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S. HRG. 113–312 

THE TRANSATLANTIC TRADE AND INVESTMENT 

PARTNERSHIP: ACHIEVING THE POTENTIAL 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

OCTOBER 30, 2013 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

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 

SHERROD BROWN, Ohio 

MICHAEL F. BENNET, Colorado 

ROBERT P. CASEY, Jr., Pennsylvania 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

JOHN THUNE, South Dakota 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

ROB PORTMAN, Ohio 

PATRICK J. TOOMEY, Pennsylvania 

AMBER COTTLE, 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 

WITNESSES 

Ducker, Michael L., executive vice president and chief operating officer, Federal Express, Memphis, TN ................................................................................. 5 

McCormick, Ryan, president, Montana Grain Growers Association, Great 

Falls, MT ............................................................................................................... 7 

Ricks, Dave, senior vice president, Eli Lilly and Company, and president, 

Lilly Biomedicines, Indianapolis, IN .................................................................. 9 

Roenigk, William, senior vice president, National Chicken Council, Washington, DC ............................................................................................................. 11 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

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

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

Ducker, Michael L.: 

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

Prepared statement .......................................................................................... 23 

Hatch, Hon. Orrin G.: 

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

Prepared statement .......................................................................................... 30 

McCormick, Ryan: 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 33 

Ricks, Dave: 

Testimony .......................................................................................................... 9 

Prepared statement with attachment ............................................................. 38 

Roenigk, William: 

Testimony .......................................................................................................... 11 

Prepared statement with attachments ........................................................... 53 

COMMUNICATIONS

Advanced Medical Technology Association (AdvaMed) ........................................ 65 

Center for International Environmental Law (CIEL) .......................................... 68 

Toy Industry Association, Inc. ................................................................................ 78 

(III) 

(1) 

THE TRANSATLANTIC TRADE AND 

INVESTMENT PARTNERSHIP: 

ACHIEVING THE POTENTIAL 

WEDNESDAY, OCTOBER 30, 2013 

U.S. SENATE, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 11:10 a.m., in 

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

(chairman of the committee) presiding. 

Present: Senators Carper, Cardin, Brown, Casey, Hatch, Thune, 

and Isakson. 

Also present: Democratic Staff: Mac Campbell, General Counsel; 

Rory Murphy, International Trade Analyst; Bruce Hirsh, Chief 

International Trade Counsel; Chelsea Thomas, Professional Staff 

Member; and Lisa Pearlman, International Trade Counsel. Republican Staff: Chris Campbell, Staff Director; Everett Eissenstat, 

Chief International Trade Counsel; and Jeff Wrase, Chief Economist. 

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

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The committee will come to order. 

Benjamin Franklin, who helped negotiate the original trade treaties between America and Europe more than 2 centuries ago, gave 

the following advice, and I quote: ‘‘To succeed, jump as quickly at 

opportunities as you do at conclusions.’’ 

Franklin was our first ambassador, becoming the U.S. Minister 

to France in 1776, long before our Nation won its independence 

from Britain. 

He saw an opportunity, an opportunity to build a strong relationship with a powerful ally. Thanks to his work, the United States 

and France signed treaties in 1778 that gave our young army critical support and laid out the framework for a successful trading 

partnership. 

We are here today because we have another opportunity, an opportunity to boost America’s economy, an opportunity to create 

thousands of new jobs across the United States. This opportunity 

lies in a new comprehensive trade agreement between the United 

States and the European Union. It is called the Transatlantic 

Trade and Investment Partnership, or TTIP. And it is an opportunity we must jump at quickly. 

2 

The U.S. and E.U. already enjoy the strongest economic relationship in the world. Together we make up half of global GDP and 

more than a third of global trade. Every day, the United States and 

the E.U. trade $2.7 billion in goods and services. We have invested 

nearly $4 trillion in each other’s economies. Transatlantic trade 

supports 13 million U.S. jobs. We all know that we need more jobs 

and better-paying jobs. This new opportunity, this new trade and 

investment agreement, would deliver those jobs. 

This new trade agreement could boost exports to the E.U. by a third and add more than $100 billion annually to U.S. GDP. It 

could support hundreds of thousands of new jobs in the United 

States. 

Jobs related to exports pay 13 to 18 percent more than the national average, and jobs supported by foreign direct investment in 

the United States pay 30 percent more than non-FDI-supported 

jobs. When we lower trade barriers, we increase exports and attract 

foreign investment, and we provide America’s economy the shot in 

the arm it so desperately needs. 

The benefits of TTIP would ripple across our Nation. For example, in my home State of Montana, TTIP could grow exports to the 

E.U. by 19 percent and support nearly 2,400 new Montana jobs. 

Every State would have its own success story. 

How would TTIP do this? It would lower tariffs on our enormous 

bilateral trade, increasing U.S. exports by double digits and saving 

families money on the goods and services they buy here at home. 

It would cut red tape and reduce costs for businesses, such as 

automakers that currently face duplicative regulations in the E.U. 

and the United States. And it would spark investment in innovation that would bring jobs and growth on both sides of the Atlantic. 

We are talking about a landmark opportunity. But for the TTIP 

to live up to its potential, we will first have to tackle a number of 

challenges. For example, we must address the E.U.’s unscientific 

and unjustified barriers to U.S. agricultural products, including 

beef and poultry. 

While in Europe last year, I pushed their leaders to drop those 

barriers. U.S. beef has earned the top safety rating from the World 

Organization for Animal Health. And CODEX, another of the 

world’s trusted authorities on food safety, has declared U.S. beef 

production methods to be perfectly safe. It is finally time for the 

E.U. to act. 

I am confident that we can overcome that hurdle and others. The 

more challenges we address in negotiating the TTIP, the bigger the 

gains will be for our two economies, boosting exports, attracting 

new investment, and creating jobs. 

The TTIP is just one part of the most ambitious U.S. trade agenda in a generation. Ninety-five percent of the world’s consumers 

live outside of the United States. Our trade agenda today gives 

American farmers, ranchers, businesses, and workers more opportunities to reach them than ever before. 

It means Dave and Cole Mannix, two proud family ranchers from 

Helmville, MT, can expand their market for some of the besttasting beef I have ever had. It means global brewers, like 

Anheuser-Busch InBev, can use more Montana malt barley in their 

beer. It means international companies like Siemens can have even 

3 

more reason to work with educational institutions like Flathead 

Valley Community College to develop the skills of Montana’s workforce. 

Congress needs to be a full partner in the development and execution of this agenda, and the best way to do that is to pass Trade 

Promotion Authority and to do it soon. 

The United States has numerous other trade opportunities. The 

Trans-Pacific Partnership, or TPP, is near completion. The TPP 

parties need to know in the clearest terms what Congress’s priorities are. And Congress needs to set priorities as the administration 

starts negotiating with Europe. We can do that through Trade Promotion Authority. I am pleased that President Obama has requested TPA and that Ambassador Froman has been making the 

case for TPA. 

It is time for us to do our part. We must introduce a bill and pass 

it quickly. Senator Hatch, let us work together to get that done as 

quickly as possible. 

Ben Franklin counseled us to jump at opportunities. That is advice we must heed for very simple reasons. More trade means more 

American jobs, and more trade means a stronger economy. More 

trade means a more secure future. It is that simple. 

So let us jump at this opportunity to expand the world’s largest 

trade relationship. Let us do the hard work. Let us make sure that 

TTIP is as meaningful as we can make it. 

[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, for holding this 

hearing. 

As we all know, expanding international trade is vital to our economic growth. Unfortunately, the United States has not conducted 

a new free trade agreement since June of 2007. Fortunately, the 

administration has a golden opportunity to change that in the near 

future. 

Negotiations for a small package of trade-enhancing measures 

under the auspices of the World Trade Organization are really 

reaching a critical stage. According to Ambassador Froman, negotiations to conclude a Trans-Pacific Partnership are also in the, 

quote, ‘‘end game.’’ 

Meanwhile, interest in concluding the Trade and Investment 

Services Agreement continues to build. And, of course, there is the 

potential surrounding the Transatlantic Trade and Investment 

Partnership agreement, or TTIP, which we are here to discuss 

today. 

TTIP negotiations are just getting underway. If successful, they 

will build on our already strong economic ties with the 28 member 

states of the European Union. Our economic relationship with the 

E.U. is one of the largest and most complex in the world. Together, 

our two economies account for about one-half of the world GDP and 

for nearly a third of world trade. 

4 

Our two markets are already deeply integrated. So, for TTIP to 

reach the full potential, the agreement must reflect an unprecedented level of ambition. 

Tariffs between our two economies remain low, but the sheer volume of trade means that companies and consumers on both sides 

of the Atlantic are paying vast sums in unnecessary tariffs. For example, ICON Health, based in Logan, UT, manufactures home exercise equipment. Grown from a small company on the campus of 

Utah State University, ICON now employs over 3,000 people and 

sells its products all over the world. Yet, today, they still face tariffs in the E.U. averaging 2.7 percent. Elimination of these nuisance tariffs would help spur more economic opportunity on both 

sides of the Atlantic. 

On February 12th of this year, Chairman Baucus and I sent a 

letter to Ambassador Kirk outlining our expectations for the TTIP 

negotiations. We highlighted the importance of strong market access for U.S. agricultural products, including the elimination of unjustified sanitary and phyto-sanitary standards. We also called for 

the agreement to be comprehensive, excluding no product or sector 

from the actual negotiations. 

Finally, we called upon the administration to ensure that the 

agreement reflects the highest standards of intellectual property 

rights and does not jeopardize our ability to reach high levels of intellectual property protection in other negotiations or in other markets. 

All of these goals still hold. But today I want to emphasize a few 

key points. First, for the U.S. economy to thrive, strong intellectual 

property rights protections are vitally important. Intellectual 

property-intensive industries support at least 40 million jobs and 

contribute more than $5 trillion to the U.S. economy. 

For me to support a final agreement, it is absolutely essential 

that TTIP reflect the highest standards of intellectual property 

rights protection of any prior agreement. Indeed, the standards set 

in TTIP will be a model for the world. So we just have to get it 

right. 

I also want to emphasize the importance of digital trade. The 

Internet has fundamentally changed the way in which consumers 

shop and businesses deliver their products and services. Businesses, especially small businesses, benefit through improved efficiency, lower production costs, and access to a wider range of markets, while consumers benefit from more choices and, I might add, 

improved access to products and services. 

Given the importance of digital trade in the European market, 

there are several barriers to digital trade that I believe the agreement must address. 

First, there are barriers that inhibit the free flow of digital data, 

including forced localization policies that, for example, require data 

servers to be located in-country or that require utilization of local 

content or technologies. The final TTIP agreement should prohibit 

these kinds of policies. The agreement should also prohibit discriminatory treatment of digital products and ensure that all technologies are given the chance to compete in the marketplace. In addition, audiovisual services must be included. 

5 

Regulatory coherence will also be critical to achieving a meaningful agreement. Inconsistent and duplicative regulations create 

enormous cost and inefficiency for U.S. exporters of goods and services to the E.U. These negotiations must strive for regulatory convergence and coherence to eliminate barriers to trade. In particular, we should seek identical standards for emerging technologies, such as nanotechnology and Internet technologies. 

Finally, no sector should be excluded from our efforts to enhance 

regulatory convergence, including financial services. Financial services play an essential role in facilitating trade and investment 

flows between our two regions. Given the central importance of the 

financial sector to every other aspect of industrialized economies, 

I do not see how financial services regulation can be excluded from 

a meaningful TTIP agreement. 

Of course, for this or any trade negotiation to succeed, the President must work with Congress to achieve renewal of Trade Promotion Authority, as the distinguished Senator has said, the chairman of this committee. Senator Baucus and I are currently working with our House counterparts to conclude a discussion on legislation to renew TPA. Once those efforts succeed, I hope that President Obama and his team will actively work with Congress to 

quickly seek Congress’s approval. 

Mr. Chairman, I want to thank you again for holding this hearing. I look forward to hearing from each one of our witnesses today. 

Thank you. 

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

The CHAIRMAN. Thank you, Senator. 

I am pleased to be here today with Michael Ducker, who is the 

executive vice president and chief operating officer of FedEx Express. 

Following him is Mr. Ryan McCormick, president of the Montana 

Grain Growers Association, a grain farmer and small business 

owner near Kremlin, MT. 

Our third witness is Dave Ricks, senior vice president of Eli Lilly 

and president of Lilly Biomedicines. 

Our fourth witness is Mr. Bill Roenigk, senior vice president of 

the National Chicken Council. 

Thank you all so very much for coming. And you are first, Mr. 

Ducker. Go ahead. And you know our rules here. Your statements 

will automatically be included in the record, and you have about 

5 minutes to tell us what you think. 

STATEMENT OF MICHAEL L. DUCKER, EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER, FEDERAL EXPRESS, 

MEMPHIS, TN 

Mr. DUCKER. Yes, sir. Chairman Baucus, Ranking Member 

Hatch, and distinguished members of the committee, I do thank 

you for the opportunity to be with you today and to talk about 

TTIP, which we believe is an opportunity of enormous importance, 

and FedEx strongly supports that. 

At FedEx, our business is trade, operating the world’s largest express delivery network spanning 220 countries and territories, linking that 95 percent of global GDP that Chairman Baucus just 

6 

spoke about—all within 72 hours—along with other operating companies, creating jobs for more than 300,000 team members. 

Our network handles more than 10 million shipments on an average day, and our customers range from individuals and small and 

medium-sized enterprises to the largest companies. Therefore, a 

trade agreement that creates opportunities for our customers to expand their businesses and generates increased demand for FedEx 

services will be an undeniable boon for the U.S. economy, as well 

as for our own company. 

The U.S. and Europe, as you heard, account for close to half of global GDP, and our trade already exceeds $1 trillion each year. 

So, liberalizing the rules that govern trade and investment in that 

enormous economic area will inevitably result in unprecedented 

gains in jobs, competitiveness, and GDP. 

But the TTIP opportunity, we believe, is even greater than that. 

By instituting ambitious, high-standard, comprehensive trade 

rules, including those which address emerging global issues, such 

as regulatory compatibility, state-owned enterprises, data flows, 

competition policy, and investor-state dispute settlement, the TTIP 

can pave the way for global trade in the 21st century to be governed by the shared values and mutually agreed regulatory standards of the U.S. and E.U., rather than alternative approaches favored by countries with different attitudes toward free markets and 

sensible regulation. 

I want to talk about several pillars of TTIP. First of all, tariffs. 

Now, those are the traditional mainstay of trade negotiations and 

maybe the easiest ones to address in TTIP. Tariffs are already relatively low, however, in the U.S. and the E.U. So it should not be 

difficult to gain an agreement to get rid of those tariffs that remain. Nonetheless, the importance of eliminating those tariffs is 

very significant. Because of the enormous volume of trade across 

the Atlantic, even the generally single-digit tariffs still force costs 

of about $6.4 billion a year. 

Second, as the world’s largest express delivery carrier, the rules 

to be negotiated that will govern the services sector are of particular importance to us. In order for trade in services to realize its 

full potential, TTIP needs to reflect principles that are conducive 

to continued investment, competition, and innovation in the services sector. That would include full market access, national treatment, as well as disciplines to prevent state-owned enterprises 

from engaging in anticompetitive conduct. Because the U.S. and 

the E.U. both have strong global express delivery companies, it represents a unique opportunity to agree on high standards in that 

area that can eventually become a global standard. 

Investment is the third area. It already totals about $3.9 trillion, 

resulting in $3 trillion in incremental annual sales for U.S. businesses and incremental employment for 3.5 million U.S. workers. 

We can take this opportunity of TTIP to enshrine the rules which 

can form the right to establish and operate investments on a nondiscriminatory basis and freely transfer funds and data, and establish high standards and disciplines regarding competition with 

state-owned enterprises and investor-state dispute settlement. 

Regulatory compatibility is the fourth area. It lies at the heart 

of the TTIP negotiations and is likely to be one of the most chalVerDate Mar 15 2010 20:55 Jul 09, 2014 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 R:\DOCS\88432.000 TIMD
7 

lenging issues to tackle, but it really holds the greatest promise for 

economic gains. 

To be successful, we do not really need fundamental changes in 

our respective regulatory approaches. It is about finding areas 

where unnecessary, redundant regulations or processes can be reduced to simplify trade and facilitate it while still maintaining very 

high standards of consumer, investor, and environmental protection. And it is about improving regulatory cooperation, transparency, and best practices to reduce regulatory barriers in the future. The rewards in this area could be substantial. 

Improving trade facilitation is another area, and by getting rid 

of unnecessary red tape that raises the cost of trading across borders, we think that holds enormous potential. There are many 

things we can do in our border management and Customs clearance procedures to make trade simpler, faster, and more seamless. 

And one important example is the de minimis level, the threshold 

below which goods can enter the country duty- or tax-free. Ours in 

the U.S. is $200. And legislation is pending in both houses with bipartisan support to raise that de minimis level to $800. 

In Europe, the de minimis level is around $200. But, in effect, 

de minimis on VAT is about $30 in most member states and as low 

as $13 in some. That means that companies, as Senator Hatch 

pointed out, selling into Europe will often face higher taxes and administrative costs than European companies that are selling into 

the U.S. 

In sum, we believe the TTIP represents an unprecedented opportunity to promote economic growth on both sides of the Atlantic. 

Neither side can afford to forego this opportunity. And I know, also, 

the committee is interested in Trade Promotion Authority. FedEx 

fully supports the passage of TPA as soon as possible. Given the 

United States’ ambitious trade agenda, getting that done quickly 

will be critical to bringing those agreements across the finish line. 

I deeply appreciate the opportunity. 

[The prepared statement of Mr. Ducker appears in the appendix.] 

The CHAIRMAN. Thank you, Mr. Ducker, very much. 

Mr. McCormick, you are next, and welcome to Washington, DC. 

STATEMENT OF RYAN McCORMICK, PRESIDENT, MONTANA 

GRAIN GROWERS ASSOCIATION, GREAT FALLS, MT 

Mr. MCCORMICK. Thanks, Max. 

The CHAIRMAN. For the interest of everybody in the room, we 

just saw each other a week ago in Montana. 

Mr. MCCORMICK. Not so long ago, yes, that is right. 

The CHAIRMAN. That is right. Thanks very much. 

Mr. MCCORMICK. Chairman Baucus, Ranking Member Hatch, 

members of the committee, my name is Ryan McCormick. I, along 

with my family, operate a successful agribusiness near Kremlin, 

MT. 

On our farm, we raise hard red winter wheat, hard red spring 

wheat, durum, dried peas, and, most recently, mustard. I currently 

serve as the president of the Montana Grain Growers Association, 

am on the Board of Directors for the National Association of Wheat 

Growers, and I am the chairman of NAWG’s Domestic and Trade 

8 

Policy Committee, which helps set NAWG’s policy for international 

trade. 

In a typical year, U.S. wheat farmers export about 50 percent of 

their production. In Montana, we export nearly 80 percent of our 

production. To say that trade is important to Montana is an understatement. Trade is just as important to Montana producers as 

tractors, fuel, and seed. Not only do we depend on trade, the world 

depends on us as a reliable supplier of high quality wheat. 

The U.S. wheat industry supports the swift negotiation and ratification of a comprehensive, high standard TTIP. A successful TTIP 

must be completed in a single undertaking, with no exclusions or 

commitment to deal with tough issues at a later date. 

First, the TTIP must eliminate all duties on U.S. wheat imports. 

The E.U. reduced the in-quota duty to zero on low- and mediumquality wheat in February of 2011. Due to this recent action to remove tariffs and taking into account the low U.S. tariff, the U.S. 

should push for complete, immediate, and permanent tariff and 

duty elimination. 

U.S. wheat producers, many from Montana, compete against 

Canada for sales of durum and high-quality wheat. Canada and the 

E.U. just this month completed negotiation of their own free trade 

agreement. The outcome of the Canada-E.U. agreement will result 

in permanent zero wheat duty for Canadian producers to be phased 

in over 7 years. This will lead to future tariff differentials and a 

preference toward Canadian wheat. This increases the urgency to 

finalize this trade agreement so that we can stay competitive with 

our neighbors to the north. 

Second, U.S. wheat producers strongly support science-based, 

least trade restrictive regulations. The E.U. and the U.S. are 

viewed as global scientific leaders, and our actions on sanitary and 

phyto-sanitary measures have a broad impact, making this a critical area of discussion. Increased cooperation on science-based SPS 

risk assessments, standards, processes, and implementations of 

least trade restrictive regulations would benefit U.S.–E.U. bilateral 

trade and positively influence SPS regulations in countries that 

look to the U.S. and the E.U. for guidance. 

Third, the European Union must agree to a more predictable biotechnology approval process. The E.U.’s political approach in regulating crops enhanced with traits achieved through modern biotechnology procedures is a concern to U.S. wheat producers. The 

E.U. biotechnology approval process is slow and often influenced 

more by politics than science. Creating uncertainty and deterring 

new investment in wheat research, the slow biotechnology approval 

process puts future trade at risk. 

Science should be the basis for biotech crop approvals, and the 

E.U. market should provide consumer choice for biotech and nonbiotech products. Due to the slow approval process, the E.U. needs 

to implement a low level presence policy for food to avoid trade disruptions. A workable LLP policy and threshold for events approved 

by U.S. regulators would ensure that trade continues even when 

negligible amounts of approved biotech traits are inadvertently 

present in bulk shipments. 

Finally, we urge Congress to renew Trade Promotion Authority. 

TPA renewal is essential to completion and ratification of a comVerDate Mar 15 2010 20:55 Jul 09, 2014 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 R:\DOCS\88432.000 TIMD
9 

prehensive TTIP agreement, as well as completing the TransPacific Partnership and securing an eventual WTO agreement. 

In conclusion, U.S. wheat farmers welcome the progress that has 

taken place so far in the TTIP negotiations and encourage Congress and the administration to work together to negotiate a comprehensive, high standard agreement. 

Mr. Chairman, Ranking Member Hatch, members of the committee, thank you for allowing me the opportunity to be with you 

today to discuss the importance of this free trade agreement to 

wheat farmers. I would be happy to answer any questions you may 

have. And I wanted to let Max know that anytime he wants to, he 

would be welcome to operate my combine. [Laughter.] 

[The prepared statement of Mr. McCormick appears in the appendix.] 

The CHAIRMAN. Thank you, Ryan, very much. That is an inside 

joke that we talked about last week. 

Senator HATCH. I do not know that I would trust him with that 

expensive equipment. [Laughter.] 

The CHAIRMAN. Thank you, Ryan, very much. 

Mr. Ricks? 

STATEMENT OF DAVE RICKS, SENIOR VICE PRESIDENT, ELI 

LILLY AND COMPANY, AND PRESIDENT, LILLY BIOMEDICINES, INDIANAPOLIS, IN 

Mr. RICKS. Thank you. That is hard to compete with. 

Chairman Baucus, Ranking Member Hatch, members of the committee, we very much appreciate the opportunity to address the 

committee today on the TTIP arrangement, a negotiation of great 

importance to Eli Lilly and Company and, we think, the entire 

business community. 

Now, Lilly is a 137-year-old global biopharmaceutical company 

headquartered in Indianapolis, IN—we are Hoosiers. We are a 

truly integrated transatlantic company with significant investments in R&D, in people, and facilities in both the U.S. and in Europe. 

In addition to our more than 16,000 U.S. employees, our investments in Europe help support U.S. jobs, investment, and patient 

programs, including in the great States of Montana and Utah. 

Through our membership in a number of industry and transatlantic organizations, we have advocated for the TTIP on both 

sides of the Atlantic as a comprehensive and ambitious agreement, 

offering many benefits to our company and our employees, to the 

U.S. economy, and to patients here and around the world who rely 

on our medicines. 

I have a strong appreciation for the benefits of open trade and 

the concerns that occur when it is not there. As the leader of Lilly’s 

largest business, spanning from Japan to Europe, formerly the 

head of Lilly’s Chinese business and the Canadian business, I know 

how these barriers can affect trade and real investment. 

Before commenting on the TTIP, however, it is important to first 

say that Lilly, our industry, and the business community believe 

that legislation to renew the TPA, or the Trade Promotion Authority, could provide an important opportunity to strengthen and grow 

the U.S. economy. I would like to acknowledge Chairman Baucus 

10 

and Ranking Member Hatch for their leadership on this issue and 

underscore that the business community stands ready to work with 

you and your staffs on a high standard TPA bill. 

On TTIP, we strongly favor an ambitious, comprehensive, and 

high standard trade investment agreement. Lilly and the pharmaceutical industry believe that TTIP represents a unique opportunity to promote the highest standards of intellectual property, 

market access, and regulation, in particular for IP-driven sectors in 

which the U.S. and the E.U. enjoy today a global advantage. We 

believe the two governments should use the TTIP arrangement to 

work together to maintain and grow that advantage. 

We believe the agreement must cover industrial goods, food and 

agriculture, services, investment, procurement, protection of IPR, 

and regulatory issues. We believe there should be no exclusion of 

specific sectors or commodities. We believe that the TTIP should 

set the highest possible standards for third countries to work toward in the areas of investment, IPR, competition policy, and 

SOEs, and should eliminate forced localization. As for the timeline, 

we would prefer that negotiators take the time needed, within reason, to achieve a comprehensive agreement rather than rushing to 

meet a self-imposed deadline. 

I also want to underscore how critical it is that intellectual property rights be included in negotiations. For our company, for our 

industry, and for the broad business community, we believe it is essential that this agreement maintain and promote effective levels 

of IPR in the E.U. and globally. This is absolutely essential to continued investment in research, development, and commercialization 

of leading-edge technologies. 

We believe TTIP should set an ambitious standard for pharmaceuticals in the fields of regulatory standards, intellectual property 

protection and enforcement, and market access. For Lilly, this 

agreement represents a significant opportunity to address regulatory duplication, increase reward for innovation through raising 

the IPR standards, and address serious market access and transparency concerns we have. 

As well, TTIP should improve alignment between the U.S. and 

the E.U. vis-a`-vis third countries, to promote a high policy standard 

for pharma and improve access to innovation and new medicines 

throughout the world. 

In conclusion, Lilly, along with the biopharmaceutical industry 

and much of the broader business community, sees TTIP as a oncein-a-lifetime opportunity to simplify transatlantic business, address 

longstanding trade issues, create new markets, and, most importantly, increase this country’s competitiveness and improve U.S. 

jobs here. 

We look forward to working with the committee and Congress to 

ensure that this agreement meets the expectations of the business 

community, creates jobs, and enhances the competitiveness of our 

two economies. 

Thank you for the opportunity to testify today. 

[The prepared statement of Mr. Ricks appears in the appendix.] 

The CHAIRMAN. Thank you, Mr. Ricks, very much. I appreciate 

that. 

Mr. Roenigk, you are next. Thank you. 

11 

STATEMENT OF WILLIAM ROENIGK, SENIOR VICE PRESIDENT, 

NATIONAL CHICKEN COUNCIL, WASHINGTON, DC 

Mr. ROENIGK. Good morning. 

The CHAIRMAN. Good morning. 

Mr. ROENIGK. Thank you, Chairman Baucus, Senator Hatch, and 

members of the committee, for the opportunity for the National 

Chicken Counsel to share our thoughts and recommendations regarding the Transatlantic Trade and Investment Partnership. 

This is an important hearing and very timely, as our negotiators 

continue to move forward to reach a conclusion and a final agreement. So we very much appreciate this opportunity. 

I am Bill Roenigk with the National Chicken Counsel. The Counsel represents the vertically integrated companies that will produce 

and process over 95 percent of the chickens in the United States 

this year, and we will produce, as an industry, over 9 billion chickens, almost as many packages as Federal Express will deliver this 

year. 

In my written statement, I have outlined how the European 

Union has excluded U.S. poultry from its market since 1997. At the 

same time, I can assure this committee that, if time permitted, you 

would have a long, almost endless list or stream of other witnesses 

from other parts of agriculture who could share with you their frustrations and their problems in trying to export their commodities 

and products to the European Union. These problems not only restrict or limit, but in our case, prohibit our exports to the E.U. 

With tomorrow being Halloween, permit me to note that we in 

U.S. agriculture know the final agreement with the TTIP could be 

a trick or it could be a treat. We, of course, hope that it is a treat 

and not a trick. Time will tell, of course, how the final agreement 

looks to U.S. agriculture. 

The E.U., since 1997, when it implemented the common agricultural policy, has used a bagful of scary tricks to severely hamper 

free and fair trade in U.S. agricultural products. One of the more 

irksome tricks in the E.U. bag has been the so-called precautionary 

principle, which, as I understand it, the E.U. uses when it is convenient as a call to approve an over-abundance of caution regarding food safety and similar issues, while, at the same time, having 

zero risk involved. 

Having experienced some of our frustrations, I should note that 

there may be reasons to be hopeful. I am not going to use the word 

‘‘optimistic,’’ but there may be reasons to be hopeful with respect 

to a successful agreement being concluded. 

First, it does appear the E.U. is somewhat willing to fully engage 

in negotiations in a serious way. More specifically, in the case of 

agriculture, we have examples where the E.U. may be changing. 

Export subsidies for poultry were discontinued last month. These 

subsidies or, as the E.U. calls them, export restitutions, have been 

an integral part of the common agricultural policy. So it was good 

to see the export subsidies being discontinued. 

Another example in agriculture is the E.U., earlier this year, I 

think in February, approved lactic acid to be used on beef as a 

pathogen reduction treatment. Further, we now understand the 

E.U. is considering peroxyacetic acid as a pathogen reduction treatment on poultry. Peroxyacetic acid may be a scary name, but basiVerDate Mar 15 2010 20:55 Jul 09, 2014 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 R:\DOCS\88432.000 TIMD
12 

cally it is hydrogen peroxide and vinegar. And we are hopeful that 

this process will continue. 

In 1997, the reason we were prohibited from the market was because we used hyper-chlorinated water to reduce the bacteria on 

our product. In 1996, U.S. poultry exports to the E.U. 15, at that 

time, totaled about $55 million, making it the 9th-largest market. 

If the current 28 countries were in the E.U. in 1996, our exports 

would have been $210 million, making the E.U., if it existed at 28 

at that time, our 3rd-largest market. 

U.S. poultry exports to the E.U., we believe, with a successful conclusion of an agreement, could be over $600 million and would 

make the E.U. the 3rd-largest market, behind Mexico and Hong 

Kong, China. The E.U. imports about $2 billion worth of poultry on 

an annual basis, so, if we were able to secure a market, we believe 

we would have about one third of that. 

When U.S. Trade Ambassador Froman announced a launch of 

TTIP, he said he wanted to do it on one tank of gas. Now, he did 

not mention how big that tank of gas was or whether there was 

10 percent ethanol in that gas, but I will leave the ethanol issue 

for another day and another hearing. But we are hopeful that that 

tank of gas will move along quickly and we will secure an agreement, a good agreement, sooner rather than later. 

But at the point where we do have an agreement, we would be 

willing to support that agreement if it does include, as my fellow 

panelists said, inclusive, comprehensive benefits to all parts of U.S. 

business and agriculture. If the agreement does not, those of us in 

U.S. agriculture will need to consider our options. 

Before I conclude, I would like to share what my fellow panelists 

said about Trade Promotion Authority. Not only is it critical for 

Congress, for this administration and future administrations, but 

we believe that if it was given to our negotiators now, it would 

strengthen their hand in terms of being able to be more successful 

at the negotiating table. 

Chairman Baucus, Senator Hatch, members of the committee, we 

very much appreciate this opportunity and look forward to working 

with the committee to have a successful agreement. 

I look forward to your comments and questions. 

[The prepared statement of Mr. Roenigk appears in the appendix.] 

The CHAIRMAN. Thank you, Mr. Roenigk, very much. 

I might say, we were there about a year ago and talked to the 

E.U. folks about lactic acid as a pathogen reduction treatment, and 

we were a bit firm about it, and they backed off. And, as you might 

recall, that was one of the conditions we had in entering into negotiations with TTIP. 

Mr. ROENIGK. That was a big breakthrough. We appreciate that. 

The CHAIRMAN. You bet. The point being, if you are fairly precise 

and fairly firm and make it very clear, you are more likely to succeed. That was one area where we had some success. 

I tend to think, in trade, that no country altruistically, out of the 

goodness of its heart, ever lowers a trade barrier. That is, you need 

leverage. There has to be an economic interest for them to do so. 

They are not going to do it out of the goodness of their heart. No 

country will. 

13 

So what leverage do we have here? That may be a little bit 

strong and crude, but what do we have that they want to help us 

get what we want? What do we want? We want lower tariffs, we 

want greater access, we want more direct investment in the U.S., 

we want regulatory transparency, scientific standards, et cetera. 

We want that. 

Now, it could well be that many European business people want 

a lot of that too. But what do they want from us that we are going 

to have to think about as we work for what we want? 

Who wants to first address that? Mr. Ducker, do you want to 

take a crack? 

Mr. DUCKER. Yes. Yes, Senator. I could take a stab at it. I think 

most of us would agree that global economic growth has sort of languished over the last 5 years, and the reason I believe that the timing is so opportunistic is that both of these large trading blocs want 

to create job growth. 

And I think that we have already demonstrated in the past that 

the greater the extent that we trade with each other, the greater 

jobs and the better jobs can be created. So I think the economic 

conditions have certainly given us greater leverage. Whether it is 

as a consequence of the DOHA round stalling or not, I think that 

people are taking the opportunity, and trade agreements like this 

one are proliferating. And I think that is a pent-up demand, and 

I think it can increase economic benefits on both sides of the Atlantic, and I think there is leverage on both sides. 

The CHAIRMAN. So your basic point is, world demand is down a 

bit and this can help address that. That is the basic point. 

Mr. DUCKER. Absolutely. Only a few times in the last 25 years 

has global trade grown slower than global GDP, and, usually, it is 

about 21⁄2 times the pace. But we are significantly below that 

today, and one of the reasons, I think, is the failure of the DOHA 

round, the multilateral trading round, and the fact that we do not 

have good trading rules and a liberal trading environment. 

And I think, in today’s world of fast-paced commerce, we have to 

work really hard to get greater transparency, regulatory standardization, harmonization, and I think that it would increase global 

trade and, as a result, global GDP. 

The CHAIRMAN. So do you think, to some degree, the Europeans 

have the same view, that this will help demand in Europe? 

Mr. DUCKER. I think they do. My belief is, in discussion with 

some of my longtime colleagues there—and I have been managing 

that in one capacity or another for more than 20 years—that many 

of the businesses in Europe want to see greater trade with the 

United States and a free trade agreement that is a high standard 

free trade agreement. 

The CHAIRMAN. Who else wants to address that? Mr. Ricks? 

Mr. RICKS. I will jump in. I think in our industry and in other 

intellectual property-based industries, the U.S. and Europe lead 

the world. Our customers are, of course, among each other, but increasingly outside of these two economic zones as an export opportunity. 

So, in the area of pharmaceuticals, there is not a lot of disagreement between companies on that side of the Atlantic and companies on this side of the Atlantic about the opportunities in TTIP to 

14 

raise intellectual property rights standards to be the highest in the 

world between the two economies so that, vis-a`-vis other trade 

agreements, we can create leverage on the rest of the world to raise 

their standards and reward investment in research and development for new medicines. 

The CHAIRMAN. I appreciate that. 

Mr. RICKS. The other opportunity is to reduce regulation burden, 

which is—there are many duplications, which cause delay and excess cost in the business, and I think everybody would be for eliminating those. 

The CHAIRMAN. Thank you very much. 

Senator Hatch? 

Senator HATCH. Thank you, Mr. Chairman. 

Mr. Ricks, yesterday it was reported that Ambassador Froman, 

while speaking about the Trans-Pacific Partnership negotiations, 

suggested that there is a tension between protecting intellectual 

property rights for innovative medicines and ensuring access to 

medicines. I cannot disagree more. To the contrary, strong intellectual property protections spur innovation. They are, therefore, essential for providing access to innovative medicines. 

Now, could you please comment on why strong intellectual property protection for innovative medicines is important and, also, 

what steps can be taken by these foreign governments to ensure access to lifesaving medicines that do not include diluting intellectual 

property rights for U.S. innovators? 

Mr. RICKS. Thank you. Strong intellectual property protection is 

a key issue for us, but it is not a barrier to access to innovation 

in developing markets or anywhere. New products come from the 

incentive to develop them through the promise of reward through 

intellectual property. Without those rewards, it is difficult to see 

where these new medicines would come from to begin with. 

On the other hand, there is a lot of evidence that market access 

to medicines does not have to do with intellectual property or pricing, but rather the way health systems function. In fact, 95 percent 

of the World Health Organization’s, quote-unquote, ‘‘essential medicines’’ to treat populations are generic. There is no intellectual 

property associated with them. 

So, more often than not, you are dealing with issues of how drugs 

get distributed, how care and diagnosis happen in a given country, 

and these are complex issues that have to do with the entirety of 

the health care system, not just a simple issue of IPR. 

So we are aligned in the view that intellectual property is an important issue for our sector. It is where new medicines come from, 

but it is not related to market access for these medicines years 

after their invention. What is important there is collaborating with 

health systems, governments, and regulatory authorities to make 

sure the health systems work around the world. 

Senator HATCH. Let me just add another question. In your testimony, you note that trade secret theft is a growing problem around 

the world. We know that China, in particular, is systematically 

stealing critical information from hundreds of U.S. companies. 

Now, this is an area where international standards for protection 

must be improved and where it is important for the U.S. and E.U. 

to work together. 

15 

Can you discuss why it is so important for our trade agreements 

to include strong provisions that safeguard U.S. trade secrets? 

Mr. RICKS. Absolutely. And we have been very active in trying 

to strengthen our own company’s systems to prevent this type of 

theft. But having a legislative and a regulatory framework between 

the E.U. and the U.S. on this point would be critical. 

We both share an interest in knowledge-based industries, like 

the pharmaceutical industry and others. We simply cannot afford 

together to lose or have leakage of this to the rest of the world inappropriately and illegally. So we support that. 

I believe there is an opportunity to include that in the TTIP arrangement, and we would support that as a key component for intellectual property-driven industries like ours. 

Senator HATCH. Thank you. 

Mr. Ducker, in your testimony, you talked about how the valueadded tax, as levied in European Union countries, can significantly 

drive up the cost of U.S. goods and exports to the European Union, 

especially for small businesses. 

In fact, the Utah company I mentioned in my opening statement, 

ICON, has to deal with this problem when exporting their exercise 

equipment into the E.U. How much of an impediment to U.S. exports are value-added taxes in the E.U. and should their elimination be a priority for the USTR as they negotiate the TTIP 

agreement? 

Mr. DUCKER. Well yes, sir, it should absolutely be a priority, and 

it is an impediment for our exporters. I think I mentioned in my 

verbal testimony that it is not only the de minimis value, but on 

the value-added tax, some of those numbers are as low as $30, and 

it can even go lower on some of the newer entrants into the E.U., 

which means that any good that is shipped into Europe that is 

above the value on the VAT of $30 has to file unnecessary forms 

for a low value-added good. 

In many cases, the value and the transaction costs to ship a good 

into the E.U. with these low de minimis standards can exceed the 

cost of the good itself. So we believe that de minimis values need 

to be raised across the board, and we need to have some regulatory 

harmonization between the two trading blocs on that. 

So I think it has a big impact on small and medium enterprises, 

in particular terms, because large multinationals have the infrastructure in place to deal with more complex regulations. The small 

shippers and customers do not. 

The CHAIRMAN. Thank you. Thank you, Senator. 

Senator Carper? 

Senator CARPER. Thanks. Again, welcome to all of you. 

Just permit me a little bit to talk about Trade Promotion Authority, please. I understand it is not a slam-dunk that we are going 

to get it done. And I am going to ask each of you for just a little 

bit of audience participation. 

If you will, on a scale of 1 to 10, 1 for not very important that 

we get it done, 10 for very important, each of you just give me 

some kind of idea what you think, starting with you, Mr. Ducker. 

Just briefly, just very briefly. 

Mr. DUCKER. I believe it is hugely important that we get it done, 

and the reason that I believe it is important is—— 

16 

Senator CARPER. No, no. 

Mr. DUCKER. You want a scale. 

Senator CARPER. Yes. Just answer my question. 

Mr. DUCKER. Eight out of 10. 

Senator CARPER. Thank you. 

Mr. MCCORMICK. I would say similar, 9 out of 10. 

Mr. RYAN. Nine-and-a-half. 

Mr. ROENIGK. On a scale of 1 to 10, I would say it is 11. 

Senator CARPER. Thank you very much. Those are the scales we 

use. Now give me the best argument, your one single best argument, very briefly, against Trade Promotion Authority, best argument against, and then rebut it, very briefly, please, same order. 

Mr. DUCKER. Best argument—— 

Senator CARPER. Against, that anybody would give. What is the 

best, strongest argument against it, and then rebut it, just very 

briefly. 

Mr. DUCKER. I think that anybody would say the best argument 

against it would be the lack of collaboration and participation from 

large groups of people. And I would rebut that argument to say 

that, at the pace that commerce and trade deals are moving around 

the world, that we have to have speed to market in this case for 

U.S. business and U.S. trade. 

Senator CARPER. Thanks. 

Mr. McCormick, same question. 

Mr. MCCORMICK. I would say that probably the biggest thing is 

speed, and the reasoned argument against it would be that we 

would make rash decisions too fast, too swiftly. But speed is key, 

especially when Canada has just signed their free trade agreement. 

So our neighbors to the north are competing against us. We need 

to have the ability to swiftly come in behind them with our own 

agreement. 

Senator CARPER. Mr. Ricks, give us your strongest argument 

against TPA, then rebut it. 

Mr. RICKS. I suppose the argument against it is to make sure all 

interests are well-represented, but I think, when one is negotiating, 

it is important to empower the people at the table to make the 

tradeoffs that are in the best interest of the country. 

Senator CARPER. All right. Thank you. 

Mr. Roenigk? 

Mr. ROENIGK. I would not say it is legitimate, but I think they 

would argue this is a blank check given to Congress. Let us see the 

agreement, and then we will decide whether we want to sign the 

check or not. 

Senator CARPER. All right. Good. We raise a lot of chickens on 

Delmarva, in Delaware. There are, I do not know, 300 or 400 chickens for every person in my State. So this is pretty important. 

It used to be we did not export many of them. Today, I was talking with Senator Cardin earlier, and I think we export about 20 

to 25 percent of the poultry that we raise. 

You shared with us some numbers going back, I think, about 20 

years, and I think you said, Mr. Roenigk, that the E.U. was number three if you put all those countries together, but our numberthree market 20–25 years ago. Today, are they still in the top 10? 

I do not think so. 

17 

Mr. ROENIGK. We are prohibited from exporting to the E.U., so 

they are not an export market for us. But if we had access, we believe that total exports would be $600 million, making them the 

third-largest market. 

So it would be very, very important not just for Delmarva, but 

for the entire industry. 

Senator CARPER. You touched on this, but let me ask you to drill 

down on it. Could you just describe for us what the current poultry 

market is like in the E.U. and what other factors, besides addressing regulatory barriers, could be important to ensure that our poultry industry can achieve the kind of potential in the E.U. you have 

just mentioned to us? 

Mr. ROENIGK. Some of the most expensive chicken in the world 

is in the E.U. So it is not an inexpensive place to enjoy chicken. 

Senator CARPER. Is it the best chicken in the world? 

Mr. ROENIGK. The best chicken in the United States—is the Senator from Georgia gone? [Laughter.] 

Senator CARPER. But we are still here. We are still here from 

Delaware and Maryland. 

Mr. ROENIGK. The best chicken in the United States is from Delmarva. 

Senator CARPER. Thank you. That was good. I have no more 

questions. 

Go ahead, finish your answer. 

Mr. ROENIGK. I would just say the most expensive chicken is in 

the E.U., a few other places, but what we need is a climate, a regulatory climate, where the food safety and so on is based on performance, not on proscriptive regulations—the walls are white, but are 

they the right color white? So we need to get away from a proscriptive approach to inspecting chicken and some animal health issues, 

and, hopefully, the agreement will address those critical issues. 

Senator CARPER. All right. Thank you very much. Thank you all. 

The CHAIRMAN. Thank you, Senator. 

Senator Cardin? 

Senator CARDIN. Thank you, Mr. Chairman. Let me thank our 

witnesses. 

I certainly concur in the observations of our witnesses for a TTIP 

agreement that includes the provisions you all have said. But let 

me just inject a little bit of reality here. The chairman’s comment 

is that we never achieve what we need to easily, that the other side 

is always looking for something else. 

Mr. Ducker, you mentioned the de minimis rule and our tax 

issues. I could expand that. We had our issues with Europe when 

we tried to get a better understanding on and a level playing field 

in corporate taxes, business taxes, and we tried to deal with that 

through some form of credit, only to find that Europe challenged 

us successfully under WTO rules. 

So we do not have a level playing field on business taxes with 

Europe today. And the de minimis rule just underscores the challenge for small entities, but it does not deal with the underlying 

core problem that we should harmonize the tax agreement so that 

we have a level playing field in international trade. The last time 

we looked at a global trade update, Europe was very difficult on 

the agricultural sector, protecting its high-cost poultry, among 

18 

other commodities, and it ended up we were unable to get an 

agreement. 

I guess my point is this. I hope we can successfully complete a 

TTIP agreement that does put us on a level playing field, and I 

know that it is going to have to be a give-and-take. But I hope that 

your testimonies here today will be consistent as we evaluate a 

TTIP agreement to make sure that it is worthwhile and that we 

are not just yielding to the pressure to get an agreement, but that 

we really do accomplish something positive for commerce between 

Europe and the United States. 

If it is on a level field, I am very confident that American producers, manufacturers, and farmers will do just fine. But if we continue to make these unilateral concessions, then it is not in America’s interest and not in the global interest. 

So, on the poultry side, we have seen over and over again, it is 

not just the tariff but also the non-tariff issues, and I just really 

want to point out that the numbers you give could be much greater 

if we get science-based safety standards in Europe. 

That is going to be one area that I think we really need to focus 

on as we look at the regulatory side. Europe, on agriculture, has 

used many creative ways in order to protect their farmers, and I 

hope you all will be very direct with us as to whether this agreement deals with a meaningful change that will allow an increase 

in market penetration by American agriculture, including the poultry industry. 

So, Mr. Roenigk, I want you to know, we are going to be looking 

to you to be very clear with us and not just say, any trade agreement is okay. We really need to make sure that we have a trade 

agreement that will give us a more level playing field. 

Mr. ROENIGK. If I could just say so, you have exactly hit the nail 

on the head. The creative ways they have used—it is our concern 

that those creative ways will continue, and that is what we have 

to be very careful about. We have to perhaps trust, but verify. 

Senator CARDIN. Mr. Ducker, let me just underscore the point on 

the taxes. You mentioned the de minimis rule. I understand that. 

But for any American manufacturer or producer, they have to go 

through that process concerning the European VAT tax where 

there is no comparable burden on a European who exports into the 

United States. Is that fair? 

Mr. DUCKER. No. I did not say it was fair. That is why I hope 

we can move the ball forward and advance it with some of these 

common rules in the trade agreement. 

Senator CARDIN. The de minimis rule absolutely deals with those 

products that come in under that threshold, but it does not do anything for those above that threshold. Why are we not more ambitious? 

Mr. DUCKER. Well, I think, as far as I am concerned, we can be 

more ambitious with that. We already have a bill moving through 

to raise it to the $800 level, on the de minimis levels. But I do not 

know if it is a part of TTIP at this point in time. That matter 

might be better served in another area. 

Senator CARDIN. In another hearing, as the chairman knows, I 

will be bringing up tax legislation to try to give our producers and 

farmers and manufacturers a better break. 

19 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Brown? 

Senator BROWN. Thank you very much. And to Senator Hatch 

and to especially the chairman, thanks for holding this hearing on 

this very important issue. 

This is for both Mr. Ducker and Mr. Ricks. With respect to investment under TTIP, you advocated for the coalition’s position 

that we needed a TTIP that has a ‘‘robust investor-state dispute 

settlement mechanism.’’ 

Why is that necessary in this kind of an agreement when we 

have two well-developed systems to safeguard intellectual property? And this is not an agreement with a country that is obviously 

less developed than ours. With the rule of law and the sort of sophistication and the intellectual property investment that we have 

developed in all of these countries, why is this necessary? And give 

me examples, if you would, of why we need it between the world’s 

two most developed entities, if you will. 

Mr. Ricks, do you want to start? 

Mr. RICKS. Absolutely. Thank you, Senator. 

It is necessary because the systems do not work identically and 

sometimes do not work well. I will give you an example under 

NAFTA which my company is working through right now with the 

Canadians. 

We have a situation in Canada where a large number of patents 

on medicines are being thrown out by the courts, we think, in violation of the principles of NAFTA and TRIPS in the WTO intellectual property regime. We have exhausted all local options in the 

Canadian courts, including going to the Supreme Court on this 

issue, and we now have an investor-state action under NAFTA 

with Canada. This is really our only recourse to level the playing 

field to what we think is a global standard. 

Those types of issues hopefully will not occur with Europe, but 

they could, and there are quite a number of differences in the patent system, as well as your rights to intervene and have early resolution, in Europe versus the U.S. 

So these investor-state provisions are quite important to assure 

predictability over the long term. 

Senator BROWN. Does it concern you, as an American citizen, living in a country of laws and democratically reached rules, regulations, and statutes, to allow a foreign investor to, in essence, challenge, to have the standing to challenge, a democratically attained 

rule or law in this country, sort of converse to what you were saying? 

Mr. RICKS. It does not concern me, as long as it is quid pro quo; 

as long as we have the same rights in their system. And increasingly, companies like mine are global companies. We have an interest in many geographies. I think, if we agree under a trade agreement to certain provisions, that it is a reasonable standard to have 

the ability to have that enforcement from abroad. 

Senator BROWN. These provisions—you mentioned NAFTA, and 

I think NAFTA was the first sort of prototype trade agreement to 

do this—do shift power, in reality, to a corporation to challenge a 

20 

sovereign government, something that we have not done previously. 

But thank you for your answer. 

Mr. Ducker, your thoughts? 

Mr. DUCKER. Well, I have many similar thoughts, but the U.S. 

Government has been sued many times, and I do not know that we 

have lost any of those suits. And so I think gaining some predictability, especially for future agreements, as we go through, is an 

important element of a high quality and ambitious trade agreement, and my colleague gave some very good examples of it. 

Senator BROWN. Anybody else? Do one of the other two of you 

want to comment on that; any thoughts? 

[No Response.] 

Senator BROWN. No. Thanks, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

One thought here. It seems to me—I would like your response— 

not only is a potential agreement good for all the reasons that you 

have all indicated, but also, it will help set world standards so that 

the United States can more easily trade with other countries, say 

the developing countries, India for example, and Brazil and so 

forth. 

So the degree to which this is very successful, this TTIP, helps 

not only the United States and not only Europe, but also helps the 

United States and Europe in trading with a lot of other countries. 

I think, therefore, that we should work very hard to make this 

a very successful agreement that sets very high standards worldwide. That is, for our two continents, which will help in other 

areas. 

Thank you very much. You have been very helpful here. Thank 

you. 

I am sorry. Senator? 

Senator HATCH. Mr. Ricks, I am particularly concerned about the 

data exclusivity with regard to biologics. So I would like to have 

you weigh in on that and maybe send me a letter on it. 

Mr. RICKS. We would love to, and we appreciate your support on 

that point. 

Senator HATCH. Send it to the committee so everybody will see 

it, because that is an extremely important thing. And I have to say 

that Senator Kennedy stuck with me on that even though he felt 

the other way, because he knew doggone well it was right. And I 

would like to see us negotiate a much better situation there—— 

Mr. RICKS. We appreciate that. 

Senator HATCH [continuing]. So that innovation is created and 

we move forward. 

Mr. RICKS. Thank you. 

Senator HATCH. Thank you. 

The CHAIRMAN. The hearing record will be open, certainly until 

the end of this week, for other Senators to submit questions for the 

record. 

Thank you very much. I appreciate it. The hearing is concluded. 

[Whereupon, at 12:15 p.m., the hearing was concluded.] 

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88432.042
63 


88432.043
64 


88432.044
(65) 

COMMUNICATIONS


88432045.eps
66 


88432.046
67 


88432.047
68 


88432.048
69 


88432.049
70 


88432.050
71 


88432.051
72 


88432.052
73 


88432.053
74 


88432.054
75 


88432.055
76 


88432.056
77 


88432.057
78 


88432.058
79 


88432059.eps
80 


88432.060
81 


88432.061
82 


88432.062
83 


88432.063
84 


88432.064
85 


88432.065
86 


88432.066
87 

Æ 


88432067.eps