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78–159 PDF 2002

S. HRG. 107–329

NOMINATIONS OF:

GRANT D. ALDONAS, KENNETH I. JUSTER,

MARIA CINO, AND ROBERT GLENN HUBBARD

HEARING

BEFORE THE

COMMITTEE ON

BANKING, HOUSING, AND URBAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

ON

NOMINATIONS OF:

GRANT D. ALDONAS, OF VIRGINIA, TO BE UNDER SECRETARY OF THE

INTERNATIONAL TRADE ADMINISTRATION

U.S. DEPARTMENT OF COMMERCE

KENNETH I. JUSTER, OF THE DISTRICT OF COLUMBIA

TO BE UNDER SECRETARY OF THE BUREAU OF

EXPORT ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE

MARIA CINO, OF VIRGINIA, TO BE ASSISTANT SECRETARY AND

DIRECTOR GENERAL, UNITED STATES AND FOREIGN COMMERCIAL SERVICE

U.S. DEPARTMENT OF COMMERCE

ROBERT GLENN HUBBARD, OF NEW YORK, TO BE

CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISERS

APRIL 24, 2001

Printed for the use of the Committee on Banking, Housing, and Urban Affairs

(

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

PHIL GRAMM, Texas, Chairman

RICHARD C. SHELBY, Alabama

ROBERT F. BENNETT, Utah

WAYNE ALLARD, Colorado

MICHAEL B. ENZI, Wyoming

CHUCK HAGEL, Nebraska

RICK SANTORUM, Pennsylvania

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

JOHN ENSIGN, Nevada

PAUL S. SARBANES, Maryland

CHRISTOPHER J. DODD, Connecticut

TIM JOHNSON, South Dakota

JACK REED, Rhode Island

CHARLES E. SCHUMER, New York

EVAN BAYH, Indiana

ZELL MILLER, Georgia

THOMAS R. CARPER, Delaware

DEBBIE STABENOW, Michigan

JON S. CORZINE, New Jersey

WAYNE A. ABERNATHY, Staff Director

STEVEN B. HARRIS, Democratic Staff Director and Chief Counsel

BRIAN J. GROSS, Deputy Staff Director and Counsel

LINDA L. LORD, Chief Counsel

AMY F. DUNATHAN, Senior Professional Staff Member

TOM LOO, Senior Economist

MARTIN J. GRUENBERG, Democratic Senior Counsel

GEORGE E. WHITTLE, Editor

(II)

CONTENTS

TUESDAY, APRIL 24, 2001

Page

Opening statement of Chairman Gramm .............................................................. 1

Opening statements, comments, or prepared statements of:

Senator Schumer .............................................................................................. 6

Prepared statement ................................................................................... 13

Senator Santorum ............................................................................................ 7

Senator Hagel ................................................................................................... 9

Senator Corzine ................................................................................................ 11

NOMINEES

Grant D. Aldonas, of Virginia, to be Under Secretary, International Trade

Administration, U.S. Department of Commerce ................................................ 2

Prepared statement .......................................................................................... 13

Biographical sketch of nominee ....................................................................... 16

Response to written questions of Senator Schumer ...................................... 70

Kenneth I. Juster, of the District of Columbia, to be Under Secretary, Bureau

of Export Administration, U.S. Department of Commerce ............................... 4

Prepared statement .......................................................................................... 25

Biographical sketch of nominee ....................................................................... 26

Maria Cino, of Virginia, to be Assistant Secretary and Director General,

United States and Foreign Commercial Service, U.S. Department of

Commerce ............................................................................................................. 5

Prepared statement .......................................................................................... 38

Biographical sketch of nominee ....................................................................... 40

Robert Glenn Hubbard, of New York, to be Chairman of the Council of

Economic Advisers ............................................................................................... 6

Prepared statement .......................................................................................... 45

Biographical sketch of nominee ....................................................................... 46

(III)

(1)

NOMINATIONS OF:

GRANT D. ALDONAS, OF VIRGINIA

TO BE UNDER SECRETARY OF

THE INTERNATIONAL TRADE ADMINISTRATION

U.S. DEPARTMENT OF COMMERCE

KENNETH I. JUSTER, OF THE DISTRICT OF COLUMBIA

TO BE UNDER SECRETARY OF

THE BUREAU OF EXPORT ADMINISTRATION

U.S. DEPARTMENT OF COMMERCE

MARIA CINO, OF VIRGINIA

TO BE ASSISTANT SECRETARY AND

DIRECTOR GENERAL, UNITED STATES AND

FOREIGN COMMERCIAL SERVICE

U.S. DEPARTMENT OF COMMERCE

ROBERT GLENN HUBBARD, OF NEW YORK

TO BE CHAIRMAN OF THE COUNCIL OF

ECONOMIC ADVISERS

TUESDAY, APRIL 24, 2001

U.S. SENATE,

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS,

Washington, DC.

The Committee met at 3 p.m., in room SD–538 of the Dirksen

Senate Office Building, Senator Phil Gramm (Chairman of the

Committee) presiding.

OPENING STATEMENT OF CHAIRMAN PHIL GRAMM

Chairman. GRAMM. Let me call the Committee to order. The first

thing I should do is introduce our panel, then administer the oath,

and then I will ask each of you to make an opening statement. I

would like to ask you to keep it within 5 minutes, but if you run

over a little, I am not going to stop you.

I would first like to introduce Grant Aldonas of Virginia. He is

nominated by the President to be Under Secretary of Commerce for

International Trade. I have known Grant and worked with him on

the Finance Committee, I am very pleased that you have been

nominated for this position. Opposing protectionism and promoting

free trade is God’s work, and as should be true in all of God’s noble

efforts, there should be little compromise and much effort.

2

Our next nominee is Ken Juster of the District of Columbia. He

is nominated to be Under Secretary of Commerce for Export Administration. Ken, let me welcome you before the Senate Banking

Committee.

As you know, we have reported the Export Administration Act.

It represents a major modernization of an important law that expired in 1995, and we hope to see this bill passed into law this

year. We expect you to be effective in promoting American exports

and protecting American technology under this new law, and I look

forward to working with you.

Maria Cino of Virginia to be Assistant Secretary of Commerce

and Director General of the United States and Foreign Commercial

Service. Let me say that one of our Members, Rick Santorum, is

going to be here at some point, and when he arrives, we will give

him an opportunity to introduce you.

Let me say to Ken Juster that Senator Chuck Schumer is inserting in the record his introduction of you. He had intended to be

here, but we have all kinds of things going on today.

Finally, Glenn Hubbard, who is an economist and professor of

Economics and Finance at Columbia University. He is nominated

to be a member and Chairman of the President’s Council of Economic Advisers. Glenn, we are very happy to have you here with

us today.

Let me get each of you to rise and raise your right hand.

[Witnesses sworn.]

Chairman GRAMM. Please be seated. Grant, why don’t you begin?

STATEMENT OF GRANT D. ALDONAS, OF VIRGINIA

TO BE UNDER SECRETARY

INTERNATIONAL TRADE ADMINISTRATION

U.S. DEPARTMENT OF COMMERCE

Mr. ALDONAS. Thank you, Mr. Chairman. It is an honor to appear before you today as President Bush’s nominee to be Under

Secretary of Commerce for International Trade. I have a longer

statement that I would with your consent submit for the record.

Chairman GRAMM. I will put the extended statement of each of

our witnesses in the record.

Mr. ALDONAS. I will summarize my points here. First, I want to

express my thanks to President Bush and Secretary Evans. I am

humbled by the confidence they have placed in me and I look forward to representing our Nation’s interests—and God’s interest as

well, Mr. Chairman—in the international trade arena if confirmed.

Second, I want to thank——

Chairman GRAMM. Don’t forget the order.

[Laughter.]

Mr. ALDONAS. I am conscious of that. Second, I want to thank

you for making time on the Senate Banking Committee schedule.

The Senate Banking Committee obviously has been punching

things out left and right early on in this year, and I appreciate

your making time for us.

I want to assure you of my interest in building a strong partnership with the Committee, and I hope that I can call regularly on

your advice and good counsel and on your staff regarding all matters before the International Trade Administration.

3

Third, I want to underscore how proud I am to have the opportunity to serve with the professionals at the International Trade

Administration, whether it is the industry experts in Trade Development, the Market Access and Compliance staff responsible for

enforcing our trade agreements, the staff of Import Administration

that are responsible for addressing foreign unfair trade practices,

or the officers of United States and Foreign Commercial Service

that link American business to export opportunities abroad.

I also want to say how pleased I am to have colleagues like

Maria Cino with her experience and stature and expertise as a part

of our team in ITA to head the United States and Foreign Commercial Service, and Ken Juster, who is going to be heading the Bureau of Export Administration.

Fourth, in terms of priorities, I believe we should pursue the

overall goal of shaping an economic environment in which goods,

services, capital and ideas flow freely, because that is the environment in which the American entrepreneurs’ risk, and American

workers’ labor, will be ultimately rewarded.

At a practical level in the International Trade Administration,

that means focusing the Department’s resources on the objective of

expanding export and business development opportunities abroad,

including the use of tools that the Senate Banking Committee has

given us, like the Trade Promotion Coordinating Committee; making clear our commitment to see that our trade agreements are enforced and that our exporters receive the benefit of the bargain

that our negotiators reach at the negotiating table; and adopting

the same results-oriented approach to the enforcement of our unfair trade laws.

And here, with respect to the unfair trade laws, I want to be

clear that we would like to use these as tools not as an end in and

of themselves but as tools to encourage the elimination of the underlying unfair trade practices, the market distortions they create,

and the limitation they impose on our exporters.

Finally, I would like to express my thanks to Senator Bill Roth

for the opportunity he gave me to serve as Chief of the International Trade Counsel on the Finance Committee while he was

Chair for 4 years, and to both Senator Roth and Senator Moynihan,

the Ranking Member on the Finance Committee. I owe them a debt

that I hope my continued public service can, in part, repay.

Most importantly, I would like to thank my wife, Pam, who has

been my partner.——

Chairman GRAMM. Why don’t you introduce any members of your

family who are here?

Mr. ALDONAS. This is my wife, Pam Olson, who has been my

partner in every endeavor for the last 21 years. We just got

through another anniversary, for which I am always grateful.

[Laughter.]

This is my son, Noah, who is all of 10 and is cross with me because he missed a good lunch and a field trip to come down to the

Senate Banking Committee this afternoon.

[Laughter.]

I have two daughters who are not here, Nicole and Kirsten, who

are off at college, and hopefully will be coming home pretty soon.

I have my brother John, who is the workout expert at the Overseas

4

Private Investment Corporation. So, when anything bad happens at

OPIC, he has to take care of it.

The other point I would make, Mr. Chairman, particularly for

you, knowing that you sit on the Finance Committee, is Pam recently left her partnership at Skadden Arps and her role as the

first woman chair of the ABA Tax Section to become the Deputy

Assistant Secretary for Tax Policy. And all I can say is that for 20

years, I have assiduously followed her advice, and I would recommend that you do the same on tax policy.

[Laughter.]

Mr. ALDONAS. I would be pleased to answer any questions you

may have.

Chairman GRAMM. Ken, why don’t you, if you have any kinfolks

here, introduce them and then make your statement.

STATEMENT OF KENNETH I. JUSTER, OF THE

DISTRICT OF COLUMBIA, TO BE UNDER SECRETARY

BUREAU OF EXPORT ADMINISTRATION

U.S. DEPARTMENT OF COMMERCE

Mr. JUSTER. Thank you, Mr. Chairman. It is a great honor for

me to be here today as the President’s nominee for the position of

Under Secretary of Commerce for Export Administration.

I thank the President and Secretary Evans for their confidence

and trust in me. I appreciate the time that several Members of the

Committee have taken in the past few weeks to meet with me individually to discuss export and related issues. I regard consultation with this Committee as an important and ongoing process, and

if confirmed, I will look forward to working closely with you and

your staff.

The Bureau of Export Administration operates at the intersection of issues involving industry and national security. As you

know, a principal focus for the Bureau is administering an export

control system that is intended to further the growth of U.S. exports while protecting our national security.

On the one hand, it is important to enhance the operation of the

system for the 21st Century in a manner that affords business the

opportunity to compete effectively in today’s increasingly competitive global marketplace.

It is in my view essential to the health of our Nation’s industrial

and technological base that U.S. companies be able to export their

goods, services and technology without being hindered by arbitrary

or unnecessary export controls. At the same time, however, as

someone who has worked at the U.S. Department of State, I fully

appreciate the critical importance of protecting this country’s national security by ensuring that our sensitive technologies do not

fall into the wrong hands.

The challenge for all of us in government and in the private sector is to have a tough minded yet common sense export control regime that strikes the proper balance between sharing our technology with friends and protecting against the transfer of sensitive

technology to potential adversaries.

If confirmed, I am committed to the pursuit of policies and procedures that will advance these objectives.

5

If confirmed, I also will try to enhance multilateral cooperation

to control the proliferation of the most critical technologies to potential adversaries. If the U.S. Government determines that our

companies should not make a particular technology available to

certain countries, then we owe it to our business community to

make every effort possible to ensure that our allies and partners

do not undercut us by making that same technology available.

Finally, the Bureau’s work involving industry and national security extends to assisting in the coordination of the U.S. Government’s initiatives on critical infrastructure protection. This effort

includes promoting public-private partnerships across industry sectors, integrating the various infrastructure plans developed by

these partnerships into a comprehensive national plan, and assisting Federal departments and agencies in assessing their own reliance on critical infrastructures.

In an era when cyberterrorism is a real and dangerous threat,

I regard the work of the Bureau’s Critical Infrastructure Assurance

Office as an important component of our overall mission.

Let me conclude by thanking the Committee for its prompt consideration of my nomination and by reiterating my commitment to

work closely and cooperatively with you.

Thank you.

Chairman GRAMM. Ms. Cino.

STATEMENT OF MARIA CINO, OF VIRGINIA

TO BE ASSISTANT SECRETARY AND DIRECTOR GENERAL

UNITED STATES AND FOREIGN COMMERCIAL SERVICE

U.S. DEPARTMENT OF COMMERCE

Ms. CINO. Mr. Chairman, Senator Hagel, it is an honor and a

privilege to come before you as President Bush’s nominee for the

position of Assistant Secretary and Secretary General of the United

States and Foreign Commercial Service.

Thank you for granting me this hearing today. I know how busy

you are, and I appreciate your attention to this nomination. I look

forward if confirmed to working with the Members and staff of this

Committee on matters related to export promotion.

I would also like to thank President Bush and Secretary of Commerce Don Evans for their support in my nomination.

Small- and medium-sized American businesses understand and

appreciate the unique and valuable role played by commercial service in trade promotion and trade compliance. If confirmed, I have

set three goals for the agency: First, to increase the number of exports from traditionally underserved communities, which would include minority, rural and women-owned businesses.

Second, increase the number of new exporters, and help current

exporters increase the number of markets to which they export.

And third, to include the quality of export assistance provided to

American companies by the Commercial Service by enhancing the

skills of our employees through professional development opportunities. I welcome the challenge of leading a worldwide, field-based

operation of 1,700 dynamic individuals.

My 20 plus years of leading field-based organizations developing

and adhering to complex budgets, setting goals, long-term and

6

short, building coalitions and developing, motivating and mentoring

staff have prepared me for this position.

Finally, let me say that I am humbled. I could never imagine,

our growing up in blue collar ethnic and conservative household,

that I would be sitting here today before the U.S. Senate in a confirmation hearing to be Assistant Secretary and Director General

for the United States and Foreign Commercial Service.

I want to thank my loving parents for teaching me that if I work

hard, anything was possible. I would also like to thank my colleagues and my friends who challenged me and gave me the opportunity to grow. I deeply appreciate the honor of being here today.

If confirmed, I look forward to working with Grant Aldonas and

my sister International Trade Administration bureaus to promote

U.S. exports, to support U.S. trade policies, and to enforce trade

agreements.

Thank you.

Chairman GRAMM. Thank you.

Glenn, I know that your family is here. Why don’t you start by

introducing them, then give us your statement.

STATEMENT OF ROBERT GLENN HUBBARD, OF NEW YORK

TO BE CHAIRMAN OF THE COUNCIL OF

ECONOMIC ADVISERS

Mr. HUBBARD. Thank you, Mr. Chairman.

My wife Constance is here and my two sons, Raph and Will. I

think Will has escaped into a nap. My older son, Raph, may follow

our footsteps as an economist, Mr. Chairman, but he may decide

to be a baseball pitcher instead, so I don’t know whether we will

snag him.

Chairman GRAMM. The money’s better in baseball.

[Laughter.]

Mr. HUBBARD. That is what my wife reminds me of. If he can become a New York the Yankee, that is fine. I am also privileged to

have my wife’s parents, Cecil and Betty Pond, with me, and my

children’s godparents, Bev and Bill Roberts.

I would like to begin, Mr. Chairman, just by thanking you for the

timely consideration of my nomination—especially given the pressures under which the Committee is operating. I am very honored

to be the President’s nominee as Chairman of the Council of Economic Advisers.

Because I am an advocate of a tax cut, I will start out by reducing the length of my oral remarks.

Chairman GRAMM. Let me stop you a minute on that thought,

and let me recognize Senator Schumer who wanted to say a word

on behalf of Maria Cino.

COMMENTS OF SENATOR CHARLES E. SCHUMER

Senator SCHUMER. Ken Juster and Maria Cino are both New

Yorkers, and are extremely well-qualified. I apologize for being

late, but it has been a busy day. I hope the Committee gives each

of them a unanimous recommendation and I thank you, Mr. Chairman, for the time, and apologize to Mr. Hubbard for interrupting.

I am back to the Judiciary Committee. I apologize to the witnesses. Thank you.

7

Mr. HUBBARD. I am also a transplanted New Yorker—another

one of your constituents.

Senator SCHUMER. Transplanted coming or going?

Mr. HUBBARD. Both. I am not a native New Yorker and I am living in Washington.

Senator SCHUMER. I am sure those few years in New York have

helped Mr. Hubbard along.

[Laughter.]

Chairman GRAMM. Go ahead.

Mr. HUBBARD. Thank you, Mr Chairman.

Again, I would like to say at the outset that I am honored to be

President Bush’s choice to be Chairman of the Council of Economic

Advisers. Should you confirm me, I will take very seriously the

long-standing tradition of the Council in providing economic analysis to the President and to the Executive Branch.

The stewardship of the Council is a wide-ranging responsibility

for everything from the preparation of the Economic Report of the

President to the advice to the President and the Vice President.

As I had mentioned to you, Mr. Chairman, when we met in your

office, I intend to continue the tradition of applying the highest

professional standards possible. I share your concern for the Lord’s

work, as you know. The Lord, I think, is usually on the side of

economic efficiency. The constituency for the Lord’s work is sometimes small, but, at the Council, we count ourselves as part of

that constituency. I look forward to working with you on this

Committee and other Committees in the Congress in the economic

policy process.

Thank you.

Chairman GRAMM. Thank you.

Let me recognize Senator Santorum, who wanted to make a comment on behalf of Maria Cino.

COMMENTS OF SENATOR RICK SANTORUM

Senator SANTORUM. First let me apologize for being late, but I

wanted to get over here and introduce to the Committee Mario

Cino, and just tell you that I have the utmost respect for this

young woman. She is someone who I got to know when she did everything she could to elevate a rather fumbling politician from outside of Buffalo, NY, named Bill Paxon, into the leadership of the

House of Representatives.

She did an outstanding job with him in running his office, and

just amazed me with her incredible confidence and work ethic, and

under understanding of the process as well as the politics of the

process. She went over and she did some great work in the political

realm for a while.

Again, she was just someone I felt knew her job and did it as

well as she could, no matter what job it was.

When I found out that she was interested in taking a job with

the Administration, frankly it did not matter what job she was taking, in my mind, because I knew that she would take the kind of

energy and effort and professionalism to that position that would

be beyond what anyone could possibly hope for.

I am excited she has agreed to come on to this Administration

and work for the United States and Foreign Commercial Service.

8

I know she will do an outstanding job in our Government and for

the businesses who rely on the Foreign and Commercial Service.

Chairman GRAMM. Thank you, Senator Santorum. I have just a

couple of points I would like to make.

First, Mr. Juster, have you had an opportunity yet to study the

Export Administration Act reported by this Committee?

Mr. JUSTER. Yes, I have, Senator.

Chairman GRAMM. Do you feel comfortable in vigorously supporting it?

Mr. JUSTER. I commend this Committee on its work on S. 149

and I do regard it as a very positive step toward reform of the export control system.

I should note that, while I have not been involved in Administration discussions regarding the legislation, the Administration has

indicated its support for the legislation. If confirmed, I would be

joining the Administration in supporting the legislation.

Chairman GRAMM. Thank you.

Let me go back to Mr. Aldonas and just simply say that I have

had, in my political career, the following experience, and I would

submit that you will have it in your new job.

People knock on my door and tell me terrible stories about how

these foreigners are cheating, and how they won’t allow goods they

produce to come into this foreign country.

Then I say to them, well, what do you want me to do?

They say, not in these words, but the basic translation is, foreign

governments cheat their consumers, and I want you to cheat American consumers by protecting me from foreign competition.

I would say of 100 people who come to see me with a trade complaint, 99 of them do not have the least interest in dealing with

that complaint. They simply want to use that trade complaint as

a reason for imposing protectionism in the American market.

I had the president of a major automobile company once try to

explain to me his effort to force the Japanese to open their market.

And so I listened and listened and listened, trying to determine the

relevance of what he was saying to me.

And finally it became clear that the relevance was justification

for erecting protectionist barriers against Japanese automobiles in

the American market. So I just commend that experience.

Maybe your experience will turn out to be different than mine.

Maybe yours will be one in a thousand instead of one in a hundred

that have a legitimate case that they actually want to be fixed.

But I think it is very important that the Commerce Department

set a very high standard when people are actually asking for trade

remedies that will put Americans out of work, that will make

America noncompetitive in many different areas.

As you know, the political base for international trade, like the

political base of freedom, is often very, very small. I have found,

of all issues that I have dealt with in public life, that trade is the

least well-understood. Of all issues that I have dealt with, it is the

most difficult because it is counterintuitive. It is like skiing.

[Laughter.]

Chairman GRAMM. So I commend you to your task.

Senator Hagel.

9

COMMENTS OF SENATOR CHUCK HAGEL

Senator HAGEL. Thank you, Mr. Chairman.

I too welcome each of you this afternoon. I note with some curiosity that there is such a big deal made, Mr. Chairman of being

from New York, when I would rather think that a Texas background might serve you better.

But if you cannot be from Texas or Nebraska, then I guess New

York will have to suffice.

[Laughter.]

Senator HAGEL. I do not say that in any gratuitous way to curry

favor with the Chairman. We have never done such a thing here,

and I am not about to violate that principle.

Chairman GRAMM. Well, all of their bosses are from Texas. You

need to understand that.

Senator HAGEL. Well, I am glad. But we do not have anybody

from Nebraska, unless you have claimed Nebraska.

I might add, as long as we are on Nebraska, did you know, Mr.

Chairman, that the Navy pilot that brought the P–3 in successfully

on Hainan Island was from Nebraska. I do not know what that has

to do with your hearing.

[Laughter.]

Chairman GRAMM. Isn’t he the Navy pilot that ran down that jet

fighter?

[Laughter.]

Senator HAGEL. We have a big airspace in Nebraska. That is

where he learned how to fly.

[Laughter.]

Senator HAGEL. Nonetheless, picking up a little bit on where the

Chairman left off on his observations during his distinguished career about trade, I happen to concur with the Chairman on that

point.

Not that I have been in Congress near as long as Chairman

Gramm, but at one time, I was a business man. And at one time,

I did a lot of work around the world, or attempted to do work

around the world.

So I have seen from various perspectives the importance of this

government in promoting trade and trade policy. I do not believe

there is a more important dynamic for the future of this country

and the future of the world than trade. I think it is that important.

The three of you—and we will get to Mr. Hubbard in a moment—

are charged with a heavy responsibility which each of you I think

understands.

And I would be very interested in getting each of your thoughts

on where we should direct more of our focus on trade issues.

I left a meeting about half an hour ago of the United States/

China Security Commission. It was a Commission set up which you

know about, Mr. Aldonas, to look at some of the more high tech,

dual use pieces of equipment and exports that we now export specifically to China, especially in light of events of the last few weeks.

We are now confronted, your Administration and the Congress,

together are confronted with this perplexing dilemma. Do we pull

back on trade with China? Do we try to punish China. Do we adjust our relationship with China through trade.

10

I have never believed that that is effective. As a matter of fact

I think it is counterproductive. That is aside from the point that

I would again like to ask each of you to share with this Committee

some of your thoughts about where we should be doing better, how

can we do better, how will you lead that effort to promote trade.

Mr. Aldonas, we will begin with you.

Mr. ALDONAS. Maybe I could divide the answer between some of

the policy priorities and some of the practicalities, Senator. It is the

right question to be asking of us and of the Administration at this

point. On the policy priorities, I think the President was clear in

Quebec. His stance is that this Administration is going to be an

Administration that stands for free trade, for trying to create the

environment in which entrepreneurs can succeed where capital is

at risk and where workers can see rising standards of living. Trade

is essential to that.

The first near-term prospect, as outlined by the President, is the

Free Trade Agreement of the Americas. We have an opportunity to

build out the arrangements we have with the Canadians and Mexicans into an agreement that covers the 34 democracies in the western hemisphere.

The President is focused on that. We have a window of opportunity because of the President’s focus. The President’s agenda can

be changed and be shaped by events like those in China. I think

this is an opportunity for our trading partners in Latin America to

seize as much as it is an opportunity for us. But that is the first

target out of the box.

It is also a good precursor to what we should be doing with in

the framework of the World Trade Organization which is launching

a new round of multilateral trade negotiations.

As you well know, it is essential to our agricultural community

to be in the WTO. We have the agriculture negotiations as part of

the built in agenda, which have gotten a lot farther than frankly

I would have expected at this point without having a solid push

from the prior Administration. This Administration is fully behind

that effort.

There is one essential element that is missing as a part of that

package, however, which is to get trade promotion authority from

the Congress. The President is committed to doing that by the end

of the year.

Although the argument is many times made that it is our trading partners that have to know we have trade promotion authority,

in my view, it is our negotiators that need to know it. What they

need to know is that there is a contract between the Congress and

the Executive about what the agenda is when they sit down to negotiate at a table. That is the critical element that I think in many

respects has been missing, as we have gone to the negotiating table

in recent years.

On the practical side, I would like to see us at the Commerce Department get focused on trade agreements compliance in a way we

haven’t in the past. So, if it is a problem with a customs inspector,

in Shanghai, we solve that problem there, so it doesn’t become a

debate about principles.

If it is a systemic problem among all customs inspectors in

China, I want to hear about it, so we can bring the weight of the

11

U.S. Government to bear on that and resolve that at the political

level before we end up in a larger dispute.

If it is a problem with the EU, where we realize we are going

to be headed for litigation in the WTO, then I think all of us at

the Commerce Department need to be building an effective record

that allows us to vindicate our rights when we are in that forum

at the end of the day.

And, I will be dedicating most of my time to focusing on ensuring

that the trade agreements we have reached and the bargains our

negotiators negotiated are going to be fulfilled.

Chairman GRAMM. Mr. Juster, did you want to answer that question as well?

Mr. JUSTER. I would be happy to.

Senator HAGEL. Thank you, Mr. Chairman.

Mr. JUSTER. As you noted, Senator Hagel, my area focuses on the

exports of sensitive technology to countries around the world. In

terms of my overall philosophy, it would be to promote such exports

when we are dealing with allies and partners and we can work together in areas of defense cooperation.

But we must be more careful when we are exporting sensitive

technology to countries of concern. We might permit such exports

if they are going to help the people of a country and open up their

society without enhancing their weapons capabilities.

But if there is a true national security concern, we want to restrict such exports. In those circumstances, it is incumbent upon us

to try to get multilateral cooperation on restricting these exports,

so that we are not just restricting our own companies’ ability to export such technology. Instead, we should be working in a cooperative way with allies and not having our own exports undercut by

the same technology being shipped abroad by our allies.

I therefore want one of my priorities to be to enhance multilateral cooperation of export controls, and to try to make sure that we

are working effectively with our allies and partners in terms

of stopping the proliferation of weapons capabilities in countries

of concern.

Chairman GRAMM. Senator Corzine.

COMMENTS OF SENATOR JON S. CORZINE

Senator CORZINE. Yes, Mr. Chairman. I appreciate very much the

time and service that this outstanding panel is about to begin. Tremendous credentials.

I have actually worked with several of these folks on a personal

level and give testimony to their excellence and commitment to integrity, but I would be remiss if I did not—and I hope this question

has not been asked of a future Chairman of the Counsel of Economic Advisers on his current views of how the economy is evolving. I do not know whether someone asked that question, but I

would love to hear your comments, sir.

Mr. HUBBARD. Certainly, Senator. In my view, the economy’s current rate of growth is unacceptably low. That is, the economy’s potential rate of growth is substantially above the rate of growth that

we have experienced in the past two quarters.

In the first quarter, the economy’s rate of growth likely will be

in the range of 1 to 2 percent at an annual rate.

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I share the predictions of many private forecasters that the

economy’s rate of growth is likely to improve toward the end of

2001, and going into 2002. I would caution, however, that part of

the prediction of improvement in growth by private forecasters reflects a belief that a more stimulative fiscal policy will be in place.

To give a quick answer to your question, Senator, I believe we

are in a growth slowdown at the moment. The rate of growth is unacceptably low, but we are likely not at the present time to be in

a recession.

Senator CORZINE. Thank you, Mr. Chairman.

Chairman GRAMM. Let me thank each of you for coming today.

We will try to have a mark-up and report each of your nominations

to the floor of the Senate as soon as we can.

And again I want to thank each of you for your willingness to

serve. Thank you very much.

[Whereupon, at 3:35 p.m., the hearing was adjourned.]

[Prepared statements, biographical sketches of the nominees, and

response to written questions follow:]

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PREPARED STATEMENT OF SENATOR CHARLES E. SCHUMER

Thank you, Mr. Chairman. I want to thank you for having this hearing today and

getting the nomination process moving.

I would like to welcome our New Yorkers, Ken Juster and Maria Cino It is good

to see that New York, which breeds talent as well as the spirit of public service,

has excellent representation on this panel. In particular, I have the privilege of introducing Ken Juster, who has been nominated by the President to serve as the

Under Secretary of Commerce for Export Administration.

Ken is eminently well qualified to be the Under Secretary, not simply because he

was born and raised in New York. Although that helps. Ken has had a distinguished

academic and professional career. He received a B.A. from Harvard College—my

alma mater—and then received a law degree from the Harvard Law School—also

my alma mater. After a clerkship with the Second Circuit Court of Appeals, Ken

came to Washington, DC, where he joined Arnold & Porter, practicing in international economic and legal matters, including export issues, economic sanctions,

and foreign investment.

In the previous George Bush Administration, Ken served as an adviser to Lawrence Eagleburger and became Counselor of the State Department in 1992. While

at State, Ken managed a wide-range of policy issues relating to many of the same

countries with which he will have to deal if confirmed for his new position. Upon

completion of his tenure, Ken received the Distinguished Service Award and Medal,

which is the State Department’s highest honor, then returned to Arnold & Porter.

Ken has the intellect and broad experience needed for an Under Secretary in Export Administration. He also has a great sense of humor, and he is someone with

whom I am sure we will all enjoy working. In short, I think we are fortunate to

have someone of Ken’s caliber willing once again to enter public service. And I

would like to welcome him here today.

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PREPARED STATEMENT OF GRANT D. ALDONAS

UNDER SECRETARY-DESIGNATE

INTERNATIONAL TRADE ADMINISTRATION

U.S. DEPARTMENT OF COMMERCE

APRIL 24, 2001

Mr. Chairman, Senator Sarbanes, and Members of the Committee, I am honored

to appear before you today as President Bush’s nominee to be Under Secretary of

Commerce for International Trade. I am humbled by the confidence the President

and Secretary Evans have placed in me. I look forward to representing our Nation’s

interests in the international trade arena and am eager to tackle that challenge.

America’s ability to lead on trade ultimately depends on a partnership between

Congress and the President. That boils down to a question of trust between Members of Congress and the President and his team. If I am fortunate enough to be

confirmed by the Senate, my primary objective will be to establish a strong working

relationship with the Members of the Committee and your staff to ensure that ours

is a partnership that works.

I intend to establish a regular schedule of meetings with your staff to ensure that

you are fully informed of our progress. I will always be on call and will always be

interested in your views on how we can improve our performance at the Commerce

Department. I look forward to your advice and counsel.

President Bush and Secretary Evans are fond of quoting Ronald Reagan for the

proposition that trade represents a ‘‘forward strategy for freedom.’’ The Commerce

Department’s International Trade Administration (‘‘ITA’’) is on the front lines in

that effort.

The staff in Trade Development are the U.S. Government’s industry experts, providing technical support to our trade negotiators, advice to American exporters, and

advocacy for U.S. firms in sector-specific talks with our trading partners. Officials

in Market Access and Compliance (‘‘MAC’’) advocate the American exporter’s interest in trade negotiations and are responsible for ensuring that American firms get

the benefit of the bargain under our trade agreements. Import Administration ensures that our firms compete internationally on a level playing field. The officers

of the United States and Foreign Commercial Service link American firms—particularly small- and medium-sized businesses—with trade and business development opportunities abroad.

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I have had the good fortune to work with many of the professionals in International Trade Administration throughout my career, both in my prior public service with the State Department, the Office of the U.S. Trade Representative, and on

the staff of the Senate Finance Committee, as well as during the many years I spent

in the private sector. I want to underscore for the Committee, and for my friends

in the Department, that I consider it an honor to have the opportunity to work sideby-side with them in advancing America’s trade agenda. I also want to underscore

how pleased I am that a colleague of Maria Cino’s experience and stature will join

our team in ITA as the head of the United States and Foreign Commercial Service.

We live in a time of unprecedented economic opportunity and unprecedented economic challenge. The end of Cold War barriers to peaceful commerce and the changing nature of communications and transportation technology have made us neighbors of every country around the globe. The challenge lies in ensuring that those

changes expand the economic opportunity for all Americans.

The Commerce Department’s International Trade Administration has a significant

role to play in that effort. It is the American entrepreneur who puts his or her capital at risk and American workers who with their labor ensure that American goods

and services represent a hallmark of quality around the world. It is their efforts,

not the government’s, that create economic prosperity. What we in government can

do, however, is help shape an environment in which goods, services, capital and

ideas flow freely because that is the environment in which the entrepreneur’s risk

and the American worker’s labor will ultimately be rewarded.

I would like to outline three priorities I intend to focus on if confirmed as Under

Secretary for International Trade that I believe will serve that end. First and foremost is expanding export opportunities for American business. At a practical level,

that effort involves concentrating the Department’s resources in ways that are likely

to provide the greatest pay-off for American businesses trying to gain access to

world markets.

The challenge within ITA is to ensure that the component parts stay fixed on a

single goal—identifying promising targets for our exporters and providing the support they need to reach those markets. The Senate Banking Committee has been

in the forefront of providing the Department with the tools to improve our performance in that regard. In particular, I would like to reinvigorate the Trade Policy

Coordinating Committee as the vehicle for bringing not just the Department’s resources to bear on behalf of U.S. exporters, but the resources of the government

as a whole.

The Commerce Department can also contribute to the effort to expand the benefits

of trade to all Americans. I intend, for example, to work closely with other parts

of the Department, other U.S. agencies, and with trade promotion offices at the

State-level to reach out to minority-owned businesses interested in international

markets. I am committed to working closely with the Small Business Administration, in particular, to ensure that those small- and medium-sized businesses that

provide the overwhelming source of new employment in our economy have the opportunity to ‘‘go global’’ from the outset of their existence.

Second, I want the Bush Administration’s tenure to reflect the strongest possible

commitment to the enforcement of our trade agreements. Both the President and

Secretary Evans fully support that effort. We cannot expect the American public’s

support for an active trade agenda if our exporters do not get the benefit of the bargain they have a right to expect from our trade agreements.

What that means in practical terms is ensuring that each and every employee in

the Commerce Department is focused on serving our exporters on the ground. If the

problem lies with an errant interpretation of the World Trade Organization Customs

Valuation Agreement by a customs official in Marseille, I want our Foreign Commercial Service officers to solve that problem at a working level in Marseille so that

the goods can reach their markets without further delay. If the problem is a systemic one—a pattern of behavior that violates our rights under trade agreements,

I want to hear about it immediately so that the staff in Trade Development can

bring the weight of the U.S. Government to bear on the problem at a political level

as early as possible in pursuit of a practical solution to our exporters’ problems. If

the problem is one that requires us to go to dispute settlement under our various

trade agreements, I want our Market Access and Compliance officers to understand

the importance of building the factual record for our claim and working closely with

our counterparts in the Office of the U.S. Trade Representative to ensure that the

dispute settlement process vindicates our rights.

Third, I would like to adopt the same results-oriented approach to the administration of our unfair trade laws by the Import Administration. Congress never intended

antidumping and countervailing duty actions to be an end in themselves. Rather,

the unfair trade laws represent tools that should be used in an effort to eliminate

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the underlying unfair trade practices that distort markets and deny American

firms—and firms worldwide—to compete on an equal basis.

The debate over the earliest versions of the U.S. countervailing duty law in the

1890’s reflected Congress’ intent to offset the market distortions introduced into the

sugar trade by Russian subsidies to sugar production. Congress’ action, however,

also reflected an intent to provide leverage to pursue the elimination of such practices and their harmful effects on U.S. markets.

It is time to restore that focus to our efforts. Whether the issue is steel, lumber,

semiconductors, or supercomputers, our goal should be the elimination of unfair

practices that interfere with the market’s ability to guide investment to its most

productive use in our own economy and in markets for goods and services world

wide. The capital markets impose a strict discipline that steers capital to those activities that generate the highest possible rate of return. Trade distorting subsidies

and other unfair practices that interfere with the ability of the capital markets to

impose that discipline impose a high cost on our exporters and on our economy as

a whole.

In his conversations with me, Secretary Evans has put that in more human and

tangible terms. He has often said that there is nothing more dispiriting to American

workers and American entrepreneurs who put capital at risk than to see that they

are not competing on a level-playing field. If confirmed by the Senate, I pledge to

work within the Department, with other agencies, and, most importantly, with

American industry to ensure that our policies and our actions target the elimination

of trade-distorting practices and the costs they impose.

Let me close by once again thanking the President and Secretary Evans for nominating me to serve the American public as Under Secretary of Commerce for International Trade. I would also like to reiterate my appreciation to you, Mr. Chairman,

to Senator Sarbanes, and to the other Members of the Committee for allowing me

to appear before you today.

I would like to thank Senator Bill Roth for having given me the opportunity to

serve as the Chief International Trade Counsel while he was Chairman of the Finance Committee for the past 4 years. Chairman Roth and his esteemed friend and

colleague, Senator Pat Moynihan, the Ranking Member on the Finance Committee,

exemplified the spirit that should always imbue the democratic process. I will be

forever in their debt for the education and inspiration their leadership provided.

Last, and most importantly, I would like to thank my wife, Pam, and my children,

Nicole, Kirsten, and Noah, for their support for me while I have been in public service. Pam recently left her law partnership and her role as the first woman ever to

chair the American Bar Association’s Section of Taxation to serve President Bush

and Treasury Secretary O’Neill as the Deputy Assistant Secretary of Treasury for

Tax Policy. I can say, objectively, based on 21 years of evidence that Pam is the

best partner anyone could ask for—the President and Secretary O’Neill could not

have found a better choice.

I would be pleased to answer any questions you may have.

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PREPARED STATEMENT OF KENNETH I. JUSTER

UNDER SECRETARY-DESIGNATE

COMMERCE FOR EXPORT ADMINISTRATION

U.S. DEPARTMENT OF COMMERCE

APRIL 24, 2001

Chairman Gramm, Senator Sarbanes, and Members of the Committee: It is a

great honor for me to be here today as the President’s nominee for the position of

Under Secretary of Commerce for Export Administration. I thank the President and

Secretary Evans for their confidence and trust in me.

I appreciate the time that several Members of the Committee have taken in the

past few weeks to meet with me individually to discuss export and related issues.

I regard consultation with this Committee as an important and ongoing process. If

confirmed, I will look forward to working closely with you and your staff.

The Bureau of Export Administration operates at the intersection of issues involving industry and national security. A principal focus for the Bureau is administering

an export control system that is intended to further the growth of U.S. exports while

protecting our national security. On the one hand, it is important to enhance the

operation of the system for the 21st century in a manner that affords business the

opportunity to compete effectively in todays increasingly competitive global marketplace. It is essential to the health of our Nation’s industrial and technological base

that U.S. companies be able to export their goods, services, and technology without

being hindered by arbitrary and unnecessary export controls.

At the same time, however, as someone who has worked at the U.S. Department

of State, I fully appreciate the critical importance of protecting this country’s

national security by ensuring that our sensitive technologies do not fall into the

wrong hands. The challenge for all of us—in government and in the private sector—

is to have a tough-minded, yet common-sense export control regime that strikes the

proper balance between sharing our technology with friends and protecting against

the transfer of sensitive technology to potential adversaries. If confirmed, I am committed to the pursuit of policies and procedures that will advance these objectives.

If confirmed, I also will try to enhance multilateral cooperation to control the proliferation of the most critical technologies to potential adversaries. If the U.S. Government determines that our companies should not make a particular technology

available to certain countries, then we owe it to our business community to make

every effort possible to ensure that our allies and partners do not undercut us by

making that same technology available.

Finally, the Bureau’s work involving industry and national security extends to

assisting in the coordination of the U.S. Government’s initiatives on critical infrastructure protection. This effort includes promoting public-private partnerships

across industry sectors, integrating the various infrastructure plans developed by

these partnerships into a comprehensive national plan, and assisting Federal departments and agencies in assessing their own reliance on critical infrastructures.

In an era where cyber-terrorism is a real and dangerous threat, I regard the work

of the Bureau’s Critical Infrastructure Assurance Office as an important component

of our overall mission.

Let me conclude by thanking the Committee for its prompt consideration of my

nomination and by reiterating my commitment to work closely and cooperatively

with you.

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PREPARED STATEMENT OF MARIA CINO

ASSISTANT SECRETARY AND DIRECTOR GENERAL-DESIGNATE

UNITED STATES AND FOREIGN COMMERCIAL SERVICE

U.S. DEPARTMENT OF COMMERCE

APRIL 24, 2001

Mr. Chairman, Ranking Member Sarbanes, Members of this Committee, it is an

honor and a privilege to come before you as President Bush’s nominee for the position of Assistant Secretary and Director General of the United States Foreign and

Commercial Service. Thank you for granting me this hearing today. I know how

busy you are and I really appreciate your attention to this nomination. I look forward, if confirmed, to working with the Members and staff of this Committee on

matters related to export promotion.

I would like to thank Senator Santorum for that kind introduction. Ten years ago

when Senator Santorum was first elected to Congress I was Chief of Staff to Congressman Bill Paxon. Our office acted as ‘‘big brother’’ to his office and we introduced him to the culture on Capitol Hill. We must have been good teachers. After

only one term in the U.S. House of Representatives he came back as a U.S. Senator.

I also want to thank President George W. Bush and Secretary of Commerce Don

Evans for their support of my nomination.

Mr. Chairman, Congress created the United States Foreign and Commercial Service to provide export assistance at a reasonable cost to American companies. From

the beginning, our mission has been to help small- and medium-sized American

business export their U.S. made products and services and protect the interests of

U.S. businesses abroad. The Commercial Service has grown into a worldwide organization that facilities export transactions by linking U.S. suppliers with international

buyers through our network of 105 domestic and 159 international field offices.

Small- and medium-sized American businesses understand and appreciate the

unique and valuable role played by the Commercial Service in trade promotion and

trade compliance. Federal, State and local international trade agencies also value

the Commercial Service. Over the years we have forged a strong partnership with

the Trade Promotion Coordinating Committee to leverage scarce resources and provide seamless export assistance to clients.

If confirmed, I will work to further strengthen the partnerships created through

the Trade Promotion Coordinating Committee to better leverage Federal resources.

The Commercial Service actively pursues partnerships with government agencies

and the private sector. I believe that working together through partnerships at the

point of service delivery is the most effective way to help American exporters in today’s climate of increased global competition.

We live in a rapidly changing society. Our Nation continues to evolve into a service orientated, high-tech based economy where an increased number of exporters are

from nontraditional backgrounds. The Commercial Service must continue to respond

to these changes.

If confirmed, I have set three goals for the Agency:

• Increase the number of exporters from traditionally under-served communities

(minority, rural and women-owned businesses).

• Increase the number of new exporters and help current exporters increase the

number of markets to which they export.

• Improve the quality of export assistance provided to American companies by the

Commercial Service by enhancing the skills of our employees through professional

development opportunities.

This is truly an exciting time and one of tremendous opportunity for U.S. exporters. Commercial Service employees are dedicated, hardworking and committed to

providing export assistance services that are second to none. Their enthusiasm is

contagious. I invite each of you to visit your local U.S. Export Assistance Center to

observe firsthand the tremendous service that these men and women provide to

your constituent businesses seeking to export.

I welcome the challenge of leading a worldwide field-based organization of 1,700

dynamic individuals. My 20-plus years of leading field-based organizations, developing and adhering to complex budgets, setting short and long term strategic goals,

building coalitions, and developing, motivating and mentoring staff have prepared

me for this position. In addition, the contacts I have made in Federal, State and

local agencies will enable me to further the goals of the U.S. Commercial Service.

It is my hope that my skills in developing successful, strategic marketing and outreach programs will heighten the awareness and value of the Commercial Service’s

programs to American companies.

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Finally, let me say that I am humbled. I could never have imagined that while

growing up in a blue-collar, ethnic and conservative household, I would be sitting

here today before the U.S. Senate at a confirmation hearing to be the Assistant Secretary and Director General for the United States and Foreign Commercial Service.

I want to thank my loving parents for teaching me that if I worked hard, anything

was possible. I especially want to thank my late father for not heeding the advice

of my grandfather who insisted that it would be a waste of money to send a girl

to college. I also want to thank my colleagues and friends who challenged me and

gave me the opportunity to grow.

I deeply appreciate the honor of being here today. If confirmed I look forward

to working with Grant Aldonas and my sister International Trade Administration

bureaus to promote U.S. exports, support U.S. trade policies and enforce trade

agreements.

Thank you.

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PREPARED STATEMENT OF ROBERT GLENN HUBBARD

CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISERS-DESIGNATE

APRIL 24, 2001

Mr. Chairman, Senator Sarbanes, and other distinguished Members of the Committee, it is an honor and privilege for me to appear before you today as the President’s nominee to be Chairman of the Council of Economic Advisers. I am mindful

of the Council’s significant responsibilities in the economic policy process, and I am

eager to assume the duties of the position should I be confirmed.

Since my designation as Chairman, I have had the pleasure of visiting with many

of you personally, and I look forward to meeting with all of you as your schedules

permit. I have enjoyed the occasion to discuss the many economic priorities and opportunities we face in this Congress and the new Administration. Let me assure you

that I am committed to a frank and outgoing dialogue with Members of Congress.

Your input and advice are valuable to me personally and to the workings of the

Council.

Before my recent nomination, I served as Russell L. Carson Professor of Economics and Finance at the Graduate School of Business and Department of Economics

of Columbia University. While at Columbia University, I also served as a research

associate of the National Bureau of Economic Research (in programs on monetary

economics, economic fluctuations and growth, public economics, industrial organization, and corporate finance) and as a visiting scholar and director of the Tax Policy

Program of the American Enterprise Institute. I have, in the past, worked with committees in both the House and the Senate on a range of economic policy issues, and

I have acted as adviser to various government agencies. It is with this background

that I come before this Committee to seek confirmation as Chairman of the Council

of Economic Advisers.

Our Nation today confronts economic opportunities and challenges. Technological

change and economic growth have increased living standards. We face the challenge

of sustaining the economy’s expansion. Though no single policy can generate the

sustained growth and stability of our economy, the Administration is committed to

a set of basic principles to, achieve this objective.

As Chairman of the Council of Economic Advisers, I will be an adviser to President Bush, Vice President Cheney, and other Administration officials on all aspects

of economic policy. The Council will provide the soundest possible advice on the

major issues of concern to the American people.

Mr. Chairman and Senator Sarbanes, as I have assured you personally, the recommendations of the Council of Economic Advisers will be based on a reasoned and

comprehensive view of the economic environment and empirical evidence. We will

be diligent in our efforts to continue the Nation’s economic growth and in our response to events in the national and international economy.

In closing, I would like to take this opportunity to thank you, Mr. Chairman, and

the Committee for the prompt consideration of my nomination. Mr. Chairman, I

would be delighted to answer any questions you and the other Members of the Committee may have.

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RESPONSE TO WRITTEN QUESTIONS OF SENATOR SCHUMER

FROM GRANT D. ALDONAS

Q.1. American cosmetics constitute one of our Nation’s most important consumer product export sectors. American manufacturers

have raised strong concerns about new regulations issued by the

Korean Food and Drug Administration (KFDA) that are purported

to insure the safety and efficacy of a wide range of skin care products that are already widely used and accepted both here and

around the world. The American firms complain that the KFDA

regulations are extremely discriminatory and in reality are serving

as enormous barriers to the entry of safe and desirable American

skin care products into the Korean Market. Indeed, of approximately 450 product applications submitted to date under the new

regulations, only a handful have been approved, all of which were

submitted by Korean firms. No foreign firm applications approved.

Would you commit to expeditiously looking into this serious issue

and reporting back quickly to the Committee about the status and

avenues for redressing this apparent cosmetics trade barrier problem with Korea?

A.1. Yes. I understand this is an important market access issue

for U.S. companies and, if confirmed, I will make it a priority for

the International Trade Administration (ITA). Once confirmed, I

will report back to you and the Committee on the extent to which

our ITA compliance officers have already been actively monitoring

the issue of trade barriers to exports of cosmetics in Korea and

what future steps we will take to improve the prospects for our exporters in the Korean market.