U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

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

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

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

89–474 2016

U.S.–EU TRADE AND INVESTMENT PARTNERSHIP 

NEGOTIATIONS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON TRADE 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

MAY 16, 2013

Serial No. 113–TR02 

Printed for the use of the Committee on Ways and Means 

( 


joloto on DSKB35BYQ1 with HEARING
ii 

COMMITTEE ON WAYS AND MEANS 

DAVE CAMP, Michigan, Chairman 

SAM JOHNSON, Texas 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

JIM GERLACH, Pennsylvania 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

TODD C. YOUNG, Indiana 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

JAMES B. RENACCI, Ohio 

SANDER M. LEVIN, Michigan 

CHARLES B. RANGEL, New York 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

ALLYSON Y. SCHWARTZ, Pennsylvania 

DANNY K. DAVIS, Illinois 

LINDA T. SA ́ NCHEZ, California 

JENNIFER M. SAFAVIAN, Staff Director and General Counsel 

JANICE MAYS, Minority Chief Cousel 

SUBCOMMITTEE ON TRADE 

DEVIN NUNES, California, Chairman 

KEVIN BRADY, Texas 

DAVID G. REICHERT, Washington 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

CHARLES B. RANGEL, New York 

RICHARD E. NEAL, Massachusetts 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 


joloto on DSKB35BYQ1 with HEARING
iii 

C O N T E N T S 

Page 

Advisory of May 16, 2013 announcing the hearing .............................................. 2 

WITNESSES 

Chairman Devin Nunes, Representative of the State of California .................... 5 

Honorable Charles B. Rangel, Representative of the State of New York ........... 8 

Ambassador Stuart E. Eizenstat, Partner, Covington & Burling LLP, on behalf of the Transatlantic Business Coalition, Testimony .................................. 13 

Ms. Inga Carus, President & CEO, Carus Corporation, Testimony .................... 25 

Mr. James Grueff, Principal, Decision Leaders, Testimony ................................. 35 

Mr. Greg Slater, Director, Global Trade and Competition Policy, Intel Corporation, on behalf of the Business Coalition for Transatlantic Trade and 

the Coalition of Services Industries, Testimony ................................................ 40 

SUBMISSIONS FOR THE RECORD 

The Honorable Erik Paulsen .................................................................................. 76 

Handmade Toy Alliance .......................................................................................... 77 

ACLI ......................................................................................................................... 85 

American Farm Bureau .......................................................................................... 89 

GWU ......................................................................................................................... 92

IPMI .......................................................................................................................... 95 

NAM .......................................................................................................................... 97 

Public Citizen ........................................................................................................... 98 

Shellfish Growers Association ................................................................................ 104 

USIFI and IFAI ....................................................................................................... 107 

MATERIAL SUBMITTED FOR THE RECORD 

Questions for the Record ......................................................................................... 112 


joloto on DSKB35BYQ1 with HEARING

joloto on DSKB35BYQ1 with HEARING
(1) 

U.S.–EU TRADE AND INVESTMENT 

PARTNERSHIP NEGOTIATIONS 

THURSDAY, MAY 16, 2013 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON TRADE, 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 2:55 p.m., in room 

1100, Longworth House Office Building, the Honorable Devin 

Nunes [Chairman of the Subcommittee] presiding. 

[The advisory of the hearing follows:] 


joloto on DSKB35BYQ1 with HEARING
2 

HEARING ADVISORY 

Chairman Nunes Announces Hearing on U.S.–EU 

Trade and Investment Partnership Negotiations 

1105 Longworth House Office Building at 2:00 PM 

Washington, May 9, 2013 

House Ways and Means Trade Subcommittee Chairman Devin Nunes (R–CA) 

today announced that the Subcommittee will hold a hearing on negotiations of a 

U.S.–EU trade and investment partnership agreement. The hearing will focus on 

the opportunities and challenges presented by the President’s notification to Congress that he intends to negotiate such an agreement. The hearing will take 

place on Thursday, May 16, 2013, in 1100 Longworth House Office Building, 

beginning at 2:00 P.M. 

In view of the limited time available to hear the witnesses, oral testimony at this 

hearing will be from invited witnesses only. However, any individual or organization 

not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. A 

list of invited witnesses will follow. 

BACKGROUND: 

The transatlantic economy is the largest and most integrated in the world, comprising 50 percent of global GDP and generating approximately $5 trillion in total 

commercial sales each year. The European Union and United States account for 30 

percent of world trade. Each day, $2.7 billion of goods and services are traded bilaterally, supporting millions of jobs in both economies. Five of the top ten export markets for U.S. services are in Europe. Direct investment by the United States and 

the EU into each other’s markets totals more than $3.7 trillion. Europe is by far 

the largest destination for U.S. outbound investment, with Europe accounting for a 

roughly equal amount of U.S. outbound investment. In comparison, China ranks 

12th as a U.S. investment destination, behind Belgium, France, Germany, Ireland, 

the Netherlands, Switzerland, and the UK, among others. This longstanding integration translates into significant U.S. jobs: approximately 15 million workers in the 

United States are employed as a result of transatlantic trade. 

On March 20, 2013, President Obama notified Congress of his intent to enter into 

formal trade agreement negotiations with the EU, thus beginning a 90-day consultation period with Congress that will expire on June 18, 2013. The President’s notification emphasizes that a U.S.–EU trade and investment agreement would address 

both traditional tariff barriers as well as important regulatory and other non-tariff 

barriers, including sanitary and phytosanitary barriers to U.S. agriculture exports. 

A U.S.–EU trade and investment agreement would also provide an opportunity to 

broaden and deepen cooperation on third-country issues. 

In announcing this hearing, Chairman Nunes said, ‘‘A comprehensive and ambitious transatlantic agreement would promote economic growth, strengthen an already strong economic alliance, and serve as an influential model 

promoting free trade and open markets around the world. The agreement 

is also an opportunity for the United States to resolve long-standing regulatory barriers, and, in particular, regulatory barriers not based on sound 

science that block our agriculture exports. Furthermore, an ambitious 

agreement can help to set the rules of global trade and strengthen U.S.–EU 

cooperation in addressing barriers in third countries.’’ 

FOCUS OF THE HEARING: 

The focus of the hearing is on the benefits of expanding U.S.–EU trade, including 

through the negotiation of a trade and investment agreement. The hearing focus 

will include: (1) tariff barriers to trade; (2) regulatory barriers, including sanitary 


joloto on DSKB35BYQ1 with HEARING
3 

and phytosanitary barriers to U.S. agriculture exports; (3) opportunities for regulatory cooperation and coherence; (4) services and investment barriers; and (5) ways 

to strengthen cooperation between the United States and the EU with regard to 

third-country issues. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://www.waysandmeans.house.gov/, select ‘‘Hearings.’’ Select the hearing for 

which you would like to submit, and click on the link entitled, ‘‘Click here to provide 

a submission for the record.’’ Once you have followed the online instructions, submit 

all requested information. ATTACH your submission as a Word document, in compliance with the formatting requirements listed below, by the close of business on 

Friday, May 31, 2013. Finally, please note that due to the change in House mail 

policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call 

(202) 225–1721 or (202) 225–3625. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing 

record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, 

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

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

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

comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will 

be maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word format and MUST 

NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised 

that the Committee relies on electronic submissions for printing the official hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

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

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, telephone, and fax numbers of each witness. 

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

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

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

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://www.waysandmeans.house.gov

f 

/. 

Chairman NUNES. Good afternoon. I want to welcome everyone 

to our hearing on the U.S.–EU trade and investment partnership 

negotiations. Today’s hearing focuses on the enormous potential 

that exists in a U.S.–EU trade and investment agreement. The 

U.S.–EU economic relationship is the largest and most integrated 

in the world, comprising 50 percent of global GDP, supporting millions of U.S. jobs. 

Although it is a deep and mature relationship, we can do more. 

The timing is exactly right to promote growth in both of our econoVerDate Sep 11 2014 10:12 Jun 27, 2016 Jkt 089474 PO 00000 Frm 00007 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\89474.XXX 89474

joloto on DSKB35BYQ1 with HEARING
4 

mies, and I strongly support negotiations for an ambitious and 

comprehensive trade and investment agreement. 

From a strategic perspective, the United States and Europe have 

long been close allies in the effort to open markets and to promote 

free trade. These negotiations are an opportunity to strengthen an 

already strong economic alliance and serve as an influential model 

to promote free trade and open markets around the world. However, we should also recognize that these negotiations will not be 

easy. They will require enormous creativity and flexibility on both 

sides of the Atlantic. 

Any agreement must be ambitious and comprehensive with all 

issues on the table. A critical area for me is agriculture and SPS. 

This area has been exceedingly, longstanding difficult and frustrating, which must be resolved. In particular, I would like to see 

sufficiently enforceable obligations that go beyond the WTO SPS 

chapter. I know many of my colleagues share this concern. 

This hearing provides an opportunity to hear from the private 

sector about the potential benefits and challenges of these negotiations, and particularly, I hope that we will learn more from our 

witnesses about the following issues. One, addressing traditional 

barriers to trade, including the elimination of tariffs and liberalizing tariff rate quotas. 

Two, resolving services and investment barriers, and establishing 

strong rules in these areas that can be jointly promoted in our engagement with other countries. 

Three, creating specific commitments and an ongoing agenda to 

identify and eliminate unnecessary regulatory barriers, including 

sanitary and phytosanitary barriers to U.S. ag exports. The EU 

regulatory process is often non-transparent and prevents U.S. 

stakeholders from participating, and is unpredictable. An agreement should address the EU’s practices on a comprehensive, horizontal basis. 

Four, exploring opportunities for regulatory cooperation and coherence by eliminating redundancy and inefficiency without weakening our respective high standards. 

And five, finally, five, developing and strengthening cooperation 

regarding our shared concerns with trade and investment policies 

in third countries, such as anti-competitive behavior from subsidized state-owned enterprises and policies that undermine intellectual property rights. 

Today’s hearing also highlights the need to develop and pass bipartisan trade promotion authority to provide a clear framework 

for Congressional consideration and implementation of trade agreements, as well as to set out negotiating objectives for this negotiation. I welcome the Administration’s interest in TPA, but call for 

further and intensified engagement from USTR and the White 

House. 

It is now my pleasure to yield to Ranking Member Rangel for the 

purpose of an opening statement. 

[The prepared statement of Chairman Nunes follows:] 


joloto on DSKB35BYQ1 with HEARING
5 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 396 here 89474.001
6 

f 

Mr. RANGEL. Thank you, Mr. Chairman. 

Let me say, first off, I want to thank you and your staff for the 

very cooperative way in which you pulled together this most important hearing, and I want to thank you for having it. The timing is 

just right. We are in the midst of a 90-day layover period following 

the administration’s notification that it intends to enter into these 

talks. 

This time gives us a chance to think about the opportunities that 

this kind of deal could provide. Any reduction in foreign trade barriers has the potential to strengthen our economy, and in that 

sense, this agreement is no different. Today one-third of all tariffs 

on U.S. exports through the world are paid to the EU. A successful 

TTIP would eliminate those tariffs, but the bigger issue is nontariff 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 397 here 89474.002
7 

barriers. An agreement with the European Union gives us a chance 

to address issues, such as regulatory nontariff barriers. There are 

certainly cases where these nontariff barriers arise because of a desire to protect regulatory burdens can be shared perhaps through 

exchanging inspection results or other information concerning public health risks, but a successful TTIP negotiation will do more 

than simply improve our bilateral relationship. 

An agreement between these two global leaders together accounting for nearly half of the world’s GDP and 30 percent of world 

trade gives us the chance to establish new rules and a new framework for global trade. These rules should address critical issues 

that are not adequately addressed under existing arrangements. 

Some of these issues include, first, ensuring that exchange rates 

are not manipulated to gain unfair advantage in trade. Europeans 

are not current manipulators, and neither are we, but we can work 

together to develop a standard to capture what is or isn’t permissible in this area. 

Two, ensuring that state-owned enterprises are not granted unfair advantages over private enterprises. We and the Europeans 

share the view that state capitalism puts our companies at a competitive disadvantage. 

There is no guarantee that we will succeed in reaching a deal 

that works for both sides, as it must. The European negotiators 

will have to consult closely with the European parliament and also 

the 27 member states, and our negotiators will have to consult 

closely with the Congress and regulatory agency, and especially 

this subcommittee. 

At the same time, we should maintain our sense of the bigger 

picture. Our relationship with Europe is unlike any other. We 

share common objectives, common values, and this agreement has 

the potential to raise the bar for the next generation of trade agreements. We should capitalize on this opportunity. 

And I look forward and thank all of the witnesses for their presence and tolerance with our agenda, and especially to Ambassador 

Eizenstat for his long commitment to public service. Thank you, 

Mr. Chairman. 

[The prepared statement of Mr. Rangel follows:] 


joloto on DSKB35BYQ1 with HEARING
8 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 398 here 89474.003
9 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 399 here 89474.004
10 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 400 here 89474.005
11 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 401 here 89474.006
12 

f 

Chairman NUNES. Thank you, Mr. Rangel. 

And I want to thank Mr. Rangel and his staff, because we have 

set upon this Congress to make this committee as bipartisan as 

possible, and this is, I think, an extraordinary achievement, because all four witnesses were agreed upon by both Mr. Rangel and 

his team and our team on our side. 

Thank you, Mr. Rangel. 

Mr. RANGEL. Thank you, Mr. Chairman. 

Chairman NUNES. Our first witness will be Ambassador 

Eizenstat, former Ambassador to the EU, who also served in a 

number of other important roles, including deputy treasury secretary, undersecretary of state for economic, business and agricultural affairs, and Undersecretary of Commerce for International 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 402 here 89474.007
13 

Trade. He now heads the international practice at the law firm of 

Covington & Burling, and is U.S. co-chair of the Transatlantic 

Business Council. 

After him, we will hear from Inga Carus, CEO of Carus Corporation, an SME chemical manufacturer based in Illinois. 

Our third witness will be Jim Grueff, who is currently Principal 

at Decision Leaders and formerly served as the lead U.S. negotiator 

for the WTO sanitary and phytosanitary agreement, among a number of other senior positions in the foreign agricultural service. 

And last, we will hear from Greg Slater, Director of Global Trade 

and Competition at Intel, who is also testifying on behalf of the 

Business Coalition for Transatlantic Trade and the Coalition of 

Services Industries. 

We welcome all of you, and we look forward to your testimony. 

Before recognizing our first witness, let me note that our time this 

afternoon is limited, so witnesses should keep their testimony to 5 

minutes and members should keep their questioning to 5 minutes. 

Ambassador Eizenstat, your written statement, like all of the 

witnesses, will be made part of the record. And you are now recognized for 5 minutes. 

STATEMENT OF STUART E. EIZENSTAT, PARTNER, COVINGTON 

& BURLING LLP, ON BEHALF OF THE TRANSATLANTIC BUSINESS COALITION 

Mr. EIZENSTAT. Chairman Nunes, my long-time dear friend, 

Ranking Member Rangel and distinguished members of the Trade 

Subcommittee. The TTIP provides the opportunity to garner more 

bipartisan support than almost any other economic agreement, and 

that is because the EU has very high labor standards and environmental protections, making some traditional opponents of free 

trade agreements less likely to oppose TTIP on these grounds. 

TTIP would be the most comprehensive trade agreement the 

United States has ever entered into in history in terms of the dimensions and areas it covers. The significant economic benefits of 

the agreement are enormous. TTIP would provide a deficit-free way 

of creating jobs and growth. At a time when both sides of the Atlantic are suffering from subpar economic and job growth and high 

levels of unemployment, a successful TTIP can add anywhere between a half to one full percent of gains in GDP on both sides of 

the Atlantic. 

Together, the EU and U.S. account for almost half of the global 

output of goods and services and almost a third of global trade, but 

even more so, transatlantic investment dwarfs those huge trade 

numbers and is the backbone of our mutual economies. There is 

more than three and a half trillion dollars in two-way foreign direct 

investment between the EU and the 27 EU countries and the U.S. 

American companies invest more in tiny Ireland than in China. 

Another unique dimension to transatlantic trade is the high degree of integration across the pond. Intra-firm trade between U.S. 

and EU parent companies and their subsidiaries account for almost 

40 percent of the trade between us. 

Individual U.S. States will also benefit from a successful TTIP. 

For example, both California and New York rank first and second, 

respectively, as the top two States with jobs supported directly 


joloto on DSKB35BYQ1 with HEARING
14 

through European investment, and second and third after Texas by 

total goods exports to Europe by value. 

There is also a geopolitical importance to this agreement. It 

sends an important signal that we remain dedicated to Europe. European nations share our core values of democracy, free speech, respect for human rights and the rule of law, and they are our key 

allies as we face difficult global challenges. 

There are essentially two competing models of governance in this 

world: One is our free market democratic model, and the other is 

the autocratic state-controlled, state-dominated model. A successful 

TTIP can demonstrate that our model of governance can produce 

tangible gains for our people on both sides of the Atlantic and, 

more broadly, is the best model to meet the challenges of the 21st 

century. 

It is true that there are daunting challenges because of the comprehensive nature of the negotiations, but these are manageable. 

For example, we have agreed already that the EU and U.S. will 

make the foundation of TTIP the most comprehensive free trade 

agreements that each has entered, and fortunately, on both sides, 

that is with Korea. The EU-Korea and U.S.-Korea agreements, 

therefore, are a way of harmonizing as a forced order of business 

a workable framework agreement. This can be done in fairly short 

order, giving each other, in effect, what each of us gave to Korea. 

Eliminating tariffs alone would boost U.S. exports by 8 percent 

and EU exports by 7 percent. 

I would like to focus the rest of my testimony on the top priority 

of the Transatlantic Business Council, and that is on regulations. 

And this is really critical. I want to take this from a micro to a 

macro perspective. If, Mr. Chairman, ranking member and Members of the Subcommittee, we can agree on common standards, 

these will become global standards for our products around the 

world rather than China’s. This will give us an enormous competitive advantage. The biggest potential benefit of TTIP is, therefore, 

in the area of regulation. 

There are indeed many regulatory differences, and these have 

long acted as a break on transatlantic trade and growth. We do 

have different regulatory philosophies, and I certainly have the 

scars in negotiations to show that, but we have come to a point in 

the 21st century when we should have confidence that each other’s 

regulatory standards are adequate to protect our publics and our 

companies. Our goals should be regulatory convergence and coherence to avoid impediments to trade. 

In new and emerging technologies like nanotechnology or internet technology, we should seek identical standards and make those 

the world’s standards. We should strengthen the EU–U.S. high 

level regulatory cooperation forum to get our regulators together, 

who often only think domestically and not internationally to develop common approaches. And we should adopt the concept of tested once, tested in both markets even if each other’s standards are 

somewhat different. 

I would like to close by focusing on a few areas of prime importance to the TBC companies. One is services. The volume of EU– 

U.S. bilateral trade in services totals almost $350 billion, the highest in the world. It is essential that both governments ensure the 


joloto on DSKB35BYQ1 with HEARING
15 

importance of trade and investment in services, including an agreement which would allow enforceable obligations for the free flow of 

data across borders while taking into account protections of privacy. 

You mentioned, Mr. Chairman, and this is really important, 

state-owned enterprises. State-owned enterprises are eating our 

lunch on both sides of the Atlantic, and it is not acceptable. We 

need to have enforceable disciplines against countries like China 

that provide unfair subsidies and unfair advantages against our 

private sector companies, and TTIP is the place where we can develop disciplines to make sure that those companies, if they are 

state-controlled, don’t get the kind of access that they otherwise 

would have. 

It is also essential that financial services be included in the 

agreement. TTIP offers a terrific opportunity to coordinate the extensive but often disparate array of financial regulations. And, 

again, if we can agree on these, these can become global standards 

and help us develop financial market regulations in third countries 

that will be important. 

Two last areas. Intellectual property. There is an unprecedented 

theft of intellectual property from cyber-attacks—they are in effect 

state-sponsored IP theft—from forced technology transfers, and for 

the lack of protection of our intellectual property in emerging countries. This is our seed corn. This is our advantage in the world. We 

must have the highest levels of IP protection in this agreement and 

then propound those to the world, aligning U.S. and EU positions 

in multilateral dialogues and encouraging robust third country IP 

protections. 

And last is in life sciences. This is, again, an enormous area 

where European and American global companies still are highly 

competitive. We are leaders here, but if we are going to stay as 

leaders, TTIP must present an once-in-a-lifetime opportunity to address longstanding issues in intellectual property protection and 

regulatory and market access that they can improve efficiency, patient outcomes and overall business environment. 

TTIP should ensure responsible data sharing that protects patient privacy, maintains the integrity of the regulatory review process, and preserves incentives for biomedical research. 

In conclusion, I believe that we are embarking on an unprecedented bipartisan effort to demonstrate that free markets and free 

peoples can deliver, and I think we are going to succeed. Thank 

you. 

Chairman NUNES. Thank you, Ambassador. 

[The prepared statement of Mr. Eizenstat follows:] 


joloto on DSKB35BYQ1 with HEARING
16 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 403 here 89474.008
17 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 404 here 89474.009
18 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 405 here 89474.010
19 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 406 here 89474.011
20 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 407 here 89474.012
21 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 408 here 89474.013
22 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 409 here 89474.014
23 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 410 here 89474.015
24 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 411 here 89474.016
25 

f 

Chairman NUNES. Ms. Carus, you are recognized for 5 minutes. 

And if we can keep it as close to 5 minutes as possible. I don’t 

want to be a time clock monitor here, but I know that we are going 

to have votes in probably another hour, hour and a half, so we 

want to make sure that we get all the testimony and allow all the 

members time to ask questions. 

Ms. Carus, you are recognized for 5 minutes. 

STATEMENT OF INGA CARUS, PRESIDENT & CEO, CARUS 

CORPORATION 

Ms. CARUS. Okay. Thank you. Chairman Nunes and distinguished members the subcommittee, my name is Inga Carus. I am 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 412 here 89474.017
26 

president and CEO of Carus Corporation. Thank you for this opportunity to speak today. 

Carus Corporation of Peru, Illinois, is a family-owned company 

that was founded by my grandfather 98 years ago. Carus is an environmental products and services company. We manufacture products which are used by our customers both in the public utility sector as well as in private industry for the purification of water, air 

and ground water. We currently have about 400 employees. 

In recent years, Carus has expanded from a single location in LaSalle, Illinois, to become a global corporation with locations in the 

U.S., Europe and Asia. Carus plans to expand further as we look 

for new opportunities to develop new and unique products for environmental markets. 

In both the U.S. and EU, small and medium-sized SME manufacturers are key drivers of economic growth. I believe that advancing 

open trade policies with the EU could create new and dynamic 

commercial growth and export expansion opportunities for U.S. 

small, medium and large enterprises alike. While there are difficult 

hurdles to a successful TTIP negotiation, the potential benefits in 

terms of growth, productivity and job creation are huge. 

Current tariff barriers on transatlantic trade in chemicals are 

relatively low, averaging around 3 percent. However, due to the 

high volume of trade, the benefits of removing the remaining tariff 

barriers would be significant. The American Chemistry Council estimates that eliminating remaining duties on transatlantic trade 

just in chemicals could result in savings of around $1.5 billion a 

year. These savings would immediately reduce the costs of production for business, and the benefits would be reflected throughout 

the economy. 

As an example, Carus Corporation would save 5 and a half percent of the duties on our products of material that we ship from 

Illinois to Carus Europe. This would result in savings to my company of $5 million over 10 years, which we would use to create 

good jobs and grow exports. 

The potential cost savings for governments and industry alike 

from enhanced regulatory cooperation are even greater than this. 

The goal in pursuing closer regulatory cooperation between the 

U.S. and EU should be to explore opportunities for creating efficiencies between regulatory systems while maintaining high levels 

of protection for human health and the environment. 

An example of additional costs generated by regulatory barriers 

for Carus is the difference in standards for chemicals used for 

water treatment in the U.S. and the EU Some EU member states 

also request a separate registration for chemicals in water, further 

encumbering trade. 

While the U.S. and EU regulate chemicals in different ways, 

Carus Corporation sees the TTIP as an important opportunity to 

promote efficient and effective regulatory approaches and explore 

opportunities for cost reductions and burden sharing. 

Specific actions to enhance transatlantic regulatory cooperation 

include efforts to promote scientific cooperation. The goal should be 

to minimize the potential for imposing additional regulatory barriers when revising or developing new regulations and to develop 

a common scientific basis for regulations. In our view, the chemical 


joloto on DSKB35BYQ1 with HEARING
27 

industry is well placed to be a priority sector for enhanced regulatory cooperation under TTIP. 

TTIP should also focus on ensuring greater transparency in 

transatlantic cooperative activity between regulators. This would 

help enhance stakeholder confidence and support for regulatory cooperation. An example which has cost Carus a large amount of 

time and resources is obtaining approval for a drinking water 

chemical in the EU, a material which has been in common use and 

has been approved for drinking water treatment for decades in the 

U.S. 

The EU–U.S. drinking water standards are different. And although a product has been long approved by the EPA in the U.S., 

the approval process in the EU does not recognize this and can 

take years. We applied for EU approval for sodium permanganate 

in 2005, and it was in use in the United States for decades. And 

although we received approval 3 years later in 2008, for those 3 

years, we could not sell the product in Europe. And we are still 

waiting today, 8 years later, for some EU member companies’ approval who have not approved it yet. 

Carus Corporation strongly supports the launch and timely completion of negotiations on a transatlantic trade and investment 

partnership. For the chemical industry and for thousands of smalland medium-sized manufacturers in the U.S., like Carus, it has the 

potential to provide a significant boost to growth and job creation, 

which in turn would promote innovation and strengthen the international competitiveness of U.S. exporters. 

Thank you, again, for inviting me here today. I look forward to 

your questions. 

Chairman NUNES. Thank you, Ms. Carus. 

[The prepared statement of Ms. Carus follows:] 


joloto on DSKB35BYQ1 with HEARING
28 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 413 here 89474.018
29 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 414 here 89474.019
30 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 415 here 89474.020
31 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 416 here 89474.021
32 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 417 here 89474.022
33 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 418 here 89474.023
34 

f 

Chairman NUNES. Mr. Grueff, you are recognized for 5 minutes. 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 419 here 89474.024 Insert offset folio 420 here 89474.025
35 

STATEMENT OF JAMES GRUEFF, PRINCIPAL, DECISION 

LEADERS 

Mr. GRUEFF. Thank you, Mr. Chairman and Congressman Rangel, for the invitation to be here with you today. 

TTIP presents unique and extraordinary opportunities and challenges for U.S. agriculture and for those in the U.S. Government 

who will oversee or conduct the TTIP agriculture negotiations. 

There is a long and difficult history of agricultural trade policy conflicts between the U.S. and the EU, and that will be an important 

feature of this negotiation. 

The two sides also have shown very different approaches to negotiating their free trade agreements. The U.S. has pursued a strategy of including virtually all agricultural products in its FTAs, with 

few notable exceptions. The EU, on the other hand, has been much 

more selective in the inclusion of agricultural products in its bilateral trade agreements. Therefore, for example, just agreeing on the 

range of products for which tariffs will be reduced or eliminated 

will probably be a daunting challenge in itself. 

Looking at the scope of issues that can comprise the agriculture 

negotiations, it is clear that the most challenging area will be 

health-related import restrictions, known as sanitary and 

phytosanitary barriers, or SPS barriers as they are called. 

Much of the difficulty in the U.S.–EU agriculture relationship derives from fundamental differences in their approaches to food and 

food production and in the management of the health risks from 

food and agricultural products. The U.S. asserts that it applies the 

science-based approach to risk management and health-related import restrictions that is completely consistent with the SPS agreement of the World Trade Organization. 

The EU believes that the WTO provides the latitude to take a 

more risk-averse approach to risk management. This is embodied 

in the EU’s so-called precautionary principle, which essentially 

states that health-related preventative measures can be applied, 

including import restrictions, when it is scientifically uncertain but 

possible that a risk exists. 

These policy differences have real trade consequences. U.S. agriculture has indicated that addressing SPS barriers, the health-related barriers that block access to the EU market, is its top priority 

in the TTIP negotiations. These issues include, among others, the 

EU approach to regulating the use of agricultural biotechnology, 

the EU ban on anti-microbial washes for poultry meat, the beef 

hormones case, the EU ban on the beef and pork feed additive 

ractopamine and the possibility of a new trade-blocking in EU policy on cloning. 

Many of these issues are complicated, longstanding and very politically sensitive, but this is what the TTIP can offer: the opportunity to bring unprecedented, high level attention to the SPS 

issues that are the most difficult agricultural disputes in the bilateral relationship. 

In addition to the existing disputes, U.S. agriculture is advocating the concepts of SPS-Plus and SPS enforceability. SPS-Plus 

means essentially that the TTIP would contain SPS rules and disciplines that go beyond what the WTO currently provides, and enforceability means that the TTIP would have its own self-contained 


joloto on DSKB35BYQ1 with HEARING
36 

SPS enforcement mechanisms that would be much quicker than 

the WTO dispute settlement process. 

These are both very worthwhile objectives, but here is a note of 

caution. The EU’s history of SPS decision-making indicates that 

finding agreement on these new concepts will be very difficult. 

Also, based on recent experience in the context of the transpacific 

partnership negotiations, it may be questionable whether the U.S. 

Government’s interagency process will agree to pursue these new 

concepts for the TTIP. 

But I believe there is a larger dilemma here regarding TTIP and 

the SPS issues. It will take time to make progress on the SPS 

issues. However, leaders at the top levels on both sides have said 

or implied that the TTIP is essentially an effort to provide much 

needed economic stimulus as quickly as possible. 

The EU Trade Commissioner stated that he wants these negotiations completed by the end of next year, which would indeed be a 

very quick outcome. This is not a time frame that would be conducive to resolving the SPS issues of concern to U.S. agriculture. 

I would suggest to you that decisions regarding the scope of the 

agriculture negotiations, especially decisions on the inclusion of the 

SPS issues, should be under serious consideration now and certainly should be made before the substantive negotiations begin. 

Thank you for your attention. 

Chairman NUNES. Thank you, Mr. Grueff. 

[The prepared statement of Mr. Grueff follows:] 


joloto on DSKB35BYQ1 with HEARING
37 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 421 here 89474.026
38 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 422 here 89474.027
39 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 423 here 89474.028
40 

f 

Chairman NUNES. Mr. Slater, you are recognized for 5 minutes. 

STATEMENT OF GREG SLATER, DIRECTOR, GLOBAL TRADE 

AND COMPETITION POLICY, INTEL CORPORATION, ON BEHALF OF THE BUSINESS COALITION FOR TRANSATLANTIC 

TRADE AND THE COALITION OF SERVICE INDUSTRIES 

Mr. SLATER. Thank you, Mr. Chairman. And thank you, Congressman Rangel and—— 

Chairman NUNES. Mr. Slater, if you could turn your mike on, 

please. 

Mr. SLATER. I apologize. 

Chairman NUNES. Okay. 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 424 here 89474.029
41 

Mr. SLATER. Thank you, Mr. Chairman, members of the subcommittee. 

I work for Intel Corporation, but today I am appearing before you 

on behalf of the Coalition of Services Industries, or CSI, and the 

Business Coalition for Transatlantic Trade, or BCTT. 

CSI is the primary policy advocacy association for U.S.-based 

global services, and BCTT was established last year to support the 

TTIP negotiations. Its steering committee is co-chaired by multisectoral industry organizations and companies like Intel. 

Both CSI and BCTT support the negotiations of an ambitious, 

comprehensive and high standard agreement between the U.S. and 

EU. I would like to make some suggestions today on how to achieve 

that objective. 

First, a comprehensive agreement must take into account evolving business models as it seeks to fully liberalize trade in goods 

and services. U.S. manufacturing companies are increasingly using 

services both to manufacture and in their product distributions like 

never before, because of increased global competition, wiser use of 

global supply chains, and new opportunities provided by the information economy. This accelerated integration of goods and services 

has blurred the distinction between manufacturing and service 

companies. Trade policy needs to catch up to this trend, and negotiators should not look at goods and services as separate silos. 

Also, market access commitments should apply to the entire supply chain by taking into account interrelated services, or that is, 

services that are in different categories but complement each other. 

And trade barriers for any one link in the chain can undermine a 

service as a whole. 

Moreover, all basic ways of delivering services should be liberalized and for all types of companies. Manufacturing businesses regularly look at the services they are using and change their approach 

because their innovation capabilities are becoming increasingly collaborative and cross-border, involving multiple sites and parties. 

So, for example, stringent mobility rules for highly skilled employees can impair both the development of new goods and the delivery 

of additional services. 

In brief, market access commitments for services should be recorded on a negative list with only a minimum number of nonconforming measures subject to timetables for full liberalization. 

Second, negotiators need to creatively use all available mechanisms to reduce and remove nontariff barriers, or NTBs, in a transatlantic economy. These mechanisms can include regulatory simplification, interoperability, mutual recognition, convergence and 

even harmonization where appropriate. TTIP also needs to establish a framework for ongoing regulatory cooperation to reduce and 

remove future NTBs. 

In addition, TTIP needs to establish global principles, as Ambassador Eizenstat mentioned, that the U.S. and the EU should promote to minimize NTBs in emerging markets where they are used 

more frequently to build up local industries and national champions. For example, new localization barriers to trade in the BRIC 

countries can force U.S. and EU companies to either move businesses’ operations overseas or to forego important market access 

opportunities. 


joloto on DSKB35BYQ1 with HEARING
42 

Similarly, TTIP should address technology mandates that require 

the use of domestic technologies, which are on the rise and can significantly undermine the competitiveness of U.S. IT companies. 

Third, we note that although removing NTBs will benefit many 

economic sectors, like finance and insurance, there is a major multiplier effect when information and communication technology, or 

ICT, goods and ICT-enabled services are liberalized because they 

enhance efficiency and innovation capabilities across sectors. The 

U.S. and EU should therefore maximize opportunities for suppliers 

to provide services over the Internet on a cross-border and technology-neutral basis. 

And TTIP should prohibit specific requirements to locate servers 

or data in country as a condition for allowing digital services. As 

with the TBC, we strongly support the administration’s objectives 

to include provisions that facilitate cross-border data flows. The 

transfer of information is increasingly important to all industry 

sectors. There must be a clear obligation in the agreement that enables companies and their customers to electronically transfer information internally or across borders, store or access publicly 

available information and access their own information, wherever 

located. 

Restricting international data flows as a means of protecting access to data or ensuring security is both inefficient and ineffective. 

This will only slow down the expansion of trade by so many Internet-dependent companies at a time when innovation in digital services is benefiting such a variety of industries. 

The U.S. and the EU should use TTIP to bridge their differences 

in approaches to privacy and cyber security without undermining 

data flows. 

Fourth, and finally, along with promoting privacy and cyber security principles to ensure interoperability in a digital infrastructure, the agreement should enhance global protection of trade secrets, again, as mentioned by Ambassador Eizenstat. There is a 

strong correlation between cyber attacks and cyber theft. Although 

trade secrets are a critical form of IP, they are subject to some of 

the weakest IP protections. 

We appreciate the opportunity to provide input to the trade subcommittee on such a critical free trade agreement. Thank you. 

Chairman NUNES. Thank you, Mr. Slater. 

[The prepared statement of Mr. Slater follows:] 


joloto on DSKB35BYQ1 with HEARING
43 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 425 here 89474.030
44 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 426 here 89474.031
45 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 427 here 89474.032
46 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 428 here 89474.033
47 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 429 here 89474.034
48 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 430 here 89474.035
49 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 431 here 89474.036
50 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 432 here 89474.037
51 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 433 here 89474.038
52 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 434 here 89474.039
53 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 435 here 89474.040
54 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 436 here 89474.041
55 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 437 here 89474.042
56 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 438 here 89474.043
57 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 439 here 89474.044
58 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 440 here 89474.045
59 

f 

Chairman NUNES. My first question is for Mr. Grueff. You describe a little bit of the EU’s regulatory system, and I was hoping 

that you could maybe go into some of the top barriers that you see 

to agricultural products. And I know you had some ideas and concepts that you mentioned on SPS and perhaps a way that we can 

move forward. Also I would kind of like your opinion on whether 

or not the EU is actually serious about removing these barriers and 

serious about agriculture. 

Mr. GRUEFF. Well, as you know, Mr. Chairman, this is a very 

challenging topic. I believe that they are—first of all, from the big 

picture perspective, that the European Union is very serious about 

the TTIP. 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 441 here 89474.046
60 

I think that any negotiations in the SPS area are going to be 

very difficult for them. These are very politically sensitive issues 

for them, as I think you know. There are cultural differences that 

have very much had an impact on the policy process. This very 

much is demonstrated in the issues of agricultural biotechnology, 

in which the EU consumers apparently feel it is important to have 

the right to know how food was produced. American consumers, I 

believe, are more trusting in the U.S. regulatory agencies and don’t 

have those kinds of concerns. 

There are a wide range of SPS issues, many of them that we 

could talk about. One that I would find, I mentioned it in the written testimony, is the issue of the, what are called antimicrobial 

washes, or pathogen-reduction treatments, because the science is 

basically the same on both sides. In other words, in the EU, the 

scientific advisors for the EU have said basically these are safe 

substances, and the political process did not allow the system to 

work with the information and for there to be approvals, and so we 

have a trade dispute right now that is lingering at the WTO on 

that particular issue. 

The issue of ractopamine is a very important issue, not just with 

the EU. This is the feed for pork and beef production widely used 

in the U.S. It is a very important issue, because there are also bans 

in Russia and China and other countries. 

Again, the U.S. perspective, and I would agree is that the science 

is clear on this. There is now an international standard at the 

Codex Alimentarius. The EU is not accepting the international 

standard. This has very broad implications that the EU is not accepting the international standard here. 

So my point in the oral testimony about this is going to take time 

is that it isn’t just a matter of negotiating tariffs, as difficult as 

that will be. There is a lot more to these issues. It goes to their 

view of risk management, their view of their right to be more riskaverse than perhaps we are and many other countries. 

So it is going to take a very focused and in-depth approach. And 

it is going to take also, I might add, a real team effort on the part 

of the U.S. regulatory agencies. The U.S. side is very much going 

to need the expertise of the Food and Drug Administration and 

other regulatory agencies to take on these issues. 

Chairman NUNES. Thank you, Mr. Grueff. 

And as you know, our European friends, it is sometimes tough 

to decipher between, you know, what is a real issue and what is 

just a nontariff barrier to trade. And as our European friends and 

the ones who have come to visit me, agriculture is also a sensitive 

topic for us, as is food safety. So I appreciate your comments. 

Ambassador, I actually—would you like to comment on the agricultural issue? 

Mr. EIZENSTAT. Yes, if I may. 

Chairman NUNES. Sure. 

Mr. EIZENSTAT. When I was ambassador to the EU, we, after 

some difficulty, got the first genetically modified product approved, 

Roundup Ready soybeans and then later tomatoes. And interestingly, in the last, I would say, 6 months, there has been a fairly 

significant increase in European Union approval of GMO products, 


joloto on DSKB35BYQ1 with HEARING
61 

so that does indicate at least in this area that we are making some 

progress. 

Chairman NUNES. Well, as someone who used to hoe weeds, 

Roundup Ready crops were a big benefit for those of us who had 

to actually work in the fields. 

I had an additional question for you, Ambassador, as it relates 

to—you mentioned this in your testimony about financial services. 

And I know the President’s nominee, Mr. Froman, has expressed 

that everything should be on the table, but we have read some reports, heard rumors about some in the administration who want to 

exclude financial services. Do you think this would be appropriate? 

Mr. EIZENSTAT. No. I think it would be disastrous, and the 

‘‘some’’ may be in one of my former departments. I think it is very 

important that financial services be included, because financial 

services are really the backbone of all the international trade we 

do. We have more than a dozen financial regulatory agencies, and 

I think it is important that Treasury, through the Financial Stability Oversight Council, coordinate their regulations so that we 

don’t have disparate regulations coming out of each. We avoid 

extraterritoriality, and we get those agencies to think globally. 

There is also a market access issue, Mr. Chairman, and I know 

Mr. Neal is also interested in this issue as well. For example, our 

banks simply cannot get full access to many emerging markets. We 

can’t get consumer banking in China, for example. So it would be 

very useful for the EU and the U.S. together to collaborate in third 

markets. 

And last, TTIP offers a really critically needed forum to establish 

a framework to coordinate the extensive but often disparate array 

of regulatory efforts on both sides of the Atlantic. It provides an 

enormous opportunity to create a process for discussion in an early 

stage, to help resolve or at least mitigate regulatory differences. 

The goal should be to promote greater financial compatibility and 

where possible, mutual recognition of equivalence. 

And the positive impact would also be that if we can agree between the U.S. and EU, then we can also promote those same high 

quality regulatory standards in global financial markets, particularly in faster growing developing markets. So I think it is tremendously important. This is not at the expense of what is happening 

at the G20. It would supplement it. It is a terrific forum. It would 

be an enormous missed opportunity if financial services aren’t included. 

Chairman NUNES. Well, thank you, Ambassador. 

I would now like to recognize Ranking Member Rangel for his 

questions. 

Mr. RANGEL. Thank you. 

This sounds like a revolutionary advancement that we can make 

to improve the trading commerce with the EU and, therefore, 

around the globe. I guess it is accepted that an educated constituency, one that is able to have a job, actually contributes to commerce, being the consumer, and it could even give us a brighter 

economic picture, the same way poverty takes away from our opportunity to enjoy a higher quality of life for some. 


joloto on DSKB35BYQ1 with HEARING
62 

In these agreements, I notice that the question of visas and skills 

or lack of skills or job qualifications are given a consideration rather than just goods and services. 

Ambassador Eizenstat, you have served your government in so 

many different capacities, but it just seems to me—is there anything in the trade bill or could possibly be that deals with the question of poverty, healthcare, education or to be able to say that after 

this revolutionary trade bill passes, that countries that are in poverty can depend on the increase in advantages that we make, that 

somehow that they were on the agenda as we conclude these type 

of negotiations? 

Any member could answer, but I know what Ambassador 

Eizenstat—— 

Mr. EIZENSTAT. Well, I—Mr. Member, I did an op-ed Article 2 

weeks ago in the Washington Post on the need for a public-private 

apprenticeship program to provide skilled workers, because I believe with lower energy prices, we are going to get more and more 

companies coming back to the United States who have gone over, 

and other companies like Siemens who want to invest more here 

and don’t have the skilled workers. 

This can be done very inexpensively. It is the German model. It 

is very much putting an employee, potential employee, who is at 

the community college, in a plant to learn a skill so he or she can 

actually get that job afterward. It is being done in States like 

South Carolina, where they are financing such a program. 

This is not in TTIP, but what there is a workforce provision to 

promote the skilled labor mobility between integrated companies. 

And this would be tremendously important to help our workforces 

have the free flow of commerce to promote more labor force mobility. So there is a large—— 

Mr. RANGEL. But this is—— 

Mr. EIZENSTAT [continuing]. Workforce—— 

Mr. RANGEL. But this was my point, Ambassador. I am saying 

because you could provide a wedge in trade to get individuals with 

talents and skills to come in, what is in there to get people without 

talents, without skills and not the beneficiary of these agreements? 

You know, when world history is recorded, I think is going to be 

one of the biggest things that they have said that civilization has 

done in coming together, pulling together our resources and trying 

to level the quality of life for everyone, but somehow there are people all over the world, and indeed in the United States, that it 

would appear from the record that there was no consideration at 

all as to whether or not technology even allowed more of them to 

become unemployed and go into poverty. 

And if you can stretch trade into including such things as individual skills, why can’t you stretch it to include lack of skills and 

lack of resources so that the record would be clear that this isn’t 

just for Europe and America, it is for the quality of life for the 

world? I think this is the way we have got to sell this project to 

the world: It is for everybody. 

Mr. EIZENSTAT. Well, again, this is still a trade negotiation, 

and we would have to address skills training separately. But what 

we should address, and is to be addressed and it is part of the 


joloto on DSKB35BYQ1 with HEARING
63 

mandate, is to promote labor market mobility, provide an ease of 

people getting jobs across the Atlantic—— 

Mr. RANGEL. How do you—how do you—— 

Mr. EIZENSTAT [continuing]. Through joint research 

projects—— 

Mr. RANGEL. Ambassador, you say this is trade, and I never 

would have raised this until I saw that skills are included in this 

now. 

Mr. EIZENSTAT. They are. That is correct. 

Mr. RANGEL. Well, poverty is included in this as well; education 

is included. And so when you say—when I was fighting international drug trafficking, that is all I heard, that this is a trade 

bill, and we have to deal with trade. So I have given up on trying 

to stretch what trade is, but I see that, and I don’t know whether 

anyone disagrees with me, that you find yourselves very comfortable in talking about who should be allowed to come into our 

country based on the skills that they have. Is that correct? 

Mr. EIZENSTAT. That is correct. 

Mr. RANGEL. Well, if that is correct, it is a stretch, don’t you 

think it is a stretch to include that in trade, our immigration programs? 

Mr. EIZENSTAT. Well, again, there is a workforce provision that 

will be negotiated, and perhaps that will provide the latitude 

for—— 

Mr. RANGEL. But it has nothing to do with trade. I mean, it is 

not in the trade bill. 

Mr. EIZENSTAT. It does have to do with trade. 

Mr. RANGEL. Will it be in the bill? 

Mr. EIZENSTAT. It is in the bill, yes. 

Mr. RANGEL. Okay. 

Mr. EIZENSTAT. Workforce mobility is specifically mandated between the EU and the U.S. as a negotiating topic. There is an 

agreement that this should be one of the areas that should be covered. 

Mr. RANGEL. Is it your professional opinion that the question 

of educating everybody generally to have them to be more of a consumer around the world and especially in the United States is not 

the proper subject for a trade agreement? 

Mr. EIZENSTAT. No. I mean, I think that what we want to promote, and this is also part of it, is to allow, for example, certification from universities, so we accept each other’s university degrees, having scientists and engineers and others be able to work 

on joint collaborative projects across the Atlantic. So this is going 

to be the first trade agreement, I believe and hope, that will actually have a workforce provision in it. 

Mr. RANGEL. Thank you, Ambassador. I didn’t make my point 

as clear as I wanted. Thank you. 

Ms. CARUS. May I speak to that question? 

Chairman NUNES. Sure. 

Ms. CARUS. I just wanted to speak in support of Ambassador 

Eizenstat’s statements about workforce mobility. One of the biggest 

challenges we face as a small- to medium-sized enterprise is talent 

and skilled labor, and this addition to the bill would be enormously 

advantageous to companies like Carus. 


joloto on DSKB35BYQ1 with HEARING
64 

Chairman NUNES. Thank you, Ms. Carus. 

Mr. Rangel, any more questions? 

Mr. RANGEL. No, thank you, Mr. Chairman. 

Chairman NUNES. Ms. Jenkins is recognized for 5 minutes. 

Ms. JENKINS. Thank you, Mr. Chair. 

And I thank you and the ranking member for hosting this very 

important hearing. Thank the panel members for participating. 

And first, I would like to echo the sentiments of Chairman Nunes 

and his concerns with the European Union’s restrictive SPS barriers. 

But having covered that topic sufficiently, I would like to turn toward another issue, because improving regulatory cooperation and 

coherence would be a key benefit of any United States-EU trade 

agreement. And the EU regulatory process is often non-transparent, prevents U.S. stakeholders from participating, and it is unpredictable. And while Kansas livestock producers noticed this primarily when facing restrictions on our U.S. beef and pork, it is true 

that there would be sufficient gains from simply bringing the EU 

into compliance with the type of commitments that were included 

in chorus. And I think it is fair to say that those gains would not 

be exclusive to U.S. producers, but would also benefit producers in 

the EU. 

So really for any of you, how would addressing horizontal regulatory issues help to open up the EU market, and what are the relative merits of addressing these horizontal issues as compared to 

sector-specific harmonization? Sure. 

Mr. EIZENSTAT. One of the things that I have suggested, and 

my testimony actually suggested, for well over a decade is that we 

need to have certain sectoral agreements. Let me give you an example; then I will go to the horizontal. The Auto Industry on both 

sides of the Atlantic wants to enter into a sectoral agreement in 

which they basically accept each other’s standards. It makes no 

sense that BMW produces a product in South Carolina that it then 

can’t export to Europe, and that the BMW they make in Europe 

can’t be exported to the U.S. There are different bumper standards, 

for example. 

This is an area where mutual recognition should exist; that is, 

we recognize that each other’s safety standards in autos may not 

be identical, but they are adequate to protect each other. And that 

is the way the common market works within Europe. It is not that 

France and Germany or France and Sweden have identical regulations, but they accept each other’s regulations as being equivalent. 

Second, your point, which is tremendously important, is horizontal. We can’t get that kind of sectoral agreement in every area, 

so we should adopt certain horizontal standards. For example, have 

an accord that all regulations that have a transatlantic impact of 

more than, say, $500 million require notice to companies on both 

sides of the Atlantic and the opportunity to comment; that the least 

costly regulatory alternative should be taken; that the process 

should be transparent; that it should be science based, which is tremendously important for agriculture, but for pharmaceuticals and 

others. And those kinds of basic principles would be very important. 


joloto on DSKB35BYQ1 with HEARING
65 

Mr. Grueff is certainly correct, and I have suffered for this in 

many negotiations with the U.S. on the precautionary principle, it 

is a huge barrier, but if we could establish those kinds of horizontal 

principles, it would give us a real leg up so that we go beyond, in 

the agricultural area, the SPS area and exceptional. 

We establish the fact that we have to have sound science, least 

costly alternatives, transparency, notice. If we can agree on those, 

then that will at least give us a head start with our own dispute 

resolution process, as you probably agree. That would be a big 

start. Where we can get identical standards, like I hope we can get 

in the auto area, we should do it. 

And Mr. Neal and Mr. Rangel, I mention because of New York, 

we have been negotiating for years on common accounting standards. We use GAAP accounting; they use International Accounting 

Standards. I can assure you that both adequately protect investors. 

The costs of annual reconciliations by a European company doing 

business here and vice versa is, like, $2 billion. That should be simply accepted that they each, although they are different, they each 

adequately protect, they are equivalent, and we do away with reconciliation. 

Ms. JENKINS. Other thoughts? 

Mr. GRUEFF. Yes. I agree with the ambassador. If there could 

be a horizontal approach to regulatory convergence, I think that 

would be a very good development for U.S. agriculture. I guess 

looking at our very difficult, sad history with the European Union 

on agricultural trade issues over decades, I am somewhat skeptical. 

It is certainly worth an effort. 

I think in answer to the chairman’s first question to me, even as 

our negotiators begin to try to deal with the issues that you have 

raised, for example, ractopamine, it is an access issue for beef and 

pork and the original beef hormones issue, I think really this takes 

negotiators immediately into very challenging questions like how 

was—was there a risk assessment done? How was the risk assessment done? Are you following international standards? If you are 

not following international standards, according to the WTO rules, 

there have to be very specific reasons why the member, a WTO 

member is not following international standards. 

I would think that the approach would need to be very specific 

and immediately very challenging in terms of why the European 

Union is implementing these specific SPS measures at the border 

that it is. If this somehow could be countered with a horizontal approach, I think that would be ideal. I guess I am skeptical that it 

could be done. 

Ms. JENKINS. Mr. Slater. 

Mr. SLATER. Thank you. Just to add to what has been said, I 

think you are going to—it is obvious to me that, at some point, the 

parties are going to sign off even though not everything has been 

done. We have achieved simplification in this other area, convergence in this area, maybe even harmonization in this area. 

No approach is going to work across the board, but with a horizontal regulatory hierarchy, or best practices, you can keep working on these issues beyond the signature of the agreement and 

keep making progress. I do think they have to be detailed. In addition to notice and comment and some description of what was done, 


joloto on DSKB35BYQ1 with HEARING
66 

you have to—it would be great if the Europeans would be forced 

to go through and explain what alternatives they considered and 

why they were rejected, and go through all of the feasible alternatives to be able to show them that there is a better way. I know 

this is going to be tough, but that exercise is critical to make 

progress going forward beyond when the agreement’s concluded. 

Thank you. 

Ms. JENKINS. Thank you. 

Mr. EIZENSTAT. Let me say that this is not just an EU problem, it is a U.S. problem. Our regulatory agencies are independent 

oftentimes of the executive branch. They have domestic focus only. 

And I can remember meeting in the now called Eisenhower Executive Office Building with FDA when we were trying to get mutual 

recognition. We encouraged the FDA to at least allow testing in 

European labs to U.S. standards, not on identical standards, so 

they wouldn’t have to test twice. And they said, well, we could accept tests in certain labs in Europe but not in other countries. 

I think we have now reached a stage where we ought to be able, 

at the very least, to test in each other’s markets to each other’s 

standards once, not duplicative testing. And you have a terrific 

role, because you oversee these independent agencies, to get them 

to think in a global fashion. And we have a regulatory forum between the U.S. and the EU to hopefully do that. But Congress can 

play a tremendous role here. 

Ms. JENKINS. Thank you. 

Thank you, Mr. Chairman. I yield back. 

Chairman NUNES. Thank you. 

Mr. Neal is recognized for 5 minutes. 

Mr. NEAL. Thank you, Mr. Chairman. 

Mr. Ambassador, just to let you pursue this a bit. We are used 

to setting the table in some of these areas. What suggestions would 

you make to our negotiators so that we might avert the problem 

of being pulled to the table? And you mentioned financial services 

earlier. And we have heard from agricultural interests, and I am 

sure we are going to hear from other sectional interests across the 

country. But in terms of financial services, how might you approach harmonizing some of the issues that you have already described? 

Mr. EIZENSTAT. First of all, we really do have an exceptional 

nominee for United States Trade Representative. Mike Froman 

knows financial services, he has worked in that industry, he has 

worked globally, as the President’s deputy for international economic advisor. And so I think we have got a good start there. 

Second is just getting financial services, Mr. Neal, in the negotiations. They are not in. 

Third, again, is getting the Treasury Department to take the role 

as the chair of the Financial Stability Oversight Council to coordinate our own regulatory actions—you have got agencies that are 

regulating extraterritorially, or proposing to do it—so when we 

come to the negotiating table with the EU on financial services, we 

have got a coordinated position taken by Treasury through the Financial Stability Oversight Council. 

Next is, again, working on these market access issues. If we work 

together with our financial institutions to try to get access for our 


joloto on DSKB35BYQ1 with HEARING
67 

banks and financial services to third countries that are keeping 

them out by having both the EU and the U.S. work together, that 

would be a huge advantage. 

And then last, to the extent, again, that we can develop common 

regulatory approaches, it can set a standard for the world. I think 

that the U.S. wants to do this. I hope the barrier that one of the 

agencies doesn’t want to include it in TTIP can be overcome. 

Mr. NEAL. Thank you. 

And, Mr. Slater, your description through your testimony about 

emerging and expanding localization barriers to trade, I guess better known as LBTs, they apparently condition market access for 

goods and services on, one, requirements to invest and develop or 

use local R&D, intellectual property, manufacturing, and assembly 

capabilities; two, mandate transfer technology to another party involuntarily; and, three, request to disclose proprietary information 

that would not typically be needed for regulatory purposes. How do 

you explain these barriers and how might they impact Intel and 

your operations in Massachusetts? 

Mr. SLATER. Thank you, Congressman Neal. These are relatively new. Let me rephrase that. Some of the ones where they require local manufacturing content for government procurement 

preferences, those are old school. But what is new is they are going 

upstream to include intellectual property, to include R&D. And 

they are being linked, for example, buying spectrum. That is a Brazilian LBT. And they put companies in a tough situation. Do we 

expand at home—for example, in our case, at our facility in Massachusetts—or do we chose to expand in an emerging market where 

we may forgo a major market access opportunity. 

These are new. The TTIPs should push back strongly against 

them, set the gold standard, and prohibit them entirely, and then 

commit the parties to promoting the prohibition in other FTAs and 

in other forums, because they are a pernicious form of NTBs. Some 

of them violate WTO, some of them fall between the cracks of WTO 

provisions. But they are relatively new and untested at this point. 

They started showing up in India and now other countries are looking at copying them. 

Mr. NEAL. Thank you. 

Thank you, Mr. Chairman. 

Chairman NUNES. Thank you, Mr. Neal. Gentleman yields back. 

Mr. Boustany is recognized for 5 minutes. 

Mr. BOUSTANY. Thank you, Chairman Nunes. 

And, Ambassador Eizenstat, I was really enthusiastic about your 

comments in your written testimony about the geopolitical implications of getting this done, and the kind of leverage we will have 

in dealing with rising economic powers like India, China, Brazil, 

and so forth, to get back to a rules-based trading system. 

One of the most interesting aspects of these negotiations in my 

mind will be the effort to address a number of the 21st century 

issues that have not been traditionally covered in previous trade 

agreements. State-owned enterprises, you have talked about those. 

Competition, customs, trade facilitation, global supply chains, and 

cross-border data flows. 

And I believe it is critically important that Congress develop and 

pass strong bipartisan trade promotion authority to set out the neVerDate Sep 11 2014 10:12 Jun 27, 2016 Jkt 089474 PO 00000 Frm 00071 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\89474.XXX 89474

joloto on DSKB35BYQ1 with HEARING
68 

gotiating objectives for this negotiation. TPA will establish the 

framework for congressional consideration and implementation of 

the agreements, and it empowers the administration to negotiate 

and conclude the agreements. 

So, just for the record, do you think these negotiations can be 

concluded and an agreement implemented without trade promotion 

authority? 

Mr. EIZENSTAT. No. 

Mr. BOUSTANY. Thank you. 

Mr. EIZENSTAT. They can be launched, but they can’t be concluded, because the EU is not going to accept our final deal if they 

know it can be second-guessed when it comes to Congress. So Congress has a huge role here. There hasn’t been fast track or TPA authority for a number of years, either for a Republican or Democratic President. It is absolutely essential. It will be essential for 

the Trans-Pacific Partnership agreement to be concluded. But this 

is your chance to put an imprint on the TPA as well. So I think 

it is tremendously important and it is absolutely impossible to have 

a concluded agreement, in my opinion, either in the TPP in the Pacific or the TTIP without this trade promotion authority. 

Mr. BOUSTANY. With regard to this agreement, could you discuss timing? Should we have trade promotion authority early in 

the process? 

Mr. EIZENSTAT. The earlier the better. 

Mr. BOUSTANY. Okay. 

Mr. EIZENSTAT. And if you are going to have it, you might as 

well get it for TPP, for the services agreement—— 

Mr. BOUSTANY. Services agreement, yes. 

Mr. EIZENSTAT [continuing]. The plurilateral service agreements. So I would put it all together in one, rather than having 

separate votes at separate times. 

Mr. BOUSTANY. Thank you. Also, on a different subject, the 

U.S. and the EU have an existing regulatory dialogue called the Financial Market Regulatory Dialogue, or FMRD. And given the importance of this dialogue to ensuring the regulatory agendas of our 

country and the EU don’t work at cross-purposes in global financial 

markets, doesn’t this trade agreement present an opportunity to reinforce this type of dialogue? 

Mr. EIZENSTAT. Absolutely. It should be seen as enhancing 

that dialogue and giving more structure and more discipline to it. 

Mr. BOUSTANY. And if we are to include in the trade agreement newly expanded requirements of financial regulatory transparency principles for cooperation, impact assessment, and a mechanism for commenting and consulting on financial regulations that 

could lead to greater regulatory coherence, would this not advance 

the dialogue’s hugely important task and benefit both financial 

services trade flows, not to mention manufacturing and agricultural trade flows that depend on efficient financial services? 

Mr. EIZENSTAT. Yes, sir, it would. And, again, I would like if 

I could to just return to this broader theme. To the extent that the 

EU and the U.S. can agree on common approaches, that can become the world standard. And that means that our companies, 

whether in agricultural or manufacturing or financial services, 

have a tremendous leg up when they want to do business in third 


joloto on DSKB35BYQ1 with HEARING
69 

markets because those third markets will be under a lot of duress 

to accept this common EU–U.S. approach. 

If, on the other hand, we fail, you can be sure that China or 

other developing countries will be trying to get their standards approved. And so it is not just improving trade flows between the 

U.S. and EU, as important as that is, it is setting a standard for 

global approaches. 

Mr. BOUSTANY. And that was what I referred to earlier in the 

geopolitical side of this in that as we have seen a stalling of Doha, 

how do we get back to a real rules-based trade system with good 

mechanisms for dispute resolution and so forth? And I see this as 

a strong vehicle to impress U.S. leadership in trade, and I am very 

excited about the prospects. 

Mr. EIZENSTAT. Absolutely. 

Mr. BOUSTANY. Thank you. I yield back. 

Chairman NUNES. Thank you, Mr. Boustany. 

Mr. Blumenauer is recognized for 5 minutes. 

Mr. BLUMENAUER. Thank you. 

Appreciate the opportunity for your easing us into some of these 

issues. There are certainly some, I think, significant opportunities. 

I appreciate notions of common accounting standards or, Mr. 

Eizenstat, your notion of bumpers, you know, might suffice if they 

meet the standards in either the EU or the United States. 

And I do think your point about this perhaps being an easier 

entry point than what we have seen, at least in the 17 years I have 

watched these in Congress—some of them have been a little choppy—this could potentially be easier and perhaps serve as a template to do some other important things. 

But I am interested in your thoughts about what we do to make 

sure that we avoid unnecessary conflicts, areas, for example, dealing with finance. There is some apprehension in terms of how far 

we go in standardization, given the fact that the United States is 

imposing a little more significant regulatory protections to avoid 

some of the problems we have had in the past. And there is some 

pushback with some of our friends in the EU making sure that 

whatever we are doing in this arena is not somehow as a backdoor 

effort to undo hard-fought efforts to prevent the next meltdown in 

the United States, or, for that matter, giving an undue advantage 

to some European institutions that wouldn’t have to meet the same 

standards, although one has to note that some of these European 

institutions availed themselves to Fed facilities during the last 

meltdown. Do you have some thoughts on that? 

Mr. EIZENSTAT. Yes. I feel quite confident in saying that the 

financial services industry does not want to use this as a backdoor 

way of diluting the standards and regulations which are necessary 

for consumer protection. And also I would say that, here again, 

having been ambassador to the EU and spent a lot of time in Europe, I can assure you that European financial regulators are just 

as interested in protecting their investors and their consumers as 

we are. We are not dealing with a Third World country; we are 

dealing with an institution that has very high standards themselves. The question is trying to get as much convergence, of not 

weakening standards. But if we can get that convergence, we can 

save an enormous amount of money. 


joloto on DSKB35BYQ1 with HEARING
70 

Mr. BLUMENAUER. We are already seeing some apprehension 

in the United States. I am sure everybody has the same goal, but 

there is some concern that maybe there is some convergence into 

some areas that look a little riskier on the other side of the pond. 

Mr. EIZENSTAT. That is not a concern I share. 

Mr. BLUMENAUER. I am glad. 

One other area that is of interest to me that is likely to come up 

when we are talking about agriculture. There is, as I understand 

it, a little different philosophy between the EU and the United 

States just in allowing consumers to know what they are buying. 

Products are routinely comprehensively labeled in the EU. In the 

United States, people do not have access to the same labeling. 

Mr. Grueff, this would seem to be a pretty straightforward issue 

of transparency. Do you see this coming up, and thoughts about its 

resolution? 

Mr. GRUEFF. Yes, sir. It is a very important issue. And I hope 

it does come up. Usually where this issue is most discussed and apparently has the most economic consequence is in the area of agricultural biotechnology, the mandatory labeling issue. And as you 

just described it, really at its root there are real cultural differences, societal differences, in terms of the consumer’s right to 

know, the consumer’s desire to know. And in the EU, there is a 

very strong feeling, I would say, among—I was stationed in Germany for 4 years myself—I would say among consumers that they 

want to have this information as to how the product was developed, 

was genetic engineering employed or not. That is important. 

I would say generally, to American consumers that is not important. But we are all working under the rules of the WTO. So when 

it comes to mandatory labeling, I would say that the U.S. approach 

is that this is not a role where the government should be making 

this a trade barrier, that if consumers have an interest in knowing 

this information there will be a commercial response to that, companies will provide that information to them. And it really is not 

appropriate for WTO members to deal with each other in the way 

of making it mandatory. 

Mr. BLUMENAUER. Is there any problem with just allowing— 

this is not an issue of scientific dispute, is it—knowing what it is 

that you are buying? This is not the same in terms of having some 

unusually artificial barrier to keep a product out, just allowing to 

know what it is. 

Mr. GRUEFF. You are right. It is not a food safety issue in that 

sense. I would say—— 

Mr. BLUMENAUER. And it is not a pernicious thing, that somehow a barrier that can’t be overcome or foreclosing a market. 

Mr. GRUEFF. Well, it is a difficult issue and there is a lot to it. 

Part of the U.S. perspective I think is that when you require, when 

the government on either side of the ocean requires labeling that 

a product was genetically produced and there is no food safety 

issue, then why—— 

Mr. BLUMENAUER. Just letting people know what it is. Put 

aside whether it is genetically modified or not, that should not be 

a trade barrier, should it, just allowing people to know what they 

are buying? 


joloto on DSKB35BYQ1 with HEARING
71 

Mr. GRUEFF. I think the issue from the U.S. perspective is, is 

the government requiring that companies label this for consumers. 

And then if you are—— 

Mr. BLUMENAUER. And you think that is an unnecessary trade 

barrier? 

Mr. GRUEFF. Yeah, I mean, I would agree with U.S. perspective 

on this, that if this is an import requirement, this is a requirement 

that would be imposed on U.S. exports, that this product be labeled, then, yes, I—— 

Mr. BLUMENAUER. I think that, Mr. Chairman, just at some 

point I would be interested in exploring this a little bit. Because 

I think this puts us in a very weak position. I think it is 57 or 67 

countries that allow consumers to know what they are buying, and 

that is part of what governments do. And I think if we fall on our 

sword over something like this, I think the public opinion is very 

much in flux over this, you have had a little experience in California, where there were tens of millions of dollars spent in an avalanche of kind of an exciting political campaign. We are not hearing 

the end of it. And I would just offer up that I think it would be 

interesting to explore it a little further. Because I think there are 

some real opportunities with this. 

But this is an example of something that I think is a side issue 

that could, in fact, complicate this unnecessarily. I think we have 

got real issues that we want to contend with, with our European 

friends. This, I think, is a stupid fight, to prevent consumers from 

just knowing what they are getting. Picking a fight with Europe 

over this instead of going along with what many countries—I think 

a majority of people around the world have the right to know what 

they are purchasing. I think that that gets in the way of other objectives in the trade arena, and I would like a chance to explore 

that a little further at some point. 

Mr. EIZENSTAT. If I can just add a perspective. I think it is a 

trade barrier. Certainly consumers should have the right to know 

what they are buying and what the components are. But when 

there is a non-scientific basis is for simply saying because something is genetically modified the implication is that it is dangerous 

and you don’t approve it, that is wrong. That is a trade barrier. 

And I think now increasingly the EU is allowing more GMO products. It is fine to have consumers understand what has happened, 

what is in the component, but when you simply label something 

and then give the impression that that makes it dangerous, that 

can be—— 

Mr. BLUMENAUER. Your position, where people think if they 

know what it is that they won’t buy it or if they know what it is 

that that is an implication that it is not appropriate to buy or it 

might be dangerous, I think is creating a false battle. And I am not 

prepared at this point—I mean, we can talk about what happens 

when you have got Round-Up-resistant weeds, which 49 percent of 

American farmers are finding now, and they are using even more 

pesticides. 

But I think it is important for us to think about what it is worth 

going to the mat over when we are dealing with our friends in the 

EU with something that is probably going to be popping up in various States around the country. I think the first State that decides 


joloto on DSKB35BYQ1 with HEARING
72 

that consumers have the right to know, I think you are going to 

see a lot of businesses fall off the bandwagon in fighting against 

allowing people to know what it is, because I think that creates the 

expectation or feeds the fear that there is something they shouldn’t 

be able to know if you are not labeling it. 

And I don’t want to go into it further now, but I do want to explore it at some point, because I think it is going to create some 

unnecessary problems with this trade agreement, that we have got 

bigger fish to fry, like Intel people that I represent, where there are 

real battles on intellectual property, there are real battles on 

standards that matter and easing this forward. And this—— 

Chairman NUNES. I would like to thank my good friend from 

Oregon. And his time has expired. 

Mr. Schock is recognized for 5 minutes. 

Mr. SCHOCK. Thank you, Mr. Chairman. Thank you for hosting 

this meeting. And thank you to the panel of interesting witnesses. 

First, I would like to start with Ambassador Eizenstat. You mentioned in your testimony the importance of TPA, not only to getting 

the agreement done, but actually in credibility with our negotiations. And so I thought I would just give you the opportunity to expand a little bit on that and talk to us about why TPA is important 

even just during the negotiating process. 

And then our Congress, you heard our chairman at the opening 

of this committee, has expressed support for TPA. We need greater 

commitment from the administration to build support for this effort. And so from a Member of Congress’ point of view, there seems 

to be only upside for the administration to ask for TPA, since it 

seems to be important for them in the negotiating process when it 

comes to credibility. But you have served in administrations, multiple administrations. Are there things we could be doing to help 

build support for TPA and encourage the Administration to be 

more involved? 

Mr. EIZENSTAT. Well, Mr. Froman is going to be going through 

hearings on his appointment in the Senate. I would assume this 

would be some of the questions about TPA. I can’t imagine the administration wouldn’t want to have it. And if there is bipartisan 

support for it and if it can be indicated that there is bipartisan support, that this is not going to be a knockdown, drag-out, because 

the worst thing to happen, this really would throw a kink in the 

negotiations, is you launch in mid-July, which is what their hope 

is, these TTIP negotiations and then you end up having a bruising 

battle over fast track at the outset. So I think they may want to 

get some momentum in the negotiations. 

But to the extent that the Congress can indicate that there is bipartisan support at the outset and that there won’t be such a bruising battle, it gives them really a tailwind rather than a headwind. 

So I suspect that they are going to want some assurance that this 

will, in fact, be a bipartisan program and not one that, you know, 

ends up throwing, again, a curveball in the negotiations before they 

start. But I think what you are saying certainly should be welcome 

to the ears of the administration. 

Mr. SCHOCK. Thank you. I wanted to address the intellectual 

property, not so much relative to the U.S.–EU agreement, but what 

the agreement between the U.S. and the EU’s trade agreement will 


joloto on DSKB35BYQ1 with HEARING
73 

mean for intellectual property right fights that we have for more 

developing countries. Most of the companies that do business in my 

district that are worried about their intellectual property being 

stepped on or stolen are not worried about a European Union country doing it. I am aware of multiple cases where the U.S. and the 

EU have already filed jointly cases before the WTO. And I am just 

wondering, in any of the panelists’ view, whether a U.S.–EU agreement gives any more weight or ability for us to protect our IP in 

both countries or either country. In other words, does this have any 

impact on our fights in China and some of the other emerging markets? 

Mr. EIZENSTAT. In my opinion—and I would like my colleague 

from Intel, I am sure this is a big issue—absolutely. If we can establish a really high level of intellectual property protection here 

and then work shoulder to shoulder against things like, you know, 

domestic innovation policies where they basically require forced 

technology transfers, compulsory licenses, a whole set of nontariff 

barriers in the IP area, this would be, I think, a big step forward 

in establishing the high standard of intellectual property protection 

around the world at a time when it is under enormous stress across 

the board. 

So I think it would be a very big step. We do have strong protections already. But coming in a trade agreement where we do it 

jointly I think would have a very big impact on Third World and 

emerging markets. 

Mr. SCHOCK. Any other panelists? Mr. Slater. 

Mr. SLATER. If I may, Congressman Schock. I agree with what 

Ambassador Eizenstat said. I think that setting global principles 

on IP protection where we have a commonality of interests, not trying to harmonize the systems, but where we are concerned about 

Third World markets, and we are, would be very beneficial. Every 

initiative that I know where we have succeeded in pushing back in 

China on one of their indigenous innovation policies, it was because 

we cooperated with the EU and usually Japan. And formalizing 

that cooperation, making it actually binding and more detailed, 

would be very, very useful. 

The other thing to keep in mind is the trade secret protection in 

the EU varies from member state to member state. The commission 

is looking at an EU-wide directive on trade secrets. TTIP could provide the momentum for them to go further down that road, and 

that would help. It is hard to argue to enhance trade secret protections if you, yourself, don’t have the best standard in place. 

Mr. SCHOCK. Well, I have more questions, but my time has expired. So thank you again for being here. 

Thank you, Mr. Chairman, for having this meeting. 

Chairman NUNES. Thank you, Mr. Schock. 

Mr. Reichert is recognized for 5 minutes. 

Mr. REICHERT. Thank you, Mr. Chairman. 

I apologize for being late and missing some testimony, and I did 

get to catch part of the discussion, and I know that you have 

touched on this issue a little bit. But I just want to go back and 

maybe reemphasize your answers to a couple of questions. 

I am from the State of Washington, and I have just acquired a 

new part of my district of some apple growers and some other agriVerDate Sep 11 2014 10:12 Jun 27, 2016 Jkt 089474 PO 00000 Frm 00077 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\89474.XXX 89474

joloto on DSKB35BYQ1 with HEARING
74 

cultural products. We are very excited about the opportunity of a 

trade agreement between the United States and the European 

Union. It offers critical opportunity for trade for that industry, and 

also for other businesses, of course, in Washington State. We are 

the most trade-dependent State in the Union, as probably all of you 

know. 

It also provides a way to tackle some of the challenges facing 

Washington tree fruit growers, and even our dairy producers as 

they try to access the European market. Each year, on average, 

Washington exports 35 percent of its apple crop, and some of our 

dairy producers export as much as 50 percent of their product, but 

only a small amount of those products go to Europe. I am hearing 

from growers and dairy producers in my State about how nonscience-based regulations and standards and other nontariff barriers are limiting their access to the European market. It is essential, I think all of us recognize, and as I said, I have heard some 

of the testimony, that these barriers be addressed in the negotiations. 

Mr. Grueff, what do you think can be accomplished through 

these trade negotiations in this area? 

Mr. GRUEFF. Well, I guess, bigger picture, in response to your 

question, our history with the EU, as I pointed out in my testimony, especially in the sanitary and phytosanitary area, the 

health-related area, has not been a good one. And, in fact, I would 

say that our way of trying to deal with these issues has been 

through WTO dispute settlement, which is really not a very good 

way to try to do this. 

So this will really be the first time that we are going to have a 

structure, a forum for the U.S. and the EU to really focus on these 

issues. And so I am hopeful. I know that this is going to be very 

difficult, but I am hopeful that the opportunity will be used very 

productively. 

As to your specific point about, for example, your district, for our, 

your district and the U.S. dairy industry, I think this is a very important opportunity for a number of reasons. One is the issue of 

geographical indications, which is generally viewed as an EU offensive issue. This is the issue of producers getting to keep the name 

of the original area where a product was produced, like Parma ham 

and so on. But our U.S. dairy industry says that they feel confident 

that they will have much better access to the EU market if there 

can be some agreement with the EU regarding some of the biggest 

issues regarding geographical indications in dairy, mozzarella and 

feta and so on, that if something could be worked out with the Europeans on this, our dairy industry is very optimistic about their 

opportunities in the EU market. 

So this is an issue that I certainly expect will be part of the negotiations. And, again, it would be a platform, a structure or forum 

that we just haven’t had. So this can provide some real opportunities. 

Mr. REICHERT. I appreciate that. Thank you. 

For Mr. Slater, another issue of importance to the businesses in 

my State that operate globally is the protection of cross-border data 

flow. In both the European Union and the United States, data privacy is protected, but we have different systems for providing that 


joloto on DSKB35BYQ1 with HEARING
75 

protection. Respecting the difference of those privacy approaches, 

how can we ensure a robust protection of cross-border data flows? 

Mr. SLATER. Thank you. I am encouraged by an exercise that 

is going on right now, where there is a mapping exercise between 

the corporate binding rules in the EU and the cross-border privacy 

rules that APEC has put together. And they are mapping out the 

similarities and differences to ensure interoperability as much as 

possible and then find a way to bridge the differences. I have 

talked to USTR about this, and I now want to encourage that approach and to, instead of trying to harmonize or trying to dilute the 

EU privacy regime that is to find a way to maximize interoperability and yet have a right to strong cross-border data flows. They 

are not inconsistent. And the EU, apparently, many of the officials 

in the EU want the freedom to have cross-border data flows because they recognize it is important to their own service industries. 

So it is almost like you have to treat the two issues separately. 

And even though they obviously touch, they are heavily dependent 

on one another to make progress, but I am encouraged by what 

they are looking at right now. 

Mr. REICHERT. I appreciate that. Thank you. 

I yield back, Mr. Chairman. 

Chairman NUNES. Thank you, Mr. Reichert. 

Well, that concludes our hearing. I do want to thank the gentleman from New York for his cooperation on and bipartisan support for agreeing to all the witnesses. I think it makes for a much 

more productive hearing like we had today. And I especially want 

to thank all of the witnesses for their time and their patience dealing with our schedule. I hope we didn’t make you late for any appointments, but we do appreciate your time. 

And with that, the meeting is adjourned. 

[Whereupon, at 4:22 p.m., the subcommittee was adjourned.] 


joloto on DSKB35BYQ1 with HEARING
(76) 

[Submissions for the Record follow:] 

The Honorable Erik Paulsen 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 447 here 89474.052
77 

f 

Handmade Toy Alliance 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 448 here 89474.053 Insert offset folio 449 here 89474.054
78 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 450 here 89474.055
79 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 451 here 89474.056
80 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 452 here 89474.057
81 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 453 here 89474.058
82 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 454 here 89474.059
83 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 455 here 89474.060
84 

f 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 456 here 89474.061
85 

ACLI 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 457 here 89474.062
86 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 458 here 89474.063
87 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 459 here 89474.064
88 

f 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 460 here 89474.065
89 

American Farm Bureau 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 461 here 89474.066
90 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 462 here 89474.067
91 

f 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 463 here 89474.068
92 

GWU 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 464 here 89474.069
93 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 465 here 89474.070
94 

f 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 466 here 89474.071
95 

IPMI 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 467 here 89474.072
96 

f 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 468 here 89474.073 Insert offset folio 469 here 89474.074
97 

NAM 

f 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 470 here 89474.075 Insert offset folio 471 here 89474.076
98 

Public Citizen 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 472 here 89474.077
99 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 473 here 89474.078
100 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 474 here 89474.079
101 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 475 here 89474.080
102 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 476 here 89474.081
103 

f 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 477 here 89474.082
104 

Shellfish Growers Association 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 478 here 89474.083
105 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 479 here 89474.084
106 

f 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 480 here 89474.085
107 

USIFI and IFAI 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 481 here 89474.086
108 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 482 here 89474.087
109 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 483 here 89474.088
110 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 484 here 89474.089
111 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 485 here 89474.090
112 

MATERIAL SUBMITTED FOR THE RECORD 

Questions for the Record 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 442 here 89474.047
113 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 443 here 89474.048
114 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 444 here 89474.049
115 

Æ 


joloto on DSKB35BYQ1 with HEARINGInsert offset folio 445 here 89474.050 Insert offset folio 446 here 89474.051