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22–183 2017

EXPANDING AMERICAN TRADE WITH 

ACCOUNTABILITY AND TRANSPARENCY 

HEARING 

BEFORE THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

APRIL 22, 2015 

Serial No. 114–FC04 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

PAUL RYAN, Wisconsin, Chairman 

SAM JOHNSON, Texas 

KEVIN BRADY, Texas 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

TODD YOUNG, Indiana 

MIKE KELLY, Pennsylvania 

JIM RENACCI, Ohio 

PAT MEEHAN, Pennsylvania 

KRISTI NOEM, South Dakota 

GEORGE HOLDING, North Carolina 

JASON SMITH, Missouri 

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 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

JOYCE MYER, Staff Director 

JANICE MAYS, Minority Chief Counsel 


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C O N T E N T S 

Page 

Advisory of April 22, 2015 announcing the hearing ............................................. 2 

WITNESSES 

The Honorable Jacob J. Lew, Secretary, United States Department of the 

Treasury ................................................................................................................ 10 

The Honorable Penny S. Pritzker, Secretary, United States Department of 

Commerce ............................................................................................................. 16 

The Honorable Thomas J. Vilsack, Secretary, United States Department of 

Agriculture ............................................................................................................ 20 

SUBMISSIONS FOR THE RECORD 

Letter from certain American film and television companies .............................. 70 

The Alliance for Healthcare Competitiveness, statement .................................... 72 

American Apparel & Footwear Association, statement ........................................ 78 

American Chemistry Council, letter ....................................................................... 80 

Center for Policy Analysis on Trade and Health, statement ............................... 82 

Distilled Spirits Council of the United States, Inc., statement ........................... 93 

LeadingAge, letter ................................................................................................... 96 

National Farmer’s Union, statement ..................................................................... 97 

The Representative of German Industry and Trade, statement .......................... 101 

QUESTIONS FOR THE RECORD 

The Honorable Penny S. Pritzker .......................................................................... 64 


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EXPANDING AMERICAN TRADE WITH 

ACCOUNTABILITY AND TRANSPARENCY 

WEDNESDAY, APRIL 22, 2015 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

WASHINGTON, DC. 

The committee met, pursuant to call, at 3:10 p.m., in Room 1100, 

Longworth House Office Building, the Honorable Paul Ryan [chairman of the committee] presiding. 

[The advisory announcing the hearing follows:] 


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Expanding American Trade with Accountability and Transparency 

House Committee on Ways and Means Chairman Paul Ryan (R·WI) today announced 

that the Committee on Ways and Means will hold a hearing on the expanding 

American trade with accountability and transparency. The hearing will take place 

Wednesday, April22, 2015, at 3:00PM in Longworth 1100. 

A list of witnesses will follow. Oral testimony at this hearing will be from invited 

witnesses only. However, any individual or organization may submit a written 

statement for consideration by the Committee and for inclusion in the printed 

record of the hearing. 

Details for Submission of Written Comments: 

Please Note: Any person(s) andjor organization(s) wishing to submit written 

comments for the hearing record must follow the appropriate link on the hearing 

page of the Committee website and complete the informational forms. From the 

Committee homepage, .httg:LLwa)l$andmeg_ns.h_ousg.g_ov, select "Hearings." Select 

the hearing for which you would like to make a submission, and click on the link 

entitled, "Click here to provide a submission for the record." Once you have followed 

the online instructions, submit all requested information. ATTACH your submission 

as a Word document, in compliance with the formatting requirements listed 

below, by the close of business on Tuesday, February 10, 2015. For questions, or 

if you encounter technical problems, please call (202) 225-3625 or (202) 225-2610. 

Formatting Requirements: 

The Committee relies on electronic submissions for printing the official hearing 

record. As always, submissions will be included in the record according to the 

discretion of the Committee. The Committee will not alter the content of your 

submission, but we reserve the right to format it according to our guidelines. Any 

submission provided to the Committee by a witness, any materials submitted for the 

printed record, and any written comments in response to a request for written 

comments must conform to the guidelines listed below. Any submission not in 

compliance with these guidelines will not be printed, but will be maintained in the 

Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be submitted in a single 

document via email, provided in Word format and must not exceed a total of 10 

pages. Witnesses and submitters are advised that the Committee relies on 

electronic submissions for printing the official hearing record. 
3 

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2. All submissions must include a list of all clients, persons and/or organizations on 

whose behalf the witness appears. The name, company, address, telephone, and fax 

numbers of each witness must be included in the body of the email. Please exclude 

any personal identifiable information in the attached submission. 

3. Failure to follow the formatting requirements may result in the exclusion of a 

submission. All submissions for the record are final. 

The Committee seeks to make its facilities accessible to persons with disabilities. If 

you are in need of special accommodations, please call 202-225-1721 or 202-226-

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including 

availability of Committee materials in alternative formats) may be directed to the 

Committee as noted above. 

Note: All Committee advisories and news releases are available 

at bnp_;Lfwww. waysand means.house.gQYL. 
4 

Chairman RYAN. The hearing will come to order. 

Welcome to the Ways and Means Committee hearing on expanding trade with accountability and transparency with our Secretaries Lew, Pritzker, and Vilsack. 

I want to welcome all of our members back into our hearing 

room. It has been all year long since we have been in here. If anybody has any concerns or complaints about the decoration, I would 

like you to send your emails to DaveCamp@privatesector.com. 

So it is nice to finally be back in our hearing room. You will notice we have a new sound machine because this is also the alternative floor. 

A couple housekeeping items. First, under the rules of the House, 

the chairman is responsible for maintaining order and preserving 

decorum in the committee room. I expect the audience members to 

be respectful of the witnesses and the public. 

First of all, I want to thank our witnesses for coming. I want to 

thank the ranking member for waiving the 7-day rule to allow this 

hearing to take place. I want to thank Secretary Lew, Secretary 

Pritzker, and Secretary Vilsack. Very interested in hearing your 

testimony. 

But before we start, I would like to say a few words about why 

today’s topic is so important. Why do we need to establish trade 

promotion authority? What is the point of all of this? Well, for me, 

it comes down to two things: promoting American trade and restoring American leadership. 

Right now, we are negotiating the biggest trade deal in history, 

the Trans-Pacific Partnership. It alone will cover 40 percent of the 

world economy—our economy and 11 others, ranging from Japan 

and Malaysia to Canada. Now, I have talked to a lot of people from 

these countries—elected officials, businessmen, activists—and the 

question on everybody’s mind is, can the United States close the 

deal? Can we drive a hard bargain? Will we keep our word? Do we 

have staying power? Or should the world look elsewhere for leadership? 

That is why we need to establish trade promotion authority. TPA 

will send a signal to the world: The United States will not retreat. 

The United States will stay engaged. And, once we present a 

united front, our credibility will get a major boost. Our trading 

partners will know that we are trustworthy. Our rivals will know 

that we are serious. And the American people, most importantly, 

will know that this trade agreement is a fair deal for them because 

they will have the information they need to decide for themselves. 

A lot of people have said that trade agreements have been too 

secretive. I agree. That is why TPA will make the negotiations 

much more transparent and much more accountable. Under TPA, 

any Member of Congress will be able to read the negotiating text. 

In fact, TPA will require the administration to post the full text of 

the agreement at least 60 days before signing the deal so that the 

American people can read it for themselves. 

And, most important, TPA makes very clear Congress has the 

final say. If the administration fails to meet its obligations, Congress can hit the brakes, cancel the vote, and stop the agreement. 

But we need to move. Because if you are not moving forward in 

trade negotiations, you are actually falling behind. In the first 10 


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years of this century, the countries of East Asia negotiated 48 trade 

agreements—48 trade agreements since the year 2000 in Asia 

alone—and the U.S. has been a party to 2 in the region. And, as 

a result, our share of East Asia’s imports fell by 42 percent. Every 

one of our trade competitors did better—every single one. 

And while we are sitting on the sidelines, guess what? China is 

negotiating agreements all around the world. They are writing the 

rules that give kickbacks to government-owned firms and stack the 

deck against American job creators. 

So the question comes down to this: It is unquestionable that the 

rules of the global economy are being written; the question is, who 

is going to write them? Are we going to write them with our allies, 

with our trade partners? Or will China write them to benefit 

China? 

The fact is we are the only country that can do this. We are the 

only country that can tear down barriers to American exports and 

win a fair deal for the American worker. We are the only country 

that can stand up for free enterprise and for the rule of law. 

We know these are serious times, and we know that the stakes 

are high. They call out for leadership—bipartisan leadership. And 

I want to pass this bill because I want Americans to answer that 

call. 

And, with that, I would like to yield such time as he may consume to the ranking member, Mr. Levin, for his opening statement. 

Mr. LEVIN. Thank you. 

And welcome, everybody. 

How do we turn this off? 

Chairman RYAN. The floor? 

Mr. LEVIN. Yeah, how do we turn off the floor? 

Chairman RYAN. Let me figure it out. 

Mr. LEVIN. Thank you, Mr. Chairman. 

Chairman RYAN. I honestly don’t know how to turn it off. 

Mr. LEVIN. And, again, welcome. 

Along with colleagues on this committee and throughout this 

Congress, I have been working to achieve a Trans-Pacific Partnership that could gain broad bipartisan support. We have laid out 

TPP issues and specific proposals on how they can be effectively 

addressed. There has been no effective response in so many cases. 

So TPP is now on the wrong track in key areas, so it should not 

be fast-tracked. 

This trade promotion authority bill does nothing to get us there. 

The negotiating objectives within that TPA bill are almost identical 

to those of the dead-on-arrival TPA bill that was introduced a year 

ago and are so broad that they don’t begin to address the outstanding issues within the TPP negotiations. 

We have made it clear that it is imperative that there be a currency obligation in the TPP, but the objective within the TPA bill 

says nothing that will change the status quo. Currency manipulation by Japan in the 1990s and by China in the last decade have 

cost millions of middle-class American jobs—millions. Yet this TPA 

and the position of the administration means no specific provision 

within TPP, nor addressed through separate legislation, even 

though a majority of the Members of the House and Senate have 

urged action. 


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On the issue of investment in ISDS, concerns have grown exponentially, and cases have proliferated in the 12 years since the last 

TPA was passed. Yet the negotiating objective within the HatchWyden-Ryan TPA is identical to 12 years ago. That is a major problem because, again, the status quo. 

We have made major progress in recent FTAs on the issue of 

labor by including enforceable international labor standards. Yet 

this bill does not address at all what needs to be done to bring 

countries like Vietnam and Mexico, as well as Malaysia and 

Brunei, into compliance with those international labor standards, 

which affects the jobs of American workers. 

Our workers do not compete on a level playing field with Mexican workers. Right now, Mexico does not adhere to the ILO standards. Today, there is zero assurance that it will. These are issues 

of vital importance to the middle class and American jobs. 

On the issue of auto and market access in Japan, the bill is so 

broad that it states simply, and I quote, that the U.S. ‘‘should expand competitive opportunities for exports of goods,’’ end of quote. 

Missing is any guidance on how to truly open the Japanese automotive market, which is so closed that only 6 in 100 vehicles that 

are sold there are made outside of Japan, while our market has 

been totally open to Japanese vehicles for decades. 

With so many issues within the TPP needing to be improved, all 

that this bill does is give away the leverage of Congress to make 

the agreement better. The outcome of these issues will decide the 

merits of TPP, yet this bill only serves to suggest that their resolution doesn’t really matter very much at all. 

TPP is too important to leave open so many key issues and essentially leave out a meaningful role for Congress. That is not the 

way to get TPP right, which I want. It is not the way to get a TPP 

with broad bipartisan support, which I very much want. Real congressional power is not at the end of the process; it is right now, 

when the critical outstanding issues are being negotiated. 

My colleagues on the other side of the aisle repeat often that the 

administration needs TPA to get, in quotes, ‘‘the best deal.’’ But 

you only get the best deal if you are seeking the right things, and 

not by loss of congressional leverage, making it more likely that we 

will end up with less. And, right now, on so many unresolved 

issues, USTR is not seeking the strongest outcome, and this TPA 

bill does not change that. So it is very unwise for Congress to give 

up our leverage so that we take steps to get a better trade deal. 

I plan to offer an alternative to this TPA at tomorrow’s markup 

that puts TPP on the right track, providing a path forward to an 

agreement that will garner broad bipartisan support in this Congress. 

Thank you, Mr. Chair. 

Chairman RYAN. Thank you, Mr. Levin. We will have plenty of 

time to debate the merits of these issues, but we obviously have a 

difference of opinion on these issues. 

I want to thank the three Secretaries for coming. The committee 

has received your written statements, so I would just ask if you 

could summarize your written statements, which will be included 

in the record, to 5 minutes so we can get on with the Q&A. 


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With that, Secretary Lew, if you could start us off, you are recognized. 

STATEMENT OF THE HONORABLE JACOB J. LEW, SECRETARY, 

DEPARTMENT OF THE TREASURY 

Secretary LEW. Thanks very much, Mr. Chairman, Ranking 

Member Levin, Members of the Committee. It is good to be here 

today to discuss trade promotion authority. 

At the Department of Treasury, we have been working hard on 

the trade agenda and bolstering economic growth and stability. 

Today, exports make up roughly 30 percent of global GDP, and 

global per capita incomes are over 50 percent higher than they 

were 20 years ago. These macroeconomic gains are due, in part, to 

the rules-based trading system that boosts U.S. and global exports 

of goods and services and opportunities for American workers even 

as it raises the standard of living for consumers. 

Reducing trade barriers and securing reforms abroad through 

well-crafted trade agreements benefits both U.S. economic competitiveness and global economic prosperity. First, our firms and workers benefit as our partner countries open their markets to imported 

goods and services. Second, as countries open up to trade, over time 

they innovate more, invest more, and become more productive. The 

result is a stronger and more stable global economy, and that is 

also good and important for American businesses and workers. 

For all the reasons I just described, we believe it is important to 

continue the long tradition of close bipartisan cooperation between 

Congress and the executive branch through trade promotion authority. TPA is critical in helping secure the substantial economic 

gains that our ambitious trade and investment agreements can 

bring. TPA sends a strong signal to our trading partners that Congress and the administration speak with one voice to the rest of the 

world on our priorities. 

Since the first trade negotiating legislation in 1934, trade authority has been renewed or revised by Congress on 18 different occasions. The legislation introduced by Chairman Ryan and Senators 

Wyden and Hatch is both the continuation of that tradition and a 

significant strengthening. 

TPA is fundamentally an exercise in congressional oversight. 

Through TPA, Congress puts in place the requirements that Congress wants to see followed through trade negotiations, lays out the 

priorities Congress wants to see negotiated in trade agreements, 

and establishes the procedures Congress will use for consideration 

of trade legislation. 

The TPA legislation currently before Congress includes a number 

of important leaps forward in trade policy. It updates negotiating 

objectives to reflect the consensus on trade that has emerged over 

the last decade, such as the need to address labor and environmental issues, to take on unfair competition from state-owned enterprises, and to protect a free and open Internet. 

It requires increased transparency during trade negotiations, 

mandating by law that trade agreements be made public months 

before the President can sign them and months more before Congress is asked to consider them. 


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It creates new opportunities for congressional oversight and engagement. It includes strong sovereignty safeguards that make it 

absolutely clear that nothing in our trade agreements can change 

U.S. law without congressional approval. 

And it requires that trade agreements encourage good governance and the rule of law, which are key to promoting democracy. 

We support the TPA bill introduced by Chairman Ryan, Senators 

Hatch and Wyden, which includes a strong currency objective that 

goes well beyond the 2002 TPA. Specifically, it elevates currency to 

a principal negotiating objective. It sets clear expectations regarding standards that our trading partners should meet, and it sets 

forth mechanisms that will help ensure that our trading partners 

will be held accountable. 

We strongly agree with Members of Congress that unfair currency practices need to be addressed. Since day one, the President 

has been clear that no country should grow its exports based on a 

persistently undervalued exchange rate, and currency has been at 

the top of Treasury’s international agenda. We share the goal of 

moving major economies to market-determined exchange rate systems that are transparent, flexible, and reflect underlying economic 

fundamentals. 

Our TPP counterparts are also aware of congressional interest in 

addressing currency practices through the TPA legislation. We 

have formally consulted with our TPP partners in the last week, 

and they have indicated willingness to discuss those concerns. 

Nonetheless, our partners also firmly stated that the introduction 

of enforceable currency provisions in the context of trade agreements will undermine ongoing efforts to address currency issues 

and force them to reconsider TPP negotiations. 

We, too, have serious concerns that the inclusion of enforceable 

currency provisions in trade agreements would be counterproductive. There is a significant risk that others would seek to use 

such provisions to impinge on U.S. macroeconomic policy management. And, given the deep reservations held by our trading partners, seeking enforceable currency provisions would likely derail 

the conclusion of the TPP. 

We also strongly oppose legislation that attempts to use the 

trade remedy process to address currency undervaluation. Such 

legislation would be viewed as inconsistent with our international 

obligations, and we would expect other countries to pursue retaliatory measures by introducing similar approaches that would hurt 

our exporters. 

We are working tirelessly to address currency concerns, and our 

efforts through bilateral and multilateral engagement have met 

with considerable success. Japan and other G–7 countries have 

publicly affirmed that they will not target exchange rates and that 

fiscal and monetary policies will remain oriented toward meeting 

domestic economic objectives using domestic policy instruments. G– 

20 members have also pledged to move more rapidly toward more 

market-determined exchange rate systems and flexibility in order 

to reflect underlying economic fundamentals, avoid persistent exchange rate misalignments, not target exchange rates, and refrain 

from competitive devaluations. 


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We have also successfully pressed the IMF to strengthen its surveillance of its members’ exchange rate policy obligations. We have 

made progress with China on the exchange rates through our strategic and economic dialogue as well as our multilateral engagement, and we continue to raise the issue regularly with our Chinese counterparts. 

On a trade-weighted basis, the RMB has seen a real effective appreciation of nearly 30 percent since China allowed its currency to 

resume appreciation in mid-2010. RMB appreciation has contributed to a decline in China’s current account surplus from a peak 

of 10 percent of GDP before this administration took office to just 

2 percent of GDP last year. 

We will continue to intensify our efforts on exchange rates using 

the tools and channels that are most effective. While we have made 

real progress, we believe more is needed, and Treasury will continue to engage with Congress on how best to address currency 

issues in a way that is consistent with our overall strategy of multilateral engagement and bilateral engagement. 

The passage of bipartisan TPA legislation is an important step 

towards entering into trade agreements that expand opportunities 

for American businesses, create high-quality jobs, and further 

unlock the gains from expanded trade and investment in the 21stcentury economy. We look forward to working with Congress to 

make this possible, and I look forward to answering your questions. 

Thank you. 

[The prepared statement of Mr. Lew follows:] 


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EMBARGOED FOR DELIVERY 

Secretaryoftl1e U.S. Department ofthe Treasury Jacob Lew 

l#itten Statemem 

House Committee on Ways and Means 

April22, 2015 

Chairman Ryan and Ranking Member Levin, and distinguished members o f the Committee, 

thank you for the opportunity to testify on the Bipartisan Congressional Trade Priorities and 

Accountability Act of2015. Bolstering global economic growth and stability remains a priority 

of the United States, and the U.S. Department of the Treasury has been working hard over the 

last six years to achieve a high-standard trade and investment agenda that raises income and 

spurs growth. 

Our robust trade agenda - the cornerstones of which include the Trans-Pacific Partnership and 

the Transatlantic Trade and Investment Partnership agreements - will expand opportunities for 

American businesses, create high-quality jobs, and further unlock the growth-expanding gains 

from expanded trade and investment. 

Today, exports make up 30 percent of global GOP, and global per-capita incomes are over 50 

percent higher than what they were 20 years ago. These macroeconomic gains are due in part to 

the framework ofbilater<tl, regional, and multilateral trade agreements that are in place and to 

institutions such as the World Trade Organization that have been developed to implement the 

rules-based trading system. The rules-based trading system facilitates greater openness to trade 

- boosting U.S. and global exports of goods and services and opportunities for American 

workers- even as it raises the standard or living for consumers, through greater choice and 

access to quality imports. 

Much has changed in the way we trade and invest in the last 30 years. The growth of the 

services sector, the development of global supply chains, the rise of electronic banking and 

commerce, and the maj or role of state-owned enterprises in some of the most dynamic regions of 

the world- altogether, these trends have expanded the sectors in which U.S. firms are investing 

and competing. At the same time, U.S. firms continue to face market access and fair competition 

challenges to operating, investing, and exporting overseas. 

Reducing trade barriers and securing refonns abroad through well-crafted trade agreements 

benefit both U.S. economic competitiveness and global economic prosperity. First, our finns 

and workers stand to benefit directly as our partner countries further open their markets to 

imported goods and services, including from the United States. Second, as countries open up to 

trade, over time they innovate more, invest more, and become more productive; the result is a 

stronger and more rapidly growing global economy. TI1at, too, is important for American 

businesses and workers. 

Trade Promotion Authority Legislation 

For all the reasons described above, we believe it is important to continue the long tradition of 

close, bipartisan cooperation between Congress and the Executive Branch through Trade 

Promotion Authority (TPA). 
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EMBARGOED FOR DELIVERY 

TPA is critical to helping secure the substantial economic gains that our ambitious trade and 

investment agreements can bring, including labor and environmental standards, consumer 

protections, and benefits for small and medium-sized businesses. There are few policy measures 

that can do more to support jobs and deliver sustained high-quality growth than trade 

agreements, and TPA sends a strong signal to our trading partners that Congress and the 

Administration speak with one voice to the rest of the world on our priorities. 

Since the first trade negotiating legislation in 1934, trade authority has been renewed or revised 

by Congress on 18 different occasions. The legislation introduced by Chairman Ryan and 

Senators Wyden and Hatch is both a continuation of that tradition and a significant 

strengthening. 

TPA is fundamentally an exercise in congressional oversight. Through TPA, Congress puts in 

place the requirements that Congress wants to see followed for trade negotiations; lays out the 

priorities Congress wants to see negotiated in trade agreements; and establishes the procedures 

Congress will use for the consideration of trade legislation. 

The TPA legislation currently before Congress includes a number of important leaps forward in 

trade pol icy: 

It updates negotiating objectives to reflect the consensus on trade that has emerged over the last 

decade, such as the need to address labor and environmental issues, to take on unfair competition 

from state-owned enterprises, and to protect a free and open intemet. 

It requires increased transparency during trade negotiations - mandating, by law, that trade 

agreements be made public months before the President can sign them and months more before 

Congress is asked to consider them. 

It creates new opportunities for congressional oversight and engagement. 

It includes strong sovereignty safeguards that make it absolutely clear that nothing in our trade 

agreements can change U.S. law without Congressional approval. 

And it requires that trade agreements encourage good govemance and the rule of law, which are 

key to promoting democracy. 

We support the TPA bill introduced by Chairman Ryan and Senators Hatch and Wyden which 

includes a currency objective that goes well beyond the 2002 TPA. We appreciate that this bill 

reflects the importance of currency issues to members of Congress and stakeholders. 

Specifically: it elevates currency to a principal negotiating objective; it sets clear expectations 

regarding standards that our trading partners should meet; and it sets forth mechanisms that will 

help ensure that our trading partners will be held accountable. 

We strongly agree with Members of Congress that unfair currency practices need to be 

addressed. Since day one, the President has been clear that no country should grow its exports 
12 


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EMBARGOED FOR DELIVERY 

based on a persistently undervalued exchange rate, and currency has been at the top of 

Treasury's international agenda. We share the goal of moving major economies to marketdetermined exchange rate systems that are transparent, flexible, and reflect underlying economic 

fundamentals. 

Nonetheless, we have serious concerns about the inclusion of cntorceable currency provisions in 

this or any trade agreement. Enforceable currency disciplines would impair our already 

successful efforts addressing currency practices through our bilateral and multilateral 

engagement and could grant other countries a legal basis to interfere with the flexibility of U.S. 

policymakers to take the steps necessary to protect jobs, support growth, and ensure continued 

price stability in the United States. Seeking enforceable currency provisions would also likely 

derail the conclusion of the TPP, given the views expressed by our TPP partners that such 

provisions would force them tO reconsider and reopen TPP negotiations. Accordingly, any 

amendment to TPA legislation requiring that the Administration seek enforceable currency 

provisions as a principal negotiating objective would be counterproductive. 

We also strongly oppose legislation that attempts to use the trade remedy process to address 

currency undervaluation. Such legislation would be viewed as inconsistent with our 

international obligations, and we would expect other countries to pursue retaliatory measures by 

introducing similar approaches that would hurt our exporters. Taking such an aggressive 

unilateral step would be counterproductive to our ongoing bilateral and multilateral engagement, 

and would work against our efforts to promote greater accountability on currency policies in the 

context of the TPP. 

Progress on Exchange Rate Policies 

We are working tirelessly to address currency concerns, and our efforts through bilateral and 

multilateral engagement have met with considerable success: 

We have secured unprecedented commitments in the G-7 and G-20 related to exchange rate 

practices. Through our leadership, Japan and other G-7 countries have publicly affinned that 

they will not target exchange rates and that fisca l and monetary policies will remain oriented 

towards meeting domestic economic objectives using domestic policy instruments. 

Likewise, G-20 members have also pledged to move more rapidly toward more marketdetennined exchange rate systems and flex ibility in order to re flect underlying economic 

fundamentals, avoid persistent exchange rate misa lignments, not target exchange rates, and 

refrain from competitive devaluations. 

We have also successfully pressed the IMF to strengthen its surveillance of its members' 

exchange rate policy obligations. As a result of our efforts, the IMF now publishes an External 

Sector Report that includes estimates of exchange rate misalignment for 25 major economies, 

and has stepped up its monitoring of countries' excess foreign exchange reserves. 

We have made progress with China on exchange rates through our Strategic and Economic 

Dialogue, as well as our multilateral engagement, and we continue to raise the issue regularly 
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EMBARGOED FOR DEU VERY 

with our Chinese counterparts. As pan of our S&ED, China has committed to reduce its foreign 

exchange intervention as conditions permit- and the amount of China's currency intervention 

has fallen significantly in the last year. On a trade-weighted basis, the RMB has seen a real 

effective appreciation of nearly 30 percent since China allowed its currency to resume 

appreciation in mid-2010. RMB appreciation has contributed to a decline in China's current 

account surplus from a peak of I 0 percent of GOP before this Administration took office to just 

2 percent of GOP last year. 

We will continue tO intensify our effons on exchange rates using the tools and channels that are 

most effective. We will build on our ongoing multilateral and bilateral engagement in the G-20, 

IMP, and U.S.-China Strategic and Economic Dialogue to press China and other countries even 

harder towards more market-determined exchange rates and to secure strong commitments on 

currency disciplines. 

While we have made real progress, we believe that more is needed, and Treasury will continue to 

engage with Congress on how best to address currency issues in a way that is consistent with our 

overall strategy of bilateral and multilateral engagement. 
14 

Chairman RYAN. Thank you. 

Secretary Pritzker. 

STATEMENT OF THE HONORABLE PENNY S. PRITZKER, 

SECRETARY, DEPARTMENT OF COMMERCE 

Secretary PRITZKER. Thank you, Chairman Ryan, Ranking 

Member Levin, and Members of the Committee. Thank you for the 

opportunity to discuss the bipartisan congressional Trade Priorities 

and Accountability Act of 2015—legislation that is good for America’s economy, for America’s businesses, and for America’s workers. 

At the Department of Commerce, we work every day to create 

the conditions for U.S. companies to compete at home and abroad. 

As Secretary, I have met with more than 1,600 CEOs and business 

leaders from across the country. These executives know that 96 

percent of the world’s customers live outside our borders. They see 

the reality of integrated supply chains and appreciate that we must 

reduce barriers. 

Whether they employ 20 workers or 200,000 workers, these leaders view exports as essential to reaching new markets and creating 

more good-paying jobs—American jobs. When I ask business leaders what Washington can do to help them grow, they tell me time 

and again, ‘‘We need new free trade agreements.’’ To create sustainable growth for our companies, for our workforce, and for our 

economy, we must make it possible for more American firms of all 

sizes to sell their goods and services abroad. 

Take the opportunity in the Asia-Pacific markets for example. 

The Asia-Pacific middle class is set to grow to 3.2 billion over the 

next 15 years—unprecedented in the world. To put that in perspective, by 2030, the middle class in the Asia-Pacific will be nearly 

nine times larger than the entire U.S. population. Expanding into 

Asia-Pacific markets is an opportunity we cannot afford to miss. 

Opening more markets to our goods and services is not simply 

about access for business. It is about more jobs and prosperity in 

our communities. Exports contributed nearly one-third of our overall growth from 2009 and 2014. Every day, 11.7 million Americans 

go to work in jobs supported by exports, positions that pay up to 

18 percent more, on average, than jobs not related to exports. 

These Americans work in companies like DodoCase, a small 

manufacturer of iPad cases in San Francisco; or World Art Group, 

a small publisher of high-quality posters and prints in Richmond, 

Virginia; and Leatherman Tools, a medium-sized manufacturer of 

innovative hand tools in Portland, Oregon. These companies are 

finding success through exports, yet they face tariffs of at least 20 

percent in markets like Vietnam and Malaysia. 

China, by contrast, already has trade agreements with these 

countries among its 17 free-trade partners across Asia. As a result, 

Chinese firms face zero tariffs in most products in these fast-expanding markets and have a competitive edge over American businesses. 

This debate is not solely about China but the world our businesses face today. The world is not standing still. Our competitors 

are racing forward with their trade agendas, and we cannot afford 

to be left behind. We must lead. 


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As a former CEO, I know that our companies must sell their 

goods outside their own communities not just to survive but to 

thrive. Put simply, trade agreements are not a nice-to-have for 

businesses; they are a need-to-have. 

Completing strong new trade agreements will level the playing 

field for companies like DodoCase, World Art Group, and 

Leatherman Tools, but these agreements can only be realized if 

Congress does its part by enacting trade promotion legislation, setting the guidance needed to negotiate the strongest deals possible. 

This administration believes that all workers deserve fair wages 

and a safe workplace. This administration believes in protecting 

our forests and fisheries. This administration believes that new 

trade agreements will allow us to promote American values, raise 

global standards, and maintain the competitiveness of our workforce and our businesses. 

I understand and respect some Members have concerns about 

trade agreements. The best way to address those concerns is for 

Congress to lay out clear guidance that gives this administration 

and future administrations the tools to negotiate high-quality 

agreements consistent with our values. 

You can do so by passing trade promotion legislation. This is one 

of our most important votes this Congress will take to strengthen 

our economy. If we get this right, I am confident we can keep 

America more competitive and keep our country open for more 

business. 

Thank you. 

[The prepared statement of Ms. Pritzker follows:] 


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WRITTEN TESTrMONY BY S.ECRETARY PENNY PRJTZKER 

U.S. DEPARTMENT OF COMMERCE 

WAYS AND MEANS COMM ITIEE 

APRIL 22, 2015 

Chairman Ryan, Ranking Member Levin, and members of the Committee, thank you for this 

opportunity to discuss the Bipartisan Congressional Trade Priorities and Accountability Act of 

20 15, legislation that is good for America's economy, for America's businesses and for 

America· s workers. 

At the Department of Commerce, we work every day to create the conditions for U.S. companies 

to compete at home and abroad. As Secretary, I have met with more than 1,600 CEOs and 

business leaders from across the country. These executives know that 96 percent of the world's 

customers live outside our borders. They see the reality of integrated supply chains, and 

appreciate that we must reduce barriers. 

Whether they employ 20 workers or 200,000, these leaders view exports as essential to reaching 

new markets and creati ng more good-paying jobs - American jobs. 

When I ask business leaders what Washington can do to help them grow, t11ey tell me time and 

again: we need new free trade agreements. To create sustainable growth for our companies, for 

our workforce and for our economy, we must make it possible for more American firms of all 

sizes to sell their goods and services abroad. 

Take the opportunity in Asia Pacific markets, for example. The Asia Pacific's middle class is set 

to grow to 3.2 billion 1 over the next 15 years. To put that in perspective, by 2030, the middle 

class in the Asia Pacific will be nearly nine times larger than the entire U.S. populati on. 

Expanding into Asia Pacific markets is an opportunity we cannot afford to miss. 

1 Brookings: 

hup://'"''~".brookings.cdul~lmcdial cscarch fo lcs/paocrs/20 I 0/3/china%20middlc%20class%20khara.s103 china mi 

ddle closs kharas.rdf 
17 


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Exports - Good for Business and Workers 

Opening more markets to our goods and services is not simply about access for our businesses; it 

is about more j obs and prosperity in our communities. Exports contributed nearly one-third of 

our overall growth between 2009 and 2014. Every day, 11.7 million Americans go to work in 

j obs supported by exports - positions that pay up to 18 percent more, on average, than jobs not 

related to exports. 

These Americans work at companies like: 

Competition 

DodoCase, a smallmanufacrurer of iPad cases in San Francisco; 

Worl d Art Group, a small publisher of high-quality posters and prints in 

Richmond, Virginia; and 

Leatherman Tools, a medium-sized manufacturer of innovative hand tools in 

Portland, Oregon. 

These companies are finding success through exportS, yet they face tariffs of at least 20 percent 

in markets li.ke Vietnam and Malaysia. China, by contrast, already has trade agreements with 

these countries - among its 17 free trade partners across Asia. As a result, Chinese firms face 

zero tariffs on most products in these fast-expand ing markets and have a competitive edge over 

American businesses. 

New World 

This debate is not solely about China, but the world our businesses face today. The world is not 

standing still. Our competitors are racing forward with their own trade agendas. And we cannot 

afford tO be left behind. We must lead. As a former CEO, I know that our companies must sell 

their goods outside their own communities not just to survive, but to thrive. Put simply: trade 

agreements are not a "nice to have" for businesses; they are a " need to have." 
18 

f 


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Rules for the Road 

Completing strong, new trade agreements will level the playing field for companies like 

DodoCase, World Art Group, and Leatherman Tools. But these agreements can onl y be realized 

if Congress does its part by enacting trade promotion legislation, setting the guidance needed to 

negotiate the strongest deals possible. This Administration believes that all workers deserve fair 

wages and a safe workplace. This Administration believes in protecting our forests and fisheries. 

This Administration believes that new trade agreements will allow us to promote American 

values, raise global standards, and maintain the competitiveness of our workforce and 

busine-sses. 

C losing 

I understand and respect that some Members have concems about trade agreements. TI1e best 

way to address those concems is for Congress to lay out clear guidance that gives this 

Administration and future Administrations the tools to negotiate high-quality agreements 

consistent with our values. You can do so by passing trade promotion legislation. This is one of 

the most important votes this Congress will take to strengthen our economy. 

If we get this right, I am confident we can keep America more competitive and keep our country 

open for more business. 

Thank you. 
19 

Chairman RYAN. Thank you. 

Secretary Vilsack. 

STATEMENT OF THE HONORABLE THOMAS J. VILSACK, 

SECRETARY, DEPARTMENT OF AGRICULTURE 

Secretary VILSACK. Thank you, Mr. Chairman. 

And to the chairman and Ranking Member Levin and Members 

of the Committee, let me align myself with the remarks of my colleagues and attempt to summarize very quickly why agriculture 

throughout the United States is favorably inclined towards trade 

promotional authority and trade agreements. 

The past 6 years have been record years for trade promotion and 

export opportunities for American agriculture. In fact, since the 

passage of NAFTA, we have seen a 145-percent increase in agricultural trade. 

That may be why 70 agricultural groups and 8 former Secretaries of Agriculture, in a bipartisan way, have indicated support 

for TPA and TPP. They understand that we will see, as a result 

of TPA, reduced and eliminated tariffs and structures to do so, enforceable SPS proposals, expanded opportunity with an expanding 

middle class that is anxious to have access to high-value-added agricultural products from the U.S., and balancing China’s influence 

in the region. 

We are convinced that this is a multibillion-dollar opportunity to 

expand access and opportunity for America’s farmers, ranchers, 

and producers. In turn, we believe that this will help to support 

and create tens of thousands of jobs, as well. 

Mr. Chairman, we are anxious to respond to your questions, and, 

in the interest of time, we will get to that. 

[The prepared statement of Mr. Vilsack follows:] 


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4.22.2015 

Statement by 

Thomas Vilsack 

Secretary of Agriculture 

Before the House Ways and Means Committee 

April 22, 2015 

Mr. Chairman, members of the Committee, thank you for the opportunity to testify today 

on the benefits of agricultural trade, trade agreements, and Trade Promotion Authority (TPA) for 

America's fanners, ranchers, and producers. I join with President Obama in saying that I am 

pleased by the introduction ofTPA legislation in the U.S. House of Representatives by Chairman 

Ryan and in the U.S. Senate by Chairman Hatch and Senator Wyden last week. 

I look forward to working with Democrats and Republicans in Congress to pass the bill. 

Securing TPA is a top USDA priority. That is why I have been speaking publicly and sending 

USDA officials to roundtables around the country to make the case for a trade agenda that merits 

strong bipartisan support. TPA is a linchpin in final izing trade agreements that strengthen the 

U.S. economy through expanding exports, which are critically important to the U.S. agricultural 

sector. 

Fiscal years 2009 to 2014 represent the strongest six years in history for U.S. agricultural 

trade, with U.S. agricultural exports totaling $771.7 billion. Agricultural exports last fiscal year 

reached S 152.5 billion, the highest level on record. U.S. agricultural expons support more than 

one million jobs across America. TI1ese numbers would not be possible without the market 

access secured in trade agreements. 

Access to export markets is vital to U.S. agriculture. Our producers rely on and prosper 

from access to foreign markets. We exp01t: 

About half of U.S. wheat, milled rice, and soybean production; 

Over 60 percent of almond, walnut and pistachio production; 

More than two-thirds of cotton production; 

40 percent of grape production, 20 percent of cherry production and 20 percent of 

apple production; 

20 percent of poultry and pork production and 10 percent of beef production. 

Population growth and rising incomes - particularly in the developing countries of the 

Asia-Pacific - are creating significant new agricultural export opportunities. U.S. farmers, 

1 
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4.22.2015 

ranchers, and food processors are well positioned to capitalize on growing g lobal demand, 

especially since the productivity of U.S. agriculture is growing faster than domestic food and 

fiber demand. But to capitalize, we need to break down tariff and non-tariff barriers to allow our 

agricultural sector to compete on a level playing field. Eight former Secretaries of Agriculture 

agree. That is why they recently wrote to you noting that it is critical for U.S. agriculture that 

Congress passes a bipartisan TPA. The former Secretaries noted how each of them worked hard 

to open foreign markets and support trade agreements that help U.S. farmers, ranchers, and 

producers thrive. 

Despite our export successes, many other countries' markets are not as open tO American 

products as our markets are to theirs. Trade agreements are the most effective way to eliminate 

foreign tariffs, unscienti fie regulatory barriers, and bureaucratic administrative procedures 

designed to block trade. Trade agreements lead to expanded agricultural exports by promoting 

economic growth, removing trade barriers and import duties, and developing mutua lly beneficial 

trade ru les. 

Key to our ability to negotiate and implement market-opening agreements has been 

enactment of trade negotiating authority. TPA ensures that the United States has the credibility 

to conclude the best deal possible at the negotiating table. TPA ensures common trade 

agreement objectives between the President and the Congress, and appropriate consultation prior 

to final Congressional approval or disapprova l of a trade agreement. TPA will signal to TransPacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (T-TIP) 

negotiation counterparts that Congress and the Administration stand together on the high 

standards we are seeking at trade talks. 

For U.S. agriculture the opportunities ofTPP are clear across the board. Here are a few 

examples where TPP will address tariffs and expand market opportunities for U.S. farmers and 

ranchers: 

Beef'- Japan is the largest export market lor U.S. beef, valued at S I .6 billion in 20 I 4. 

Tariffs are as high as 50 percent in some TPP countries. 

Pork - Japan was the United States' top pork market in 2014 with S2 billion in sales 

despite high tariffs and a complicated import system, both of which will be addressed 

in TPP. 

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4.22.2015 

Poultry - Poultry tariffs in the TPP region are as high as 240 percent, and in 2014, 

the United States exported over $2.5 billion of poultry to the TPP region. 

Dairy Products - TPP countries markets for dairy accounted for $3.6 billion in U.S. 

dairy product exports in 20 14. 

Fruits - Tariffs on fmits are as high as 40 percent across the TPP region, and in 20 I 4, 

the United States exported almost $3.1 billion in fresh fruits to the TPP region. 

Vegetables- In 2014, the United States exported almost $5 billion in fresh and 

processed vegetables to the TPP region, and tariffs are as high as 90 percent.. 

Wheat- ln2014, the United States exported more than $2 billion of wheat to the TPP 

region, including to Japan where the United States is the dominant supplier. 

Soybeans and Soybean Products -The TPP region is the fourth-largest export 

destination for U.S. soybeans, accounting for over $1 billion a year in sales, despite 

tariffs as high as 20 percent. 

In addition to cutting tari11s, the TPP will include strong sanitary and phytOsanitary 

(SPS) provisions that will improve transparency and scientific decision-making to 

provide expanded access for U.S. products including meat, fresh fruits, and 

vegetables. 

Trade in the 21" Century is also about America's place in the world. The TPP is key to 

markets in Asia and the ability for the United States to play a lead role in establishing the rules 

and tenns of trade throughout the Pacific Rim. If we don't get a trade agreement, the world will 

not stand still; other countries will step in and fill the void. They will have their own trade 

agreements. For those of us in agriculture who are concerned about raising standards, reducing 

barriers to trade, securing preferential access, and instituting enforcement provisions, the 

question is who do you want writing the rules of the road? I want the United States negotiating 

those rules. 

With TPA, the United States will be able to seal the deal on high standard agreements, 

like the TPP and the T-TIP, that will help America's fanners and ranchers increase U.S. exports 

and compete in a highly competitive, globalized economy. But don't j ust take my word lor it, I 

urge you to speak to your fanners, ranchers, and producers. A group of more than 70 

agricultural organizations recently sent a letter to Congress staling that TPP can become the 

"most important regional trade negotiation ever undertaken" but for "TPP to become reality, 

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4.22.2015 

Congress needs to pass TPA." I am committed to working with you in securing a bipartisan 

TPA. 

Thank you. l look forward to your questions. 

111111 

4 
24 

Chairman RYAN. Great. Three minutes and 44 seconds. You 

would have made a great House Member. Thank—— 

Secretary VILSACK. No, thank you. 

Chairman RYAN [continuing]. You. 

So let me ask this. We have been talking with our Members 

throughout the year about what do they think went right and what 

do they think went wrong in past trade promotion authorities that 

have been given to past White Houses. 

And, you know, this is authority that we have had since FDR. 

It is critical for the administration to go out and get the best deal. 

Our trade partners aren’t going to give us the best agreement, 

their last best offer, if they think that you can just take it back to 

Congress and Congress will just rewrite it. 

So we understand that this tool is absolute critical to getting the 

best deal possible for American workers. But we also believe that 

there were some mistakes made in the past that need to be improved upon. And so we have new provisions in this particular 

trade promotion authority aimed at a few things. 

Number one, we have 150 guidelines. Mr. Levin pointed to his 

concerns with those guidelines. I would simply say the guidelines 

had to be done in such a way that give our negotiators room to negotiate. You know, we are not going to have 536 negotiators negotiating with 11 different countries. We are going to have one negotiator. But that one negotiator, the administration, the USTR in 

particular, we want to make sure that they understand what Congress expects of them and the process in which we are going to consider this. 

So we also were concerned about Members and their ability to 

access text, their ability to get their questions answered, their ability to participate. And so that is why we have new provisions in 

here that gives a Member of Congress and their security-cleared 

staff the ability to not only look at the text, query the negotiators, 

but participate and attend the negotiations if they want to. 

But the other point that we were concerned about is we want to 

make sure that the public sees what this is before we are even considering it. That is why we have more transparency requirements 

in this law placed upon the White House, so that the public has 

plenty of time to digest what is in these large, multilateral trade 

agreements. 

And so it is a different type of TPA. And if the administration 

does not conform to these procedures, to these processes, if it 

doesn’t work within these guidelines, then Congress, this committee retains the right to turn TPA off for any particular agreement. And that is different. That is a new level of accountability 

that we have added to this. 

So let me just ask you, Secretary Pritzker—because I think we 

could use some reassurance that this administration has a very 

clear grasp of what this Congress is expecting of the administration. And I agree with the statements of all three of you; I think 

this is an unprecedented opportunity for us. 

Do you understand the consequences that are laid out in this bill 

if the administration does not meet its TPA obligations? 

Secretary PRITZKER. Yes, Mr. Chairman, we do. 


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And, in fact, we are very much committed to transparency. And 

we have heard the concerns from many Members of Congress. And, 

as a result, we have had over 1,700 consultations with Members of 

Congress. We have 28 industry advisory councils, ITACs, that meet 

that are made up of members from different sectors—small companies, medium-size companies, large companies, labor, NGOs—that 

have been advising us. 

And we also absolutely understand the fact that texts are to be 

made accessible to the committee as well as to make sure that the 

staff has access to the text. And they don’t have to make an appointment; the texts are up here on the Hill. We very much, you 

know, heard the concern, and we are trying very hard to be responsive. 

And then, as you said, in addition, the public will have access 

once the agreements are completed, have time to better understand 

those agreements so that everyone understands what we are getting into. 

Chairman RYAN. Thank you. 

Secretary Lew, you went into currency quite a bit in your opening. I just want to kind of drill down a little bit more because we 

might very well be considering some amendments on this issue as 

early as tomorrow with our markup. 

So, as you mentioned, for the first time, this bill includes as a 

principal negotiating objective an objective on currency that directs 

the administration to seek a meaningful outcome in our trade 

agreements. The committee worked very closely with the Treasury 

Department while drafting this negotiating objective, and I believe 

it provides the important tools that the administration needs to get 

a better outcome. 

I received a letter from you yesterday, and I wanted to talk to 

you a little bit about that. In it, you updated us on the status of 

your currency negotiations in the TPP. You wrote that ‘‘any amendment to TPA legislation requiring that the administration only 

seek enforceable currency provisions as a principal negotiating objective would undermine our ability to successfully conclude a TPP 

negotiation.’’ So that is one pretty darn important point. 

You also wrote that you oppose the current legislation ‘‘that 

would use the countervailing duty process to address currency 

undervaluation because it would raise questions about consistency 

with our international obligations and it would be counterproductive to our ongoing bilateral and multilateral engagement as 

well as our efforts to promote greater accountability on currency 

policies in that context.’’ 

So, basically, what I am asking you is, knowing the position here, 

you would oppose amendments to TPA if they were being offered— 

I just want to ask you this for the record—if they did such things? 

Secretary LEW. Yes, Mr. Chairman, that is correct. 

Chairman RYAN. Okay. 

Secretary LEW. And let me be clear. We are very sympathetic to 

the concerns raised by Members on currency, as you indicated in 

your opening remarks, as well. I don’t think there is a disagreement that we need to take tough actions with trading partners that 

do things that are unfair. But we have to do it in a way that is 


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effective, and we have to do it in a way that doesn’t undermine, 

ultimately, our own interests. 

I believe that the letter states correctly that, having over the last 

week raised this issue with 10 of the 11 negotiating partners, the 

reason they are willing to have a conversation on currency, in part, 

is because of the firm knowledge that Congress has set it out now 

as something that is going to be a negotiating objective. I don’t 

know that there would be the kind of conversation that we are having now—and that is why I think TPA is very important. It does 

send a clear signal that this has to be part of the conversation. 

At the same time, I got a very clear signal, in all of our conversations we got a very clear signal, that if it was an enforceable trade 

discipline on currency, that that was something they wouldn’t even 

be open to discussing. Because for many of these countries, there 

is some form of intervention that is a part of legitimate macroeconomic policy, and they are worried that legitimate policies could 

be impaired by a mechanism where monetary policy is reviewed in 

the context of a trade enforcement process, which, you know, is 

something that is a legitimate concern. 

On the other hand, they don’t have the ability, when we engage 

with them bilaterally or through the existing fora, to say that 

interventions that are persistent and sustained, that build up the 

kinds of surpluses in foreign exchange, that create a competitive 

advantage for them is something that is permissible. 

We pushed back very hard, and we are making progress. I don’t 

know that we would be able to make the kind of progress we are 

making if we start taking actions that are the kinds of actions in 

these amendments. So I think, you know, there is a question of 

whether the effectiveness of our current tools are undermined. 

Chairman RYAN. Yes, I think that is right. No one is disputing 

that manipulation occurs and has occurred and that it is wrong 

and that it is not helpful and it is not good for America. We get 

that. Everybody agrees with that. I guess the question is, what is 

the best way to deal with it? And some of these remedies, I think 

I agree with you, can be more than counterproductive, can actually 

backfire and blow up in our faces if we get them wrong. So it is 

all about finding the right tools to respond so that we can get ourselves into a win-win situation, not a win-lose situation. 

Let me just go to you, Secretary Vilsack, real quickly. Yesterday, 

a new report showed that workers who have jobs related to trade 

earn higher wages than those who do not. Manufacturing workers 

earn 16.3 more. Service workers earn 15.5 percent more than workers in similar non-trade-related occupations. 

So we all want stronger economic growth and more jobs. We 

don’t always agree on how to do that, but one area where I think 

we have seen agreement on a bipartisan front is on agriculture. We 

clearly produce more than we can consume here in America. So the 

future for agriculture, the future for good, stable prices and good 

living wages on the family farm and keeping family farms in place 

is opening more markets for our products. 

This is an area where, with respect to TPP and with respect to 

the trade guidelines we have in TPA, we want to make a huge effort in. And we already provide a fairly open system and access to 

our markets for countries sending us their products, but we don’t 


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have anything close to reciprocal treatment to our agricultural exports. 

Give us a sense of how unlevel that playing field is with respect 

to some of these countries on their tariff rates, on their non-tariff 

barriers, and how, if we can get more of a reciprocal treatment, 

that could be a big boon to agriculture. 

Secretary VILSACK. Mr. Chairman, our farmers do, in fact, face 

some fairly significant barriers. In poultry, there are tariffs are as 

high as 240 percent. In corn, it could be 40 percent; wine, 55 percent. Vegetables can be as high as 90 percent; citrus, 43 percent. 

The reality is a lot of the commodities that we currently raise in 

this country are absolutely dependent on exports. Fifty percent of 

our wheat crop, 50 percent of our rice crop, 50 percent of our soybean crop, 80 percent of our cotton crop, even 70 percent of the tree 

nuts that are produced in this country are exported. 

That is why it is so important that we get a level playing field, 

reducing and eliminating tariffs and science-based SPS requirements. With that, America producers will compete very effectively. 

Without it, we are obviously behind. 

Chairman RYAN. Thank you. 

Mr. Levin. 

Mr. LEVIN. Thank you. 

And, again, welcome. 

You know, a lot of us have been working for a TPP we could support. And I say this respectfully, as to currency, Mr. Secretary. We 

have been friends for a long time. The country needs more than 

sympathy on this issue, and we need to do more than get it. The 

problem has been that, for decades, we were not able to take action 

that really impacted the manipulation of other countries, and our 

workers and businesses got desperately hurt. 

And I just think it is a serious mistake to overstate what is in 

this negotiating objective. Because, after listing what is wrong with 

currency manipulation, it says that actions shall be taken through 

cooperative mechanisms, enforceable rules, reporting, monitoring, 

transparency, or other means as appropriate. So that doesn’t say 

anything specifically. ‘‘Other means as appropriate.’’ 

And we know you care. And we have talked about this a lot. But, 

essentially, what we are left with, with this negotiating objective, 

is more of the status quo. That is all that is guaranteed. 

And let me just say a word about workers’ salaries. It is true 

that workers’ salaries in industrial areas, those salaries are higher 

than in other areas. It is also true that, in part because of trade, 

not only because of it, that there has been stagnation of wages for 

workers in this country—stagnation for 30 years. And no one has 

said that trade is the only cause of it, but it makes a mistake to 

essentially ignore it. 

And that is why we have raised the issue in terms of worker 

standards and in terms of Mexico and Vietnam. There are supposed to be what are called consistency plans on workers, Vietnam 

and Mexico. Do any of you have any idea, the status of those plans? 

Secretary LEW. Congressman, obviously, we are not negotiating 

that specific provision, but let me answer in a general way. 

In the labor standards section, what it requires is that anyone 

who signs the agreement comply with the International Labor OrVerDate Sep 11 2014 16:22 Mar 17, 2017 Jkt 022183 PO 00000 Frm 00031 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\22183.XXX 22183

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ganization standards, and there is a process for that to be enforceable. Obviously, for each country, there is going to be a different 

path towards enforcement, but we are talking about countries for 

whom this is a huge step, making the commitment to meet the 

higher standards. 

And when you look at the competitive disadvantage the United 

States has with such high standards—I am proud of our high 

standards—bringing other countries from a very low level up is 

going to make it more competitive for American businesses. 

Mr. LEVIN. I agree. I agree. And that is why when we put together, Mr. Rangel and I, with support of others, the Peru free 

trade agreement, we required that changes be made in their laws 

and practices before we voted. And we did the same with Colombia 

before we voted. And so where is the consistency plan? 

And I am in favor of transparency. The problem is, I must say, 

at this moment, voting on TPA, we have no real idea where on this 

it is going. 

And the same is true in so many areas. You mentioned stateowned enterprises. We have no idea what the exceptions will be 

asked for and agreed to. The same is true, as we sit here, in terms 

of the Japan automotive provision. 

And, Mr. Secretary, let me close; I have just a few seconds. Do 

you know what Japan has agreed to in terms of their tariff reductions on our five or six major crops? And can you, if you know that, 

tell us what they are today? 

Secretary VILSACK. Congressman, I can tell you that the negotiations are ongoing. I can tell you that there has been progress 

with Japan in terms of opening up their markets. I think they recognize and appreciate that they have to make some changes in a 

market that has been closed for far too long. 

And I think, when all is said and done, the negotiating principles 

and objectives that are laid out in the TPA legislation, as it relates 

to reduction and elimination of tariffs, you will see that with reference to Japan. 

Mr. LEVIN. Okay. I just want to finish. What the objective says 

is to eliminate or reduce tariffs in agriculture. That is a meaningless objective. Because Japan started off by saying they would reduce. The question is how many they will eliminate and how much 

they will reduce in these key crops. And, as we sit here today, 

about to vote tomorrow on a TPA, we have no idea where those discussions are. And the objective, it just says reduce or eliminate. It 

is meaningless. It is a meaningless objective. And so that is why, 

in our bill tomorrow, we are going to spell our alternatives, something more specific. 

Okay. I have to yield back. 

Thank you very much for giving me this time. 

Chairman RYAN. Thank you. My pleasure. 

Mr. Johnson. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Let me just start by saying trade is very important to the State 

of Texas, and, in fact, our Governor, Greg Abbott, likes to say 

Texas is number one when it comes to exports. So, certainly, it is 

in our interest to open up those foreign markets that still put up 

barriers to American goods and services. 


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Secretary Lew, welcome. Now, you have heard what I just had 

to say about Texas and trade. And, with that, I have to be up front 

with you, in that we have heard loud criticism from some about the 

lack of congressional consultation and engagement with Congress 

and the public during trade negotiations. As you know, the TPA 

bill includes a number of new provisions to ensure that Congress 

and the public are fully engaged and consulted. 

So, for the record, let me ask: Do you agree that TPA strengthens 

congressional-executive consultation? 

Secretary LEW. Are you asking me or Secretary Pritzker? 

Mr. JOHNSON. You. 

Secretary LEW. Congressman, there is no question but that the 

TPA raises the bar from any prior approaches in terms of the 

amount of consultation, the amount of transparency. We have 

made great efforts, USTR has made great efforts to consult with— 

I believe, a record amount of consultation. But that doesn’t mean 

we can’t do more, and this TPA requires that we do even more. 

Mr. JOHNSON. Well, more importantly, is this administration 

committed to following the requirements—— 

Secretary LEW. Yeah. We are committed to following the law. 

And we are committed to working with the Congress, more importantly, to work together, to make sure that America speaks with 

one voice as we go about agreeing to trade agreements. I mean, ultimately, we have to bring any agreement back to this Congress, 

and we need to be able to negotiate with the belief that we can get 

Congress to approve the agreement. 

Mr. JOHNSON. Thank you. 

Secretary Pritzker, I want to ask you about TPA’s transparency 

requirement. As you know, TPA requires significant transparency, 

particularly for Members of Congress, throughout the process. For 

example, Members can serve as official advisors for trade delegations and personally attend negotiating rounds. 

So, Madam Secretary, how does the administration intend to 

comply with these new transparency requirements? And what assurance can you give us that the administration will follow those 

requirements? 

Secretary PRITZKER. As Secretary Lew said, we intend to comply with the law, and so making sure that Members of Congress 

can have access to texts in the security of their office at their convenience or your staff can accompany you, if they have appropriate 

clearance, so that your staff has the ability to see the text. And 

then, you know, the requirement to be credentialed is one that is 

included in TPA, is one that we intend to abide by. 

Mr. JOHNSON. Thank you. 

And, Secretary Vilsack, I didn’t want you to think you were being 

left behind. You know, while I represent a fast-growing district in 

the Dallas area, I do happen to represent farmers and ranchers in 

the northern part of my district, such as in the towns of Princeton 

and Melissa, which you have probably never heard of. 

Do you happen to know what our top ag product from the district 

is? 

Secretary VILSACK. Well, Texas has a very varied agriculture. 

It wouldn’t surprise me if there are cotton and soybean growers in 

your district. It wouldn’t surprise me if there was livestock cattle 


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being raised in your district, or in and around your district. And 

it wouldn’t surprise me if you had some dairy, as well. 

Mr. JOHNSON. Well, you hit all three, but the main one is 

wheat, believe it or not. 

Unfortunately, as you know, our wheat growers face barriers 

overseas, particularly from countries like Japan. So how will TPA 

and TPP benefit the farmers and ranchers, particularly wheat 

growers? And are we making progress, any real progress, with 

Japan? 

Secretary VILSACK. I would say in two significant ways, Congressman. One is reducing and eliminating tariffs, and, two, making sure that whatever sanitary or phytosanitary barriers are created, that they are science-based, and if they are not science-based, 

TPP would basically provide for a mechanism for a quick resolution 

to reduce those barriers so that you wouldn’t see the disruption of 

trade that we currently see. 

And this is another reason for being concerned about the Chinese 

influence in this part of the world. Because China does, indeed, 

have a tendency to create those kinds of SPS barriers. If we can 

surround China with a better system, a science-based system, I 

think we will avoid the disruption in the market that we have seen 

recently. 

Chairman RYAN. Thank you. 

Mr. Rangel. 

Mr. RANGEL. Thank you, Mr. Chair. And thank you for the opportunity this committee has to get the views of the administration. 

And I want you to know that I agree with almost everything you 

said about the future of the United States and the world in terms 

of trade. I think it means peace, it means prosperity, it means security, it means standards, that a country would understand that 

when America speaks it also provides the leadership that is expected of us now and also of the future. 

I agree, also, that 535 of us would be a bad group of people to 

be negotiating an agreement. And we have had confidence in the 

past Presidents; I have no reason to believe that we shouldn’t have 

confidence in this President. 

Is the agreement for 6 years? 

Chairman RYAN. Yes. 

Mr. RANGEL. So I think Hillary Clinton appreciates the fact 

that this is extended far beyond the time that she has to ask for 

it. 

But having said all of that, when we get back in our districts, 

we have to figure out, why did this constitutional authority we 

have pass on, and how is it going to be good for the country? 

So I have looked at this. And with currency manipulation, I don’t 

think at my townhall meetings with my underemployed and unemployed this is a big deal. But human rights, fighting against a 

bunch of rogue cops shooting down people in complete disregard of 

their human rights. 

As far as investment service, I know that Republicans and the 

President are going to take care of our investors. The whole idea, 

of course, is to make certain that we are able to sell more than we 

consume and that we get out there with the market. 


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Now, I don’t have a problem with that, except that I don’t know 

what happens when we get in this profit. I don’t know—I have to 

trust the President. In order to trust him, he has to have some cooperation with the Republicans and Democrats in the House so 

that, if I was to ask, are there any provisions here that, when 

America succeeds and the profit is there, that this big disparity 

with the CEOs that you have visited, Mr. Secretary, who said this 

is the greatest thing—are there any provisions in here that the 

workers would be beneficiaries? I think not. 

Are there any provisions in there that says that, ‘‘And the only 

way we can make this work is to have an infrastructure—seaports, 

airports, roads—in order to support the principles that we have 

and to provide for the leadership of the world’’? I think not. 

You talk about productivity, and I kind of think that means that 

we are going to lose some jobs, but there would be great new opportunities. I think so. Are there provisions in this bill that Americans 

will be able to take advantage of that, with the training and education and all of these things? I think not. 

So what do I have to tell my people that this is good not only 

for the world and the country but it is good for you? Well, I think 

we have TPA. It would be, ‘‘Trust that the President is going to do 

the right thing for America.’’ 

But if I ask them, is the infrastructure bill included in this, they 

said, no, the Parliamentarian wouldn’t allow it. If I asked, well, is 

education, in terms of getting the skills that is necessary to perform—no, that is a separate bill. 

But suppose I ask, are the Republican majorities prepared to tell 

the President, if he asks for it, this is a package, this is what I 

promise of you? It is not a question of Americans’ leadership and 

profits. This is a question of prosperity for the entire country. 

Are there any provisions that you know that are included in this 

package that people would say that I am prepared for the new future and the standards for decades in the future? I think not. 

Could the President possibly say that he had an agreement with 

the Republicans that it may not be in TPA but take my word for 

it? This is going to bring our Congress together. These aren’t 

Democratic proposals; these are Americans proposals. Republicans 

want infrastructure improvement; they want skills. Well, then, why 

can’t they say that this is a part of the package in or outside of 

TPA? 

So if there is anyone that can find jobs that I can talk about now, 

if you can find infrastructure provisions in this bill that I can talk 

about now—because the trade bill, without being able to export, 

doesn’t count—and if you can find anything that would indicate 

that our constituents won’t be able to get a job but their kids can 

damn well depend on the fact that they will be ready for competition—and we will get to the farmers because that is a second thing. 

They can make a lot of money, but if you have a problem having 

the income to buy fresh food in my district, saying that farmers are 

going to make out won’t sell. 

Could we start with Secretary Lew or anybody who wants to volunteer at any point of the hearing, where these provisions, if they 

are not in TPA, you would say what agreement do we have they 

come up to be with the bill? 


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Chairman RYAN. So let me just interject for a moment, Mr. Rangel. You are out of time. 

Mr. RANGEL. I am sorry. 

Chairman RYAN. And I just want to make sure that we can get 

to—we have a lot of people. So we want to make sure, if there is 

a question, we ask it early on in the 5-minute increments so people 

can get their answers in. 

Is there a quick answer that anybody wants to offer? 

Mr. RANGEL. No, there is not. 

Chairman RYAN. Okay. Well—— 

Secretary PRITZKER. Why don’t I just say, you know, the following. 

I mean, I could give you chapter and verse—in fact, we have put 

together a book—of various companies that have created jobs because of their exporting. And so that is one thing that I could share 

with you. And, in fact, stories from New York are happy to do that. 

Mr. RANGEL. You are not serious. 

Secretary VILSACK. And we have a State-by-State breakdown of 

the benefits to agriculture in each State, which we would be happy 

to provide you. 

Chairman RYAN. Not trying to give you short shrift. 

Mr. RANGEL. Not State by State, but New York City. 

Chairman RYAN. I am just trying to be cognizant of the other 

Members’ time. 

Mr. RANGEL. I appreciate it. 

Chairman RYAN. Mr. Tiberi. 

Mr. RANGEL. Thank you so much. 

Mr. TIBERI. Thank you, Mr. Chairman. 

I just want to thank the three of you for being here today and 

for participating and educating us. 

In my State of Ohio, trade becomes a pretty emotional issue, particularly during campaign time. And the three of you know that. 

One of the amazing statistics, though, with respect to countries 

that we have an agreement with, as you all know, is, according to 

the National Association of Manufacturers, in each of the past 2 

years, the U.S. manufacturers had a $50 billion surplus with trade 

agreement countries. In Ohio, nearly 60 percent of Ohio goods and 

exports went to countries we have an FTA with, approximately 20. 

We export to 200, but 60 percent goes to those 20. 

Secretary Pritzker, you happened to visit one in my district in 

western Ohio, Lake Shore. It was founded in a basement. The 

owner founded this business in a basement. High-tech manufacturer, nearly 200 employees. And what is fascinating about it, if 

you remember, is from the ceiling hangs flags of the countries that 

they export to, most of whom are countries that we have FTAs 

with. Their major competitors are in East Asia. 

As you know, Secretary Lew, because you mentioned it, many of 

those countries are joining China in trade agreements. And, as you 

eloquently said, which I don’t think the administration gets enough 

credit for, quite frankly, is that those agreements with China typically aren’t as high a standard as they are, as Secretary Vilsack 

said, with the United States. And so either China is going to write 

the rules of the region and the world, or we are going to write the 


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rules with these countries who want to trade with us. And each one 

is a little bit different, as you said, Secretary Lew. 

The question that I have—and I won’t take up my entire time; 

and I think this is really, really important—is that some say we 

lose leverage, that I lose leverage by passing TPA. 

Chairman Ryan took a CODEL to the Far East and East Asia, 

and we heard from many government leaders who were negotiating 

with us that we are not going to put our best offer on the table 

until you really pass this bill, to know that you are serious, and 

that you give the administration the authority to do this. 

But, more than that, Secretary Lew—and you have been really 

engaged in this issue for a long time now—tell us why we are not 

giving up our leverage. Tell us why this administration is committed, after TPA is passed by this House and the Senate, that you 

and your colleagues and Ambassador Froman are going to continue 

to negotiate with us. 

And if you would like to answer that, as well, Secretary Pritzker, 

go right ahead. 

Secretary LEW. Congressman, I would just say that these negotiating objectives are very important. We know that an agreement 

is going to have to come back that you judge as having taken those 

objectives very seriously. 

That is why we care that the objectives be crafted in a way 

where we can bring back a product that is consistent and why, if 

we don’t believe it is possible, we say so. 

The thing that is important to remember is this is the procedure 

for considering a trade agreement. The substance of the agreement 

comes later. 

Mr. TIBERI. Thank you. 

Secretary LEW. And we don’t—this does not set an irrevocable 

path. It has to be passed. And I don’t believe we can pass a trade 

agreement if we ignore the objectives that Congress sets out. 

And there is a tension in—— 

Mr. TIBERI. We are all set. 

Secretary LEW [continuing]. When to do TPA. If you do it very 

early in the process, we can’t tell you anything about the shape of 

the conversation. If you do it too late in the process, then all the 

decisions have been made. 

We are coming in now, as we approach the final stages, where 

we can show you where we are heading, nothing is agreed to until 

everything is agreed to. We can give you a sense of where the 

agreements are going. We can take your direction, and we can go 

back and complete agreements cognizant of Congress’ direction. 

Mr. TIBERI. Very well said. 

Anyone add anything? 

Secretary PRITZKER. I would just add, Congressman, that, you 

know, as a former CEO, you want to know the person on the other 

side of the negotiating table. You need confidence that, if you go 

out on a limb to put your best offer in place out there, that you 

are not going to find yourself with no deal and having exposed 

yourself. 

It is no different for the political leaders. And several heads of 

state who are party to TPP have said that. They want to know that 

Congress and the administration are standing together, and they 


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want to know what the standards are in order for them to take the 

political risk in their country to put their best offer on the table. 

Mr. TIBERI. Thank you. 

Chairman RYAN. Thank you. 

We let the 15-minute vote go down to zero. We have two 5- 

minute votes following this. So we will recess subject to the call of 

the chair and—or do you want to—do you want to continue? Did 

you already vote? 

Mr. REICHERT. I voted already. 

Chairman RYAN. Yeah. But you got the 5-minute coming up. 

So—— 

Mr. REICHERT. Yeah. I want to be at the 5-minute vote. 

Chairman RYAN. Yeah. I don’t want you to miss your vote. 

We will recess subject to the call of the chair for these two 5- 

minute votes and resume shortly thereafter. 

Committee is in recess. 

[Recess.] 

Mr. REICHERT. [Presiding.] The hearing will be called to order 

once again. 

I thought for a minute we were going to do the usual thing that 

Congress does, and that is work in the dark. But somebody turned 

the lights on; so, that is good. 

I am going to recognize Mr. McDermott for 5 minutes. 

Thank you for your patience, panel. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. 

I think it is safe to say I have been around this place for quite 

a while. It kind of reminds me of an old cattle drive in the West. 

And I have been here for 17 of them. I have voted on 17 trade bills 

since I came to Congress in 1989. 

If you look at this dais, there is only six people here who were 

here when NAFTA passed. So there is a lot of history that has been 

lost over the course of time, and I think we need to really think 

about some of what went on then. 

I would like to touch on some of the more prominent trade agreements, really, the NAFTA being the one that I think epitomizes a 

lot of what is troubling many of us up here. 

Remember back to ’92. In order to appease the labor groups, then 

Bill Clinton said he would negotiate a side agreement on labor for 

the North American Free Trade Agreement, which he signed in August of ’92, months before his election—or months after his election—before his election. It was signed under Bush. 

Now, this is the first time that worker rights received more than 

just passing mention in a trade agreement. We had a 43-page document outlining 11 labor principles, including the prevention of occupational injuries and diseases. 

At the signing of the NAFTA agreement in December 1993, Clinton said, ‘‘The labor side agreement negotiated by our administration will have the agreement of force for social progress as well as 

economic growth.’’ 

But, since then, the problems with the labor side agreement have 

become exposed. The promises of social progress have not lived up 

to the reality because NAFTA’s side agreement was weak. It did 

not force any of the governments that are part of the NAFTA to 

adopt new worker rights—laws or conform to any international 


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standards. However, only three of the principles were enforceable 

by sanctions, and the process of bringing a case that would result 

in sanctions takes a long time. 

Another less known, but equally important, issue of NAFTA was 

the explosive growth of the maquiladoras which now dot the U.S.- 

Mexican border. Many on this committee may not have heard 

about maquiladoras—perhaps my friends from Texas and Arizona 

and New Mexico have—but they are factories that import materials 

tax free from the United States, complete work added value, and 

then export the final product back to the United States. 

It doesn’t sound like a bad idea. But these factories are essentially modern sweatshops. The working conditions are simply abhorrent. Maquiladora employees face health concerns and injuries 

because of preventible violations of labor rights, according to one 

study, the same rights, I would point out, that are in—the very 

side agreements were created to protect. 

Women who worked in those sweatshops have a three times 

higher incidence of babies being born at low birth weight than 

women in service jobs who lived in the same town. One study found 

the maquiladora workers had upper back, neck, shoulder, and hand 

and wrist pain at incident levels 40 to 90 percent above general 

labor. 

Another study found that children of maquiladora workers were 

three to five times more likely to bear a child that had 

anencephaly, which is a horrible condition that results in a baby 

being born without parts of the brain or skull. They were working 

in chemical factories. 

In addition to failing to protect worker safety, the side agreement 

did nothing to ensure that workers received livable wages. 

Maquiladora workers worked longer hours and received lower 

wages than the national average. One study shows that it took a 

maquiladora worker—11⁄2 hours to earn enough money to buy a 

kilo of rice. By comparison, a dock worker in San Pedro and Los 

Angeles could earn enough money to buy the same amount of rice 

in 3 minutes. 

Even today the conditions are hardly any better. One family 

profiled in a recent news article about maquiladoras works in an 

air-conditioned factory by day and lives in a dirt floor hut by night. 

The roof of his house, corrugated metal, is hit on by rocks, a bear. 

A single light bulb hangs in the house. Now, after working in the 

sweatshop for a decade, that worker says he has no hope for a better life for his children. 

The point I want to make here is that promises that the administration makes regarding trade agreements may not always end up 

the way they predict that it will. For the women whose children 

suffered birth defects, the labor rights of the agreement did not 

lead to social progress. For the workers who struggle with wages 

that do not keep up with inflation, they did not provide enough 

money for the basics and do not give families the money needed to 

send their children to schools. There is no economic pro for them. 

The TPA agreement has plenty of good-sounding protections that 

the administration says will protect workers, but my experience 

here in the House through 17 of these agreements makes me very, 

very skeptical. As we move toward TPA and TPP in the coming 


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days and weeks, I would strongly urge all my colleagues on this 

committee to look at NAFTA, CAFTA, and some of the other agreements before they make their vote. 

Mr. REICHERT. Gentleman’s time has expired. 

I will yield myself 5 minutes, since I was in line at the other end 

of the dais. I want to thank you all for your patience as we were 

away voting and thank you for your work in support of expanded 

trade. 

This is critical for my home district. As you know, Washington 

State is the most trade-dependent State in the country and its 

trade supports over 77,000 jobs in Washington State. $8.6 billion 

total goods and services and exports in 2013. So you can see how 

critical it is. 

And Secretary Lew, I think, testified to, jobs tied to trade pay, 

on average, 15 to 20 percent more than non-trade-related jobs. So 

we want to create more of these jobs, and we need to pass trade 

promotion authority in order to do that. 

So I would like to ask just a few questions. First, I want to give 

Secretary Lew an opportunity. I saw you raise your hand earlier 

when Mr. Levin was talking about meaningless language in the 

agreement in TPA, referring to Japan and reducing and/or eliminating tariffs. 

Did you want to respond to that? I wanted to give you a couple 

of minutes. 

Secretary LEW. I don’t remember raising my hand. I am happy 

to respond if you think—— 

Mr. REICHERT. Okay. Maybe it was nodding your head or—— 

Secretary LEW. You know, obviously, the final agreements have 

not been reached yet. They are being negotiated. That is why Ambassador Froman isn’t here today. He has been in Japan. And Congress will have a chance to judge based on what the reductions are. 

TPA is a process for the consideration of the substance in TPP. 

And as I indicated in response to an earlier question, there is a 

tension between when to vote on TPA and when you have enough 

of the substance of the agreement to know what the agreement is 

going to look like. 

I think we are at the point now where we have shared so much 

that you have a good idea of the direction things are heading in, 

but we now get the guidance and the priorities from TPA as we go 

into the final round of negotiations. 

Mr. REICHERT. I appreciate that. Thank you. 

The legislation calls for our negotiators to seek commitments 

from our trading partners to allow for cross-border data flows and 

to refrain from implementing forced localization measures. These 

are the types of 21st-century barriers that we need to address in 

our trade agreements. 

Secretary Pritzker, could you discuss why this updated language 

is so important to expanding trade. 

Secretary PRITZKER. Well, thank you very much. 

I mean, this bill includes affirmative measures to facilitate ecommerce, recognizes the significance of the Internet as an international trade platform, as well as it works to prevent the blocking 

of international or cross-border data flows. All of these things are 


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necessary for companies in order to be able to work in the modern 

age. 

And so the fact that—you know, the significance of the Internet 

as a trading platform is something that has not been recognized. 

Think about it. Twitter and Facebook didn’t exist in 2002. So we 

need to address these issues. They are absolutely critical. 

I get more calls from more companies about challenges in terms 

of being required to do local storage of data or cross-border data 

flow. So this is imperative, that we address these things for business in the 21st century. 

Mr. REICHERT. Thank you. 

Secretary Vilsack, also included in the legislation are negotiating 

objectives related to ensuring strong commitments in agriculture 

from our trading partners, including eliminating the improper use 

of geographic indications and obtaining enforceable rules on sanitary and phytosanitary measures. This is important for the State 

of Washington as other States across the country. 

How has the U.S. agricultural benefited from previous free trade 

agreements? 

Secretary VILSACK. Well, since the passage of NAFTA, we have 

seen a 145-percent increase in agricultural exports. The last 6 

years have been the best 6 years in ag exports in history. Horticulture—fruits, vegetables, and other horticulture items have led 

the way. We have seen a remarkable increase in trade. 

The only impediment is these tariffs and the SBS barriers that 

are constructed by countries for reasons not related to science. And 

our belief is that the TPP, with a high standards agreement, is 

going to reduce and eliminate tariffs and it is going to make a process for SBS that is science-based, which would absolutely benefit 

American producers and will help to support additional jobs here. 

Mr. REICHERT. Thank you for your answer. 

Mr. Lewis, you are recognized for 5 minutes. 

Mr. LEWIS. Thank you, Mr. Chairman. 

Let me thank each one of you for being here today. I would like 

to get some response from the three of you. 

Do you believe that a trade agreement should reflect the value 

of our Nation? How—let me continue. I ask each of you: What does 

it profit a nation such as the United States of America to gain a 

trade agreement and lose her soul, to lose her soul by leaving so 

many people in America and around the world behind when it 

comes to human rights, labor rights, the right to organize, collective-bargain, to protect the environment? 

When you travel to some parts of these unbelievable places, there 

are too many people that have been left out and left behind. It is 

not compatible with what we believe in as a society and as a people, as a Nation. And I would like to get some response from you. 

Secretary PRITZKER. Let me start. Let me begin. 

I do think these trade agreements are consistent, and I think 

TPA is very much consistent with our values in requiring, in terms 

of labor standards, that we include, you know, freedom of association, rights of collective bargaining, protection from child and 

forced labor, employment discrimination protection. I think this is 

very much reflective of our values as we try to raise the standards 

around the world of how other countries are doing business. 


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The same is true in the environment. In the environmental objectives, for example, things that are near and dear to the heart of 

the Department of Commerce would be issues around illegal fishing 

or over-fishing and protecting our coastlines. Those are objectives 

to be protected. 

This is the kind of thing that is consistent with the standards we 

hold ourselves to, and what we are asking in these agreements and 

demanding in the agreements is that the countries that are party 

to trade agreements with us do the same. 

Mr. LEWIS. Now, Madam Secretary, you go to Vietnam—and I 

have been there—you only have one union, state-sponsored union. 

People are not free to organize another union. 

I hear the case where a young woman tried to organize a union. 

She was arrested and jailed for 4 years. That is not freedom of association. That is not freedom to organize. 

Secretary PRITZKER. I appreciate that. But I believe that the 

Vietnamese Government is hoping to use TPP as a way to raise the 

standards. 

Mr. LEWIS. Madam Secretary, we need more—if you want us to 

support this piece of legislation, we need more than hope. 

Secretary LEW. Congressman, I think, if you look at a country 

like Vietnam—I think we all agree Vietnam needs to raise its labor 

standards. And there are conversations going on with each of the 

countries that need to raise their labor standards as to what steps 

they need to take, but it is not part of TPA. 

It will be part of agreements that are reached in conjunction 

with TPP. They are going to have to commit to meeting higher 

standards because part of TPP will be committing to meet those 

standards. The question is the path they take to get there. 

So I think, with all the concerns that we share about the labor 

conditions and the rights of workers in countries like Vietnam, this 

agreement is not the same as past agreements. It puts into the 

body of the agreement the requirement that they comply with the 

International Labour Organization standards. 

Secretary VILSACK. Can I just simply add one other point, Congressman? And that is this is not a static situation. If we don’t get 

this done, somebody else will. And the question is: Who is that 

someone else? And the chances are quite good it will be China. 

And, frankly, if I have a choice in terms of labor, environment, 

and human rights, the U.S. leading that effort or the Chinese leading that effort, every single time I am going to pick the U.S. 

Mr. LEWIS. Thank you. 

Mr. REICHERT. Gentleman yields back. 

Mr. Boustany, you are recognized. 

Mr. BOUSTANY. Thank you, Mr. Chairman. 

Just to follow on this conversation, just think if 11 countries, 

along with the United States, with very disparate levels of economic development can come together in a high-level, 21st-century 

standard agreement. What an accomplishment that will be. I think 

that fits in with American values. 

And as we look at the U.S. economy, we need growth. We need 

job creation. We want to promote innovation and value creation. 

And, to me, the catalyst for American leadership in all of this and 

for our foreign economic policy is TPA, trade promotion authority. 


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And this version of TPA is not the 1974 or 1988 or 2002 version. 

It is a much enhanced version of this. And I think Chairman Ryan 

raised some of these points earlier with the robust expansive consultative process between our negotiators, the executive branch, 

and Congress, the transparency, the detailed objectives. 

So I want to explore that further and each of you to comment. 

How does this version of TPA, with all those new enhancements, 

help us get to the best possible agreement? How does it create the 

kind of leverage? How does it put the full force of the United States 

Government and the people of the United States behind this kind 

of high-level, high-standard agreement? 

Secretary LEW. Congressman, I would say at the highest level— 

and Secretary Pritzker said this earlier—countries that we are negotiating with won’t go the final mile until they know what it is 

we need in the end. 

So I think, by putting 150 guidelines in there and by sending our 

chief negotiators out with clear instructions that sends a signal 

that, if he comes back, his team comes back, with an agreement 

consistent with the principles, Congress is likely to stand behind it. 

The decisions rest with Congress. So we can’t commit Congress 

to act. And Congress will have the vote. But these guidelines send 

a pretty clear signal of what we need. 

Mr. BOUSTANY. Right. 

In the consultative process, as the negotiations are being carried 

out—in other words, under this version of TPA, any member of 

Congress can see the text, understand our negotiating position, and 

weigh in on what the American position should be step by step as 

we go. 

That is pretty powerful. And there should be bipartisan support 

for something like this. And I would submit that the stronger the 

bipartisan level of support, the stronger signal it sends to our trading partners who are negotiating with us. 

I don’t know if either of the two of you want to comment on this 

or this line of thinking, but—— 

Secretary PRITZKER. Well, I would concur with your line of 

thinking. It is really important that we send a strong signal that 

Congress and the administration stand side by side in setting the 

terms and tone for this agreement. 

And the fact that there are so many provisions that support 

transparency is to continually acknowledge that, ultimately, the decision rests with Congress. And, therefore, Congress needs to be 

part of the process and brought along as it sees fit—as each member sees fit for themselves. 

Mr. BOUSTANY. Secretary Vilsack, I know, as we negotiate with 

Japan and TPP, agricultural products and market access with regard to our agricultural products is a big issue. It is one of the outstanding issues. 

And, of course, rice is a particularly sensitive issue and probably 

one of the last to be resolved. But this one is critically important 

for the rice industry, which is a big part of my State’s economy. 

I got positive signals when I was in Japan in March with Chairman Ryan and others on the committee that the Japanese were 

waiting on TPA before they will put their best offer on the table. 


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Is it your belief that that is the case and that we can get to an 

acceptable deal with rice and market access? 

Secretary VILSACK. Well, I know that Ambassador Froman, as 

Secretary Lew indicated, has just finished a round of discussions 

and negotiations with the Japanese. Rice is obviously a very critical 

component to that discussion. And I am confident, at the end of the 

day, we are going to see a much better market access opportunity 

for our rice producers. 

And I would say that these negotiations, to the extent that we 

can continue to reduce and eliminate these barriers, to the extent 

that we can provide a process which science rules on sanitary and 

phytosanitary barriers, we will continue the evolution of a trading 

system that will provide American producers expanded opportunity 

as we have seen in the last several years. 

Mr. BOUSTANY. And, Secretary Pritzker, real quickly with the 

time I have remaining, ISDS is something that is really important 

in this. And as we look at the National Export Initiative, in trying 

to expand export opportunities for small and mid-sized enterprises, 

explain why ISDS is so critically important and why it is not an 

infringement on U.S. sovereignty or U.S. law, but, in fact, helps our 

small and mid-sized firms with market access issues and their ability to thrive in these foreign markets. 

Secretary PRITZKER. Well, ISDS is a mechanism where investors, especially small businesses, who are 50 percent of the claimants, are able to challenge foreign governments in an international 

arbitration court rather than in a domestic court. 

So their opportunity to get a fair hearing, if there has been a 

taking or they have been deprived of the benefit of a contract, is 

really important. 

There is—nothing in ISDS prevents a State from regulating 

health and safety, environment, and other issues that are important to regulating one’s own nation. 

Mr. BOUSTANY. Thank you. 

I know, in my experience where we have a lot of energy companies, these companies have been involved in foreign operations and, 

in the absence of ISDS, they have had serious problems with, you 

know, loss of assets and so forth. So I thank you for your answer. 

I yield back. 

Mr. REICHERT. Mr. Becerra. 

Mr. BECERRA. Thank you, Mr. Chairman. 

To all three of you, thank you very much and for your patience, 

since we had to leave for votes. 

Secretary, let me go back to the issue of currency. I know you 

tried to address that, and we appreciate your thoughts on that. 

I guess I would ask—I know in your letter that you wrote to 

members you indicated that you share the concerns that there are 

countries that are using different means, in some cases, less-thanappropriate means, to try to advance their interests around the 

world when it comes to commerce. 

I would straight out call it currency manipulation. I don’t think 

in your letter you used the words ‘‘currency manipulation,’’ but you 

did talk about how currency is used in different ways by countries. 

I know you have in the past identified some countries that have 

used currency in the past. 


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Let me ask you this: Are we trying to tackle this issue of currency manipulation as we speak? 

Secretary LEW. Congressman, we take on this issue of currency 

and unfair practices every time we engage in a bilateral or multilateral setting, and we have the results to show it. 

I mean, I can’t count the number of hours I have spent bringing 

this issue to the attention of other countries, saying, ‘‘If you want 

to have the kind of relationship you want with the United States 

on economic and other grounds, you need to deal with this.’’ 

And we have made real progress. And that doesn’t mean we are 

done, and it doesn’t mean we can back away from doing it. And we 

are open to having more tools to do it with. 

Mr. BECERRA. And I know you mentioned in your letter that 

China’s currency has appreciated some 20, 30 percent in the last 

4 or 5 years, which, to me, is a signal that, in fact, there are countries like China that are manipulating their currency to make it 

look like their products are less costly and, therefore, they can sell 

them for a cheaper price in the U.S. compared to American products that would therefore be more expensive relative to those Chinese products. 

The concern I have this is this. I appreciate everything you are 

trying to do, but we have been trying to deal with this for years. 

And to say that we are going to keep trying to do something means 

that there will be people and there will be countries that will continue to do this. 

And unless we have an effective means to stop it, all we can do 

is hope for the goodwill of these countries to stop doing what they 

have done in the past, which some people—some moderate estimates tell us that we have lost some 1 to 5 million American jobs 

as a result of currency manipulation. 

So I think, for many of us, for us not to take an aggressive approach on currency manipulation is a nonstarter. And I know that 

you have said that the parties to this trade deal have said, ‘‘If you 

try to do’’—I will just use your words—‘‘All the partners consulted 

have made clear that they will not support the introduction of enforceable currency provisions in the context of trade agreements 

and specifically the TPP.’’ 

So, essentially, they are saying, ‘‘We will talk to you, but we 

won’t let you put anything enforceable in the trade deal,’’ which I 

think would be a major mistake because we know some of these 

countries have done it and we know others are doing it. 

And I just don’t believe that there is a satisfactory answer to saying, ‘‘We will keep trying to get folks to be—countries to do the 

right thing even though we know in the past they haven’t.’’ 

Secretary LEW. Well, Congressman, I think we are doing more 

than saying we are trying. We are actually making a difference. So 

the fact that it has been moving in the right direction is a reflection of the fact that it makes a difference to engage the way we 

have been engaging. 

And, as I said, we are open to other tools. The fact that putting 

it in a trade agreement where it is enforceable through trade remedies is not the same as saying we are not open to having more 

tools. 

Mr. BECERRA. Right. 


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But, Mr. Secretary, tell me, how are you going to get these partners that want TPP to sit down at a different point in time and 

actually commit to stop manipulating their currency? 

Secretary LEW. Well, you know, they have signed on through the 

G20, many of them, to the principle—— 

Mr. BECERRA. Where are the teeth? 

Secretary LEW. Pardon me? 

Mr. BECERRA. Where are the teeth to enforce that? 

Secretary LEW. So if the question is how we are going to get 

them to do better, I think we have shown that we can make 

progress, and we will make more progress. 

Mr. BECERRA. I don’t think—— 

Secretary LEW. I don’t think there is going to be a trade agreement that has that in it. So that won’t be the way that moves 

them. 

Mr. BECERRA. I don’t disagree with you that we will keep trying and that there will be ways to improve. Where I disagree fervently with the administration and this bill is that this is the best 

chance. 

You have got them where they want to negotiate. They want access to our markets. This is the best time when you can make a 

deal because they want something in return. And for us not to, 

when we can strike hardest, get what we need, I think it is—— 

Secretary LEW. Though, in fairness, our markets are very open 

and we want access to markets that are not very open. So the—— 

Mr. BECERRA. Let me ask one last question, and I don’t think 

I will have time to get an answer. But let me just pose the question. 

People keep asking, ‘‘If we don’t get in this, if we don’t reach this 

deal, which is going to write the rules?’’ I ask: What happened with 

CAFTA, the Central American free trade deal? What happened 

with NAFTA? Did we write those rules? 

And we see the consequences of much of what has happened with 

CAFTA and, in some cases, NAFTA. We have got a trade dispute 

with Guatemala in the CAFTA deal where they don’t even enforce 

their own law. 

Chairman RYAN. [Presiding.] Time for the gentleman has expired. 

Mr. BECERRA. Yield back. And I thank the chairman. 

Chairman RYAN. Mr. Roskam is not here. Mr. Price not here. 

Mr. Smith. 

Mr. SMITH of Nebraska. Thank you, Mr. Chairman. 

And thank you to our panel here today for taking the time to articulate the benefits of trade. 

And, obviously, Secretary Vilsack, American agricultural trade is 

a tremendous story where we know that, as mentioned earlier, 96 

percent of the world’s population lives outside our country and they 

all need to eat, including ourselves. And so I see it as such a great 

opportunity to promote jobs here at home. And certainly the very 

compelling information on previous trade agreements in terms of 

increasing the exports from our country are just, I think, very convincing. 

Let’s move forward just a bit beyond TPP to TTIP, the European 

Union. Obviously, I have concerns about biotechnology and its acVerDate Sep 11 2014 16:22 Mar 17, 2017 Jkt 022183 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\22183.XXX 22183

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ceptance in the European Union. And we know that many of the 

regulations are biased against biotechnology and not based on 

science. 

Secretary Vilsack, could you share a bit—you touched on it a little bit earlier, perhaps, in the context of TPP. But in a broader context of further trade opportunities, could you elaborate on what 

TPA can help accomplish in that arena. 

Secretary VILSACK. Well, the opportunity for us to ensure that 

innovation continues in agriculture is somewhat related to the ability for us to make the case that biotechnology is safe, that it increases productivity. It reduces reliance on chemicals and pesticides and is better for the environment, in many cases, because 

of that. 

The European Union has an interesting take on this. Just today 

I received word from the Ag commissioner, Commissioner Hogan, 

that the European Union is about ready to essentially authorize 

the development and the acceptance of biotechnology, streamlining 

their process, but they are going to give each individual member 

state the right to opt out of the utilization of biotech for either cultivation or feed. 

I expressed concern about that. I expressed concern that it is 

going to make it a little bit more difficult to conclude these negotiations. So we are obviously in the beginning stages of that negotiation. We intend to be very strong on that issue. We intend to be 

very strong on the geographic indicator issue as well, which is 

equally important to American agriculture. 

Mr. SMITH of Nebraska. Very, very interesting, and I am glad 

you brought that up. And certainly we know that biotechnology 

helps us feed the world. And I don’t think we can state firmly 

enough how important that is and what that brings about geopolitically. And I hope that we can continue in a very positive direction 

and even perhaps make further developments utilizing the innovation and creating jobs here at home. 

Thank you. I yield back. 

Chairman RYAN. Thank you. 

Mr. Doggett. 

Mr. DOGGETT. Thank you, Mr. Chairman. 

And thank each of you for your service. 

Let’s talk first about jobs, which the USDA Economic Research 

Service reported on last October, saying that, quote, ‘‘During the 

next decade, TPP would have no measurable impact on real GDP 

here on our economic growth.’’ 

The founder of the Peterson Institute upon whose studies the administration has so frequently relied about the effects of TPP said 

a couple of years earlier, quote, ‘‘Congress always wants to know 

how many jobs they are going to create. As good economists, we 

take the view that a trade agreement does not create or destroy 

jobs. It alters the composition of the workforce.’’ And Peter Petri, 

the author of the Peterson Institute study on TPP, agreed. 

I would ask you, Secretary Vilsack, do you agree with him that, 

while it may offer some of the other advantages you have discussed 

today, that TPP will not produce any significant net job growth in 

America? 


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Secretary VILSACK. Congressman, it is our view that, for every 

billion dollars of agricultural sales that are increased, that 6,500 

jobs are supported. I am convinced—— 

Mr. DOGGETT. I would welcome getting the basis for that claim. 

So you disagree with these economists and you think there will 

be net job growth? 

Secretary VILSACK. Certainly, as a result of agriculture, I think 

we are going to see increased export opportunities. I think that is 

going to support—— 

Mr. DOGGETT. And you disagree with your Economic Research 

Service that said there will be no measurable impact on real GDP 

here in the United States? 

Secretary VILSACK. You know, there are a few qualifications in 

connection with that study. That same group also indicated and 

supports the notion that every billion dollars of Ag sales supports 

6,500 jobs. 

Mr. DOGGETT. I would welcome getting that information. 

Secretary Lew, even USTR has agreed that, with the authoritarian nature of the Vietnamese Government, we will never see enforcement of any of the labor standards unless we have what they 

call a consistency plan or an annex to provide for the implementation of those guarantees. 

Can you give us an outline of what such a consistency plan or 

annex will look like and how many years or decades it will be delayed before Vietnamese workers will be able to organize in independent unions? 

Secretary LEW. Well, Congressman Doggett, I can tell you that 

the fact that USTR is in a conversation, a negotiation, with Vietnam and a number of other countries—— 

Mr. DOGGETT. They have been doing that 4 or 5 years, haven’t 

they? 

Secretary LEW. On specifics, knowing that there has to be a plan 

for them to meet high labor standards if they are going to be part 

of TPP is something that wouldn’t be happening if we weren’t in 

a TPP negotiating context. 

Mr. DOGGETT. I guess what concerns me is you have been doing 

that 4 or 5 years and we have no specifics, but we are being asked 

to approve a process that really largely removes us from a role in 

this without knowing what it is Vietnam will be required to do. 

Secretary LEW. I actually don’t think that that is what TPA 

does. TPA gives you an ongoing role as we go forward. There won’t 

be a TPP if Congress doesn’t approve it. And I am quite certain 

that one of the things you will be looking at is what they come back 

with in terms of a plan. 

Mr. DOGGETT. Do you have any specifics on what Vietnam 

would be required to do? 

Secretary LEW. I would have to defer to USTR on the specifics, 

obviously. 

Mr. DOGGETT. Well, they have been declining to give us any information about that. 

Mr. LEVIN. Mr. Doggett, would you yield for 10 seconds? 

Mr. DOGGETT. Yes, sir. 

Mr. LEVIN. I just say this respectfully. I don’t see any place in 

TPA or any other place that says there has to be a plan. It is not 


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there. And I know it has been said by some that they will not participate in TPP if there is no such plan. I don’t think that there 

is any such requirement. 

Mr. DOGGETT. I don’t believe there is either, and I think that 

is one of the several deficiencies in this. Of course, even when they 

had a plan and an annex on illegal logging and environmental protection with Peru, it hasn’t gotten us any meaningful enforcement 

out of USTR. Indeed, as with the labor enforcement in the Americas, USTR’s disinterest and lack of commitment has really been 

appalling. 

I want to address the arguments that each of you and some of 

our colleagues have made about, ‘‘If we don’t do it, China will.’’ It 

seems to me, though I have some concern about having countries 

like Vietnam in this agreement, that, if that was really the gold of 

this, the administration’s commitment wouldn’t have been so spotty 

and selective. 

Excluding the Philippines, which is literally on the frontline with 

China today, excluding Korea, which asked to be in, excluding a 

number of the countries that Secretary Pritzker referred to that 

the Chinese have free trade agreements with, whether it is Laos 

or Thailand or Burma, Cambodia, Indonesia—all of these countries 

are left out. So if that was the gold, it certainly seems to have been 

handled in a spotty and selective way. 

Since my time is expiring, I would just say that today’s events 

and this week’s events give new meaning to the term ‘‘fast track.’’ 

We have a bill introduced last Thursday. It is being marked up 

today in the Senate. It will be here tomorrow. The question is 

whether this fast track runs over a few people on the way, leads 

to another train wreck, or it does, in fact, provide significant greater service and growth for our economy. 

Chairman RYAN. Thank you. The time for the gentleman has expired. 

Mr. Paulsen is recognized. 

Mr. PAULSEN. Thank you, Mr. Chairman. 

And I just want to start by thanking you for all being here. I 

mean, we have three of the President’s cabinet Secretaries here. I 

mean, this is important. 

It is really important for us on a bipartisan basis, a bicameral 

basis, to make sure TPA gets across the finish line so we can get 

TTP and TTIP, Asia and these European deals done. 

Because it is so important to get these done to help create a 

healthier economy. And whether it is selling American products or 

services or exports or direct foreign investment, it all leads into 

more jobs and higher wages. There is no doubt about it. 

And, you know, here in America, we have a lot of intellectual 

property-intensive industries. I mean, it is part of our DNA. It is 

part of who we are. It is part of our headquartered operation. And 

so many jobs are a part of this. And I think it is key to our economy. Whether it is the life sciences area or med tech or biopharmaceuticals, strengthening protections for American innovation is absolutely critical. 

So maybe, Ms. Pritzker, if I can ask you a quick question. Ensuring 12 years, for example, of biological data protection in the 


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Trans-Pacific Partnership, that will help foster more investment in 

and access to new lifesaving technologies and therapies. 

Will TPA help strengthen the hand of our U.S. negotiators who 

are working to achieve 12 years of data protection in this agreement? 

Secretary PRITZKER. I believe that TPA gives our negotiators 

greater leverage. You know, the challenge in addressing the issue 

with biologics is the fact that our TPP partners have a broad range 

of approaches to regulatory data protection for biologics. And so I 

think this does strengthen our hand because it demonstrates that 

this is a very high priority for our country. 

And, you know, if you step back and think about the United 

States economy—and the United States is shining in terms of innovation, whether it is biologics, whether it is in the digital economy. 

And these agreements—I mean, the TPA and, ultimately, the 

trade agreements that can be passed will allow us to protect our 

businesses, which today are vulnerable because we don’t have 

these kinds of protections in place, protect them around the world. 

And that is extremely important. 

And we have to remember our economy is very open. I mean, you 

can access with an average tariff of 1.4 percent the United States 

market. But our access to markets in Asia is very limited. And if 

you do have access, you are vulnerable in terms of intellectual 

property protection. 

Mr. PAULSEN. You know, you mentioned digital trade and the 

digital economy. There has been a lot of talk about using the negotiations with the Europeans to encourage more transparency in 

that regulatory process, greater transatlantic cooperation in developing new standards, mutual recognition where appropriate, and 

an increased reliance on international standards where appropriate. And these steps would result in more predictability and 

lower compliance costs while not reducing our standards, which is 

really important. 

So, as a practical matter, how will you tackle these issues and 

these negotiations or how do you plan to achieve the new negotiating objectives on this issue within TPA itself? 

Secretary PRITZKER. Well, the digital economy, the fact that— 

look, we have to remember, if you are talking about the digital 

economy, as I said earlier, you know, in 2002, half the companies 

that were trying to create standards that would address their businesses didn’t even exist. 

So it is very important, again, that what we do is, you know, facilitate e-commerce that we support and recognize the significance 

of the digital economy and the Internet as a platform for international trade. 

So all of these requirements in TPA create a floor, if you will, for 

the negotiation. As Secretary Lew said, by putting out the 150 objectives, that creates a floor that becomes very—that is transparent, frankly, to the other countries that are participating in the 

negotiation, whether it is in intellectual property protection, the 

digital economy, labor, environment, et cetera. 

And so it is, I think, extremely important and valuable from a 

negotiator’s standpoint that they know that the administration and 

Congress stand side by side on the floor that is created by TPA. 


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Mr. PAULSEN. Thank you, Madam Secretary. 

I yield back, Mr. Chairman. 

Chairman RYAN. Mr. Thompson is recognized. 

Mr. THOMPSON. Thank you, Mr. Chairman. 

Secretaries, thank you all for being here. 

I believe that, if we increase our exports and we eliminate trade 

barriers, it can be a huge win for our country and certainly a huge 

win for my district and I think probably every other district in the 

country. But it has to be done in a way that creates a level playing 

field, and it has to be done based on a set of standard rules, basic 

rules, where everybody is playing by the same set of rules. 

I also think that, if we do trade, it has got to create good jobs 

here in the United States. It has got to grow our U.S. economy. We 

have got to set standards for our trading partners to live up to. We 

need to improve market access. And we need to do all of this making sure that we have an eye clearly on our environment. And I 

am just not sure that this TPA gets us to where we need to be. 

It is my understanding that all of the language pertaining to climate change has been taken out of the bill. Is that correct, Secretary Lew? 

Secretary LEW. I would actually ask the chairman if he might 

respond. It is not an area of the TPA that I am familiar with. But 

the—— 

Mr. THOMPSON. Do any of you know that? 

Secretary PRITZKER. TPA includes—in terms of the environment, it codifies and requires that all seven of the multilateral environmental agreements are included. And then, also, for the first 

time, it—— 

Mr. THOMPSON. But climate change is not one of them. Correct? 

Secretary PRITZER [continuing]. Settlement. I would ask the 

chairman. 

Mr. THOMPSON. I think it is amazing, given the incredible importance to this issue—and it is not something that I just believe 

to be true. Every agency in our Government, the intelligence community, every branch of the military, is cognizant of this and working on it. And, yet, it has been not left out. It was—as I understand, it was taken out. 

Secretary LEW. Congressman, my understanding is that there 

are a number of provisions that deal with the environmental standards in a way that address the substance of climate change. I just 

don’t know if the words ‘‘climate change’’ are used. That is why— 

but the standard—— 

Mr. THOMPSON. I think the absence of it leaves me—— 

Secretary LEW. The standards of environmental rules are there. 

Mr. THOMPSON [continuing]. Leaves me concerned. 

Secretary Lew, you had mentioned in your oral testimony today 

that—you said nothing can change a U.S. law without congressional approval. One of the things that I am hearing a lot of concern about, especially from my home State, is that it could, in fact, 

change California law—California regulation. 

We are pretty progressive in regard to our environmental work, 

our health and safety standards, and a lot of folks are worried that 


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this trade agreement can, in fact, remove a lot of the things that 

we have done in regard to clean air, clean water, et cetera. 

Do you have any understanding of that? 

Secretary LEW. Well, certainly the issues of Federal law, I know, 

are addressed. And, obviously, there are many areas where Federal 

law preempts state law. So that covers an awful lot of territory. 

I would be happy to get back to you on the specific issues and 

check with the experts on the California law issues. 

Mr. THOMPSON. I would appreciate hearing back on that. 

Secretary Pritzker, you said that it is good for American workers. 

Is it just coincidental that every American worker in my district 

that has talked to me about this is solidly against it? 

Secretary PRITZKER. I think that I fundamentally believe that 

the economic growth in Asia is something that, if our companies 

are not taking part in, our workers are going to suffer. 

And, for example, I met with a company called Electric Mirror. 

Electric Mirror makes electrified mirrors. They follow their customer around the world, which happens to be the hospitality industry. 

They want to sell their goods and service, their products, into 

Vietnam and into Malaysia, but they face a 30-percent tariff. Their 

customers have said, ‘‘Please move your manufacturing to China 

because there is no tariff between China and Vietnam and Malaysia.’’ They said to me—the CEO said to me, ‘‘I don’t want to move 

my manufacturing. I like manufacturing here.’’ 

I believe it is good for American workers. And I think that we 

have to recognize that, as Secretary Vilsack said, the world is not 

standing still, businesses are not standing still, they will follow 

their customers, and that by doing nothing doesn’t mean that our 

workers are protected. 

Chairman RYAN. Gentleman’s time has expired. 

Mrs. Black. 

Mrs. BLACK. Thank you, Mr. Chairman. 

And once again I want to thank all of you for being here today. 

It has been a good conversation. 

I want to go to the data issue. One of the most important 21stcentury issues is protecting the cross-border data flows, which are 

vital not just in the service industries, but also globalized countries 

in any sector. 

So the 2015 TPA includes new provisions that encourage a free 

flow of data around the world and directing the administration to 

achieve meaningful outcomes in trade negotiations. 

Firms with global sales forces must be able to transfer this data 

back to their headquarters, and many of the companies across sectors that centralize the processing of their data must be able to do 

so seamlessly. 

In both the EU and the United States, there is data for privacy 

there that is pretty robust and is protected, but we have different 

systems for providing that protection. 

So respecting these differences of those data privacy approaches, 

how can we ensure that robust data protection is there for crossborder data flows? 

Secretary Pritzker, would you like to address that. 


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Secretary PRITZKER. Well, I mean, TPA is very clear about this. 

It recognizes the significance of the Internet, as you have said, as 

a trading platform, and it sets forth modernized objectives to facilitate e-commerce and to promote an open Internet. 

And, importantly, the bill directs negotiators very clearly to ensure that governments refrain from impeding digital trade in goods 

and services to restrict—you know, refrain from restricting crossborder data flows and refrain from requiring local storage or processing of data. 

Those are objectives that are laid out in the 2015 TPA bill. These 

were not part of previous trade promotion legislation. 

Mrs. BLACK. I appreciate that. 

And I want to hear that we can be confident that that data is 

going to be protected. Obviously, we are dealing with all kinds of 

breaches of data in our country right now from foreign nations as 

well as domestically, and that is a really big concern. I want to be 

sure that we are protecting that. 

Secretary PRITZKER. Your fear about cybersecurity and someone stealing data? 

Mrs. BLACK. Yes. 

Secretary PRITZKER. So, you know, I mean, the responsibility 

for that lies with a business and—but if—you know, that is an 

asset of a business. And if data is stolen, that is—you know, there 

are consequences for that. 

What we have done—I mean, what TPA does is improve the likelihood that e-commerce can actually exist in these countries today. 

Mrs. BLACK. Do any of the other Secretaries want to address 

the data flow? Is that something—Secretary Vilsack or Secretary 

Lew? 

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

Chairman RYAN. Mr. Larson. 

Mr. LARSON. Thank you, Mr. Chairman. 

And I want to thank our Secretaries, as well, for their service to 

the country and, also, the extended welcome that they received 

from our colleagues on the other side of the aisle today and embracing what I think people generally understand, the need for 

trade. I think the President has articulated the country’s position 

extraordinary well. And it is clear that the United States has got 

to be a player on this stage. 

I want to associate myself with the remarks of our ranking member, Sandy Levin, and also with a great sage, Charlie Rangel. And 

in a comment—and then I will yield my time to my good friend 

from Massachusetts, who, along with me, will be introducing an 

amendment tomorrow. 

Mr. Levin is right about the principles. There is no doubt that 

this administration will work harder and has the confidence both 

of our Republican colleagues and certainly of the people on this 

side of the aisle to do the best possible job for the American people. 

But our Chairman Ryan, at the beginning of this, raised a statement about China, and I think he is right: that if we are not on 

the field, then China will be; and that the entire world is looking 

at us. He is right about that, too. The entire world, not just the 

Business Roundtable, not just the Chamber of Commerce, not just 

Wall Street, not just the captains of industry, but the citizens of 


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this country and the citizens of all the nations we seek to do trade 

with. 

And so there is a great deal of confidence that our President and 

this administration will do the best possible job. But Mr. Rangel is 

absolutely right in saying that this alongside of an infrastructure 

agreement that has not yet come forward in this Congress and, 

therefore, does not give the American people the confidence in 

trade deals that happen that are sophisticated and way beyond 

their understanding, that it complicates this issue in a way that I 

think we need to address as a Congress and as a committee. And 

it is—we were creating jobs, building roads and bridges. 

China has 1.4 billion in population. In less than a decade, they 

raised over 320 million, approximately the population of the entire 

United States, not because of trade but because of infrastructure 

and the creation of jobs, even jobs where people aren’t credentialed. 

And so that has to remain our focus, as well as this issue of currency. 

And I yield to my good friend from Massachusetts. 

Mr. NEAL. Thanks, Mr. Larson. 

Nick Brady, O’Neill, Bentsen, Rubin, and Snow—they have all 

talked about currency manipulation. And we all know in the backdrop that there are geopolitical considerations as it relates to currency manipulation. There is a rhythm to the enthusiasm that we 

have had from time to time about confronting the Chinese and the 

Japanese and others over currency manipulation. 

In the conversations that we have had—I just want to play off 

of what John said a moment ago. I suggested to the President a 

month ago at the White House, when we were talking about this, 

that we really should have linked this to a big infrastructure bill 

so that there would have been something there for all, in terms of 

a pro-growth economic plan. 

But, Jack—I am going to call him ‘‘Jack’’ because he is a friend— 

Jack, these conversations we have had, they relate to challenges 

and retaliation that might come over the issue of QE2 and quantitative easing. And you have suggested it would open up the opportunity for competitors to challenge us on the basis of currency 

manipulation, just as we would be doing the same. 

Would you, perhaps, for our enlightenment, talk a little bit about 

that? 

Secretary LEW. Congressman, I think that the question of us 

being able to unilaterally write an international standard is not 

one that—that is not how international agreements are made. We 

wouldn’t write a standard where QE2 could be judged to be currency manipulation. But if you get into a negotiation internationally, which I think would be hard to even get into about a binding, 

enforceable constraint, there are other countries in the world who 

would insist on having it apply to all countries. 

We don’t intervene; we don’t buy and sell foreign currency because we are the world’s global reserve currency. Other countries 

have to buy and sell dollars all the time just to manage their 

economies. They are worried that the normal management of their 

economies, macroeconomic policy that is perfectly legitimate, could 

be represented as being something that it is not. 


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So I have no sympathy for countries that are doing the wrong 

thing, and we should go at them very hard. But I do understand 

why countries are worried that a process that goes to a trade remedy could mix the two up. And I don’t think we can rest assured 

that an international standard would not be expanded to include 

the kind of monetary policy that the United States has. We would 

find that unacceptable; we would not agree to that. But I am just 

trying to give you insight into why I understand their position on 

this. 

But, you know, we are not saying, don’t give us tools. There are 

amendments being offered in the Senate that we are sympathetic 

to, we are supportive of, that would give us tough tools. We would 

work with Congress to get tough tools. I am just trying to be clear 

about which ones we think help and which ones hurt. 

Chairman RYAN. Thank you. 

Time for the gentleman has expired. 

Mr. Young. 

Mr. YOUNG. Thank you, Mr. Chairman. 

And I thank all our witnesses here today for your service and for 

your stamina throughout this hearing. 

The 2015 TPA renewal dramatically updates and expands the 

number of negotiating objectives, to include nearly 150 specific new 

objectives from the 2002 TPA version. TPA requires that the administration seek to achieve these objectives in our trade negotiations, ensuring advancement of important economic sectors—important sectors, for example, like agricultural, which is essential to the 

State of Indiana, or manufacturing, also very important to my 

home State of Indiana. 

In the Hoosier State, these two sectors are, of course, vital to 

workers, to ensuring that wages rise, to their families and so forth, 

and they account for nearly $40 billion in foreign sales annually. 

But thanks to the work of our chairman and this committee, this 

2015 TPA importantly addresses new 21st-century trade-related 

negotiating objectives, like cross-border data flows, state-owned enterprises, regulatory practices, global value chains, and all these 

things that were perhaps a lesser priority just a decade-plus ago. 

It also includes, for the first time, a principal negotiating objective, which has been talked about at some length here today, on 

currency. 

Secretary Pritzker, what is the administration’s reaction to this 

expansion of negotiating objectives during these negotiations? 

Secretary PRITZKER. I think the expansion is good. As we have 

said here, it lays out what is important to the United States. It 

lays out what our values are, it lays out what we think is fair, it 

lays out what our priorities are. 

And I think that we have to recognize, as you talk about the digital economy or the new economy, our economy is changing. The 

United States, one-third of our growth has come from innovation. 

And we need protections for those cutting-edge, growing markets 

that are creating jobs in the United States. We need intellectual 

property protection. We need free flow of data. We need these 

things because we dominate in many of these industries. And we 

are a creative society that has been successful at that. 


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And so it is extremely important that we recognize that there are 

new needs and new areas that require attention in trade agreements. So we welcome the idea of the administration and Congress 

standing side-by-side and declaring, ‘‘Here is what is important to 

us.’’ It will help our negotiators. 

Mr. YOUNG. Secretary Vilsack, as Secretary of Agricultural, 

maybe you could offer that perspective, about the expansion of negotiating objectives, and your thoughts related to that. 

Secretary VILSACK. Well, Congressman, I am very pleased with 

the fact that the objectives include a direction to the negotiators to 

make sure that SPS rules are enforceable. We run into this a lot, 

with countries basically creating barriers that are artificial and not 

science-based. And the fact that there is a strong indication of the 

need to have enforceable SPS, I think, will help us reduce those 

barriers, reduce the friction in trade, and increase agricultural 

trade. 

I am also pleased with the fact that there is included a directive 

as it relates to geographic indicators. You come from a State that 

does quite a bit of dairy. This is something of very significant interest to the dairy industry. And I think it will help us in terms of 

negotiating with our friends in the EU about why their approach 

to GIs is not the approach that is supported in this country. 

Mr. YOUNG. Secretary Lew, anything to add? I will allow you 

to close, sir. 

Secretary LEW. Well, I would just say that, you know, I have 

conversations on currency issues with countries all the time. The 

fact that Congress puts a priority in TPA that says it is a principal 

objective makes it clear that I am not just speaking for myself or 

for the President but speaking for our whole country, and that does 

strengthen our ability to press hard. 

And, you know, I would point out, on currency, that we do a report twice a year, and if a country is named to be a currency manipulator, what you do is you go into a detailed consultation to 

drive the policy to change. That is the kind of thing we can talk 

about in terms of what we would do with countries in a trade 

agreement. I think it opens the door to have those kinds of conversations. 

So the fact that we have real reservations and think that some 

of the language is damaging, the fact that Congress has spoken to 

this issue strengthens our hand to get more done. 

Mr. YOUNG. I would agree. 

And I yield back. Thank you so much. 

Chairman RYAN. Thank you. 

Mr. Blumenauer, are you here? 

Mr. BLUMENAUER. I think so. 

Chairman RYAN. The gentleman is recognized. 

Mr. BLUMENAUER. Thank you, Mr. Chairman. I appreciate 

your courtesy. 

I think sometimes we lose track of the fact that we are part of 

a two-step process here, that trade promotion authority is to establish these guidelines, these objectives that we help tell the administration what we want the administration to do. 

I am pleased that we are here, finally, with a bill. I am sorry 

that it took this long. I think, had it been done earlier, some of the 


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questions and concerns could have been hopefully resolved or at 

least clarified. 

I do agree wholeheartedly with my friend Mr. McDermott, who 

had a litany of horrors about NAFTA. I came shortly after NAFTA 

was approved. I heard why it was bad from critics, and I concluded 

they are correct. It wasn’t a good agreement. It wasn’t comprehensive, and many of the things that people care about where I come 

from in terms of labor and environment weren’t embodied in the 

text; it was kind of a sidebar. 

We have come a long way. And I want to express my appreciation for my colleague and my constituent, Ron Wyden, who has 

worked really hard to try and drive into this proposal many of 

what I think are values not just of Democrats but what we hear 

of people around the country who are concerned and skeptical and 

want to make sure it works for America. 

And I think the transparency, I think having these objectives 

spelled out—they may not be everything that everybody wants, 

and, while I am comfortable with the overall outline and, knowing 

what I know now, will probably vote for it, but I want us to continue to see if there are things we can do to strengthen it and build 

consensus and move it forward. I am looking forward to the giveand-take going forward. 

I have offered up a half-dozen proposals that I think build that 

consensus—things like establishing an enforcement trust fund that 

comes from some of the money that the cheaters pay us and dedicate it to have the resources to make sure the agreements are enforced. That is one of the biggest complaints I hear, and it is a reasonable complaint. It shouldn’t have taken 6 years for Guatemala 

to get to this point and have to be briefed by the AFL–CIO. But 

the USTR, Commerce don’t have the resources to be able to do all 

that they could. 

And I hope that this committee, either in TPA or a package of 

things that comes forward, includes something of this nature. The 

Green 301—there are elements that are out there that have bipartisan support that could be folded into a package. Many of us have 

cosponsored some of these things, and I hope they will be considered. 

And I hope the administration will consider things that I have 

shared with Ambassador Froman, who has indicated amazing patience. I appreciate it. But I think there is more that we can do. 

And I would appreciate folks working to meet us halfway or maybe 

go a little further. 

But, at the end of the day, we will have a trade promotion authority or not. I think the odds are we probably will. And, regardless of what people have said here—and there are areas that they 

disagree and think that it might be—but I think there is no question that we are better off with that than without one. 

And it certainly doesn’t resemble what we had in 2002. I voted 

against the one in 2002. And if we had not enacted these improvements, I would not be supportive. But this is part of a change that 

is taking place. 

I hope that people dive in and look at some of the parade of 

horribles that have been given to us and actually look at the cases 

and look at what has happened. As I do that, I find that there is 


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a broader picture, and I think people won’t be quite so alarmed. We 

have never lost, for example, an investor-state dispute. And some 

of the things that are tossed up as horrible examples actually give 

people pause. 

But the question at the end of this process for me is going to be 

whether we have done all we can to strengthen this process to get 

the best deal possible. And then, are we going to be better off with 

no deal at all? Are things going be to better in Vietnam in the absence of any agreement? And those are the sorts of things that I 

think we need to take a step back, listen to the critics. I think 

many people have. 

I appreciate the administration’s work. I hope you will help us 

move a little further, both in terms of the refinement, the enforcement, and how we can work together to make sure that currency, 

that we deal with enforcement, that these things are items that we 

come together to do a better job. Because the critics in my community have an important point, and I want to work with them and 

with you to make sure they are satisfied. 

Thank you for your courtesy, Mr. Chairman. 

Chairman RYAN. Thank you. 

Mr. Kelly. 

Mr. KELLY. Thank you, Chairman. 

And thank you all for being here. 

I know that sometimes when we have these get-togethers, it is 

kind of contentious, but I just think this is really what the country 

looks for, is that we have people on both sides of the aisle coming 

together to recognize opportunity. 

And I am going to ask each of you to answer this and very quickly. So if we don’t do TPA, if we aren’t able to put together TPP, 

if we are not able to put together TTIP, and if we truly think the 

road back to prosperity is through growing it, our global share, our 

share of the global economy—and I am from the automobile business. I watched General Motors lose market. And they lost it, and 

they will never, ever get it back. 

And my question, then—Ms. Pritzker, you came from the private 

sector. Once you lose that market, the chances of getting it back 

are very slim. And I don’t think the rest of the world is going to 

sit back idly and say, ‘‘You know what? I think we will keep waiting for the United States to jump on board.’’ 

So I would just, if each of you just could very briefly—there is 

really no alternative to this. And I want to make sure that our people back home understand—and there is a lot of debunking to be 

done with this, as you know, for various reasons. But we have to 

let people know there is a tremendous amount of transparency, 

there is a tremendous amount of accountability. And, at the end of 

the day, Congress has the oversight on it and can reject it if it 

doesn’t come within the structure of the way we have said it should 

go forward. 

So if each of you could weigh—Ms. Pritzker, you come from the 

private sector. I have to tell you, there is nothing more important— 

if we want to get the labor force participation rate back to where 

it needs to be, and then we have to grow jobs. And the only way 

we grow jobs is by growing market share. There is just no other 

way to do it. 


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Secretary PRITZKER. I will make two very quick points. 

First is market access in the United States is very easy. The status quo for our companies is not working. Market access outside 

the United States is very difficult, and the trade agreements can 

change that. And that will be good for American business, but it 

will also be good for the American worker. 

Secretary LEW. Congressman, I would just give you two statistics to answer the question. More than 95 percent of the world’s 

consumers live outside of the United States. And, by 2030, there 

will be 3.2 billion middle-class consumers in Asia. That is a market 

we need to be part of. 

Secretary VILSACK. Congressman, there are 250 bilateral, multilateral trade agreements, and the U.S. is party to 14 of them. And 

I just want to indicate that, if we don’t participate in this effort, 

I guarantee you that our competitors will. 

Mr. KELLY. Okay. And I appreciate that. 

I know the chairman has worked very hard with the Senate to 

come up with something that makes sense. I would just say that, 

for all of us sitting here today, if we are really going to succeed, 

if we are going to get people back to work, if we are going to have 

true growth policies, there is no way we can do it without going 

after these markets. Our market share has got to get back to where 

we actually dominate the global market, not just participate. 

I think in your testimony, Ms. Pritzker, you say you just don’t 

want to survive, you want to thrive. And that is the type of attitude America has always had. 

So for all of you to be here today—and you have endured a long 

time sitting here to answer our questions, but I really think that 

the biggest problem we are facing is educating now people back 

home, both back home and right here in this body, about the dangers of us not being able to pass TPA and not being able to participate and be at the table. I have always thought if you are not at 

the table you are on the menu. And I think the one thing we don’t 

want to do is put ourselves in a bad position. 

So, Chairman, I thank you so much for your work on this. 

I thank you all for what you are doing. 

I think it is kind of odd that we are sitting here today, and so— 

the President comes under a lot of fire from our party. His Cabinet 

is here. And we are agreeing with you that we have to find a way 

to grow jobs, to grow our economy, to get our people back to work. 

And I think that is what the American people expect. That is the 

very least we can do. So thank you so much for your participation 

today. 

Mr. Chairman, I yield back. 

Chairman RYAN. Thank you. 

Mr. Kind. 

Mr. KIND. Thank you, Mr. Chairman. 

I want to thank our witnesses for your patience and courtesy, 

being with us today. 

But, Mr. Chairman, thank you for scheduling this. These are important initiatives. And, like Mr. Blumenauer, I wish we had been 

addressing this a lot earlier on, but, now that we are here, hopefully we can continue to build bipartisan consensus and support for 

a robust trade agenda. 


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Mr. Chairman, just a quick note of caution: We are going to have 

to find a better offset to pay for TAA. And I think you have probably heard some feedback on it already. Senator Warner was offering an amendment today. We are working on some more acceptable 

offset for TAA, rather than taking cuts out of Medicare in order to 

pay for it. So we will look forward to working with you to find if 

we can get a reasonable solution to that. 

And, Mr. Chairman, you probably have these stats in front of 

you, too, but I have been doing my fact-checking as far as my home 

State of Wisconsin. Eighty-seven hundred companies in Wisconsin 

are exporting to other countries today, supporting 785,000 jobs, almost 1 out of every 5 in the State. Eighty-seven percent of those 

companies are small to medium-size businesses. During the past 6 

years, exports have increased over 84 percent in Wisconsin. We are 

number two in the Nation with dairy exports, are in the top five 

in 10 industrial sectors. 

So trade is important for good-paying jobs back home. And we 

are doing it. We are already trading with many, many countries. 

So it is not a question of if we are going to trade; it is what the 

rules of trade are going to look like going forward. And that is 

what this discussion is all about. And that is why the TPP negotiations are so important, one of the fastest growing regions of the 

country. 

And, Secretary Pritzker, I think you cited the fact that we are 

looking at almost a 2-billion-person increase in the market in the 

Asian-Pacific Rim right now. We have to be in that tent. We have 

to be in there competing and doing the best job to be at the table, 

to elevate these standards and rules in order to level the playing 

field for our businesses, our farmers, for our workers so they can 

effectively compete in the 21st-century global economy. 

But we also know, Secretary Vilsack, we are not there yet in 

these TPP negotiations. You and I have had discussions about the 

importance of greater market access in Japan, Canada, autos, but 

especially agricultural and especially dairy. And so we look forward 

to working with you and the administration in order to get to ‘‘yes’’ 

on those very important issues. 

And I also want to commend Ambassador Froman and his USTR 

team. They have been Johnny-on-the-spot, their level of engagement, as the entire administration and each of you Secretaries 

have been in engaging us Members of Congress so we do have 

input, so we can walk through texts, so we can ask questions and 

provide our feedback in the course of these negotiations. And that 

is how it is meant to work. And I encourage more of my colleagues 

to be that active and engaged so that there are no surprises at the 

end of this journey, so that there is strong support in Congress to 

finally get these agreements passed to get us back in the game. 

Let me ask each of you for a quick yes-or-no answer to this question. Do you think it is important for this President to get trade 

promotion authority in order for us to get back from our negotiating partners their last best offer? 

Secretary Lew. 

Secretary LEW. Yes. 

Secretary PRITZKER. Yes. 

Secretary VILSACK. Absolutely. 


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Mr. KIND. Well, we have also had a discussion today and Mr. 

Neal raised the importance about currency manipulation. And we 

knew for a very long time that there has been bipartisan concern. 

I share many of the same concerns my colleagues have been raising 

in regards to how we best address other nations that are manipulating their currency for export purposes. 

Today, Senator Bennet had offered an amendment and a discussion on that. Secretary Lew, I am wondering if you had an opportunity to take a look at that and the pros and cons that he was 

discussing. 

Secretary LEW. Congressman, I have. I think that it has a lot 

of features to it that are—I think can add a lot of attention. And 

it seems to be something that we would be supportive of. 

It has very objective standards. It is a question of whether there 

is a significant bilateral trade surplus with the United States, material current account surplus, and a persistent one-sided intervention, things that are measurable. 

It has remedies that are very concrete. It doesn’t get into the 

very difficult and, I think, almost impossible task of coming up 

with a precise point estimate of valuing the kind of interventions 

that we want to offset. 

And they are the kinds of remedies that I think countries will 

care about: being blocked from access to U.S. Government contracting, being barred from financing through OPIC or Ex-Im. And 

I believe there are some other ideas, as well. 

So it is something I think is very much—— 

Mr. KIND. Well, we look forward to working with you, engaging, 

as you have been willing to do with us. 

And, Mr. Chairman, as we work on the currency issue in particular, it is important. 

Secretary Pritzker, I really appreciated the story you just told us 

because I just had a similar story told in my office from an auto 

part manufacturer from my home State who was in my office recently talking about the importance of these trade agreements. 

And, unfortunately, he said he had to move one of his lines recently 

to Mexico. And I asked him, ‘‘Was it because of labor? Was it because of the environment?’’ And he said, no, it is because of the fact 

that Mexico has 46 bilateral trade agreements that have low tariff 

barriers to the goods and products being made there. So he had to 

move his line there in order to get access to these other countries 

because we don’t have trade agreements with those other nations. 

So that is another aspect of trade that gets lost in this discussion, that, because of the lack of these agreements, we are forcing 

countries to have to play in someone else’s backyard and creating 

jobs there, as opposed to Wisconsin or throughout our Nation. So 

that is another important point that I appreciate you raising today. 

Thank you, Mr. Chairman. 

Chairman RYAN. Thank you. 

Mrs. Noem. 

Mrs. NOEM. Thank you, Mr. Chairman. 

It is interesting; for my producers in South Dakota that are involved in agriculture, we sell 111⁄2 times more goods to countries 

where we have trade agreements than to those countries that we 

don’t have trade agreements. So it certainly has been good for our 


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economy whenever we can finalize these kinds of negotiations because agriculture is our number-one industry in our State. 

Secretary Vilsack, I wanted to talk to you a little bit about something I hear a lot. And American farmers and ranchers are extremely frustrated with China’s unjustified barriers that they put 

up for our Ag products. Many times, they ignore international 

standards. They also have no basis in science. 

And I am curious what kind of USTR activities have been taking 

place that would help finalize and rectify some of what China’s actions have been. For example, the World Organization for Animal 

Health recognized last year that all cuts of beef, no matter what 

their age were, were healthy for individuals, yet China still continues to ban our beef products. Those kinds of things happen. 

Also, they have banned the veterinary drug ractopamine, which ignores international standards, as well. 

So I think you are very familiar with the subject, and I was wondering if you could speak to what USTR is doing to ensure that 

these regulations and that their products comply with their WTO 

obligations and then, also, that they are based on science and they 

are based on international standards that we currently have. 

Secretary VILSACK. I would say a couple things, Congresswoman. 

I would say, number one, USTR is working its way through a series of cases in the WTO involving China, most recently a case 

which was brought on subsidies and the subsidization of various 

aspects of the Chinese economy, including aspects of agriculture. So 

they are working their way through the process, bringing cases, 

and have been quite successful in the cases they have brought. 

Secondly, they have worked with us, as did Secretary Pritzker, 

during the recent JCCT to structure a strategic dialogue with the 

Chinese that will allow us to get down to the very specific technical 

issues that you just raised, to try to impress upon the Chinese that 

they are disrupting not just the relationship between our producers 

and their consumers but disrupting the relationship between producers around the world and consumers around the world. And I 

think, if we can have that strategic dialogue, that more in-depth 

dialogue, maybe we can break down some of these barriers. 

The last thing I would say: This TPP agreement and the TPA 

agreement, structuring science-based sanitary and phytosanitary 

rules, creating a sanction and a method for enforcement, will allow 

us to put greater pressure—— 

Mrs. NOEM. On China. 

Secretary VILSACK [continuing]. On the Chinese over time. 

Mrs. NOEM. I agree with that, as well. So I appreciate that that 

is a part of these negotiations that are ongoing within TPP because 

I think it will direct our activities even in the region and with 

other countries and especially with China as we go forward. 

So, with that, I will yield back my time. Thank you, Mr. Chairman. 

Chairman RYAN. Thank you. 

Mr. Pascrell. 

Mr. PASCRELL. Thanks, Mr. Chairman. 

Good to see you today. 


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This is not a question of trade agreements versus no trade agreements. As much as the proponents of this piece of legislation would 

like that to be the question, it is not. 

Madam Secretary, Secretary Pritzker, you said we need market 

access for American companies. I start at a different point. I want 

market access to American working families. That is what I want. 

And when you start at your position and you start at my position, 

you have a different perspective of looking at these things. 

So, before I make some comments, if I have time, I would like 

to ask you some questions, if I may, through the chair. 

There are no standards in TPA to ensure food imports from countries are safe. There aren’t any. 

I would like to add—I am going to talk about an amendment tomorrow which will provide a guideline that all food imports meet 

U.S. safety standards to be eligible for fast track. Do you agree 

with that? 

Secretary PRITZKER. Well, Congressman, I am not an expert on 

food safety, and so, for that, I will yield to Secretary Vilsack. But 

I would just like to make one comment—— 

Mr. PASCRELL. You don’t have a comment on food safety? You 

don’t have to be an expert to have a comment on food safety. 

Secretary PRITZKER. Well, let me begin with a fundamental 

comment. 

American families are what I get up in the morning and go to 

work for, and helping businesses grow so that they can create jobs. 

Because the private sector, ultimately, is what creates jobs—— 

Mr. PASCRELL. Madam Secretary, we don’t have all day, 

but—— 

Secretary PRITZKER. I understand, but I just—— 

Mr. PASCRELL [continuing]. Would you please talk to the question? Thank you. 

Secretary PRITZKER. You know, food safety—we have equivalency requirements as it relates to food safety. But I defer to Secretary Vilsack in terms of the specifics. 

Mr. PASCRELL. Mr. Secretary. 

Secretary VILSACK. Congressman, nothing gets imported into 

this country unless we have certified that the process that was 

used to produce that product is equal to or better than the process 

we use in the U.S. 

Mr. PASCRELL. Well, I have been at the border at McAllen, and 

I see the produce coming over the border, and I would like to differ. 

I have a second question for you, Madam Secretary. The United 

States does not have a VAT, a value-added tax. Foreign manufacturers selling in the United States do not pay United States income 

or payroll taxes, as you well know. They also do not pay their own 

consumption or VAT taxes because the VAT is rebated by their 

government on exports—very, very tilting the whole table, if you 

will. 

So we need to change the WTO rules that allow this unfair tax 

burden on American producers and service providers. In the past, 

I have introduced legislation, bipartisan, that would help end this 

disadvantage to American companies. We are being penalized. 

My understanding is that this negotiating objective on border 

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duced over 40 years ago, but has any United States trade agreement ever achieved this objective? 

Secretary PRITZKER. You know, we are working with the WTO 

to address the distortions that are caused by the VAT. And that is 

the state of play that I am aware of at this time. 

Mr. PASCRELL. Do you know how many questions were asked 

today, and we are working on it, and we are working on it, and 

some we are working on for 5 months, and some we are working 

on for 5 years, and some we are working on for 10 years. 

Here is the problem. The fast-track bill being introduced would 

revive the same old failed process that led to disastrous trade 

agreements in the 1990s and the early 2000s. I voted against fast 

track then. I must vote against it again now because it unnecessarily cedes congressional constitutional authority to negotiate 

trade agreements. 

Most of the past trade deals haven’t been good for American 

workers. I will take one city I have grown up in and I have lived 

there all my life: Paterson, New Jersey. It is a prime example of 

how trade has devastated the American textile industry. 

Paterson was the country’s first planned industrial city, created 

at the urging of Alexander Hamilton in 1792. Hamilton, our first 

Secretary of Treasury—we have had a slew of good ones—believed 

that the United States needed to develop its own industries and reduce its dependence on foreign goods. We were at one time called 

the Silk City, you know, the Silk Road. But, following NAFTA and 

the other free trade agreements, factories began relocating overseas. 

When you start to talk about—and I will conclude here, Mr. 

Chairman. 

When you start to talk about jobs—or when we start to talk 

about jobs, you go silent. We hear about what you might do, what 

perhaps could happen. But you can’t answer the question about 

how this particular agreement that you want us to vote for will 

produce at least, within range—no one can predict exactly—what 

they could produce for the American jobs or how it will help stagnant wages. 

Chairman RYAN. The gentleman—— 

Mr. PASCRELL. Yes. 

Chairman RYAN. I let the gentleman go over a minute. 

Mr. PASCRELL. Thank you. 

Chairman RYAN. I thought you were winding, but you are winding back up, so—— 

Mr. PASCRELL. I appreciate it. 

Chairman RYAN [continuing]. Time of the gentleman has expired. 

Mr. PASCRELL. I was winding down, Mr. Chairman, but thank 

you. 

Chairman RYAN. Okay. 

Mr. Reed. 

Mr. REED. Thank you very much, Mr. Chairman. 

Thank you to our panel for staying as long as you have. 

And, Madam Secretary, it is a pleasure to see you again, as we 

have worked previously on some manufacturing initiatives. And I 

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tionship and that spirit of working together in regards to U.S. manufacturing in particular. 

As I listen to colleagues, as I listen to some of the testimony, one 

of the things as we are discussing trade promotion authority today 

that I just want to clearly put out on the record to the American 

people back home who are tuning into this—and most American 

people, as I will tell you going around the town halls and things 

in the district, listening to people, you know, you hear the acronyms—TPA, TPP, TTIP, fast track—they don’t know what that is. 

I will be perfectly honest with you. 

So the question I put to you is, as we talk about trade promotion 

authority—and I get a sense from the folks that are opposed to 

this, my good friends on the other side of the aisle, that they envision some type of negotiation where 535 Members of Congress are 

sitting in the room with representatives of countries and trying to 

negotiate the best deal for American workers and for American 

people. 

I also get a sense that they want to have Congress weigh in on 

an open amendment process that every single provision of any 

agreement is subject to amendment. Now, I am just a country lawyer from western New York, a small business guy before I came 

here. And I can tell you, in negotiations that I had, if I was on the 

other side of that table, with 535 individual Members who have authority or power to negotiate or amend certain individual words 

and lines of an agreement such as a trade agreement that is going 

to open markets for our American workers, in my opinion, do you 

think we would get the best trade agreement for the American 

worker possible in that environment? 

Does anyone want to take—Madam Secretary, would you take a 

swing at that? 

Secretary PRITZKER. No. I think it is very—look, it is very difficult to negotiate a deal between two parties. The idea that we are 

negotiating with 12 countries is really extraordinary, in my opinion. 

And I think the fact that Congress, you know, with the trade promotion legislation, the 2015 trade promotion legislation, that lays 

down really high standards for what we are trying to achieve, that 

has extraordinary transparency and efforts to include Members of 

Congress to make sure that they understand what is being negotiated in these deals, that there is time for not just Congress but 

also the public to study the deal, and then Congress ultimately has 

the opportunity to decide whether they want that deal or not. 

And I think, you know, what is really important is that we empower our negotiators with trade promotion legislation that lays 

out what our values are, what is important to us, make that very 

clear. There are 150 objectives, as we have talked about today. 

That is of value to our trade negotiators because then the folks on 

the other side of the table recognize we are serious; we are going 

to get a deal done. They, therefore, can take the risk of putting the 

most aggressive options on the table. 

So I think this is absolutely essential for us to get the best deal 

possible. 

Mr. REED. And I so appreciate that, as representing a district, 

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nity, in particular—things like dairy, things like apple. We are 

going through this yogurt renaissance in western New York that is 

going through the roof. 

And I would say that is the type of market access, that is the 

type of negotiation I would hope that you are pursuing, and I assume you are pursuing it. And this would be a tool, if you agree 

with this statement, to get you that most aggressive best position 

from these entities available on the table and brought back to us 

here in Congress. 

And one other point I want to stress to the American people back 

home who are concerned about this: This transparency reform in 

this new—this is a new piece of legislation. This isn’t your 

grandpa’s TPA, as a Member once described to me. How many days 

would people be able to look at the agreement? And we live in an 

environment of 24/7 news cycles, instant access. 

I mean, how many days are we talking that the American people 

are going to see that agreement, they are going to see the details 

of the agreement before it even comes to—any idea? I might have 

an answer for you, but I want to see if my understanding is correct. 

Secretary PRITZKER. I think it is 60 days. 

Mr. REED. Yeah, 60 days, possibly 90 days by the time you go 

through the—— 

Secretary PRITZKER. I think it is 60 working days and 3 

months, roughly, if you count the weekends. 

Mr. REED. So, in a 24/7 news cycle, I am fairly confident that 

the American people are astute enough, that my colleagues that 

may be opposed to this are astute enough, that if there are concerns in the agreement that need to be raised, they will be raised. 

Our phone will be going off the hook, our social media sites will 

be going around the clock, 24/7, and this room will be packed with 

people if you do not fulfill the obligation that we know that we 

need to do here. That is to open markets for American workers and 

creates the jobs of today and tomorrow in each and every one of 

our districts. 

And, with that, I yield back. 

Chairman RYAN. Thank you. 

Mr. Holding. 

Mr. HOLDING. Thank you, Mr. Chairman. 

There has been a great deal of discussion today about the automotive industry. And I can tell you that North Carolina wants to 

get in on the action of building cars, particularly in eastern North 

Carolina, where I am from. We have a great workforce, and they 

would do a good job at building cars. 

And our Governor and our North Carolina secretary of commerce 

have been talking to some interesting prospects and traveling 

around, and they run into one constant hurdle which they have no 

ability to do anything about. 

So, Secretary Pritzker, what do you think that hurdle is that 

they run into? 

Secretary PRITZKER. Tariffs and market access, probably. 

Mr. HOLDING. Tariffs. If you want a European car manufacturer to come to eastern North Carolina and build cars to export 

back to Europe, it costs tariffs. It is my understanding it might cost 

upwards of $4,000 per car. So these manufacturers lose interest in 


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coming to eastern North Carolina. And as my colleague Mr. Kind 

from Wisconsin said, you know, perhaps they would choose a country like Mexico, which has agreements that can avoid those tariffs. 

So, Secretary Pritzker, are you hearing similar stories from 

around the country, from my colleagues who are running into—and 

your colleagues who are local state secretaries of commerce who are 

running into these complaints? 

Secretary PRITZKER. Congressman, yes. We have heard about, 

you know, tariffs are an impediment in not just the auto industry 

but in numerous industries for selling our goods and our manufactured goods around the world. 

But we have an opportunity, with these trade agreements, to 

make the United States the number-one manufacturing platform in 

the world. And I really believe that, you know, by completing these 

agreements, we will not only grow our businesses, we will grow 

jobs in the United States, and wages will grow, as well. 

Mr. HOLDING. So, in your estimation, if we want to build cars 

in eastern North Carolina, we need to pass TPP and TTIP, correct? 

Secretary PRITZKER. Yes. 

Mr. HOLDING. And are we going to be able to pass those trade 

agreements through this Congress without TPA? 

Secretary PRITZKER. No. 

Mr. HOLDING. Thank you. 

Mr. Chairman, I yield back. 

Chairman RYAN. Well, it has been a long afternoon. I want to 

thank the three of you, on short notice, setting your very, very, 

very busy schedules aside for the afternoon, indulging us. 

You can see that there is some bipartisan support here for TPA 

and for putting these trade agreements together. This is one of 

those rare instances, I think, where a Democratic administration, 

a Republican majority, we can see eye-to-eye on a few things; get 

some things done on behalf of the people we represent. 

We all want higher wages, more jobs, faster economic growth. We 

don’t always see eye-to-eye on how to do that, but, in this particular case, many of us do. I think that is a good thing. 

So I want to thank you for coming today. 

And this hearing is adjourned. 

Mr. LEVIN. May I just say a word? 

Chairman RYAN. Yes. 

Mr. LEVIN. Okay. 

I just want to thank you for coming. 

And I just want everyone to remember the constructive approach 

that we on this side are taking. These are major outstanding 

issues—major, major. And it is our deep feeling it is not the appropriate point for this Congress to give up our leverage. 

But we really appreciate you coming, and we look forward to tomorrow. Thank you. 

Chairman RYAN. We will debate the finer points tomorrow, but 

I just want to say thank you very much. 

This hearing is adjourned. 

[Whereupon, at 6:28 p.m., the committee was adjourned.] 

[Questions for the record follow:] 


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July 3 1. 2015 

The Honorable Paul Ryan 

Chainnan. Committee on Ways and Means 

U.S. House of Representatives 

Washington. DC 205 15 

Dear Mr. Chairman: 

UNITED STATES DEPARTMENT OF COMMERCE 

The Secretary of Commerce 

Washington. D.C. 20230 

Thank you for your lener submining questions for the record following my testimony 

before the Committee on Ways and Means on April 22. 2015. 

Enclosed please find the responses to the questions provided by the Comminee. lfyou 

have any further questions, please contact Jim Stowers. Acting Assistant Secretary for 

Legislative and Intergovernmental A flairs, at (202) 482-3663. 

r~~ Penny Pritzker 

Enclosure 
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Response to Question fo•· the Record 

U.S. House of Representatives 

Ways and Means Committee 

April 22, 2015 

Questions from Rep. Reichert 

I) India 

I am pleased to see that the United States and India have agreed to expand and elevate the U.S.-

India Strategic and Commercial Dialogue. Leadership from the Department of Commerce and 

the United States Trade Representative will be crucial to achieving solid deliverables to the 

benefit of U.S. and Indian businesses, workers, and consumers alike. In particular, one such 

win-win would be to eliminate the restriction that India imposes on foreign direct investment 

(FDI) in e-commerce. Will this issue be on the agenda as part of the dialogue? Can you describe 

what else Commerce is doing to encourage the Indian government to liberalize FDI in ecommerce? Additionally, is this issue on the agenda of the Trade Policy Forum? 

Response: 

The Department of Commerce routinely engages with the Government of India (GOI) to discuss 

the benefits in liberalizing foreign direct investment in India's e-commerce sector for the 

business to consumer model. This includes helping India create jobs in various sectors, 

integrating Indian small- and medium-sized enterprises into the global supply chain of 

multibrand retailers, obtaining access to cheaper goods, and increasing competition in the 

marketplace. Simultaneously, market access for U.S. companies will mean greater access to 

India's large and growing economy, an increase of U.S. exports, and job creation in the United 

States. Additionally, the GOI is working on gllidelines fore-commerce and we will continue 

engaging with them while the guidelines are being developed. 

The Department of Commerce is in the early planning stages for the U.S.-India Strategic and 

Commercial Dialogue (S&CD) and we have not yet come to agreement with the Indian 

Government regarding what topics will be on the agenda. 

£-commerce liberalization is also discussed under the services work stream of the Trade Policy 

Forum (TPF) agenda. The Office of the United States Trade Representative (USTR) specifically 

raised the issue of India liberalizing business to consumer e-commerce at the Minister level 

during the TPF in November 2014, and has had technical discussions in 20 I 5 emphasizing the 

spill over benefits of e-commerce liberalization to logistics, warehousing, and transportation 

services. USTR will continue to discuss this issue with India in the context of the TPF. 
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2) Chile 

Is the Administration aware the Chilean government is considering educational reforms that 

could potentially violate existing agreements between U.S. businesses and Chilean institutions? 

If so, does the Administration have a position? 

Response: 

Yes, the Administration is aware of the education reforms in Chile and their potential to impact 

U.S. business interests in the sector. The Administration continues to monitor the ongoing 

reform process. 

Questions from Rep. Boustany 

I) Trade Promotion Authority 

Madam Secretary, as you know, trade plays a crucial role in the economic growth and stability of 

my home state of Louisiana. In fact, exports last year totaled $65.1 billion, marking an increase 

of almost three percent from 2013, and also the sixth consecutive year of growth, according to a 

new report by the World Trade Center of New Orleans. The results mirror a national trend: 

Exports for all 50 states in201 4 set a national record totaling $1 .62 trillion, an increase of2.78 

percent from 20 13. 

In recent years, countries across the Asia-Pacific have concluded more than 200 trade deals, 

while American workers and businesses have largely missed out. I do not believe the United 

States can afford to sit on the sidelines as others complete trade agreements that put our 

economy, businesses, and workers at an interoational competitive disadvantage and encourage a 

race to the bottom. Mrs. Secretary, in your opinion, do you believe the United States will be able 

to complete current trade agreements and continue to see growth and development opportunities 

without the passage of the Trade Promotion Authority? 

Response: 

As he noted when signing the Trade Promotion Authority legislation on June 29, the President 

welcomed the strong biplll1isan congressional action leading to the passage of this legislation. In 

the past several months, Administration officials have traveled throughout the country 

highlighting the important benefits of trade for firms and workers and the disadvantage they 

currently face by virtue of the fact that other countries, including China, have already secured 

trade preferences for their goods and services through their own trade agreements. The 

Administration, therefore, shares your perspective that trade promotion legislation is critical to 

help strengthen the competitiveness of U.S. fim1s and workers by allowing the government to 

conclude negotiations on trade agreements that open markets and create significant new 

commercial oppottunities for U.S. goods and services. Securing this legislation now helps 

ensure that we get the best deal possible in our trade negotiations and allows us to bring those 

benefits home to the American people. 
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2) Investment Protection 

The United States protects foreign investments through systems of jurisprudence, rights to 

equitable treatment, and fair and impartial heari ngs of disputes. Madam Secretary, do you 

support an investment chapter in trade agreements containing strong investment protections that 

ensure fair and equitable treatment of investors; full protection and security of investments; a 

prohibition on expropriation of investments; prompt compensation when expropriation occurs; 

free transfers of capital; and access to reliable, independent, intemationalthird-pa11y dispute 

resolution mechanisms (e.g., investor state arbitration)? 

Response: 

The Department of Commerce is a strong proponent of trade agreements that ensure that U.S. 

investors and investment are protected abroad. That includes investor protections like those you 

cite. For example, the U.S. Government advocates for a minimum standard of treatment 

obligation that includes guarantees offair and equitable treatment and full protection and 

security. Although a sovereign nation has the right to expropriate property, we call for clear, 

appropriate limits on the expropriation of investments and a standard that requires the payment 

of prompt, adequate and effective compensation when expropriation takes place. We stress the 

importance of the requirement that investors be able to move capital relating to their investments 

into and out of the host country without delay. We also seek to secure for our investors the right 

to bring an investment dispute against a host country's govermnent iJl a neutral intemational 

forum. It is through securing strong, enforceable rights in U.S. international agreements that we 

help protect U.S. foreign direct investment abroad, as well as promote the U.S. exports that 

follow such investment. 

3) Energy 

Crude oil exp011s are an important aspect of the benefits of global trade both domestically and 

throughout the globe. I was pleased to see the PEMEX application this winter regarding swaps 

of crude oil. I hope this positive development with Mexico continues. 

Are you working toward further collaborations, and do you believe that we should allow exports 

to Mexico in the same way that exports are allowed to Canada? And would you support 

Congressional efforts to codify No1th American crude exports as a first step toward ultimately 

achieving free trade of oil? 

Response: 

The Department of Commerce's regulations have long implemented the provisions in relevant 

laws allowing the exchange of crude oil with adjacent foreign states. It is not clear that allowing 

U.S. crude oil exports to Mexico without reciprocation is warranted. 
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4) Energy 

The shale development boom across the United States is changing our country's energy 

landscape as U.S. crude oil output soars to a 3 1-year high and oil impo1ts continue to steadily 

decline. Lifting the 1970s era crude oil export ban would allow this boom to continue while 

lowering energy costs for conswners and increasing tax revenues for local govenunents. In 

Louisiana, lifting the ban would grow the industry that so many Louisianans care deeply about. 

According to HIS Energy, lifting the export ban would increase U.S. production from 8.2 million 

barrels per day to 11.2 million barrels per day and increase investment in the American economy 

by nearly $750 billion. A high crude oil export scenario would lead to 63,000 jobs added at peak 

in 2019, according to an Aspen Institute report, and lifting the ban would put downward pressure 

on domestic gasoline prices. 

During the recent CERA Week conference, Senator Murkowski stated that " it is time to lift the 

ban" on crude oil exports. Do you agree? 

Response: 

I understand as you do the vital role that the energy sector plays in our economy. The increase in 

domestic oil production is a positive development and is an important pa11 of the President's all 

of the above energy strategy. We arc closely monitoring the implications of growing domestic 

energy supplies, including the economic, environmental, and security opportunities and 

challenges that they present. Given the numerous stakeholders in this issue, we are also 

following the Congressional legislative efforts related to the crude oil export ban. 

5) TPP/Chile 

Chile is one of the 12 nations currently negotiating the TPP trade agreement with the United 

States. Under current Chilean law, a non-profit university may receive services from for-profit 

organizations. It has been brought to my attention by Laureate, a Baltimore, Maryland-based 

company, that the current Chilean President, Michelle Bachelet, has been pushing wide-ranging 

education reforms that would jeopardize ongoing investments in higher and professional 

education by companies. Over the past 15 years, Laureate has invested oearly $1 billion in Chile 

and provided academic, technical, and management services that currently support 150,000 

students through three leading non-profit universities and several professional training institutes 

in Chile, including Universidad Andres Bello (36,000 students in 7 campuses), Universidad de 

Las Americas (26,000 students in 4 campuses), and Universidad Vina del Mar (6,000 students in 

2 campuses). Although Laureate has been and currently is fully compliant with Chilean law and 

agreements in place, it is concerned that planned education reforms by the Chilean Govenunent 

run counter to existing contracts, such as those Laureate has signed with the government for its 

three universities a decade ago, as well as international agreements, such as the U.S.-Chile Free 

Trade Agreement, which came into force in 2004. 
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Has the Administration expressed its concerns over Chile's proposed education reform and the 

impact it would have on American investors? If so, how and when? What impact does it have in 

our TPP negotiations? 

Chile's proposed educational reforms appear to be a de-facto nationalization of private education 

in Chile. Given there is $1 billion of U.S. investment in Chile's higher education system, how is 

the U.S. prepared to respond? 

Resnonse: 

Yes, the Administration has expressed concerns about the potential impact of education reforms 

on U.S. investments in Chile. The Administration has raised its concerns on a number of 

occasions in meetings with Chilean Government officials since becoming aware of the issue in 

early 2014. 

TPP negotiations include negotiations relating to the protection of investor interests in partner 

countries. This includes the right to compensation in the case of a partner govenunent's 

expropriation of a U.S. investor's assets. The U.S.-Chile Free Trade Agreement includes similar 

protections. The Administration will continue to advocate on behalf of U.S. interests abroad, 

including those of education-related investments, and take appropriate action to promote 

compliance with international treaty obligations. 

Rep. Marchant 

l)GSP/AGOA 

I understand that the Administration is cun·ently reviewing a longstanding investment dispute 

between the Republic of Congo and the company COMMISlMPEX. I understand that your 

review is centered on whether the Republic of Congo has taken steps that are inconsistent with 

the eligibility criteria found in the GSP statute and the AGOA legislation- both of which the 

Committee moved to renew and extend recently. Please provide an update on your review. 

Response: 

As you note, both GSP and AGOA have eligibility criteria related to investment and we are 

committed to ensuring that all eligible countries continue to meet the criteria. To date, no 

petition has been filed under GSP regarding the COMMJSIMPEX case and this dispute came to 

our anention subsequent to the completion of our last AGOA eligibility review. We are 

monitoring this ongoing dispute closely. 
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[Submissions for the record follow:] 


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The Honorable Orrin Hatch 

Chairman 

Committee on Finance 

U.S. Senate 

219 Dirksen SOB 

Washington, DC 205 10 

The Honorable Ron Wyden 

Ranking Member 

Committee on Finance 

U.S. Senate 

219 Dirksen SOB 

Washington, DC 205 10 

April 2 1, 2015 

The Honorable Paul Ryan 

Chairman 

Commiuee on Ways & Means 

U.S. House of Representatives 

1101 Longworth HOB 

Washington, DC 20515 

The Honorable Sander M. Levin 

Ranking Member 

Committee on Ways & Means 

U.S. House of Representatives 

I I 06 Longworth HOB 

Washington, DC 20515 

Dear Chairmen Hatch and Ryan and Ranking Members Wyden and Levin: 

We write in strong support of the Bipartisan Congressional Trade Priorities Act of 20 IS 

(BCTPA). America's film and television industry is one of the few that runs a persistent trade 

surplus - over $ 13 billion in 2013. More broadly, America's core copyright industries (film, TV, 

music, publishing, and software) are among America's biggest trade success stories. Total 

foreign sales (exports+ licensing and roya lty revenue) of these industries exceeded $ 156 billion 

in 20 13 -which is larger than tota l fo reign sales of many other major U.S. industries, including 

aerospace, chemicals, and all of agriculture. 

As these numbers show, international markets arc already critically important to the U.S. movie 

and television industry and the two million men and women whose jobs depend on it. On 

average, over 60% of fihn revenue comes from overseas markets. Foreign market sales also 

provide an important source of revenue supporting U.S. television productions. Overseas 

markets will be increasingly important in the future. 

For the U.S. movie and television industry, the intellectual property (IP) chapters of U.S. free 

trade agreements (FTAs) are cri tical. All over the world, a lack of adequate IP protection is an 

effective market access barrier for the U.S. creative and innovative industries. Many of our 

trading partners do not provide nearly the level of copyright or other IP protections as the United 

States. The lP chapters help raise standards to a basic level of protection for America's creative 

and innovative industries-- still significantly lower than the level provided by U.S. law, but 

usually major improvements from the standards in the absence of the FT A. 

Other provisions of FT As are also important. The Services chapters help break down barriers to 

U.S. audio-visual productions such as screen quotas, primetime limits, investment restrictions, 

and distribution limits. Thee-commerce and digital trade provisions are also increasingly 

critical. The U.S. movie and television industry is already one of Ameri ca's biggest Internet 

industries and will increasingly rely on digital distribution channels in the future. 
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BCTPA's objectives provide the right foundation for USTR to negotiate strong agreements for 

the U.S. creative industries and the millions of workers they employ. We urge you to move 

swiftly to approve the legislation and look forward to working with you to help. 

Sincerely, 

21st Century Fox 

NBCUniversal 

Sony Pictures Entertainment Inc. 

Time Warner Inc. 

Viacom Inc. 

The Walt Disney Company 
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The Alliance for Healthcare 

Competitiveness 

Improving lives, creating Jobs and meeting the 

healthcare needs of a growing global 

population 

WRITTEN STATEMENT OF DOMINIC CARUSO 

CHIEF FINANCIAL OFFICER, JOHNSON & JOHNSON 

ON BEHALF OF ALLIANCE FOR HEALTHCARE COMPETITIVENESS 

HEARING ON 

EXPANDING AMERJCAN TRADE WITH ACCOUNTABILITY AND 

TRANSPARENCY 

HOUSE WAYS AND MEANS COMMITTEE 

APRIL 22, 20 15 

3:00p.m. 
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Testimony of Dominic Caruso of Johnson & Johnson 

I would like to thank the Committee, Chairman Ryan, and Ranking Member 

Levin for the opportunity to provide our viewpoints in support of trade and Trade 

Promotion Authority today. Johnson & Johnson is a member of the Alliance for 

Healthcare Competitiveness (AHC), a group of27 leading firms and non-profits 

involved in American health, including healthcare providers, medical device and 

pharmaceutical manufacturers, insurers, health IT, hospitals, global health advocates, 

health-specialized architects, express carriers, and other participants in America's 

$2.9 trillion health sector. 

About Johnson & Johnson 

Johnson & Johnson has approximately 126,500 employees worldwide 

engaged in the research and development, manufacture and sale of a broad range of 

products in the healthcare field. The Company conducts business in virtually all 

countries of the world with the primary focus on products related to human health 

and well-being. Research and development activities represent a significant part of 

our business, and last year we spent over $8.5 billion worldwide, $4 billion of that 

amount in the United States. Those research dollars help support, among other 

things, numerous cl inical trials on new and life-improving phanuaceuticals. 

The Company is organized into three business segments: Consumer, 

Pharmaceutical, and Medical Devices and Diagnostics. The Consumer segment 

includes a wide range of well-known brands for health and healing, and beauty and 

well-being, including well-known brands such as JOHNSON's Baby, BAND-AID, 

LISTERINE, TYLENOL, ZYRTEC, AVEENO, and NEUTROGENA. The 

Pharmaceutical segment includes products in therapeutic areas including: antiinfective, antipsychotic, contraceptive, gastrointestinal, immunology, infectious 

diseases, neurology, oncology, pain management, thrombosis, and vaccines. The 

Medical Device and Diagnostics segment includes a broad range of products to treat 

cardiovascular disease; trauma, orthopedic and neurological products; blood glucose 

monitoring and insulin delivery products; general surgery, biosurgical and energy 

products; professional diagnostic products; infection prevention products; and 

disposable contact lenses. 

Johnson & Johnson makes an important contribution to the U.S. economy. We 

have 39,000 direct jobs in the U.S. which in turn help support 206,700 indirect jobs, 

which means for every one direct job in the U.S., we support 5.3 additional jobs in 

the U.S. economy. For every dollar of Jol111son & Johnson output, we add $1.4 in 

additional indirect output to the U.S. ec.onomy. We have employees in every state of 

the U.S., but if! look at the states represented by Members on this Committee, I note 

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Testimony of Dominic Caruso of Johnson & Johnson 

we have over 1,000 employees in each of the following states: California, Florida, 

Georgia, Indiana, Massachusetts, New Jersey, New York, Ohio, Pennsylvania, and 

Texas. 

Johnson & Johnson is a leading corporate supporter of trade, and a member of 

pro-trade organizations including the Alliance for Healthcare Competitiveness, the 

U.S. Chamber of Commerce, the Business Roundtable, the Trade Benefits America 

coalition, AdvaMed, PhRMA, and the Personal Care Products Council. All support 

trade, and all support the Trade Promotion Authority legislation that is under 

consideration by this Committee. 

The Importance of Trade to the United States 

With more than 95 percent ofthe world's population living outside of the 

United States, U.S. economic growth and job creation depend on expanded trade and 

investment opportunities so U.S. companies and workers can sell more American 

products and services to foreign customers. For example, in 2014, nearly 40 million 

U.S. jobs- more than one in five - depended on U.S. exports and imports. This 

represents 25.8 mill ion more trade-related U.S. jobs than two decades ago, before 

the U.S. implemented a series of bilateral, regional, and multilateral trade 

agreements. 

High-level trade agreements have been critical to global economic growth, 

and directly benefit the U.S. economy. Our fi·ee trade agreements have significantly 

helped contributed to export growth, and in part to recovering from the 2008 global 

recession. U.S. goods exports to our free trade partners have grown by 57 percent 

since 2009. Nearly 30 percent of gross domestic product (GDP) growth over the last 

five years has been the result of export growth. This is particularly impressive given 

that exports of late have accounted for nearly 14 percent ofGDP, according to the 

Department of Commerce. 

Some of these. benefits have been the result of the U.S. pressing countries to 

make free-market and democratic reforms to their systems. Improving the rule of 

law, imposing codes of ethical conduct, respecting and strengthening protection of 

intellectual property rights, and improving transparency and administrative 

procedures have enhanced the ability of American businesses to grow overseas. At 

the same time, reforms initiated in the pursuit of free and fair trade have improved 

the lives and economic freedoms of the citizens of our trading partners, which has a 

value in its own right, and a factor in promoting stability and regional security. In 

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Testimony of Dominic Caruso of Johnson & Johnson 

short, free trade agreements help U.S. business, expand wealth and economic 

freedom, and promote U.S. foreign policy objectives- a win-win-win scenario. 

Understanding the Healthcare Eco-system 

I have been speaking generally about the benefits of trade to the whole U.S. 

economy. I would like to focus on healthcare now. Health is one of the largest and 

fastest-growing sectors of the world economy. Valued at $7.2 trillion in 2012, it is 

likely to surpass $9.3 trillion - over a tenth of the world's likely economic outputby2018. 

There are logical, predictable, and well-understood reasons for this surge in 

growth. One is that the world's population is aging. The global over-60 population 

is expected to double in the next 20 years while the youth population remains stable. 

In developing regions everywhere, the world's population is urbanizing, with global 

city populations likely to rise by 1.4 billion in the next 20 years while rural 

populations remain stable. And the world is growing more affluent, with the global 

middle class expanding from 1.7 billion to four billion over the next 20 years. 

All t11ese factors mean a rapidly growing demand for healthcare. Older people 

need more preventive care and more treatment. City residents, living closer to 

hospitals and clinics, are more likely to seek care when they need it, and also more 

likely to use preventive care. And a middle-class population, no longer struggling 

with deep material deprivation, is more likely to seek and demand regular highquality care. 

Thus, the world's medical industries will need to provide regular preventive 

care and treatment for two billion more people; provide the additional medicines 

needed for an additional 600 million elderly people; bui ld the clinics and hospitals 

needed for these patients; and finance treatment through some mix of out-of-pocket 

payments, public financing, and private insurance. 

As the leader in all these aspects of healthcare innovation, the U.S. is uniquely 

positioned to take advantage of these developments. Over the next two decades, the 

U.S. healthcare sector will be a powerful stimulus for global growth and investment, 

a driver of technological progress, a key factor in stimulating productivity, a means 

of channeling young people into highly paid, technically demanding careers, and an 

important contributor to social stability and therefore regional and national security. 

The U.S. government is to be applauded for advancing trade policy affecting many 

of the components of the healthcare eco-system, but what is critically needed now is 

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Testimony of Dominic Caruso of Johnson & Johnson 

a more comprehensive strategy for the sector as a whole. That is why one of our key 

recommendations has been for the U.S. Trade Representative (USTR) to create a 

dedicated bealthcare trade position to bring together this wide range of interests and 

issues when negotiating trade agreements. 

The health eco-system represents a range of expertise that extends beyond 

pharmaceuticals and medical devices; it touches logistics, infrastructure, intellectual 

property, research, services, and more. The depth and breadth of the sector and its 

unique considerations require a look at the sector holistically. 

Trade Promotion Authority 

Trade agreements will help that occur, and the Bipartisan Congressional Trade 

Priorities and Accountability Act of20 15 (TPA) is critical to capitalizing on the 

benefits of trade l have laid out. This legislation: (1) helps shape the principal goals 

the United States wants to accomplish in international trade negotiations with other 

countries; (2) establishes a framework for Congress and the Executive Branch to 

partner in pursuing trade agreements and enacting bills implementing the agreements 

into law; and (3) strengthens the hands of U.S. trade officials when negotiating with 

other countries. 

TPA presents a critical framework for ensuring that the U.S. trade agenda is 

robust and ambitious. Ln many ways, this law provides both a floor for negotiating 

objectives - minimum standards that the U.S. should seek - and also urges the U.S. 

and its trading partners to strive for the strongest rules-based trading regime 

possible, greater cross-border integration, and commitments to reforms that spur 

economic growth. These principal negotiating objectives have never been more 

important in protecting innovation, opening markets for U.S. goods, and ensuring 

that U.S. i.ndustries - particularly those like the innovative biopharmaceutical 

industry, which delivers cutting edge treatments for patients, high-paying jobs, and 

significant economic output - continue to thrive. 

The healthcare industry's priorities for trade agreements, and therefore for 

TPA legislation, include many features that are in current agreements and related to 

other U.S. industries. 

We seek better access for patients around the globe through the reduction or 

elimination of measures that impede trade and investment in bealthcare-related 

industries, like tariffs and non-tariff barriers. We want to ensure that obligations 

under agreements apply to healthcare-related products and services and are properly 

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Testimony of Dominic Caruso of Johnson & Johnson 

enforced. There should be investment protections and the ability to deliver lifesaving products and services across borders efficiently with no discriminatory or 

undue barriers, including those created by state owned entities. The U.S. 

government should promote competitiveness within the healthcare sector through 

the provision of strong intellectual property protections for new and emerging 

technologies and innovative productS. We also want other countries to provide 

increased transparency to their regulatory activities and provide regulatory due 

process in the healthcare sector. Moreover, the interrelated and multi-sectoral nature 

of the healthcare eco-system requires that trade officials take a holistic view of the 

health industry. 

In other words, the U.S. healthcare industry wants the opportunity to share its 

remarkable life-saving products and services with patients around the world. I am 

happy to say that the legislation prepared by Chairman Ryan and the leaders of the 

Senate Finance Committee incorporates all of these important goals. 

Conclusion 

Chairman Ryan, l want you to know that the business community very much 

appreciates your leadership in preparing legislation to provide the President with 

trade negotiating authority. 

You and your staff obviously worked very hard to include the viewpoints of a 

wide range of stakeholders, and 1 think you have struck a good balance. It is 

especially heartening to see this example of bipartisanship and how you worked with 

the leadership of the Senate Finance Committee to put this legislation together. 

We wholeheartedly support your effort and want to work with you and all 

Congressional offices to have this law enacted. 

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-'-A J... ill jt~car " as.o;oc ""'"'. iation we wear· jobs 

Statement by Juanita D. Duggan, 

President & CEO 

American Apparel & Footwear Association 

Submitted to the House Ways and Means Committee 

and the 

Senate Finance Committee 

Congress and U.S. Tariff Policy 

April 23, 2015 

On behalf of the members of the American Apparel & Footwear 

Association, and the four million trade-dependent U.S. workers we 

employ, we thank the Committee for its leadership in considering key 

trade legislation. 

In a global economy where 95 percent of our customers live outside 

the U.S., our members and their employees depend on trade. 

Reducing trade barriers means we can better access markets and 

materials. It also helps ensure our products and inputs can easily 

move across borders. Simply put, trade liberalization is critical to the 

health of U.S. clothing and shoe companies. 

We were pleased to see passage of The Bipartisan Congressional 

Trade Priorities and Accountability Act of 2015 (HR 1890/S. 995) in 

the House Ways and Means and Senate Finance Committees this 

week. 

Early enactment of this legislation will facilitate completion of 

negotiations for the Trans Pacific Partnership (TPP) with 11 Pacific 

Rim countries and the Trans-ALantic Trade and Investment 

Partnership (T -TIP} with the European Union. When completed, those 

agreements have the potential to eliminate long-standing tariff 

barriers, harmonize regulatory regimes, and expand trade and 

investment opportunities for the U.S. apparel and footwear industry. 

Equally important, Congressional consideration ofTPA paves the way 

for renewing expired and expiring trade measures such as the African 

Growth and Opportunity Act (AGOA), the Generalized System of 

Preferences (GSP), and the Haitian Hemispheric Opportunity through 

Partnership Encouragement Act (HOPE)/Haiti Economic lift Program 

16ol North Ktttt Strttt 

SUiteuoo 

(Jo)) l4·186~ 

(8oo) S20·tt&:t 

(JOJ) su-67u f•)( 

www.wewtar.org 
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(HELP) programs. We were particularly pleased to see the committees pass 

bills that: 

• Retroactively renew the GSP program through December 2017; 

• Extend the HELP/HOPE program until September 2025; 

• Extend the AGOA until September 2025; and 

• Update and modernize Customs facilitation and intellectual property 

rights enforcement provisions. 

In addition, we thank the Senate Finance Committee for approving: 

• Provisions patterned after the GSP Update Act (HR. 681/S. 340) - to 

extend travel goods to the GSP program; 

• The "athletic footwear initiative" - to update tariff classification for 

certain shoes; 

• Provisions patterned after the U.S. Outdoor Act; and 

• Miscellaneous Tariff Bill (MTB) reform 

We urge Congress to approve these measures, which are vital for our 

members in reducing costs, promoting investment, and supporting tradebased jobs, both in the United States and abroad. 

Thank you. 

### 

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MICHAEl P. WALLS 

VICE PRESIDENT 

REGULATORY & TECHNICAL AFFAIRS 

The Honorable Paul Ryan 

Chairman 

Committee on Ways and Means 

U.S. House of Representati ves 

1102 Longworth House Office Building 

Washington, D.C. 20515 

merican· Chemistry 

ouncil 

April 22, 2015 

The Honorable Sander Levin 

Ranking Member 

Committee on Ways and Means 

U.S. House of Representatives 

II 02 Longworth House Office Building 

Washington, D.C. 20515 

Dear Chairman Ryan and Ranking Member Levin: 

The American Chemistry Council (ACC) strongly supports current initiatives to expand access 

for U.S. exports to key international markets. We particularly support the Trans-Pacific 

Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (TTIP) negotiations as a 

means to achieve these export objectives. Trade Promotion Authority (TPA) renewal is among 

the most critical trade votes Congress must undertake to realize America's ambitious trade 

agenda and support expanded growth in exports. We urge Congress to renew TPA as soon as 

possible. 

The business of chemistry in the Un ited States is enjoying an unprecedented boom in 

competitiveness and growth. largely due to the increased supply of low-cost natural gas, a 

feedstock and a power source for chemical manufacturing. As a result of shale gas, more than 

229 separate chemical manufact11ring investments have been announced since 20 I 0, representing 

a cumulative capital investment of$ 140 billion in new chemical capacity. This new capacity will 

exceed U.S. domestic demand, and will necessarily serve important export markets. Even with 

the recent drop in oil prices, gross exports of chemical products linked directly to natural gas are 

projected to double in the next fitleen years, from $60 billion in 2014 to $123 billion by 2030, 

according to a recent report from Nexant, Inc. However, enhanced U.S. chemical export 

perfom1ance will depend on many factors, including the U.S. pursuing the right trade policies 

that further strengthen the competitive position of the U.S. industry. 

TPA is critical to completing the trade agreements now being negotiated. TPA will therefore 

help open markets and help ensure the U.S. chemical industry can capitalize on its massive 

export potential. 

americanchemistry.com• 700 Second St., NE I W•>hington, OC 20002 I (202) 249.7000 
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The Honorable Paul Ryan 

The Honorable Sander Levin 

April22, 2015 

Page 2 

The Congressional trade agenda should a lso include the reauthori.zation of the Miscellaneous 

Tariff Bill (MTB). U.S. manufacturers large and small use the MTB's tariff suspension 

provisions to obtain raw materials, proprietary inputs and other products that are not available in 

our nation without incurring unnecessary tariff barriers. Each day that passes without an MTB 

process hurts American manufacturers' ability to do business. In fact, the fa ilure to pass the 

MTB has essentially imposed a tax on manufacturers of$748 million and economic losses of 

$1.857 billion over three years. The impacts extend to the people and businesses that depend on 

manufacturing. Ramifications are experienced throughout the supply chain, from the suppliers, to 

the millions of people who are employed in manufacturing, to the local govemments that depend 

on the spending and tax revenue generated by the industry. Any action to reduce barriers to 

domestic production and increase the competitiveness of U.S. companies must include the 

reauthorization ofMTB. 

For U.S. chemical manufacturers to succeed in today's global economy, we must be able to 

compete effectively in intemational markets. For this reason, we support an ambitious trade 

agenda, including TPA and MTB, that deliver enhanced access to overseas markets and support 

the competitive position of U.S manufacturers. ACC looks forward to working with you to 

ensure that an ambitious trade agenda delivers on its promise. 

Sincerely 

k.,t.tfk, 

Michael P. Walls 

Vice President 

Regulatory & Technical Affairs 

Cc: Members of the Committee on Ways and Means 
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Overview 

CPATH: Public HealTh Commems Regarding Fast Trt1ck /frade Promo1ion Amhority 

Hearing of tile House CommifUte on Wt~ys and Means· Apri/ 22. 2015 

On behalf of the Center for Policy Analysis on Trade and Health (CPATH), we appreciate the 

opportunity to comment on the proposed Congressional Trade Priorities and Accountability Act of 

20 15. CPATH is an independent organization that has been in volved for many years in bringing a 

public health voice to debates on trade and sustainable development through research, policy 

analysis, and advocacy. 

A rail of complex trade agreements with sweeping implications for the public's health are being 

negotiated by the U.S. Trade Representative (USTR) in secrecy, shielded from the light of public 

scrutiny. These include the Trans-Pacific Partnership Agreement (TPP) with II Pacific Rim nations, 

the Transatlantic Trade and Investment Partnership (TTfP) with the European Union, and the Trade 

in Services Agreement (TISA). Unfortunately the USTR has relied on Trade Advisors representing 

the pharmaceutica l, tobacco, alcohol, health insurance, and processed food industries in shaping the 

Administration's trade objectives and negotiating positions relating to public health and health care. 

These deals confer new and expanded rights to transnational corporations to protect their profits over 

the rights of democratically elected govemments and the public. These include the right to challenge 

the implementation of domestic laws and regulations in international trade tribunals. 

This bill would create a Fast-Track process to allow trade agreements to leapfrog customary 

legislative protocol, and be put to a rapid "up or down" vote in Congress without public 

hearings o•· amendments, including those in the interest of protocting the health and safety of 

the American people. 

The Fast Track bill also aims to set out Congress' policy objectives for trade agreements, as well as 

an undemocratic and abbreviated process lor reviewing them. As an illustration of this fatally flawed 

legislation, not one objecti ve would safeguard or improve the economic well-being of the American 

middle class. Rather, they prioritize commercial gain at the expense of people's health, including 

access to affordable medicine, protection from deadly tobacco products, and democratic sovereignty 

to make decisions to satcguard and improve our health. 

A more apprOJ>riate title would be: Bargaining to Concentrate the Power and Wealth of Global 

Corporations Including Finance, Drugs, Tobacco, Fossil Fuel, Agribusiness, Media and 

Information Technology; to Entrench and Deepen Income Inequality; and to Progressively 

Reduce the Rights and Policy Space of People and Democratically Elected Public Officials and 

Governments. 

Promote Democratic, Transpare_l!!, and Accountable Trade ~egotiations 

In order to create trade agreements that advance tl1e promises of the 2 t" century for sustainable 

technological and economic development that protect and promote health, CPATH recommends that 

Congress adopt and enforce robust objectives for the TPP Trade Agreement negotiations that will 

safeguard the hea lth of Americans and our trading partners, and promote economically and socially 

CPATH • Ell en R. Shaffer & Joseph E. Brenner, Co-Directors, P.O. Box 29586, San 

Francisco, CA 94129- 0586; phone: 41 S- 922 - 6204 · ershaffer@cpath.org · 

www.cpath.org 
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CPATH: Public Health Comments Regar<ling Past Track /Trade Promotion Alllhority 

Hearing of the House Commiuee on Ways and Means· Apri/ 22, 2015 

2 

just, democratically controlled, and environmentally sustainable outcomes, specifically the following 

Public Health Objectives for Global Trade Agreements: 

CPATH • Ellen R. Shaffer & Joseph E. Brenner, Co-Directors, P.O. Box 29586, San 

Franci sco, CA 94129- 0586; phone: 41 5- 922 - 6204 · ershaffer@cpath .o rg · 

www.cpath.org 
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CPATH: Public Health Comments R(.'garding Ft1s1 Track flralle P1·omotion Awhorily 

Nearing oj1he H(mse Commi11ee on Wt1ysand Means· Apri/22. 2015 

Public Health Ob"ectives for U.S. Global Trade Agreements 

I. Assure democratic participation by public health and transparency in trade policy: 

a. Open all proceedings and documents of trade negotiations and trade advisory committees tO 

the public; and 

b. Appoint to all three tiers of trade advisory committees representatives of organizations that 

work to assure equitable access to affordable health-related services and products, and 

promote the health of individuals, communities and populations, who can provide formal 

advice to USTR from the public health and health care community to USTR; and 

c. USTR to consult with all relevant committees of the House and Senate in the development. 

negotiation, implementation, and administration of trade and negotiating objectives. 

2. Develop mutually beneficial trade relationships with trade partners that create sustainable 

economic development in an increasingly interdependent world. 

3. Recognize the legitimate exercise of national, regional and local government sovereignty to 

protect population health, and ensure that countries do not weaken or reduce, as an 

encouragement for trade, sound policies that contribute to health and well-being and democracy, 

including laws on public health, the environment, labor, food safety, human rights and intemct 

freedom. 

4. Exclude tariff and nontariff provisions that address vital human services such as health care, 

water supply and sanitation, food safety and supply, and education, including licensing and crossborder movement of personnel in these fields. 

5. Exclude tobacco and tobacco products, which are lethal, and for which the public health 

goal is to reduce consumption, !Tom tariff and nontariff provisions of the TPP, including 

advertising, labeling, product regulation and distribution. 

6. Exclude alcohol p.-oducts, which present seri ous hazards to public health. Policies designed to 

reduce the harm caused by alcohol products should not be subject to compromise in exchange for 

other trade benefits. 

7. Eliminate intellectual property provisions related to pharmaceuticals from the TPP and 

TTIP negotiations, as these are more appropriately addressed in multilateral fora, and promote 

trade provisions which enable countries to exercise all flexibilities provided by the Doha 

Declaration on Public Hea lth, including issuing compulsory licenses for patented 

pham1aceuticals, parallel importation, and other measures that address high prices and promote 

access to affordable medicines. 

The outline of the following comments is as follows: 

I. Economic globalization and health - Overview 

2. The track record: trade and health 

3. Transparency and democracy 

4. Intellectual property rules limit access to affordable medicines 

5. Tobacco corporation challenges to tobacco controls 

6. Investor-state dispute resolution 

Conclusion: Oppose the Bipartisan Congressional Trade Priorities and Accountability Act of2015 

CPATH • Ellen R. Shaffer & Joseph E. Brenner, Co-Directors, P.O. Box 29586, San 

Francisco, CA 94 129-0586; phone: 41 S-922-6204 · ershaffer@cpath.org · 

www.cpath.or9 
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CPA Til: Public Heolth Commems Rt'gording F <ISI Track ffn1de PromO/ion Amhon'ty 

Hearing of the House Commiuee on Way$ tmd Means · April 22,1015 

I. Economic globalization and health - Overview 

Economic globalization is characterized by the accelerated number and pace of cross-border 

transactions starting in the 1980s, including the production and consumption of goods and services, 

faci litated by changes in communicati on, technology, and transportation. Services from finance to 

health care are major economic drivers in developed countries. Ownership of transnational 

corporations has become more concentrated. Millions in poor countries have emerged from poverty, 

at the same time that economic inequality is increasing among and within nations. 

At issue arc the roles that democratically elected public officials, civil society, unregulated trade as 

well as rules related to trade, will and should play in determining outcomes of economic activity that 

benefit population health, and how the imperatives of human social and economic development can 

be integrated. 

Public health principles prioritize achieving and protecting the health and wellbeing of individua ls, 

communities and populations, which in turn requires economic and social equity and j ustice, 

democracy, and equitable access to health-related services. 

Trade agreements establish countries' mutual rights and obligations with regard to trade. Once 

focused on setting tarifts on goods, they now address rules that govern critical areas that are a 

matter of public debate at the national and international levels: intellectual property rules on access 

to affordable medicines and to information, copyrights, and advertising; services ranging from 

banking to health care and water supply; government procurement for grants and contracts; 

agriculture; and internet access and information privacy. They can provide a basis for altering the 

implementation of domestic U.S. laws and policies, as well as those of our trading partners. Trade 

rules that protect corporations' ability to operate within uniform and predictable rules c-an foster 

sustainable economic development, democracy, and peace, consistent with public health principles 

that prioritize achievi ng and protecting the health and wellbeing of individuals, communities and 

populations.' 2 They can also conOict with or subordinate policies that prioritize people's health, and 

equitable access to health-related services. 

2. The Track Record: Trade and Health 

Health is a uni versal aspiration of all peoples and governments. People's health must be the highest 

priority in determining trade policies. Public health measures have been responsible for creating and 

monitoring the conditions that maintain a healthy population. The safety of our living spaces, work 

places, prescription drugs, food and water, and consumer products, and protection from biohazards 

and the burden of tobacco-related diseases, are all products ofgovemment action, legislation and 

regulation, not the result of unregulated market forces. 

Previous trade agreements negotiated under "fast track" rules, without Congressional ability to 

discuss, debate, and revise provisions in the public interest, have prohibited parallel importation 

'Institute of Medicine. The future of public health in the 21)l ccntury. National Academics Press. Washington, DC. 

November, 2002. hup:I/W\\~V.iom.edu Ob cct. Filc/M astcr/4/ 165/0.pd r 1\Vorld Hcallh Organization. Constitution of the World Health Organization. 

CPATH • Ellen R. Shaffer & Joseph E. Bre nner, Co- Directors, P.O. Box 29586, San 

Francisco, CA 94129-0586; phone: 415-922-6204 · ershaffer@cpath.org · 

www.cpath.org 

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CPATH: Public Health Comments R4..~llrding Fast Track /frude Promotion Authorlry 

Hellring ofrhe House Commilteeon Ways and A1eans ~April 22. 2015 

(reimponation of pharmaceuticals to increase their affordability)3

, and weakened the ability of local, 

state and national governments' procurement contracts to specify standards for medical and financial 

privacy, quality and performance, local economic development, and environmenta l protection. 

Otl1er public health concerns at issue include the ability of local, state and national governments to 

regulate clean and safe air, water, food, consumer products; workplace environments, transponation 

systems; whether government procurement contracts can specify standards for medical and financial 

privacy, quality and performance, local economic development, and environmenta l protection; and 

the distribution of alcohol beverages. 

An extensive group of advisory committees provide forn1al recommendations to the Office of the 

U.S. Trade Representati ve (USTR). 

Confidentiality of Trade Proposa ls Prc,•cnts Democratic Debate 

The USTR can authorize advisory committees to operate in a transparent, public manner. For a 

number ofycars, however, the USTR has chosen impose a blanket closure rule, requiring that 

advisory committee members maintain complete confidentiality regarding proposed trade agreement 

provisions until after each agreement is signed. This restriction limits debate by Committee 

members' own constituencies, by the public, and by policy-makers, on public health matters of 

significant domestic concern. A transparent mechanism is imperative. 

Trade Ad,•isory Committees Shut Out Public Health 

In 2002, the United States Government Accountability Office (then the General Accounting Office) 

examined the role, structure, and system of the trade advisory committee system. The GAO Report 

found that " new stake holders io the trade p1·ocess, such as public health ... have limited or no 

participation in the formal committee system, even though topics such as intellectua l property are 

of interest to them."" 

CPATH's analysis has found that health-related industries are robustly represented on US trade 

advisory committees, which include pharmaceuticals, tobacco, health insurance, processed foods, and 

alcohol beverages. 5 A public health presence on all three tiers of U.S. trade advisory committees is 

required for a legitimate balance of interests. However, the extent of representation from the public 

health community in 2015 persists: Zero. 

In November. 2003, U.S. health leaders called for caution in negotiating international trade 

•Australia· U.S. Free Trade Agreement. Article 17.9.4. 

http:/ jwww.ustr.gov jsl tes/ default/nics/ uploads/agreements/fta/a usrralla/asset_upload_flle469 _S 14l.pdf. 

'GA0·02·876. p. 60: P.L. No. 96·39. 93 S1a1. 308-tO. p.40. 

' Brenner, 1oseph and Shaffer, Ellen. Advice and No Dissent, Public Health and the 

Rigged U.S. Trade Advisory System, M_uJ.!j.!l.ati.onal M_q_oi_t.ru:. November 2004 ·VOLUME 25 ·NUMBER 11. 

CPATH • Ellen R. Shaffer & joseph E. Brenner, Co-Directors, P.O. Box 29586, San 

Francisco, CA 94129-0586; phone: 415-922-6204 · ershaffer@cpath.org · 

www.cpath.org 
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CPATii: Public Heallh Comments Regarding F(lst Track ffrade Promorlon Awhority 

Hearing oft he House Committee on Wti)'S and A1etms .. Aprll 22. 2015 

6 

agreements. Former U.S. Surgeon General Dr. David Satcher, joining representatives from the 

American Medical Association, American Nurses Association, the American Public Health 

Association, and the Center for Policy Analysis on Trade and Health (CPATH), to issue an 

historic "Call for Public Health Accountability in lntemationa l Trade Agreements." 

During the 2004 Congressional deliberations on the US-Australia Free Trade Agreement (FTA), 

Bipartisan members of the House and Senate expressed concerns about the extreme imbalance on 

trade advisory committees and lack of representation from public hea lth. Congress raised objections 

to provisions in the agreement related to pharmaceuticals and intellc.ctual property tl1at they had been 

unaware of that could have an impact on Congressional efforts to authorize re-importation of 

drugs. TI1ey also expressed concem about the potential impact on current U.S. health care 

programs. including on Veterans Affairs, Medicare and Medicaid, and urged that such provisions 

should not serve as precedent for future trade agreements. 

In March, 20 14, USTR announced a call lor nominations to a Public Interest Trade Advisory 

Committee. However, no action has been taken to establish this committee. 

4. Intellectual Property Rules limit access to affordable medicines 

High prices restrict access to prescription drugs in lower income countries and also in developed 

countries which lack regulatory mechanisms to address drug pricing, such as the United States. 

Few useful innovative drugs are being developed, despite substantial revenue from drug sales. 

There is insufficient research into therapies for conditions prevalent in low-income countries. 

Trade agreements negotiated by the Un ited States have enforced, extended, and progressively 

strengthened intellectual property (IP) rights internationally, such as patents, data exclusivity and 

linkage, that offer monopoly marketing rights to pharmaceutical companies which therefore exert 

tremendous influence over prices. The World Trade Organization's (WTO) Doha Declaration on 

Public Health states that IP rules "should not prevent [countries] from taking measures to protect 

public health." It reaffirms the right ofWTO countries to use the llexibilities in TRIPS (Agreement 

on Trade Related Aspects of Intellectual Property Rights), including their right to issue compulsory 

licenses to produce brand name or generic equivalents of originator companies' drugs, and parallel 

importation. Respect for the Doha Declaration, and a fair balance of rights, was also stated as a 

Congressional objective in the Trade Act of2002. 

These rights were eroded in U.S. bilateral and regional agreements with Jordan, Chile, Singapore, 

Morocco, Australia and Central America. Civil society organizations in the U.S. and in partner 

nations raised concerns, which frequently delayed negotiations. In May, 2007, witl1 leadership by the 

Trade Subcommittee of the Ways and Means Committee, Congress took action to limit negotiations 

with lower income countries on "TRIPS-Pius" LP rules. 

" Fast-track" negotiating obj ectives in the current proposed legislation however reverse course 

and ca ll for " accelerated" implementation of drug patent rules in developing nations. 

CAFT A Raises Prices, limits Availability of life Saving Drugs for U.S. Trade Partners 

CPATH • Ellen R. Shaffer & Joseph E. Brenner, Co-Directors, P.O. Box 29586, San 

Francisco, CA 94129- 0586 ; phone: 415 - 922- 6204 · e rshaffer@cpath.or9 · 

www.cpath.org 
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CPATH: Public He(J/th Comments Regarding Fasl TrtJCk /Trade Promotion Authority 

Hetwing oftlte House Commillee on Woys tMd Means- Apri/12. 1015 

CPATH's report published in the peer-reviewed journal Health Affairs demonstrated how intellectual 

property rules in the U.S.- Central America Free Trade Agreement (CAFTA) keeps lower-priced 

generic versions of life-saving drugs off the shelves and out of the hands of some of the poorest 

people in our hemisphere. Guatemala is increasingly unable to produce or import affordable 

medicines because of intellectual property provisions in the trade deal that were demanded by the 

U.S. pharmaceutical industry and have been aggressively enforced by the U.S. Trade Representative 

(USTR). As a result, the cash-strapped Guatemalan public sector faces higher prices- up to 846 

percent higher- for importa nt drugs to fight diseases such as diabetes and HIV/AIDS.6 People 

with HIV/AIDS have repo11ed cutbacks in access to needed drugs 

The report focused on data exclusivity rules and patents that are among the intellectual property 

provisions of CAFT A and other free lrade agreements. Particularly alarming is that the rules not only 

keep affordable new generics from entering the market; they also function retroactively to remove 

existing medicines from the shelves. While patents already allow brand name dmg manufact11rers like 

Novanis and Merck to suppress competition from generic drug makers in the U.S. and abroad, data 

exclusivity is an additional bonus for this multi-billion dollar industry. Securing data exclusivity is a 

simple process for these companies, but it places insurmountable bureaucratic burdens on generics 

manufacturers. Generic drug makers typically rely on the clinical trial data already generated by 

brand-name manufacturers to demonstrate the safety and efficacy of their products. But CAFTA 

prohibits generic drug manufacturers from using the brand-name clinical trial data for a fixed period 

of years, sometimes even after the brand-name drug is no longer under patent. Without these data, 

generic versions cannot be approved for market. 

The report examined a total of77 data-protected dmgs. Detailed tables in the article illustrate the 

ways in which both patent and data exclusivity protections influence Guatemalan health officials to 

purchase brand name pharmaceutica ls, often at hundreds of times the cost of their generic 

counterparts. They also provide examples of generic dmgs that were blocked from being marketed in 

Guatemala in the first place. 

Tobacco usc contin ues to be the leading preventable cause of death in the United States and 

worldwide. and is the only legal substance that, when used as intended, kills people. causing 6.3 

million deaths a year.

7 Cigarette smoking is responsible for about one in fi ve deaths annualll and a 

major contributor to the global pandemic of tobacco-related non-communicable diseases. 

Countries continue to tackle this public health crisis with sound policies designed to curb smoking 

and combat deceptive industry practices. Such regulations include bans on flavored cigarettes, 

6 ShatTer, Ellen R. and Brenner, Joseph E .. A Trade Agreement's Impact On Access To Generic Drugs, Health Affairs. 

28. no. 5 (2009): w957-w968 (published online 25 August 2009: 10.1377 /hlthaiT.28.5.w957) 

• Centers for Disease Control and Prevention. Smoking-Attributable Mortality, Years of Potential Life l-ost, and 

Productivity Losses-United States, 2000-2004. Morbidity and Mortality Weekly Report 2008. 

•U.S. Department of Health and Human Services. How Tobacco Smoke Causes Disease: The Biology and Behavioral 

Basis for Smoking-Attributable Disease. Atlanta: U.S. Oepartmentofli ealth a.nd Human Services, Centers for 

Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on 

Smoking and Health, 2010. 

CPATH • Ellen R. Shaffer & Joseph E. Brenner, Co-Directors, P.O. Box 29586, San 

Francisco, CA 94129- 0586; phone: 415 - 922 - 6204 · ershaffer@cpath.org · 

www.cpath.org 
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Cf>AT!f: Public Health Comments Regm·ding FC1St Track ffrmfe Promotion Authority 

ffeodng of the House Commiuee on Ways tmd A·fetms -April 21. 201 S 

increases in tobacco taxation, restrictions on tobacco advertisements, and placemelll of graphi c 

waming labels on cigarene packages. Although all of these policies are supported by a robust body 

of scientific evidence, each has been contested in recent trade agreements and by trade-related 

challenges. Tobacco companies have accelerated their use of trade rules to anempt to delay and 

reverse tobacco control measures in the U.S., Australia, Uruguay, and Norway.9 For example: 

s 

" In 2006, the Uruguayan government- led by then-President and oncologist Tabare Vasquez, 

MD- passed a series of regulations to: (I) increase warning labels from 50% to 80% of the 

package; (2) place health images on packages; and (3) prohibit the use of"brand families" in 

which the same brand name is used across multiple product lines (eg, Marlboro Red, 

Marlboro Green, etc). In the years after enactment of these anti-smoking laws, 30-day 

prevalence rates of tobacco use among adolescents decreased by 8% annually, and per person 

cigarette consumption decreased by 4.3% annually. In 2010, however, the Swiss operational 

hub of Phillip Morris filed suit at the World Bank, claiming that government's regulations 

violate a 1991 bilateral investment treaty between Uruguay and Switzerland. The Swiss-based 

PM contends that Umguayan policies intrude upon PM's intellectual property and exceed that 

which is reasonable to protect the public's health. Per the terms of the 1991 trade agreement, 

the dispute is being arbitrated by a tribunal of international trade experts housed at the World 

Bank, who ru led in July 2013 that it had jurisdiction to hear the case; each side is currently 

submitting testimony to support their claims." 

U.S. bilateral agreements with Singapore and Peru also eliminated tariffs on tobacco and tobacco 

products. 

Tile Doggett Amendment to the Foreign Service Act, passed by Congress in 1997, banned the usc 

of government monies from the Commerce, Justice, and State Departments to promote the sale or 

export of tobacco overseas or to seek the removal of any nondiscriminatory foreign-country 

restrictions on tobacco marketing. However, it is subject lo annual renewal, and c.ompliance is up 

to the USTR and other Agencies. Unfortunately, the Doggen Amendment has not been honored 

since 2001. Tile U.S. has negotiated eliminating tariffs on tobacco products as well as leaf 

in bilateral and regiona l agreements, including the U.S. Singapore Agreement and CAFT A. It is 

perhaps time for a change. 

According to the Pan American Health Organi zation: ' 'Transnational tobacco cornpanies ... have been 

among the strongest profoncnts of tari IT reduction and open markets. Trade openness is linked to 

tobacco consumption."' 

The extent to which the TPP will further destabilize existing tobacco control policies is unknown, 

largely because negotiation of trade rules and tobacco industry activity in the trade arena occur in 

secret, outside of public scrutiny. Analysis of the Intellectual Property Chapter dran of the TPP that 

' SudS. Brenner lB. Shaffe•· ER. CommcnlllfY: Trading Away lleallh: The Influence ofTradc l'ol icy on Youth Tobacco 

Comrol. Journal of l'ediatrics. Online: Feb. I 0. 2015. DOl: http://dx.clol.org/10,101Q/j.jpeds.201 5.01 .016 10 D. Woodward, N. Drogcr, R. Bcaglehole, D. Lipson. Trade in Health Services: Global, Regional and Country 

Pcrspccli\•es. 

CPATH • Ellen R. Shaffe r & joseph E. Brenner, Co- Directors, P.O. Box 29586, San 

Francisco, CA 94 12 9- 0586; phone: 415- 922- 6204 · ershaffer@cpath.org · 

www.cpath.org 
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CPATH: Public Health Comments Regarding Fast Track /f'rotle Promotion Authority 

Hearing ofthe House CQmmitteeon Ways1mtl Means - Apri/22. 2015 

was made public in 2014 found multiple potential threats to tobacco-control measures, and the 

sovereign ability of nations to protect public health from tobacco-related disease and death. 11 

Only through appropriate public and Congressional oversight will we ensure that the TPP does not 

undermine the right and ability of the U.S. or participating countries from exercising their domestic 

sovereignty in order to adopt or maintain measures to protect public health, including reducing 

tobacco use and to prevent the hann it causes to public health. 

6. Investor-State Oisl)ute Resolution 

9 

WTO agreements are enforced by financial lines and trade sanctions in the case of violations. For this 

reason, they have proven to be the most effectively enlorced internationa l agreements. The WTO is 

set as the unequivocal arbiter of trade rules for its 160 member countries. Countries that believe their 

companies are being barred from trade by another country for reasons that violate WTO rules can file 

a dispute with the WTO. Disputes among nations are resolved by panels appointed by the WTO. The 

panels are not accountable to national governments or C•Ourts. The panels can authorize countries to 

impose trade sanctions, financial penalties and the boycott of products against other countries, as 

compensation for violations or for failure to comply with trade panel decisions. 

Nations have successfully brought challenges before trade tribunals claiming that public health 

measures violate trade rules. Health and quality standards and labeling requirements have sometimes 

been construed by the World Trade Organization as barriers to trade. From a public health 

perspective, standards for labeling genetically modified foods or protecting dolphins from becoming 

snared in commercial fishing nets are important protections for human and animal health, and the 

environment. But businesses have lound these standards cumbersome, and therefore barriers to trade. 

Chapter I I ofNAFTA provides an "investor's rights" provision that allows individual loreign 

corporations (referred to as investors) to directly sue any of the three participating national 

governments. Companies can sue lor the loss of current or f11ture profits, even if the loss is caused by 

a govemment agency's prohibiting the use of a toxic substance. Prior to NAFTA, regional trade 

agreements only permitted country-to-country enforcement by govemments. This was a major 

elevation of the rights of corporations, and an important blow to national sovereignty. Subsequent 

regional and bilateral agreements negotiated by the US include the investor's rights provision. 

Objections by the Intergovernmental Policy Advisory Committee to the USTR, composed of state 

and local public officials, contributed to keeping this provision out of the U.S.-Australia Free Trade 

Agreement. 

The tobacco industry has used both WTO country-to-country dispute procedures, and investor-state 

mechanisms, to protest and delay tobacco control measures including graphic warning labels and 

plain packaging, as described above. 

" Center for Polley Analysis on Trade and Health. Intellectual Property Chapter of Trans-Pacific Partnership Trade 

Agreement. Tobacco, and Public Health, November 25,2013. 

http:ffwww.cpath.org/sitebuildercontentf Sitebuilderfoles/TP P J P. TobaccoNov2 5. 20 13.pdf 

CPATH • Ellen R. Shaffer & joseph E. Brenner, Co- Directors, P.O. Box 29S86, San 

Francisco, CA 94129-0586; phone: 4 1 5-922-6204 · ershaffer@lcpath.org 

www.cpath.org 
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CPA TN: Public Health Comments Regartling Fasl TrCick /Trade Promotion Amhorily 

Hearing of tire House Commillee 011 Ways and Means· Apri/12, 2015 

10 

The following investor-state trade dispute cases illustrate the negative implications for health. As is 

typical of such cases, the health argument did not substantially prevail. The Methanex case, an 

exception, nevertheless extended exposure to a known health hazard: 

Closul'e of a Toxic Waste Disposal Site 

In a landmark environmental case filed underNAFTA Chapter II , a NAFTA tribunal awarded the 

U.S.-base.d Metalclad Company $16.7 million in its suit against Mexico. The state of San Luis Potosi 

had refused permission for Mctalclad to re-open a waste disposal facility, in the face of a geological 

audit showing the facil ity would contaminate the local water supply and resulting opposition by the 

local community. Mctalclad claimed that this local decision constituted an expropriation of its future 

potential profits and successfully sued Mexico. 

Eliminating Toxic Gasoline Additive 

The Methanex Corporation of Canada sued the United States for approximately $ 1 billion, because 

the state of California banned the use of methyl tertiary butyl ether (MTBE), a gasoline additi ve. 

Though introduced to reduce air pollution, MTBE was found to be carcinogenic when it leaked into 

the water supply. Methanex produces methanol, a component of MTBE. Methanex ultimately lost 

its case, because the trade panel cast doubt on whether the state imended to discriminate against 

Methanex as a foreign corporation. However, due in part to the possible sanctions resulting from this 

case, MTBE remained in use within California for years as the case proceeded, The U.S. Dept. of 

Justice spent millions defending the case. 

These cases suggest two policy remedies for public health: 

I. Eliminate the investor-state mechanism that permits foreign corporations to file trade charges 

against sovereign governments. 

2. Trade agreements should exclude health-related laws and regulations from trade challenges at both 

the country-to-country level, through the WTO, and from cha ll enges by corporations through 

bilateral and regional agreements. 

Conclusions 

CPA TH recommends that Congress: 

Incorporate the Public Health Objectives for U.S. Global Trade Agreements as U.S. negotiating 

objectives. 

Conduct hearings, solicit public comment, and take other appropriate investigatory and oversight 

actions in all relevant Committees in Congress to assess the impact of past, pending and current 

trade agreements on population hea lth, and assure based on such assessment that these 

agreements do not have an adverse impact on health. 

Mandate the appointment to all relevant trade advisory committees represematives of 

organizations that work to assure equitable access to aflordable health-related services and 

products, and promote the health of individuals, communities and populations. 

CPATH • Ellen R. Shaffer & Joseph E. Brenner, Co-Directors, P.O. Box 29586, San 

Francisco, CA 94129-05 86; phone: 41 5-92 2-6204 · ershaHer@cpath.org 

www.cpath.org 
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CPATH: Public Health Commems Regarding Fast Trllck ffrade Promotion Amltorit)' 

Hearing oft he /louse Commlueeon Ways ami Means- Aprl/11, 2015 

I I 

Promote transparency and democratic accountability at all levels of the trade negotiation process, 

including enabling public access to all trade advisory committee meetings, proceedings and 

submissions related to multilateral and bilateral trade negotiations. 

Exercise its power and authority concerning trade agreements negotiated by the U.S.; retain its 

rightful authority for review, discussion and revision of the TPP and all future trade agreements in 

the interest of protecting the health and safety of the American people; and oppose the Bipartisan 

Congressional Trade Priorities and Accountability Act of20 15. 

CPATH • Ellen R. Shaffer & joseph E. Brenner, Co- Directors, P.O. Box 29586, San 

Francisco, CA 94129-0586; phone : 415 - 922 - 6204 · ershaffer@cpath.org · 

www.cpath.org 
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UNITED STAT ES HOUSE Of REPRESENTATIVES 

COMMITTEE ON \>VAYS AND MEANS 

"Ex1>anding American Trade with Accountability and Transpar ency" 

Al>ril22, 2015 

The following statement is submiued on behalf of the Distilled Spirits Council of the United 

States, Inc. (Distilled Spirits Council) for inclusion in the printed record of the Committee's hearing 

on Expanding American Trade with Accountability and Transparency. The Distilled Spirits 

Council is a national trade association representing U.S. producers, marketers and exporters of 

distilled spirits products. Its member companies export spirits products to more than 130 c-ountries 

worldwide. 

THE IMPORTANCE OF TRADE TO TH E U.S. SPIRITS INDUSTRY 

The Distilled Spirits Council and its members have a strong and growing interest in trade, 

from a commercial perspective and from a policy perspective. As a commercial matter, our 

members have become increasingly reliant on exports to fuel growth. Indeed, global U.S. spirits 

exports have more than doubled over the past decade, reaching over $1.5 billion in 2014. This was 

the eighth consecutive year that exports of American-made spirits exceeded $1 billion. The majority 

of U.S. spirits export.s are comprised of Bourbon and Tennessee Whiskey, which are recognized in 

severa l trade agreements as distinctive products of the United States. Exports of rum and other 

spirits also make a significam contribution to the U.S. economy. As of2012, the distilled spirits 

industry supported 717,000 direct employees. Continuing to expand exports supports current and 

future employment in the industry. 

GLOBAL U.S. SPIRITS EXPORTS1 

(2004 - 2014) $UOO 

$LZOO 

$400 

$200 

1 Source: U.S. International Trade Commission TradeDataweb 
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Given the growing importance of export markets to the industry's long term growth, the 

Distilled Spirits Council has a strong interest in a wide range of trade policy matters and has long 

been a very active supporter of market-liberalizing trade initiatives. For example, the Distilled 

Spirits Council has strongly supported multilateral, regional and bilateral trade agreements. We are 

active participants in the business coalitions supporting the negotiations toward a Trans-Pacific 

Partnership Agreement (TPP) and Transatlantic Trade and Investment Partnership (TTIP), have 

supported Congressional approval of free trade agreements (FT As) the United States has concluded 

with various trading partners, as well as the granting of Permanent Normal Trade Relations (PNTR) 

status to China, Vietnam and Russia . 

THE IMPORTANCE OF RENEWING TRADE PROMOTION AUTHORITY 

There is no doubt that past efforts by the United States to open foreign markets have 

contributed to the impressive gains the U.S. industry has made, and continues to make, in expanding 

U.S. spirits exports. Certainly, past grants of trade promotion authority provided previous 

administrations with the necessary leverage to secure significant market access commitments from 

trading partners. 

For example, during the Uruguay Round of GATT negotiations, distilled spirits were 

included in the "zero-for-zero" negotiations, in which the United States and European Union agreed 

to eliminate their respective tariffs on substantially all spirits. The value of U.S. exports to the 

European Union have more than tripled since the Uruguay Round agreements entered into force in 

1995. from $184 million to $744.5 million in 2014. In addition, the implementation ofFTAs has 

improved access for U.S. spirits exports to several imp011ant overseas markets, such as Australia, 

Canada, Mexico, Chile, Peru, Singapore, Korea, Colombia, Panama and Central America. Since the 

tariffs were e liminated under the U.S.-Australia FTA in 2005, for example, U.S. spirits exports to 

Australia have grown hy 70% to $13 1 million. Australia now ranks as 1he industry's fourth largest 

export market worldwide. Such trade liberalizing efforts are critical to ensure that U.S. spirits 

exports are on a level playing field with domestically-produced spirits and other imported spirits. 

Despite these impressive gains, the U.S. spirits industry continues to confront formidable trade 

barriers, particularly in key emerging markets. India, for example, assesses an import tariff of 150% ad 

valorem on spirits and, as a result, U.S. spirits exports to India remain disappointingly low. In 2014, 

U.S. direct spirits exports to Ind ia were valued at $3.9 million, accounting for less than 0.3% of all U.S. 

spirits exports. Indeed, U.S. spirits exports to India remain far below U.S. exports to comparable 

markets, particularly in light of the fact that India ranks as the largest whiskey market in the world., both 

in terms of volume (1.5 billion liters in 20 13) and value ($2 1.6 billion in retail sales in 20 13).2 Other 

emerging markets with strong potential for U.S. spirits sales also maintain high tariffs on imports, 

including Vietnam (45%), which is partic ipating in the TPP negotiations, lltailand (54-60%). and Brazil 

(20%). 

1 Source: Euromonitor International Database. 
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Moreover, international regulatory activities affecting product standards, labeling and 

certification requirements, among other non-tariff measures, have become increasingly problematic 

for the U.S. spirits industry. As a consequence, our organizati on devotes considerable resources 10 

monitoring regulatory developments, principally through the notification procedures established 

under the WTO Agreements on Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary 

Measures (SPS). In that connection, the Distilled Spirits Council has submitted numerous detailed 

comments with respect to proposed TBT and SPS measures that could impact trade in distilled 

spirits. 

Current and future trade negotiations otTer an important vehicle to address tariff and nontariff barriers that impede the ability of U.S. spirits exporters to gain a foothold in foreign markets. 

Specifically, negotiations towards a TPP agreement afford an important opportunity to open up key 

emerging markets, including Vietnam and Malaysia, to U.S. spirits exports. However, TPA is 

essential in order to bring these important negotiations to a successful conclusion. Failure to do so 

will provide trading partners with whom the U.S. is negotiating little incentive to make the key 

decisions needed to conclude strong, market-opening agreements, thus leaving U.S. companies, 

including spirits exporters, at a serious competitive disadvantage vis-a-vis our overseas competitors. 

CONCLUSlON 

In sum, international trade has become increasingly important to the U.S. spirits industry, 

and the ability of the United States to conclude high standard, comprehensive and trade liberalizing 

agreements with key partners will help to ensure the long term viability of the industry. TPA is 

absolutely vital to ensure that U.S. negotiators are empowered to conclude the strongest possible 

trade agreements to address the types of trade barriers that impede U.S. exports of distilled spirits. 

The Distilled Spirits Council, therefore, strongly supports swift congressional approval of the 

Bipartisan Congressional Trade Priorities and Accountability Act of 2015, and we stand ready to 

cooperate closely with Congress in seeking the prompt approval of this legislation. 

Thank you very much for your consideration. 

Written Statement of: 

Dr. Peter H. Cressy 

President/CEO 

Distilled Spirits Council of the United States, Inc. 

1250 Eye Street, NW, Suite 400 

Washington, DC 20005 

(202) 682-8870 
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April 21. 2015 

1l1e Honomble Paul D. Ryan, Chair 

l11c Honorable Sander M. Levin. Ranking Member 

Committee on Ways and Means 

U.S. I louse of Re-presematives 

Washington. DC 205 I 5 

Dear Chninnan Ryan and Ranking Member Levin: 

&adingAge~ 

On behalf of Leadin.gAgc. l run writing about our concern over proposed u·ade legjslatiO•l that would offse1 the 

cost of extending trade readjustment assistance benefits with another extension or Medicare sequestration. This 

oiTsct is simply wrong. and we urge you to remove it from the legislation. 

Over the last rew years. Medicare payments 10 post-acute c.are providers have taken a !lUmber of hits. The 

Affordable Care Acl applies a productivily adjustment factor to the annual Medicare payment update. directly 

affecting resources necessary for good-qu.ality care. Payments to skilled nursing facilities were cut by l l o/o 

across-the-board in 2011. Home health care payments arc being rebased. which will substantially reduce 

reimbursement to providers. Last year, Congress enacted value·ba.sed purchasing for skilled nursing facilities. 

due 10 take enect within a !Cw months. And the IMPACT Act enacted last year will lead to major revisiOJ\S in 

post-acute care p.'lymcnt systems over the next few years. 

In 2015. the 2% Medicare sequestration resulted in no payment update for most post-acute c-are providers. since 

it essemially negated the 2% increase in provide_r costs that the Cemcrs for Medicare :llld Medicaid Services 

(CMS) had calculated. Medicare sequestmtion is nlready scheduled to last a year longer than originally enacted 

because it was used to offset the cost of restoring cost-of-li\•ing increases in military pensions. Again. we don~ 

argue with military pension policy. bm the otTset should not have come from a program providing essential 

health care coverage to seniors. 

As lhc large baby boom eohon ages. Medicare will face growing cost pressures. We also anticipate pOtential 

budget legislation later this year that could have an impact on the program. If savings have to be achieved in 

Medicare. they should be directed back into keeping it financially stable for the population it is inte-nded to 

serve. 

Medicare must not be a piggy bank to offset the costs oflcgisl:nion unrelated to the program. Please find other 

means of offsetting the costs of the trade measure soon to come before your committee. 

Sincerely, 

;W~~-

William L. Minnix, Jr. 

President and C £0 

Aboul LtadingAge 

1l1e mission of LeadingAgc is to expand the world of possibilities for aging.. Our membership has a service 

footprint of 4.5 million and includes a communily of 6.000 members representing the entire field of aging 

sen~ces, including not·for .. profit organizations, state partners. and hundreds of businesses, consumer groups. 

foundations, and reseatch panners. LeadingAge is a tax-exempt charitable orga1li1..ation focused on education. 

advocacy, and applied research. 

1St9ConM«kvtAve .. NW I WHh•ngtOI\.OC l0008•tS20 

, to:t.71).lLP I F tOlJ8).11SS I h<ldlngAJ:•.org EKponding tht world of possibi/ititt for oging. 
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TESTIMONY OF ROGER JOHNSON 

PRESIDENT 

NATIONAL FARMERS UNION 

SUB MinED TO THE U.S. HOUSE OF REPRESENTATIVES 

COMMITIEE ON WAYS AND MEANS 

REGARDING EXPANDING AMERICAN TRADE WITH ACCOUNTABILITY AND TRANSPARENCY 

APRIL22, 2015 

WASHINGTON, DC 

1 
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Introduction 

On behalf of family farmers, ranchers, and rural members of National Farmers Union (NFU), thank you 

for the opportunity to submit testimony regarding U.S. trade policy and Trade Promotion Authority. NFU 

was organized in Point, Texas in 1902 with the mission of improving the wellbeing and economic 

opportunity for family farmers, ranchers, and rural communities through grassroots-driven advocacy. 

That mission still drives NFU's work today. As a general farm organization, NFU represents agricultural 

producers across the country and in all segments of agriculture. 

NFU, as directed by its policy adopted by delegates to its annual convention, advocates for fair trade. 

NFU recognizes that international trade is an important part of successful family fa rming in the U.S., but 

increasing trade is not an end unto itself. NFU policy states, "Every future trade agreement must address 

differences in labor standards, environmental standards, health standards, and the trade-distorting 

effect of currency manipulation and cartelization of agriculture markets." ' 

The original intent of Trade Promotion Authority (TPA) was to lay out the procedures for notification 

between the executive and legislative branch and the expedited legislative process for approval. Beyond 

the procedural components of Trade Promotion Authority, and most importantly, the legislation sets 

forth the objectives for any president for negotiating trade agreements. The Trans-Pacific Partnership 

negotiations are largely completed, so there is no need for Congressionally-assigned, unenforceable 

objectives. Objective-setting should occur prior to the start of negotiations, not near the end. 

Balancing trade 

For years, trade agreements have been touted for their ability to open up markets for agricultural 

exports. Agriculture has had the good fortune to fair relatively well in trade. Since 1960, U.S. agricultural 

exports have been larger than agricultural imports, creating a surplus in agricultural trade.' This surplus 

is important for the overall economy because it helps offset the massive overall trade deficit, which 

totaled over $505 billion in 2014, a six percent increase from 2013. The overall trade deficit represents 

roughly three percent of the U.S. Gross Domestic Product (GOP). The trade deficit causes a drag on 

overall growth of the economy. With a strengthening U.S. dollar, the deficit is likely to grow in 2015, as a 

strong U.S. dollar will encourage imports and reduce exports. 

In the first three years of the Korea-U.S. Free Trade Agreement, remarkably and unfortunately, U.S. 

agricultural exports have stagnated at zero percent, and the overall trade deficit with Korea has 

increased to $12.7 billion, an estimated 84 percent increase. After implementation of the free trade 

1 Nat'l Farmers Union, 2015 Policy of the National Farmers Union (2015) available at http://www.nfu.org/nfu· 

2015-policy/2066. 2 USDA Economic Research Service available at http://www.ers.usda.gov/topics/international-markets-trade/usagricultural·trade.aspx. 

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agreement, agricultural exports have failed to increase to Korea, despite increasing six percent overall. 

When even agriculture fails to grow as a result of trade agreements, the overall trade policy must be 

reevaluated. The U.S. reduced tariffs with Korea, and as a result, more Korean products are in the U.S. 

than the U.S. has shipped to Korea. The deficit has negative impacts on jobs and rural communities. 

The massive overall trade deficit exists despite the U.S. having free trade agreements with 20 countries, 

including major trading partners like Canada and Mexico. Because of the significant impact the trade 

deficit has on the U.S. economy, all future trade agreements, such as TPP and the Transatlantic Trade 

and Investment Partnership (T-TIP), must have the explicit objective of balancing trade. NFU is 

disappointed this objective was not included in the Bipartisan Congressional Trade Priorities and 

Accountability Act of 2015. 

Currency manipulation 

One of the major contributing factors to the massive trade deficit is currency manipulation. Currency 

manipulation occurs when other countries deliberately lower the value of their currencies relative to the 

U.S. dollar to gain an unfair advantage. This uniquely American issue, due to the role of the U.S. dollar in 

the global economy, effectively acts as a subsidy on that country's exports and a tax on U.S. exports. 

One of the members of the TPP negotiations, Japan, is a major currency manipulator. In a report by the 

Economic Policy Institute (EPI) evaluating the impact of trade w ith Japan, EPI found that 896,600 U.S. 

jobs have been lost due to the U.S. -Japan trade deficit.' Currency manipulation is the single most 

significant cause of the trade deficit with Japan, which totaled $78.3 billion in 2013 for goods. 

The issue of currency manipulation is not exclusive to countries with which the U.S. does not have trade 

agreements. In fact, the latest free trade agreement the U.S. entered into with South Korea suffers the 

same issues with currency manipulation as Japan. Earl ier this month, the U.S. Treasury Department 

issued its semiannual report on international economic and exchange rate policies. In its report, its 

harshest criticism of currency manipulation was reserved for South Korea, not China. The report stated, 

"Korean authorities appear to intervene on both sides of the market but, on net, they have intervened 

more aggressively to resist won appreciation."' The U.S. entered into a free trade agreement with Korea 

in March of 2012. The U.S.-Korea Free Trade Agreement (KORUS) used the same failed blueprints of 

previous trade agreements and failed to include provisions to address currency manipulation. South 

Korea has, and continues to be, one of the world's major currency manipulators. Currency manipulation 

has the capacity to eliminate any gains in tariff reductions that may be made in free trade agreements. 

Without measures to enforce restrictions on currency manipulation, free trade agreements fail to live up 

to the promises made by their supporters. 

'Economic Policy Institute, Currency Manipulation and the 896,600 U.S. Jobs Lost Due to the U.S.-Japan Trade 

Deficit (2015) available at http://www.epi.org/publication/currency·manipulation-and-the-896600·u-s-jobs-lostdue-to-the-u-s-japan·trade-deficit/ 4 U.S. Department of the Treasury, Report to Congress on International Economic and Exchange Rate Policies 

(2015) available at http://www.treasury.gov/resource-center/international/exchange-ratepolicies/Documents/2014-4·15_FX%20REPORT%20FINAL.pdf 

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Currency manipulation remains a top concern of NFU, particularly in the context of TPP. Members of the 

TPP negotiations are well known currency manipulators, including M alaysia, Singapore, and Japan. With 

passage of Trade Promotion Authority, Congress eliminates its capacity to ensure that this significant 

trade agreement contains enforceable measures to address currency manipulation. 

Conclusion 

NFU's policy book states, "The measure of the success of a trade agreement has to be its benefit to U.S. 

agriculture and specifically of its producers' net income. Vague promises of 'market access' to foreign 

markets do not offset opening our border for even larger amounts of foreign-produced goods to enter 

our markets. Market access does not equal market share." 

Since TPP almost certainly contains no measures to address the trade deficit or currency manipulat ion 

and TPA fails to address these major concerns, NFU opposes TPA. Congress should maintain its 

Constitutional authority and review the trade agreements in a transparent manner. 

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R [!I REPRESENTATIVE 

I T of German Industry +Trade 

17761 Street NW I Suite 1000 

Washington DC 20006 I USA 

(001) 202 6S9 4 777 

To: United States House of Representatives Committee on Ways and Means 

From: Or. Thomas Zielke, CEO & President, Representative of German Industry and Trade 

Date: May 6, 201S 

Re: Statement for the Record on H.R. 1890, a Bill to establish Congressional Trade Negotiating 

Objectives and enhanced consultation requirements for trade negotiations, to provide for 

consideration of trade agreements, discussed at a hearing on April 22, 2015. 

The Representative of German Industry and Trade appreciates this opportunity to submit comments to 

the Members of the House Committee on Ways and Means on H.R. 1890, the "Bipartisan Congressional 

Trade Priorities and Accountability Act of 2015," commonly referred to as "TPA." 

The Representative of German Industry and Trade (RGIT) is the liaison office of the Association of 

German Chambers of Commerce and Industry (OIHK) and the Federation of German Industries (BOI) in 

Washington, DC. 1 RGIT represents the interests of the German business community in the US, 

comprising of over 4,700 German subsidiaries that employ over 620,000 American workers, mainly in 

various manufacturing sectors' 

RGIT supports H.R. 1890 because Trade Promotion Authority laws have played an essential role in 

guiding both Democratic and Republican Administrations as they pursue trade agreements that 

eliminate barriers to trade in foreign markets, and establish rules to prevent discrimination, while also 

supporting America n jobs. 

The US needs trade: 

One in five US jobs already depend on trade and the successful negotiation of future trade 

agreements could create further job opportunities.' 

One in four US manufacturing jobs depends on exports, and these workers' wages are 18% 

higher on average than those of other factory workers.' 

The United States actually has a trade surplus with its 20 FTA partners.' 

1 RGIT does not represent individual companies as clients, but rather represents its principals DIHK and 801. 2 Source: US Department of Commerce. 3 "Trade and American Jobs," The Trade Partnership: 

http://www.tradepartnership.com/pdf_files/Trade_and_American_Jobs7.2010.pdf. 4 US Department of Commerce: http://trade.gov/publications/ita·newsletter/0510/exports·play·vital·role·in· 

supporting·us·employment·OSlO.asp and 

http://trade.gov/mas/ian/build/groups/public/@tg_ian/documents/webcontent/tg_ian_003208.pdf. 

RCIT Is the lia.lson office of the Federattan or Ct.rman lndusuies (801) and the Assodauon of rm~n Chambers of lnduury and Commerce (OU·II() 

@BDI iniO(Ilrglt·usa.com 

www.rgit·usa.com 
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With Trade Promotion Authority, the United States will be better positioned to negotiate 21" century 

trade agreements that support high standards and help American companies compete in the global 

economy. Thus, H.R. 1890 is also an important strategic instrument. 

H.R. 1890 Supports Increased Trode with Germany and the European Union: 

The transatlantic trade and investment relationship is particularly st rong:~ 

The EU is the most important destination for US exports after Canada, 

accounting for 17% of all US exports. 

Germany is the fifth largest export market for the US. 

50% of all US foreign direct investment (FDI) is invested in the EU. 

60% of FDI in the US comes from the EU. 

TIIP would foster the strong trade and investment ties between our two markets, and it would spur job 

creation on both sides of the Atlantic. 

RGIT represents large companies and SMEs in the US and Germany. The main barriers to trade and 

investment cited by these companies are: 

Diverging standards and regulations 

Duplicative testing and inspection requirements 

Tariffs that put a strain on high trade volume 

Burdensome custom procedures 

In part icular, most SMEs do not have the resources to overcome significant market barriers on their own 

and must instead rely largely on US government initiatives to increase their access foreign markets. In 

2012, SMEs accounted for 98% of US exporters with nearly 300,000 companies shipping goods overseas. 

When one considers that only 5% of Am erica's 6 million SMEs are exporting, the potential benefits of 

expanded market access through TilP are staggering. 

A survey by the US Trade Representative (USTR) and the European Commission provides several 

examples of how American SMEs, across a wide variety of sectors, suffer due to trade restrictions, 

tariffs, and burdensome regulations.7 Section 2 of H.R. 1890 highlights that regulatory cooperation, in 

light of globalized supply chains, is a vital negotiation objective. 

La rger American companies who rely on German goods and components in their global supply chains 

also suffer significant losses as a result of regulatory divergence. In an increasingly globalized world, 

companies strive to streamline their supply chain logistics and often choose to invest in countries which 

not only have a substantial supplier network for intermediate components, but also preferred tariffs for 

s US Chamber of Commerce: https://www.uschamber.com/blog/one-weird-fact-about-trade-deficit-no-one-hasnoticed. 6 Source for statistics below: US Department of Commerce. 7 http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_lS2266.pdf 

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