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ADMINISTRATION’S 2008 TRADE AGENDA

HEARING

BEFORE THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

MARCH 6, 2008

(

Printed for the use of the Committee on Finance

COMMITTEE ON FINANCE

MAX BAUCUS, Montana, Chairman

JOHN D. ROCKEFELLER IV, West Virginia

KENT CONRAD, North Dakota

JEFF BINGAMAN, New Mexico

JOHN F. KERRY, Massachusetts

BLANCHE L. LINCOLN, Arkansas

RON WYDEN, Oregon

CHARLES E. SCHUMER, New York

DEBBIE STABENOW, Michigan

MARIA CANTWELL, Washington

KEN SALAZAR, Colorado

CHUCK GRASSLEY, Iowa

ORRIN G. HATCH, Utah

OLYMPIA J. SNOWE, Maine

JON KYL, Arizona

GORDON SMITH, Oregon

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

PAT ROBERTS, Kansas

JOHN ENSIGN, Nevada

JOHN E. SUNUNU, New Hampshire

RUSSELL SULLIVAN, Staff Director

KOLAN DAVIS, Republican Staff Director and Chief Counsel

(II)

C O N T E N T S

OPENING STATEMENT

Page

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee

on Finance ............................................................................................................ 1

ADMINISTRATION WITNESS

Schwab, Ambassador Susan C., U.S. Trade Representative, Washington, DC .. 3

ALPHABETICAL LISTING AND APPENDIX MATERIAL

Baucus, Hon. Max:

Opening statement ........................................................................................... 1

Cantwell, Hon. Maria:

Prepared statement .......................................................................................... 21

Grassley, Hon. Chuck:

Prepared statement .......................................................................................... 22

Schwab, Ambassador Susan C.:

Testimony .......................................................................................................... 3

Prepared statement .......................................................................................... 24

Responses to questions from committee members ......................................... 33

(III)

(1)

ADMINISTRATION’S 2008 TRADE AGENDA

THURSDAY, MARCH 6, 2008

U.S. SENATE, COMMITTEE ON FINANCE, Washington, DC.

The hearing was convened, pursuant to notice, at 10:07 a.m., in

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus

(chairman of the committee) presiding.

Present: Senators Bingaman, Lincoln, Cantwell, Salazar, Snowe,

and Roberts.

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE

The CHAIRMAN. The hearing will come to order.

One hundred fifty years ago, tens of thousands of prospectors

came to Montana hoping to tap promised riches in the hills. Some

had visions of gold, others sought silver and copper. In a day’s

work, a prospector’s claim could yield a fortune, or a day’s wages

of nothing but sore muscles.

Looking at our trade agenda for the remaining months of 2008,

we have chances like those prospectors. We can hit a rich vein of

productivity and accomplishment, or we could come up emptyhanded, or we could come out somewhere in between. There is only

one way to find out. That is, we need to put our backs into it and

keep digging.

Optimism is in my Montana blood, and frankly I think it is in

the blood of most everybody in public service. You have to be an

optimist. I hope our year this year will end in a rich payday for

America’s workers, ranchers, and farmers.

Our work this year can put our economy on a path to greater

wealth, stronger productivity, and more vigorous international engagement. I have made clear where our work must begin. We must

begin with reform, expansion, and implementation of Trade Adjustment Assistance. After listening to my constituents, my colleagues,

and my conscience, I am certain that we must put a better TAA

program in place before Congress can move on to other trade priorities, especially pending free trade agreements. I say this not to be

rigid, but to do what is right by America’s workers, farmers, and

ranchers.

I have also been clear about what a new TAA program must look

like. It must cover services workers, workers whose jobs are offshored to China, India, and other non-FTA partner economies. It

must enhance the health care tax credit. It must boost training

funds and help displaced workers get back in the labor force, and

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it must help communities like Montana’s lumber communities that

are negatively affected by unfair trade.

This year we also have an opportunity to help America’s consumers by safeguarding our borders. We must meet that responsibility of border enforcement and security without sacrificing trade

facilitation and enforcement. This committee will do so by reauthorizing Customs and Border Protection.

We can pursue a bill that will put more resources at our Nation’s

borders to ensure that imports of food and consumer goods are safe

and healthy. Our bill will buttress our ability to identify, destroy,

and keep pirated and counterfeit goods off our store shelves, and

our bill will make sure that Customs fully collects the revenue due

to the United States.

Enforcement of our trade laws must also be at the heart of our

trade agenda. That is why I intend to pursue the Trade Enforcement Act that I introduced with Senator Hatch and Senator

Stabenow last year. That bill will strengthen our trade remedy

laws, it will create a Senate-confirmed enforcement officer, and it

will increase oversight of dispute settlement implementation.

Fair and firm enforcement includes a WTO-consistent approach

to addressing misaligned currencies like China’s RMB. This committee strongly endorsed such a bill last year. And fair and firm

enforcement also includes better intellectual property rights enforcement in our trade agreements. That will bolster our most innovative companies.

This year’s trade agenda also promises the opportunity to implement policies that are both good economic policy and good foreign

policy. This includes extending trade preference programs to the

Caribbean, it includes extending the Generalized System of Preferences, and it also means reviewing trade sanctions toward countries that act against American interests, such as Burma and Iran.

We are faced with an opportunity to consider free trade agreements pending before this Congress. This administration has concluded free trade agreements with Colombia, Panama, and Korea.

Each holds some promise, each poses some obstacles. None are simple, none face unanimous support. But each agreement has its potential for passage when fairly handled and properly addressed.

Montana’s mining boom in the mid-1800s yielded some of the

world’s greatest riches. Even today, Montana copper illuminates

much of America, from Butte to Brooklyn. How brightly this year’s

trade achievements will shine is up to all of us. There is just one

way to find out, and that is to put our backs into it and keep

digging. I hope Ambassador Schwab and my colleagues will join me

in this effort.

Before I turn to our witness, I want to take a moment to note

that, if and when we get a quorum of 11 Senators, we will interrupt to take up the nomination of Doug Shulman to be Commissioner of the IRS, and also to revise subcommittee assignments in

the wake of a new Senator added to this committee.

Now, turning to our hearing, our witness today is Ambassador

Susan Schwab, U.S. Trade Representative.

Ambassador, thank you very much for coming today to give the

administration’s trade agenda. Your full statement will be in the

record.

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STATEMENT OF AMBASSADOR SUSAN C. SCHWAB,

U.S. TRADE REPRESENTATIVE, WASHINGTON, DC

Ambassador SCHWAB. Thank you, Mr. Chairman. I have a

lengthier statement that is in the record. I just wanted to say a few

words at the outset. I am very pleased to be here to address the

2008 trade agenda with you and members of the Senate Finance

Committee.

Trade, as you know and as you stated, is critical to our economy

and vital to sustaining our economic growth. If you look at 2007

statistics, the year just passed, we exported $1.6 trillion worth of

agricultural goods, manufactured exports, and services, historic

highs in all three sectors, including our first-ever $100 billion trade

surplus in services.

U.S. exports represented 12 percent of our GDP, again, the highest ever. If you look at export growth last year, it was responsible

for over 40 percent of our GDP growth overall. Therefore, our 2008

trade agenda is very clear. We need to move this economy forward

by opening overseas markets to U.S. workers, farmers, ranchers,

and service providers, and to do this we seek approval of the pending free trade agreements with Colombia, Panama, and South

Korea, and a successful conclusion to the Doha Round of multilateral trade negotiations.

We also look forward to continuing working with you and other

congressional leaders to reform and reauthorize Trade Adjustment

Assistance, and we will continue to aggressively enforce existing

trade agreements. We accomplished a great deal last year, and

working together we know that we can accomplish even more in

2008.

Let me begin briefly with the free trade agreements, because

those who say they want a more level playing field in trade need

to look no further than the two pending Latin FTAs. Our agreements with Colombia and Panama will provide a level playing field

by transforming one-way free trade with those nations into twoway free trade.

Both the House and Senate voted overwhelmingly, twice in the

past 15 months, to continue giving virtually all of Colombia’s exports duty-free access to the U.S. market. We are asking the Senate and the House now to vote to give American agricultural, manufacturing, and services the same preferential treatment when they

export to both the Colombia and Panamanian markets, and the

only way to do that is through enactment of these free trade agreements.

For those who hesitate over the Colombia FTA with claims that

the government is not doing enough to stem the violence, the evidence to the contrary is clear and compelling. President Uribe has

a remarkable track record of success in reducing the historic violence and impunity that has plagued Colombia for decades.

For example, since his government came into office in 2002, the

Colombia homicide rate has dropped by 40 percent. Homicides of

unionists have dropped more than twice that fast. Kidnappings are

down, as are terrorist incidents. Those who have perpetrated

crimes in the past are being brought to justice with the help of additional investigators, prosecutors, and judges. Moreover, the CoVerDate 11-MAY-2000 14:27 Mar 01, 2010 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 54662.000 SFIN1 PsN: SFIN1
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lombia FTA has profound implications for U.S. strategic interests

in the region and the future of the western hemisphere.

As for the U.S.-Korea FTA, this is, as you know, the most commercially significant free trade agreement the United States has

concluded in 15 years. According to the ITC, the Korea FTA promises to boost U.S. exports and GDP by some $10 to $12 billion annually.

A ‘‘no’’ vote on any of these FTAs, any of these three FTAs, is

a vote against U.S. exporters, manufacturers, service providers,

and agricultural producers, and the 20,000 small and medium-sized

companies that benefit from exports to the markets.

On the Doha Round, the Doha Round is the President’s highest

trade negotiating priority this year. He is committed to concluding

an ambitious Doha Round this year that will increase economic

growth, alleviate poverty, encourage development through new

trade flows in agriculture, manufactured goods, and services. We

are committed to doing everything possible to conclude a Doha

Round, short of signing off on an unambitious deal. In this regard,

we are not alone in our concern about the serious potential erosion

of ambition evident in the most recent Agriculture and Non-Agriculture Market Access (NAMA) texts.

Doha cannot succeed if WTO members cave in to the lowest common denominator positions advocated by some who merely want to

preserve the status quo, or worse, roll back progress made in earlier rounds. The fact is, there are many countries, developed and

developing alike, that want a successful round and, like the United

States, are prepared to show the necessary flexibility and political

will to get there.

The positions of these countries need to be taken as seriously as

those of the noisier groups that have focused on what they will not

do rather than making efforts to contribute. Done right, the Doha

Round offers unparalleled promise for America and the world, particularly the developing world, and I remain confident that a successful Doha Round is doable this year.

Finally, when it comes to enforcement of existing trade agreements, this administration will continue to employ the continuum

of tools at our disposal to restore our rights and, if necessary, litigate to ensure our rights are protected.

Again, thank you for the opportunity to discuss our 2008 trade

agenda. I look forward to fielding your questions and will certainly

‘‘put my back into it,’’ Mr. Chairman.

The CHAIRMAN. That is good to hear.

[The prepared statement of Ambassador Schwab appears in the

appendix.]

The CHAIRMAN. Thank you, Madam Ambassador. I would like to

raise with you the problem of Canadian softwood lumber. As you

know, the Canadians are not—at least it is my view, and the view

of many—properly applying the circumstances under which they

can export lumber to the United States and they are not properly

calculating the surge and export charges.

There was a decision before the Court of International Arbitration which basically, in its arbitration ruling, came up with decisions that I believe are unfair for the United States. I just wonder

what you think we should do to get better enforcement with respect

5

to agreements, generally, that we reach with other countries, and

in particular, this one.

Ambassador SCHWAB. Thank you, Mr. Chairman. As you know,

the softwood lumber agreement is exceedingly important for this

country and for U.S. industry, and, quite frankly, U.S. users, in

that it has brought some stability to a market that has been in turmoil as a result, in part, to litigation for over 20 years. We were

disappointed in the mixed outcome of the arbitration decision and

believe that it did not accurately reflect the agreement that we had

reached with the Canadians.

That said, it is worth noting that the core of the agreement is

fully intact and has not been challenged, and we have every reason

to believe is being enforced, and that is the export tax being imposed on the western Canadian provinces which is at the maximum

15 percent that was in the agreement, and the quantitative controls on exports from the eastern provinces.

The arbitration case—and a second one, as you know, is pending—is still pending related to provincial subsidies that we believe

are inconsistent with the SLA. But in the one that was decided earlier this week, it was a mixed result. In the first part, we won in

our assertion that an adjustment mechanism to account for dramatic increases or dramatic surges, changed circumstances, that

the quantitative measure that was to be put on the eastern provinces should have been imposed from January to July of 2007 rather than imposed starting in July. In the case of the western provinces, we did not win in our assertion that an additional tariff

should have been imposed. This would have been 7.5 percent over

the 15 currently in place. Excuse me. Not tariff, export tax. And

we believe that should have been in place from January to July.

But even we would agree that, at this point in time, that would not

have been in place, therefore while we had——

The CHAIRMAN. I appreciate that. But what ideas do you have for

making sure the Canadians do live up to this? Because we have a

long history here. I mean, it has been 20 years at least. As long

as I can remember, it has always been a problem. Sure, we like to

think we are fair and others are not. But even looking at this thing

objectively, it is clear that the Canadians have broken the agreement several times, and sometimes in very clever ways. They put

notches in the lumber, bore holes in lumber so it is not graded

properly, et cetera.

What more can you do? What more is the administration thinking of doing to uphold this agreement?

Ambassador SCHWAB. The single most important thing we can,

and we believe we are doing, is that where the Canadians are expected under the agreement to have in place quantitative—well,

export taxes in the case of eastern provinces, 5 percent plus a

quantitative limit, and in the western provinces now a 15 percent

export tax, but those are in fact being collected. So, first and

foremost——

The CHAIRMAN. Well, I appreciate that. My time is about to expire, and I would just tell you to really barrel down on this thing,

because it is getting out of hand, frankly, in my judgment.

The second question is, what priorities has the administration

given to Trade Adjustment Assistance? I did not hear much in your

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comments about Trade Adjustment Assistance. In the President’s

State of the Union address, he said that he wants to help. The Federal Government has a responsibility to help misplaced workers. So

where is TAA in your priorities?

Ambassador SCHWAB. TAA is extremely high in our priorities.

Obviously it would not have been in the President’s State of the

Union address if it were not one of his highest priorities, along

with enactment of the free trade agreements, and as I noted, the

Doha Round. We continue to be very interested in working with

you and other congressional leaders to——

The CHAIRMAN. I appreciate that. I urge you to be very interested because I don’t think we’re going to make much progress on

the free trade agreements until we get TAA done.

Ambassador SCHWAB. Mr. Chairman, we all have priorities here,

and I think that it is in everyone’s interest for a win-win that

would include movement on Trade Adjustment Assistance and the

free trade agreements.

The CHAIRMAN. I am just saying, TAA is number one. Get that

done, we can talk.

Senator Bingaman?

Senator BINGAMAN. Thank you very much.

Ambassador Schwab, thank you for coming. Let me go right to

this issue that you raised toward the end of your written testimony—what you refer to as ‘‘trade saber rattling’’ in connection

with climate change. You say that nations should avoid using the

environment and climate change as an excuse to impose trade restrictions.

I have a level of frustration on this. I have tried for the last 2

years, at least, to cause the administration to engage with Congress on a cap and trade system, with no success. The only statement I have seen from the administration on the proposal that I

have made with Senator Specter, or that Senators Warner and

Lieberman have made, is your statement concerning this one provision that we have in there which says that 8 years after we put

a cap and trade system in place, we can consider the possibility of

requiring imports into this country to have some allowances attached to them.

The statement that you made, which is that this is ‘‘trade saber

rattling’’ and that we are using the environment as an excuse for

imposing trade restrictions, is just not a very constructive way to

engage the Congress on a serious debate about climate change. I

do not know if you have a suggestion for changes that we should

make in the bill. If you do, I would be anxious to hear that. I do

not know if the administration wants to participate in this discussion. I would be anxious to get them involved.

I do not know who is in charge of climate change policy for the

administration, but personally I just have real trouble with the

idea that, after we get as far down the road as we have gotten in

trying to get a bill drafted and get it where we can consider it, the

only thing we hear from the administration is, you guys ought to

quit ‘‘trade saber rattling.’’

We are trying to get a bill here that we can get the votes to pass.

Obviously there are legitimate concerns on the part of U.S. industry that we are going to be competitively disadvantaged if we put

7

a cap and trade system in place and do nothing to encourage other

countries to follow suit. So I do not know if you want to elaborate

on your comments, but I have to tell you, my own reaction is not

very favorable to what you are saying here.

Ambassador SCHWAB. I would welcome the opportunity to elaborate. Let me just mention a couple of things. One, the obvious,

which is, we would be happy at any point that you wanted to sit

down. I would be happy to come up. Jim Connaughton from the

Council for Environmental Quality——

Senator BINGAMAN. I have spoken to Jim Connaughton, and he

has indicated the administration opposes any limits on greenhouse

gases. If you oppose any limits on greenhouse gases, then I do not

know that you have a whole lot of standing to be part of the discussion.

Ambassador SCHWAB. Well, there is a lot of work, as you know,

going on in the administration related to the major economies initiative, related to activities in a post-Kyoto structure and environment. There are a lot of us involved in that. USTR on the trade

side. But as I said, we would be happy to sit down with you at any

point to talk through the issues.

I think the point I was trying to make in the testimony—I was

trying to make two points. One is that you hear a lot of negatives

about trade and the environment, and one of the things that has

not been stressed enough is how trade can really make a positive

contribution to the environment and to the climate change issue.

The best example is the proposal that we have put forward with

the EU and the Doha Round to eliminate all tariffs and non-tariff

barriers to environmental technologies and goods trade in the

world. I mean, if we are serious about using environmental technologies, adopting environmentally friendly production processes,

this specific proposal that we have offered would result in a 7- to

14-percent increase in trade, and presumably use of these technologies. So, let us first of all look at trade——

Senator BINGAMAN. I think that is a constructive suggestion.

Let me just go to one other thing since I am about out of my time

here. I voted for CAFTA. Trade Representative Portman at the

time committed the administration to request $40 million a year

for fiscal years 2007, 2008, and 2009 to support labor and environmental capacity building efforts in CAFTA countries. I am informed now that that was then, and now is now, and you have decided $30 million is adequate. Is that the position of the administration?

Ambassador SCHWAB. Actually, that is not the position of the administration. The administration requested the full $40 million.

Unfortunately, only $30 million was appropriated. Plus, as you

know, an extra $10 million each for two of the CAFTA countries

for some infrastructure building.

We would be happy to work with you and members of the Appropriations Committee, AID, State Department, to see how we can

come up with sufficient funds to meet the full commitment. But we

did make the request and we are working to make sure that we

continue to deliver on our commitments, both in the labor and in

the environment areas in capacity building and CAFTA. It is a firm

commitment.

8

If I may just add quickly, on the——

The CHAIRMAN. Very briefly, please.

Ambassador SCHWAB. On the question of using trade restrictions

related to climate change initiatives, as I said, we would be happy

to come up and talk about it. I think if you look around the world,

you look, for example, at some of the saber-rattling that France has

been doing on this, you can see how easily abused trade restrictions

can be in connection with what would otherwise be legitimate efforts to address climate change. So I think the key is, how do we

address climate change in a way that is not going to be using trade

restrictions that are an excuse to be protectionist rather than making a real contribution to the goal? But as I said, I am happy to

follow up on that.

The CHAIRMAN. Thank you.

Senator Roberts?

Senator ROBERTS. Thank you, Mr. Chairman.

I want to thank the Ambassador for your testimony, your strong

leadership. I appreciate your hard work and your perseverance. As

of this morning, we have intelligence reports that Hugo Chavez’s

tanks are on the border of Colombia in a dust-up down there. So

the trade policy situation in regards to the trade pact with Colombia is very important from an economic standpoint, but now we

have to toss in national security as well. Thank you for your perseverance.

But, unfortunately, recent events have forced my attention and

that of Senator Cantwell—and I appreciate her very strong leadership, and others in the Senate—to an extremely disappointing and

egregious decision by the Air Force, who rewarded EADS—i.e., Airbus—over Boeing to make our critical new aerial refueling tanker,

a project worth $40 billion. Not only does this defy common sense,

but it does raise some national security concerns as well.

Now, the chairman mentioned copper and gold in Montana and

the history of copper and gold, and the value of mining in his fine

State, and I appreciate that. But with apologies to Larry Gatlin, all

the trade gold in America is now in the bank in the middle of

Paris, France in somebody else’s name, and that name is Airbus.

It truly makes me question our trade agenda when we brought

a massive case before the WTO challenging unfair subsidies or

launch aid provided by the EU government to Airbus, then turn

around and bestow one of the largest military contracts we have

ever had to the same company using the very aircraft developed

with unfair launch aid.

Now, the whole situation is like Alice in Wonderland, or maybe

I should say the Air Force in Wonderland. Ambassador Schwab, I

think this is a ridiculous situation, a disservice to you, and to all

of your efforts to protect the U.S. aerospace industry from unfair

foreign competition. I do not envy you your position. I hope the

misguided tanker deal does not undermine you and our efforts.

Question number one for you: what is the status of the current

case against Airbus? Are you still pursuing it?

Ambassador SCHWAB. Yes, we are still pursuing it as actively as

ever.

Senator ROBERTS. Then question two: given the fact that we are

aggressively pursuing the WTO case and hopefully can see some

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light at the end of the tunnel this May with an announcement from

WTO, did the Department of Defense seek your input considering

the $15 billion in launch aid alone, not to mention the great benefit

of debt forgiveness? Did they seek your input?

Ambassador SCHWAB. We had discussions with the Department

of Defense at an early stage of the procurement, the so-called criteria stage.

Senator ROBERTS. Yes.

Ambassador SCHWAB. And we described to them the litigation.

Beyond that point we had no interaction at all with the Air Force

on their procurement.

Senator ROBERTS. Did you hear back from them in regards to the

fact that the WTO case would not be part of the bidding process,

would not be part of the evaluation, would not be part of the critical analysis?

Ambassador SCHWAB. No, we did not hear back. As you know,

this decision was a procurement done solely by the Air Force under

the procurement laws and regulations.

Senator ROBERTS. Well, you have answered my question, because

my next one was, was USTR part of the decision-making process?

Ambassador SCHWAB. No, we were not.

Senator ROBERTS. Well, perhaps this is a start to a new precedent, where the United States starts handing out contracts to countries that we are challenging before the WTO. In fact, we just filed

a case against China, which has a problem enforcing intellectual

property rights. Why do we not just go ahead and give them a contract to provide the security for the Patent Office?

Well, on the flip side, does this make sense to award one of the

largest military contracts, in part, to a country that has a separate

retaliatory challenge before the WTO against the United States?

I think the irony is almost laughable if it were not true and so

serious. I sincerely hope, and I know Senator Cantwell does as

well, that the tanker decision does not make this mountain you are

climbing any steeper. I would like you to walk me through what

happens next, if you can, with our WTO case. The first decision is

due out in May, is that correct?

Ambassador SCHWAB. We have not been told officially when the

interim decision on the first case, meaning the case we filed

against Airbus, will come out. The deadline has slipped. We know

it will be no earlier than April. We hope it will be in the April/May

time frame.

Senator ROBERTS. So the next step would be to determine if there

is any compensation. Is that correct?

Ambassador SCHWAB. Yes. The first step, we would first receive

the interim finding, which is generally supposed to be a confidential determination. As you know, there is a second case, as you

said, that Airbus has filed against us. That is several months behind. If we were to have won the case, and we will continue to pursue this case as rigorously as ever, then there are opportunities for

settlements, opportunities for compensation, and, if necessary, opportunities for retaliation.

Senator ROBERTS. Then if we find that Airbus and the EU countries are not complying with their commitments—you have just

10

said this—then we could retaliate by increasing tariffs. Is that correct?

Ambassador SCHWAB. That is always an option.

Senator ROBERTS. That is a hypothetical, but it is an option.

Ambassador SCHWAB. It is a hypothetical in the absence of a settlement or compensation.

Senator ROBERTS. All right. A situation could arise then that the

United States must retaliate against Europe, potentially in the

form of increased tariffs on foreign aircraft and aircraft parts. Let

us get this straight. U.S. taxpayers could potentially foot the bill

for higher duties imposed on spare parts for the Airbus tanker

being finished in the United States. That is quite a Catch-22. Now,

that is hypothetical, but that could happen.

So the long and short of it is, if this decision holds, it will be to

the detriment of our local and national economy, if not our National security, in my view and that of Senator Cantwell.

Let me be very clear: this is not an anti-trade rant. I am not

holding you responsible. I just do not see how you can do your job

with this kind of thing, the left hand not knowing what the right

hand is doing, or maybe the left hand knowing what the right hand

is doing and then it does not make any difference. This is an outrage, with the fact that the Air Force chose the, in my view, inferior aircraft in the so-called competitive bidding process. I think

they pushed it.

Ambassador Schwab, I do not expect you to have any response

to most of my questions here. That is for the Air Force and the Department of Defense to face up to. Thank you for the job that you

are doing.

Ambassador SCHWAB. Senator, thank you very much. Let me add

to your initial comments about Colombia, the Colombia FTA, as I

noted in my testimony, written and oral, is an unqualified win for

the United States as well as a win for Colombia. In terms of the

geopolitics and U.S. national security interests in the region, it is

also absolutely critical and critical that we move expeditiously on

it.

The President spoke with President Uribe just the other day, and

President Uribe made it clear that the single most important thing

that we can do to contribute to stability in the region—and, I might

add, we have heard that from leaders throughout the western

hemisphere—is for the Congress of the United States to act expeditiously and enact the Colombia free trade agreement.

The CHAIRMAN. Thank you very much. Thank you, Senator.

Next on the list is Senator Cantwell. She obviously is not here.

She has very strong views on the matter raised by the Senator

from Kansas, and frankly I think there is a problem here, too.

Ambassador SCHWAB. Senator Cantwell actually has raised——

The CHAIRMAN. But I think that Senator Roberts and Senator

Cantwell have raised a very, very important issue, and it is very

disturbing.

Next on the list, after Senator Cantwell, is Senator Salazar.

Senator SALAZAR. Thank you, Chairman Baucus.

Let me thank you, Ambassador Schwab, for your service to our

country. I know the hard work that you put in trying to deal with

this tangled world that you have to deal with all the time.

11

I want to go back to Senator Baucus’s question relating to TAA

and the free trade agreements. In the exchange between you and

him, I think it was very clear that he indicated to you that we

needed to get TAA done. My comment to you, and to the President

through you, is that it seems to me that unless we get TAA done

we are not going to move forward with the rest of the trade agenda

that we currently have before us. At the end of the day, we are getting close to the end of the Bush administration. We have less than

9 months before the election. There is only going to be so much we

are going to be able to do.

I heard Chairman Baucus say loud and clear, we need to get

TAA done. Unless we get TAA done, then we cannot go on and

work on some of the other trade issues that are on your agenda.

It is either, we are going to have a dead Colombia Free Trade

Agreement and other trade issues or we are going to make

progress. I want to just underscore my support for the point of view

that Senator Baucus has taken here, which is, let us get TAA done

and then hopefully we can move forward and try to address some

of the other issues that are on our agenda.

If we can get that done, I am hopeful we can turn our attention

to Columbia. I look back at the Peru Free Trade Agreement which

came out of this committee, which went to the floor of the Senate,

and was adopted by the Senate on a bipartisan vote of 77–18. That

free trade agreement, in my view, had essentially the same kinds

of parameters that we have for the Colombia Free Trade Agreement.

So I think that if we can deal with TAA in the right way, that

there is a possibility that we might be able to deal with Colombia.

I understand the geopolitical importance of us being able to deal

with the Colombia Free Trade Agreement.

So I would like you to take a minute and talk to us about the

differences between the framework of the Peru Free Trade Agreement and the Colombia Free Trade Agreement. I know the economic parameters are different, but what are the essential differences in terms of some of the protections for American workers?

Then, second, if you would, tell us how the administration and

how President Uribe and his regime have been attempting to address the issue of violence against labor leaders, because even the

latest information I have still is that Colombia is leading the world

in terms of violence against labor leaders. Now, you may have different information on that, and I would appreciate hearing your

point of view.

Ambassador SCHWAB. Thank you, Senator. I appreciate your

question and comments. You are absolutely right, the Colombia

Free Trade Agreement is identical, really, to the Peru Free Trade

Agreement in that both Colombia and Peru have had virtually unlimited access to the U.S. market through the Andean Preference

Program.

In both cases, Peru and Colombia have said they are willing to

trade in temporary extensions of this preference program for the

stability that comes with making preferences permanent, and in

exchange are willing to totally open their markets in terms of our

agricultural exports, our manufactured exports, our services exports.

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There are protections in terms of investment, protections in

terms of intellectual property rights. When it comes to protections

in the labor and environment area, those are identical to the ones

that were built into the Peru Free Trade Agreement and come from

the May 10 bipartisan agreement between the Democratic leadership and Republicans in the Congress and administration to, for

the first time, make labor and environmental protections fully enforceable, as are the commercial provisions of our free trade agreements. So in that way——

Senator SALAZAR. Given that similarity, Susan, really the obstacle that we face politically here in the U.S. House of Representatives and the U.S. Senate is a concern about the treatment of labor

leaders within Colombia. That is what I hear the most. So how

would you respond to that particular concern that we have?

Ambassador SCHWAB. You are absolutely right. I guess I shared

Chairman Rangel’s frustration when he said last week that it is

not the facts on the ground, it is the politics in the air that seems

to account for the Colombia FTA situation.

In the case of violence and impunity issues, what I would like to

do is provide more for this committee in writing on that. I am just

going to do a quick summary. Colombia, as you know, for many

decades has been plagued with violence. It is, in fact, under the

Uribe administration since 2002 that we have seen a dramatic

transformation in the situation. As I mentioned, murders are down

40 percent. Murders involving trade unionists are down 85 percent.

Now, that is not to say that the situation is fine, is good. Even

with kidnappings down over 70 percent, terrorist incidents down

almost 70 percent, all of those trend lines are trend lines in the

right direction, but even President Uribe and the administration in

Colombia acknowledge there is more to be done, and they are doing

more. So in the case of——

Senator SALAZAR. Ambassador, my time is up. But I would say,

just in conclusion, two things. One is, I do think it is so important

for us to get TAA done, because unless we get TAA done we are

not going to get the rest of this done.

Two, it would be very helpful to us to get a written description

of how it is that the violence issue has changed on the ground as

opposed to the politics in the air, but how it has changed on the

ground and how we are going to make sure that Colombia is protecting labor leaders within its country.

Thank you very much.

Ambassador SCHWAB. I would be very happy to provide that, plus

information on the impunity issue. I will say on the TAA question,

passage of TAA and passage of the Colombia Free Trade Agreement both would be wins for American workers. Honestly, I do

not——

The CHAIRMAN. That is right, Madam Ambassador. You can do

the one first and then do the second, maybe. But you are not going

to get the second until you do the first. I will make that clear.

Senator Lincoln?

Senator LINCOLN. Thank you, Mr. Chairman. I appreciate you

holding this hearing, and certainly very much appreciate your balanced leadership on the issue of trade. We all know that free trade

is important, but it has to be fair and we have a lot to do.

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Ambassador Schwab, thanks so much for coming to the Hill

today. We appreciate your leadership as well. I certainly enjoyed

my very first opportunity to travel on the trip we took to Colombia.

As we all know, I think the current economic climate has become

a source of anxiety among many working Americans, and for some,

trade has become a scapegoat for their economic woes. We do not

need to let that exacerbate.

But as we do begin to see this tremendous erosion of domestic

political support for trade, we have to understand that there are

multiple things that we can do to recapture the ability to engage

in good trade negotiations. But we have to realize that now, I think

more than ever, that we have seen this domestic erosion of support

for it. We also have to understand that, now more than ever, we

are an integral part of the global economy as it is growing. The

21st century is a whole different era in terms of trade and the

countries that we are dealing with. I think we cannot shrink from

our responsibilities there.

But as I think to my State, having been a strong advocate for

free trade but looking to my constituency for the support that they

have had for free trade in the past, it is going to be very, very critical that we move forward on the TAA. The multiple closures and

job loss that we have seen in our State just over the past 6 months

have been phenomenal.

The only thing in many of those instances that we have been

able to use has been Trade Adjustment Assistance in terms of retraining and a host of other things that are critically important to

at least maintaining the support for free trade in States like mine

where we have had it in pretty good form. While I am definitely

a firm believer that we have to be aggressive in looking for new

markets for our goods and services, I also recognize that trade has

its difficulties.

As my colleagues have said, you have done a tremendous job in

working through those challenges. We cannot turn a blind eye to

the impact that trade has had on our workers in the U.S., or certainly for me in Arkansas, seeing the number of jobs that we have

lost. We cannot turn a blind eye to the environment, as Senator

Bingaman mentions, or certainly to our trading partners.

It means moving forward on trade agreements like Colombia. As

I said, traveling there, I had a tremendous experience of being able

to visit with President Uribe and many others, got a great sense

of where they were and where they were going. We also need to

update and extend the TAA programs so that we can ensure individuals who do not benefit from free trade have access to the support and assistance that they truly need to recover.

From an agricultural standpoint, which you know I will always

bring up, it also means ensuring that our domestic producers have

access to new markets before we agree to concessions to reduce our

domestic support.

Just a couple of questions. The Doha Round. The WTO negotiations continue, particularly with respect to agricultural negotiations. I am increasingly concerned that our negotiators are so driven to complete an agreement before the end of this year, that the

U.S. is now offering far greater concessions on domestic support

from agriculture than we will gain in additional market access. It

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always seems to happen with this administration that they want

to give away the farm, quite frankly, in terms of the concessions

they are willing to make, and cutting back on domestic support

without getting the assurances of the open markets that we need,

our producers need in the world marketplace.

I am just hoping that you can provide some assessment of what

our negotiating approach is going to be and will continue to be. Do

I have your assurances that we are not going to bring back a bad

deal for U.S. agriculture? I need that. I need those assurances. I

would have to say, over the way that we have had the debate on

the farm bill, it is hard for me to believe that we are spending $15

billion a month in Iraq and we just spent $150 billion with a surgical shot into stimulating the economy, and yet we are arguing

over a $4-billion difference in the farm bill—$4 billion over 5 years,

mind you—in one of the greatest stimulus packages for rural America that we could possibly see.

So, we are hoping that you will ensure that in any potential

agreements we will make sure that our farmers are given greater

market opportunities, without dismantling our domestic safety net.

I think it is absolutely critical. We are seeing continued imports

from other countries that are unsafe.

I think we are at the juncture now where we are either going to

protect a domestic supply of safe and abundant food or we are

going to start out-sourcing our food supply and become dependent

on other countries for our food supply, just like we have our source

of oil.

The other key subject I wanted to bring up is Cuba. I do not

know if anybody else has. I was a little bit late. It is of key importance to our rice producers in Arkansas. It is a huge export market

potential that exists. Cuba was once our number-one export market

for rice prior to the embargo. Today, we are meeting a small percentage of their demand for rice. Industry estimates put the potential size of the Cuban market for U.S. rice at 600,000 metric tons

annually, at a minimum. Less than 90 miles from our U.S. borders,

we could easily achieve this market potential, if not for the undue

restrictions that are placed.

We have been given, with the recent developments in Cuba, an

opportunity. I hope there are some discussions, in your office and

elsewhere in the administration, under way to rethink the policy

towards Cuba moving forward. I do not know if those discussions

are occurring or you are at least reassessing the situation in Cuba,

and I hope you can answer that for me.

Then, last, I just wanted to throw out there some of our efforts

on behalf of our hardwood flooring, the unbelievable imports from

China. Our hardwood flooring industries and U.S. counterparts are

being subject to some unfair trade practices from China, obviously

the controlled exchange rate, but government subsidies, and certainly the unimpeded access to illegal logging. Again, if we are

going to move into this environmental discussion here, we need to

make sure that we have an equal playing field for those. I appreciate the chairman’s work on that hardwood flooring as well.

The CHAIRMAN. Thank you. Thank you, Senator, very much.

Ambassador, I would like to have you address this a little bit on

what you are doing about beef. As you know, many countries—

15

Korea, Japan, China, et cetera—do not take all the beef that the

World Animal Health Organization guidelines suggest they could

take. The United States is a controlled-risk country, and under the

OIE guidelines, certainly our beef, of all ages, should be imported

by those countries. It is a $2-billion loss to the United States’ beef

producers because Japan and Korea do not take American beef. We

are not asking Japan and Korea to do something they should not

do, we are asking them to do something they should do. Your comments. What are you doing to open those markets?

Ambassador SCHWAB. Let me, if I may, quickly touch on a couple

of items that Senator Lincoln asked, and beef, an issue that you

know is near and dear to my heart. I would be very happy to respond.

Just a couple of things about the politics of trade. I agree with

your comments on that and would say, quickly, there are four

things that we can be doing to address it: (1) doing a better job of

getting the word out about the benefits of trade; (2) we have talked

about Trade Adjustment Assistance; (3) we have talked about the

importance of enacting trade agreements that open foreign markets

to U.S. exports; and (4) the enforcement side of the equation, which

we have also talked about today and USTR takes very seriously.

In terms of Doha, you have my assurance that we will not come

back with a bad deal. I mean, we have unfortunately had to walk

away from bad Doha deals, or potential Doha deals, in the last 2

years. We believe, however, Doha is doable if it is an ambitious

deal, and ambitious has to include real, new market access in agriculture, in manufacturing, and in services. So there has to be a balance there when it comes to domestic support. We are prepared to

do our share, but we cannot do it by ourselves. I absolutely take

your point.

On the issue of Cuba, that is a long, involved conversation. I

know we are exporting some agricultural commodities to Cuba. I

would just point out that the Cuban market is less than one-eighth

the size of the Colombia market for American agricultural products.

China. That is an enforcement issue. Let me get back to you on

that on the hardwood flooring, because we have done a lot on that.

Let me see what the status is. You know that we won the subsidies

case that we took against China, the prohibited subsidies. China

has now eliminated those export subsidies, but let me find out

about the other part of the unfair trade practice side.

On beef——

The CHAIRMAN. Madam Ambassador, you have 2 minutes left.

You have not even started to address the question I asked you.

Ambassador SCHWAB. On beef——

The CHAIRMAN. I am just quite surprised you did not address the

question I asked you at the beginning of my 5 minutes. But go

ahead.

Ambassador SCHWAB. All right. There is no product that the

United States produces that I personally have spent more time on,

nor I suspect that the President of the United States has spent

more time on, than getting U.S. beef into the Korean market, into

the Japanese market, into the Chinese market, into Taiwan’s marVerDate 11-MAY-2000 14:27 Mar 01, 2010 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 54662.000 SFIN1 PsN: SFIN1
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ket. This is a matter, as you say, of getting those countries to adopt

international standards, the OIE.

The CHAIRMAN. I know you have been working on it. But, if you

will pardon the pun, where is the beef? Where are the results?

Ambassador SCHWAB. We believe that we have been making

progress. As you know, last May was the first time the OIE called

the United States a controlled-risk country—that, in the wake of

the BSE issues in 2003. We have been working with the Korean

government. We have worked with the previous government. We

are working with the current government to see that the beef issue

is resolved.

We know, and the Korean government knows, that Congress is

not going to act on the KORUS FTA absent beef being resolved. We

have raised the beef access issue, the OIE compliance issue, with

Japan on multiple occasions—when I say ‘‘we,’’ that includes the

President of the United States—with leaders in Japan.

The CHAIRMAN. So how do we get results? Talking is one thing,

results is another. How do we get results?

Ambassador SCHWAB. I think we are on a path to get results.

The CHAIRMAN. And what is the path? Do you have benchmarks?

Do you have dates that are quantifiable by which something is

going to be done?

Ambassador SCHWAB. We have, yes.

The CHAIRMAN. And what are they?

Ambassador SCHWAB. We are working on all of those fronts.

The CHAIRMAN. And what are they?

Ambassador SCHWAB. The effort is to move—in the case of Korea,

as you know, currently they let in de-boned beef under 30 months.

In the case of Japan, it is 20 months for de-boned and for bonein. We are looking at steps where they can go directly to full OIE

compliance.

The CHAIRMAN. What have you learned about China? We have

been dealing with China a bit, the Strategic Economic Dialogue, for

example, and trying to get a good, solid relationship with China.

You have had this job a while. Step back a little bit. What have

you learned? What has our country learned? How do we deal with

China?

Ambassador SCHWAB. I think you have to treat China with respect, but to be very clear about what we expect and what we need

from China in terms of their behavior and their responsibilities to

the international trading system. That includes what they should

be contributing to the Doha Round, it also includes compliance.

We have had some real successes in terms of our approach, the

administration’s approach, of engagement where dialogue through

the Strategic Economic Dialogue, through the Joint Commission on

Commerce and Trade has generated real results, but has not resolved all of the issues, and therefore, where we have not been able

to resolve issues through dialogue, we have turned to litigation. We

have filed the first six cases ever filed against China at the WTO.

We launched six cases.

As you know, we have three currently pending, and we just announced a new case this week. We have resolved successfully, settled successfully, several of those cases—three of those cases. So it

really is a balance, where you have to be ever-vigilant, we have to

17

pursue actively our interests, but we need to do so in a way that

is knowledgeable about China’s interests and approach and respectful but no less pushy.

The CHAIRMAN. You know, some endowments in the United

States—and I will finish with this; I have over-extended my time—

major university endowments, are assuming that the RMB is going

to be a major currency about 20 years from now. It will be the dollar, euro, and the RMB. What are we doing? How do we keep the

United States number one, in the best sense of the term, on trade?

Ambassador SCHWAB. Well, first of all, I think we need to recognize that we are still number one, in the best sense of the term,

in trade. If you look, for example, at our trade picture, our manufacturing output, our employment picture, real hourly compensation, all of those numbers are up. Manufacturing output continues

to be up, productivity growth, technology enhancements. However,

the key is making sure that the infrastructure, the underpinnings

stay intact to retain that competitiveness. As you know, I came out

of higher education. The importance of education and training is

absolutely a critical component of that.

The CHAIRMAN. I appreciate that. I have over-extended my time.

I will let Senator Lincoln ask some questions if she wishes to.

Senator LINCOLN. I asked mine before you.

The CHAIRMAN. All right.

Senator LINCOLN. I think I am good.

The CHAIRMAN. Right. Sorry. Go ahead.

Ambassador SCHWAB. No, no. Before I came into this position, as

you know, I was the president of the University System of Maryland Foundation and we were making a lot of these investment decisions, endowment investment decisions. What you will see universities, pension funds, and others do with these large sums of money

is look to diversify their portfolio and obviously maximize the longterm return for their investors or for their shareholders or for those

people, those students who depend on student aid that is generated

through endowments.

In terms of U.S. competitiveness, the President, in the American

Competitiveness Initiative that he announced 2 years ago, stressed

a variety of measures that includes encouraging investment, includes our own investments in math and science education. The No

Child Left Behind program, again, is another example of something

that is contributing to, and should be contributing to, our competitiveness moving forward.

There are other elements associated with making sure that we

are not placing undue restrictions on the mobility of our economy,

on the ability of our economy to adjust. That includes not putting

up isolationist barriers, both within and at the border. Those kinds

of things all contribute to maintaining and growing U.S. competitiveness internationally.

The CHAIRMAN. I appreciate that. There is no easy answer to the

question I asked. I am just urging all of us to be asking ourselves

that question constantly so that, without being too corny about it,

our kids and grandkids have the same living standards that we

have enjoyed as Americans.

Senator Snowe?

Senator SNOWE. Thank you, Mr. Chairman.

18

Welcome, Madam Ambassador. I am sorry I was not here for

your testimony. Constant conflicts.

I just want to make sure that I indicate my strong support for

Trade Adjustment Assistance. I have joined the chairman in support of legislation to reauthorize and to expand it to include communities as well, because they certainly are directly and negatively

affected by the loss of jobs abroad. That has certainly been exacerbated with this declining economy. I know that in Maine, for example, we have lost 24 manufacturers in 2006 alone. It has been staggering. That is why I am such a strong champion and advocate of

the Trade Adjustment Assistance program.

I was concerned because the President indicated in his State of

the Union address that he was going to reform trade adjustment,

and we have seen in his budget that he is reducing worker training

programs, as I understand it, by 15 percent, $70 million, at a time

in which Americans should be getting the benefits of the support

of these types of programs, at the minimum.

There is no question, with the globalization of our economy and

these trade agreements, it has resulted in the loss of jobs, and is

certainly true in my State. We have seen the loss accelerated over

the last few years, and we have lost more than 17,000 jobs in the

State of Maine. That is 26 percent of our manufacturing force since

2000.

So I would like to ask you your views and the administration’s

on Trade Adjustment Assistance, similar to the legislation the

chairman has introduced and I am co-sponsoring. I think it is so

important. I think our government has an obligation to support

these types of programs. It represents a very small amount of our

overall budget. In fact, our exports were more than $1.6 trillion in

2000 alone; the current TAA programs cost 1/20th of 1 percent.

The legislation the chairman has introduced and that I am supporting would raise those expenditures to less than 1/10th of a percent of the entire total. I mean, I do not think that that is too much

to ask. We have an obligation to assist our workers, and certainly

in the difficult transitions that they are making as a result of losing their jobs.

So can you tell me where the President and you stand on these

questions, and what are you going to do to support these efforts in

Congress? Because we really do need to reauthorize and expand

the support of these programs.

Ambassador SCHWAB. Thank you, Senator, for the question. As

the President laid out in the State of the Union address, he and

the administration are fully supportive of a strong, vibrant Trade

Adjustment Assistance program that includes reauthorizing and

improving TAA. We have noted that we are willing and ready as

an administration to work with Congress on TAA legislation. In

terms of the budget, the budget assessment reflects the current

state of play and current law. As you know, the authorization for

TAA has expired. So, I think that the key is for Congress and the

administration to move forward in terms of working on TAA legislation.

I would note, when it comes to jobs and employment—and this

in a way goes back to your question about competitiveness—every

year the economy creates approximately 17 million jobs, on averVerDate 11-MAY-2000 14:27 Mar 01, 2010 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 54662.000 SFIN1 PsN: SFIN1
19

age. It loses approximately 15 million. These are long-term jobs.

Last year it was for a net plus of a little over one million, but generally on average, you look back, say, 10 years, 17 million created,

15 million lost. There is this churn in the economy. The key is to

ensure that the individuals who may be losing their jobs are eligible and knowledgeable about, have the skills, training, and mobility to have access to the net increase, the 17 million jobs being created.

We know, for example, that since August of 2003 the U.S. economy has created, net, over 8 million jobs. Who is getting those jobs?

And are those individuals who may be laid off, those individuals,

whether they are losing their jobs because of productivity enhancements, technological change, even trade—and we know that the

trade impact, while very narrow, is something we need to be cognizant of and sympathetic to and address, for example, through

Trade Adjustment Assistance. But overall, we need to create an environment within which these individuals in these communities can

make the transition. Many have, and some are struggling to. We

look forward to working with you on it.

Senator SNOWE. Well, first of all, that may be true if you look

at the long term and what has happened. But in January alone,

we have lost 17,000 jobs, which is the first time in 4 years employment has shrunk in America’s economy. I am just saying that I

have seen the acceleration of job losses, and particularly in the

manufacturing sector in my State. We just lost another company

a few weeks ago, Burlington Homes, 70 jobs. They had been in

business for more than 14 years.

So I guess what I am asking is, first, why is the President proposing cuts in Trade Adjustment Assistance? It does not stand to

reason. It does not make sense. It is going totally in the wrong direction. I am telling you, we have an obligation, so cutting these

programs simply does not make sense, and it is the wrong thing

to do.

Second, I would hope the President does not threaten to veto this

reauthorization. I hope that we can work together to make sure

that it can happen to benefit workers. This time is very important

to so many. This is the safety net that we owe the American worker at a time in which we are talking about and expounding the virtues of trade agreements, and we have heard it time and again, but

there are a lot of losers in those trade agreements, and there certainly have been many in my State. So we have to honor, I think,

the benefits of that program and to make sure that we expand it

to address some of the real problems that are facing these workers.

Ambassador SCHWAB. Let me offer just a quick, 2-part response

to what you said. One, the President is not threatening to cut

Trade Adjustment Assistance. Recognizing the way TAA is set up,

it is basically an entitlement, so the budget estimates what the

through-put will be. As I said, we are committed as an administration to work with the Congress to reauthorize and improve TAA.

The President stated that. He stated it in the State of the Union,

and we stand by that.

The CHAIRMAN. Madam Ambassador, I am afraid——

Ambassador SCHWAB. Could I just mention one other thing?

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The CHAIRMAN. Well, we have 3 minutes left to get to the floor

to vote.

Ambassador SCHWAB. All right.

The CHAIRMAN. And we should vote. It takes only a certain

amount of time to get there, so I thank you very much, Madam

Ambassador.

I note there have not been 11 Senators present for a quorum so

we could not report out the nomination of Doug Shulman to be IRS

Commissioner. We will find an opportune time when we can vote

on that nomination.

In the meantime, the committee stands in recess.

[Whereupon, at 11:12 a.m., the hearing was concluded.]

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