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21–111 2016

ADVANCING THE U.S. TRADE AGENDA: 

THE WORLD TRADE ORGANIZATION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON TRADE 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JULY 16, 2014

Serial 113–TR06 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

DAVE CAMP, Michigan, Chairman 

SAM JOHNSON, Texas 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

JIM GERLACH, Pennsylvania 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

TODD YOUNG, Indiana 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

JIM RENACCI, Ohio 

SANDER M. LEVIN, Michigan 

CHARLES B. RANGEL, New York 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

ALLYSON SCHWARTZ, Pennsylvania 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

JENNIFER M. SAFAVIAN, Staff Director and General Counsel 

JANICE MAYS, Minority Chief Counsel 

SUBCOMMITTEE ON TRADE 

DEVIN NUNES, California, Chairman 

KEVIN BRADY, Texas 

DAVID G. REICHERT, Washington 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

CHARLES B. RANGEL, New York 

RICHARD E. NEAL, Massachusetts 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 


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C O N T E N T S 

Page 

Advisory of July 16, 2014 announcing the hearing ............................................... 2 

WITNESSES 

Michael Punke, Ambassador, Deputy United States Trade Representative 

and U.S. Ambassador and Permanent Representative to the World Trade 

Organization, Office of the United States Trade Representative .................... 6 

SUBMISSIONS FOR THE RECORD 

Alexan International, letter .................................................................................... 46 

Ambassador Glassman, letter ................................................................................. 48 

American Farm Bureau Federation, statement .................................................... 49 

Institute for Liberty, letter ..................................................................................... 53 

Stewart and Stewart, statement ............................................................................ 55 

QUESTIONS FOR THE RECORD 

The Honorable Charles Boustany .......................................................................... 32 

The Honorable Peter Roskam ................................................................................. 36 

The Honorable Tom Reed ........................................................................................ 36 

The Honorable Lynn Jenkins ................................................................................. 37 

The Honorable David Reichert ............................................................................... 38 

The Honorable Sander Levin ..................................................................................

and the Honorable Charles Rangel ..................................................................... 39 

The Honorable Sander Levin .................................................................................. 42 

The Honorable Richard Neal .................................................................................. 43 

The Honorable Richard Neal ..................................................................................

and the Honorable Ron Kind .............................................................................. 43 

The Honorable John Larson ................................................................................... 44 


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ADVANCING THE U.S. TRADE AGENDA: THE 

WORLD TRADE ORGANIZATION 

WEDNESDAY, JULY 16, 2014 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON TRADE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:00 a.m., in 

Room 1100, Longworth House Office Building, the Honorable Devin 

Nunes, [chairman of the subcommittee] presiding. 

[The advisory announcing the hearing follows:] 


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Mr. NUNES. Good morning and welcome to today’s hearing on 

advancing our trade agenda and the World Trade Organization. Before hearing from Ambassador Punke, I would like to make three 

points. 

First, after years of inaction, we now have an active agenda at 

the WTO which can create new opportunities for U.S. exports and 

support American jobs. Our first order of business is ensuring that 

last year’s trade facilitation agreement is fully adopted and implemented. We have an important deadline later this month, and I am 

closely watching to see if the WTO can still function as an institution for negotiating—and implementing—new trade liberalization 

agreements. Implementing the trade facilitation agreement helps 

developing countries become more attractive for trade and investment. 

We are also trying to conclude negotiations to expand the Information Technology Agreement, but I am frustrated by China’s intransigence. Any final agreement must include key U.S. products. 

Failure to reach an ambitious agreement would reflect a serious 

failure in China’s leadership as it hosts APEC this year. 

The Environmental Goods Agreement negotiations formally 

launched last week could cover nearly ninety percent of trade in 

environmental goods and provide an enormous boost to U.S. high 

tech exports. And of course, we must continue our crucial enforcement and compliance work. 

Second, beyond our current agenda, we must strengthen and improve the WTO, particularly by eliminating behind the border barriers. The WTO has been successful in reducing tariff barriers. For 

the organization to be relevant in the 21st Century, however, it 

must address non-tariff barriers more effectively. These include, 

among others, government-induced border delays, unjustified regulatory rules, domestic content requirements, and sanitary and 

phytosanitary measures that impede U.S. agricultural exports. 

Continued work is also needed to ensure that countries meet 

their WTO obligations and to improve the WTO’s dispute settlement system. At the same time, we cannot take up where we left 

off on the Doha round. Emerging market nations must take on 

meaningful obligations befitting their level of development. I look 

forward to hearing from Ambassador Punke about the Administration’s efforts to strengthen the WTO in each of these areas. 

Third, we must pass Trade Promotion Authority without delay to 

ensure that our negotiators have the strongest negotiating hand 

possible. The Bipartisan Congressional Trade Priorities Act I cosponsored earlier this year with Chairman Camp includes robust 

provisions on the WTO as well as multilateral, plurilateral and bilateral negotiations, providing clear guidance to the Administration 

about the type of agreements Congress will accept. I call on the Administration to focus on passing Trade Promotion Authority as soon 

as possible—and to immediately work to lay the groundwork with 

their Democratic colleagues. 

We are going to wait on Mr. Rangel. He is on his way, to give 

his opening statement, and I think we will go right to you, Ambassador Punke. 


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Before recognizing you, you know that you are limited to five 

minutes. Your written statement will be made part of the record, 

and you are now recognized. 

STATEMENT OF MICHAEL PUNKE, AMBASSADOR, DEPUTY 

UNITED STATES TRADE REPRESENTATIVE AND U.S. AMBASSADOR AND PERMANENT REPRESENTATIVE TO THE WORLD 

TRADE ORGANIZATION, OFFICE OF THE UNITED STATES 

TRADE REPRESENTATIVE 

Ambassador PUNKE. Thank you very much, Mr. Chairman. 

Chairman Nunes, Ranking Member Rangel—I am anticipating his 

arrival—and members of the Trade Subcommittee, thank you for 

the opportunity to testify on the Obama Administration’s priorities 

and recent developments at the World Trade Organization. 

The core of the Obama Administration’s economic strategy is to 

create jobs, to promote growth, and to strengthen the middle class. 

The WTO is a critical part of that strategy. It sets the rules that 

govern the global trading system, and we believe it has the potential to do much more. 

That is why the United States led the charge at the WTO’s Ninth 

Ministerial Conference last December in Bali to complete the Trade 

Facilitation Agreement, or TFA; the first successful conclusion of a 

multilateral trade negotiation in the two decade history of the 

WTO. It is why we are working on other major initiatives in Geneva, including a group of key plurilateral agreements which have 

the potential to reinvigorate the multilateral trading system and to 

help the WTO meet its potential. 

In Bali, WTO members concluded a package of significant results 

that include the TFA and important outcomes on agriculture and 

development. We are now actively engaged in implementing all of 

the Bali outcomes in keeping with the very specific timelines and 

procedures agreed to unanimously by all WTO members. 

The TFA is a huge accomplishment for the WTO, reestablishing 

that its members can reach significant multilateral outcomes. The 

rest of the Doha round remains a challenge. We are working to develop a post Bali work program by the end of this year. This will 

help to determine whether conclusion of the Doha Round is possible. 

The worst case scenario for the WTO after the Bali success would 

be renewed drift. The time has come for the WTO to conclude 

Doha, move forward, and take up new areas of trade. A final Doha 

agreement must address key U.S. priorities, including agriculture, 

and industrial market access and services. There will be no Doha 

result without balance across all of these areas and across all of 

the major trading countries. For Doha to succeed, as we have emphasized consistently, the emerging developing countries must 

carry their weight as well. 

In parallel with the Bali results and post Bali work, we have created other opportunities by leading regional and plurilateral negotiations with like-minded trade partners. The Trade in Services 

Agreement, or TiSA, represents a unique opportunity among 23 

participants representing 50 WTO members to build a new agreement that incorporates the best of what the United States has been 

achieving in this sector in our free trade agreements. 


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We have high expectations for TiSA to provide increased market 

access and potential rules to support expansion of services trade 

into the future. 

Just last week we launched negotiations on the new Environmental Goods Agreement with 13 other WTO members representing 86 percent of global trade in environmental goods. Elimination of tariffs on environmental technologies will make these 

goods more available and boost U.S. jobs. 

ITA expansion holds out similar promise for boosting simultaneously the WTO’s credibility and exports of high quality American 

technology. If we are successful, and there is more work to do with 

our Chinese colleagues as you noted, Mr. Chairman, the ITA will 

be the first tariff cutting agreement at the WTO in 17 years. 

From day one, the Obama Administration has made enforcement 

a key priority to ensure that American stakeholders get the full 

benefits of the market opportunities we have negotiated. When direct engagement with the trading partner is not successful, we do 

not hesitate to use WTO dispute settlement. The United States has 

brought 18 WTO complaints since 2009. We have brought disputes 

in areas such as trade distorting subsidies, export restraints, import licensing barriers, local content requirements, retaliatory use 

of trade remedies, and non-science based SPS measures. Those disputes involve major trading partners, such as China, India, Indonesia and Argentina, and we have had significant successes. 

We will continue to prosecute and defend these disputes, launch 

new disputes as appropriate, and insist that WTO members live up 

to their obligations. 

To conclude, certainly we see challenges ahead, but also great potential for using WTO in other negotiations to promote opportunities for American workers, farmers, ranchers, businesses of all 

sizes, and most importantly, American families. 

In this regard, let me say something about trade promotion authority. To actively and effectively pursue these initiatives and 

bring benefits home to Americans, we will need TPA. TPA is the 

mechanism by which Congress has worked with Presidents since 

1974 to give the Executive its marching orders about what to negotiate, how to work with Congress before and during negotiations, 

and how Congress will take up and approve or disapprove the final 

agreement. 

We agree with those that say that TPA needs to be updated, and 

we look forward to working with this Committee and Congress as 

a whole to secure a TPA that has as broad bipartisan support as 

possible. 

Thank you, and I look forward to your questions. 

[The prepared statement of Mr. Punke follows:] 


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Mr. NUNES. Thank you, Ambassador. 

I will now recognize the Ranking Member, Mr. Rangel, for the 

purpose of offering an opening statement. 

Mr. RANGEL. I will be brief and I thank you, Mr. Chairman, 

and I congratulate you for assuming this great responsibility, Ambassador. I congratulate the work that the World Trade Organization is doing and you guiding America for fairness and equity. 

I know that your job is to enforce the cases or to study the cases 

that are brought to you, but there are certain challenges that we 

have with cyber, with Internet theft, with intellectual property, and 

perhaps the WTO can issue guidelines so that countries will know 

that they should not have to wait until the offended country brings 

an action. 

Another problem that we face with the trade agreements as well 

as the President’s authority is that it is hard to give the President 

authority to do or not to do when you have no clue as to what is 

going to be in the agreement. You know, it would be great if you 

had a TPA telling the President to do the right thing, but recognizing that there is a need for the negotiations not to be public and 

at the same time not know what authority to restrict or expand of 

the President legislatively is a very, very difficult job. 

But we value and welcome advice that you can give us as legislators so that we can be supportive of the Executive Branch, recognizing that trade does not involve 535 of us in order to reach a conclusion. 

But thanks for the work that you do, and I am very concerned 

about China’s violation of the principles of fair trade, which she 

agreed to do and seemingly it is up to the United States to bring 

the allegations to the WTO instead of having some way of making 

certain that countries fulfill their obligations to the organization 

without a country having to come forward and make the accusation. 

Thank you, Mr. Chairman. 

Mr. NUNES. Thank you, Mr. Rangel. 

I am now going to yield to the former chairman of the Trade 

Committee and our current chairman of the Health Committee on 

Ways and Means, Mr. Brady. 

Mr. BRADY. Chairman Nunes, first, thanks for your leadership 

and all the new energy you bring to the trade agenda in Congress. 

Ambassador Punke, you are doing a terrific job, not merely in 

representing U.S. negotiating agreements so critical to our economy, but the time you take in consulting with both parties in the 

House and Senate on the nuances, the politics, the dynamics, the 

details of these agreements, and I am not complimenting you merely because your wife and daughter are in the audience today, but 

they do need to hear that you have very broad support in the 

House, and we appreciate your work. 

Let me ask a broader question. You know, the Doha Round has 

lapsed now for nearly six years. There is real progress on 21st Century issues such as trade facilitation; moving these goods quicker, 

faster, cheaper across the borders for the benefit of consumers 

around the world. We are seeing progress in information technology, in services agreement, and environmental goods area. 


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There are some who, because of the Bali Round, seem to believe 

the focus now should really go back to Doha, and this is not a good 

analogy, but it seems to me that after a dozen years, the Doha garden for various reasons simply is not producing. 

But in services and facilitation and information technology and 

others, I think we are seeing real growth, real results in those 

areas. 

I would like to see you and we as a country continue to focus on 

the garden that is growing, the results that are producing for the 

economy we have today. I would like to hear your thoughts on 

whether you agree on that approach or whether we ought to shift 

focus back to the Doha round. 

Ambassador PUNKE. Well, thanks very much, Congressman 

Brady, and I very much appreciated the opportunity I have had to 

consult with you and your colleagues in the time that I am back 

in Washington. It has very much informed our positions across a 

whole range of issues. 

But to answer your question directly about sort of the interplay 

between some of these plurilateral discussions in Geneva, like the 

ITA, TiSA, and environmental goods and the broader Doha agenda, 

I very much agree that the place where we have vitality and energy in the room and a sense of like-mindedness among negotiating 

partners has been in the plurilateral discussions, and quite honestly, it is very refreshing after a long day in deadlocked discussions to step into some of these plurilateral negotiations and recognize that even if you are negotiating with people who might have 

a slightly different perspective, all of you are working towards the 

ultimate goal of a result in liberalizing trade. 

And so those plurilateral discussions are on their own track, and 

they will continue, and we will push them and lead in those discussions as we move forward. 

I do think that there is the potential for us to make progress on 

Doha despite the fact that we are now 14 years into that negotiation. But I think one of the points that you made is really critical 

there, and I think Chairman Nunes made a similar point. We cannot simply keep going back to things that have not worked in the 

past. I think about the Einstein maxim that, you know, the definition of insanity is to do the same thing over and over and expect 

a different result. There has been too much of that in Geneva. 

So Bali has given us a puff of wind in our sails, the first one in 

a long time in terms of a broad, multilateral discussion. We have 

an opportunity this year if we are willing, all of the members of 

the WTO, to wrestle with difficult questions like the appropriate 

role of emerging economies to make progress on Doha, but we can 

only make progress if we address those issues very directly. 

Mr. BRADY. And I am not trying to downplay Doha. In fact, having broader agreements obviously, I think, would be better for the 

global economy. It just seems to me the work that is being done 

in the other areas actually builds confidence, creates a better environment and provides some time where we can go back with more 

agreement on trying to grow that garden that is Doha. 

But right now I guess my point is I think the progress we are 

seeing is important in those agreements. I think they help build 

the type of dynamics that allow us to tackle Doha in the future. 


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I do not want to shift focus at this point where we are seeing that 

growth. 

Ambassador PUNKE. Well, we agree with you that premise, and 

the worst case scenario from our standpoint is for Doha to continue 

to drift. We think there needs to be resolution with Doha, and we 

are pushing for that pointed discussion now. 

And I agree with you on another point, which I think that the 

plurilateral discussions have actually had a very virtuous impact 

on Doha because they have demonstrated very clearly to the small 

number of countries that do not want anything to happen in Geneva that there are options there for those that are seeking to use 

the institution in a productive way. 

Mr. BRADY. Right. Thanks, Ambassador. 

Thank you, Chairman. 

Mr. NUNES. Thank you, Chairman Brady. 

I now recognize the gentleman from Massachusetts, Mr. Neal for 

five minutes. 

Mr. NEAL. Thank you, Mr. Chairman. 

Just a quick thought on Mr. Brady’s comments. The committee 

has been pretty bipartisan on trade, but just to pick up on something that Kevin said, I do think that the collapse of Doha aided 

the bilaterals and moved them up on the agenda. So I think there 

was that sort of benefit. If we cannot do the big, then let us proceed 

with the smaller bilaterals where we actually have had some success. 

But let me talk a little bit about the suggestion I made to President Obama at the White House about a month ago. I suggested 

that we really focus the European trade proposal, T–TIP, and suggested that I thought that was easier for all of us to do, and I 

thought that the Pacific proposal is a longer climb, to be very candid, and I thought that an effort to build some confidence, Mr. Ambassador, that we might be able to focus on what is now almost 30 

percent of the world’s trade and investment. 

And it strikes me that the relationship that we have with Europe, given the difficulty it would be that we would make the argument that we were somehow trading down with countries that have 

a very similar quality of life and enjoy similar economic success, 

that we might embrace with more vigor that whole notion. 

I had a chance the other night at the Italian Embassy to once 

again make the case for moving T–TIP along, but there are some 

non-tariff barriers that remain important to U.S. exports to European Union, and the EU regulatory and legislative processes also 

do not typically provide essential and meaningful opportunities for 

WTO members and their stakeholders to comment on regulatory 

proposals. 

Could you speak to what could be done in T–TIP or at WTO to 

otherwise help coax our European counterparts to provide more 

meaningful opportunities to comment on regulatory proposals so 

that Americans, American small and medium size businesses are 

not at an economic disadvantage? 

Ambassador PUNKE. Thank you very much, Congressman Neal. 

That is one of the central goals for us in the T–TIP negotiations. 

But I want to step back for just one minute. I do think, you 

know, USTR is a small agency as the people on this Committee 


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know very well, but I do think we very much have the capacity to 

pursue multiple discussions at the same time. 

I work more on WTO and T–TIP issues. My colleagues back in 

the Winder Building work on TPP, but I do see us as having the 

capacity to pursue all of these things simultaneously. 

But with regard to T–TIP specifically and especially with regard 

to the regulatory issue that you have mentioned, one of our biggest 

goals has been to pursue the so-called horizontal regulatory issues, 

which is to say exactly the types of issues that you are raising. 

In the U.S. system, through our notice and comment process, all 

interested parties, foreign and domestic, have the opportunity to 

see draft regulations and to comment on them and to have those 

comments taken into account by regulators in making decisions 

about the final shape that regulations should take. 

We do not have those same opportunities in the European system, and that is something that we think is enormously important 

for our stakeholders to have. Transparency in terms of making regulations, access in terms of an opportunity to provide input at critical junctures, and then accountability on the part of European regulators to respond to those comments that they hear. 

Now, we are not seeking a guaranteed outcome, but we believe 

that that process in and of itself results in much better regulatory 

outcomes, and in a transatlantic context, it creates the opportunity 

for there being fewer impediments to trade as a result of unnecessary regulatory differences. 

So that is an issue that I appreciate your support on because it 

is something where we are working very hard. 

Mr. NEAL. Thank you, Mr. Ambassador. 

Thank you, Mr. Chairman. 

Mr. NUNES. Thank you, Mr. Neal. 

Mr. Reichert is recognized for five minutes. 

Mr. REICHERT. Thank you, Mr. Chairman. 

Welcome, Ambassador. So your wife and your daughter are in 

the audience. Is your brother here, too? 

Ambassador PUNKE. You know, he is in town, and he did not 

come today. So I guess I should be very offended. 

Mr. REICHERT. Yes, he is off the Christmas list. 

First of all, I just want to thank you for recognizing in your opening comments the importance of TPA. I think most members here 

recognize TPA is critical to any agreement associated with TPP, 

and we made it very clear on our side of the aisle that if an agreement comes to this Congress without TPA, it is dead on arrival. 

So I look forward to working with you and other members of our 

USTR, Ambassador Froman, et cetera, and the Administration on 

moving Mr. Camp’s initiative forward for Trade Promotion Authority. It is bipartisan. It is bicameral. A lot of work has been done 

on it, and we need some help to move that forward here. 

I would also like to just thank you and your colleagues for the 

work at WTO in challenging Indonesia’s import restrictions on agricultural products. Indonesia, as you know, is a top market for 

Washington’s high quality apples, and it was very critical for them, 

and we appreciate your fighting for our growers in Washington 

State. 


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I have got a couple of questions. I am happy to see that you have 

launched negotiations for a plurilateral agreement on environmental goods. This is a significant opportunity, I think, to increase 

our exports in environmental goods and lower prices for consumers. 

Are there major global traders in environmental goods that are 

not currently a part or a party to the negotiation? 

And what is your plan to bring them into the process? 

Ambassador PUNKE. Well, let me address that very specifically. 

We have faced this question in other plurilateral discussions about 

whether or not to sort of actively seek countries’ participation in 

plurilateral negotiations, and I think the viewpoint that we have 

landed upon is that what makes the plurilaterals work is the fact 

that the countries that are there are like-minded and want to get 

a result. 

And as I mentioned earlier, that does not mean we do not have 

disagreements within the group. It does not mean we do not argue 

with each other and negotiate very hard for national interests, but 

there is a common desire to reach an agreement and to be ambitious. 

And so we have not done work; we have deliberately not done 

work to solicit members to come into the various plurilateral discussions, whether it is TiSA or the Environmental Goods Agreement, because our experience, and this is a metaphor that only 

works in Washington so I am very happy to be able to use it here; 

this does not work in Geneva. It is Tom Sawyer and the picket 

fence. We want people who want to paint the picket fence on their 

own. We do not want people negotiating before they come into the 

negotiation about whether they should be there. 

And we have had good success with that dynamic in the context 

of TiSA. We started the TiSA negotiation, for example, with 15 

members, and we have had eight join that discussion without doing 

any recruiting. You asked if there are countries outside of the Environmental Goods Agreement that we would like to see in. There 

certainly are, and I would expect that we will have more that will 

see it as being in their own interest to be a part of that discussion. 

We are already hearing inquiries in Geneva, and so I think you 

will see that grow over time, but frankly, we already have a good 

set that. I think currently about 86 percent of global environmental 

goods trade. 

Mr. REICHERT. All right. Thank you. 

I am sure you have a timeline for negotiations, but could you 

elaborate on your plan to avoid a free rider problem? 

Ambassador PUNKE. There is a free rider problem that is built 

into plurilaterals that are based on goods trade because of the 

MFN principle in the WTO. In TiSA we have a very unique situation where the existing WTO rules explicitly allow us to have a 

plurilateral negotiation whose benefits are not provided on a MFN 

basis to the rest of the organization. 

Unfortunately, we do not have that same benefit when it comes 

to goods trade. And so whether it is ITA or environmental goods, 

whatever benefits the members decide among themselves, they 

have to share with the rest of the membership, and as you point 

out, that creates a free rider problem. 


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What that means is that we really will not be in a position to 

conclude a deal if key players are not a part of it because there are 

certain players, for example, China, that we would never allow to 

be a free rider on something like the Information Technology 

Agreement or the Environmental Goods Agreement. 

Fortunately, China is a part of both of those discussions, although in the context of ITA, with mixed results to date, but that 

is the challenge of having key players inside of the negotiation so 

that they take on obligations and are not able to free ride. 

Mr. REICHERT. Thank you, Mr. Chairman. 

Mr. NUNES. The time of the gentleman has expired. 

I will now recognize the gentleman from Florida, Mr. Buchanan, 

for five minutes. 

Mr. BUCHANAN. Thank you, Mr. Chairman. 

I also want to thank the Ambassador for your service. 

Let me just start out on a general question. I get asked quite a 

bit about the effectiveness of WTO. I know it is the rulemaking 

body. It is the body, and you are the main interface. What is your 

general feeling about how effective it is in general as it impacts the 

world and then as it relates to the U.S.? 

Ambassador PUNKE. Well, it is something I spend a lot of time 

thinking about, and I have had the privilege of being in this job 

for about four and a half years now, and so I have seen this unfold 

over a little bit of a time frame here now. 

I guess to me there are a couple of lessons that I have drawn out 

of that, and the starting point, I think, is that a very frank acknowledgement that especially when it comes to its negotiating 

arm, the institution needs to do a lot better because the notion that 

we are 14 years into a negotiation is not a good way of advertising 

the WTO as a place for doing serious business. 

But I think in terms of lessons learned that one of the most important ones is the importance of creative approaches, and that is 

something that I think the U.S. has pushed very hard in the WTO 

context, is not falling into this trap of trying the same thing over 

and over again and expecting a different result. 

That is one of the reasons why we have pushed plurilaterals, for 

example, so aggressively over the course of the last four years. I 

think it is critical that we make the WTO relevant for our stakeholders today, and that goes back in some ways to, for example, addressing the issue of emerging economies. It is impossible to have 

a meaningful discussion about an issue like agricultural subsidies, 

for example, if two of the four largest agricultural subsidizers in 

the world, namely, India and China, are not a part of that discussion. 

Mr. BUCHANAN. Let me get a couple more questions here. 

Ambassador PUNKE. Sorry. 

Mr. BUCHANAN. Let me just jump to just in terms of the TF 

agreement. What I have read is there is a trillion dollars in benefit 

to the global economy, 21 million jobs. It could impact not only a 

lot of U.S. companies, but others. 

It seems like the countries that would benefit the most are the 

ones that are in terms of India and Africa, I guess, half of the benefit would ideally go to them. What is the holdup? Why are they 

not supportive, and what are we doing about it? 


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Ambassador PUNKE. Well, that is a very important question. 

You know, we had a very important agreement at Bali with trade 

facilitation, as you mentioned, and the agreement is very explicit 

about the timelines for implementing trade facilitation and for implementing other parts of our work plan in Geneva. 

We have been concerned about statements by a handful of WTO 

members indicating that they intend somehow to link these already 

agreed implementation deadlines to issues that are not a part of 

trade facilitation and that have different deadlines. 

There has been a lot of mixed signals on that front over the 

course of the last several weeks, including with regard specifically 

to India, and so we are hoping that by the time that we have this 

meeting in Geneva next week in the General Counsel that we will 

be able to move forward and all of us do what we committed to do, 

which is implement, adopt the protocol of accession on the timeline 

that we agreed. 

Mr. BUCHANAN. Yes. And let me just close with this one point. 

Many of us were in Tokyo a month or so ago, and as relates, you 

touched on TPA. You know, a lot of at least the comments that I 

got back, everybody was concerned that we should put that in 

place. The Administration should have. The TPA should get 

passed. 

People are concerned as it related to our ongoing relationships. 

They are afraid that they would get something negotiated and it 

would not get done. What is your sense of where we are at and 

what we have got to do to get it done? 

Ambassador PUNKE. Well, Congressman, we are very committed 

to getting TPA. I think Ambassador Froman has practically 

camped up here over the course of the last six weeks in terms of 

the outreach that he has done personally. 

Other members of the cabinet have been involved in this, whether it is Secretary Kerry, Secretary Lew, Secretary of Commerce, 

Secretary of Agriculture. The President has indicated, including in 

the State of the Union Address, his commitment to seeking and 

achieving a trade promotion authority agreement. 

We are looking for an agreement that has the broadest bipartisan support possible. At the same time, as you mentioned, we are 

committed to ambitious outcomes in all of the negotiations that we 

are working on, and I think it is possible and it has been possible 

based on our experience at the table for those two tracks to proceed 

at the same time. 

Mr. BUCHANAN. Thank you. 

Mr. NUNES. The time of the gentleman has expired. 

I now recognize Mr. Smith for five minutes. 

Mr. SMITH. Thank you, Mr. Chairman. 

I thank you, Ambassador, for your presence here today and your 

service. I think obviously you have got an important job, and we 

appreciate your service. 

We know that the WTO rules-based talked about enforcement 

and dispute settlement and the ways to truly level the playing field 

on international trade, and we know that tariff elimination is a 

high priority, but it seems that the non-tariff trade barriers are becoming more and more of an issue, and obviously that creates inVerDate Sep 11 2014 10:17 Oct 18, 2016 Jkt 021111 PO 00000 Frm 00023 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\21111.XXX 21111

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creases in costs and uncertainty, and they are often at the borders 

of countries which can least afford it. 

Last year the subcommittee held a hearing on India, as you 

know. At the time I provided an example of a Nebraska company 

faced with inconsistent tariff rates and unreasonable regulatory requirements in India. Even though the market does exist for the 

product, and this was a common theme throughout the hearing. 

While India is not the only WTO partner unfairly blocking imports through non-tariff barriers, this does reflect on the overarching fact that a number of our global trading partners, even 

those with the large markets and a huge trading presence continue 

to unfairly block U.S. goods and most notably in agriculture. 

So for this reason and many others, we here on the panel were 

encouraged by the WTO Trade Facilitation Agreement announced 

last year in Bali, and while the goal is to have non-tariff barriers 

addressed completely, this agreement is designed to address the 

cost and time associated with clearing customs, and customs facilitation would be a very positive step, especially the perishable goods 

such as agricultural products. 

And now we are hearing reports certain countries, like I said 

India, for example, are backing out of commitments to meet the 

agreement. The one thing I hear again and again in the trade 

arena is the importance of this accountability, and I am just wondering if you could reflect a bit on the time line. 

We know that the interim deadline is quickly approaching, and 

can you discuss the timeline that is involved here? 

Ambassador PUNKE. Well, with regard to trade facilitation specifically, the Bali agreement is crystal clear on the time line. By 

July 31st, which is to say in two weeks, the members of the WTO 

are to have concluded this so-called protocol of accession, which is 

a very short agreement that essentially is the launching document 

for everyone to go seek domestic ratification. 

Also by the 31st of July developing countries are to submit their 

first report about the time lines that they anticipate with regard 

to the implementation of some of the specific obligations in the 

trade facilitation agreement. So that deadline is crystal clear. 

Now, you mentioned as did others that there have been some inconsistent signals from India, and we are extremely concerned 

about that. We are working very hard in the Obama Administration to get off to a good start with the new Indian government. At 

Bali when we concluded the Trade Facilitation Agreement, we 

worked very closely; we negotiated very hard with India. They negotiated very hard with us, but we reached an agreement, and obviously we have an expectation, as you pointed out that our trading 

partners will live up to their commitments. 

It also is critical to the WTO and the credibility of the WTO that 

this one agreement that we have been able to achieve in its 20-year 

history not evaporate six months after it was concluded. 

So for all of those reasons, this is a source of an awful lot of work 

on our part in trying to make sure that everyone sticks to what 

was agreed and implements the agreement starting with July 31st. 

Mr. SMITH. Would you agree that perhaps failure of reaching an 

agreement here actually negatively impacts consumers not only 

here at home but abroad? 


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Ambassador PUNKE. There is no question in my mind that the 

Trade Facilitation Agreement has enormous benefits for every 

member of the WTO, and there is overwhelming academic evidence 

that the biggest benefits of trade facilitation accrues in developing 

economies that are less integrated into the global economy. 

So I believe that the single most important development outcome 

that we achieved in Bali was the Trade Facilitation Agreement, despite the fact that we did not call it a development agreement. 

Mr. SMITH. Right. Okay. Switching gears just a bit before I run 

out of time, we know that Mexico and Hong Kong have lifted their 

remaining age-based restrictions on U.S. beef, and I was just wondering. You know, there are several other countries that have not 

lifted those age-based restrictions even though scientific evidence 

abounds relating to that. 

Is the Administration considering pursuing some WTO action on 

that topic? 

Well, congressman, my home town is in Torrington, Wyoming, 

which is about eight miles from the Nebraska border, and right on 

the border is a feedlot. So this is an issue that I understand perhaps from a similar perspective of you, despite being slightly across 

the border. 

We are dedicated in this Administration and at USTR that international rules on trade be based on science, and we are pursuing 

that principle across numerous issues, including our efforts to promote beef exports, and we will very much continue to do that. 

Mr. SMITH. Okay. Very well. Thank you very much. 

Mr. NUNES. I thank the gentleman. 

The gentlelady from Kansas, Ms. Jenkins, is recognized for five 

minutes. 

Ms. JENKINS. Thank you, Mr. Chairman. Thank you for holding 

this important hearing, and we thank you, Ambassador, for being 

here and for your good work. 

My home State of Kansas is a major producer of beef and pork, 

and as was shown in this Committee’s last hearing, the U.S. livestock industry is very frustrated with difficulties of opening the 

Japanese market, and I can assure you that my constituents share 

that frustration. 

But the truth is the European Union has never come into compliance with the WTO findings in the beef hormones and biotech 

cases, sanitary and phytosanitary cases in which the U.S. has prevailed. Do you have any suggestions on how the U.S. should manage the EU’s failure to respect its obligations under the WTO SPS 

agreement? Do you believe that ultimately a Transatlantic Trade 

Investment Partnership offers a better opportunity to get the EU 

into compliance? 

Ambassador PUNKE. Well, I think what is critical with regard 

to all of these difficult issues, and certainly the issues that you 

cited are among some of the more difficult issues that we have bilaterally, whether it is Japan or the European Union, is that we 

use all of the tools in our toolbox to promote our interests. 

And so you mentioned WTO rules and WTO litigation, and as 

you pointed out, those are tools that we are applying and have applied in the context of Europe. Europe, in fact, is paying compensation having lost a case on beef hormones. 


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Now, that being said, as you point out, we are not yet satisfied 

in terms of our efforts to ensure that our bilateral trade is conducted on the basis of science. I think that T–TIP does provide an 

opportunity, another opportunity, for us to pursue this conversation 

with Europe. We are doing that. 

In fact, as we speak USTR has a team of negotiators in Brussels 

who are engaged in the sixth round of T–TIP negotiations. There 

is a specific interaction over the course of this week on SPS issues, 

and part of that discussion includes issues like beef hormones. Part 

of that discussion includes issues by biotech. 

And so we are not where we need to be yet in terms of results, 

but we are at the table literally today and using every one of the 

tools that we have at our capacity to try and achieve a sciencebased result. 

Ms. JENKINS. Okay. Thank you, Mr. Ambassador. 

I yield back. 

Mr. NUNES. I thank the gentlelady for yielding. 

The gentleman from Louisiana, Mr. Boustany, is recognized for 

five minutes. 

Mr. BOUSTANY. Thank you, Mr. Chairman. 

And, Ambassador Punke, congratulations on Bali, and thank you 

for the outstanding work you are doing along with your team. 

I want to revisit the Trade Facilitation Agreement because of the 

recent hurdles that have emerged, and given the importance of 

this, first multilateral since the formation of the WTO in 1994. 

This is really important, and all the nations will benefit, especially 

the African countries, India, Brazil and so forth. 

And yet everything seemed to be a go. We were just two weeks 

away from the deadline for the protocol of accession, and now India 

has created this difficulty by trying to merge some food security 

issues which should be dealt with in 2017, and I am trying to understand what exactly is going on with that because we have a new 

Indian government under Prime Minister Modi who has touted 

themselves as a pro business individual, somebody who wants to 

engage more not only in opening up the business atmosphere within India, but also internationally. This is baffling to me, and so I 

was hoping you might shed a little more light on that. 

Second, the members of the African Union who have also raised 

a separate issue, I think it is with funding or to help build capacity 

for the facilitation agreement. Are the Indians and Africans collaborating on this or are these two separate developments? 

Ambassador PUNKE. Well, I do not know the degree to which 

there is interplay between the Indians and Africans in terms of 

their discussions. They are raising in some cases slightly different 

issues, and so maybe I will address them separately. 

With regard to India, as you pointed out, there have been conflicting signals even in the last 24 hours as to where India intends 

to come down on fulfilling its obligation under the Trade Facilitation Agreement, and we are certainly hopeful that the more positive signals that we have heard are the ones that will prevail in 

Geneva at the General Counsel meeting next week. 

Ambassador Froman left Washington yesterday for a meeting of 

G–20 ministers in Sydney. I will be joining him there on Saturday, 

and this is an issue that we will be raising along with other G– 


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20 members very directly with India in an effort to get clarity on 

exactly where the Indians stand. 

I do remain hopeful that the positive signals will be the ones that 

prevail. 

With regard to Africa, you point out I think one of the most perplexing aspects of this, which is that what every African country 

is doing domestically is seeking to improve its trade facilitation 

systems. What the Africans are doing regionally is regional cooperative efforts to improve trade facilitation. 

And so the notion that we would not also cooperate on this issue 

multilaterally in the WTO is perplexing, and that being said, we 

were able to reach an agreement, and the more recent signals from 

most of the Africans have been positive in terms of following 

through on their obligations. 

There are a couple of outlier signals from a very small handful 

of African countries, but obviously we’re hopeful that they will also 

respect their obligations by the time we get to the key moment 

next week 

Mr. BOUSTANY. Yes, I hope so. I know the Administration put 

forth this Power Africa initiative. Mike Froman has been very 

much involved in it. That ought to be a clear signal that the United 

States is committed, but given the fact that trade facilitation will 

help these countries immensely, it is truly perplexing that they 

have taken this initial step. I hope we can get through it because 

earlier, as you said, this Trade Facilitation Agreement has basically the impact of creating a virtual cycle with regard to Doha, 

and the actions of India and Africa, these African countries threaten to take us back to where we were with the impasse on Doha, 

and that is a big concern I have. 

Finally, I just want to quickly ask you about China and the ITA. 

I was in China in March, as you know, and we pushed them really 

hard. I think the whole of government we are pushing. Do you 

think we will get a breakthrough at APEC with President Xi? 

Ambassador PUNKE. Well, I am extremely hopeful we will have 

an agreement, but we are not there yet. As you pointed out, China 

is hosting APEC this year, and we had been without even dialogue 

with China for almost six months prior to the APEC meeting in 

Chengdu. 

There was incremental but positive progress on ITA on the margins of the Chengdu meeting in May. I was in Beijing last week 

with Ambassador Froman and with a number of members of the 

President’s cabinet in the context of the S&ED discussions. We 

pushed this issue very hard, not just Ambassador Froman, but also 

Secretary Kerry, also Secretary Lew, and we made more incremental progress. 

But we still are not where we need to be in, I think, achieving 

what the chairman referred to as a sufficiently long list where 

China is making an appropriate contribution to the overall agreement. 

We are going to keep pushing, and I think we can get there, but 

we are not there yet. 

Mr. BOUSTANY. Mr. Chairman, I think we need to send a 

strong signal to the Chinese to reach that level of ambition on ITA. 

I mean, they are one of the world’s largest exporters of technology 


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products, and for them to really in effect wreck this deal is not 

good. 

This is an opportunity for the new leadership in China to step 

up internationally and to provide leadership and do the right thing 

for the international community. 

Thank you. I yield back. 

Mr. NUNES. I thank the gentleman. 

The gentleman from Illinois, Mr. Roskam, is recognized for five 

minutes. 

Mr. ROSKAM. Thank you, Mr. Chairman. 

Ambassador, I want to shift gears if I could and move from the 

details and on the ground sort of insights that you have been able 

to provide, and I have learned a great deal from this morning and 

I thank you for that, to a little bit more of a philosophical question, 

and so let me lay a premise out, and I would be interested if you 

think my premise is right, and what your observations are as 

somebody that is driving U.S. trade policy and really having an impact all around the globe. 

And here is what I have observed. I think that there is a palpable ambiguity in the United States on what the U.S. role should 

be in the world today. On the political left, and I do not want to 

over-characterize it, but you will get my drift; on the political left 

there is this feeling, and it kind of a hangover from Vietnam, a 

hangover from the debate about Iraq and weapons of mass destruction, and so forth, and there is this natural reluctance to assert 

American power around the world. 

On my side of the aisle, in my party, there is a growing isolationism that is now becoming manifest in our debates and so forth, 

and it is shrouded in budget talk. You know, we cannot afford this, 

and so forth. 

And so here is my question. So what have you observed as somebody who is really uniquely on the global scene and interacting all 

around the world literally? How does trade fit into the assertion of 

American influence? 

And I am not talking sharp elbowed ‘‘have it our way,’’ but I am 

of the view that the United States and our presence around the 

world is a good thing. 

An Asian Ambassador yesterday put it very elegantly to me in 

my office, and he said, ‘‘We miss you more than ever,’’ meaning the 

United States. 

Can you give me your observations about how trade fits into this 

overall influence that we are trying to have, you know, as the Navy 

puts it, as a global force for good? It sounds like a bumper sticker, 

but it is a very apt way of trying to describe this. 

How does trade fit into this whole milieu? 

Ambassador PUNKE. Well, I think it is a very interesting question and a very interesting premise. I would disagree with the 

Asian Ambassador who would indicate in any way that the U.S. 

has been missing, and I think in listening to your question what 

I thought of was actually just the opposite in the following sense. 

One of the things that I think is unique about this moment historically in terms of U.S. leadership is the degree to which we have 

put ourselves really at the center pivot of critical discussions. We 

are at the center pivot of a discussion about Asian trade through 


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TPP. We are at the center pivot of a discussion about Atlantic 

Trade in T–TIP. We are at the center pivot of an effort to make 

the WTO a more productive place through leadership in TSA and 

ITA and environmental goods. 

So I really see us as being very well positioned right now if we 

can consummate those agreements, and that is the question that 

I think from a philosophical standpoint is the challenging one, is 

how do we build a bipartisan coalition that is supportive of trade 

and those agreements that I just described because the key thing 

from my perspective is that those agreements are the way that we 

have an opportunity to not only create economic opportunities for 

U.S. stakeholders, but also to promote our values globally. 

And the thing that is frustrating to me sometimes is I think that 

sometimes opponents of these agreements forget that this is not 

happening in the abstract. Our rivals are out there very actively 

seeking to put their own systems in place, and for example, in the 

context of TPP, we can be very certain that if TPP did not succeed 

that the Chinese would be quite happy to fill that vacuum with 

their RCEP agreement, and I can guarantee you that values and 

concerns that we have about things like environmental protection, 

consumer protection, labor rights will be far better served under 

TPP than they would be under Chinese leadership. 

Mr. ROSKAM. It seems that one of the areas where we can all 

work together, the Administration and this Committee, in particular, and you sense a strong bipartisan commitment to free trade 

is to articulate at home how this is a winner for us, how this is 

a winner for our consumers, how this is a winner for our producers, 

and we need to shun the sort of thinking that says, ‘‘No, this is a 

zero sum game, and the only way somebody else benefits is at our 

expense.’’ 

And so to the extent that we can be actively participating with 

you in that debate, I would be honored to play that role. 

Mr. NUNES. The gentleman yields back. 

And I recognize the gentleman from Connecticut, Mr. Larson for 

five minutes. 

Mr. LARSON. Thank you, Mr. Chairman, and thank you, Ambassador for your service. 

Following along with a number of the concerns that my colleagues have addressed, I always like to try to take it back to my 

district and to a place called Augie & Ray’s. I do not know that you 

have been there, Ambassador, but if you ever get the chance, I 

highly recommend it. Larson’s special is not bad. 

But it is at Augie & Ray’s that you hear the unfiltered opinion 

of the community, and I am talking about everybody from the 

Chamber of Commerce to the insurance industry to the machinists 

at Pratt & Whitney, and it is there that we see this growing skepticism and divide about trade, and it is a great irony coming from 

a State that is primarily an export State that relies on trade. 

I think a lot of the angst comes from both the implementation 

of trade agreements with unenforceable provisions, aka such as the 

labor provisions in NAFTA, and also the enforceable provisions 

that while useful, often require years of deliberation and considerable amounts of money before the enforcement actually takes place. 


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While the Administration clearly has been aggressive in utilizing 

the enforcement mechanisms available in the WTO, it is clear that 

more must be done to ensure that nations are living up to the 

standards that they agreed on, Mr. Roskam’s point, I think, that 

that would better have the public have a stronger feeling about it. 

So I have three questions that I want to pose to you, short ones, 

but what more is the Administration doing to ensure that American businesses, manufacturers and laborers are playing on a level 

playing field? 

And that is the whole gist at Augie & Ray’s, is that they are not. 

They feel that we write tax policies that make it easier for people 

to go overseas, and then we end up in trade agreements that further hurt labor here at home. 

So what are we doing further to level the playing field with their 

competitors? 

Also, and again, this is something that Mr. Boustany raised as 

well, and I think it is generally held on the committee, our overarching concerns with China who consistently retaliates when the 

United States brings an issue to the WTO for enforcement. It 

seems that these types of retaliatory actions have in many ways 

stalled the United States’ ability to move forward on issues like addressing currency manipulation, which again has broad bipartisan 

support here in Congress and would have a real beneficial impact 

on the American workforce and send a clear message that, yes, we 

are staunchly persistent in wanting to enforce this. 

And last, because it is at that same place and because it is, 

again, an export State and a lot of small businesses and major 

manufacturers, they rely heavily on the Import-Export Bank. 

Has the USTR taken a position on the Import-Export Bank? It 

faces expiration this fall, and yet it is a vital tool, again, in terms 

of leveling that playing field. 

Ambassador PUNKE. Well, thank you, Congressman. Let me try 

and work my way through those starting with the initial observation you made about the importance of labor and environment provisions being fully enforceable. 

We agree with that, and one of the things that we have made 

a hallmark of our efforts to negotiate in TPP and T–TIP is to seek 

labor and environment provisions that are not only fully enforceable but also subject to dispute resolution the same as any other 

obligation in the agreement, including in the instance where a 

party prevails in dispute resolution and the losing party does not 

come into compliance, that there would even be the potential of 

trade sanctions to enforce those obligations. 

So we agree with you that that needs to be a central part of the 

way that trade agreements are negotiated in the 21st Century. 

To touch briefly on the other specific issues that you raised, what 

are we doing about leveling the playing field? Part of that, I think, 

is a very aggressive and constant effort with all of our major trading partners to open up new opportunities so that there is not the 

ongoing situation where the U.S. market is more open than the 

market of our most important competitors. 

You know, the truth of the matter, and this is something that I 

think is relevant to the philosophical question that was raised by 

Congressman Roskam, is that the U.S. market is largely already 


joloto on DSKB35BYQ1 with HEARING
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open. We made that decision beginning 60 years ago at the end of 

World War II. 

So we are more open than a lot of the countries that we are most 

worried about, and the only way that I know of to bring that into 

better alignment is to negotiate trade agreements where we lower 

the barriers that our competitors still maintain. But that requires 

us to engage and specifically to engage in trade negotiations and 

bring back trade agreements. 

The other aspect of that, I think is enforcement and demonstrating that we do not just negotiate the agreements and then 

they go away, but rather that there is vigilance there and that we 

will ensure that other countries live up to their obligations. 

I think enforcement has been a hallmark of this Administration 

just in the WTO context alone. We have brought 18 WTO enforcement cases. 

One of the things you mentioned is concern about the Chinese 

using inappropriate retaliatory litigation when we brought legitimate cases. That is something we have pushed back against explicitly, and I might add also successfully in terms of their misuse of 

their domestic anti-dumping laws. So that is a place where we are 

very focused. 

The last point you raised, which I will just . . . though very 

briefly . . . because my position will not surprise you, is our position with regard to Export-Import Bank. Of course, USTR is 

strongly in line with the position of the Administration about the 

importance of extending the Ex-Im Bank and maybe the additional 

perspective that we bring to that is to see what our competitors are 

doing. 

And we know what we are up against, and I think the Ex-Im 

Bank is one of the things that helps to level the playing field in 

exactly the way that you were talking about. 

Mr. LARSON. Thank you. 

Thanks for the latitude, Mr. Chairman, also. 

Mr. NUNES. No problem. The time of the gentleman has expired. 

I now recognize the gentleman from Wisconsin, Mr. Kind, for five 

minutes. 

Mr. KIND. Thank you, Mr. Chairman. Thanks for holding this 

very important hearing. 

Ambassador Punke, it is very good to see you again, and thanks 

for your service to our country. 

Let me ask you, Ambassador Punke, while I have got you here, 

a resources issue. I mean, right now we are engaged in TPP negotiations, T–TIP negotiations going on, trying to figure out a way to 

salvage and resurrect the Doha Round, the potential for 

plurilateral negotiations to help spur Doha. You have directly been 

involved in the ITA negotiations, especially with China. We have 

got the Environmental Goods Agreement that is pending, Trade in 

Services Agreement, Trade Facilitation Agreement coming out of 

the Bali Ministerial Round. 

Is our team in Geneva and is our USTR team being stretched to 

the limit right now in regards to our negotiating capacity, given all 

of these different items, which are tremendously important in their 

own right, but how are we doing as a Congress in making sure that 


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you and the entire USTR team have the resources that you need 

in order to do an adequate job of representing this country with so 

many balls up in the air at the same time? 

Ambassador PUNKE. Well, Congressman, thank you very much 

for that. We certainly are very grateful for the support that we 

have had from you specifically, but from the committee more broadly in terms of resources for the Office of the U.S. Trade Representative. 

Look. We pride ourselves on being lean and mean at USTR, and 

we will always make do with whatever resources we are given and 

life off the land or do whatever else is necessary to make sure that 

we are fulfilling our mission. 

I think Ambassador Froman was asked this question a couple of 

months ago and noted the fact that there had been recent months 

particularly during the sequester when we were perhaps a little bit 

leaner than we wanted to be. I think we are in a slightly better 

position as of the last couple of months, and it has been gratifying, 

I think, to have the ability to field the teams in the places that we 

need to field them in order to engage robustly in all of the negotiations that you described. 

So we appreciate your support. We will make the most of the resources that we are given, and we know that in the type of budget 

environment that we are in, that all of us have to be very accountable in terms of how we spend scarce resources, but we will continue the conversation with you about resources and USTR. 

Mr. KIND. All right. I gave you a softball. I gave you a chance 

to ask for more, but I am not hearing a specific list of concerns 

right now. 

What about retention? Obviously you have been in place for 

about four and a half years, a little over four years. Obviously a 

lot of this requires a lot of experience, background, relationship 

building, too. How are we doing in keeping the team constitutes? 

Ambassador PUNKE. We are doing pretty well, given the fact 

that USTR’s very talented staff has lots of opportunities. I think 

one of the things that I love about the agency that I work at is that 

people are very dedicated to their mission. They genuinely love 

their work, and so people tend to stick around. 

That is not true across the board, and there are areas where, you 

know, we always would hope for a longer retention, but I think as 

a general matter we are doing okay. 

Mr. KIND. What is your assessment of where Doha is at the current state? Obviously we have a new General-Director Azevedo, 

who has tried to resurrect and breathe new life into it and that, 

but to say it has been disappointing as far as lack of progress 

would be an understatement. Here I think you appreciate that, too. 

But this was the opportunity of being able to bring those developing and emerging economies into the global trading system, and 

it just seems to be a disappointment so far. 

Ambassador PUNKE. Well, we are at a critical juncture just over 

the next two weeks because Bali gave us a chance, but over the 

next two weeks we will find out whether or not WTO members are 

sticking to their Bali commitments. If they stick to their Bali commitments and we can continue to point to trade facilitation and the 

other Bali agreements as areas where it worked, that gives us a 


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chance of grappling with the bigger issues like the one that you 

pointed out of the appropriate role of the emerging economies. 

If Bali falls apart, it is very difficult to imagine that we are going 

to be able to have that conversation about post Bali in any kind 

of a credible way. 

Mr. KIND. Geographic indicators at EU, is this insurmountable 

or do we have tools with WTO to help? 

Ambassador PUNKE. Well, it is a huge issue with the EU, as I 

know you know well coming from where you come from, and I will 

say very clearly in the context of T–TIP that we will not be bringing the European system of geographic indications to the United 

States. 

At the same time, we will be pressing very hard for access for 

our agricultural products in the geographic indication domain into 

the European market, and that is a conversation that is difficult 

and very significantly different viewpoints obviously between us 

and the European. 

But I have discovered something quite interesting in my time in 

Europe over the last four and a half years that we are injecting 

into that conversation, and this will be of interest to you, I think, 

Congressman, and that is I have discovered the phenomena of 

something called German feta cheese, and I have also discovered 

the phenomena of something called French gruyere, and I am not 

an expert on cheese the way that people form your State might be, 

but I do know that gruyere is not in France, and so that is the type 

of anomaly that we are pointing out to our European colleagues in 

trying to address this issue of geographic indications in the context 

of T–TIP. 

Mr. KIND. All right. Thank you, Mr. Ambassador. 

Thank you, Mr. Chairman. 

Mr. NUNES. Thank the gentleman. 

The gentleman from Minnesota is recognized for five minutes. 

Mr. PAULSEN. Thank you, Mr. Chairman. 

And, Ambassador, just I want to reiterate just a thank you for 

your daunting and continued efforts in leadership in advancing the 

trade agenda. 

A couple of things I want to just touch on real quick. As you well 

know, health care is playing a very increasing role in the U.S. and 

global economies, and there is no doubt it is the largest private sector employer in the United States. It is one of the largest and fastest growing sectors in the world economy. It is also one of America’s key economic drivers of innovation and cutting edge research. 

And it is not just pharmaceuticals or medical devices that a lot 

of folks just think of. We are actually talking about opportunities 

in our health care service delivery now in terms of express delivery, 

hospital design, doctors, nurses, insurance companies, health IT 

systems, as well as logistics. 

You know, my colleague on the committee, Ron Kind, who was 

just speaking a minute ago, and I have even gone so far as to ask 

Ambassador Froman to consider adding a position that would have 

USTR dedicate a position on health care trade. Can you just comment or add some thoughts about the role or the importance that 

you see right now that this sector has in your work in Geneva or 

in trade negotiations? 


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Ambassador PUNKE. Well, thank you for that question, Congressman Paulsen. 

There is no question that we see health care as being an enormously important sector in all of the manifestations that you described. You know, just last week in Beijing we were pressing the 

Chinese specifically on the information technology agreement with 

regard to tariffs on things like MRI machines, CAT scans, 

implantable medical devices. 

But we are also very aware, as you point out that health care 

is not just goods. It is also significantly services, and one of the, 

I think, most helpful or most hopeful fora for seeking to promote 

those type of opportunities in terms of U.S. services is through 

TiSA. 

You mentioned insurance. You mentioned health IT logistics. You 

mentioned, you know, the provision of health care services themselves. All of those are issues that are under discussion in the TiSA 

context right now, and we see enormous potential. 

Obviously those are also part of the various bilateral and regional agreements. So we are very focused on that issue set. 

Mr. PAULSEN. Good. And let me follow up with sort of a different topic here. When the TRIPS agreement was negotiated 20 

years ago, there was some disagreement whether intellectual property was truly a trade issue, and developments since then have certainly answered the question. The answer is yes, and IPR is now 

actively traded whether it is in the form of cross-border licensing 

agreements or sales of IPR portfolios or a cloud computing services 

and other services that allow foreign clients to have access to U.S. 

companies’ intellectual property rights. 

In fact, IPR now accounts for the major portion of the value of 

many of U.S. exports. If you take the iPod, for example, the value 

of Apple’s IPR accounts now are far more than the value of the 

final product in terms of shipping and distribution and assembly. 

Yet there are a lot of countries within the WTO that continue to 

question intellectual property rights, especially copyrights and patents for innovative medicines. 

What are you doing to ensure that WTO members comply with 

those TRIPS obligations to help build greater understanding within 

the WTO of the importance of IPR? 

Ambassador PUNKE. Well, it is an ongoing focal point for us in 

terms of enforcement. And I talked earlier about the premium that 

this Administration has placed on enforcement and specifically on 

intellectual property enforcement, whether it is with regard to the 

TRIPS agreement and our opportunities in the WTO to pursue this 

multilaterally; whether it is with regard to a new negotiation like 

T–TIP where we have another country in the form of the European 

Union that actually has quite high standards with regard to intellectual property, and we see the potential to work together to create a standard that can be pointed to in future negotiations with 

other parties, whether it is with regard to a country like China or 

India, which was mentioned, as places where we have significant 

concerns about intellectual property compliance and we are pursuing enforcement; whether it is through bilateral discussions or 

litigation. 


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We are using the whole toolbox across the whole range of issues 

precisely because I think we recognize that what intellectual property is about is innovation and protecting innovators, and we obviously want to continue to be an innovation society. 

Mr. PAULSEN. Thank you, Mr. Chairman. I yield back. 

Mr. NUNES. I thank the gentleman. 

Ambassador, I would like to thank you for your testimony today. 

Our record will remain open until July 30th, and I urge interested 

parties to submit statements to inform the committee’s consideration of the issues discussed today. 

This hearing is now adjourned. 

[Whereupon, at 11:17 a.m., the subcommittee was adjourned.] 

[Questions for the record follow:] 


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f 

[Submissions for the record follow:] 


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Alexan International, Letter 


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Ambassador Glassman, Letter 

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Institute for Liberty, Letter 


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Stewart and Stewart, Statement 


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Æ 


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