U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

86–399 2015

THE U.S.-EU FREE-TRADE AGREEMENT: TIPPING 

OVER THE REGULATORY BARRIERS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

JULY 24, 2013 

Serial No. 113–75 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

(III) 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

LEE TERRY, Nebraska 

Chairman 

LEONARD LANCE, New Jersey 

Vice Chairman 

MARSHA BLACKBURN, Tennessee 

GREGG HARPER, Mississippi 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVE B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

JOE BARTON, Texas 

FRED UPTON, Michigan, ex officio 

JANICE D. SCHAKOWSKY, Illinois 

Ranking Member 

G.K. BUTTERFIELD, North Carolina 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

JOHN D. DINGELL, Michigan 

BOBBY L. RUSH, Illinois 

JIM MATHESON, Utah 

JOHN BARROW, Georgia 

DONNA M. CHRISTENSEN, Virgin Islands 

HENRY A. WAXMAN, California, ex officio 

(V) 

C O N T E N T S 

Page 

Hon. Lee Terry, a Representative in Congress from the State of Nebraska, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 3 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 4 

Hon. Leonard Lance, a Representative in Congress from the State of New 

Jersey, opening statement ................................................................................... 5 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, prepared statement ........................................................................... 6 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

prepared statement .............................................................................................. 105 

WITNESSES

Matthew R. Blunt, President, American Automotive Policy Council .................. 7 

Prepared statement .......................................................................................... 11 

Answers to submitted questions ...................................................................... 172 

John J. Castellani, President and CEO, Pharmaceutical Research and Manufacturers of America ............................................................................................. 18 

Prepared statement .......................................................................................... 20 

Answers to submitted questions ...................................................................... 179 

Calvin M. Dooley, President and CEO, American Chemistry Council ................ 27 

Prepared statement .......................................................................................... 29 

Answers to submitted questions 1 ................................................................... 184 

Dean C. Garfield, President and CEO, Information Technology Industry 

Council .................................................................................................................. 37 

Prepared statement .......................................................................................... 39 

Answers to submitted questions 2 ................................................................... 186 

Jean M. Halloran, U.S. Liaison, Transatlantic Consumer Dialogue Secretariat, Senior Advisor on International Affairs to the President Of Consumer Reports, on behalf of the Consumers Union and the Transatlantic 

Consumer Dialogue .............................................................................................. 48 

Prepared statement .......................................................................................... 50 

Answers to submitted questions 3 ................................................................... 188 

Carroll Muffett, President and CEO, Center for International Environmental 

Law ........................................................................................................................ 58 

Prepared statement .......................................................................................... 60 

Answers to submitted questions ...................................................................... 191 

SUBMITTED MATERIAL

Documents submitted by Mr. Terry 

Statement of American Apparel & Footwear Association ............................. 107 

Statement of the Alliance of Automobile Manufacturers .............................. 111 

Statement of Global Automakers .................................................................... 113 

Statement of Handmade Toy Alliance ............................................................ 119 

Statement of Marketing Research Association .............................................. 133 

Statement of the Society of Chemical Manufacturers and Affiliates ........... 135 

Statement of TechAmerica ............................................................................... 139 

Statement of the Toy Industry Association Statement of America .............. 143 

Statement of the Biotechnology Industry Organization ................................ 153 

Documents submitted by Ms. Schakowsky 

Statement of the Coalition for Sensible Safeguards ...................................... 161 

Statement of the Transatlantic Consumer Dialogue ..................................... 163 

Page

VI 

Documents submitted by Ms. Schakowsky—Continued 

Statement of Hon. Sharon Treat, a Representive from the State of Maine 166 

1 Mr. Dooley did not respond to submitted questions for the record. 2 Mr. Garfield did not respond to submitted questions for the record. 3 Ms. Halloran did not respond to submitted questions for the record. 

(1) 

THE U.S.-EU FREE-TRADE AGREEMENT: 

TIPPING OVER THE REGULATORY BARRIERS 

WEDNESDAY, JULY 24, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND

TRADE, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:45 a.m., in room 

2123, Rayburn House Office Building, Hon. Lee Terry (chairman of 

the subcommittee) presiding. 

Present: Representatives Terry, Lance, Blackburn, Harper, Guthrie, Olson, Kinzinger, Bilirakis, Johnson, Long, Schakowsky, Sarbanes, McNerney, Dingell, Matheson, Barrow, Christensen, and 

Waxman (ex officio). 

Staff Present: Charlotte Baker, Press Secretary; Jerry Couri, 

Senior Environmental Policy Advisor; Kirby Howard, Legislative 

Clerk; Nick Magallanes, Policy Coordinator, CMT; Gib Mullan, 

Chief Counsel, CMT; Andrew Powaleny, Deputy Press Secretary; 

Shannon Weinberg Taylor, Counsel, CMT; Michelle Ash, Minority 

Chief Counsel; and Will Wallace, Minority Professional Staff Member. 

OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA 

Mr. TERRY. All right. I think we are all set now. And it looks like 

we will have a good morning, in the sense that the votes will not 

occur until 1:30. I am pretty confident that we are going to finish 

this panel before then. 

So let’s start the hearing. And I recognize myself for 5 minutes 

for the opening statement. 

Good morning, and welcome to today’s hearing, where we will examine the regulatory issues that we expect will come up during the 

negotiation of the Transatlantic Trade and Investment Partnership, also known as TTIP. 

A trade agreement with the European Union should, in many 

ways, be a commonsense policy for the United States. Already, the 

bilateral trade relationship between the U.S. and the EU is the 

largest in the world, accounting for over $1 trillion in trade, of 

which U.S. exports account for $463 billion. According to the U.S. 

Trade Representative, this relationship supports over 13 million 

jobs in the United States and Europe, accounts for $3.7 trillion 

worth of direct investment in both economies. 

2 

These are significant data points, and our subcommittee’s legislative record thus far supports many of those figures. Our subcommittee’s activity this Congress began by hosting an entire hearing series that focused on learning from our Nation’s manufacturers. We heard time and time again from a variety of industries 

about the well-paid, middle-class jobs it could create if given the 

opportunity to expand their operations and the positive effects this 

type of growth has on various parts of our economy. 

As the numbers suggest, foreign direct investment is a key element of our trade relationship with the EU. We want this piece of 

our trade portfolio to grow and strengthen, and not just with the 

EU. So Ranking Member Schakowsky and I crafted legislation aiming to lower barriers in the U.S. to inbound foreign direct investment that the full committee unanimously approved last week. And 

I am hearing solid rumors that it will be on the floor next week. 

I believe that when foreign companies want to initiate or expand 

their manufacturing footprint in the U.S., it is good for our longterm economic success. 

Now we will turn our attention to TTIP, another potential jobcreating addition for our economy. This trade agreement is unique 

for many reasons. Historically, tariffs on goods have been the single biggest barrier to trade, but because of how tariffs between the 

U.S. and the EU already exist, this isn’t the case with this negotiation. Consequently, addressing non-tariff barriers is a substantial 

portion of the negotiation. 

And, according to high-level working groups, as much as 80 percent of the so-called potential gains in the TTIP lie in addressing 

these so-called behind-the-border issues. TTIP represents a historic 

opportunity for both sides to create greater openness, transparency, 

and convergence in regulatory approaches and standards, while reducing unnecessary and redundant requirements. 

It would seem to make sense that if the European Medicines 

Agency, EMA, just inspected a pharmaceutical manufacturer in 

Berlin for compliance with good manufacturing practices, that the 

U.S. FDA could rely on the findings of the European inspector instead of duplicating the effort by conducting its own inspection. But 

that is not the case. 

It might also seem to make sense that, givenour respective 

standards yield equivalent safety performance on vehicles, we 

should be able to find a certain level of uniformity or at least mutual recognition of the U.S. and European auto safety regulations. 

Remarkably, or maybe unremarkably, as the case may be, over the 

past 15 years only seven out of the hundreds of safety regulations 

have been harmonized. 

There are countless more examples of areas where U.S. companies, workers, and consumers stand to gain from this type of collaboration. And we should use every tool at our disposal in an effort to maximize the potential benefits for Americans when it 

comes to this agreement. 

I would like to thank our witnesses for appearing before us 

today. We have a broad cross-section of stakeholders before us that 

each have a unique perspective on what the TTIP could bring to 

their industries and, most importantly, into the United States. 

3 

I look forward to hearing from each of you and now recognize the 

ranking member, Jan Schakowsky from Illinois. 

[The prepared statement of Mr. Terry follows:] 

PREPARED STATEMENT OF HON. LEE TERRY

Good Morning, and welcome to today’s hearing, where we will examine the regulatory issues that we expect will come up during the negotiation of the Transatlantic 

Trade and Investment Partnership, also known as the U.S.-EU free-trade agreement, or T–TIP. 

A trade agreement with the European Union should in many ways be a common 

sense policy for the United States. Already, the bilateral trade relationship between 

the U.S. and the EU is the largest in the world-accounting for over $1 trillion in 

trade-of which U.S. exports account for $463 billion. According to the U.S. Trade 

Representative, this relationship supports over 13 million jobs in the United States 

and Europe and accounts for $3.7 trillion worth of direct investment in both economies. 

These are significant data points, and our subcommittee’s legislative record thus 

far supports many of those figures. Our subcommittee’s activity this Congress began 

by hosting an entire hearing series that focused on learning from our nation’s manufacturers. We heard time and time again from a variety of industries about the wellpaid middle class jobs they could create if given the opportunity to expand their operations and the positive effects this type of growth has on various parts of the economy. 

As the numbers suggest, foreign direct investment is key element of our trade relationship with the EU. We want this piece of our trade portfolio to grow and 

strengthen, and not just with the EU, so Ranking Member Schakowsky and I crafted legislation aiming to lower barriers in the U.S. to inbound foreign direct investment that the full committee unanimously voted to approve last week. I believe that 

when foreign companies want initiate or expand their manufacturing footprint in 

the U.S. it’s good for our long term economic success. 

Now, we will turn our full attention to T–TIP, another potential job-creating addition to our economy. This trade agreement is unique for many reasons. Historically, 

tariffs on goods have been the single biggest barrier to trade. But because of how 

low tariffs between the U.S. and the EU, this isn’t the case with T–TIP. Consequently, addressing non-tariff barriers is a substantial portion of the negotiation 

and, according to the High Level Working Group, as much as 80 percent of the overall potential gains in the T–TIP lie in addressing these so-called ‘‘behind the border’’ 

issues. 

T–TIP represents a historic opportunity for both sides to create greater openness, 

transparency and convergence in regulatory approaches and standards while reducing unnecessarily redundant requirements. 

It would seem to make sense that if the European Medicines Agency (EMA) just 

inspected a pharmaceutical manufacturer in Berlin for compliance with Good Manufacturing Practices, the U.S. FDA could rely on the findings of the European inspector instead of duplicating the effort by conducting its own inspection. Unfortunately, 

this is not the case. 

It might also seem to make sense that given our respective standards yield equivalent safety performance of vehicles, we should be able to find a certain level of uniformity—or at least mutual recognition of—the U.S. and European auto safety regulations. Remarkably, or unremarkably as the case may be, over the past 15 years 

only seven out of the hundreds of safety regulations have been harmonized through 

participation in a United Nations working group. 

There are countless more examples of areas where U.S. companies, workers and 

consumers stand to gain from this type of collaboration, and we should use every 

tool at our disposal in an effort to maximize the potential benefits for Americans 

when it comes to this agreement. 

I would like to thank our witnesses for appearing before us today. We have a 

broad cross-section of stakeholders that each have a unique perspective on what the 

T–TIP could bring to the U.S. I look forward to hearing from each one of them. 

I now recognize the ranking member, Ms. Schakowsky. 

4 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. I appreciate the 

hearing that you are holding, that we are holding here today on the 

Transatlantic Trade and Investment Partnership negotiations. 

I look forward to hearing from all of our witnesses about this 

very important issue. I especially want to welcome Former Congressman Cal Dooley. 

It is good to see you, Cal. Glad you are here. 

American trade with Europe is vitally important to our economic 

outlook. One-fifth of all U.S. trade is conducted with Europe, accounting for $1 trillion in trade of goods and services just last year. 

Some economists maintain that an agreement would increase trade 

by as much as 15 percent. 

While I am committed to strengthening our economic ties to our 

European allies, I do have serious concerns that an agreement with 

inadequate safeguards could hurt American consumers, workers, 

public health, and the environment. 

The High-Level Working Group on Jobs and Growth, in its February report on this issue, identified three objectives for a trade 

agreement with the EU. Among the three main objectives identified 

is the goal, quote, ‘‘to reduce unnecessary costs and administrative 

delays stemming from regulation,’’ unquote. 

That objective, I have to tell you, raises many red flags for me. 

While we all agree that actual unnecessary trade barriers should 

be addressed, it is important to identify what qualifies as unnecessary. 

For example, I don’t believe that the fuel economy standards that 

President Obama negotiated with auto manufacturers, which reduce greenhouse gas emissions by 6 billion metric tons over 8 

years, saving the average U.S. driver $8,000 over the life of her 

car, are unnecessary. I don’t believe that standards that keep the 

toys our children and grandchildren play with and the food we eat 

safe are unnecessary. I don’t believe that price limits for public programs like Medicare negotiation or Medicaid drug rebates are unnecessary, and, in fact, they save consumers billions of dollars and 

enable access to lifesaving medicine. 

On the issue of drug pricing and accessibility, we are going to 

hear from Mr. Castellani—and I appreciate our meeting yesterday—about pharmaceutical issues and trade agreements. I want to 

make very clear my view that access to essential medicines should 

be debated out in the open, not in secret trade discussions where 

the public and even Members of Congress are excluded. 

The pharmaceutical industry has put its significant weight behind efforts to protect the profits and intellectual property associated with its products. In many cases, those efforts fly directly in 

the face of efforts to expand access to lifesaving drugs for low-income individuals, both in the developing world and here at home. 

I am much more concerned about saving people’s lives than adding 

to the already large profits of the pharmaceutical companies. 

We have made some progress to achieve more balance between 

the priorities of the pharmaceutical industry and those of the people in need of treatment through the Doha Declaration and the 

5 

May 10th Agreement, and I am deeply concerned about efforts to 

undo those improvements. I have heard from healthcare advocates 

and doctors from around the world and experts here at home that 

proposed changes to our trade agreements would not only raise the 

cost of drugs overseas but tie the hands of those who want to make 

medications more affordable here at home. 

At the very least, I repeat, this issue should be considered in 

open, public forums, not closed-door trade negotiations. 

Again, I support efforts to expand trade with Europe, but not at 

the cost of undermining our own or our partners’ efforts to promote 

the growth of good jobs or protect the public health and the environment. 

I look forward to hearing from all of our witnesses on these 

issues. 

And, Mr. Chairman, I yield back. 

Mr. TERRY. Thank you. 

And now we recognize the vice chairman of the subcommittee, 

Mr. Lance, for 5 minutes. 

OPENING STATEMENT OF HON. LEONARD LANCE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. LANCE. Thank you, Mr. Chairman. 

And I welcome our invited witnesses and everyone in the audience to this important hearing on the United States and European 

Union’s negotiation of the Transatlantic Trade and Investment 

Partnership, also known as TTIP. 

I am pleased that the United States and the European Union 

have entered into negotiations over TTIP. The economic relationship between the United States and the European Union is the 

world’s largest and most prosperous. These negotiations have wide, 

bipartisan support because of the recognition that, should this 

trade agreement be completed, it will have a dynamic effect on the 

economies of all nations concerned. 

In New Jersey’s Seventh Congressional District, which I represent, the pharmaceutical and telecommunications industries 

stand to benefit from an agreement. On a broader scale, if successful, this agreement has the potential to serve as a template for 

which all future agreements between the United States, the European Union, and third parties could be negotiated. 

From my perspective, I hope that the negotiations address some 

of the regulatory barriers that stand in the way of an agreement 

being reached, the so-called beyond-the-border barriers of regulations. 

While tariffs between the United States and the European Union 

are lower compared to other standing trade agreements, the differences between the regulatory structure of the United States and 

the regulatory structure of the individual European states are, for 

the most part, different. And we must reconcile these differences in 

order to reach an agreement. 

The other issue that I hope is addressed is that of intellectual 

property rights. This subcommittee highlighted the issues of intellectual property rights in trade agreements with India in a previous hearing, and I hope that the United States and the European 

6 

Union can agree to robust intellectual property-right protections in 

their trade agreement. 

It is my ultimate hope that the United States and the European 

Union, the two largest trading markets in the world, will be able 

to come to a mutually beneficial agreement that strengthens this 

already great trading relationship. I look forward to the discussion 

among members of the committee and stakeholders on how to 

achieve this objective. 

And, Mr. Chairman, I yield back the balance of my time. 

Mr. TERRY. Is there anybody else on our side that wishes 2 1⁄2

minutes? 

Seeing none, the time is yielded back. 

The chair recognizes the full committee ranking member, the 

gentleman from California. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you, Mr. Chairman. 

Today we are holding a hearing on an important subject with 

major ramifications for U.S. policies, the U.S.-EU free-trade agreement. 

The United States and the European Union, which together 

make up over 40 percent of global GDP, have entered into negotiations on what would be the largest free-trade agreement ever completed. Just for comparison, the EU market is more than five times 

larger than the combined markets of Canada and Mexico, our partners in NAFTA. 

We have much in common. EU member states are democracies 

with general high levels of economic development. And, despite recent economic turmoil, they remain dedicated to policies supporting 

an open international economy. We both have engaged in austerity 

economic policies, which have failed there and are failing here. 

In 2012, more than $1.5 trillion in trade flowed between the U.S. 

and member states of the EU, nearly double the value of such 

trade 10 years earlier. The Transatlantic Trade and Investment 

Partnership, or TTIP, proposes to further strengthen our economic 

ties. I believe this is a worthy goal, and I applaud the Obama administration for pursuing it. 

While traditional trade barriers between the U.S. and EU were 

already low, with average tariffs under 3 percent, they are still significant, particularly to small and medium-sized enterprises that 

want to become exporters. Lowering these tariffs will save these 

companies millions of dollars. We can also gain by cooperating on 

specific challenges, such as local content rules, state-owned enterprises, and customs policies. 

For most major industries, the major focus of negotiations are behind-the-border barriers, which usually refers to domestic regulatory measures. While we should always work to avoid duplication, we must ensure that the push for regulatory compatibility 

does not create a race to the bottom. I have consistently believed 

that trade agreements negotiated by the United States should not 

compromise sensible standards in the United States or abroad. The 

7 

U.S. and EU member states should strengthen our competitiveness 

by raising the standards in our countries, not by weakening them. 

The pharmaceutical industry is a good example of the complex 

issues this trade agreement raises. This agreement should not be 

used as a vehicle to, one, drive up drug prices in other countries 

or undermine efforts to reduce prices here; or, two, delay or impede 

access to less expensive generic drugs in developing countries, 

where too few can afford needed medicines; or, three, disrupt the 

delicate balance of innovation and access to medicines that we 

achieved in Waxman-Hatch. Yet this could be the result of some 

proposals that have been discussed. 

International trade has the potential to raise the standard of living and quality of life for people in the United States, the European Union, and around the world. To uphold that vision, we must 

ensure that our citizens continue to have essential regulatory protections. Regulations keep automobiles, children’s toys, our food 

supply safe. They support public health, privacy rights, and secure 

financial markets. And they are crucial to the global effort to combat climate change. 

When TTIP negotiators reconvene, I encourage them to remember the importance of commonsense regulatory measures that enhance consumer wellbeing. Trade liberalization should not be just 

about reducing costs or enhancing efficiency. It is more fundamentally about improving people’s quality of life, whether they live and 

work here in the United States or in the countries with which we 

trade. 

Unless any of my colleagues wish to have additional time, what 

is left, I yield back the balance of my time. 

Mr. TERRY. Thank you, Mr. Waxman. 

The gentleman yields back. And I am going to introduce our—— 

Mr. WAXMAN. Oh, Mr. Chairman, before you do—— 

Mr. TERRY. Yes? 

Mr. WAXMAN [continuing]. May I apologize to the members that 

are testifying. I know it is a very good group, an important group 

of witnesses. But we have other subcommittees meeting at the 

same time, so—— 

Mr. TERRY. Almost all of them, by the way, all the subcommittees at one time, it seems like. 

Mr. WAXMAN. Right. 

Mr. TERRY. Thank you, Mr. Waxman. 

I am now introducing our panel, and I will introduce the whole 

panel, and then we will start with you, Mr. Blunt, Governor Blunt, 

and move from my left to right. 

So first on our panel, Governor Matt Blunt, president of the 

American Automotive Policy Council; then John Castellani, president and CEO of the Pharmaceutical Research and Manufacturers 

of America; one of our own, been on both sides of this table, honorable former Member Cal Dooley, president and CEO of the American Chemistry Council. 

Then we are honored to have Dean Garfield, president and CEO 

of Information Technology Industry Council; and then Jean 

Halloran, on behalf of the Consumers Union and the Transatlantic 

Consumer Dialogue, U.S. liaison, Transatlantic Consumer Dialogue 

Secretariat, Senior Advisor, International Affairs, to the president 

8 

of Consumer Reports; and then last, Mr. Carroll Muffett, president 

and CEO of the Center for International Environmental Law. 

Thank you all for taking time to be here to help educate us. As 

most of you know, you have 5 minutes for your statements. There 

are lights there that will be green when you start. When you start 

seeing the yellow, sum up, please. 

So, at this time, I am honored to recognize Governor Blunt for 

your 5 minutes. 

STATEMENTS OF THE HON. MATTHEW R. BLUNT, PRESIDENT, 

AMERICAN AUTOMOTIVE POLICY COUNCIL; JOHN J. 

CASTELLANI, PRESIDENT AND CEO, PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA; THE HON. 

CALVIN M. DOOLEY, PRESIDENT AND CEO, AMERICAN 

CHEMISTRY COUNCIL; DEAN C. GARFIELD, PRESIDENT AND 

CEO, INFORMATION TECHNOLOGY INDUSTRY COUNCIL; 

JEAN M. HALLORAN, U.S. LIAISON, TRANSATLANTIC CONSUMER DIALOGUE SECRETARIAT, SENIOR ADVISOR ON 

INTERNATIONAL AFFAIRS TO THE PRESIDENT OF CONSUMER REPORTS, ON BEHALF OF THE CONSUMERS UNION 

AND THE TRANSATLANTIC CONSUMER DIALOGUE; AND CARROLL MUFFETT, PRESIDENT AND CEO, CENTER FOR INTERNATIONAL ENVIRONMENTAL LAW 

STATEMENT OF THE HON. MATTHEW R. BLUNT 

Mr. BLUNT. Thank you, Chairman Terry and Ranking Member 

Schakowsky and members of this committee. 

Mr. TERRY. Is the microphone on? 

Mr. BLUNT. It is now. And, again, thank you, Chairman. 

I am Matt Blunt, president of the American Automotive Policy 

Council, which represents the common public policy interests of our 

member companies: Chrysler, Ford, and General Motors. 

On May 10th, AAPC and our European counterpart, ACEA, jointly submitted a detailed auto regulatory convergence proposal in response to the USTR Federal Register notice. This statement is 

based on that submission, which would provide a more thorough 

treatment of our proposal. 

As the largest manufacturing and exporting sector in the United 

States, the auto industry has a major stake in the successful completion of a Transatlantic Trade and Investment Partnership, or 

TTIP. TTIP will represent the largest share of auto production and 

sales ever covered by a single free-trade agreement. And we believe 

that a well-negotiated TTIP that includes the elimination of tariffs 

and major non-tariff barriers in the auto sector has great potential 

to grow the transatlantic auto trade and investment relationship. 

The global landscape for auto production and sales is changing. 

Global auto sales are expected to increase more than 50 percent by 

the end of the decade, equating to roughly a billion new automobiles on the road around the world. The concentration of this 

growth will be in emerging markets, with vehicle sales eventually 

surpassing the sales growth in mature markets such as the United 

States and Western Europe. It is essential to ensure that regulatory costs do not inhibit future growth in auto sales and exports 

9 

and the critical role they play in economies on both sides of the Atlantic. 

The negotiation of the TTIP presents an opportunity to implement a regime that effectively breaks down regulatory barriers in 

the auto sector, recognizes regional integration of benefits both to 

the U.S. and the EU, reduces costs and increases commercial predictability, while respecting U.S. and EU sovereignty, and certainly 

without sacrificing vehicle safety or environmental performance. 

Past efforts to harmonize have been ineffective and slow, and we 

are proposing a new approach: mutual recognition for existing 

automotive regulations and for future regulations that are deemed 

necessary, the establishment of a joint regulatory harmonization 

process that facilitates the development and adoption of common 

future new regulations. 

Our proposal is guided by the following principles: We must have 

strong and sustained political support at the highest levels of government and the relevant regulatory authorities. There should be 

no net increase in U.S. or EU regulatory requirements as a result 

of this convergence; no new third regulations or additional certification requirements. And then, as I stated, mutual recognition 

shall permit an automaker to sell a vehicle built to either recognized standard in either market. 

Recognizing the significant advancements that the regulations 

have provided in environmental and safety technologies in both the 

U.S. and the EU, acceptance of an existing regulation should be 

presumed unless the analysis of the data conducted by the responsible regulatory agency demonstrates that the regulation is deficient from either a safety or environmental perspective. 

We recommend that the process begin immediately, in close cooperation with industry, in order to take advantage of the current 

increased existing political will and interest in regulatory convergence. Our May 10th submission provides a list of U.S. and EU 

safety and environmental regulations for mutual recognition consideration during the TTIP negotiations and a proposed data-driven process for purposes of completing the necessary assessment. 

When a new regulation is needed, a joint U.S. and EU regulatory 

harmonization process that takes into account the differences and 

regulatory development and implementation timelines needs to be 

developed that promotes and facilitates the development and adoption of common future new regulations. This process should also include a mechanism to foster the development of common voluntary 

standards in the pre-regulatory environment. 

Key elements of a U.S. and EU harmonized standards process 

must aim at strengthening the automotive industry in both regions 

with lower costs through reductions in regulatory complexity, reducing administrative burdens while maintaining flexibility and increased predictability, have strong and sustained political support 

at the highest levels of government, and engage industry to work 

together to develop the harmonized approach, and certainly should 

provide a timeline to complete the development of this harmonization process. 

TTIP presents an opportunity to break down tariffs and regulatory barriers in the auto sector, promote regional integration, reduce costs, and increase commercial predictability, while respecting 

10 

U.S. and EU sovereignty, and, as I said earlier, without sacrificing 

vehicle safety and environmental performance. 

Again, thank you for the opportunity to present our views on the 

TTIP, and we look forward to working with the subcommittee on 

this important negotiation. 

Mr. TERRY. Thank you. 

[The prepared statement of Mr. Blunt follows:] 

11 


86399.001
12 


86399.002
13 


86399.003
14 


86399.004
15 


86399.005
16 


86399.006
17 


86399.007
18 

Mr. TERRY. Mr. Castellani, you are now recognized for your 5 

minutes. 

STATEMENT OF JOHN J. CASTELLANI 

Mr. CASTELLANI. Thank you, Mr. Chairman, Ranking Member 

Schakowsky, and members of the committee. It is a pleasure to be 

here to talk about this very important proposed agreement. 

To put the relationship of our industry between ourselves and 

Europe in context, in 2011 about 80 percent of the medicines and 

development around the world were being researched and tested in 

the United States and in the European Union. And this figure is 

a testament to the fact that the U.S. and EU generally provide the 

strongest global support for biopharmaceutical research and development. 

Yet the continued strength of the innovative biopharmaceutical 

industry in both regions is far from guaranteed. The time and investment required to research and develop new medicines continues to increase, and the global ecosystem grows more hostile to 

that innovation. 

And it is in this context that PhRMA and its member companies 

strongly support a high-standard, trade-liberalizing agreement between the EU and the U.S. and one that eliminates unnecessary 

non-tariff barriers between these regions and establishes a model 

for all future trade agreements. 

PhRMA represents America’s leading biopharmaceutical companies. Our members pioneer new ways to save lives, cure disease, 

and promote longer, healthier, and more productive lives. 

In 2012, our members invested more than $50 billion in research 

and development. And in 2011, the last year we have numbers, our 

sector employed more than 810,000 workers in the United States 

and supported 3.4 million jobs, in addition, across the country. 

That total activity contributed nearly $790 billion in economic output, considering the direct, indirect, and induced effects of our industry. 

PhRMA welcomes the expansion of the world’s most dynamic 

trading relationship that already contributes significantly to creating jobs on both sides of the Atlantic. To be meaningful and comprehensive, the U.S. and EU negotiations should address not only 

regulatory compatibility initiatives but intellectual property protections, market access provisions, and customs and public pronouncement measures, as well. 

Biopharmaceutical innovation does not happen in a vacuum. It 

requires significant intellect, time, resources, and an ecosystem 

that values and protects the resulting intellectual property that is 

created. 

For this reason, our industry is particularly concerned about aspects of the current European environment. 

First, shortsighted cost-containment measures, ostensibly proposed in response to financial crisis but too often implemented 

without predictable, transparent, and consultative processes, have 

significantly impacted our members’ business in Europe. These 

measures raise serious concern regarding several EU member 

states’ commitment to adequately reward innovation. 

19 

Another issue of concern to the industry is the EMA’s current 

and proposed data disclosure policies. The biopharmaceutical industry is firmly committed to enhancing the public health through 

responsible reporting and publication of clinical research and safety 

information. However, the disclosure of non-public data submitted 

in clinical and preclinical dossiers and patient-level data sets risks 

that damage both public health and patient welfare. 

PhRMA and its members urge the U.S. Government to engage 

with the EU in every available avenue to ensure responsible datasharing. 

We also recommend that the biopharmaceutical market access 

commitments be included in the EU and the U.S. agreements, with 

the Korean form of the basis for similar commitments included in 

any EU–U.S. agreement. 

Key principles should be built into potential pharmaceutical 

chapters that we believe should include recognizing the value of 

biopharmaceuticals and the value they can play in reducing more 

costly medical interventions and improving the life of patients; respecting the right of physicians and other healthcare providers to 

prescribe appropriate medicines for their patients based on clinical 

need. 

Further, both the EU and the U.S. recognize that IP is the lifeblood of innovation, and providing IP rules within the legal and 

regulatory regimes. Any agreement between the U.S. and EU must 

not dilute those protections. 

Finally, on the already high level of cooperation between the 

FDA and EMA, PhRMA has proposed a number of regulatory compatibility initiatives to reduce the regulatory burden for both the 

sponsors and the agencies. These include reducing redundant testing, seeking mutual recognition of our general manufacturing principles and our good clinical principles, inspections, and establishing 

a procedure for the development of therapeutic area-specific regulatory guidelines. 

In summary, PhRMA and its members strongly support the proposed agreement and look forward to being an active stakeholder 

throughout the negotiations. 

Thank you very much. 

Mr. TERRY. Well done. Thank you very much. 

[The prepared statement of Mr. Castellani follows:] 

20 


86399.008
21 


86399.009
22 


86399.010
23 


86399.011
24 


86399.012
25 


86399.013
26 


86399.014
27 

Mr. TERRY. And, Mr. Dooley, thank you for being here once 

again. And you are now recognized for 5 minutes. 

STATEMENT OF THE HON. CALVIN M. DOOLEY 

Mr. DOOLEY. Thank you, Mr. Chairman. I want to thank all the 

members of the subcommittee for an opportunity to speak today. 

The American Chemistry Council represents the leading companies engaged in the business of chemistry. And the business of 

chemistry is a $770-billion enterprise which provides about 788,000 

high-paying jobs in this country. A lot of folks don’t also realize 

that the American chemistry industry produces 15 percent of the 

world’s chemicals, which represent—and we also provide about 12 

percent of all U.S. exports. 

ACC and its member companies are strong supporters of the 

Transatlantic Trade and Investment Partnership. Two-way trade in 

chemicals across the Atlantic totaled more than $51 billion in 2012, 

and Europe remains one of the U.S. industry’s largest markets. 

The reduction and elimination of transatlantic tariffs and barriers to trade in chemicals would contribute to a significant expansion of U.S. chemical manufacturing and exports, allowing to us to 

capitalize on our enhanced competitiveness of the U.S. chemical industry due to increased supplies of natural gas, primarily from 

shale formations. 

Since 96 percent of all manufactured goods rely on the business 

of chemistry, this would provide a major boost to overall economic 

growth and job creation, enhance U.S. competitiveness, and expand 

consumer choice. 

The purpose of pursuing closer regulatory cooperation between 

the U.S. and EU should be to explore opportunities for creating efficiencies within and between regulatory systems while maintaining high levels of protection for human health and the environment. The goal is not to undermine or weaken existing regulatory 

mandates, but rather to ensure that those mandates do not result 

in unnecessary barriers to trade. 

The U.S. and the EU regulate chemicals in different ways. That 

is not going to change because of TTIP. In fact, recent congressional action affirms that the U.S. will continue to embrace a more 

risk-based approach to chemicals management than the more hazard-based approach embodied in the EU’s REACH regulation. 

Where TTIP can add value is in ensuring that these different 

regulatory systems operate as coherently as possible, promoting efficient and effective regulatory approaches, and exploring opportunities for cost reduction and burden-sharing. 

Specific areas that might be addressed include efforts to promote 

the better sharing of sound science. The goal should be to minimize 

the potential for imposing additional regulatory barriers when revising or developing new regulations and to develop a common scientific basis for regulation. This could, in turn, promote enhanced 

data- and information-sharing, which would result in significant efficiencies for both government and industry, reducing the need for 

duplicative testing. 

Consistent with the comments of Congresswoman Schakowsky, 

TTIP should also focus on ensuring greater transparency and 

transatlantic cooperative activity between regulators. Stakeholders 

28 

on both sides of the Atlantic are aware that regulator-to-regulator 

discussions are occurring, but information on when cooperative activity is taking place and what issues are being addressed is typically not made available to stakeholders in advance of those discussions. Stakeholder input and, where appropriate, participation in 

relevant cooperative activities would facilitate expert input and 

help enhance stakeholder confidence and support for the regulatory 

cooperation. 

ACC also calls on U.S. negotiators to explore opportunities for 

promoting enhanced coherence in chemical prioritization and assessment. The development of common principles for prioritization 

and a process for comparing lists of chemicals that are defined as 

priority could lead to greater efficiencies, primarily by sharing the 

burden of review. Final risk management decisions would remain 

sovereign, but a joint approach in this area could promote greater 

certain in chemical assessment process, significantly reduce costs 

for government and industry by avoiding duplication and unnecessary testing, and accelerate chemical reviews. 

ACC strongly supports the negotiation of a comprehensive and 

ambitious TTIP. In our view, the chemical industry is well-placed 

to be a priority sector for enhanced regulatory cooperation under 

TTIP. For the chemical industry and for the broader U.S. economy, 

the TTIP has a potential to provide significant boosts to growth 

and job creation, which in turn would promote innovation and 

strengthen the international competitiveness of U.S. exporters. 

Thank you. 

Mr. TERRY. Thank you. 

[The prepared statement of Mr. Dooley follows:] 

29 


86399.015
30 


86399.016
31 


86399.017
32 


86399.018
33 


86399.019
34 


86399.020
35 


86399.021
36 


86399.022
37 

Mr. TERRY. Now, Mr. Garfield, you are recognized for your 5 minutes. 

STATEMENT OF DEAN C. GARFIELD 

Mr. GARFIELD. Great. 

Thank you, Chairman Terry, Ranking Member Schakowsky, 

members of this committee. On behalf of the world’s most dynamic 

and innovative companies that make up the global tech sector, we 

thank you for the opportunity to talk to you about this issue today. 

As well, we thank you for your work in general on trade. The 

hearing you held last month on India has already had a significant 

impact in pushing back on the preferred market access regime that 

they tried to put in place there. In fact, our hope for today’s hearing is that it will have a similar salutary impact as we move forward on TTIP. 

As you have noted, this agreement has the potentially precedentsetting impact, both economically and otherwise. And given the eloquence of the other colleagues who have been on this panel, rather 

than go through my entire written testimony, I thought I would 

simply share our three objectives for the potential partnership. 

One, and foremost for you, I know, as well, is economic growth 

and job creation. In order to ensure that this agreement lives up 

to the forecast and that that forecast, in fact, becomes fact, it is important that we include aspects of the economy that are critical to 

economic growth. 

The colleagues on the panel have highlighted a number of areas. 

I would also like to point to electronic goods in commerce. That ecommerce has the potential to be a significant force multiplier for 

the entire economy, both businesses large and small. So whether 

you are talking about AppleLink or an app developer or the Apple 

vendor in each of your communities, the potential impact is significant. And so we would suggest a focus there. 

As well, we would suggest focusing on the policy issues that 

would impact e-commerce. A number of people on this panel have 

already spoken about the importance of cross-border data flow and 

the rules that need to be put in place to ensure that that occurs, 

and we think that should be a priority. 

Our second objective for this agreement is to make sure that it 

is, in fact, a model for the rest of the world. A number of economies, in an effort to drive innovation and economic growth, have 

put in place forced localization requirements like those that we saw 

in India or have tried to fix things that are not broken—for example, creating new governance models for the Internet. 

Both the European Union and the United States have acted as 

a bulwark against those sorts of pernicious policies. And TTIP has 

the potential to align us in a more significant way in pushing back 

against those sorts of problematic policies on a global basis. 

Our third and final priority for this agreement, potential agreement, is something that the other folks on this panel have spoken 

of already, which is greater regulatory alignment where possible. 

The reason we have almost as many mobile phones as people in 

the world and the reason we have almost 3 billion people accessing 

the Internet is because it is an open, interoperable platform that 

38 

is built on global consensus-based standards. That is a model that 

we think is apt for purposes of these discussions, as well. 

We recognize that we are not going to be able to align and harmonize all regulation, but where we can, we should. It will reduce 

costs and will continue to improve lives, as we have seen with the 

Internet generally and the availability of mobile technologies. 

Related to that, we think it is important, where it isn’t possible 

to have alignment, that we have an alarm system so that there is 

greater transparency and certainty around where those disagreements are and the reasons for the disagreements. 

And so we look forward, as the tech sector, in working with this 

committee and with Congress generally in making sure that TTIP 

is not only completed but it is completed in a way that advances 

both U.S., European, and world economic interests. 

Thank you. 

Mr. TERRY. Very well done. Thank you very much. 

[The prepared statement of Mr. Garfield follows:] 

39 


86399.023
40 


86399.024
41 


86399.025
42 


86399.026
43 


86399.027
44 


86399.028
45 


86399.029
46 


86399.030
47 


86399.031
48 

Mr. TERRY. Now, Ms. O’Halloran—I am sorry, Halloran. I have 

a good friend, O’Halloran, so I apologize. You are not Terry. But 

you are now recognized for 5 minutes. Thank you. 

STATEMENT OF JEAN M. HALLORAN 

Ms. HALLORAN. Thank you. 

Thank you for inviting me to testify today, and I am pleased to 

be able to give you the consumer viewpoints on the trade negotiations. 

I represent Consumers Union, the policy arm of Consumer Reports, which has 8 million subscribers to its print and Web editions. And I am also representing the views of the Transatlantic 

Consumer Dialogue, which includes all the major consumer organizations, some 60 groups, on both sides of the Atlantic. 

Trade between the EU and U.S. already has many obvious benefits for consumers, increasing choices in products and services 

ranging from automobiles to banking to wines. However, consumer 

groups are extremely concerned about the avowed focus of this negotiation, which is regulatory and non-tariff barriers. We are concerned this may erode safety, threaten privacy, and even increase 

prices by extending patent protections and other means. 

In citing the need for regulatory convergence and harmonization 

and mutual recognition, we think there are many hazards. 

The EU and U.S. are both advanced, highly civilized societies 

which have high standards of consumer protections for its citizens, 

so what could be wrong with this? The answer is, unfortunately, a 

lot. Theoretically, harmonization, if it is to the highest standard of 

consumer protection, could bring great benefits. However, that is 

not the history of trade agreements, and it doesn’t appear to be the 

goal of the U.S. negotiators nor of a number of my colleagues here. 

Meanwhile, the scope of topics being tackled in this negotiation 

is breathtaking, including, potentially, auto safety, chemical safety, 

biotechnology, nanotechnology, pharmaceutical safety, patent protections, privacy on the Internet, banking regulations, food safety, 

medical device safety, and toy and consumer product safety. We 

find the potential for erosion of standards in these areas alarming. 

Let’s look at a few examples of why consumer groups are extremely concerned. 

The concept of regulatory convergence implies some sort of movement to the middle where standards differ. In the area of toy safety, this committee and the U.S. Congress, with bipartisan support, 

addressed a sudden influx of hazardous toys, in most cases made 

in China, bypassing the CPSIA. 

A key provision of that law requires toy companies to obtain 

independent third-party certification from an accredited laboratory 

that says that U.S. standards for the lead in the paint on the toys 

and other safety standards are being met. Europe does not require 

third-party certification for toys. How do we converge that? 

The idea of mutual recognition is equally concerning here. Some 

might propose that we simply recognize that the self-certification 

behind the CE mark in Europe is comparable to our provision. We 

feel, however, that this could potentially open the door for toys 

made in China by European companies, exclusively designed for 

sale in the United States, which could be less safe than toys made 

49 

by U.S. companies and, therefore, subject to CPSIA. Consumers 

could be put at risk, and U.S. toy companies could be put at a disadvantage. 

Let’s take another example, in the food area. When mad cow disease was discovered in the U.K. A number of years ago, the U.K. 

And other European regulators continued to allow European beef 

products to be sold and shipped across borders. The U.S., prudently, did not. We shut our doors to European beef quickly. 

We think the U.S. action was entirely correct and appropriate. 

The U.S. had a plentiful supply of beef here and did not need to 

take any risks with the European beef. But what if the EU and 

U.S. had a mutual recognition scheme in place at the time? The 

U.S. could have been forced to keep taking European beef for as 

long as Europeans deemed it safe enough to sell to Europeans. 

I would like to quickly bring up a couple of other topics. 

Investor-state dispute resolutions concern us greatly. They were 

originally developed in trade agreements to provide a means for 

U.S. corporations who invested in countries who had poor legal systems to obtain compensation if a government acted to, say, nationalize their oil wells. Such mechanisms are completely unnecessary, 

however, in the EU–U.S. context, where we both have well-developed court systems to deal with these kinds of difficulties. 

Finally, a few words about secrecy in this discussion. A critical 

area of concern is the secrecy with which the Obama administration’s appointed negotiators will be conducting this. We certainly 

understand, as do Members of Congress, that not every conversation needs to be conducted or can be conducted in public. But Congress makes pending legislation public at numerous stages. By contrast, drafts and texts in this negotiation are being classified as 

Top Secret, unavailable to public and stakeholders at this table as 

well as to Members of Congress. This has not always been the case, 

and we urge you to demand that USTR periodically make public 

the texts that they are drafting. 

Thank you. 

Mr. TERRY. Thank you. 

[The prepared statement of Ms. Halloran follows:] 

50 


86399.032
51 


86399.033
52 


86399.034
53 


86399.035
54 


86399.036
55 


86399.037
56 


86399.038
57 


86399.039
58 

Mr. TERRY. And, Mr. Muffett, you are now recognized for your 5 

minutes. 

STATEMENT OF CARROLL MUFFETT 

Mr. MUFFETT. Thank you, Chairman Terry, Ranking Member 

Schakowsky, and members of the subcommittee, for the opportunity to appear before you today on a matter of profound importance for the people of the United States, Europe, and the world. 

I am Carroll Muffett, president of the Center for International—— 

Mr. TERRY. Mr. Muffett, would you pull your microphone a little 

bit closer to you? 

Mr. MUFFETT. I am Carroll Muffett, president of the Center for 

International Environmental Law, a nonprofit organization that 

uses the power of the law to protect the environment, promote 

human rights, and ensure that—ah, is that better? 

Mr. TERRY. We will leave it to the IT guy. 

Mr. GARFIELD. If you have a problem back there, I can help you. 

Mr. TERRY. Thank you for being here, Mr. Garfield. 

Mr. MUFFETT. For over 20 years, CIEL has worked with partners 

around the world to support a positive trade agenda, where increased market access does not undermine environmental protections or human rights. 

I offer this testimony on behalf of CIEL, Friends of the Earth, 

and the Sierra Club. I have submitted a full statement for the 

record and would like to briefly summarize my testimony here. 

The current system for regulation of chemicals in the United 

States is wholly inadequate to meet the challenge posed by the 

modern chemicals economy. The rate of cancer and other adverse 

effects continues to increase among Americans. The amounts of 

synthetic chemicals in our bodies have also increased and are 

among the highest in the world. Absent greater regulatory action, 

they will continue to increase. 

This is an international public health problem that remains unsolved. Public health is one of the core responsibilities of a government to its citizens, and this responsibility is not being met with 

regard to chemicals. 

The limited information on TTIP, particularly from the United 

States, makes assessments of its eventual impact inherently speculative. While TTIP could offer an opportunity to increase protections in the U.S. and the EU, experience with other trade agreements, industry submissions on TTIP, and the parties’ express goal 

of reducing perceived regulatory barriers to trade make it far more 

likely that TTIP will hinder progress on chemical safety and potentially move us backward. 

Of particular concern is the risk that TTIP will be used to weaken the stronger chemical standards that already exist in the EU 

and in some U.S. States, rather than to raise U.S. standards to 

achieve higher levels of protection. 

To reduce this risk, TTIP must respect and protect the right of 

citizens in the United States and Europe, through their governments, to choose their own levels of environmental protection and 

to set the standards needed to achieve those levels. 

59 

TTIP must avoid measures likely to delay or dilute the creation 

of new rules for the protection of human health or the environment, including stronger chemicals laws. TTIP should not include 

provisions for mutual recognition for the chemical sector and other 

sensitive sectors that reduce domestic regulatory control in crucial 

public health and safety matters. 

TTIP must not elevate the narrow interests of private corporations above the public good through provisions for investor-state 

dispute resolution. TTIP should not preempt or impede the rights 

of State and local governments or of governments outside the 

United States and EU to adopt new initiatives on toxic chemicals 

and other threats, including their rights to choose higher levels of 

protections for their citizens and to innovate new and better approaches to achieving that protection when the Federal Government is unwilling or unable to do so. 

TTIP should not impede regulatory efforts to address emerging 

threats such as nanotechnologies, endocrine-disrupting chemicals, 

or hydraulic fracturing, which have profound implications for our 

health and our environment. 

Finally, TTIP must be negotiated in an open, transparent, and 

participatory matter that safeguards the universal and fundamental public interest in the outcome of the negotiations. In recent 

years, the United States has conducted trade negotiations with a 

secrecy and a lack of transparency wholly inconsistent with basic 

principles of good governance in a constitutional democracy and inconsistent with the public’s right to informed, meaningful participation in a public policy dialogue of profound national consequence 

on both sides of the Atlantic. Both parties should commit to broad 

public access to negotiating documents and positions to facilitate 

informed public debate regarding the negotiations and any resulting agreement. 

To protect the environment, health, and safety of consumers, 

workers, and children around the world, what is needed is not freetrade agreements but better trade agreements—agreements that 

see public protection not as a competing goal but the highest goal 

and leverage the power of markets to serve the global good; agreements that enhance trade by strengthening and advancing environmental health and safety standards, rather than viewing them as 

irritants to be reduced and eliminated. We look forward to an open, 

transparent, and inclusive dialogue on whether and how such an 

agreement can be achieved. 

Thank you again for the opportunity to testify. 

Mr. TERRY. Thank you, Mr. Muffett. 

[The prepared statement of Mr. Muffett follows:] 

60 


86399.040
61 


86399.041
62 


86399.042
63 


86399.043
64 


86399.044
65 


86399.045
66 


86399.046
67 


86399.047
68 


86399.048
69 


86399.049
70 


86399.050
71 


86399.051
72 


86399.052
73 


86399.053
74 


86399.054
75 


86399.055
76 


86399.056
77 


86399.057
78 


86399.058
79 


86399.059
80 


86399.060
81 


86399.061
82 


86399.062
83 


86399.063
84 


86399.064
85 


86399.065
86 


86399.066
87 

Mr. TERRY. Now, at this time, we will all ask the questions. So 

my first question—I recognize myself for 5 minutes of questions. 

Mr. Blunt, Mr. Castellani, Dooley, and Garfield, I will ask you 

this question. You set out your goals for each one of your industries. Now, it seems like the easiest approach here would simply 

be, who has the most restrictive, and we will harmonize to that 

level. Is that an appropriate strategy for the USTR? 

Mr. Blunt, you can start. 

Mr. BLUNT. We would argue that, since both economies have very 

sophisticated regulatory regimes today with very similar environmental and safety outcomes, that the real goal should be mutual 

recognition of vehicles built to either economy’s standards, so that 

vehicles built to the EU standard would be acceptable for sale in 

the U.S. and vice versa. 

Mr. TERRY. So you would disagree with just harmonize to the 

most restrictive standards? 

Mr. BLUNT. We think you should look at the results of the standards that exist today and that the results would demonstrate that 

you have very high levels of environmental and safety performance 

in both economies and that you should just recognize that you are 

achieving the same thing through the two regulatory processes. 

Mr. TERRY. All right. 

Mr. Castellani? 

Mr. CASTELLANI. Mr. Chairman, in our industry, as you know, 

both the EU and the U.S. have very strict and very important regulatory regimes. What we are suggesting in this agreement is we 

take the best of the both but give the opportunity, from the patient 

perspective, to have harmonization that makes it more efficient for, 

for example, our FDA and the EMA. 

In our industry, we have very high standards on both sides of the 

Atlantic, obviously, for our manufacturing practices and for our 

clinical trial practices. We think if we could harmonize to that high 

standard, we could free up FDA resources and EMA resources to 

focus on countries that present more of a risk and manufacturing 

practices that present more of a risk for patients. 

So it is a not a simple ‘‘yes’’ or ‘‘no.’’ It is taking the best, from 

a patient perspective, and applying it equally on both sides of the 

Atlantic. 

Mr. TERRY. OK. 

Mr. Dooley? And you may want to add some context for Mr. 

Muffett’s comment. 

Mr. DOOLEY. Yes, I would say that, no, we have no interest in 

a harmonization to the most restrictive standard. 

And, you know, our companies, whether they are manufacturing 

and introducing chemicals and products in the United States or the 

EU or anyplace in the world, their first commitment is that they 

are safe for their intended use. 

But I would also just give a couple examples. You know, you can 

look at what we would assess as a non-science-based approach in 

the EU to the evaluation of the safety of GMO products in agriculture. It is not just an accident that BASF and Syngenta, both 

European-based companies, have moved all of their bio-ag research 

and development to North Carolina, and it is a direct response to 

the regulatory impact. 

88 

On the issue of REACH, BASF, one of the largest chemical companies in the world, are now assessing that the regulatory costs to 

their company to comply with REACH is going to amount to about 

$650 million or $700 million. You know, we don’t think that that 

is contributing to safer outcomes and safer products, because they 

are marketing the same products in the EU as they are in the U.S. 

But they are facing an additional cost of operation, which is siphoning dollars away from innovation. 

What we are suggesting, though, that a lot of that research and 

assessment and data that is being developed by BASF, what they 

are spending some of that $650 million on, is that there are opportunities for the sharing of that data between the U.S. and the EU 

that can achieve greater efficiencies for industry as well as for government. 

Mr. TERRY. Mr. Garfield? 

Mr. GARFIELD. The answer is also ‘‘no’’ for us, but nor are we advocating for the adoption of the least restrictive either. I think that 

dichotomy is a false one. 

What we are encouraging is that we use greater, more objective 

standards that are science-based and, as well, that we look at the 

impact and also avoid redundancy. So oftentimes we, in fact, do 

have very similar standards, where you couldn’t point to any great 

distinction, but we have redundancies anyway. 

Mr. TERRY. All right. Very good. 

I will yield back my 15 seconds and recognize the gentlelady 

from Illinois, Jan Schakowsky. 

Ms. SCHAKOWSKY. Thank you very much, Mr. Chairman. 

Mr. Castellani, in your testimony, you talked about, quote, 

‘‘issues of considerable concern to the industry,’’ unquote, and 

among them you mentioned, quote, ‘‘shortsighted cost-containment 

measures,’’ talking about the European environment. 

And, to me, it is a little ironic. You also said something about 

‘‘too often implemented without predictable, transparent, and consultative processes,’’ which we are talking about, too, as a shortcoming, I think, of these trade negotiations, that it is not very 

transparent. 

But I wanted you to tell me, yes or no, is PhRMA opposed to the 

following cost-containment measures: 

One, Medicaid drug rebates, the current Medicaid drug rebates. 

Yes or no? 

Mr. CASTELLANI. We are opposed. 

Ms. SCHAKOWSKY. You are opposed. 

The 340B program, which would allow reduced costs for certain 

safety net providers? 

Mr. CASTELLANI. We favor the 340B program. 

Ms. SCHAKOWSKY. Favor. 

A ban on pay-for-delay that would prohibit drug companies from 

paying to keep generics off the market? 

Mr. CASTELLANI. We oppose that. 

Ms. SCHAKOWSKY. State law limits on pharmaceutical company 

payments to doctors? 

Mr. CASTELLANI. We oppose that. 

Ms. SCHAKOWSKY. Medicare negotiation for prescription drugs? 

Mr. CASTELLANI. We already have Medicare negotiations. 

89 

Ms. SCHAKOWSKY. OK, but allowing Medicare to fully negotiate, 

as the VA does, for lower drug prices? 

Mr. CASTELLANI. Oh, the negotiations that occur now occur 

through the insurance companies that provide the drug benefit. 

Ms. SCHAKOWSKY. Right. But Medicare, itself, negotiating? 

Mr. CASTELLANI. No. We think the current system works fine. 

Ms. SCHAKOWSKY. VA negotiations currently? 

Mr. CASTELLANI. The current system is fine. 

Ms. SCHAKOWSKY. Negotiating authority for Federal Employees 

Health Benefits Program? 

Mr. CASTELLANI. Well, again, the insurers do have that authority. 

Ms. SCHAKOWSKY. OK. And you wouldn’t oppose that or want to 

change that in any way? 

Mr. CASTELLANI. That is how prices are determined by insurance 

companies. 

Ms. SCHAKOWSKY. OK. And formularies? 

Mr. CASTELLANI. That is how formularies are determined by insurance companies. 

Ms. SCHAKOWSKY. OK. 

The elimination of existing cost-containment measures and the 

restriction on possible future ones that we see could be coming up 

increases cost to States, taxpayers, and consumers. And, at the 

very least, I think all of these cost-containment changes that could 

possibly be in this agreement should be discussed publicly rather 

than just behind closed doors. 

Turning to another issue, auto safety. And, Ms. Halloran, I wanted to ask you and Governor Blunt if you wanted to comment. 

In meetings regarding this hearing, companies pointed to the 

auto industry as one space where they believe there can be substantial progress made toward their goal of regulatory harmonization. 

So, in your testimony, you mentioned child occupant protection 

standards. I have long supported efforts to strengthen U.S. requirements for car seats and boosters. It is only recently that the U.S. 

has added a child-sized crash dummy to its testing, which is the 

size of the typical 10-year-old, as well as a standard crash test for 

rear occupants. 

Can you describe the difference between the U.S. and EU standard for car seats and why you think the EU standard is safer? 

Ms. HALLORAN. I think it might be best if I get back to you on 

that. 

The EU does have a number of standards which are better than 

ours, we think, and ones which we would advocate for NHTSA to 

adopt. And this is a clear area where it would be good to harmonize 

up. 

But I think I should get back to you on the specifics after I talk 

to my colleagues. 

Ms. SCHAKOWSKY. OK. 

And let me ask you, Governor Blunt. I mean, there are many efforts right now where consumer groups are looking at those ways 

in which European standards are higher. 

90 

My understanding of what you are saying is neither one should 

have to change and that each should be accepted in each country. 

Is that—that is your goal? 

Mr. BLUNT. That is our goal, though if a new need emerged, we 

are not stating that we are opposed to new regulations in either 

economy if there is a new safety need that needs to be addressed. 

But our goal would be to recognize that today you achieve essentially the same environmental and safety outcomes and have mutual recognition of those standards. 

Ms. SCHAKOWSKY. OK. 

And with just a few seconds, I would love to meet with you about 

the regulation that would require rear visibility through cameras, 

which has been held up at the National Highway Transportation 

Safety Board. That would prevent two children, on average, a week 

being killed by back-overs. And if we could at some point meet 

about that, I would appreciate it. 

Mr. BLUNT. Look forward to it. 

Ms. SCHAKOWSKY. Thank you. 

I yield back. 

Mr. TERRY. Thank you. 

And I now recognize Mr. Lance for 5 minutes. 

Mr. LANCE. Thank you, Mr. Chairman. 

To Mr. Castellani, the rapid deterioration of Indian intellectual 

property protections are direct evidence that India’s industrial policies are designed to take American and European innovation for its 

own domestic industries, the industries affected by India’s actions 

cover a broad range of innovative industries here and in Europe, 

including high tech, telecom, green technology, and your industry 

as well. 

In light of this threat, how can we use this trade agreement to 

set global standards that value strong IP protections? 

Mr. CASTELLANI. Thank you, Mr. Lance. 

As I said in my testimony, we view and I think across industry 

we all had agreed that we view this as an opportunity to set a 

standard that should be applied around the world. In our industry, 

the ability to reward and protect innovation is key to the ability 

to meet patient needs, and particularly to develop medicines where 

none exist right now. We think the high standards that the Europeans have and the high standards the United States have present 

an opportunity to demonstrate to the rest of the world that you can 

have both the innovation that is necessary to serve patients and 

the affordability of medicines at the same time. And you can’t have 

one without the other. 

I would quote what the vice president said in India this morning, 

where he said a young Indian physician who is a researcher is motivated by his or her ability to discover and to continue that discovery process because they can be rewarded and encouraged because of the protection of what they develop. And we think that 

should be the standard around the world. 

Mr. LANCE. Thank you. Isn’t it true that many of the innovations 

that occur in your industry occur based upon research and development here in the United States? 

Mr. CASTELLANI. About 65 percent of all of the research that is 

done in biopharmaceuticals is done in the United States. It, as I 

91 

said, represents—the National Science Foundation has told us that 

we do 20 percent of all the industry-funded research and development in the United States. It is also about 20 percent of our revenues, which I think is the highest of any sector in the economy. So 

it is absolutely vital to the United States and the United States as 

a leader. 

Mr. LANCE. We will be having a major discussion on tax policy 

in this country out of Ways and Means, not E&C, but of course, we 

want as much research and development as possible. And I think 

the 20-percent figure is extraordinary in relationship to what it is 

across other sectors. 

Now, as I understand it, the cost of generic drugs is higher in 

developing parts of the world than perhaps many realize; is that 

accurate? 

Mr. CASTELLANI. Generics are higher in price across the board in 

Europe than they are in the United States, yes. 

Mr. LANCE. Thank you. Would others on the panel like to comment on intellectual property matters as they relate to your fine industries? 

Congressman Dooley, it is a pleasure to meet you, sir. 

Mr. DOOLEY. I would just say we are very much aligned and consistent with the policy that Mr. Castellani said. We are one of the 

leading innovation manufacturing sectors in the United States; 

about 20 percent of all patents are issued to our industry. So protection of that intellectual property is a high priority. 

Mr. LANCE. And do you see challenges in that regard in other 

parts of the world for your industry? 

Mr. DOOLEY. There are challenges, you know, throughout the 

world. I would say with the EU, that is not where we are facing 

the greatest challenges. 

Mr. LANCE. I am not suggesting the EU. 

Mr. DOOLEY. Significant concerns—— 

Mr. LANCE. This is a model for other parts of the world. 

Mr. Garfield. 

Mr. GARFIELD. Yes. I would add two things. One is, we do see 

challenges in other parts of the world, particularly around tech 

transfers as a part of a requirement for participating in a market. 

That was one of the challenges that we faced in that India that we 

are now seeing a bit of a reprieve on, but there is still a lot of work 

to be done there. 

The second is as we think about IP, I would ask that we also 

think about trade secrets, which there is a great opportunity for 

greater harmonization between here and Europe and for it be to a 

model for the rest of the world. 

Mr. LANCE. Thank you. 

Ms. Halloran. 

Mr. HALLORAN. I think everyone needs to just think for a moment, though, about the recent Supreme Court decision in the Myriad case, where they decided that a breast cancer gene could not 

be patented. This is an example of how patenting may be going too 

far in a number of cases and getting in the way of actual innovation and unnecessarily raising healthcare costs for consumers. 

Mr. LANCE. Thank you. My time has expired. 

Thank you, Mr. Chairman. 

92 

Mr. TERRY. At this time, I recognize the emeritus of the entire 

Congress, Mr. Dingell. 

Mr. DINGELL. Thank you, Mr. Chairman. I thank you for your 

courtesy, and I commend you for holding this important hearing. 

I am delighted to see the subcommittee is exercising its long neglected jurisdiction over matters related to international trade. 

At the April 10 hearing of this subcommittee about domestic 

automobile manufacturing sectors, I tried to establish that some 

form of regulatory harmonization or mutual recognition of standards with the European Union would allow U.S. automakers and 

others to be more globally competitive. While it is arguable that 

regulatory harmonization or mutual recognition of standards would 

be helpful to industry, I also want to make sure that the health 

and safety of American consumers does not result from either. 

Now, to Messrs. Blunt, Castellani, Dooley, and Garfield, all of 

you posit in your written testimony that a U.S.-EU free-trade 

agreement should include some form of regulatory harmonization 

or mutual recognitions of standards. I am asking that you and the 

other panelists submit to us a brief definition of these terms and 

how this would benefit the United States. 

Now, again, to Messrs. Blunt, Castellani, Dooley, and Garfield, 

this is a yes or no question. Do each of you believe that the regulatory harmonization or mutual recognition of standards will not 

result in any diminution of the health or safety of American consumers? Yes or no. 

Mr. BLUNT. Yes. 

Mr. CASTELLANI. Yes. 

Mr. DOOLEY. Yes. 

Mr. GARFIELD. Our experience is yes. 

Mr. DINGELL. All right. Now, to Ms. Halloran and Mr. Muffett, 

do you agree with your fellow witnesses responses? Yes or no. 

Mr. HALLORAN. Absolutely not. 

Mr. DINGELL. Sir? 

Mr. MUFFETT. No. 

Mr. DINGELL. Now, I would like to hear what our witnesses have 

to say about regulatory transparency as it relates to transatlantic 

regulatory harmonization or mutual recognition in standards. As 

we all know, the Administrative Procedure Act provides for substantial stakeholder input in the U.S. regulatory process. And essentially, that is a manifestation of the requirements of the constitution. 

Now, to all witnesses, yes or no: Do you believe that the regulatory harmonization or mutual recognition of standards between 

the U.S. and the European Union would afford Americans the same 

level of stakeholder input in the regulatory process as they currently enjoy under the Administrative Procedure Act? Yes or no? 

Mr. BLUNT. No. 

Mr. DINGELL. Mr. Castellani? 

Mr. CASTELLANI. I am not sure I can answer for both sides of the 

Atlantic. 

Mr. DINGELL. Well, if you want to submit the answer later, that 

would be acceptable. 

Mr. CASTELLANI. I would be happy to do that, but I think generally, yes, it should be the objective. 

93 

Mr. DOOLEY. I will submit a written answer. 

Mr. DINGELL. Next witness. 

Mr. GARFIELD. I hate to fall prey to peer pressure, but I will submit as well. I would say that it is something that we should insist 

upon in view of it about very important. 

Mr. DINGELL. I am down to a minute, 38 seconds. 

Ma’am, if you please. 

Mr. HALLORAN. No. 

Mr. MUFFETT. Most emphatically no. 

Mr. DINGELL. Now, to all witnesses, do you believe that regulatory harmonization or mutual recognition of standards would 

make it more difficult in general for the United States and the European Union to promulgate new regulations in the future? Yes or 

no. Starting on your—at this end of the table. 

Mr. BLUNT. No. 

Mr. CASTELLANI. No. 

Mr. DOOLEY. No. 

Mr. GARFIELD. No, as well. 

Mr. HALLORAN. Definitely yes. 

Mr. MUFFETT. Yes. 

Mr. DINGELL. Now, to all witnesses, similar, do you believe that 

regulatory harmonization or mutual recognition of standards would 

constrain the ability of the United States and the European Union 

to promulgate regulations it deems uniquely appropriate for the 

specific threats to the health and safety of their respective citizens? 

In other words, do you believe that regulatory harmonization or 

mutual recognition of standards would diminish the regulatory sovereignty, so to speak, of the United States and the European 

Union? Yes or no. 

Mr. BLUNT. No. 

Mr. CASTELLANI. No, sir. 

Mr. DOOLEY. No. 

Mr. GARFIELD. No. 

Mr. HALLORAN. Yes. 

Mr. MUFFETT. Yes. 

Mr. DINGELL. OK. Now, again to all witnesses, I would like that 

you would submit additional comments on these matters for the 

record. 

Now I would like to indicate my displeasure with the manner in 

which the TransPacific Partnership has been negotiated. Congress 

and the public have had far too little access to details in the draft 

agreement. I believe that a lot of sunshine is warranted. 

Now, to all witnesses, would you support legislation that improves the transparency in trade agreement negotiations, particularly by granting improved access by all stakeholders to negotiating 

texts on future trade agreements? Yes or no. 

Mr. BLUNT. Yes. 

Mr. CASTELLANI. With all due respect, Mr. Chairman, I think you 

have to ask the negotiators; that is really the government’s business. 

Mr. DINGELL. Mr. Dooley. 

Mr. DOOLEY. I concur with Mr. Castellani. 

Mr. GARFIELD. I do as well. I think the negotiators should be the 

ones who determines it. 

94 

Mr. DINGELL. Ma’am. 

Mr. GARFIELD. And it will be different in each instance. 

Mr. DINGELL. Ma’am. 

Mr. HALLORAN. I concur with auto representative, yes. 

Mr. DINGELL. And. 

Mr. MUFFETT. I will support it and march through the streets for 

it. 

Mr. DINGELL. Now, one question—I know that I am exceeding 

my time, and I thank you for your courtesy to me, Mr. Chairman. 

On a more parochial matter, do you, each of you, support or oppose the inclusion of currency manipulation disciplines in future 

U.S. trade agreements? Yes or no, with starting this end of the 

table. 

Mr. BLUNT. Yes. Absolutely. 

Mr. CASTELLANI. It is not an issue on which we have taken a position. 

Mr. DOOLEY. It would vary with respective countries. 

Mr. DINGELL. Sir. 

Mr. GARFIELD. We don’t have a position on that issue. 

Mr. DINGELL. Ma’am. 

Ms. HALLORAN. No position. 

Mr. MUFFETT. No position. 

Mr. DINGELL. Mr. Chairman, you have been extraordinarily courteous to me. I thank you and yield back the balance of my time. 

Mr. TERRY. Thank you. 

At this time, recognize the gentleman from the great state of 

Texas, Mr. Olson. 

Mr. OLSON. I thank the chair. And want to thank our witnesses 

for coming here this morning. This is a very timely hearing. Given 

that just down the road the first round of negotiations of the 

Transatlantic Trade and Investment Partnership, or TTIP, were 

completed. Now, trade relationship with the EU is very significant, 

accounting for 40 percent of global output and nearly $1 trillion in 

trade. 

Of course, foreign trade gives me a chance to brag about my 

home State of Texas. The largest petrochemical complex in the 

world lines the 50-mile-long Port of Houston. The Port of Houston 

is the largest foreign tonnage port in America. Last week, the Department of Commerce’s International Trade Administration announced that the greater Houston area is the top market for exports, with $110.3 billion in merchandise exports in 2012, $110.3 

billion. And TTIP gives Houston a chance to get even bigger. Only 

one of the top five countries that Houston exports to are in the EU. 

That is The Netherlands. Recent study by the Paramount Group 

found that Texas could add $17 billion if tariffs on the barriers 

with the EU were eliminated. More foreign trade means more 

American jobs and a more safe and secure world. 

My former boss, United States Senator Phil Gramm, summed it 

up best when he said that American democracy and American free 

enterprise have given more hope and more freedom to more people 

than all the wars in history combined. 

Against that backdrop, my first question is for you, Mr. Dooley. 

Your testimony and in public, you stated that the American Chemical Industry is poised to capitalize on enhanced competitiveness 

95 

due to increased supply from shale formations all across our country. As you know, most of the shale gas is being produced in Texas. 

The Barnett Shale played the first up there by Dallas-Fort Worth, 

Eagle Ford Shale played south of San Antonio, towards Laredo. 

Happening all over our country. Could you please go into detail 

about how the FTA and TTIP in particular could positively affect 

the petrochemical industry? Because, again, as I have told you in 

the past, sir, in the last 4 years, I have noticed a difference. Before 

chemical guys were talking about going to overseas. Now they are 

talking about coming back to America, keeping those jobs here. A 

lot of it is because of cheap energy. Details about that for petrochemicals. 

Mr. DOOLEY. There has been a dramatic shift in the international competitiveness of the U.S. chemical industry in just the 

last 5 years. We have gone from in that period of time from one 

of the highest cost producers of chemicals globally to now the lowest cost producer of chemicals globally. There is one reason for 

that, and that is the increased supplies of natural gas, which for 

the chemical industry, we use natural gas, not only as an energy 

source but as also a feedstock. It is like flour is to bakery, natural 

gas is to the chemical industry. So when we see this dramatic increase in supplies which is resulting in more competitively priced 

natural gas, that gives us a significant competitive advantage 

internationally. 

We keep a running total of new investments. We have now, looking by the year 2020, we will have 72 billion in new capital investments and chemical manufacturing in the United States. And important to note is over 50 percent of that is from direct foreign investment, companies located outside the U.S. We are in-shoring investment into the United States, which is a dramatic shift from 

over 10 years ago. And there has probably never been a point in 

time when you are seeing a dramatic—such a divergence in energy 

policies between the EU and the United States. In the United 

States, we are seeing the prospects of having domestic energy security, we see a commitment to develop our fossil fuel sources, primarily natural gas. 

And if you look at the EU, they are putting policies in place that 

are banning fracking, that are moving away from nuclear energy. 

Their energy costs and feedstock costs are projected to go up significantly over the next decade, ours are going to stay flat. So when 

we also capitalize on the opportunity to reduce tariff barriers and 

regulatory barriers, that gives us the opportunity to further capitalize on this competitive advantage, and that’s why the U.S. 

chemical has a vested interest in seeing progress on a TTIP being 

finalized. 

Mr. OLSON. I told you I have seen a dramatic shift in the chemical industry in the last 5 years. They were talking about not growing business here in America, not building new chemical plants, 

moving overseas. Now that has changed. Coming back home or 

staying here. That is a great problem to have or solution to have. 

One final question, in your testimony, you talked about the 

greater regulatory transparency. What are you concerned about? Is 

the process breaking down, and should we be concerned going forward with TTIP? 

96 

Mr. DOOLEY. Well, what we are referring to here is there is an 

opportunity—and we’re not—contrary to what was implied by an 

earlier question, we are not for regulatory harmonization or standardization between the U.S. and the EU. But we do think that 

there are opportunities for cooperation where we can through the 

U.S. and EU through TTIP identify, you know, scientific assessment protocols. You know, we ought to be developing the best way 

to identify what are the scientific studies and the way that you are 

preparing data that can provide information on a risk of a particular chemical. You might have different standards of risks that 

EU would take versus the U.S. And that should—we should respect 

that. But you are going to have industry as well as government investing significant dollars to develop this data. And we ought to be 

providing ways to share that. And there ought to be transparency 

in terms of how those studies are being identified and developed 

that would help inform the—you know, whether the U.S. or in the 

EU. 

So that is where we think that there is a lot of savings in terms 

of this regulatory cooperation as well as transparency to build a 

trust in confidence in the respective approaches to the safety of 

chemicals in coppers. 

Mr. OLSON. Thank you, sir. 

I’ve got all my time. I want to take this interpretation, the chairman loves Texas. 

But thank you, sir. Appreciate it. 

Mr. TERRY. Chair recognizes the gentleman from California, Mr. 

McNerney, for 5 minutes. 

Mr. MCNERNEY. I thank the chairman for holding this important 

hearing. 

My first question goes to Mr. Muffett. You indicated that, in your 

opinion, U.S. chemical regulatory regime was not adequate in its 

current form. And I was wondering if you could, and a yes or no 

answer: Could our chemical regulatory regime benefit from harmonization with the EU? Could we benefit in our form? Yes or no. 

Mr. MUFFETT. No. 

Mr. MCNERNEY. No? 

Mr. MUFFETT. It doesn’t admit of a yes or no answer. If we were 

to harmonize up to the EU standard, yes, we could benefit. 

Mr. MCNERNEY. So there is a potential for benefit. But my followup question is this: How could secrecy in the TTIP negotiations 

influence the outcome of the harmonized chemical regulatory regime and the need for sound science in general? 

Mr. MUFFETT. Your preceding question is a case in point of the 

risk. The U.S. system for addressing chemical risks is far weaker 

than the European system. In efforts to harmonize, in efforts to 

find some places for regulatory convergence, the tendency will be 

to push toward the middle. And without the public there to participate, to engage, to defend the public’s interest in strongest possible 

regulations, that movement towards the middle is the biggest risk. 

Mr. MCNERNEY. Ms. Halloran, I do appreciate your concerns 

with regards to the trade negotiations. As harmonization and regulatory convergence are discussed, how can we ensure the maintenance of U.S. consumer protections? 

97 

Ms. HALLORAN. The first step has obviously got to be to have a 

more public process for this. The extent of the entire thing is just 

enormous. And then they have to set goals, I believe, that I think 

are in direct conflict, for example, with those of the auto industry, 

which says there should be no increases. I think the proper approach has to be to try to go for the best level, the highest level 

of consumer protection, which may be the EU standard in one case 

and maybe the U.S. in another. And convergence towards the middle won’t get us there. 

Mr. MCNERNEY. Thank you for that answer. 

Mr. Dooley, thank you for coming here today. I understand the 

potential benefits of the enhanced EU-U.S. cooperation when it 

comes to regulations within the chemical industry clearly. Can you 

suggest how to uphold the highest standards when sharing scientific assessments and test results that may differ between our 

two locations? 

Mr. DOOLEY. I’m not sure I understood the question. 

Mr. MCNERNEY. Sure. Can you suggest how to uphold the standards that will protect consumers when we are talking about scientific assessments and test results that may differ between our 

two regimes? 

Mr. DOOLEY. I think that, it is clear that whether you are producing a chemical in the United States or the EU, and our companies are multinational, is that, the first commitment has to be to 

the certainty of the safety of the product for its intended use. We 

would contend that the REACH program has that similar objective 

that is differing outcomes. But those outcomes are not markedly 

different than what is being determined and assessed through the 

U.S. EPA’s review of the safety of chemicals in commerce. I think 

it is also notable that we see in the Senate today, or in the last 

few months, a bipartisan bill was introduced that is supported by 

industry, ACC, as well as the Environmental Defense Fund, that 

develops a reform and modernization of TSCA that is taking a 

more risk-based approach than what the EU under the REACH 

program. But there is a collective understanding that that will result in the EPA having authority to make a determination on the 

safety of chemicals in commerce that will be every bit as accurate 

and as effective as the REACH program, but at a far less cost. And 

that is what we are looking for. How do you have the most efficient 

and effective program of assessing the safety of chemicals for industry as well as the regulators, whether it is in the U.S. or the 

EU. And that is where we have differences and where we don’t 

want to harmonize to the EU’s REACH program. 

Mr. MCNERNEY. Good answer there. 

Mr. Castellani, simple question. You folks thought IP—and I 

have IP myself, so I appreciate that. What location, do members of 

your industry prefer IP to reside, in the United States, in Europe, 

or in third countries? 

Mr. CASTELLANI. It needs to be—it needs to reside where it is developed. And the nature of our industry is such that because of the 

unique both existence of the scientific ecosystem here in the United 

States, because of the strong intellectual property protection that 

U.S. Provides, because of the transparent and rigorous regulatory 

system that we have, and because of our valuation system for 

98 

medicines, the preponderance of it lies here in the United States. 

It needs to reside where it is developed, but it needs all four of 

those elements to be able to be developed. 

Mr. MCNERNEY. All right. Thank you. 

I yield back. 

Mr. TERRY. Thank you, Mr. McNerney. 

Now the chair recognizes for 5 minutes the vice chairman of the 

full committee, gentlelady from Tennessee. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. And I want to 

thank each of you for taking your time to be here today. 

Chairman Terry has done a great job in putting the focus on how 

we bring jobs back to the U.S. And some of you, we have had the 

opportunity to visit with previously, and I have tremendous respect 

for the way each of you have looked at intellectual property and the 

protection thereof. 

Mr. Blunt, I know you have engineers who are seeking to protect 

their IP that are very concerned with reverse engineering. Mr. 

Dooley, I know the same thing happens with some of your members. So I want to just stay with that for just a minute, with the 

IP issues. 

Mr. Garfield, we had someone from your organization at a hearing recently here. We talked about India and the PMA. And that 

is something that I understand now that India is going to review 

that policy. And we are pleased with that. So we know that it could 

be reinstated. So I want you to just discuss for a moment, as you 

look at this, as you are learning lessons from what has happened 

with India and the PMA, as we look at protecting IP and looking 

at some of these transfer rights, if you will, that are there through 

the Internet, and you spoke a little about that global platform, talk 

to me about what we could do here in Congress, from a policy point 

of view, that would help us to forestall, if you will, things like the 

situation in India with the PMA. And then what would be helpful 

for the administration to do, for USTR to do, and kind of where we 

stand. Take it from there. 

Mr. GARFIELD. It is a great question. Thank you for it. I will 

start, and I am sure some of my colleagues on the panel will jump 

in. 

I began the testimony by thanking the committee for its vigilance 

and oversight as it relates to India. But India is—and we are 

pleased that we are seeing some reprieve, at least temporarily, on 

India. But India is not alone. In a number of markets that are looking to engender innovation and economic growth, I believe the way 

to do that is to have—is to take other countries’ intellectual property or other companies’ intellectual property or force the transfer 

of IP as a requirement for being in that market. 

The lesson learned from India, I think, is largely one of having 

high standards, which we do in the United States, certainly can be 

approved. But we do. Two, remaining vigilant in oversight and our 

resistance to succumbing to countries who suggest that we should 

compromise on those intellectual property rights. And then the 

third that I would point to, and it is still early days yet to fully 

assess, and we still have work to do with India, but the alignment 

of the messaging and consistency of the messaging between Congress and the administration was such that it was clear and has 

99 

been clear to India that there was no space between the private 

sector, Congress, and the administration, which I think served us 

exceptionally well. This TTIP has the potential to do that on a 

much broader basis. And it is something that we are strongly supportive of. 

Mrs. BLACKBURN. Mr. Dooley, I saw you—— 

Mr. DOOLEY. I am not familiar with the—the India, you know, 

reference that you made there. But I would just put it in the context of TTIP and make an argument for why we are not for, in 

some instances, regulatory harmonization. In the United States, we 

currently bring three times the number of new chemicals and innovations to the marketplace as they do in the EU. That is in large 

part because of the regulatory structure that is in place and the 

cost of compliance and whether or not you have an environment 

that is conducive to that. So that is where we have some concerns 

about whether or not it is in our interest to go down that path, 

which we concluded it is not. But there is an opportunity to ensure 

that there is a sharing of data and information that results in cost 

savings to industry as well as to the regulators and the agencies 

and the United States and the EU. And that is where we think 

that there is significant benefit through a TTIP in terms of trying 

to find ways in which we can share that information, which also 

has to be done in a way that it protects intellectual property rights. 

In the sharing of that information. And how do you control that, 

which all has to be part of the negotiations that are taking place. 

Mrs. BLACKBURN. OK. Mr. Castellani, did you have anything to 

add? 

Mr. CASTELLANI. Yes, ma’am. I think that one of the things that 

you have to focus on is, I am not aware of any economy that has 

been able to develop sustained economic growth over a long period 

of time by stealing intellectual property. One of the reasons why 

the United States is as strong economically as it is in also the EU 

is that we have the infrastructure to develop the intellectual property here. And that benefits not only the customers for it, in our 

case, patients, but also obviously the economy where it is developed. So the challenge with India is that the actions that they have 

taken, at least in our sector, just to usurp and therefore confiscate 

property that was developed with substantial investment in other 

parts of the world, in the United States and in Europe, has turned 

out so that it doesn’t help their economy in the long return and it 

certainly doesn’t help their patients because they are precluding 

the Indian patient from the most innovative medicine in the world. 

So thank you. 

Mr. TERRY. Chair would now recognize gentlelady from Virgin Islands for 5 minutes. 

Mrs. CHRISTENSEN. Thank you, Mr. Chairman. 

And welcome to the panel. A growing body of scientific evidence 

demonstrates that many chronic illnesses on the rise in the industrialized world are linked to exposure to toxic chemicals, including 

many cancers, learning disabilities, asthma, Alzheimer’s, and Parkinson’s disease, as well as fertility problems. The most comprehensive review to date of environmental factors that may increase the 

risk of breast cancer found that 216 chemicals are associated with 

100 

the disease, including 73 that have been present in consumer products or food. 

I would like to ask Mr. Muffett a series of questions. And so in 

light of the alarming health risks posed by some toxic chemicals, 

I can assume that you prefer the EU hazard-based approach to the 

U.S. risk-based approach? 

Mr. MUFFETT. That is correct. 

Mrs. CHRISTENSEN. And do you find that TSCA limits the ability 

to control some of those risks? Is TSCA not strong enough? 

Mr. MUFFETT. I think it is clear there is a broad, there is a broad 

consensus or at least the overwhelming weight of perspectives on 

TSCA is that it is not strong enough to respond to those risks. It 

is important to recognize that TSCA was adopted in 1976, just 4 

years after the very first book on toxicology, the very first textbook 

on toxicology was published. And TSCA was based on that very 

early, early understanding of toxicological risks and toxicological 

science. Our understanding has changed dramatically, profoundly 

over the ensuing 35 years, and TSCA hasn’t changed with it. And 

this is one of the fundamental differences between TSCA and 

REACH, is that REACH is targeted to responding to the world as 

we increasingly understand it, rather than the world as we understood it in 1976. 

Mrs. CHRISTENSEN. And, you know, I have heard Congressman 

Dooley’s position and—which is on behalf of the council, really not 

in favor of trying to harmonize any more towards the REACH 

areas. But there are some chemical manufacturers and downstream users of chemicals that have called for the expansion of 

REACH-like systems around the world to help level the global 

playing field. Can you share your point of view of why some of the 

companies or the council might oppose the REACH-like initiatives 

in the U.S., especially since some of those companies are arguing 

for harmonization? 

Mr. DOOLEY. Absolutely. Because we think there is a better and 

more effective way to assess the safety of chemicals in commerce. 

I agree with Mr. Muffett that we need to modernize and reform 

TSCA, and that is exactly what has led to a bipartisan introduction 

of a TSCA reform bill, the Chemical Safety Improvement Act in the 

Senate. It is the first time continues TSCA was introduced in 1976 

that there has been broad bipartisan support for the legislation to 

reform TSCA, which takes a risk-based approach, which gives EPA 

more authority in terms of requiring information and data from the 

industry. It is legislation that has the support of unions and the 

machinists, the ironworkers, sheet metal workers, as well as the 

transportation union, as a support of Environmental Defense Fund, 

a number of other NGOs, and has the broad support of the industry, large members, small members, throughout the value chain. 

And it is a risk-based approach that is viewed as being equally effective in the assessment of safety and chemicals as REACH but 

is done in a much more efficient and effective manner. 

Mrs. CHRISTENSEN. Mr. Muffett, I was really directing the question to you on that issue. With regard to the new legislation that 

is being proposed, do you find that that would satisfy your idea of 

where we ought to go with the regulation of chemicals? 

I can see I’m not going to get my next question in. 

101 

Mr. MUFFETT. Thank you for the question. 

The Chemical Safety Improvement Act, in our view, is not adequate without substantial amendments. And I think it is important 

to recognize that the EU in its position papers on chemical safety 

in the context of TTIP has acknowledged the same thing. So the 

bipartisan bill that was referred to is not sufficient, even from the 

EU’s perspective, to bring the U.S. to the same level of protection 

that the EU is achieving. 

Mrs. CHRISTENSEN. I think my time is up. 

Thank you, Mr. Chairman. 

Mr. TERRY. Thank you. 

Chair now recognizes Mr. Long for 5 minutes. 

Mr. LONG. Thank you, Mr. Chairman. 

And thank you all for your testimony. 

Here today—and, Mr. Castellani, I will start with you, if you 

don’t mind. As you noted in your testimony, the U.S. and the EU 

already provide the strongest global support for pharmaceutical research and development. Pharmaceutical tariffs between the U.S. 

and the EU are zero under the WTO pharmaceutical agreement. 

And you obviously support a high standard, ambitious agreement. 

But what exactly do your members’ companies hope to gain from 

such an agreement? 

Mr. CASTELLANI. As I mentioned in my testimony, from a regulatory standpoint, we are starting, as you said, from a very, very 

hard standard. It is absolutely essential to our industry. And we 

are not asking that those standards be reduced. But, rather, there 

is in our process of discovery a rather expensive part of the process; 

cost us about a billion and a half dollars to develop one medicine, 

takes about 10 years. Half of that cost, for example, is in clinical 

trials. It is very important that clinical trials adhere to the highest 

standards to both protect the patients and ensure a valuable outcome. 

We have clinical trial standards and inspection process in the 

United States to make sure that occurs and they have them in Europe. We believe those could be harmonized so that those inspectors could be freed up to cover other areas of the world where you 

perhaps don’t have as high of standards. Same is true in our manufacturing practices. Both very high. And it seems to us that there 

is a better use of time and a better use of resources than to have 

an AMA inspector come into one of our facilities followed by a FDA 

inspector, both having the same standards. So it is an opportunity 

to make our processes more efficient and an opportunity for the 

government agencies to be able to focus where there is higher risk. 

Mr. LONG. Did I understand earlier in your testimony that 80 

percent of R&D, research and development, is done between the 

U.S. and EU? 

Mr. CASTELLANI. Yes, that is correct. 

Mr. LONG. And then you had a figure in there later in your questioning; I think it was 65 percent. 

Mr. CASTELLANI. Sixty-five percent—— 

Mr. LONG. U.S. 65 of the overall—— 

Mr. CASTELLANI. U.S. is 65 percent; Europe is about 15 percent. 

Mr. LONG. OK. That was my question. 

102 

I have another question for you. How do the European Medicine 

Agency’s current and proposed data disclosure policies present potential problems regarding the protection of a patient privacy and 

shielding confidential commercial information? 

Mr. CASTELLANI. Thank you. The AMA has proposed some very 

extensive transparency requirements on our conduct of clinical 

trials that cause concern in one of the three areas, potentially two 

of the three areas that are essential for the trials to continue and 

the investment to continue. 

Here is no disagreement that we must protect patient-specific 

data. It absolutely has to be so that people who participate in clinical trials do not run the risk of having their participation and 

their medical records being released. 

Secondly, we have to make sure that the clinical trial data as it 

is released is consistent with the regulatory process so that we are 

not creating two different standards, one at the regulatory agency 

and one within academic discussion. 

Third, where we have the biggest concern with the EMA’s proposal is EMA is proposing to release what is called commercially 

confidential information, that is, the intellectual property into the 

whole environment. And, therefore, the companies who have invested the billions of dollars to develop it will lose that exclusivity 

because it will just go into the world and anybody can copy it. 

So our concern is that we protect patients; we enhance the transparency of the clinical trial process; we protect the regulatory process; but we also protect the ability the continue to invest. 

Mr. LONG. OK. Thank you. 

And the next question goes to a gentleman that I would like to 

thank, Governor Blunt, number one, for your service to our country 

in the Navy, and your service in our area, my neck of the woods, 

as a State rep and a Secretary of State and then Governor. So 

thank you for all of the above. 

And a question for you. If mutual recognition of a regulation is 

achieved, is it your expectation that an automaker could then sell 

a vehicle built in either recognized standard or sell—to either recognized standard—would they be able to sell that in either market 

then with no further? 

Mr. BLUNT. Yes. That is our aspirational goal. 

Mr. LONG. I feel like with Chairman Dingell with a yes or no answer. You said yes. 

Mr. BLUNT. We believe that that would increase trade and lower 

cost and create jobs and obviously improve the international competitiveness of the industry in the United States and Europe and 

also afford lots more choices for consumers in both markets. They 

would see a more rapid option of the newest and latest technology. 

Mr. LONG. Thank you. 

And, for the record, I would note that in your 5-minute opening, 

you had 5 seconds remaining, and I have 1, so I got closer than you 

did. 

Mr. TERRY. At this time, recognize the gentleman from Maryland 

for 5 minutes. 

Mr. SARBANES. Thank you, Mr. Chairman. 

103 

Ms. Halloran, do you think there is any chance that we can 

achieve mutual recognition or harmonization between your side of 

the table and this side of the table any time soon? 

You don’t have to answer. 

I wanted to ask you about the—this whole transparency issue in 

terms of the negotiations. How does it compare to other negotiations? Is this one particularly opaque, would you say, in comparison? Or is it about standard? And so forth. 

Ms. HALLORAN. Negotiations like this with respect to always so 

secret. The Doha round, the drafts were periodically published. The 

Free Trade of the Americas agreement, draft texts were periodically published. Bob Zoellick, the former U.S. trade representative, 

just recently said in a speech that he doesn’t know quite why 

things have gotten so closed down. And so it’s—especially in a negotiation like this, which is on regulation, which is of such broad 

interest and importance to so many sectors, I think there has got 

to be a higher level of openness. 

Mr. SARBANES. Do you have any theories, either you or Mr. 

Muffett, about what is going on? 

Mr. HALLORAN. Well, I think if you are a negotiator at USTR, it 

is obviously a much easier job if you are just talking to your European counterparts and you don’t have to show anything to anybody 

until 2 years from now and you can hand it out on a take-it-orleave-it basis. And I think they have actually said that they really 

don’t want to be burdened by the public feedback. And you can sort 

of understand their position. But it is something that in a democracy, I mean, you as Congressmen are—deal with the burden of 

public feedback all the time, and it is sort of how we should work, 

I think, in a democracy. 

Mr. SARBANES. What is the perspective on this on the European 

side, this issue of the transparency of it? 

Mr. HALLORAN. They are also in favor of the—behind-closeddoors approach. Ironically, because they have to share everything 

with all of their member states, their control over their positions 

and so forth is not very tight. So we have been finding out the most 

about what is going on from European League documents which 

seem to be leaked very regularly, and they also don’t have the 

stringent penalties we do under the Espionage Act for disclosures. 

But, on the other hand, Europe has much less of a history. They 

don’t have an Administrative Procedures Act, they have much less 

of a history of public discussion and input than we do. So they are 

amenable to the idea of doing it behind closed door, but I think 

they could also be amenable to more disclosure. 

Mr. SARBANES. Arguably, we have got a higher standard to meet 

based on our history in terms of this transparency, it sounds like. 

I wanted to ask you, all of the answers to Mr. Dingell’s questions 

were predictable, except there was one question where I was surprised that the industry folks, at the answer there, and that was 

this notion that if you had harmonization for example or mutual 

recognition, it would not affect the ability to establish new standards in response to things that might happen, which to me seems— 

that is very hard for me to understand why you would not acknowledge that that would tie your hands certainly a little bit when you 

104 

want to find new standards. And I wonder, either Mr. Muffett or 

Ms. Halloran, if you could speak to that issue. 

Mr. MUFFETT. I think the clearest example of how a TTIP agreement and these expectations of harmonization would affect the 

ability to develop new standards lies with the ability of the States 

to innovate and develop new standards. One of the things that the 

EU has identified as a major objective for it coming out of TTIP 

is harmonization to Federal levels, and that includes sub-national 

standards coming up to a relatively similar level so you don’t have 

wide divergences between what is going on at the Federal level in 

the United States and what is going on at the State level. 

Unfortunately, in the U.S., it is at the State level where all the 

innovations in chemicals regulation and chemical policy have been 

going on. If States are required to undertake additional consultations and defend their decision-making processes not only to U.S. 

industry and the U.S. public but to the European industry and European public through these processes, the additional burdens on 

regulators, particularly local and State regulators, will be profound. 

And that itself will I think impede the development of new protections. 

Mr. SARBANES. So if you are a good federalist, that might cause 

you some concern. 

I am going to yield back. 

Mr. TERRY. Thank you, Mr. Sarbanes. 

At this time, recognize gentleman from Florida for 5 minutes. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. 

I appreciate it and thank the panel for their testimony. Most of 

my questions were already asked, but I do have a question for Governor Blunt. 

The United States and Europe differ quite a bit with regards to 

safety and vehicle emissions requirements. Has your association or 

members been in discussions with NTSA or the EPA about these 

issues with regard to TTIP? 

Mr. BLUNT. Thus far, most of our discussions have been through 

the U.S. Trade Representative’s Office, but we have presented our 

proposal to representatives of all of those—of agencies. 

Mr. BILIRAKIS. Have they been receptive to your industry? 

Mr. BLUNT. I think they understand if we are going to maximize 

the benefits of TTIP, some convergence is necessary. We understand that we have set a high goal, both industry and the United 

States and Europe for the negotiations. But we are certainly willing to work with them as we evaluate data and methodologies that 

would allow us to come to what we think is the natural conclusion 

that both sets of regulatory standards achieve the same environmental and safety outcomes. 

Mr. BILIRAKIS. Very good. 

Thank you, Mr. Chairman. I yield back. 

Mr. TERRY. All right. Well, that concludes all of the questions. 

I have a little bit of business to do before we adjourn. 

And I want to put nine statements into the record. Number one, 

American Apparel and Footwear Association; the Alliance of Automobile Manufacturers statement; Global Automakers statement; 

Handmade Toy Alliance statement; Marketing Research Association statement; Society of Chemical Manufacturers and Affiliates 

105 

statement; Tech America statement; Toy Industry Association 

statement; and the Biotechnology Industry Association statement. 

There all being nine. And these have all been shared with the minority. 

[The information appears at the conclusion of the hearing.] 

Mr. TERRY. Now without any objections, they will be in the 

record. 

Now yield for the same to Ms. Schakowsky. 

Ms. SCHAKOWSKY. Thank you. 

Let me just say that while I don’t agree with a number of those 

statements that are going in for the record, we did approve them 

and agree to their submission. 

In addition, we would like to add the statement of the Coalition 

for Sensible Safeguards; the Transatlantic Consumer Dialogue; and 

the Maine State Representative Sharon Anglin Treat in a relevant 

testimony that she gave on a trade agreement. 

Mr. TERRY. I am sure I have the same thoughts on those, that 

we probably don’t necessarily agree. But all statements should be 

in the record. So, therefore, those are also in. 

Hearing no objections. 

[The information appears at the conclusion of the hearing.] 

Mr. TERRY. I want to thank all of you. 

If there is one thing I think we can take away from this hearing 

today is that TTIP is not going to be easy. All of your statements 

have been good and insightful. And I thank you for being here. 

So, at this time, we are adjourned. 

[Whereupon, at 11:37 a.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Earlier this month, the United States and the European Union held the first 

round of negotiations on what we all hope is the first step toward achieving an historic trade agreement: the Transatlantic Trade and Investment Partnership. This 

has the potential to be the most comprehensive bilateral agreement ever developed, 

addressing non-tariff impediments in ways never previously attempted. 

We have a long and valuable relationship with our European allies. These ties 

have created great cooperation on many fronts and led to a flourishing trade relationship. Together we account for almost half of world GDP and world trade. And 

as investment partners, there is no greater bilateral relationship than between the 

U.S. and the EU: we are the largest single recipient of EU foreign direct investment 

and we are the largest source of foreign investment in the EU. 

The benefits of this trade partnership cannot be overstated: additional jobs, income, and economic growth on an annual basis going forward—something both sides 

desperately need. U.S. job creators like the Big Three automakers in Michigan have 

the potential to make significant gains. And Congress doesn’t have to appropriate 

a penny to reap the potential rewards. 

We are all hopeful of achieving the most ambitious trade agreement possible. The 

sheer size of our bilateral trade and investment with the EU means that any significant progress to cut regulatory costs and bureaucracy, reduce market access barriers, and eliminate tariffs will translate into positive economic growth for both 

sides of the agreement. 

To achieve our shared goal, we need to work together. Both sides agree we have 

different, but mature regulatory regimes, which, in most cases, attain equivalent 

outcomes. Unfortunately, the outright elimination of regulations is a lot more difficult than eliminating tariffs; however, we can and should reduce the costs of these 

dual regulations. 

In our federalist system, different (even incompatible) state regulations exist yet 

we do not allow them to impede interstate commerce. For example, states can and 

do regulate auto safety inspections for vehicles registered in their state in different 

106 

ways and under different timelines, but it would be counterproductive if states were 

able to block residents of other states from traveling across sate borders unless they 

complied with the exact standards of the visiting state. We wouldn’t stand for it. 

So if we allow recognition of different state standards, there is no reason we can’t 

find a way to similarly work with the EU to harmonize or recognize each other’s 

standards to avoid duplicative and costly regulations designed to achieve the same 

goals. 

We have a distinguished panel of witnesses today who can elaborate on the real 

costs of trade barriers. 

They also know how reducing those costs will benefit more than just the individual companies and industries. It will provide all of our citizens with a more prosperous future. It is our job to ensure they are not denied that opportunity. 

107 


86399.067
108 


86399.068
109 


86399.069
110 


86399.070
111 


86399.071
112 


86399.072
113 


86399.073
114 


86399.074
115 


86399.075
116 


86399.076
117 


86399.077
118 


86399.078
119 


86399.079
120 


86399.080
121 


86399.081
122 


86399.082
123 


86399.083
124 


86399.084
125 


86399.085
126 


86399.086
127 


86399.087
128 


86399.088
129 


86399.089
130 


86399.090
131 


86399.091
132 


86399.092
133 


86399.093
134 


86399.094
135 


86399.095
136 


86399.096
137 


86399.097
138 


86399.098
139 


86399.099
140 


86399.100
141 


86399.101
142 


86399.102
143 


86399.103
144 


86399.104
145 


86399.105
146 


86399.106
147 


86399.107
148 


86399.108
149 


86399.109
150 


86399.110
151 


86399.111
152 


86399.112
153 


86399.113
154 


86399.114
155 


86399.115
156 


86399.116
157 


86399.117
158 


86399.118
159 


86399.119
160 


86399.120
161 


86399.121
162 


86399.122
163 


86399.123
164 


86399.124
165 


86399.125
166 


86399.126
167 


86399.127
168 


86399.128
169 


86399.129
170 


86399.130
171 


86399.131
172 


86399.132
173 


86399.133
174 


86399.134
175 


86399.135
176 


86399.136
177 


86399.137
178 


86399.138
179 


86399.139
180 


86399.140
181 


86399.141
182 


86399.142
183 


86399.143
184 


86399.144
185 


86399.145
186 


86399.146
187 


86399.147
188 


86399.148
189 


86399.149
190 


86399.150
191 


86399.151
192 


86399.152
193 


86399.153
194 


86399.154
195 


86399.155
196 


86399.156
197 


86399.157
198 


86399.158
199 


86399.159
200 


86399.160
201 


86399.161
202 


86399.162
203 


86399.163
204 


86399.164
205 


86399.165
206 


86399.166
207 


86399.167
208 


86399.168
209 


86399.169
210 


86399.170
211 


86399.171
212 


86399.172
213 


86399.173
214 


86399.174
215 

Æ 


86399.175