is systems has contributed to a one hundred million dollar increase in u s imports of agricultural products from sub saharan african countries products imported include fruits nuts coffee wines fruit juices cocoa products prepared vegetables cut flowers and prepared food however before we can permit the import of cultural products into the u s from any country u s d a s animal plant and health inspection service must complete an extensive analysis of the past and disease risks associated with those products to expedite the import approval process if us pub published a final rule in two thousand and seven that has been used to allow the import of products such as baby carrots and baby corn from kenya currents and gooseberries from south africa and peppers eggplant and okra from guyana with that said it's important to note that even if a fish determines that the pass and disease risk associated with the import of these products can be appropriately mitigated this does not mean that export of these products to the united states will begin immediately recognizing these challenges u s d a working in concert with the u s agency for international development continues to assist african host countries in strengthening their sanitary and phyto sanitary safeguarding p s improvement activities that are critical to building the institutional regulatory capacity necessary to facilitate the chance to go was enacted u s d a has conducted training  phyto sanitary issues for more than thirty five subsaharan countries u s d a has several flagship programs that provide technical training and research opportunities for policymakers scientists private sector representatives university professors and other agricultural professionals these programs include the cochrane fellowship program the boer log international agricultural science and technology fellowship program the faculty exchange program and the scientific cooperation research program successes include a cochrane fellow who doubled milk production on his small canyon fire and he also implemented marketing strategies that improve the prices he gets from l a successful boar log initiative is our public private partnership with the world cocoa foundation this partnership helps cocoa producing countries learn state of the ar modern production and processing techniques to improve overall quality and increase exports of high quality cocoa and cocoa products worldwide agriculture is not only a basis for a is objectives it is the heart of the administration's food security strategy our food security strategy employs a whole of government approach under the leadership of the state department and in cooperation with u in this strategy will link all pertinent us government agencies together as well as partners in the private sector non governmental private voluntary and international organizations civil society and smallholder farmers the administration is committed to assist in sub saharan africa and food insecure countries globally to achieve food security u s d a is striving to assist countries to develop the capacity to capitalize on the beneficial terms provided by go on and i look forward mr chairman to your comments and questions and thank you very much well thank you let's go of you help us list what some of the outstanding issues are as we as we proceed and these will come up with future with the panels but i think you can help us from the point of view of your agencies aluminite what the present issues are as we expand extend and expand perhaps and reform the preference programs from the point of view of us i know you're not in a position yet to necessarily comment on these issues but tim if you would just list what you think the key issues that the committee in the administration face as we p so i think the among the key issues would be are the programs serving the goals of development amongst developing countries particularly in the least amongst the least developed countries are the criteria that are established in the programs functioning well and smoothly and in particular are serving the objectives that congress established in regard to those criteria over the last thirty years criteria include these are the eight or twelve criteria related to today with other elements of u s trade and development policy so those would be a few of the issues i might flag as you go forward and you'll participate in the discussion of which countries and discussion of perhaps expansion of preferences and how that expansion would interact with for example the present president preferences for goa and for haiti and other words the dynamics as you talk about expanding some preferences how they impact the present status of preferences for certain countries yes or very much so the proposals including mr mcdermott's proposal passed and i understand future relating to those issues and the question of how they interact with our existing programs the impact on workers and businesses in the united states those were very much a part of of our discussions with you sandra poleski do you want to add from your perspective so we have the  challenge in front of id chairman levin thank you i think first of all we would pose the question of whether we are utilizing the full potential of the preference programs broadening of the opportunities in trade that i talked about in my testimony and i think there are things that we're looking at the department of labor about ways that we can improve this and obviously will be engaging in the interagency process but we will be very open to be in a dialogue with your committee with your subcommittee to discuss ways of of utilizing the full potential particularly in our case of the labor conditionalities to achieve real development really broad based growth in the beneficiary countries and the second area that i think i would point to is that we have a sort of natural experiment among the different preference programs each of the preference programs has some of its own characteristics conditionalities are somewhat different in the different programs the level of benefits the particularly shape of the programs can we look at this natural experiment of different approaches and draw out the lessons that have been the most effective that have created the most growth the most development the most broad distribution of opportunities in most employment creation and use that to inform whatever the committee the house and the senate decide to do and preferences going forward thank you you have before you a issues that's correct chairman levin and it's an issue that we are devoting very significant attention to to be sure that we get it right so to speak that we look at the problems and that we find working with those governments to the maximum extent possible yes mr chairman in addition to the other issues that have been raised i think the question of how do trade preferences fit into overall rural development in developing countries eighty five percent of all the farms in the world are less than five acres and half an acre or less seventy percent of all the farm labor is generated by women oftentimes the least educated among the rural population so a question is how do trade preferences work with or facilitate human and economic development at the village level knowing that that requires a comprehensive approach to be successful singapore on moving forward with talks with trans pacific partnership it's a move that has broad bipartisan support here in the house and the senate depending on its composition finally could be i think a major access to new customers in that region signals our engagement and they are in a region that's literally blowing and going economically and and look forward to the talks as u s t r proceeds  also i think it's critical to that we repair south korea trade agreement for consideration for congress and i'm anxious in regards to this hearing for colombia and panama to complete their transition from a one way preference program to to a full trade relationship to level the playing field for our workers as we try to sell goods and services in that region in panels after this will probably look more closely at specific preference programs but could you because of your knowledge and position u s t r can you sort of look at the bigger picture for us obviously completion of a successful doha round is critical for the for the world and for us but as the u s we want to provide preference programs to these developing countries to help them move forward into the global marketplace at the same time giving away our preferences for free also reduces the incentive for them to participate fully in doha and to help craft ultimately a successful round from your perspective how do we find that balance as we go forward those are enormously important for our country they're enormously important for developing countries and hold the potential to be the largest source of economic growth out of trading agreements and so that is an  important priority in the area of trade development for us and for others there are also fitting in with those part of my answer to chairman levin's question was that as we look forward look in the future towards the development of our preference programs fitting into our overall policies and is is an important component of that so how preference programs fit into our ongoing negotiations over delaware we are continuing to press particularly more advanced developing countries with respect to market access issues in the now my area in the agricultural area certainly also in services and at the same time the preference programs have had a particular purpose for all developing countries and particularly the least developed to help them climb onto the escalator the neighbors them to move ahead in the context of multilateral trade as well as as you know in bilateral trade contacts to our trading partners preference partners understand that that this is not a free pass that we expect understand very clearly and have for some time that the united states is seeking important market access throughout particularly the more advanced developing countries in the developed world and those not those negotiations have been ongoing for some time and i think they are intensifying at the current time do you think just watching europe change its strategy there moving away from preference programs and more to economic partnership agreement our equivalent of trade agreements how does that impact our u s interests well the economic partnership agreement is still a work in progress for the european union and their partner countries  they are in different stages of acceptance and different stages of development as i understand it but they have several approaches as do we with respect to our trading regime we have the multilateral we have our bilateral agreements and then we have our other the labor area and one in the tax area to help to resolve those as quickly as possible and there have been some recent conversations with the government of panama about that with respect to colombia the president indicated his strong support for the colombia  and the need to continue to work on the labor rights issues in that context there were bilateral meetings three times this summer i believe in may and june and july and august u s t r sent out a fact finding mission to colombia to work further on those issues are our contact with the columbia as well as webb the congressman with stakeholders is very very active and ongoing also with respect to colombia u s t r solicited public comment in september and received a large range of views with respect to that with respect to the green agreement public comment also was completed in september and we are continuing to review and to work on the outstanding issues there that include access to the administration u s t r participated and i believe there were representatives of other agencies the department of labor state and others to both of stablish fact and understand better what the situation is on the ground as well as to begin  look for and basically what do they come back and say because it's been the same problem that i've heard for years and i don't know what the well the efforts the efforts both domestic with the congress as well as with interested private sector groups and with the governor of colombia have focused on the different ways that the issue of the issues of  prosecution and unity and the questions of addressing the violence issue going forward as well as the labor standards issue within colombia have attempted to address different parameters where it would be possible to understand out so that we know what we're trying to find out well there are with respect to the criminal justice system a number of things have been done and a lot of it is related to fact gathering  to a lot of the work in the respect of the criminal justice system in colombia as related to fact gathering and understanding the way their system there are divisions of labor and responsibility in terms of the issue of prosecution for example between centrally an federal conducted a work and work that's done outside of the federal purview so there has been an effort to understand how that division of labor functions and what is exactly being accomplished and how it may be accomplished in the future is the government or i can i can tell you that from all perspectives from the perspective of the administration from the perspective of those here that we work with in the congress from the perspective of the government of colombia there is there is a hard effort it is a good we can resolve these issues he would like to move forward on that  success we have been able to use the criteria in the preference programs on a number of different occasions with respect to both labor and i p r are the two that are most active under a go or for example most recently gone swazi land these are countries where we are able to utilize the criteria there to seek improve in those countries regimes during the one nine hundred ninety s in the one nine hundred eighty s a number of different examples in both the i p r in the labor standards area and central america where countries were able to take additional steps in these in these particular areas and in the case of colombia they've also been steps taken in both under both of those elements the reason kind of curious is the the colombians have made massive progress i have firsthand experience in this area since the late one nine hundred eighty s early one nine hundred ninety s and i did find it somewhat ironic that the colombian labor organizations came up here to lobby on behalf of the passage of the colombia f d a eventually and i know that we're not talking about it but as a bridge i think there's been a tremendous good faith effort and you know in particular the the the context of a lot of this question is we deal with labor standards in particular i think there's a common goal to move in this area but any time we seek to impose standards i think it's important that we keep it in context of progress that's being made and walking in the correct pattern is achieving perfection overnight and i think you know i think it's been something like a ninety percent drop in violence and i keep hearing the word violence come up in reports from the administration or other organizations but in fact the colombians have a somewhat different perspective in the very organizations that are allegedly being protected and i receive a huge amount of feedback in the national security arena other countries being very fearful that this after being stalled for american domestic politics principally is potentially going to lead to conflict  in latin america that may end up dragging us in because we're unwilling to do that considering the extremely aggressive moves of chavez and others and i think economic growth is key to that this does have implications term i'm concerned that if we set the standards too high we're going to find ourselves in second or third place behind either the european union or east asia coming in whereas in fact colombia being a perfect example political issues there the question of whether with trade agreements we're going to build in standards basically international standards and whether it is mutually beneficial for us to do so mr chairman the point being made is that our goal shared goal is to reach those core labor standards how we achieve it incrementally or in other  trade preferences as well as our other trade agreements that we operate competitively but on a lever a level playing field and we don't see unfair competition such as with the use of child labor and i think that's the kind of standard that you're focused on here and in our other trade agreements let me ask you i gather from your written testimony that you filled our preference system as it works today has had a very positive working conditions or labor conditions there are some positions pending at this time in those areas and do you have i know you have been making improvements to your website do you post on your website when a petition comes in what it is concerned with and when you resolve it i don't know if that's on our website at this current time i'm happy to figure that out and get back to write because i know one of the couple years well sometimes petitions do what we call we hold them over from one year to the next there are a variety of reasons you probably know we're working on it we receive incremental progress we're not ready to close the file so we maintain it open there are different i think would be helpful to be able to see since so much of our understanding the way government operates here in congress and in the executive agencies over the web when a petition comes in what it concerns needs to be concerned with both labor and environmental standards i don't see anything in your testimony about environmental standards is there any reason that as we renew we consider that legislation that we shouldn't at a minimum include the kind of requirements that were in the peruvian free trade agreement concerning multilateral environmental agreements of a global nature such as trade in endangered species and requiring our trading partners who get these preferences to enforce their own environmental laws and not denigrate them so that's a very important question and it goes to my testimony that's in part the question of reform efforts that are different kinds of rules that are being made now including proposals like that with respect to modifying the criteria of our preference programs and  suspect you know that the issue you're raising will be a part of that discussion as well a number of other issues that are in play well this is a very important legislation to renew and it would seem that there's no better time than the present to implement these provisions if they work well in the working condition area as you've indicated they ought to be included and we though some of us might question the adequacy of the model we the model that even the bush administration agreed to you were actively involved in those negotiations to say in a minimum global multilateral environmental agreements and in force and non denigration of your own laws let me just say in closing on an unrelated matter i want to be sure you seen the communication i boarded to you concerning the very troubling report that u s t r was involved in trying to weaken the band on foreign on federal contracts for corporations that are reincorporated overseas in order to dodge their tax responsibilities that would be seen to be totally inconsistent with what president obama has said on the issue of tax corporate tax avoidance and i hope you will review that and cease any effort in the senate since the house did not look at shaping our u s preference program policy over after to tell you that i am disappointed that the administration has yet to at the robust trade agenda we're still waiting for  that i had the opportunity to meet with ambassador kirk just a couple of weeks ago and asked how the f d a process was moving forward as those who have graduated from the preference programs korea for example and and he said that the hold up was that the nation is so divided on on this issue that is difficult to bring forward  i find that as a pretty weak excuse the nation is divided on health care yet we don't have a problem bringing that forward the nation's divided on cap and trade yet we don't have a problem bringing that forward i think it's time that we hear from the president about a robust trade agenda i want to focus on and i want to associate myself with the comments made by mr macdermot time to push forward not pull back so shoot with my myself with comments made by mr sanchez that this really trade is is is very key not only to jobs but to security the environment labor rights  shared responsibilities and liabilities and all of those things the cultural exchanges all those things that trade agreements bring so my question to you is is looking at mr rangle focused on colombia my question is more toward since being from washington state korea's our fourth largest trading partner and it's absolutely essential that we have an agreement with korea for washington state job growth when will that come to the floor for an agreement when will korea be graduated from and we have graduated from this preference agreement to a full trading partner with united state america when will that come to the floor for a vote thank you a extensive work is ongoing you have an estimated date maybe when that might come to the floor i can offer you today and i can offer you what has been going on since the administration took office  what's the hold up with the korean agreement well the the agreement was not there was not a basis for presenting the agreement successfully to the congress when the administration took office and we have been working on that to see if we achieve that kind of both substantive addressing the can we look forward to next year i know it's not going to happen this year even though will be here to almost christmas but i can i can assure you that we are working hard with  the outstanding issues to see if there is a basis for your hope that it come to me more next year pardon me sir is it your hope that it comes to the floor next year i would i would rather not focus on a particular date but rather on the work that we're doing we're doing with the congress with our avails that is that is a core problem the largest problem yes ok and what what is the difference in trade of automobiles how many automobiles to we import annually from korea it is i various between six hundred and seven hundred thousand and how many do we export to korea that is about five or ten thousand that's a problem well the gentleman yield yes i have a question to how long is korea beyond graduated from the preference program how long are we known about the automobile trade imbalance and how long does it take to to address an issue like that i don't let me answer that you've raised it i'll answer yes or no i'll send you the material that goes back three years you know our discussions with the administration korea has essentially kept out american manufacturing for products throughout its modern economic history and its automobiles its refrigerators whirlpool can sell their major refrigerator in korea they can sell their refrigerator in to any place in this country they can export their cars here without any any hesitation from us essentially we've had one way trade and we towed the previous administration that these issues had to be addressed in the for in the korean free trade agreement they did not address the issue and they did not address the manuf and as a result and they were pre warned if they did not do so there would not be support within this institution for proceeding despite the fact that there were major improvements in other areas he went ahead and sign the agreement anyway without effectively addressing the tax restrictions the regulation restrictions and the failure to have a dispute settlement system where we gave up the terrorists that we had in their cars and also phasing out tariff on trucks candidate made clear he had problems regarding the korea free trade agreement this was already clear since then this new administration has been talking to the koreans mr wrangle and i have met with the trade minister with the ambassador and suggested to them that there needs to be some serious discussion about revisions in the korea free trade agreement i use the word revision own have to worry about the technical tear to meet their having essentially a history of one way trade when it comes to manufacturing it means jobs in america mr chairman if i say i'll be glad to you the history of this odd like to get on this debate as well but we've got a time i think that it's agree with some of those ok there's a will do that some other time that's a deal the hearing on preferences you raised and i urge you at the beginning to have a hearing on preferences mr chairman if i could respond and i see the two as as you mentioned in your opening statement this is a constellation of of trade  which kluge preferences and graduating to a full trade agreement i don't know how you can hold a hearing on preferences and not connect the trade agreements to it they're interconnected and so when you talk about korea and the fact that korea  has graduated to this preference status the only natural follow up question then sir is when will that finally become a full trading i'll tell you the answer when the korean government agrees to sit down with the united states and address the issues that are outstanding so it sir would you and then we will proceed with the agreement well it's taken three years so far i know because they for take the position actually change presidents mean that we change but he was really offended when the chairman brought up the question of can we look over the areas that are would be glad to sit down with you i know i visited with them in singapore and you know their position is a contract is a contract and they've moved forward but i do think there's room for discussion on that could prepare this agreement granite free quota access to the u s market and i'm particularly concerned about hearing we have a day about textile products that will impact not only our state the whole southeast where many places unemployment is not fifteen percent or higher what effect do you believe that trade diversion from the african region and cap will result and secondly do you think this will have a negative impact on the stability of these markets because that's sort of what we're talking about today yes or thank you mr afterwards the question of whether and how to expand our preference programs including in southeast asia it is very closely related to an assessment of how it would impact existing preference programs as well as our own domestic industry secondly as these programs have been crafted over the last decade or so great attention has been paid to potential synergies between our own industry particularly in the textiles area and the apparel industries in africa and particularly obviously the cap to countries in the caribbean so those will continue to be important considerations for us to ensure that we have partnerships and ways that both americans and and are developing country partners can benefit from these programs and lastly we have issues of enforcement where we're seeking to make sure that the issues of trans shipment the provisions of particular rules of origin that are being that are built into these agreements that are there to ensure that they operate the way that the congress intended in the way the executive intends are being taken care of there that is not a perfect track record sir there are areas where we still have a lot of work to do but i can tell you that we are focused on those and and seeking to to do better in these areas because obviously they're closer to one of the major markets of china that would be able to train up a whole lot easier they are now and i'd be interested in those numbers because seems to me you would wind up moving all these markets to another marketplace next question as it is in that same area assuming we give we were to give new duty free benefits to bangladesh in cambodia what impact would that have on us negotiating leverage power i guess a lot every two are trying to get during the upcoming doha negotiations how would that impact that negotiation well for those negotiations yes or the question of expanding the preference programs is something i that i suspect this committee and others in the congress will engage in a robust dialogue with and together with the administration on in the coming months and i'm certain that  both members of congress and the administration will be mindful of the impact in a number of different directions including the impact on the we haven't reached a position on it yet well we haven't reached a position on the specific proposals and as i understand it new proposals are coming out every day including tomorrow that we will have to take an understand the specifics but with respect to the broader question of preference reform we are engaged with the congress on that and one consideration as we engage with you on that will be the impact on other parts other parts of our trade trade policy including the jobs that are now here in the united states tied to those who have been have been built up over the last number of years affect the preferences of others in the discussion that we've had about career is an illustration of how you need to do trade policy understanding the  interactions and the need to look at them you know in a complete way and not just take one piece so you can be assured i think the administration and i hope on a bipartisan basis as we look at the expansion potentially of preference programs we will consider what it means if we expand to some countries the impact and those w preference agreements and the impact on businesses and workers in the united states of america thank you mr chairman i look forward thanks mr herder your n important to our districts are so important to job protection lay up this time when our economy is down and i i i i would urge the chairman that we might continue with these hearings and have more of them that we can work through the defense so the misunderstanding that we have because why are we here in the united states at least currently are not moving forward with these agreements the rest of the world's nations are as we know and we just can't afford to be losing the jobs and losing these trade opportunities other countries so again i want to thank you want to specifically thank you and it's great to have you with us mr rife with and as you mentioned trade has historically been bipartisan and we need to do whatever we can that is to make sure it continues to be that way whatever that is because there's too much at stake for it not to be but i'd like to follow  up on the question name that mr astrid had and why we're not asking the least developed countries to make any market access commitments the door hard around because of their special status i think we all agree that the market access being offered by the more advanced developed countries is insufficient and mr i'd like you to discuss  your thoughts weathered united states should implement duty free quota free access for the least developed countries before the conclusion of the doha round to go  terms of how it will affect the positions of the more advanced developed countries and could providing these duty free quota free access reduce the incentive is that the least developed countries now have the push more advanced developed countries like china india brazil to make more concessions so we can have a more ambitious  negotiations good morning mr gertz good to see you again sir with respect to duty free quota free it is invasion did was envisioned on kong ministerial to be concluded together with the completion of the overall donna go see a sions and that's that's currently where we stand with respect to that with respect to the more advanced developing countries as well as others our negotiators are pressing for these market access issues in agriculture n rest of the countries like brazil and china to give concessions that they might not have given otherwise yes are typically typically provisions of the message miscellanies tariff bill are ones that are developed and the non controversial bases the administration reviews them at a policy level on a case by case basis to ascertain whether they would meet the criteria that we we have for the bill and so if there were issues with any particular proposal with respect to the m for labor for those employees for those individuals that are out of work wherever they might be that we work together we have to move forward i think it's imperative for the betterment of our nation  that kind of an investment really can help a nation build a reliable road system or a modern port or customs facility or other infrastructures which might be necessary to compete with more developed nations does that sound like it commensurate with the need in some of these countries i thank you for posing such an interesting question having worked in development for quite some time i would observe that there are no magic bullets and you're quite correct questioning whether trade greater access to trade a greater involvement of the private economy bring many benefits to developing countries more apparent and others certainly trade helps create  income opportunities whether for small farmers whether for micro entrepreneurs whether for workers i understand it also brings off more transparency better governance i don't dispute that but my point being that if you have small farmers that suddenly can export to the united states but they have no road to get their product to the united states are they really reaping the benefits of these trade preferences program and  my point simply being and again i don't trade one part of that but in and of itself i believe liberalizing trade in and of itself slowly is not an economic development strategy necessarily for these countries and we have an office specifically of trade in development that works closely with dr oz agency and with others to try to promote these other i think it's the administration's position very strongly that trade is a critical part of a component of i second the questions asked by my colleague sanchez particularly relative to trade capacity building which i do not believe has had sufficient focus and attention by our country as we have hoped for i believe more development and more progress in the lives of people in preference areas than has occurred just with the preferences themselves dr philbrook u s d a s got a part of this and i thought your testimony was very interesting i was very encouraged visiting with dr shah the the voting ourselves more to production building and hopefully the production building in these places will also have an eye on making optimal  farm bill legislation but i believe it's fair statement that u s d a central flossed responding to a hungry world has been looking at commodity support we might provide to them i'm for that but i  in the end in the honor of dr bora log we want to continue to raise production capacity in these places and i believe maybe we've taken our eye off the ball in that regard out there some very disturbing statistics relative to the diminishing number of personnel in usa with expertise in food production can you speak to that and we have made it a priority to expand our staff of agricultural experts who will be deployed in the field so that we have a robust capacity to address food security  in these agencies in this area we really took our eye off the ball people eat everyday you've got to produce food every season and yet to have the that the dwindle i mean it is a fraction of the  production capacity and commensurate trade building capacity as a result well we certainly hope so mr palmer many of the agricultural and background is in agricultural economics right not agricultural development although we do have some as the gentleman in peru for example in lima has a development background having served both in usa and others and there's a handful of around the world we're trying to encourage them i suppose is the word to work in countries in sub saharan africa we've expanded the number of saharan africa but i don't think it's reasonable to expect that if they have an macro agricultural economic background that they're going to be able to immediately do the kind of work that's necessary a rural village development but we're working toward that and we're actually thinking of creating a i don't know what the term is haven't been in government long enough to know what all these terms are but to create a address ad caches that have development backgrounds and to hire people to fulfill that role i'm excited to hear that thank you do pursue this issue when i had the privilege of being your system in a state of a you know bureau we had a rural development and city and we did the kinds of things that you mentioned and there's out of one hundred eighty two countries in the u n human development index h d i with almost half its population living on a dollar twenty five or less per day i've traveled to bangladesh on several occasions and i've seen for myself t advantage of preferences if we only give them the chance of the opportunity how can we move forward on including the least developing countries which are not beneficiaries of regional benefits it's a bit position where they can take advantage of preference programs if there is not room for full petition participation or there are other measures measures that we could take to make them more fully participatory and crowley and as you know i think you know that the basic talking points on this issue so maybe maybe i'll try to get go beyond those it's not a simple question as you state bangladesh is very far down in terms of least developed countries it's also our third largest supplier of textiles and apparel it competes up the chain to our first and second largest suppliers of textiles and apparel and it also competes down the chain towards the others those are all considerations that will factor into our discussions with you and with with others in the congress about how to how to move forward in this particular area there are issues of there are problems there that would probably manifest themselves in terms of meeting the criteria of any new program that bangladesh might participate in in the worker rights area and other things so it's not a simple equations or but it is one that i think happily will be given very careful and thoughtful attention in the coming months  capacity going back to bungle there's still a particular they have invested a great deal of resources per capita in improving the infrastructure of their country in order to make them more effective export united states by contrast our ally great britain united kingdom pays only four hundred million dollars on fifty eight billion dollars in exports it seems directly out of balance and a steep healthy for a country that lives in dire deal of the money that's being spent right now could come from monies that they're paying to the u s on duties would you agree with that this is such a great britain have the same issues that bangladesh has in terms of capacity well a point of a point of clarification the duties are actually paid by the businesses that are exploiting to us so that it's not actually money coming out of the government's pockets but the point is no we would want to create more opportunity for business to be done here and that that money drives that can be spent on infrastructure back in the country well and what it what it points out certainly is that there is a clustering of reasonably high tariff levels in some particular product categories that bangladesh and some other countries specialize in similarly back on it's so important that you be here and as we go forth with this we hope all will participate i think your last question does show the complexity but the need to tackle these complexities i think the basic answer is that the products that have come in from the country you mention are not as complementary if you want to put it with the small within as the products come from great britain and it's a reason for the higher tears but as we look at this issue i know she relates to do we need to look at expanded trade and its impact in the united states another reason we want to try for developing nations to develop middle classes so they can buy our products it's so i think interrelated and that's why as we go forth with this issue of preferences w to an ag as there is new leadership there and to you mr cholesky for coming and to you tim rice we are exceptionally glad you are where you are so we miss you with that we appropriate time when in the case of our region efforts are being undertaken to expand integration with the proposal to have a larger free extended the interests of the us government to continue with our goal and to seek ways in which it can be and h not been able to move away from their non eligibility criteria as the difficulty in in their access to their markets we have a number of ideas for improving country access to overseas financial which we believe would be more favorable than trade sanctions sadly we believe designation of reason regional groups would be would be more beneficial and when each of its for government which has allowed it to maintain a small but significant share of the market signalled above with hard of the proposals for extending the message to other countries particularly one hopes to maintain the most significant success story of the growth of the government industry in sub saharan africa we have alternative proposals for instance the us could conceive the proposal for an have expressed in the testimony with more detail with respect to origen rules do not countries have a very wide variety of origin rules which makes it difficult we also think that the market access alone is not sufficient while we have had some successes there are opportunities in the trade area to improve our war is walked the only highlighted import bank among others assistance in the infrastructure projects but you can only with a reference to the aid for trade agenda under w do you support the industries where the region and of course to clear up front of tying trade and investment policies we believe that addressing or these would greatly enhance the capacity of subs hard on countries to be able to benefit fully with their  extended to them with thank you mr chairman and other distinguished members for inviting us once again thank you and thank you for coming mr minister your next chairman levin thanking begin by expressing my gratitude for the committee scope aeration and book with cambodia on trade policy over the past fifteen years in restoring normalized trade relations in one in ninety five in helping to shape the textile agreement in force from one nine hundred ninety nine to two thousand and four and in our double door session agreement in two thousand and four and implementation since then as i trust you will appreciate i come to this hearing with a people of my age who have always reside in cambodia saluted six different national flags of cambodia that's a record in the world so please bear that in mind when you are listening  that a short accountability for compliance with cambodian labor law and fundamental international workers rights the bet the factories cambodia project has been so far branded the most innovative mechanism to promote corporate social responsibility we took also accompanying measures to make the policy books cambodia's reputation was transformed from a country known for tragedy for the killing fields of a country that was a pioneer in international trade policy we made cambodia as safe haven for debris all the major brands who saw separated from cambodia free from sweatshop after being laid off is a very big question mark the cambodian government does not have money to provide social security in developed countries over two million people have who have seen  market share from two point one percent grew to three point one percent but from the here it is only two point four percent comparing us we also thought that two point one percent almost the same level and now with days one point two percent quite the drop but this drop is not because of cambodia if you look to the chart you would see that china has come from sixteen point zero one percent to thirty four point seven people percent of the market share for the u s by us culprit social response is just one factor other factors such as competitive price speedy delivery of goods created such hillock these i said that i would continue to prevail in the decision to source products these are all related to competitiveness since the book financial crisis started in two thousand and eight industrial tensions in cambodia are flaring up factories are closing doors workers are laid off we took steps to improve of prosecco competitiveness we are working on programs to boost productivity assist laid off workers and provide for the tax incentive for the industry what we are facing with a limited budget but from the u s side there is also a step that the ways and means committee can take to provide us a bridge to manage especially our neighbors in asia if we can cobble just one or two percent of the us market share for all the products out of china that people point seven percent share for example it will change dramatically the economy of cambodia it will not affect china its called me at all these one or two percent slice is certainly not cause from aguilar countries is not top from agwai share in the us market because we are performing better let us not forget that both will mean better requires painful reforms and strong political will to change for the better performing better is not through protecting in f not producing the same type of degrees of apparel that they are doing the last chart that i would like to share with you excellencies on the world members of the subcommittee is you see the g government to the us went up to but stopping the end of the quota system in two thousand and five look to albo g d p growth we start to fall down from thirteen point three percent to ten point eight percent in two thousand and six to ten point two percent in two thousand and seven to six point seven percent last year and this year to minus two point seventy five percent this is why i said it is a crisis employ over six hundred thousand workers and at sports more than twelve billion dollars a year not company mouthguard in males employs two thousand six hundred fifty seven test style workers and seventeen facilities located in mostly rural areas of the southeast a largest plant and try and georgia employs one thousand one hundred forty two workers and has been a mainstay in the tribal community since eighteen forty five most of what we make plant to apply by noon we have taken two hundred seventy applications from people looking for work that is how difficult life is in the rural communities today understand that a committee is considering a proposal to stand duty a status to apparel imports from bangladesh in cambodia or to make other changes to the test style and apparel trade rules forty five textile and apparel groups from twenty nine countries in africa and the western hemisphere asked me to present a lot today stress in their strong opposition to this list includes nine least developed countries including as this committee considers this proposal to keep in mind the workers that are trying facility and textile facilities across the country their livelihoods literally rest in your hands if this committee grants duty free status to large competitive for our soldiers the reason is simple economics bangladesh already pays its workers the lowest wages of any apparel producer in the world the minimum wage for apparel workers in bangladesh is eleven cents an hour on top of that bangladesh has a long history of working over the last six months tens of thousands of garment workers have rotted on multiple occasions with numerous i grew up in green south carolina my father and mother worked their entire careers agreeing with their hard work paid off to the point that i was able to become the c e o of mt vernon mills that story of opportunity and promise has been replayed and some of the poor of this country for many generations that story has also been replayed around the world the united states has been a special test files on apparel to fifty five countries through these programs worth nearly thirty billion dollars has been created nearly two million workers from poverty however these gains are threatened by the proposals to stand new preferences to over two billion dollars however apparel imports from the catholic countries have fallen thirty two percent while the ago or countries are down another forty percent the us sol industry in turn has lost over one hundred  fifty thousand jobs mr chairman i do not think our country believes we should do anything that could jeopardize any additional jobs at home in particular we should not be abandoning manufacturing jobs when economists and the president tell us we must produce more and at support and war to return to economic scale also do not think we should abandon our preference partners in order to reward that barely pay their workers or engag predatory and illegal subsidies and stably that we should be focusing our efforts on ensuring a prosperous future for united states workers as well as for the millions of workers in the preference and free trade areas as an immediate issue committee to move quickly to stand trade preferences that are foreign in the andean region thank you and i will be pleased to answer your question thank you very much mr o'bri discussion in particular agree with the recommendations representative mcdermott and thank you very much for them this morning oxfam america we have fourteen of affiliates around the world working one hundred countries where an aid organization but we don't think that the answer to global poverty problems is eight we think is far more important if you increased global trade by one percent it would be more than two and a half times the global aid budget it's far more significant what we really need to see is bringing aid and trade together in a coherent global development strategy from the united states which is always going to be the leader on this front but could do far more to fulfill its potential it doesn't make sense that we give cambodia one dollar in aid for every seven dollars we charge them in trade it doesn't make sense that we're charging bangladesh five hundred million in two thousand and eight on three point three billion dollars of exports while at the same time we're charging less to the united kingdom on over fifty billion dollars of exports we've got to bring some greater coherence to our global development strategy we're going to make three recommendations to you which hopefully will be consistent with other things you've heard this morning one expand program on product coverage to establish a single unified program make it simpler make it more predictable three bring our trade and a policies together particularly in trade capacity building under a global development strategy let me say a few more words about each of those we need to expand our program and product coverage why because we have still a billion people living in poverty and a global financial crisis that put a hundred million more of them into poverty l d c's make less than one percent of global trade on imports from a all he sees in total is half a percent of us non non oil imports to the united states that's why we need duty free quota free access for all l t c on products when we exclude the key exports that help these countries lift them out lift themselves out of poverty we are undermining our global efforts at sustainable development if we take textiles and apparatus out of duty free quota free access in the key and they are the key industries in places like cambodia as you heard from the ministry the minister were undermining our longer term development goals there the same with peanuts and sugar and dairy products under the ago agreement our second recommendation is to create a single unified program with simpler rules and predictability if we really want t o drive sustainable growth overseas and we see sustainable growth as the key to long term development we have to think about the customers that we have on the ground instead of one unified program now we have ad hoc solutions to specific problems developed at different times for different reasons we don't have a simple set of rules and from the customer's perspective it's just too confusing to work with because our programs aren't as predictable as they could be businesses the people we want to make use of these can't plan around them they're not sure if they're going to be there in time we need in our legislation to make a home for preferences in our trade policy until we get that legislation we believe this committee is going to be key to that we need to make sure that the g s t in the end andy and programs which are going to be coming up next month are renewed for a predictable period of time we recommend five years  third we need to link trade and aid i've spent the last couple of years working on u s policy we are by far the global leader in a we spend one in every four dollars globally but we're underperforming in terms of what we could do to lift people out of poverty that's why we're part of the modernizing foreign assistance network to try and make our aid more effective for global development but we face many of the same challenges in the trade world there are fifteen different agencies that are doing trade capacity building that's just not an efficient use of resources people are trying to coordinate there are internet agency discussions but nobody's really in charge and it isn't part of an overall global development strategy if we don't do this we're not going to be able to help the countries that need to help most it's a problem the twelve of the thirty eight countries and go all go aren't using this program and why because they lack the physical and administrative infrastructure to avail of trade preference opportunities so we urge this committee to work with the appropriations committee and the foreign assistance or the foreign affairs authorization committee to give us the united states development strategy that brings these things together as i was listening to the minister from cambodia i was struck by how stark this reality is as you mentioned there garment sector is in crisis they've lost sixty three thousand jobs many of those those jobs are women many of them come from rural areas we estimate it's around ninety percent the fear is that many of them are going to go into the sex industry at the same time that that's happening one third of our any dollars to cambodia are going to protect so we can either address the symptom through our aid work or we can get at the underlying cause by keeping those women in the jobs that we going to be the silver bullet for economic development of impoverished developing countries and ideally what i would like to see as an overhaul of the trade model for trade agreements and preferences in which we're looking at other investments that can be made in conjunction with trade to help some of these countries develop their premise of liberalizing trade that if we can help other countries develop and develop a middle class that's pretty tough obviously for us to compete in that kind of environment and you know a lot of saying the same timeframe we've had a decrease of one hundred fifty thousand jobs what kind of legislative  as we make more products eligible while it is very helpful to the preference countries and welcome by our u s importers creates a great deal part burned for mr hastings in other businesses that compete against them same goes for rules of origin as we try to deal with that issue now tailored to each region but changes when you go to broader standards clearly preferences have become or have been historically a bipartisan effort as we're trying to move them forward so my question is to the panel what advice counsel would you give this committee as we look at broader reforms within this area how do we deal with those issues some of which conflict is as minister proceed made the point that that adding new countries doesn't necessarily take away market share we lose it to china instead but  working on poverty issues in the united states too but when we go overseas and we go to a place like cambodia where you've got thirty percent of the population living on less than a dollar a day it brings home the reality that what we need is some kind of fairness in the trade system and what we mean by fairness isn't just equal opportunity it's giving these countries the chance the opportunity to enter the global marketplace good thank you thank you mr you know i think when when you look at it within the last few years the overall decline and i go or the overall decline in trade with cap i think they've been cambodia's down probably tied to recession that's not the case in china that's not the case in bangladesh make china has a increase their trade as i stated earlier from less than twenty percent to forty five percent there is a lot like it's up to forty five billion dollars that's a a lot to supply capacity all those people who are a subject of your preferences if not they would not be able to maximize the advantages that you have provided that look to the case you have provided that they grew by eight times but they can do more if you provide more things to support for such and build up to a capacity for the kids cambodia we see the same thing but what is the important to stress access to the markets or definitely investment in infrastructure support capacity building to the private sector and other related issues but we also think other incentives  to make sure that fairness is being done and if you can't get transparency a real problem and we're dealing in a nontransparent situation so with that let mr hastings let me ask you just one question i've got several the chairman i'll submit those for the record or showers in those communities to take care of boys and girls clubs and all those little things that happen in our community well like i stated earlier over the last ten years we've had a significant decline in our company we used to be over six thousand competitive you need a certain amount of volume and once you start and you get to that critical juncture where you lose that look not have a lot just a little bit more volume then overall it just starts spiralling to how to control  where you overall cost you get where you're not competitive from a call standpoint it with any business so i would say in our case with our business and our whole industry we're at the point that we really can't lose any more we appreciate your presence and will be for a while why don't you go about your other busy business and then we'll take the fourth piano mr o'brien if you know where we work with  from all the world's poorest countries and you know we're in favor of of opening up our trade to developing countries it's part of the doha round but what would be the impact of loss in the united states if we followed what you suggest right with with that and send it to us in writing not by mining technology thank you so much and we will recess and then here the fourth panel and thanks again to the four of you for excellent testimony to especially our friends from other places who've come a long ways thank you very much announced there will be no more votes today so i'm not sure the implication we were discussing informally we very much appreciate your patience is very gifted people who come from different walks of life in ascension different viewpoints thank you very much thank you mr chairman and members of the subcommittee for the opportunity to provide this testimony today regarding the operation of u s trade preference programs  chief supply chain officer for levi's which means i sourced the product i'm i'm the key buyer for levi as you may know levi strauss and company is based in san francisco california a global corporation with roughly eleven th more than three thousand of whom are employed in the united states we are one of the world's leading brand of the power companies we design apparel and related accessories for men women and children under the levi's dockers and signature by levi strauss and company bran we market our products and more than one hundred countries actually one hundred ten countries worldwide as a truly global company levi strauss sources are jeans and other apparel products from roughly fifty countries around the world the supply chain my team and i manage is quite complex particularly when you look at the way in which we saw the important u s market over the years we have adopted our shorting strategies take advantage of the various u s trade preference programs that have been available to us as they are a part of products these programs have not been the sole reason for our decision to source from a particular country but they have been a key consideration in those decisions both to enter a country and to migrate out of of the critical factors that make the program workable from a business perspective first the program must be stable and predictable we need to know that it will be in operation over a long time often shorter term expansions are not good for business and do not encourage long term investment second the rules of trade under the preference program must be simple and liberal as possible we as businesses need maximum tr flexibility to structure our operations in developing countries which often present other challenges in areas of infrastructure and capacity so the rules of trade for the program should be stable once we have set up operations to take advantage of a particular program and it is working changing the rules of the road can have an inadvertent effect on stifling business i would like to take a moment to elaborate a little bit more on these issues with  using u s fabric our partner operations in colombia were a win win for everyone we had a stable base of quality supply for our products u s textile producers benefited as did the colombian workers in the broader colombian economy at our peak we were shorting sixty million units a newly from colombia and the business me even have grown more however then it was set to expire in two thousand and six and the uncertainty started we did not know if congress was going to renew the program and that caused us to doubt sourcing plans for colombia in the end congress did renew the program but only for a short duration and the short term renewals have continued since we cannot as possible i say this because our sourcing from the country from colombia has dropped from sixty million units to between one and two million units due to this uncertainty and i think this is a real world example of why workable trade preference programs must have long and predictable generations so my second criteria simple and liberal rules of trade here to the rules of origin and other aspects of preference programs can really make or break them from a business perspective we have a great success working with programs like go up that are low for raw material imports to be sourced from wherever we can secure the best and most reliable supply simple and liberal rules of origin for products traded under preference programs are critical and programs that are based on them are definitely the most workable when things get complicated these programs can be very difficult to use for example when the first iteration of hope for haiti enacted its complicated rules of origin made it extremely difficult for companies like levis to use over time congress has modified the program and now it is one of the most liberal and easy to use however we face other challenges in haiti that restrictive trade with the country political and social security issues labor can sound port infrastructure deficiencies water shortages and other capacity issues a difficult country in which to do business and i with our congress and the s government to work with he should officials to address these lingering concerns to help make the whole program work better for all stakeholders and that brings me to my third point you can't change the rules of the road in trade preference programs if they are working if you do they could very well stop working quickly the ago a program that i mentioned earlier provides a prime example of this we began taking advantage of a go or soon after the program was created we steadily increase our production in southern africa program was working well for us and we had future plans to grow but then congress enacted new legislation in two thousand and six which added a so called abundant supply element to the program and we had no idea how these provisions work in practice particularly since then a fabric of our lifeblood was listed as being an abundant supply in africa even though we knew that it was really was not for our needs as soon as we saw these provisions had actually been enacted we basically put the brakes on our u s sourcing operations for africa put it on hold and began a fight to remove the provisions fortunately congress eventually moved to eliminate the abundant supply provisions but not for several years and not believe stunted our operations in africa and definitely not something i think was intended so the key for success for preference program from a business perspective and something i argue to keep in mind is this committee in the house of representatives work to move forward broader preference program reform is to keep the program simple predictable and with liberal rules of origin that provide businesses the greatest opportunity to take advantage of  i would also note that we need to keep in mind that these programs are designed to promote economic development and help raise the quality of life for citizens in many of the poorest countries in the world and in our view as a socially responsible company upholding labor standards is a key aspect of these preference programs we need to make sure that we provide trade preferences to those least developing countries let not only need a leg up but are committed to improving respect for worker rights in that regard i would like to associate myself with the minister of commerce in cambodia dr pryce she spoke in the previous panel that was all these support international labor standards should be able to benefit from trade preferences for all products including the apparel products of primary concern for levi strauss and company fortunately we have proof that preferential trade agreements arrangements really can achieve the developmental objectives for l b c's and other developing countries that we hope they can achieve a structured correctly egypt i think provides an excellent example why not well not technically a trade preference program the quiz program under the us israel free trade agreement has been very successful when it was extended to egypt in two thousand apparel industry was miniscule but now a part of the exports to the united states have reached nearly eight hundred million dollars in two thousand and eight and the expanding trade has helped create new jobs for thousands of  egyptians not surprisingly the quiz is one of the simplest rules of origin and has been one of the programs easier for us two years from a trade and business perspective so in short preference programs can achieve their objectives if they are structured correctly and when i say correctly again i mean that they must be predictable with long duration they must cover all products including apparel products that are the primary exports and keep abilities of developing countries they must also have liberal rules of origin that get away from the highly restrictive young forward rule of origin in favor of more flexible rules that can actually work for developing countries and help us companies innovate and compete in a very competitive marketplace and finally any preference reform must include all else respect international labor standards economically this is my huge populations need our help and those countries that support labor standards should be rewarded our developmental trade policy should reflect this need so as you and your colleagues continue to work toward broader preference program modifications i argue to keep these tenets in mind as a recipe for success for future u s trade preference programs thank you i've been asked a focus today on labor eligibility criteria the g s t and related preference programs i've submitted for the hearing record written testimony that both examines in detail the problems with the current system as well as articulate a reasonable straightforward proposal for reform based on universal elderly criteria and a more rational transparent and consistent process review violations like arterial i'll be happy to answer any questions you may have with regard to that testimony the labor criteria of our trade preference programs are of critical importance of the global labor movement the a f l cio together with partner unions and workers in numerous developing countries in latin america africa and asia has used this important tool over the last twenty five years in the best cases it has brought about modest improvements in labor laws or resolutions to long pending cases indeed our most recent experience with bangladesh shows that the g s t program can be used to create needed political space for positive change today the vast majority of workers in the export processing zones of bangladesh now have some form of worker representation on the job because of the hard work of local labor organizations that have made use of the political space generated by the continuing g s t review  those workers can now begin the process of bargaining for their fair share of the gains of international trade is not to say there's not a very long way to go in bangladesh but it is and this is an example that when  used properly the d s p process is this leverage can bring about meaningful reform however the application of labor rights criterion trade preference programs has been highly and consistent over the years  often unrelated geopolitical and foreign policy interests or sensitivity to the economic interests of multinational corporations as men that clear cases of a grievous labor rights violations are never accepted for review where the cases once accepted are dropped without evidence of any meaningful improvement in the areas outlined in the complaint the lack of clear criteria for the acceptance of petitions of any spics timelines by when the government must rule on the acceptability of a petition or on the merits and of any obligation that the over a year ago the lack of consistency of the application of the labor criteria over the last twenty five years has substantially undermine the legitimacy the legitimacy of the program a new set of procedures that put a premium on transparent consistently applied criteria with reasonable timelines and an agency decision making based on the merits of the complaint would go a long way to improve the functioning of the labor versions i propose a new set of procedures in the written testimony i've submitted minimum labor standards as articulated by the ilo and ninety ninety eight for example internationally recognized worker rights do not include the prohibition on discrimination in respect of employment and occupation and in the preference programs currently refer a minimum age for the employment of trolls and which is weaker than the ilo formulation of the effective abolition of child labor for the labor criteria only require requires that a country take steps to afford internationally recognized worker rights their current preference program simply require a country to improve labor standards over time would not require a country to have achieved any basic level of compliance to be eligible the sea country may have horrendous labor laws and practices so long as it temporarily and marginally improves a matter of petition is filed and we also need to look at additional eldrick militarily criteria outside of labor we are supportive obviously of the addition of environmental criteria human rights and good governance criteria which we find another trade preference programs such as a goa i do want to make clear and this is come up earlier today that we do not view of the goal of filing labor petitions to be the suspension of preferences and never has rather we filed petitions with the aim of bringing about demonstrably improvements in the administration of labor justice and those improvements in the lives of workers and the economies of beneficiary countries does the approach taken to labor violations should be cooperative at least initially and that is why we propose that petitions lead first to the adoption of remediation plans with clear benchmarks developed by the u s government with input and continued participation of petitioners workers employers and governments to address unresolved systemic violation of labor rights if countries are making real progress but have not yet met those benchmarks and the end of an initial review should be given more time of course threat of suspension or withdrawal of benefits must be retained and wielded if government fails to abide by the legal obligations  preference programs finally i would like to add that we support obviously trade capacity building and this is critical as many witnesses of our already testified today to making preference programs  work a subset of that i believe we need to develop better programs for with regard to worker rights programs better health workers unions to understand and better advocate for themselves for the fulfillment of their basic labor rights on the job  will leave it there and you will be happy to answer any questions you may have with regard to my written testimony or any of the same as i made today thank you thank you very much  eliminate tariffs in order to provide cost effective inputs to u s manufacturing thereby enhanced and u s jobs and competitiveness studies by the g a o and private sector think tank show the preference programs have a small effect on the overall u s economy and the t relief they provide benefits small and medium sized companies as much as it does large corporations is chair of elimination also reduces costs for the u s consumer in the historic economic downturn we're experiencing these multiple domestic it's can be significant mention a few examples u s appliance makers imported seventy million dollars worth of air conditioning machinery parts duty free last year they were used in making appliances here in the united states the same parts not covered under g s t would have a one point four percent across the broad across the board eligibility criteria mandating a strong rule of law and respect for an independent judiciary combined with adequate capacity building assistance will serve to separate countries who are moving forward from those like ecuador moving away from international norms in april of this year the n f t joined a diverse group of twenty nine organizations sending a letter to investor kirk and to congress aligning our consensus agreement on what improvement programs would be most beneficial staff including the staff of this committee we are united in the belief that congress should make tangible improvement programs progress report on our work will be forthcoming soon but our experience has shown that the main things congress should do are first move toward a unified set of provinces harmonizing the elements of regional over a short timeframe crafting a program in a certain reliable predictable and long term is the most powerful thing congress can do to ensure the provinces work for those they are intended to help second provide permanent one hundred percent free benefits for eligible least developed countries bold move provides a commitment and leadership that will serve as a foundation for all the other work needed to make sure  poorest nations begin to integrate preferential access to the u s market to their broader development plans third and the short and uncertain renewal waiting until a month or days or even after the expiration of a program to renew it makes it difficult to use the the capacity to build the infrastructure and the understanding of what is needed to progress and what is expected to maintain this privilege are all crucial kluge and i want to make clear that we understand the preferential access  market is a privilege not an entitlement and along with the responsibilities countries will receive these provinces must demonstrate the vision to undertake other efforts to improve their citizens livelihood preferences are only one tool spread economic opportunity globally we believe that u s leadership in finding a way forward to conclude the doha round is of paramount importance clearly articulated in implementing a comprehensive forward looking national trade policy that opens markets for u s business workers farmers i appreciate the opportunity to you discussed u s trade preference programs i am a trade advisor to the global business dialogue an association that focuses on international trade and investment matters in th lobby in our members have not considered business you as a group to views expressed here today or my own they're based on my practical experience administering the d s p program at u s t r from two thousand and three to two thousand and eight although several key changes are needed i would caution against a wholesale rewrite or consolidation of the separate us trade preference programs rather i am very positive about the track record of congress for revising and rip and improving these programs in a more iterative manner as necessary to reflect current foreign policy realities the interests of u s industry and current u s objectives in multilateral trade negotiations and development priority under the single lens of any one of these concerns u s trade preference programs are far from ideal but taking into account the whole set of objectives the current structure of the preference program gives us t r the flexibility to effectively tailor u s trade policy toward one hundred  thirty one different developing countries a group that spans a very wide spectrum in terms of the per capita income and capacity to implement trade reforms because of the wide differences in the capacity of the beneficiary countries to comply trade preference eligibility criteria in the statute should not be one size fits all u s t r been successful in bringing about positive changes in beneficiary countries based on the existing conditionality criteria historically the goal of gradually integrating advanced developing countries into a reciprocal trade relationship with the united states under the disciplines of the w t o or in the context of a free trade agreement has been important for congress and for both republican and democratic over the past thirty years the united states has an active five traffic preference programs targeting specific regions of the world for deeper more generous benefits each of these regional programs has its own history national security and foreign policy contacts aimed at providing an economic alternative to drug crop production the andean trade preference program lend itself well in the case of colombia and peru to encouraging a transition from unilateral trade preferences to a willingness and ability to undertake the reciprocal and binding obligations of free trade agreement recently ecuador has been reviewed under a t p a for breaches of rule of law that have affected u s investors raising the question of whether unilateral trade preferences in this case are serving us interests but but it's my view that the statutes been working there are leaders in congress who have championed and fought for expanding trade ties with separate regions which i believe has had a tremendously positive impact on  effective tool for us to our u s t r is in a better position to encourage beneficiary countries to eliminate market ask access barriers for u s exports and respect worker rights for example because u s trade negotiators can engage the target developing countries both under g s t and under the regional program proposals to streamline and consolidate programs should be considered but not at the expense of reducing the status of regional grouping but the countries themselves be as important and which provide a framework and incentive for us yards from a regional economic integration an important development objective in and of itself there are improvements in these programs that congress should consider importers and potential investors in many developing countries have legitimate concerns about the complications and costs associated with the exceedingly arcane rules of wards and that apparel products must meet in order to receive duty free treatment effectiveness of u s preference programs is undermined by details and complicated restrictions relating to requirements to use u s yarn fabric and finishing process no other sector of trade so tightly controlled and micromanaged i urge the subcommittee to look at these rules of words in a fresh light to see what can be done to simplify and eliminate burdensome complications that have the effect of undermining the value of the duty savings to the developing countries that congress is trying to help i'm sorry to say that in terms of the doha round trade agenda the committee will also have to wrestle with reconciling the goal of helping developing countries in the first perverse and damaging incentive trade preferences create for countries to oppose multilateral trade liberalization w once developing countries become vested in their preferences they often fight multilateral reductions and tara creating a difficult negotiating dynamic for the united states in geneva for example many preference receiving developing countries continue to oppose cuts in developed country apparel tera disinclination by some preference beneficiaries to propose any trade liberalizing proposal that could be characterized as causing preference  is having serious deleterious effects on the doha negotiations this is not the most important obstacle to reaching agreement but it will have to be faced when the larger issues are solved in conclusion mr chairman preferences  bull an effective mechanism for furthering u s the u s trade policy agenda to establish market based incentives for developing countries to open their markets these programs will be enhanced by m m and that help make the program simpler and more user friendly on behalf of the sierra club one point three million members and supporters i want to thank you for the opportunity to address this issue i am here primarily as a representative of the sierra club but i'm also speaking on behalf of a broad array of organizations including the center for biological diversity the center for international environmental law defenders of wildlife do you most environmental investigation agency and friends of the earth the united states has long granted trade preferences to developing countries that meet various criteria do you have change with time reflecting u s economic and foreign policy priorities however the d s p does not currently include environmental criteria now is the time to correct that emission and environmental community looks forward to working with this committee in congress to include meaningful environmental language to our g s p system this hearing could not be more well timed in just a few weeks  leaders will gather in copenhagen to address the critical issues of climate change a quick snapshot of the state of the global environment tells us sobering story we are facing a collision of crises ranging from alarming rates of biodiversity loss deforestation vanishing fresh water supplies and pervasive chemical pollution sadly it is in the developing world that is at risk for suffering the greatest harm of these environmental threats climate change is also an economic development issue since it is projected to reduce gross domestic product by up to ten percent in the developing world converse sound environmental policies can lead to sound economic growth a prime example of this can be seen in africa where an agreement to reduce and commercial trade in elephants allowed populations that were crashing towards disappearance to rebound to healthy levels this action cut off huge amounts of corrupt payment that weaken governments throughout sub saharan africa help to simplify  improve enforcement activities protected the broader ecosystems and pave the way for massive increases in tourism revenue and assisted local employment tanzania's two thousand h r is an income for example is over one billion dollars and  centered on the wildlife and its national parks as detailed in my written testimony we believe that there are two central components that must be addressed in the revised t s p the first is the inclusion of meaningful environmental standards the second focuses on the process and implementation of these on the substantive and it's important to make clear that there is no environmental equivalent to the core labor standards found in the ilo thus r implementation of critical multilateral environmental agreements also known as can be used as a benchmark and the ace aim to protect the very fabric of the planet's ecology and address different dimensions of the environmental challenges we face ranging from climate change in protection of the ozone layer to protecting endangered species while some are regional in scope many are global agreements that are signed by a majority of countries including our g s p partners and revised t s p should demonstrate the expectation that countries live up to their m b a obligations as well as effectively enforce their domestic environmental laws and regulations however even the best intended provisions will have little impact of this not also clear process or on implementation we believe a number of improvements can be made through the current petition system making it more accessible and transparent specifically these include allowing for more frequent opportunities for the submission of petitions establishing clear timelines for the review and investigation process and accepting both country and sector based petitions including environmental criteria in the g s t is not intended to lead to the exclusion of beneficiary countries but rather improve environmental conditions while still helping to expand trade a phase in period to be established during which countries bring their actions into accordance with the environmental standards this transition phase should include capacity building technical support and financial assistance least developed countries should be allowed more time to come into compliance on the question of resources needed to enable countries to meet these obligation we believe it is important to look at a variety of possibilities in addition to any direct assistance from the united states a number of the major for example do offer financial mechanisms as well as technical assistance and capacity building in the american clean energy and security act there are funds set aside for developing countries to adapt and mitigate the impact of climate change and working with other countries would programs such as those found in europe also offers opportunities to more effectively coordinate on the multilateral level it is time to revisit our policies or create an avenue for increasing ranking member brady and members of the subcommittee i'm pleased to appear in front of the subcommittee again this time to report on our work on u s trade preference programs g a o is completed three in depth studies of u s preference programs for the committee on ways and means and the finance committee and we're involved in it study at this time the committee has already heard testimony from many experts today so let me summarize just a few key points from our written statement mr chairman the opening statements for the hearing the testimony from members sponsoring legislation the government and private sector officials all demonstrate that the design of preference programs is a difficult balancing act if you make the programs more generous for some groups you often make it more difficult for others we outline a couple of these tradeoffs in earlier reports and let me go through these very briefly one example is that the programs are designed to offer duty free access to the u s market but only to the extent that it does not harm s industry as a result the program certain products from duty free status including some that preference countries are capable of producing and exporting successfully a second trade off involves deciding which developing countries can enjoy preferential benefits for example legislation has been proposed to provide bangladesh and cambodia access to preferential benefits for their apparel exports to the united states on the other hand as in here today the african private sector spokesman and other experts on the ago a program caution that giving preferential access to bangladesh in cambodia for apparel might endanger the apparel export industry that has grown up under that program the same trade off involved decisions regarding the graduation of countries or products from the program although the intent of country and product graduation is to provide greater benefits to poor countries we repeatedly heard concerns that china rather than less developed nations would be most likely to gain u s imports as a result of the beneficiaries loss of preferences policy makers face a third tradeoff in setting the duration of preferential benefits in authorizing legislation preference beneficiaries and u s businesses that import from them agree that longer and more predictable periods for program benefit desirable while others point out that periodic program explorations can be useful as leverage members of congress have recognized this tradeoff with respect to africa congress renewed go as general provisions until two thousand and fifteen to provide an incentive for long term investment while an a t p where there are concerns about responses from ecuador congress has were shortened a renewal period to six months to maintain and retain etal average mr chairman i've also outlined a number of recommendations to improve preference programs both in my written statement earlier reports i'll be happy to summarize those in the question and answer period but at this time are not going to reform the provisions in the next six weeks i think we will have to face issues for example of length of continuation of benefits so some of the factors mentioned relate not only to longer term reform if we can do it in the short term but also what we do in the short term number of issues thank you all brought something different to the table let me just ask some quick questions the reason the sourcing from colombia plummeted from sixty million units to one or two was what really the unpredictability of what we had we try to engage with strategic players over the long term and we were not able to continue those relationships in colombia because of the economic we collapse these preference programs into a unified approach regulator brady it is not necessarily the case that you have to combine the programs in order to have a well  review process and i think one of the options would be to ensure that all of the countries within the five different preference programs do get reviewed on a fairly regular basis the situation that exists right now is that within certain regional program like the ago a program there is a very regular review process on an annual basis on the other hand within the d s p program which admittedly has a much larger number of participants about hundred thirty one the review process is not regular and in fact there was a seventeen year period between overall so i think one of the recommendations that we made had to do with the frequency and irregularity of the review process moving closer to a situation where there is a  transition ultimately to a full full partner free trade agreement a legitimate question during the preference program what is america receiving for our market access when it comes to several of these countries and we've had some good good successes i think liberia for example is one that sticks in my mind where ellen sirleaf was able to come and in two thousand and six i believe and have d s p restored to liberia  after many years of not having g s t and he received that benefit based on a willingness to invite the ilo in to work with them to figure out how they could get some unions to organize of it and sometimes petitions are actually accepted there could be informal conversations with the u s government and the foreign government no real kind of dialogue with the petitioners bad two can drag on for years without any demonstration of meaningful progress on the issues that have been the reason the complaints let me ask you specifically about the child labor case i find it difficult to justify why we would grant any preference to one of the most thuggish governments in the entire world but since we do what happened with that case right about two years ago the international labor rights forum filed a petition with regard to  that's a case in which the government as a state policy is forcing children to leave school for months at a time to pick cotton some of which is exports the united states that petition was accepted but it has been under review for a couple of years now  i know there's a vigorous in her agency discussion on this on this petition but on the merits on the labor merits and there's no question and i don't think anybody is questioning whether the allegations in the complain are true or not and in fact you know the government in a couple of opportunities refused even show up at hearings on so when when u s t r had a hearing didn't even show up to offer any rationale at all for their use of child labor and how long is that case been pending over there i think at effect of totally disregarding the need to do the same thing for environmental protection as well i think an example here could be seen in the connection between trade and harvest the timber and wood products addressing global warming but just to be clear with reference to any renewal of the regime climate change is really not directly a factor there because we don't really have a multilateral environmental one hundred seventy five countries around the world of the convention international trade for example and so having an expectation that those obligations are being met as well as enforcing domestic environmental law and that is what this broader coalition of environment morning i'll just pick right up on that point i would probably disagree with the european statements of their principles versus what they actually do you can walk through the francophone countries in western africa and watch policies in perfect harmony there is a steel contract or have contracts stolen from other lower priced bidders there is an interesting commerce that takes place the united states actually upholding vastly higher standard terms of foreign corrupt practices act and things like that that make many of the discussions on standards that we're having here seem rather moot i've seen that firsthand and i think that we play ourselves again right back into that question of creating double standards by having too many it's no different than dealing with federal bureaucracies for somebody who's run a manufacturing business you can end up complying with one bureaucracies regulations and then automatically place yourself in violation of another standard and this is not to say that this discussion is not very important that we don't want to be good stewards but i'm very concerned about the left and right hand not knowing what the other is doing and we're seeing the potential for that in this discussion you know my case in point when mr range made the comment that ecuador's moving away from this standard right here you know i might a language the panel wouldn't use but perhaps we're seeing sort of this retrograde socialist movement take place that obviously people have a right and a sovereign nation to do what they want to do they can make that choice but we don't have to underwrite that but at the same time i come back to my comments on colombia this morning who i personally witnessed a generation go through dramatic and remarkable changes moving hugely in the right direction are there are labor  concerns there perhaps there are depending on the stand we want to apply that we say that here in the united states we could say that in many countries in the world but at what point do we say ok we're not going to move you to the next step in the preference program assuming that's to lift us up and the whole aspect of this is to move us towards a place of harmonizing our economy so that we can work effectively together my question is don't we actually create a situation where we create a default double standard we punish those potentially who might be it might be politically helpful for us to do like colombia who's a vastly greater risk than simply a question of labor preferences frankly when they made these huge states strides in the right direction we have a legitimate and very real national security threat the northern half of south america right now that is progressively growing and as this spreads if we abandon those who have shown good intent have may have moved in the right direction tell me how we're not going to be  creating that double standard and punishing the folks who want to be allied with us i had the chief of staff of a number of south american countries personally tell me not colombia is i might add that their biggest strategic concern from an economic policy was not understanding why the u s would approve  the colombia free trade agreement because of their concern of all of that means in terms of second and third order effects and i don't think that's a democrat or republican issue but i think looking at it beyond our individual silos of interest you know i have some concern and i would throw it open to i mean if it creates a legitimate moral dilemma what would be ecuador is doing is unconscious they're violating all possible contracts for investors and i don't think it's a good place to invest based on what we're seeing colombia's move in the right way their own labor organizations in fact have asked us for passage of this agreement but we're not moving on i know it's not chairman i understand it that we're talking about preferences but i really want to frame this in that bigger picture that we don't overcomplicate this is the next step  programs to have meaningful labor rights standards included because from our point of view having labor standards the ilo core minimum standards is essential if these programs are to have a standards and agreements that both of us know that they have with many countries there today hold as high a standard as the united states as an actual operation so you actually see the operation their businesses over there to see that i don't have experience i can tell you they  don't and that's my big concern here is there is a double standard with we can't lift the europeans and i agree with you we should have a legitimate aspect of social justice i think it's something that's missed in many of the messages that we convey but i'm concerned that we can hurt the people that we say that we're trying to the question is what standard we should do into our trade agreement in which built into the trade agreements that we have in recent times in act as a basic ilo state and if one reads the state department documents themselves indicate some of the ways in which colombia flow sured in terms of labor standards  colombia some other time i think we need to be careful the only issue is not violence but we don't kill labor leaders in this case mr sherman connect clarify my remarks briefly not so much on colombia let me put this in a context of not dealing with with violence we know that it's dropped dramatically and that's a good thing it may not we may have different standards to what that is it's never right if a person of crime committed against and i want to put this morning regulatory context from the perspective of of economic entities and countries and businesses are they're investing with each other and one would hope that eventually we'd be able to invest both ways and be even more effectively integrated just in america if we go from state to state and i think mr love could probably confirm this osha is not the best loved organization that's out there in the manufacturing world i'm not talking about safety standards over half of the regulations and osha that can be used to shut down a business have nothing to do with safety whatsoever but their paperwork compliance matters and my biggest concern and it is we address this i think the preferences are very important i think that any time we can revisit inscribe regulations to make them more relevant or more proactive i'm all there on that it will work with you in any way possible it's simply that i don't think that we add value necessarily if we take it so far that it gets very complicated and then suddenly it becomes a matter of political preference as opposed to clear and simple objective criteria  a petition window opening up in june of one year you have about a month to file a petition you have a major labor rights violation happen in october than that and there's nothing formally you can do about it until you   considering depending on which countries we're talking about the level of market access and whether that makes sense to create some sort of incentive benefit the european system obviously i think with the program condition greater market access on having even more rigorous standards ratification of all the core conventions and effectively in  of interesting material to try and digest here i would like to just go back to where point our friend mr doggett mentioned in terms of the role that environmental and in particular climate change is going to play going forward i feel good about the time energy we spent on the ethics with a true free trade agreement i think it made a difference for that country i also think that it broadened the support for the legislation made it a better agreement made it easier to move forward having spent a fair amount of time in recent years dealing with the illegal logging we finally got those provisions tucked into the farm bill but it was interesting watching as people into it that it would actually made a big difference not just for the protection of indigenous people protecting environmental resources but it did make a difference in terms of the rule of law fighting corruption and made a big difference to american producers who didn't have to have a depressed and extended  supply i'm curious about ideas going forward and this is the end of a long day and you've been very patient but i would posit for the committee members any offer for  thoughts that they might want to supply to us at their leisure about ways that we can make a difference moving forward i'd like we had some progress on a bilateral basis what you have a brief comment here i would welcome it but i would i would be very interested in your reflections had a later date about that we should look at to be able to move forward i appreciate we don't want to  hopelessly complex i appreciate we want to be surgical but it seems to me that this is an area that we have not given appropriate attention in the past that has great potential for the challenges that we face some of these  that when we took a look at the preference programs we did find some issues where there were significantly different programs review structures and transparency between one program to another and i think one way to ensure that the congress and the public have a better chance to participate and be aware of the decisions that are being made is to take a look at the reporting process and the review process that's built into the different preference programs and make the selections on how frequently those programs and individual countries need to be reviewed what are the graduation rules the components whether those are rules of origin and finally a number of you features having to do with determination for inclusion whether it's a petition based or a government review and a large number of other that's a design feature that should be considered in the more systematic review that i know will be going forward over the next year yeah and you know on behalf of the environmental community we do want to say thank you because there's hardly a champion in congress as you have been looking at the illegal logging issue for example and so forth you know what's clear is that there's no silver bullet for any of these problems that we're facing with this is one tool we're trying to explore other ones i think  products you know these kinds of things that we can think about that helps both foster development on the ground as well as rewarding those practices that being said finding some baseline that applies for all as we're trying to lift the standards also make sense and that's how we proceed with preference for grams and the environmental issue is a relatively new one that we very much are working in the staff talking about and show i would encourage all of you that regardless of your particular perspective to join in on that in every other issue that we've talked today because without it it's not for me to sta think have to do something and sure we're going to face this question as to his to the timeline for extension and the timeline for reforms and i think will want more input on every issue that we've talked about today so we urge you to send us material they don't even have to be short and if you don't want them on the record they won't be on the record  show thank you so much for your patience i think for you mr brady and for me you've been exceptional panel more even more brilliant than you've been patient so thank you very much