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PRESIDENT’S 2011 TRADE AGENDA 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

MARCH 9, 2011 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

TOM COBURN, Oklahoma 

JOHN THUNE, South Dakota 

RUSSELL SULLIVAN, Staff Director 

CHRIS CAMPBELL, Republican Staff Director 

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

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

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

Hatch, Hon. Orrin G., a U.S. Senator from Utah ................................................. 3 

ADMINISTRATION WITNESS 

Kirk, Hon. Ronald, U.S. Trade Representative, Executive Office of the President, Washington, DC .......................................................................................... 5 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

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

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

Carper, Hon. Thomas R.: 

Prepared statement .......................................................................................... 47 

Grassley, Hon. Chuck: 

Letter from Senator Grassley et al. to President Obama dated March 

8, 2011 ............................................................................................................ 48 

Hatch, Hon. Orrin G.: 

Opening statement ........................................................................................... 3 

Prepared statement .......................................................................................... 51 

Kirk, Hon. Ronald: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 55 

Responses to questions from committee members ......................................... 59 

COMMUNICATIONS

Advanced Medical Technology Association (AdvaMed) ........................................ 139 

American Forest & Paper Association ................................................................... 148 

Interfaith Working Group on Trade and Investment ........................................... 152 

International Dairy Foods Association (IDFA) ...................................................... 154 

National Oilseed Processors Association (NOPA) ................................................. 159 

Securities Industry and Financial Markets Association (SIFMA) ....................... 166 

Sierra Club ............................................................................................................... 174 

U.S.-China Business Council .................................................................................. 181 

U.S. Wheat Associates and National Association of Wheat Growers .................. 191 

(III) 

(1) 

PRESIDENT’S 2011 TRADE AGENDA 

WEDNESDAY, MARCH 9, 2011 

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

The hearing was convened, pursuant to notice, at 9:37 a.m., in 

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

(chairman of the committee) presiding. 

Present: Senators Kerry, Wyden, Stabenow, Cantwell, Nelson, 

Menendez, Carper, Cardin, Hatch, Grassley, Snowe, Roberts, 

Coburn, and Thune. 

Also present: Democratic Staff: Russ Sullivan, Staff Director; 

Chelsea Thomas, Professional Staff; Rory Murphy, International 

Trade Analyst; Amber Cottle, Chief International Trade Counsel; 

Ayesha Khanna, International Trade Counsel; and Michael Smart, 

International Trade Counsel. Republican Staff: Chris Campbell, 

Staff Director; Everett Eissenstat, Chief International Trade Counsel; and David Johanson, International Trade Counsel. 

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

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The hearing will come to order. 

Ralph Waldo Emerson once said, ‘‘To map out a course of action 

and follow it to an end requires courage.’’ 

As any Montanan knows, you must understand the lay of the 

land before you can map out a course of action. You must see the 

mountains, the valleys, the rivers, and, more than anything else, 

you must have courage to face the challenges that lie ahead. 

The President’s trade agenda sets an ambitious goal—double 

U.S. exports by 2015. But it will take courage from the administration and the Congress to map a course of action, and it will take 

even more courage to follow that course until we reach that goal. 

To do so, we must take two major steps. We must approve our 

pending free trade agreements, otherwise known as FTAs, and we 

must meet the challenges that China presents. 

First, it is time to quickly resolve the outstanding issues on our 

pending FTAs with Colombia, Panama, and Korea, and we must 

approve all three agreements this year. 

Colombia has a strong and growing economy. It is among the 

largest markets in Latin America for exports, and it is a strategic 

partner in our fight against drug trafficking and terrorism. 

I traveled to Colombia 2 weeks ago. I met with President Santos, 

his ministers, Colombia’s top prosecutor, labor leaders, and others. 

2 

I was struck by the progress that Colombia has made in strengthening labor rights, reducing violence, and stepping up prosecutions. 

Colombia has enacted reforms to make it easier for workers to 

form unions and bargain collectively. It has reduced the homicide 

rate of union members by nearly 90 percent. And it is prosecuting 

labor violence cases identified by Colombian labor unions as top 

priorities. 

But more steps are needed, and President Santos has begun to 

take them. I believe that he is going to work with us to take more 

steps. But he needs to know what we want him to do. We must 

map a course, and we must act now. American farmers lost $1 billion in sales to Colombia over the 

last 2 years. And while China has tripled its share of the Colombian market, ours has declined by 20 percent. American jobs are 

at stake. 

Last month, Senator Hatch and I sent a letter asking you to 

come to the hearing today prepared to discuss the specific issues 

that Colombia and Panama need to address, and we asked you to 

come prepared to announce an expeditious timetable for moving 

these agreements through Congress. We look forward to discussing 

both issues with you. 

We must also consider the U.S.-Korea free trade agreement. 

President Obama mapped out a course of action for this agreement 

last June. He and South Korean President Lee pledged to resolve 

U.S. concerns regarding access to Korean beef and auto markets. 

In December, the United States and Korea reached an agreement 

resolving the U.S. concerns on autos. The President promised to 

keep working on beef, but we do not yet have an agreement. 

We know this course of action is challenging, but our goal is 

achievable. We are simply asking Korea to consult with us on a 

roadmap to full market access in the future. 

We urge you to follow that course of action that the President set 

out last June until we reach this goal. And this course of action to 

approve the pending FTAs will succeed only if we ensure that all 

Americans will benefit. We must extend Trade Adjustment Assistance to keep American workers and businesses globally competitive. 

In addition to the pending FTAs, there is a second step in achieving our goal of doubling U.S. exports. We must map a course of action that leads to a stable and dynamic economic relationship with 

China. 

Ambassador Kirk, under your leadership, the USTR has taken 

affirmative steps to compel China to abide by its international commitments. You initiated the first safeguard action against a surge 

of Chinese imports. You brought a WTO case to end China’s wind 

power subsidies. And you challenged China’s improper export restrictions of critical raw materials. 

But more steps must be taken. Additional problems remain. 

One U.S. company estimated that only 25 percent of its software 

in China is legal, and economists have estimated that China’s currency manipulation may cost up to 1.4 million U.S. jobs. 

I look forward to helping you map a course that navigates these 

challenges. As Emerson said, it requires courage to map a course 

of action and follow it. 

3 

So, let us summon up the courage to resolve the outstanding 

issues with the pending FTAs and approve them this year, and let 

us summon the courage to address our challenges in our economic 

relationship with China. By doing so, I believe we can achieve the 

goal of doubling our exports and creating jobs that our economy 

needs. 

[The prepared statement of Chairman Baucus appears in the appendix.] 

The CHAIRMAN. Senator Hatch? 

OPENING STATEMENT OF HON. ORRIN G. HATCH, 

A U.S. SENATOR FROM UTAH 

Senator HATCH. Well, thank you, Mr. Chairman. 

I firmly believe that America benefits from an aggressive trade 

agenda that opens markets to U.S. products around the world. 

Over 95 percent of the world’s population lives outside of the 

United States, and, as these economies grow, they offer new markets and new opportunities for those willing and able to seize them. 

Our workers can compete, and we can win in these markets. I 

am confident of that. We can help by negotiating good deals that 

tear down barriers to our products and level the playing field for 

our workers. And then we need to get out of the way. 

We cannot saddle our workers with burdensome regulations, 

high taxes, and government deficits, and then expect them to win 

in the global marketplace and a global economy. We must do better 

than that. 

At the risk of sounding like a homer, to see what works, all you 

have to do is take a look at my home State of Utah. Sound fiscal 

policy, a light regulatory burden, and low taxes make Utah one of 

the most competitive States in our Nation. Utah is the only State 

in the country to double exports in the last 5 years. Utah is leading 

the pack when it comes to growing jobs and expanding exports. 

The same sound regulatory, fiscal, and tax policies that work in 

Utah should inform our policies here if we are to succeed as a Nation. 

As ranking member on this committee, I am committed to pursuing these policies. As the White House looks for solutions to our 

most pressing problems, I would encourage them to look beyond 

Pennsylvania Avenue. My home State of Utah is a good place to 

start. 

As a Nation, we have a lot of work to do in order to get the economy back on track, and, in my opinion, the administration wasted 

crucial time, almost 2 years, pursuing sideshows like stimulus 

spending for government jobs and health care reform instead of 

taking on a pro-growth economic agenda that would provide jobs in 

this country. And, as a result, unemployment remains far too high, 

and Congress is just now getting to an agenda that will lead to 

meaningful economic growth, lasting job gains, increased productivity, and the dynamic economic expansion that citizens have been 

patiently waiting for. 

At the top of the pro-growth agenda happens to be trade policy. 

Yet, instead of leading the way, we are falling behind our trading 

partners. While we wait, other countries are writing the rules of 

trade. While we hesitate, other countries are opening up markets 

4 

for their workers. And, if this sorry record is not corrected, U.S. 

workers will continue to lose out on the economic opportunities afforded by free and open trade. 

A case in point. Colombia. In 2008, the United States was the 

main supplier of corn, wheat, and soybeans to Colombia, accounting for 71 percent of the market. Today our market share is just 

27 percent. 

It does not take a Ph.D. in economics to understand this collapse. 

While our trade agreement with Colombia collected dust, other 

countries were surging ahead. The same pattern holds in Panama, 

where we continue to lose out on lucrative government procurement projects. 

Some suggest that the strong interest in quick approval of our 

trade agreements with Colombia and Panama is driven by partisanship. Now, I am not going to pull any punches here. That is 

totally false. There is strong bipartisan support for these agreements in this committee and in the Senate. 

Any further doubts can be laid to rest by a recent letter from a 

bipartisan group of former government officials, including USTR, 

White House Envoys to the Americas, and Assistant Secretaries of 

State, all calling for prompt ratification of our pending trade agreements with Colombia and Panama. 

Now, I appreciate the work that the administration has done 

with regard to Korea. That should have been approved a long time 

ago. Korea is a friend. It is an ally of the United States. And, while 

we need to see more progress on beef access, it remains a strong 

agreement. I support it, and I want to see it move as soon as possible. But I do not believe the President will ever act on the Colombia and Panama agreements unless these agreements move along 

with Korea. 

And this skepticism is not unjustified. In 2009, the administration said they were developing a plan of action to address the pending trade agreements in consultation with Congress and pledged to 

address any issues promptly. That was in 2009. 

Later, at the Summit of the Americas, President Obama directed 

Ambassador Kirk to lead a review of the Colombia agreement to 

solve outstanding issues. In 2010, the administration laid out general concerns, but vowed to move the agreements forward at the 

appropriate time. 

A little later, they pledged to strengthen relations with key partners, with the goal of moving forward with existing agreements in 

a way that upholds our values. Then in 2011, President Obama 

vowed to pursue agreements with Panama and Colombia. 

Just a month ago, the President instructed USTR to immediately 

intensify engagement with Colombia and Panama. And just yesterday, we received testimony that says you were on track to resolve 

outstanding issues with Panama and are committed to addressing 

issues related to Colombia, both sometime this year. 

Now, some might call this progress. But are we really any closer 

to having these agreements before Congress today than in 2009? 

I find it hard to believe that the problem is a lack of information. 

The problem is a lack of political will and a lack of political courage. 

5 

So far, the administration has talked a big game on these trade 

agreements, but when the game time rolls around, they always 

shrink from action. 

At some point, despite all the words, it is the administration’s inaction that speaks volumes. This failure to act raises strong doubts 

about whether the President is serious about moving these agreements at all. 

Given past rhetoric, the recent promises of intensified engagement, commitments to work, and being on track are all fine and 

good, but these promises are woefully inadequate. 

After 2 years, it is still an open question whether the President 

will ever see fit to submit the Colombia and Panama agreements 

to Congress any time in the near future, if at all. 

Let me be clear. If the President will not act, I will. If the President ignores the will of the Congress and sends the Korea agreement without Colombia and Panama, I will do everything possible, 

everything that I can to make sure that those two agreements are 

considered at the same time as Korea. 

Given the gap between promises made and promises kept, I do 

not believe the President has given Congress much choice when it 

comes to the Colombia and Panama trade agreements. 

If we are to serve the national interest and get these two agreements approved, Congress must act with or without presidential 

leadership. 

Thank you, Mr. Chairman. 

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

[The prepared statement of Senator Hatch appears in the appendix.] 

The CHAIRMAN. I would like to, before we begin, quickly recognize Colombia’s Ambassador to the United States, Gabriel Silva, 

who is in the audience. 

Thank you, Ambassador, for all of your work and, also, for 

hosting me in Colombia just a few weeks ago. It was an unforgettable trip. 

I would now like to introduce Ambassador Kirk. Ambassador 

Kirk, thank you very much for coming today. Welcome to the Finance Committee, and we look forward to your testimony. 

As you know, the usual practice is to have your entire statement 

submitted for the record, and I urge you to summarize it in about 

5, 6, 7 minutes. And following that, of course, the committee will 

have some questions. 

Why don’t you proceed? Welcome. Thank you for your good work. 

You work very hard. It is a tough job. You have a good lean and 

mean agency. I know you like to keep it that way. 

STATEMENT OF HON. RONALD KIRK, U.S. TRADE REPRESENTATIVE, EXECUTIVE OFFICE OF THE PRESIDENT, WASHINGTON, DC 

Mr. KIRK. Mr. Chairman, thank you so much for your kind 

words. Thanks for the opportunity to be back with you again. 

You recognized the ambassador from Colombia. If I might, we 

also are joined by the ambassador from South Korea. We are 

pleased to have his strong support in our work on South Korea. 

6 

And one brief moment of personal privilege. You have a remarkable ability to schedule my appearances at the hearing on my wife’s 

birthday, and today is another one of those. So I know she is 

watching at home, anxious I do not mention a number. But I do 

want to acknowledge it and wish her a happy birthday. 

The CHAIRMAN. Well, the committee wishes her a very happy 

birthday. 

Mr. KIRK. And this is a special birthday. So we are pleased about 

that. 

Mr. Chairman, Ranking Member Hatch, other members of the 

committee, it is a great opportunity to come to you and talk about 

the President’s trade agenda. 

In 2010, President Obama and our administration followed 

through on our commitment to develop a trade policy that solves 

problems and supports jobs for American businesses, workers, 

farmers, ranchers, and manufacturers. 

We have enforced our trading rights and held our trading partners accountable. We have worked to open markets to help U.S. 

producers reach the more than 95 percent of the world’s consumers 

outside of the United States, including through our efforts with 

China and our leadership in the Trans-Pacific Partnership. 

We are on pace, indeed, to reach President Obama’s goal in the 

National Export Initiative to double U.S. exports by the end of 

2014. In 2011, we will expand on this jobs-focused, comprehensive 

trade policy to open markets for made-in-America products and 

goods and services and keep them open through our strong and 

dedicated enforcement actions. 

As many of you know, I had the opportunity—central to that 

agenda, as you had mentioned, is the movement and conclusion of 

our pending free trade agreements and sending them to Congress 

for your approval as they are ready. 

This week, we informed your committee that we are, in fact, prepared to begin deliberative work with you on the text of the U.S.- 

Korea free trade agreement as soon as you are ready to do so. 

It is time that we realized the promise of the more than $10 billion in increased exports and goods and more than 70,000 jobs associated with this agreement. 

Improving access to the Korean beef market remains a high priority for us as well, and we commit to working with you in close 

consultation to further open that market consistent with international guidelines. 

In the meantime, as others have noted, a ratified U.S.-Korea 

agreement will progressively reduce tariffs on our beef products to 

zero and enable our producers to build on the exponential growth 

of exports to Korea, which reached $518 million last year, which 

was an increase of 140 percent in value. 

We seek the same widespread support for the pending trade 

agreements with Panama and Colombia that we have generated 

through our work on the Korea agreement. And our goal is to have 

all three agreements with the outstanding issues addressed and approved by Congress. 

On February 9, I advised the House Ways and Means Committee 

that President Obama had directed me to intensify our engagement 

with Colombia and Panama to resolve the outstanding issues as 

7 

quickly as possible this year and submit them to Congress immediately thereafter. 

The next day, on February 10, I met with Vice President Varela 

from Panama, and our teams have subsequently met and agreed 

upon actions that, when implemented by Panama, will ready that 

agreement for congressional consideration. 

On February 11, administration officials began our consultations 

on Colombia with key stakeholders and members of Congress, including House and Senate leadership. 

On February 15, USTR led an interagency mission comprised of 

the State Department, Labor Department, and officials of the 

White House, to Bogota, Colombia. We have since met multiple 

times with stakeholders and members of Congress to review our 

findings and assess our next steps. 

I am also pleased to announce that tomorrow, senior Santos administration officials will be in Washington to continue our talks 

on our shared goals to protect labor rights and workers. We are 

working with them to resolve serious outstanding issues regarding 

the protection of internationally recognized labor rights, violence 

against labor leaders, and the prosecution of perpetrators, so that 

we can advance the agreement for your consideration. 

We are also supportive of the efforts the Santos administration 

is making to address Colombia’s challenges, including initiatives 

such as their land reform. 

At the same time, we call on Congress to keep faith with America’s workers here at home and renew Trade Adjustment Assistance now. 

Also, our Generalized System of Preferences and the Andean 

Trade Preferences Act merit renewal for as long a period of time 

as possible. And finally, we continue to lead the effort toward a balanced and ambitious outcome in the Doha round of WTO negotiations, and to grant Russia permanent normal trade relations status 

to ensure that American firms fully participate and benefit as Russia prepares to join the WTO this year. 

Mr. Chairman, I look forward to a constructive dialogue with the 

committee and welcome your questions at this time. 

[The prepared statement of Ambassador Kirk appears in the appendix.] 

The CHAIRMAN. Thank you, Ambassador. 

I traveled to Colombia a week and a half ago to find out what 

is going on and should there be more provisions in this agreement 

or not, and, frankly, I must tell you that, based upon several days 

in that country, meeting with the president, with the new attorney 

general, with members of the Supreme Court, three different meetings with labor leaders, with groups that are pushing demobilization, with many others, including the minister of agriculture, who 

is aggressively pushing the land restitution—that is, farmers who 

were displaced because of terrorism activity could get their land 

back, and so on and so forth—that country is working mightily to 

address all of its concerns, and I am very impressed with what 

they have done. 

When I met with labor leaders in the three different meetings, 

I also came away with a very strong impression that this agreement is not going to cost one job in Colombia, not one. In fact, I 

8 

asked that question. I said, ‘‘Will this agreement cost any jobs in 

Colombia?’’ The answer I got was, virtually no. 

Second, I pointed out that this agreement, this proposed agreement—the actual agreement has not been signed—has labor protection provisions. No other FTA that Colombia has concluded with 

other countries has labor protection provisions. 

So logically, I asked the labor leaders there, ‘‘Doesn’t it make 

sense to go ahead and make sure this agreement is approved, because that will provide greater labor protection in Colombia than 

labor leaders currently have? And wouldn’t failure to ratify also 

lose those labor protections?’’ And that was a logical question to 

which one would expect a logical answer. I got no answer, because 

they know the answer. 

It is very clear to me that this agreement does not in any way 

damage labor in Colombia. In fact, it helps labor in Colombia because of the labor provisions that this agreement has, not present 

in any other FTA that Colombia is conducting. 

Now, obviously, some of the labor leaders will have grievances. 

Labor leaders in every country have grievances. They gave me a 

list of things they would like to see accomplished, so on and so 

forth. 

One was to eliminate the cooperatives they are developing. We 

do not outlaw cooperatives in the United States. It is a bit difficult, 

I pointed out to them, to put in a provision that outlaws a certain 

organizational tool, like, say, cooperatives. We do not have that 

provision in the United States. Well, they understood that, that is 

probably right. 

So all I am saying, Mr. Ambassador, the time is here. The time 

is now. In fact, the time has passed to ratify the Colombia free 

trade agreement. It has long passed. 

I mentioned in my opening remarks we are losing market share 

hand over fist. Hand over fist, we are losing market share. I mentioned China in my statement, but just parochially, let me just talk 

about one product—wheat. The Canadian market share in Colombia has grown drastically. It surpassed that of the United States. 

And Colombia, as you know, is about to conclude a free trade 

agreement with Canada. 

It will be very difficult for the United States to regain lost market share. It would be more difficult if there is no FTA. 

I might also remind all of us in this room, because sometimes 

this does not come out a lot, that we have virtually no tariffs on 

Colombian products coming to the United States, whereas Colombia has tariffs—I have forgotten the average—15 percent, something like that, on American products going to Colombia. 

This is a one-way trade deal in our favor. It is a free trade agreement. I have never seen a free trade agreement before. This is a 

free trade agreement. And I just urge the administration to very 

quickly move on Colombia. 

It is clear to me that none of these agreements is going to pass 

unless they are all packaged, either one package, or locked so closely together it is clear that they are all going to be acted on. 

I have talked to members of the House, and they say they very 

much will delay, I know, the passage of Korea if there is no clear 

9 

signal that there is also going to be passage of Colombia and Panama this year. 

So my time is up, but I just might give you just a few seconds 

to explain in even more detail. What are you doing to assure this 

committee that you are going to work to get the Colombia agreement ratified? 

Mr. KIRK. Let me do so, and I will try to do so succinctly, but 

directly as possible. 

The CHAIRMAN. My time is up. Fifteen, 20 seconds, if you could. 

Mr. KIRK. Well, we share the commitment, the sentiments expressed by you and the ranking member that we not lose share in 

Colombia. 

But not only were we concerned when we came into office about 

not losing market share in other markets, we were equally concerned about not losing any more confidence of the American public 

that, frankly, questions the wisdom of our trade policy and the 

value proposition of it. 

The public does not question whether or not we can go do a deal 

to save more stuff, but they do question whether we will do trade 

deals that also advance our broader American principles about how 

we ought to treat workers, how we are to take care of the environment, how well do we improve the lots of others, and that is what 

we are working on with Colombia. 

The good news is, we have had much more engagement. Our 

team was there the week before you were. We believe we can wrap 

up our negotiations with them quickly. 

But there are core issues that are important to this administration and the American public that we will not compromise on. I will 

tell you—and I laid those out in my opening statement—we are as 

encouraged as you were by the actions and what we heard from the 

Santos administration. 

And so, in many cases, what we are working on feels like we are 

pushing on an open door. And so I am confident that we are going 

to continue to make progress. Our goal is to wrap up these negotiations. 

But I would not be much of a lawyer or negotiator if I were to 

start out by saying, as a matter of principle, we are going to vote 

on these whether we get action or not. 

So, I have heard your concerns. We have our commitment. I 

think we have proven our resolve with what we have done on enforcement, what we have achieved with China and Korea. 

The CHAIRMAN. I appreciate it. My time is up. Before I turn to 

Senator Hatch, just one point here. 

They are going to walk away from the United States if we do not 

do this deal with Colombia. Go to 2006, how could they depend on 

the United States anymore if we just do not act? 

There are huge, strategic, geopolitical reasons for us to conclude 

this agreement with Colombia. 

China now is the biggest market—the country with whom Colombia trades more than any other country now is China, not the 

United States. If we do not conclude this, the trend lines are pretty 

clear what they will be. This is a no-brainer, Mr. Ambassador, a 

no-brainer, and I just hope we get this passed quickly. 

10 

Senator KERRY. Mr. Chairman, before you recognize Senator 

Hatch, I will not be able to ask questions before the joint session 

because of where I am, but I just wanted the record to reflect I 

would like to associate myself with your remarks. I think they are 

very important, and I appreciate them. 

The CHAIRMAN. Thank you. Thank you, Senator. 

Senator Hatch? 

Senator HATCH. Thank you. Thank you, Mr. Chairman. 

Welcome to the committee. We are happy to have you here. But 

I have to say, I have never seen such a foot-dragging situation. I 

do not blame you necessarily for that. I blame the administration 

for that. It is pathetic. 

I talked with President Santos, as well, and I have to say, they 

want to have an agreement. They want to work. And, if you look 

at these last two presidencies there, they have been terrific. They 

have done an awful lot to clear up problems that organized labor 

had in the past. 

And when do you reach a point where you say, ‘‘Hey, let’s recognize the tremendous things that they have done?’’ Well, I could go 

on and on, but let me just say this. The President’s trade policy 

agenda speaks of ‘‘unprecedented levels of input,’’ from Congress 

and claims ‘‘unprecedented transparency,’’ and further claims ‘‘outreach of unprecedented scale and scope,’’ including consultations 

with your ‘‘partners’’ in Congress. 

Well, I have not seen any outreach. Your priorities and policies 

are far from transparent, and you appear more than willing to ignore our bipartisan input. We are bipartisan here on this committee. 

On February 14, the chairman and I wrote to you and asked you 

to today identify specific steps Colombia and Panama should take 

and a timetable for moving both agreements through Congress. 

And in response, you sent us a letter on Monday about technical 

discussions regarding the Korea FTA, with no mention of Colombia 

or Panama. 

You may be ready to begin technical and drafting discussions regarding Korea, but let me be clear. My team is ready to begin technical discussions for all three agreements today. 

Are you ready? If not, please tell me exactly which provisions of 

the current Colombian or Panamanian FTAs you are going to 

change that keep us from starting to draft implementing bills now. 

Why can we not get started with technical discussions on all three 

of these agreements? 

Mr. KIRK. Well, Senator, as you know, the issues with respect to 

Panama and Colombia and Korea are all different. Korea is—— 

Senator HATCH. They are not that complicated either. 

Mr. KIRK. If I might answer your question. 

Senator HATCH. Go ahead. 

Mr. KIRK. With respect to Korea, we were dealing with issues of 

market access. With Colombia, we are not dealing with the FTA. 

We are dealing with very serious issues and concerns by members 

on both sides of the aisle, whom we have consulted with regularly, 

about the failure to implement, in many minds, a proper regime to 

ensure at least minimal rights of protection for labor organizers 

11 

and workers, and then have a judicial regime in place to address 

those. 

And we are encouraged as you are by the actions of the recent 

Santos administration. We think we have an opportunity to bring 

to closure those outstanding issues. With respect to Panama, we 

have fewer than a handful of issues to be resolved, all of which are 

pending before their parliament. 

And, as I said in my opening remarks, as they move through and 

conclude those, we will be prepared to bring that agreement to 

you—— 

Senator HATCH. Why don’t we begin drafting now? You know 

most of the parameters; you know most of the issues. We would be 

happy to work with you, and we want to get this done. 

I do not, for the life of me, understand why we cannot do all 

three of them. These are not that complex. I have to admit, I think 

the administration is being run into the ground by some of its supporters. 

Mr. KIRK. Senator, I respectfully and strongly disagree with you. 

We think the issues on Panama and Colombia go to the core of why 

Americans have lost faith with our trade policy, because they do 

not believe we will stand up for the rights of workers, and they do 

not believe we will have agreements that do anything but focus on 

opening market share and that deal with many Americans’ concerns that our trade policies create a perverse incentive for people 

to move jobs elsewhere. 

Now, we think we can bridge this gap, and we have worked very 

hard to do so. But we think the correct thing to do is, since we 

have finished with Korea, and you are talking about losing market 

share, let’s move on that. 

We believe we are going to be in a position to move forward with 

Panama and Colombia really quickly as we resolve these issues. 

Senator HATCH. Look, I am counting on you doing exactly that. 

I have great respect for you. I want to support you in every way 

I possibly can, and I know that you are—hopefully, you are not the 

one foot-dragging in this thing. 

Let me just ask another question. The President’s trade agenda 

states the goal of extending normal trade relations status to Russia 

this year. Now, according to the State Department, citing the International Labor Organization—I know a lot about that, having been 

chairman of the Labor Committee—debt bondage and forced labor 

are a major problem in Russia. 

For example, the State Department found that an estimated 

40,000 North Koreans are subjected to forced labor in Russia. 

Are you concerned about labor? Specifically, if you want to get 

specific, in the logging industry? Now, in its determination to seek 

normal trade relations with Russia, did the administration take 

into consideration labor conditions in that country? 

You seem to be so concerned about Colombia and Panama. What 

about Russia? 

Mr. KIRK. We are concerned about Russia, and we are concerned 

about labor conditions everywhere. But there are two different efforts involved. One is trying to bring in one of the largest economies in the world. We have very few solutions for Russia’s behavVerDate Nov 24 2008 14:49 Jul 03, 2012 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 R:\DOCS\74816.000 TIMD
12 

ior, which frustrates many American exporters right now, because 

they are outside of a rules-based system. 

Because of our leadership, we have worked with Russia to address many of their outstanding issues that American businesses 

brought to us, and it looks reasonably likely that Russia will be admitted to the WTO. 

So the question before this body is going to be, are we going to 

be the ones responsible for bringing Russia into the WTO? But by 

leaving Jackson-Vanik in place, then no American businesses benefit from those reduced tariffs. We would not have access to those. 

Secondly, our standards for an FTA are much higher and different than they are for admission into the WTO, and that is one 

reason—whether it is in the case of Colombia or Korea or any of 

our other FTAs—they are much more encompassing and deal with 

labor rights, environmental standards, investor rights, as you 

know. 

But we believe they are equally important, but think the sound 

policy for this Congress is to make sure American businesses are 

not left behind should Russia accede to the World Trade Organization later this year. 

Senator HATCH. Mr. Chairman, my time is up, but it looks like 

a double standard to me. 

The CHAIRMAN. Senator Wyden? 

Senator WYDEN. Thank you very much, Mr. Chairman. 

Mr. Ambassador, you and I have talked about how I believe the 

Internet will soon become the biggest shipping lane in the world, 

and that is because of the increasing role that the Internet plays 

in how commerce is conducted and societies are organized. 

And we are already seeing countries all over the world establishing significant barriers to trade that is conducted over the 

Internet. As of now, China, Vietnam, and as many as 40 other 

countries are blocking products and trade facilitated by the Internet for what amounts to commercial or protectionist reasons. 

So what I would like to do this morning is see if we can break 

some new ground on trade policy and ask you this. Would you 

agree that, for the future, binding and enforceable trade commitments on cross-border data transfers ought to be a priority? That 

is for future trade agreements as we go forward. We would say that 

protecting digital goods and our opportunities to create jobs as a 

result of Internet-based commerce, that that ought to be a priority 

for future trade agreements. 

Mr. KIRK. Senator, thank you for your question. As you know, 

this has been a priority for our administration. 

Senator WYDEN. Not getting binding and enforceable agreements. 

I ask the question for a reason. We have not made it a priority to 

get binding and enforceable agreements. 

So that is my question. For the future, can we make that a priority? 

Mr. KIRK. I want to make sure that I fully understand. I know 

you are asking a very technical question. I want to have an opportunity to examine all the elements before I make that commitment. 

I would tell you this, and you know, this administration has 

worked very hard to make the enforcement of America’s intellecVerDate Nov 24 2008 14:49 Jul 03, 2012 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 R:\DOCS\74816.000 TIMD
13 

tual property rights and copyrights act the strongest as we can in 

all of our agreements. 

We successful concluded the negotiations on the Anti-Counterfeiting Trade Act. We successfully resolved a long-time case with 

the European Union over the enforcement of the Intellectual Trade 

Act agreements in the WTO. And as we are moving forward in our 

Trans-Pacific Partnership, we are looking to make sure that we 

have the strongest protection, particularly for digital goods. 

Senator WYDEN. I am talking about keeping the Internet open. 

Mr. KIRK. I understand that, Senator. 

Senator WYDEN. Yes. Intellectual property—I am glad that you 

are focused on it. But I am talking about keeping the Internet 

open. And tell me, again, how far is the administration prepared 

to go for the future? We are not talking about unraveling anything 

on the books today. 

I would like to see us set the bar so that, for the future, when 

we are talking about what I believe is going to be the shipping lane 

of the 21st century, that we are going to make it a priority to keep 

the Internet open and to secure cross-border data transfer agreements that really have some teeth in them. 

Mr. KIRK. Senator, I am reasonably certain that I agree with 

you. But because you have asked such a technical question, I—— 

Senator WYDEN. I am going to quit while I am ahead. Thank you. 

Let me ask you a question with respect to Doha. 

The committee has made clear that no Doha agreement is better 

than a bad one, and, obviously, we would like a good agreement 

passed by the Congress. 

In your view, would a good Doha agreement include meaningful 

disciplines on fish subsidies? 

Mr. KIRK. Absolutely, Senator. And this is one area where, frankly, the United States has provided very strong leadership within 

the WTO, a negotiating group looking at environmental and other 

issues on that, and we continue to press for that. 

But if I might quickly just validate your point that, while we continue to lead and work for an ambitious conclusion to the Doha 

round, because we believe this could be an extraordinary shot to 

the world’s economy, we adhere to our basic principle that the bill 

on the table does not provide that ambitious—— 

Senator WYDEN. Let me see if I can get one other one in. I am 

concerned that some of our Trans-Pacific Partnership partners may 

lack the capacity to implement their trade commitments in an acceptable timeframe, and it would be unacceptable, of course, for the 

U.S. market to remain wide open pursuant to those commitments 

while, for example, Vietnam struggles to implement its obligations. 

I do not want to get into a situation in which we are immediately 

forced to pursue a dispute settlement-kind of approach. 

What is the USTR proposing within the Trans-Pacific Partnership to hold countries accountable to their commitments? 

Mr. KIRK. Well, one, all of the nine partners that have come together to work on what we have all agreed and hope to strive for, 

which is the most advanced trade agreement and building the 21stcentury model, came into this with an understanding we would 

have to achieve at very high levels. 

14 

We understood we were asking quite a bit of Vietnam, but at 

least to this point, Senator, in every one of our rounds, they understand what is expected of them and have agreed that they want to 

get there. 

Now, there may be some cases where we can help them in terms 

of technical capacity, but we have made it plain, and we have not 

backed off of that expectation, that they are going to have to run 

and meet a very high standard that has been set by all of the members. 

Senator WYDEN. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Cardin? 

Senator CARDIN. Thank you very much, Mr. Chairman. 

Mr. Ambassador, it is a pleasure to have you again before our 

committee. I think we have to learn from some prior agreements. 

And I listened to your rationale as to why we should support Russia’s entering the WTO, and I thought back and the same arguments were made when China was before us and you sought those 

agreements. 

So I just want to go back a little bit, because I think we need 

to pay attention to some of the, I think, mistakes we made in previous agreements. 

When we entered into the agreement with Mexico, we thought 

that sidebar agreements on labor and environment would work. 

They did not work. And now I think we are all committed to making sure we have strong labor standards and environmental standards in core agreements. 

And I can tell you, I will be looking very carefully at the agreements that come forward to make sure that we are urging and 

have enforceable standards for the international labor standards 

and agreements on environment. 

When I look at the accession of China to the WTO, I now look 

at the currency manipulation issue, and I know if I asked you a 

question on that, you are going to say that is Treasury, not USTR. 

But I can tell you this. The manipulation of currency by China 

is a matter of major trade concern to this Senator, and I think to 

the Senate. And, yes, progress has been made, but it has been slow 

and it disadvantages U.S. manufacturers and producers, and it will 

continue to be an issue that is going to be raised. 

But following up on what Senator Wyden has said on the Internet, let me carry it over to intellectual property. 

When I take a look at China today, knowing how well they could 

enforce laws against the theft of intellectual property—whether it 

is creative works or whether it is manufactured goods or whether 

it is clothing or whether it is other ways that they have stolen our 

intellectual property—I know that we could have better enforcement. 

And I know you are taking steps to do something about it today, 

but when you come to us and ask us to approve additional agreements or to act on a way in which Russia can enter the WTO, I 

am going to be asking you, what guarantees have you put in writing in agreements to make sure that we are protecting American 

manufacturers, producers, and creators of intellectual property 

rights? 

15 

And I am just not going to knee-jerk approve these agreements 

unless I know that we have effective remedies in our agreements. 

I remember fighting very hard to protect America’s antidumping 

and countervailing duty laws, only to find decisions in the WTO 

that have made those issues much more ineffective. 

So what type of priorities are you going to bring forward to this 

committee to make sure that we have internationally recognized 

remedies against countries that otherwise would steal our intellectual property rights or violate their agreements without adequate 

enforcement? 

Mr. KIRK. Senator, in my previous response, there are two things 

we can do. One, we have our rights that broadly constrain and govern the activities of all members of the World Trade Organization. 

First of all, we absolutely associate ourselves with your concern, 

and other members of the committee, about Russia’s behavior. 

But at the point that Russia is eligible and meets the requirements to join the WTO, the fundamental decision is, are we going 

to give the benefits of that to American workers? 

Senator CARDIN. Just to make this clear. That is the same argument you just made previously, and you only have certain leverage 

times to make progress. Once they are in the WTO, our chances of 

getting enforceable provisions in an understanding with the United 

States evaporates. 

Mr. KIRK. Well, there is a second, and we do not have a—we are 

not proposing a free trade agreement with Russia or with China. 

But through our work on the Anti-Counterfeiting Trade Act, 

which has been very successful, we have strengthened the protection, since you asked about intellectual property rights. 

Over and over, about 60 percent of the trade in intellectual property and copyrighted goods, through our strong defense and prosecution of our rights under WTO, we have enhanced that protection 

in the European Union. We have done so in China, through every 

session we have had with China. Whether it was in our Strategic 

Economic Dialogues, through our joint commissions on commerce 

and trade, and the eight face-to-face meetings between President 

Obama and President Hu, we have pressed the need for China to 

behave responsibly with respect to protection of intellectual property rights and property rights. 

We have made significant progress. We got some of the strongest 

commitments out of President Hu’s visit this year, and we are 

going to follow those. For the first time, China committed that they 

are going to put money into the hands of their government officials 

to buy legal-sale software. They have committed that they are 

going to audit that for the first time. And we have spent a lot of 

time with your businesses and others and understand the loss to 

American manufacturers and workers from those pirated and copyrighted goods. But we have to be vigilant in engaging China on 

that and seeking the protection of our rights, and we will do that 

with China. 

Should Russia become a member of the WTO, we will do the 

same with them as well. 

Senator CARDIN. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Senator Thune, you are next. 

16 

Senator THUNE. Thank you, Mr. Chairman. 

Ambassador Kirk, thank you for being with us today. And I am 

sure you have heard it already from many of my colleagues, but 

there is a great concern about the slow rate at which these trade 

agreements are being submitted to the Congress and what is happening in the meantime. 

If you look at what we have seen, the EU and South Korea free 

trade agreement goes into effect July of this year. Since the U.S.- 

Colombia FTA was signed, Columbia has active agreements with 

Canada, Chile, the EU, Brazil, and Argentina, and, as a result of 

that, farm exports in Colombia fell by 48 percent in 2009 and another 45 percent in 2010. 

The point is, every day that passes, we are losing market share 

in these countries, and our farmers, ranchers, and small business 

owners are paying a price for these lost markets. And the Chamber 

of Commerce has indicated that we could lose 380,000 jobs if we 

fail to implement the pending free trade agreements. 

So, you have heard it from everybody else, but we have to just 

get this done. And it strikes me that the President, although, in his 

rhetoric, has been very supportive of these free trade agreements, 

there just has not been any action. 

And I guess my question for you is, what changes is the President seeking in these agreements, and do you believe that renegotiating agreements in this manner will damage our ability to negotiate future free trade agreements? I think most people would say 

that a deal with the United States ought to be a deal. 

Mr. KIRK. Senator, first of all, I agree with you. And, as I have 

said earlier, we absolutely share the commitment, I think, of every 

member of this committee, and I would say most of the members 

of Congress, that we want to do everything we can to open up markets, advance America’s interests around the world. 

But when we came into this job, when I was here 2 years ago, 

I was very honest with this committee and told you we thought we 

had a broader responsibility than just coming in and picking up the 

three pending free trade agreements and saying, find a way to get 

them passed. 

We were very concerned that we were operating in an environment in which an overwhelming majority of Americans does not believe in the wisdom of our trade policy, and you have more Americans than not, by a huge margin, who believe that we have made 

a tradeoff, frankly, of jobs for cheaper clothes and food, and they 

do not believe in that. 

So what we have sought to do was not just come up with a way 

forward, which we had on Korea and Panama and Colombia, but 

do so in a way that we begin to try to restore faith with the American public in the wisdom of what we are doing, because we cannot 

grow this economy the way we want to in the future if we are not 

involved in global trade. 

So we have no disagreement with you there, but we think the 

time that we have invested in proving that we would stand up for 

workers’ rights has helped to put us in the position where we are 

stronger today. 

17 

We believe working with the Congress to keep faith with American workers and approving Trade Adjustment Assistance as you 

did in 2007 is part of the reason why we are here today. 

So my only response to you is that we want to do that, but we 

cannot just look at one side of the equation. I think we have to 

treat this holistically, and we are moving forward. 

I have outlined the issues that we have to resolve with Panama 

and Columbia. I think we are going to have those results sooner 

than later. We have set a goal of having them done this year. 

I have heard from you. You would like to move all three of them 

together. But for the same reasons many of you have articulated, 

we should not wait on Panama and Colombia. I would suggest to 

you that Korea is ready. Let’s get it going. 

We will be moving. We will be wrapping up those negotiations 

with Panama and Colombia, and, as they are ready, we will move 

them forward. 

But as we do that, let us also make sure that we renew Trade 

Adjustment Assistance. And for those who want to help Colombia, 

Colombia is being harmed every day that we allow the Andean 

Trade Preferences Act to sit on the sidelines and not be approved. 

So there are a number of things that we can do to help out Colombia while we conclude our talks with the Santos administration. 

Senator THUNE. There was a March 2nd letter in which six 

former trade reps and other former officials stated that U.S. exports of corn, wheat, and soybeans to Colombia dropped from 1.1 

billion in 2008 to 343 million in 2010, which represents a 68- 

percent decline. 

And, as I said before, we are seeing Colombia reaching out to 

China, Brazil, the EU, and others for trade. It seems to me at least 

that, when you talk about public support in this country not being 

there for these agreements, I know where I come from, they are. 

Our economy depends upon being able to export things that we 

raise and grow to other countries around the world. 

So, if we do not get this done, how long do you think it is going 

to take us to get that 1.1-billion baseline back to where it was in 

2008, and how much is the total loss to U.S. exporters from delay 

in presenting these agreements to Congress? 

Mr. KIRK. Well, we do not want to see any loss, and let me give 

you the other side of the story. Our ag exports are at the highest 

level they have been except for one year. At $119 billion, they are 

up 18 percent. 

Believe me, we care very much about the dependency on America’s farmers and ranchers on export markets, and we have worked 

closely with Secretary Vilsack at the Department of Agriculture 

and Secretary Locke to address many of those concerns. We will 

continue to do so. 

I want to make it plain. We do not disagree with your goal. We 

do believe there is a right way to get there, and there are certain 

cores values that we have to address and have the American public 

believe that we will not compromise on. 

I think we are headed there. We share Chairman Baucus’s—we 

share his sense of the opportunity that we have presented to us 

with the Santos administration, and I believe we are closer than 

many of you think we are to having a final resolution of these. 

18 

The CHAIRMAN. Thank you very much. 

Senator Nelson, you are next. 

Senator NELSON. Thank you, Mayor Kirk, for your long-time public service, as one of the most outstanding mayors in the country, 

and now for your continued service. 

I want to add my comments to the chairman’s comments. I support the Colombia Free Trade Act. I have been there. I have been 

there in the capacity as part of the Intel Committee, as well as the 

Armed Services Committee. 

I visited with then Defense Minister Santos, when Colombia 

pulled off one of the most magnificent ruses of all time that allowed 

us to get three Americans out of the jungles, having been held by 

the FARC for a half a dozen years, and now the defense minister 

is now president. 

This is good for our country, and it is certainly good for my State, 

because we have a great deal of trade, both ways with Colombia. 

The same with Panama as well. And I cannot quite understand 

why the administration would not heed my pleas that a minimal 

amount of money go into the Corps of Engineers’ request for funds 

for the deepening of channels of some of our east coast ports, because, after I left President Santos and Colombia, I went to Panama and, of course, I went out there to see the expansion of the 

Panama Canal. 

And we are going to have these big ships coming through—they 

think in 2014, I think it will be 2015—that will not have to go to 

the west coast, but will be able to unload on the east coast because 

they will be able to get through. 

These are container ships that have twice the number of containers of existing ships that can come through the existing Panama Canal. And we need to simply make our east coast ports 

Panamax-capable. 

So, since this is going to have a lot to do with trade and, if the 

rumors are correct, may have a lot to do with your future position 

in the administration, we have to get the administration ready to 

do this, without me having to get on bended knee and clasp my 

hands and beg and beg and beg for Army Corps of Engineers 

money to deepen the channels. 

You do not need to comment on it. I just want to get it out there. 

But I support these trade agreements. 

Now, this I do not understand. The President has already issued 

a proclamation with regard to the Bahrain free trade agreement, 

which would affect an amendment that is going to help yarn coming in, and it is going to directly affect one of my industries up in 

the panhandle of Florida, Chipley, FL. 

Has your initial determination that this modification would be 

good for the U.S., has it changed? 

Mr. KIRK. Senator, I will be honest. I will have to look more 

deeply into that. Generally, though, it is other agencies. The ITC/ 

ITA will make those investigations. Then they will come to us to 

make a recommendation to the President. 

Usually they do an exhaustive amount of research of the impact 

of bringing in these yarns on components on domestic industry, but 

I am not quite familiar with this one specific case. If I can follow 

up and get the details on it, I will be happy to answer that. 

19 

Senator NELSON. You ought to get on your people, because we 

told your folks that I was going to bring this up to you today. 

Mr. KIRK. I will. 

Senator NELSON. And you have indicated in a letter to me, obviously written by your folks, which is fine, that you all were working on this, and the president has already made a proclamation, 

and the question is, when is it going to get implemented? So that 

is the question. 

Mr. KIRK. I will follow up on that. 

Senator, if I might, to your comments on the Panama Canal. 

There was a number—and I have visited your State a number of 

times. Those ports from Tampa or Orlando, they are—many of 

them are using funds, if I might make—I cannot speak for the 

corps, but they are using funds that were provided through the Recovery Act for many of our ports in Florida to be ready to handle 

those wider cargo ships. 

Senator Cardin is not here, but in particular, I know they are 

doing the same thing at the Port of Baltimore. So we do not often 

talk about some of the good that has come from the Recovery Act. 

Senator NELSON. Right. But they have the deep channel. What 

we have in our Florida ports is a depth of about 42 feet. For the 

big Panamax ships, you have to bring that down to 50 feet. And 

all we need is—we will advance the money down in Florida. All we 

need is—and this has already been authorized for the Corps of Engineers. We just need a de minimis amount of money put in for a 

new start in appropriations. 

And I’ll be doggone, I begged Jo-Ellen Darcy, the assistant secretary, to do this for a couple of our ports, and it was not put in 

the President’s budget. I am mystified as to why, because we have 

to get ready for these ships that they say are coming in 2014. We 

have to get the dredging done now. 

The CHAIRMAN. Thank you, Senator. 

Senator Coburn? 

Senator COBURN. Thank you. Ambassador Kirk, welcome. Good 

to talk with you on the phone the other day. 

The first thing, I just want you to know that I very much align 

with what Senator Hatch said on the agreements. I have no intention of giving a vote for the South Korean trade agreement unless 

the other two are on track to be voted in very short term. So you 

will not have my vote for that trade agreement unless those other 

two are moving. 

The second thing is, I want to relate a story to you, because it 

goes along with what Senator Cardin had to say and, also, Senator 

Hatch had to say in terms of Russia coming into the WTO. 

Myself, Senator Schumer, and Senator Graham met with the secretary of commerce, your equivalent, essentially, or soon to be 

equivalent, 3 years ago, and when I was questioning him on intellectual property, he told me, in no uncertain terms, China had no 

intention of honoring WTO’s agreements on intellectual property, 

because they were a developing country. 

Statement, straight out of the book. And I believe him, because 

I believe their actions have been just that. We lose tens of billions 

of dollars a year to thievery of our intellectual property to China, 

20 

every year. And what I would like to know is what exactly are we 

doing about it. 

What are we doing about it at every level, not an agreement between the President and President Hu. What do we see in a manifest that says there is a change in honoring WTO’s agreements on 

intellectual property? Because I have not seen it. Most American 

software companies have not seen it, and most other American 

manufacturers, whether it is through reverse engineering of patented items and then producing and competing with us on our intellectual property, have not seen it. 

And when we have people in the WTO who have no intention of 

honoring their agreements, what makes us think we can trust an 

agreement between President Obama and President Hu on something that they have flatly said they do not intend to honor? 

Mr. KIRK. Well, we utilize every tool and resource that we have 

to enforce intellectual property rights. We have taken China to 

cases since our administration has been in, one. We have highlighted our willingness to use enforcement tools, and we have utilized them. We have won a number of important cases against 

China on American copyright issues that were very important, critical issues, within the first 12 months of our being in office. And 

we continue to engage them, whether it is through bilateral meetings at the presidential level, through the Strategic Economic Dialogue, through the JCCT, and every other forum, that they are 

going to have conform their behavior. 

We are not satisfied with China’s pace of progress on this, and, 

believe me, we meet with industry representatives from software, 

hardware, manufacturing, biotech, on a weekly/daily basis to work 

out an appropriate strategy for them. But it is too important to just 

say we are going to walk away from the table. 

We think getting China to behave in a more responsible manner 

not only helps American industries, but China is begrudgingly beginning to understand that it is going to help them attract some 

of the innovative businesses that they want, and see the development of their own innovative industries. 

But I can assure you, Senator, we use every available venue, 

every available tool that we have at our disposal to get China to 

behave differently. 

Senator COBURN. Well, this is one Senator who thinks we should 

quit hitting them with a flyswatter and start hitting them with a 

hammer. And if, in fact, they do not change their behavior on intellectual property, I am going to be of the mind to try to do just that 

through the Congress. 

So the signal needs to be sent that their response thus far is 

highly inadequate. It is thievery. It is state thievery what China 

is doing to American intellectual property today, and it cannot be 

said to be any less than that, and they admit they plan on stealing 

it. 

So, when you have somebody in the WTO who admits they have 

a policy of stealing our intellectual property, and we are working 

through means at bureaucratic levels to change that, I think what 

we need is a different approach, and I think they need to know we 

mean business. 

21 

I would like to see us develop an approach that is much stronger, 

not on the individual basis, something that might cause some significant pain, although we find ourselves now with relatively little 

ability to do that, since they hold such a high percentage of our 

debt. 

Mr. KIRK. Again, Senator, I would be happy to follow up with 

you, because I think this administration, more so than any in recent memory, has demonstrated more resolve to take on China in 

more forms. We did it on the 421 case with tires. We are doing it 

with the recent 301 case. And we have gotten their attention. They 

understand that. But I would welcome the opportunity to follow up 

with you and go through in detail all that we are doing. 

Senator COBURN. I thank you. 

The CHAIRMAN. Thank you, Senator. 

Senator Grassley? 

Senator GRASSLEY. Thank you very much for coming, Ambassador. You have had the privilege to witness firsthand traveling in 

my State of Iowa and participating in my ambassador’s tour, how 

important trade is for my State, and I thank you for participating 

in that. 

It has already been mentioned, but I wanted to just reiterate my 

support for all three free trade agreements. 

If the goal under the National Export Initiative is to double exports, I cannot think of a better way of doing it than passing those 

three agreements. 

Farm groups, including the Farm Bureau, have spoken about 

how it represents $3 billion of additional agricultural exports. 

I am very encouraged by your testimony indicating that Korea is 

ready to go, and I would just respond by saying that we here are 

as well, and you have heard very positive comments about that 

from many members of this committee. 

In regard to Japan and the Trans-Pacific Partnership, I would 

like to thank you for mentioning in your testimony the importance 

of the ongoing negotiations on that agreement. I would like to highlight a few points from a letter sent yesterday to President Obama 

regarding TPP. I was glad to join this letter, sent by Senator 

Johanns and 26 of my colleagues. 

And, if that letter has not been put in the record, I would like 

to put it in the record, Mr. Chairman. 

[The letter appears in the appendix on p. 48.] 

Senator GRASSLEY. As you know, Japan has placed overly strict 

standards on U.S. beef imports since 2003 because of BSE. While 

this incident was serious, it is not indicative of U.S. beef. 

American farmers and ranchers produce safe and high quality 

agricultural products, probably as safe as any place in the world. 

As such, it is important that Japan recognize this fact and eliminate their restrictions placed on American beef over 20 months of 

age. If Japan wants to pursue more transparent trade relations 

with the United States, it is essential that they follow science 

based on the OIE recommendations and allow full beef imports 

from the United States. 

I have serious concerns that any potential TPP agreement that 

includes Japan without a commitment to fully resolve this beef 

issue can unfairly harm U.S. producers. 

22 

So, Mr. Ambassador, could you talk about what your administration and you personally are doing to alleviate this problem and 

what specifically U.S. strategy is on allowing Japan to enter the 

TPP negotiations? 

Mr. KIRK. Senator, thanks for your kind words, and thank you 

for the invitation to join you in Iowa for your ambassador’s tour 

last year. 

For you, and many members of the committee, I understand the 

beef and agricultural issues are important. 

Let me give you assurance. Our strategy on getting beef in that 

market is not different as it relates to Korea or Japan or China. 

As many of you know, because you have discrete industries, we 

have been effectively locked out of a lot of the Asian markets since 

the BSE scare. Our beef is safe. It has been scientifically proven 

to be safe. It meets international health standards. And our goal 

in every case, whether it is Korea, whether it is China, whether it 

is Taiwan, whether it is Japan, is to have them comply with those 

international standards. 

Senator, if I can be candid, we are exceptionally frustrated with 

the slow pace of compliance in many of these markets. 

You may not know, we have had probably not a month go by for 

the last 6 months that either Secretary Vilsack or someone from 

our Ag team has not been in one of these countries, negotiating 

with them, trying to gain their compliance. We will continue to do 

that. 

Now, separately, let me say we absolutely welcome the announcement by Prime Minister Kan at the APEC summit last year 

of Japan’s interest in joining TPP ultimately. We think the benefit 

of this Trans-Pacific Partnership will be realized when, in fact, it 

does become the free trade agreement of those Asia-Pacific economies. 

But we have been very honest with Japan that this is an issue 

we would like to see them address and resolve, and we are not 

going to wait on their decision whether or not they are, in fact, 

going to try to engage us on TPP to try to gain their compliance 

on beef. 

Senator GRASSLEY. My last question would be about pork in the 

country of Russia and Russia unilaterally reducing import quotas 

in non-science-based sanitary and phytosanitary restrictions on 

pork, because it has reduced U.S. exports to Russia by nearly 60 

percent. 

Could you provide an update on how the administration is addressing the sanitary and phytosanitary issues in Russia’s WTO accession negotiations? 

Mr. KIRK. Well, specifically, my answer would be the same, Senator. As you know, we worked very hard with their ambassador, 

even with President Medvedev when he met with President Obama 

last year, to open back up on poultry. And the same, we want them 

to comply with those standards. We have addressed as many of 

those issues as we could in resolving some of our bilateral issues. 

And I want to make it plain. We absolutely share many of your 

anxieties about Russia coming into the WTO, but the reality is, unless we get them into a rules-based environment, our ability to 

23 

seek redress on many of these concerns is limited, because they are 

outside of the WTO. 

And, in a broader case, as you know, Senator, one thing we have 

done because of the success we have had with the 301 report that 

Congress asked us to deliver to you each March on enforcing intellectual property rights in our FTAs, we are now doing the same report to you on countries’ compliance with sanitary and phytosanitary standards, and that has become another tool, and you will be 

receiving that in the next several weeks. 

The CHAIRMAN. Thank you, Senator, very much. 

Senator Cantwell? 

Senator CANTWELL. Thank you, Mr. Chairman. 

Ambassador, good to see you. Thank you for your briefing today. 

I wanted to ask you about the WTO decision that ruled in favor 

of U.S. claimants that Airbus had been receiving illegal subsidies 

from the European government. They found roughly 20 billion in 

illegal actionable items, including about 4 billion in launch aid subsidies. 

So it is my understanding now that the final appellate decision 

in the U.S. case against the EC is scheduled to be rendered this 

spring. 

So following that, if it is upheld, can you outline the next steps 

and actions the USTR intends to take to ensure that the EC complies with the decision? Because there is so much at stake here as 

it relates to jobs and job impact. 

And, obviously, the precedent it sets—I think this is probably one 

of the largest decisions we have been involved in in a long time 

and, obviously, ruled in the U.S.’s favor. 

How do we ensure the implementation? 

Mr. KIRK. Well, it is the largest, and it is the most complex. And, 

Senator, I thank you for your consistent involvement and assistance in helping us work through this. 

We are awaiting the final decision of the appellate body, and, assuming that the European Union does an appeal, then they will either have—I forget the exact timetable—they have a reasonably 

short period of time to decide that they are going to conform their 

behavior to the appellate body’s ruling that the assistance they 

have given, most of the launch aid that they have given to the Airbus, the WTO found to be noncompliant. 

They have the opportunity to comply, and, if they do not, then 

we have several remedies that are available to us in terms of levying retaliatory action. But we are not quite there yet, and as soon 

as we get that final opinion and know whether, in fact, they are 

going to appeal or not, then we will be consulting with stakeholders 

on the appropriate way forward. 

But this was an issue we have expended considerable resources 

on. It is one we take seriously because it goes to the core. One of 

our strongest manufacturing industries and hundreds of thousands 

of jobs in this case, and we will do everything we can to protect 

those. 

Senator CANTWELL. I assume that means an aggressive response. 

Mr. KIRK. Yes, ma’am. 

Senator CANTWELL. Thank you. I saw online at—actually, it was 

a Texas publication, but citing your office, saying that during this 

24 

time period, we probably lost something like 60,000 aerospace jobs, 

and they cited the USTR report. I do not know if it is true or not. 

But during this time period, there has been significant impact in 

the industry. So I think it is very important that the United States 

be aggressive when the WTO rules and that we do get some relief 

in this issue. So I thank you for that. 

I wanted to ask you about Korea. I had to step out for a markup 

in another committee. There is a lot of dialogue about the various 

trade agreements and the proposed timeframe. 

I am concerned, because the European Union-Korea free trade 

agreement goes into effect in July of this year, and so, obviously, 

that could put the U.S. at a disadvantage as it relates to access to 

markets. 

So what are you thinking the timing is for us in getting this 

agreement implemented and the timeframe for submitting it to 

Congress? 

Mr. KIRK. Senator, yours may not be as much a question as it 

is an answer, and you may have missed it. We sent a letter to the 

heads of our committees of jurisdiction, both Senate Finance and 

Ways and Means, earlier this week saying we are ready to begin 

work with them on structuring the text so that we can move forward immediately. 

And I am sure you have heard the comments of many members 

of your committee. There are some who believe we should not move 

forward with Korea until we are ready to go on Panama and Colombia. We think the wiser course of action, since Korea is ready, 

is for us to move forward. We have heard the strong sentiments of 

this committee and others that you want us to move forward as aggressively with Panama and Colombia, and we are going to do that. 

But for reasons that you outlined, it is important that we not 

lose share in Korea. Panama and Colombia are very important allies. They are good neighbors. We are making good progress. But 

Korea represents the largest market opportunity. 

Korea is more economically compelling than the last nine free 

trade agreements the United States has done combined. We are 

talking $10 billion in exports and goods, as estimated by the ITC, 

over 70,000 jobs, and since we have talked a lot about lost markets 

in these others, we were the number one exporter into Korea 4 

years ago. Today we are number four. 

We do not want to see that change. We think this is an extraordinary opportunity. We would like to work with the committee to 

move forward on that now and see it passed as soon as possible. 

Senator CANTWELL. I know many members have worked and 

worked on these issues, and it does seem that it is a little more 

ready to go. 

I would just say, on the Colombian issue, just from one Senator’s 

perspective, the Colombian government needs to do something to 

guarantee the protection of their judiciary. Judges cannot ride back 

and forth to work on buses unprotected or unaccessed. We have a 

problem there with what has happened to labor leaders, and, to 

me, having a judicial system that is on par with the U.S. and other 

countries is very important to making sure that there is a fair system of the law in Colombia. 

So, thank you very much. 

25 

The CHAIRMAN. Senator Stabenow? 

Senator STABENOW. Thank you very much. I appreciate it. And 

welcome, it is good to see you again. 

As you can tell, I think, in the questioning, that we have different views on how to proceed about opening markets and trade 

agreements. 

I think there are differences in the committee. And I just want 

to note that for me, I would thank you for taking the time necessary to address the auto situation with Korea. There was a lot 

of pressure on the administration to move more quickly in a way 

that would have been very detrimental to millions of jobs in America, with the American manufacturing in the auto industry. And so 

I want to thank you for resisting the pressure and taking the time 

to address some very significant issues. 

I think overall, what I have heard and I think most of us would 

come together on, relates to the enforcement end. We may disagree 

on exactly whether or not a trade agreement is put together correctly, whether or not it addresses all of the issues that need to be 

addressed, but we all want to make sure that markets are open for 

American businesses, American farmers. 

We want to make sure that we enforce our trade agreements, 

that other countries are not stealing our ideas, most notably, 

China, but certainly other places. 

So I would like to ask you, Mr. Ambassador, on the trade enforcement end, what we can be doing more to support your efforts 

and to be more aggressive in making sure other countries are following the rules. 

And I do also want to thank you for the WTO cases you are 

bringing against China. I think that is very significant in what you 

are doing. But, frankly, we need to be moving even faster, even 

though you have been significantly active in this area. 

I am concerned, when we look at China, for instance, and what 

they propose of an indigenous innovation policy, trying to block 

American companies from selling to their government, which controls much of their economy. 

Senator Graham and I introduced legislation, the China Fair 

Trade Act, that would level the playing field there as it relates to 

China opening their doors and, also, signing what is the government procurement agreement. 

China came into the WTO over 10 years ago now. They were supposed to sign this agreement to opening up their procurement 

through their government process, but have not done it, and I am 

wondering if the USTR has been moving or what you have been 

doing toward getting the Chinese to sign what is a very important 

agreement under the WTO to open up business opportunities for 

our businesses? 

Mr. KIRK. Senator, first of all, thank you for your remarks about 

our work on the Korea free trade agreement. And the way we did 

that is the same template, and all that we are asking is for the 

same latitude to do that on Panama and Colombia—that stays on 

the table—to take advantage of these strong relationships as we 

have with Korea and Panama and Colombia and, frankly, get a 

better deal, and that is what our goal is. 

26 

On enforcement, I am very proud of the track record that we 

have, and we are getting some progress on China, because as you 

know, when we filed that 421 case, for example, on the safeguards, 

we were absolutely pilloried in the press and by many in this body, 

because they thought we were going to spark a trade war. 

But this administration acted where no other administration had 

in seven previous cases, where an independent agency had found 

harm to American industries and workers. We were the first to 

stand up and hold China’s feet to the fire. 

Because of that, we are now beginning to see some movement on 

some of the issues you mentioned, and, specifically, the issue of indigenous innovation is one that concerns us greatly. 

We got a commitment at this year’s JCCT that China would back 

off a practice they had of saying you could only compete or apply 

for certain products if that product was made, manufactured, copyrighted in China. It was a back-door way to force many of our companies to hand over their intellectual property. We got them to 

drop that requirement and move away from that. 

Secondly, you referenced their lack of movement on their accession and acceptance of the government procurement act. We now 

have an agreement with them that they will submit a revised offer 

this year; more importantly, they are going to have that cover 

many of their sub-central governments because, as you know, most 

of the procurement opportunities in China, because of their economy, are still controlled by the government. 

So we are not done. We are still going to watch this very carefully. But we are encouraged that, if we can see follow-through on 

those two, that will go a long way to addressing two of our major 

concerns. 

Senator STABENOW. Thank you. I would just say, as my time is 

up, that I would encourage you in working with Treasury to focus 

on currency manipulation, which is costing us jobs, on the other 

areas, where they are blocking through tariff or non-tariff situations, whether it is agricultural products getting in because of artificial pesticide standards or other kinds of artificial barriers, or 

whether it is manufacturing. 

To me, where we can come together is on making sure the doors 

are open, the rules are fair, and that we are fighting for American 

jobs, because, in the end, that is really what this is about. 

Thank you. 

Senator HATCH [presiding]. Thank you. 

Senator Roberts? 

Senator ROBERTS. Well, I thank the ranking member and chairman for the time. 

Ambassador Kirk, thank you for coming. You are very articulate, 

as always. Ambassador for trade and working very hard, and I appreciate that very much. 

I think pretty much everything has been said, but I will probably 

say it again. 

Right behind you is Ambassador Silva from Colombia, about two 

back. He is a veteran ambassador. I think you know him well. And 

he came to me with his able assistant, and knowing that I had 

known the previous ambassador and I had worked very hard to try 

to get a trade agreement with Colombia when all that talk was 

27 

started 5 years ago, and they had been successful with the FARC 

and the paramilitary. 

I even know that because my daughter was a part of the World 

Food Program that got stuck between the paramilitary and the 

FARC. I did not know she was there. I would not have permitted 

her to go there had I known that. But such are daughters. 

At any rate, I did not know what to tell him. I was embarrassed. 

I am embarrassed now, him sitting right behind you, working for 

5 years to get this done. Win-win situation. Everybody said it was 

a win-win situation. Well, I think I can see the reason. I think Ms. 

Cantwell pretty well put her finger on it. We want to make sure 

that somehow the trucks are on a comparable basis with trucks in 

the United States. 

I guess that is what she said, and then something about labor. 

I do not know why we do not do that in the International Labor 

Organization. You mentioned, sir, that rather than pushing for fast 

track for all three trade agreements—and thank you for sending 

the text up to this committee, and I hope we can get it done—but 

what do I tell the ambassador sitting behind you? We are going to 

do it for South Korea but not Panama and, more especially, Colombia after all the hard work? 

I can tell you who does not care too much about the labor concerns, although I understand the labor concerns. But again, I think 

they could be addressed in another venue. And the environmental 

concerns, let us not forget about that. But that is Brazil and their 

regional trade agreement, the Mercosur agreement—I hope I am 

pronouncing that right—Argentina, Paraguay, Uruguay. Venezuela 

has signed a membership agreement. I doubt if they get in. I hope 

they do not get in. Bolivia, Chile, Ecuador, Peru, and Colombia. 

And the ambassador pointed out to me that they used to import 

in regards to grain—feed, wheat, Kansas wheat—it was about 

somewhere between 42 and 46 percent, something in that neighborhood; now it is down to 20, headed toward 16. 

And I can tell you that, basically, Canada and Argentina are supplying the majority of those foodstuffs as opposed to Kansas and 

the United States. 

I just met with 105 presidents of the Kansas Farm Bureau last 

night. They wanted to know what is going to happen with the three 

trade agreements. And I said, ‘‘Well, I hope we can do one, but it 

does not look like we can do the other two.’’ 

Why? You pretty well answered that question when you started 

off, when you said, you know, you said, rather than pushing for 

fast track for all three of the trade agreements, you were trying to 

influence public opinion. 

What on earth have you said and can you really recognize or can 

you really determine any change in opinion with organized labor or 

some of the environmental groups in regard to their opposition, almost to any trade agreement, but more especially to Colombia? 

Have we changed public opinion about that, especially when it was 

a win-win? 

Have we done that? I mean, what are we doing to change public 

opinion? If you ask the public’s opinion—and I did not even give 

you a chance to answer, and I apologize. I will slow down here in 

a minute. 

28 

If you asked the question, ‘‘Would you support a trade agreement 

we have been working on for 5 years with Colombia to offset any 

possible relationship that could develop between the leadership of 

Colombia and Hugo Chavez, would you be for it?’’ I think probably 

you get about 75 percent who say, ‘‘Well, shucks yes. My word, why 

wouldn’t we want to do that?’’ Or, ‘‘Do you think that we should 

help the one country of the 31 that are members of the southern 

command in terms of our national security who are American allies 

and have come through a very, very difficult time to achieve stability, and isn’t it time to pass a trade agreement we have been 

working on for 5 years?’’ It is a win-win situation. 

Now, that is my question and that is how I would pose it, and 

I think you would get an 80- or 90-percent approval. 

So I guess my question to you is, what have we done from the 

standpoint of alleviating the concern of Americans for so-called 

cheap products coming into the United States and that concern, 

which I understand, and the need to go ahead and pass this Colombian trade agreement, along with the situation with Korea? 

Mr. KIRK. Senator, you have asked me a lot of questions. Coming 

from a State like Texas, believe me, I share your concern, your 

sense of urgency. We have a trade policy that lets us take advantage of these opportunities, not move market share. 

But as I said to my good friend Sam Johnson when I was in the 

House Ways and Means Committee, I have not just been in Texas 

and Kansas. I have been in Detroit. I have been in Pittsburgh. I 

have been in the Carolinas, and I have asked the American public 

that question, and you get different answers. And I know people 

feel very strongly about it in Kansas, but my job is to make sure 

that we get them to feeling a little bit better about it or less afraid 

of it in places like Detroit and Pittsburgh and the Carolinas so we 

can move forward. 

What the Obama administration has said from the very beginning is, it was not just enough to come and go conclude agreements 

just because we think we can conclude them. We have a responsibility to listen to all Americans’ concerns, both positive and negative, and honestly try to address them. We have done that by focusing more on enforcement. We have done that by making sure that 

we would address those issues that go to our core values. 

That is what allowed us to move a Korea free trade agreement 

that was otherwise stalled, and we think that is what is going to 

allow us to move forward with Panama and Colombia. 

We absolutely have given you a commitment that we are going 

to work to resolve those. We are encouraged by the actions we have 

seen by President Santos, and I understand your comments about 

Brazil. But Americans expect more from us than maybe some of 

these other countries do, and this is important to the Obama administration. We think it is important to the American public. 

We think we have a discrete opportunity window to work with 

the Santos administration to do many things they have told us that 

they think it is in their interest to do. 

And, if we can do that and link that to our approval of the free 

trade agreement, we think that is the most responsible thing to do, 

and we are moving just as quickly as we can to try to get that 

done. 

29 

Senator ROBERTS. Mr. Chairman, I would only observe that, if I 

were in Colombia’s shoes and I had the United States of America 

trying to determine my labor policies and my environmental policies and hook them with a trade agreement, I would find another 

trade partner, and I think that is exactly what has happened. 

I do not know what kind of public opinion effort that you can 

launch to have all 50 States say, yes, we want this agreement, but 

I tell you what, when the ambassador came to meet with me, I was 

embarrassed. 

We just have a difference of opinion. That is all. 

Senator HATCH. Thank you, Senator. 

Senator Carper? 

Senator CARPER. Thank you, Mr. Chairman. 

Ambassador, welcome. It is great to see you. 

I want to follow up just briefly on the line of—one of the many 

lines of questioning from Senator Roberts. But the one I want to 

follow up deals with Colombia, and it deals with our concerns 

about people in that country, leaders in that country, labor leaders 

particularly, being targeted for assassination. 

It is something I have been concerned about, a lot of us have 

been concerned about. As we enter into an agreement or think 

about a trade agreement with that country, we want to make sure 

that no particular part of that country’s leadership is being targeted. That includes labor leaders. 

I read a piece recently, I think last week, in the news clips that 

come to me, about the murder rate of labor activists in Colombia, 

and the information that I seem to have recalled was that the murder rate has dropped, and it is actually now below that of the Colombia populous as a whole. 

I just asked my staff, I said, ‘‘Just double-check that and give me 

a source on that,’’ and apparently we have tracked it down most 

recently from the New York Times. I do not know if it is last week, 

this week, or not. 

But I think we would all say one murder is one too many, but 

my sense is that there has been a change in mindset, there has 

been a change with enforcement, and it is better than it was. 

Is it perfect? No. And I always like to say, if it is not perfect, 

make it better. Obviously, there is work still to be done. 

But if what the New York Times is reporting, that the murder 

rate of labor activists has fallen below that of the Colombian populous as a whole, that is progress, that is encouragement. 

Would you just comment briefly on that? And then I want to talk 

with you about chickens. 

Mr. KIRK. Senator, we do believe they have made great progress 

under President Uribe, and, again, we think President Santos is 

making great progress. He has made a very strong commitment to 

improving labor standards, addressing some long-term structural 

issues. He appointed as his vice president a very strongly recognized figure in the labor community, and I cannot emphasize 

enough what a great opportunity and window we think we have to 

work with the Santos administration to address not—we are not 

trying, and I want to make it plain, we are not trying to impose 

the United States’ labor and environmental principles on Colombia, 

but there are some internationally accepted rights that we think 

30 

we have an opportunity to address, and we think we have a discrete window of time that we can accomplish that in with the leadership of this administration. 

Senator CARPER. Thank you. Back to Delaware. All politics is 

local, and the letter ‘‘C’’ figures large in the State of Delaware, the 

letter ‘‘C.’’ Our congressional delegation, Coons—Chris Coons—Carney over in the House of Representatives, Carper. There is the 

three of us. 

The letter ‘‘C’’ defines what our economy has been for years. In 

the beginning, corn. We raised corn and we fed chickens. We got 

into the chemicals business 200 years ago. Corporations, we have 

half of the New York Stock Exchange incorporated in Delaware. 

Cars, credit cards, cargo aircraft, the list goes on and on. 

The biggest part of our economy, our ag economy, is chickens. 

Eighty percent of our ag economy in Delaware, poultry. The largest 

chicken-raising county in America, Sussex County, Delaware. The 

largest soybean-raising county in America, Sussex County, Delaware. It is a big deal for us. 

You know we talked about this before. Many thanks for helping 

to back the Russians off so that they would allow American poultry 

to be sold again in Russia. One out of every five chickens raised 

in America goes to somebody else’s pot in another country. We 

want to make sure that they can enjoy a delicious, healthy chicken. 

Our friends in China responded, two chickens in every pot in 

China and Russia and other places as well. God bless the Russians; 

they like dark meat, we like white meat. It is a marriage made in 

heaven. 

In China, we have gotten into this back and forth with China, 

as you know. We think they are dumping their tires in this country. We imposed a tariff on their tires a couple years ago. 

They responded by imposing a tariff on poultry. We basically indicate that we are going to back off on the—phase out the tariff 

on their tires. They made permanent their tariff on our poultry. 

So my question is, you have indicated that your office is trying 

to determine whether to appeal the imposition of these duties before the WTO gets to say whether or not they are too extensive. 

Just share with us, if you will, where your folks are in your shop 

and the decision-making process on whether or not to appeal these 

duties to the WTO. 

Mr. KIRK. On the case of poultry, we did appeal those. We were 

not successful, but the WTO found, because we did work with Congress—if you recall, there was a rider put on the appropriations bill 

in 2009 that blocked the Department of Agriculture study of the 

safety of Chinese chickens—we were able to resolve that. So the 

WTO found no basis, fortunately, for China imposing any penalties. 

Now, we still believe China is unfairly exercising those trade remedies through those countervailing duties, and we are studying 

that. 

It is our practice and custom not to comment any further in 

terms of whether we would pursue additional strategies within the 

WTO, but I do understand our ambassador who is handling this is 

going to be meeting perhaps with you and Senator Coons and others this afternoon, and we can go into a little more detail on that 

then. 

31 

Senator CARPER. We will look forward to it. Thanks very much 

for being here. Thanks for the good work you are doing, and your 

team, as well. 

Mr. KIRK. Thank you. 

Senator CARPER. Thanks. 

Senator SNOWE. Thank you, Mr. Chairman. 

And welcome, Ambassador Kirk. Thank you very much for being 

here today. 

I wanted to focus in on the whole currency manipulation issue, 

because it truly has devastated so many industries in my State and 

across the country, with the undervaluation of the currency by 

China specifically. And since it joined the WTO, we have lost more 

than 2.1 million jobs in the country and 10,000 jobs in the State 

of Maine. 

And I have been concerned with successive administrations, both 

Democratic and Republican, that have not been willing to investigate the manipulation of currency and the undervaluation of the 

currency by the Chinese government. And it is clearly one significant obstacle to the President’s agenda when it comes to exports, 

and it is a significant obstacle in preserving critical jobs in my 

State of Maine and, of course, across this country. 

In fact, just yesterday, there was an article in the Bangor Daily 

News, talking about ‘‘East Millinocket opts to continue mill tax 

talks.’’ There are two mills that have a combination of 650 jobs. 

One is closed that they are trying to reopen to be competitive, and 

the other they are trying to keep open, and now the potential new 

owners are asking for tax breaks worth $48 million in order to 

make this kind of an investment. 

That is where they are, and these companies are directly affected 

by what China does with respect to its policy. 

So I want to get your views on this, because I noticed that there 

is no mention of China’s currency practices in the 2011 trade agenda. Is there any reason for that? Because clearly this is a major 

issue that we ought to be addressing as a country, given the fact 

that we are losing jobs as a result of it. 

Mr. KIRK. Senator, we share your concern. It is not expressly 

mentioned in our 2011 trade policy, as you know and others have 

noted. President Obama and Secretary Geithner—Treasury more 

directly has responsibility for making that determination in terms 

of the valuation of the currency. 

But I think you know it is an issue that President Obama has 

directly pressed with President Hu on a number of occasions and 

made a strong case, along with other leaders, particularly in the 

G–20 forum and other forums, that it would not only be in the 

world’s interest, but China’s, to allow their currency to float to a 

more normal level. But I would have to defer to them on that. 

Let me say broader, our belief at USTR is that we have to be as 

concerned about other elements of China’s policy. We take very seriously and share your concerns about the currency, but you missed 

some of the conversation one of your other colleagues raised about 

their policies on indigenous innovation, the application of their 

VAT policies, and their lack of enforcement and recognition of intellectual property rights and copyrights. 

32 

Those are areas that are more closely aligned with the work that 

we do at USTR, and we think it is critically important that we 

have a holistic approach to dealing with China’s industrial and economic policy. 

And we do believe we are making progress in that area in terms 

of some of the commitments and some of the results that we have 

seen through both the Strategic Economic Dialogue and our JCCT. 

But we share your concern, and we are going to continue to press 

China both on currency, but we are also going to continue to press 

them on enforcement of intellectual property rights and having an 

industrial policy, frankly, that just gets government’s thumb off the 

scale. 

Senator SNOWE. I think it is critical. Frankly, I have been part 

of many hearings in this committee, and we have talked about 

these issues with various secretaries and ambassadors, obviously to 

Trade, as a trade representative, and we have not made any 

progress. 

But what I am seeing is the continuation of decimating our industries in, certainly, Maine, and just barely surviving and trying 

to be competitive. I am trying to say they are under-valuing their 

currency by more than 40 percent. 

That is why Senator Sherrod Brown and I have introduced legislation so that the Commerce Department will have a lower threshold on which to investigate these trade-distorting practices of currency manipulation, and that can be a means for imposing countervailing duties on those imports that directly benefit from that policy. 

I think that that is critically important. I think we have to be 

aggressive about it. Even Chairman Bernanke took the position 

that China’s currency manipulation provides, and I quote, ‘‘an effective subsidy for Chinese exporters.’’ 

Do you agree with that statement? 

Mr. KIRK. I have not seen that particular statement, but I think 

the administration has spoken to our concern over the operation of 

their currency and, in fact, the effect that it has on both China’s 

exports, with more damaging effects it has on our ability to get into 

that market. 

Senator SNOWE. So, within your jurisdiction of negotiating trade 

agreements, would you be willing to support a requirement that is 

a precondition to entering into any new trade agreement, that the 

President certify that there has been no governmental currency 

manipulation or intervention? 

Mr. KIRK. Senator, I would have to take that—I would have to 

see that language, in particular. 

Senator SNOWE. Well, I just think we are going to have to take 

concerted action. I think it would be important for all of the departments, your agency, obviously, along with Commerce and Treasury, 

to have a coherent strategy when it comes to currency manipulation and, in particular, China, because it is having a cause and effect. There is a definite correlation between the currency manipulation policy, the very deliberate tactical strategy, that is decimating 

our jobs here in this country and certainly in my State of Maine. 

Thank you. 

The CHAIRMAN. Thank you, Senator. 

33 

Senator Menendez? 

Senator MENENDEZ. Thank you, Mr. Chairman. 

Thank you, Ambassador, for your service to our country. 

I have two lines of questioning that I want to pursue with you. 

One is about intellectual property rights. The other one is about 

online piracy. 

I appreciate the work that you are doing to create a new standard for environmental and worker protections in these free trade 

agreements. At the same time, I remain very concerned about intellectual protection, property right protections in other agreements 

that remain below U.S. standards, and that are found in some of 

the free trade agreements that, in fact, we are talking about. 

The innovative biopharmaceutical industry is responsible for over 

3 million jobs here in the United States. And at a time of economic 

challenges, it is imperative that strong IP standards be part of future trade agreements. 

Can you inform the committee how USTR is working to ensure 

that the highest IP standards are included for example, in the 

Trans-Pacific Partnership and in other FTAs for all of our industries, including the pharmaceutical industry? 

That is my first question. 

And the second question is, I appreciate the work that you are 

doing to address the online piracy issues that are harming both 

nonprofit and commercial journal publishers in our country. Combatting online piracy is critical to ensuring that the U.S. remains 

a leader in science and innovation and to retaining good jobs in the 

United States. 

The publishers impacted by IPR violations directly and indirectly 

employ over 50,000 workers annually; and, in my home State of 

New Jersey, over 3,000. So, during the 2009 meeting of the U.S.- 

China Joint Committee on Commerce and Trade, your Chinese 

counterparts pledged to strengthen domestic library efforts to protect copyright. 

In particular, Chinese copyright authorities agreed to conduct 

random inspection of libraries. The problem, however, here, as in 

all of these provisions and agreements, is enforcement. We can 

have all the laws and all the agreements in the world. If there is 

no enforcement, it is meaningless, and that is a key, in my mind, 

to resolving IP problems in China over the long term. 

In the past 2 years, online journal piracy conditions on the 

ground have not improved. Chinese inspections of libraries have 

been certainly, to say the least, not thorough. Libraries can easily 

hide infringement if they are notified of inspections beforehand. 

So we need to work with the Chinese to develop specific guidelines for inspections and audits to reduce the upstream part of the 

piracy supply chain. 

What progress can be expected on this issue under the JCCT this 

year? Those are my two areas. 

We talk about trade and creating jobs here in America. Well, this 

is about jobs in America. The president talked in his speech about 

innovation. We want to be at the apex of the curve of intellect and 

innovation, which means creating opportunities to export American 

goods and services abroad. 

34 

It does not matter, if all of these intellectual property rights are 

largely taken away by other countries at the end of the day. So I 

would like to hear how vigorously you are going to be engaged in 

this, and particularly in these two areas. 

Mr. KIRK. Senator, thank you. Your articulation of the question, 

I think, provided both the necessity and the level of attention we 

are paying to this and many of the strategies we are employing. 

You wisely noted that, in the State of the Union address, the President talked about how we would win the future, and a big part of 

that is about buying out and innovating. 

We lose the benefit of that innovation, that investment in research and development, because at times, like you well know, that 

is not protected. 

We did devote a considerable amount of time at this year’s JCCT 

to the challenge of piracy and theft through academic libraries. 

We have the strongest commitment from China we ever had before that they would deal with a couple of situations, and in one 

case where we know who the perpetrator of that is. China made 

a commitment. They are going to have an enhanced 6-month enforcement effort. 

What we have pressed them for is for a more systemic approach 

to this, because what we have seen in the past, to be honest, is, 

as we get ready for a JCCT, we get a short campaign. What we 

have tried to impress on them is that we need a long-term resolution. 

Senator MENENDEZ. They have perfected the Texas 2-step. 

Mr. KIRK. Now, let’s not beat up on my—— [Laughter.] 

Senator MENENDEZ. It is a very nice dance. The problem is, we 

take a step forward and then, you know. 

Mr. KIRK. But we are going to continue to watch that, and, as 

you know, we have spent quite a bit of time with the publications 

issue. 

Broadly, Senator, it has been a good year for us in our efforts in 

terms of, overall, battling online piracy. We did have a conclusion 

of the text among 21 or so of the larger economies within the WTO 

on the Anti-Counterfeiting Trade Act. We successfully got a ruling 

against the European Union as it relates to the application of the 

ITA within that arena. 

As you know, Congress mandates that we provide a report to you 

every year, a Special 301 report on our current FTA partners’ implementation of their IPR commitments. 

One of the successes that we had, particularly as it relates to 

your concerns about the pharmaceutical industry, is getting an 

agreement with Israel to amend their laws and open up their market in a way that is going to be very beneficial to the pharmaceutical industry. 

Within the TPP—I think that was the last issue we raised—our 

goal, obviously, is to have the strongest intellectual property rights 

that we can. We want to make sure that we protect that American 

innovation. 

We would like to also make sure that we are responsive to global 

concerns, that we have a way to get particularly life-saving and 

-enhancing drugs into the hands of some of the poor countries. 

35 

So we are working to strike the appropriate balance there. We 

would welcome the thoughts of you and your staff and your industry. 

Senator MENENDEZ. Mr. Chairman, if I may, just briefly. I appreciate your answer. Also, on the online piracy, it is a huge issue for 

us. And so I hope that we can work with you, as well as give you 

some specifics of violations that are creating real consequences 

here at home so that you will be able to push the envelope. 

Mr. KIRK. We would welcome that. 

Senator MENENDEZ. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator, very much. 

Mr. Ambassador, I would like to just talk a little bit about Korea 

and beef. Last June, President Obama and South Korean President 

Lee pledged to address U.S. concerns regarding access to the Korean beef market and also the autos market, which led to side 

agreements, although the FTA was signed a long time ago. 

And in December—that statement I read to you was in June of 

last year. In December of last year, the two governments reached 

an agreement on autos, but not on beef. And when President 

Obama announced the autos agreement, he said he would continue 

working to ensure ‘‘full access for U.S. beef to the Korean market.’’ 

That was last December. Those are the President’s words: ‘‘full access for U.S. beef to the Korean market.’’ And, as you know, there 

has been no progress. 

And, as you also know, I am not asking for full access. What am 

I asking for? I am asking for Korea to consult with the United 

States on the path to full access. That is not asking very much, but 

that is what I am asking, so long as that path is consistent with 

sound science. As you know, the OEI says American beef is fine. 

So any Korean complaint that it is not safe, those complaints are 

false. Sound science says this American beef is fine. And the President did say last June that he would continue to work to ensure 

full access. 

So I am asking you, what steps have you taken to secure that 

pledge? 

Mr. KIRK. Senator, as you know, we did raise this issue with the 

Koreans, and, obviously, we were not as successful as we would 

like to be in getting it addressed during the FTA. But we have not 

and will not back off that comment we have made not just to you, 

but we have made to all of our cattle ranchers and agricultural industries, to have our trading partners play by the rules. And so you 

have our commitment. We are going to continue to engage Korea. 

As you know, largely thanks to your efforts, separate from the 

FTA, we do have a beef protocol that opened Korea’s market back 

up that has allowed us to see the extraordinary growth in penetration into that market, as we are seeing now, with over $518 million 

in exports, up 140 percent. 

And it was for that reason, notwithstanding the efforts that we 

made on beef, that we believed the wise course was to go forth with 

the FTA, and one that has the full support of many in the cattle 

and beef industry. 

We will continue to work with you and to work with the Koreans 

to see if we cannot seek the consultations that you have requested. 

36 

I do not believe that is unreasonable, so that we can go forth and 

meet the standard. 

I think in the protocol it says they would open up the market, 

in which that was, quote-unquote, full public acceptance of the 

safety of American beef. We think we need a standard that is more 

definitive. 

The CHAIRMAN. Well, if Korea is not going to agree today, what 

makes you think they are going to agree tomorrow? 

Mr. KIRK. Senator, we are going to continue to press them, and 

I think we will have an opportunity—— 

The CHAIRMAN. I hope so, because I think it is virtually a necessary condition for us to move forward on this whole range of 

issues we are talking about, the FTAs, TAA, ATPA, all of them. All 

of them. All these, they all come together. 

Mr. KIRK. We understand that, but we think we have an opportunity, that we can do a lot of good with passage of that FTA and 

the overall economic benefit. 

The CHAIRMAN. You have more opportunity to get more beef into 

Korea, too. 

China, IPR. I was just struck with Senator Snowe’s statement. 

It is true. You and I and this committee and many others have discussed IPR infringement in China. There has been a lot of talk, a 

lot of talk for a good number of years, but not a lot of action. 

And we press and we press, and you and others say we are working as hard as we can. But that is about as far as it gets. Words 

are about as far as we get. 

So let me just suggest a couple things that we are trying to do 

to help. You know about one of them, and that is that Senator 

Grassley asked for, I think it was, the International Trade Commission to do a report on China’s IPR practices. And as you know, 

the first study described China’s IPR practices, and that is already 

out. 

But the second report is due in May, and that will give us hard 

data on the domestic impact of those practices. And I am not going 

to ask you what you can do about that, but I know that you are 

going to take that report and use that as leverage to advance the 

ball here. 

A lot of the problem, too, is enforcement, as has been mentioned. 

So my question to you is, what do your experts say needs to be 

done in China to better enforce? What is their problem more specifically, not the generality, not the general, but more specifically? 

Let us drill down here. What is the problem? 

Mr. KIRK. Well, there are a number. I wish there was just one 

problem with China. 

The CHAIRMAN. I know that. Name the top two or three or four 

and then what are you doing about those, what is our country 

doing about those. 

Mr. KIRK. As you have noted, part of our frustration in the past 

was, they have said, okay, we are going to highlight this and we 

are going to—since most of their purchases are by their government, and we have estimates from industry and others that 90-plus 

percent of their government use of software is pirated software. 

That is unacceptable. In the past, they have made a commitment 

that they would begin to buy and use legal software. They put no 

37 

resources behind that. They gave their sub-governments no money 

whatsoever to do that. We have gotten a commitment from them 

this year that they will fund that and not only at the national 

level, but at the sub-central level where most of their governmental 

purchases apply. 

Secondly, they made a commitment for the first time that they 

are going to audit that and report to us on their compliance with 

that. And even though it would not be acceptable, we have heard 

from industry, from Microsoft and others, if we could reduce that 

number to 50 percent, the economic gain, the jobs gained here in 

the United States, would be extraordinary. 

I want to make it plain that that is not enough alone, but those 

are two things that we are going to pay special attention to, because, if the government begins to value and use it, that has huge 

ripple effects throughout their economy. 

The CHAIRMAN. Has USTR or anyone else in this administration 

developed a specific comprehensive strategy and plan with lots of 

different data sets as to what needs to be done in China? Assuming 

that the United States’ plans were implemented in China so that 

the result would be a very significant reduction in intellectual 

property infringement, have you developed such a plan? Do you 

know, one, two, three, four, five, six, seven, what has to be done 

in China? For example, what judges have to be hired, whether they 

have to be paid, how they have to be trained. 

Second, what has to be done at the provincial level, who has to 

do what there? Audits—the number of audits and frequency of the 

audits, who does the audits, how many dollars have to be spent 

just for enforcement at all these different levels. 

I am asking, have you developed such a plan? Because, otherwise, we are just talk, and then not much gets accomplished. 

Mr. KIRK. I understand, and that is precisely what we do, and 

that is the value of the JCCT versus the Strategic Economic Dialogue, which tends to be more high-level. 

The CHAIRMAN. Can you send me a copy of that plan? 

Mr. KIRK. We will be happy to sit down and brief your staff, send 

that brief to your staff and show you exactly what it is. 

The CHAIRMAN. I would like to see what it is, what it is that 

you—and the dollars behind it, the people behind it, the numbers 

behind it, not just generalizations. 

Mr. KIRK. We will give you what level of specificity we have. I 

do not want it at all implied that, given the resources we have at 

USTR, that we have the ability to go in and tell China how many 

people—— 

The CHAIRMAN. We have lots of different ways to skin a cat. You 

have lots of companies, American companies, that were on the 

short end of the IP infringement. They have resources. They can 

help you develop that plan. That is often the way things work 

around here. 

Our people we work for—we work for the people of this country, 

and they sometimes have ideas, and then it is up to us, as public 

officials, to decide which ideas are good ideas and separate the good 

from the bad. 

So I am just saying, I mean, come on, Mr. Ambassador, you are 

a smart man. You know how to utilize resources, and you know 

38 

how to persuade people to join the team. I do not accept that point 

that, oh, we do not have—— 

Mr. KIRK. I did not say we do not have it. I just said I was not 

sure we had it to your level. 

But I would tell you that just about every case of success we 

have had with China, whether it is prosecuting cases or whether 

it is through consultations, reforming their behaviors, is because 

we do rely heavily and consult with business and industry on a regular basis, and that is an effective partnership and tool that we utilize. 

The CHAIRMAN. My time is up. But they complain to me, so I 

complain to you. So you have to get the job done. 

Mr. KIRK. Yes, sir. 

The CHAIRMAN. Senator Hatch? 

Senator HATCH. Thank you, Mr. Chairman. 

Ambassador Kirk, you said that there are different standards for 

WTO membership than FTAs. Yet, you can say that you cannot 

move forward with Colombia and Panama because of ‘‘core values.’’ 

And you are willing to compromise those values for Russia, at least 

that is the way it looks to me. It looks like a double standard to 

me. 

But let us turn to the TPP trade agreement. Did you require 

changes to the labor laws in Vietnam, Malaysia, or Brunei before 

moving forward? 

Mr. KIRK. We are tabling the highest standards, and we will be 

tabling. I do not know that we have gotten to the labor chapters 

yet. But our goal in the Trans-Pacific Partnership, whether it is 

Vietnam, whether it is Malaysia, whether there are any other partners, that they will meet those standards as it relates to how we 

expected labor and environmental standards to be articulated in 

the TPP. And, yes, sir, we would expect that. 

We have not completed those. We are not nearly as advanced in 

those agreements. But we have set a very high level of expectations 

and expect those to be met. 

Senator HATCH. What about Russia? 

Mr. KIRK. It would be the—again, Senator, we are not—I want 

to make it plain. I do not see this as a double standard. We are 

not negotiating an FTA with Russia and, I absolutely, the administration shares your concerns about their behavior. 

But the reality is, should Russia accede to the WTO, at that 

point this Congress will have to make a decision whether or not 

you leave Jackson-Vanik in place, which dates back to the Cold 

War. And we understand why it was put there, but that decision 

would mean that U.S. businesses would be denied the opportunity 

to compete in that Russian market as every other member of the 

WTO would be. 

The United States would be left standing on the sideline. And so 

I am not at all making a case that Russia has advanced and addressed every issue, but, if they are going to be accepted into the 

WTO, at that point, this administration and Congress will have to 

make a decision whether or not we want American businesses and 

exporters to have the benefits of that. 

It does not say that our engagement with them is over, but at 

least we will have the largest economy not in a rules-based trading 

39 

system, now in a venue where we have the ability to confront them 

and have more solutions than we have now. 

Senator HATCH. Finally, I just want to point out that the 

Canada-Colombia agreement is expected to enter into force on June 

30, and I just do not see why we do not get this done. 

I really think our country does a pretty poor job in this hemisphere in many ways. Here is our own hemisphere, and we cannot 

get agreements with a country where two successive presidents 

have been heroic in bringing about peace and freedom in Colombia. 

And our long-term relationship with Panama, it seems to me, 

would say, my gosh, we ought to do everything in our power to 

make sure that that relationship continues in a very positive way. 

Now, I believe that you are sincere. I think you want to do this. 

But I have to tell you, I think we ought to pass all three of these 

at the same time, and I hope you will get them all three done so 

that we can do it. And I am going to be dedicated to getting that 

done, and I think there are a lot of others on both sides of the aisle 

who think we have played around with this enough. We do not 

treat our own hemisphere as decently as we do the rest of the 

world, and I find that appalling. And I am not just blaming this 

administration. I think prior ones could have done much better, 

too. 

So I just want to enlist your help to get this done. Quit playing 

around with it. If you put your best foot forward and start saying, 

this is what is going to happen, it is going to happen. So I am 

counting on you getting it done. 

Mr. KIRK. Well, we look forward to working with you to get it 

done. I can assure you that the Obama administration values the 

strategic partnership with Panama and Colombia, and there is a 

reason that President Obama announced in the State of the Union 

address that he is going to be traveling to South America here in 

the next several weeks. 

So we have a shared objective. 

Senator HATCH. Yes. But if he is ignoring Colombia as he travels 

down there, and Panama, too—— 

Mr. KIRK. Wherever the President is means he is not somewhere 

else, but he is going to South America. We value this partnership. 

As I have told you, I think we have laid out a way forward. We 

adhered to every commitment we made at Ways and Means. The 

Santos administration will have a team here tomorrow, and we will 

report to you all as soon as we can on the progress on that and 

what we think is a way forward to allow us to achieve a shared 

goal. 

Senator HATCH. Can we start drafting? 

Mr. KIRK. I do not know the real point to that. Senator, I would 

not be much of a negotiator—— 

Senator HATCH. What is the problem? I mean, my gosh—— 

Mr. KIRK. Because we are still at the negotiating table, Senator, 

and that is not the way to get someone to move and work with you. 

If you tell them you are going to go, they do not have to do anything. And there are issues that are important to this administration that we have articulated. 

We think there are issues that are shared by the Colombians, 

and we think we have an opportunity during these next several 

40 

weeks to get them resolved, and we are going to work as quickly 

as we can to do that. 

Senator HATCH. Well, we will be interested in sitting down and 

drafting as soon as you get that done. I do not know why Canada 

can do these things and we cannot. 

Mr. KIRK. We are the United States. 

Senator HATCH. You mean we are so doggone dumb we cannot 

figure it out. [Laughter.] 

Mr. KIRK. I would not say we are dumb. I have a flag on my 

lapel and not a maple leaf. 

Senator HATCH. The Canadians are very, very good in many 

ways, but my gosh. 

Mr. KIRK. Well, these values are important to us. Senator, listen: 

I think we have the shared goal. I believe we can get there, and 

we look forward to working with you on that. 

Senator HATCH. And we hear this every year. 

Mr. KIRK. Listen, we have brought forward—we have done more, 

and I do not want to be argumentative. I hear you, that is important to us. We are going to do everything we can—— 

Senator HATCH. Well, I do not want to unduly—— 

Mr. KIRK [continuing]. To move forward. 

Senator HATCH. I do not want to move in an undue fashion either, but my gosh, I am sick of it, and I think we have to get going. 

And I think we ought to be helping these friends of ours south of 

us. 

When they are as heroic as they are in Colombia, I mean, my 

gosh, that alone ought to cause us to put every effort we possibly 

can into getting this passed. 

As far as Korea, it is an absolute disgrace that it has taken this long. There is $11 billion in positive trade there, at least. 

How long is it going to be before Korea starts saying, ‘‘Well, we 

have to——’’ 

Mr. KIRK. Senator, we are ready. We have sent you—we can 

begin drafting the text on Korea this afternoon. We are ready to 

go. 

Senator HATCH. Then start drafting the text on Colombia, and 

we will be much happier up here. I am counting on you. You have 

been a mayor of one of the biggest cities in this country. You know 

what it is like to deal with these Democrats down there. It is terrible. 

Mr. KIRK. Well, fortunately, I had a Democratic city council, and 

we got quite a bit done. But my job is to work with everybody. 

Senator HATCH. Then you know how tough it is to deal with the 

Republicans, too. 

Mr. KIRK. Yes, sir, I do. Listen, we have a great opportunity and, 

Senator, I am more optimistic than not that we are going to be at 

a very good place sometime soon. We just ask for a little bit of forbearance. 

Senator HATCH. Well, let’s get it done. 

The CHAIRMAN. Thanks, Senator. It is clear that the President’s 

visit to South America is going to be a great success, at least in 

Brazil. I do not know what other countries he is going to. 

But when I was in Brazil, they are very much looking forward 

to it, and it is a great opportunity for the United States to cement 

41 

the relationship with a very vast, very dynamic country. Brazil is 

on the move. 

One little secret, though, is that Brazil is basically holding up 

the Doha round with their very high industrial tariffs that they do 

not want to reduce. 

So when people talk about the United States and the Doha 

round, I think it is important to remind those same people that 

Brazil is probably more than any other country, among the BRIC 

countries, maintaining high industrial tariffs in its own country, 

and they have to get those down. 

One other point about Colombia. As you know, any agreement 

protects ILO core labor standards. Now that is very important. 

This agreement protects the ILO core labor standards, the basic 

one, the core of labor standards, which will be enforced under this 

agreement, if it is ratified. 

When I hear you talk a little bit about how Americans are very 

nervous about trade, do not like our trade agreements, I want to 

remind you, in my State, people have the same view as they do in 

South Dakota. Senator Thune said, his people want this Colombia 

free trade agreement, because there are a lot of farmers there; 

same thing in Montana. And to be honest, when I hear you speak, 

it sort of sounds like you are more concerned about labor rights in 

Colombia than you are about labor in the United States, because 

all your comments and words are, ‘‘Oh, we have to help Colombia 

labor provisions.’’ Colombia labor provisions. 

I would think most Americans would care more about America’s 

labor rights than about Colombia’s. I do not mean to be critical of 

what has been addressed, and I think it is a major accomplishment, and it is basically the framework of that May 10th agreement a couple, 3 years ago. That is fine. 

I would just remind everybody that core labor standards are protected in that agreement, and they are not going to be protected 

in other agreements, as I have said, that Colombia might reach 

with other countries. 

Mr. KIRK. Mr. Chairman, if I gave you that impression that I 

care more about labor rights elsewhere than here, then let me 

make this perfectly clear. 

What has driven our trade policy from day one is that this President understands and appreciates the only way we are going—one 

of the ways that we are going to keep America’s economy vibrant 

is that we have to continue to lead and to create opportunities for 

American goods, exports, products that we grow and sell around 

the world. 

We did that and, as you know, I have been to Montana. I come 

from Texas. But my wife—I sent her my birthday greetings today, 

you heard me say—comes from Cleveland. And most of my relatives are in Detroit, and I did not think it was enough for me just 

to operate on what I have heard in Montana, in Dallas. 

I can assure you, and you have heard it from your colleagues 

here, when I go east of that Mississippi River, and when I have 

been in Detroit and Pittsburgh and I have been in Senator Snowe’s 

district, there is not that excitement about moving forward with 

our trade as there is in Montana. And the concern of Americans, 

in particular, is that, if we do not insist, if we do not take the opVerDate Nov 24 2008 14:49 Jul 03, 2012 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 R:\DOCS\74816.000 TIMD
42 

portunity of handing that gold standard, which many countries see, 

of a free trade agreement with the United States, if we do not use 

that unique opportunity to make sure they have the strongest labor 

rights, and that they, in fact, enforce them, many Americans believe that creates a perverse or reverse incentive for companies 

here to take manufacturing jobs, to move them to another country 

that does not have the same labor standards. 

So when we articulate those concerns, it is precisely because we 

are trying to be responsive to American workers who want to know 

that we are not going to use our trade agreements as a tool to ship 

jobs overseas. 

The CHAIRMAN. And do you think, if everybody in Cleveland were 

to sit down in front of you and you were to explain, as you would, 

objectively, honestly, the terms of this agreement, that they would 

not be in favor of it? 

If you explained to them this is a one-way deal, you explained 

to them that we have virtually no tariffs on products coming from 

Colombia, but they have tariffs on ours, it is a one-way deal; if you 

explained to them how much market share we have lost; if you explained to them not one job would be lost in Colombia as a consequence of this agreement, and all the terms, you mean to tell me 

that people in Cleveland would not think that is a pretty good 

deal? 

Mr. KIRK. I mean to tell you not only in Cleveland, but I can 

promise you, you can find them in Ohio, you can find them in Montana, you can find them in Texas. Senator, they do not—— 

The CHAIRMAN. Ambassador, you are not answering my question. 

Mr. KIRK. They do not believe. 

The CHAIRMAN. You are not answering my question. You are 

speaking in generalities, just people do not like free trade agreements. 

I am saying, if they knew the terms of this specific agreement, 

anybody you talk to, it is so much—as I said earlier—a no-brainer. 

I think with respect to this particular agreement, people would say, 

yes, this is good for America. 

Mr. KIRK. Listen, we have made that case. We are going to continue to make that case. We believe that it is good for America and, 

I believe, for jobs. But, Senator, you can talk to the people—and 

I have raised that issue and I have made that case in those places, 

and they do not always believe us, but we still owe them the responsibility to get the strongest agreement that we can. 

But, listen, I share your concern. We want to get there, and we 

are going to work just as hard as we can so that we can move forward. 

The CHAIRMAN. First of all, thank you for choosing Montana for 

the APEC conference this coming spring. I must tell you that our 

host committee is a little worried that the U.S. Government is 

going to put more pressure on the host committee to raise more resources than they otherwise were asked to raise, because of the 

budget constraints facing the USTR and the government. 

So I am just saying, they have that concern. 

Mr. KIRK. Not as concerned as I am, but I will be happy to have 

that conversation with you off the record. We had a pretty clear exVerDate Nov 24 2008 14:49 Jul 03, 2012 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 R:\DOCS\74816.000 TIMD
43 

pectation from the host committee. If they will meet that level of 

fundraising, then I think we will be fine. 

The CHAIRMAN. They will meet their commitment. They do not 

want the goal post moved. 

Mr. KIRK. No. 

The CHAIRMAN. That is the concern. 

TAA: what are you doing to get Congress to pass TAA? 

Mr. KIRK. We are hoping, Senator, with your leadership and your 

commitment, we can get TAA passed. The administration has been 

very firm, and I know we have talked a lot and heard a lot from 

the committee this morning that you see a linkage of Colombia and 

Panama. 

But I believe—part of my answer when you asked, when I talk 

with people, whether it is in Ohio or Pittsburgh, one of the things 

that helps buys us credibility that they think we have heard them 

is we can show that we have funded TAA, as Congress over the 

years and the administration has promised they would. So the 

President—— 

The CHAIRMAN. Why has the administration backed off from its 

support for TAA? 

Mr. KIRK. Trade Adjustment Assistance? 

The CHAIRMAN. Yes. Because—— 

Mr. KIRK. We absolutely have not. 

The CHAIRMAN. Yes, you have. I will tell you why. Your budget 

only asked for TAA for workers programs, but does not ask for 

firms, farmers, and communities, all of which were found in the 

2009 bill. 

You backed off. So why do you not fully support TAA? 

Mr. KIRK. Senator, listen, I would have to defer to OMB in terms 

of the particular budget submissions, but, as you know, this Congress is right now having to make some very difficult decisions, as 

the American public is, on how you are going to meet your goals 

to restrain spending and attack the deficit, which means everything is not going to be funded at the level that it has been before. 

I would probably have to refer you to OMB in terms of the exact 

level of requests for Trade Adjustment Assistance. 

The CHAIRMAN. I think it is a disappointment that they backed 

off, because I think this is important. 

What can you tell us about trade agency consolidation? The 

President mentioned it in his State of the Union address. So what 

is going on? 

Mr. KIRK. Well, I cannot tell you much more. It is being directed 

from within the White House. I think the President wisely realizes 

that, as the American public is, we are going to have to learn how 

to be more efficient, how can we do more with less. 

The President wisely noted you have nine different agencies with 

responsibility for trade. We are one of them. He has asked a group 

of leaders to look at our operations and see—make sure, first of all, 

there is no duplication, where we can work more collaboratively. 

I think the best use of my time is to go out and attack some of 

these challenges that you have articulated. We are privileged to 

lead the USTR, one of the smaller, more nimble agencies within 

the Federal Government, and we will keep doing our job to the best 

of our ability. But if there are recommendations that can help us 

44 

work more thoughtfully and efficiently, at the appropriate time, we 

will be happy to engage. 

The CHAIRMAN. I am concerned, frankly. In theory, it sounds 

good. Who can be against it, in theory? But in practice, it could be 

a nightmare, an absolute nightmare. 

For example, let us say USTR was consolidated with the U.S. 

Export/Import Bank. You have two different missions. You would 

have so many layers of bureaucracy to go through. You have to get 

the signoff to get agreement, all that nonsense. You could not. You 

would be hamstrung. 

So I just urge you to remember what our goal is. Our goal here 

is to be efficient, quick, to the point, effective, and I just urge you 

to keep that in mind and keep this committee fully informed, because this committee cares a lot about your agency. 

As you said, you are small, you are nimble. You can act quickly, 

and I just want you to maintain that ability. 

Mr. KIRK. We appreciate your support, and we share your concern on that. 

The CHAIRMAN. Thank you very much, Mr. Ambassador. You 

have spent a lot of time here. 

Mr. KIRK. It is always a privilege. 

The CHAIRMAN. And wish your wife happy birthday again for us. 

Mr. KIRK. Thank you. 

The CHAIRMAN. The committee is adjourned. 

[Whereupon, at 11:54 a.m., the hearing was concluded.] 

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