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JOB CREATION MADE EASY: THE COLOMBIA,

PANAMA, AND SOUTH KOREA FREE TRADE

AGREEMENTS

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

SEPTEMBER 23, 2011

Serial No. 112–69

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

ILEANA ROS-LEHTINEN, Florida, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

STEVE CHABOT, Ohio 

RON PAUL, Texas 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

GUS M. BILIRAKIS, Florida 

JEAN SCHMIDT, Ohio 

BILL JOHNSON, Ohio 

DAVID RIVERA, Florida 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ANN MARIE BUERKLE, New York 

RENEE ELLMERS, North Carolina 

VACANT 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

GREGORY W. MEEKS, New York 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

DENNIS CARDOZA, California 

BEN CHANDLER, Kentucky 

BRIAN HIGGINS, New York 

ALLYSON SCHWARTZ, Pennsylvania 

CHRISTOPHER S. MURPHY, Connecticut 

FREDERICA WILSON, Florida 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

YLEEM D.S. POBLETE, Staff Director 

RICHARD J. KESSLER, Democratic Staff Director 

(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Myron Brilliant, Senior Vice President for International Affairs, U.S. 

Chamber of Commerce ......................................................................................... 10

Mr. Luis Arguello, Sr., CEO & president, DemeTech ........................................... 24

Mr. Drew Greenblatt, president, Marlin Steel Wire Products ............................. 29

Ms. Thea Lee, deputy chief of staff, AFL–CIO ...................................................... 40

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Mr. Myron Brilliant: Prepared statement ............................................................. 12

Mr. Luis Arguello, Sr.: Prepared statement .......................................................... 26

Mr. Drew Greenblatt: Prepared statement ........................................................... 31

Ms. Thea Lee: Prepared statement ........................................................................ 42

APPENDIX 

Hearing notice .......................................................................................................... 66

Hearing minutes ...................................................................................................... 67

(1)

JOB CREATION MADE EASY: THE COLOMBIA, 

PANAMA, AND SOUTH KOREA FREE TRADE 

AGREEMENTS 

FRIDAY, SEPTEMBER 23, 2011

HOUSE OF REPRESENTATIVES, COMMITTEE ON FOREIGN AFFAIRS, Washington, DC. 

The committee met, pursuant to notice, at 9:30 a.m., in room 

2172, Rayburn House Office Building, Hon. Ileana Ros-Lehtinen 

(chairman of the committee) presiding. 

Chairman ROS-LEHTINEN. The committee will come to order. 

After recognizing myself and my good friend, the ranking member 

Mr. Berman, for 7 minutes each for our opening statements, I will 

recognize the chairman and ranking member on the Terrorism, 

Nonproliferation, and Trade Subcommittee, if they are here, for 3 

minutes each for their statements. I will then recognize members 

for 1-minute opening statements. We will then hear from our witnesses, thank you ladies and gentlemen. And I would ask that you 

summarize your prepared statements in 5 minutes each before we 

move to the question and answers from the members under the 5-

minute rule. 

Without objection, the witnesses’ prepared statements will be 

made a part of the record and members may have 5 days to insert 

statements and questions for the record subject to the length limitations in the rules. The Chair now recognizes herself for 7 minutes. 

I am pleased to hold this timely hearing on the pending Colombia, Panama and South Korea free trade agreements, especially in 

light of the President’s recent emphasis on job creation. We would 

have loved to have hosted administration witnesses, but they were 

not available to this committee. Our offer still stands. 

In his September 8th speech to the Congress, the President once 

again noted the importance of these free trade agreements saying, 

and I quote,

‘‘Now is the time to clear the way for a series of trade agreements that would make it easier for American companies to 

sell their products in Panama, Colombia and South Korea.’’

I could not agree more, but unfortunately, after almost 3 years of 

delay, we are still waiting for the President to send them to Congress. At a time when millions of American families are struggling 

and so many people are looking for work passage of the free trade 

agreements with Colombia, Panama and South Korea should be a 

top priority for all of us. Merely by putting these agreements in the 

2

mail to Congress, the administration would set in motion the creation of tens of thousands of new jobs, a major expansion of U.S. 

exports and broad economic growth. And we can do so without hundreds of billions in new spending or higher deficits. The increase 

of exports will spur economic growth throughout the U.S., including 

in my district in south Florida. 

Colombia is already south Florida’s second largest trading partner accounting for more than $5 billion a year and supporting 

thousands of jobs. And Panama is among Miami-Dade County’s top 

25 trading partners with Florida as a whole ranking first in exports to that country. In fact, Panama’s trade with south Florida 

has grown nearly 30 percent in recent years. These figures will expand further once these two FTAs are approved. However, the repeated delays over the past 3 years have already hurt many companies. For example, 96 percent of the flowers that are imported 

to the U.S. from Colombia pass through my congressional district 

of south Florida, but the small- and medium-sized businesses in 

this sector have been hit hard from the higher tariffs resulting 

from the expiration of the Andean Trade Promotion Act earlier this 

year, a problem that can be easily fixed by passage of the Colombia 

FTA. 

Free trade agreements with South Korea will produce even 

greater benefits. The U.S. International Trade Commission estimates that it will increase our export of goods by at least $10 billion a year. That is not even counting the high value services in 

which our country leads the world which are now shut out of the 

large areas of South Korea’s economy. The President’s own administration estimates that at least 70,000 jobs will result from free 

trade agreement with South Korea alone. It is time to grant American businesses and exporters barrier-free access to the world’s 

13th largest economy. While we have sat here, the EU and countries such as Canada and China have moved aggressively to undermine U.S. businesses. 

Earlier this year, the EU trade agreement with South Korea 

came into effect putting U.S. businesses at a severe disadvantage 

in that country, resulting in lost sales for American companies and 

lost jobs here in the United States. There is more than just economic benefits at stake, however. Each of these countries is a key 

ally in an unstable area of the world where U.S. interests are increasingly under threat from China and other countries. At a time 

when much of the world is expecting the U.S. to retreat from its 

responsibilities and abandon its allies, these agreements will serve 

as a clear demonstration of our enduring commitment to our democratic partners. Each has carried out their promise to us, including 

all of the many changes we have insisted upon. And now it is time 

for us to carry out ours. 

Finally, I think it is important to address a fundamental misconception regarding not only these free trade agreements, but others as well, the effects and purposes of which opponents seem not 

to understand. Because the U.S. economy is a very open, one free 

trade agreements are primarily about removing the barriers in 

other countries to U.S. exports. For example, free trade agreement 

with Colombia will eliminate duties on 80 percent of U.S. exports 

3

to Colombia with almost all of the remaining duties and tariffs removed in 10 years. 

In contrast, 93 percent of Colombia’s exports already enter the 

U.S. duty free. Colombia will benefit, but we will benefit much 

more. The same is true with Panama and South Korea. It appears 

that the process for allowing Congress to consider these agreements is finally underway, however, with the Senate approving 

just last night a key piece of legislation. The Senate passed something? For the first time it looks likely that the three FTAs will 

soon be sent to Capitol Hill to be voted on. Passage of the South 

Korea FTA before President Lee arrives in Washington in October 

would be a tremendous reaffirmation of our alliance with that key 

country. And as we vote let us remember that we are voting to 

knock down the barriers to U.S. businesses and to create the jobs 

that so many Americans and their families are desperately in need 

of. I am now pleased to turn slowly to the ranking member Berman 

for his opening remarks. And there he is. 

Mr. BERMAN. Thank you much, Madam Chairman, and thank 

you for calling this important hearing. The Foreign Affairs Committee does not have legislative jurisdiction over free trade agreements, but there is precedent for this committee reviewing pending 

trade agreements. We held hearings on both the North America 

free trade agreement and the Uruguay Round Talks that resulted 

in establishment of the World Trade Organization. 

Now that the Senate has passed trade adjustment assistance legislation the President is likely to send Congress the Korea, Columbia and Panama agreements. This may be the last hearing on those 

agreements before they come up for a vote in the House. 

Today the conventional wisdom about trade agreements is much 

different than it was when the Uruguay Round and NAFTA were 

considered. The optimism of the 1990s about the benefits to America of reducing trade barriers has been replaced by widespread 

skepticism, not just about trade, but also about the future of our 

economy and our workforce. We have seen persistent trade deficits 

which have compounded our fiscal problems, we have seen U.S. 

companies move manufacturing overseas eliminating jobs for American workers in the process and affecting America’s competitive 

edge by sending some of our best technology abroad, we have seen 

household incomes fall behind price increases, and we have seen a 

once secure private pension system erode. 

A number of factors has called this sea change. Productivity increases have reduced the labor component of both manufacturing 

and services. The Internet has profoundly affected manufacturing 

financial services by fostering a much more difficult competitive environment for the United States. The entry of China, India and 

other low cost competitors into world markets has transformed 

trade patterns with consequent effects on the U.S. economy and 

workforce. 

While the dollar value of U.S. exports has continued to rise almost every year the U.S. share of global trade flows has gone 

down. From 2003 to 2009, the U.S. share of world exports dropped 

from 9.8 percent to 8.7 percent. Over the same period, the U.S. 

slipped from first place in world exports to third behind both Germany and China. Today, exports account for just over 13 percent 

4

of the total U.S. economic output, far less than virtually every 

major economic power. Trade agreements per se are by no means 

the cause of all of our economic problems, nor are they a panacea 

for our current woes. They are a critical tool for the protection of 

American intellectual property rights, but they can also contribute 

to the dislocation of American workers. 

No matter what one thinks about the merits of any particular 

free trade agreement, we should all be able to agree that increasing 

U.S. exports will lead to the creation of more jobs here at home. 

And one important step we can take to increase exports is to improve the effectiveness of the Federal Government’s export promotion programs. A series of Government Accountability Office 

studies has found that existing U.S. programs are uncoordinated, 

unfocused and, therefore, less effective than those of our competitors. This past Monday, a report by the Council on Foreign Relations issued the same finding, urged a more robust U.S. effort. 

Specifically the Council noted, and I quote,

‘‘The U.S. has been a laggard in export promotion efforts, the 

government needs to play a more active role in assessing foreign market opportunities, identifying priorities among products and services, and carrying out a long-term plan to bolster 

U.S. performance in world markets.’’

In other words, making in the area of export promotion the government as irrelevant as possible to the lives of American people is a 

real stupid policy. For more than a year, I have been working on 

legislation to address this problem. On Wednesday I introduced two 

bills to help ensure better coordination of the 18 existing programs 

and their combined $1.3 billion budget. Madam Chairman, I believe 

that these bills will garner bipartisan support. And I thank Mr. 

Manzullo for co-sponsoring one of them. Unlike the pending free 

trade agreements they are within the jurisdiction of this committee 

and hope we can consider them as we examine ways to create new 

jobs for American workers. With that, Madam Chairman, I yield 

back my time. 

Chairman ROS-LEHTINEN. Thank you so much, Mr. Berman. I 

would like to yield to Mr. Duncan if he has got a 1-minute opening 

statement. 

Mr. DUNCAN. Thank you, Madam Chairman. Free trade equals 

jobs. Free trade agreements open up markets for U.S. products, but 

FTAs must be fair for U.S. manufacturers. And since these FTAs 

are negotiated by the executive branch, we as a Congress must remain diligent in our review and oversight to ensure that these and 

future free trade agreements are in the best interest of American 

job creators. Thank you for having this hearing. As a freshman congressman, this is very educational to me on the impact of FTAs and 

I look forward to the testimony. Thank you. I yield back. 

Chairman ROS-LEHTINEN. Thank you, Mr. Duncan. I now would 

like to yield 3 minutes to the ranking member of the appropriate 

Subcommittee on Trade and Nonproliferation, Mr. Sherman. 

Mr. SHERMAN. Our trade policy has created huge profits on Wall 

Street and the destruction of the American middle class. Doing 

more of the same will create more of the same result. Even the 

U.S. Government International Trade Commission admits that this 

5

agreement will increase our global trade deficit. But they say it will 

be only a little bit. When I say this agreement, I mean the Korea 

free trade agreement. This is the same organization that said permanent NFN for China would increase our trade deficit by only $1 

billion. 

But this agreement, all the economic studies are based on the 

idea that goods are going to be made in South Korea and come into 

the United States. Look at the fine print. The rules of origin. Goods 

that are 65 percent made in China, 35 percent finished in South 

Korea come into our country duty free. If that 35 percent of the 

work done in South Korea is done by Chinese workers living in 

barracks, duty free. Now, we are told that that 35 percent of the 

work will at least be done by Chinese workers getting the Korean 

minimum wage. But after they pay for the glorious barracks living 

those workers may receive nothing more than they make in China. 

Sixty-five percent or 100 percent Chinese labor, free entry into the 

United States and not one cent of U.S. increased exports to China. 

Likewise, rules of origin. North Korean goods, 65 percent made in 

North Korea, 35 percent made in South Korea have a right to come 

into the United States duty free under this agreement. 

Now, but their importation would violate executive orders under 

AIPA. So when the South Koreans try to bring those goods in here 

and we block them, they can legally threaten us with sanctions. At 

that point, the executive branch can repeal the executive orders 

and back down. And I know that the chairwoman has a bill designed to prevent that. The administration will certainly not let us 

pass that bill, which I have co-sponsored. So the administration 

will have the right to back down and let 65 percent North Koreanmade goods into the United States or face sanctions. Either way, 

we lose. 

Finally, the agreement carefully does not define what South 

Korea is. The South Koreans wanted to include the labor camps located north of the DMZ. This is to be resolved under appendix 22 

by future negotiations. So I have made a big point, will Congress 

get a chance to play a role. The response has been simple. The 

Obama administration issued a press release saying, well, of course 

we will let Congress vote on this. That is legally binding on no one. 

The fact is the South Koreans will not allow a change to this 

agreement which gives Congress the right to decide whether the 

case on labor agreements, some would call it labor camp, some 

would call it a slave labor camp, will have free access into the U.S. 

market. Sixty-five percent made in China, 100 percent made by 

Chinese workers, 65 percent made in North Korea or 100 percent 

made in camps located north of the DMZ, none of the economic 

studies show the tens of billions of jobs that we will lose when 

American workers have to compete against some workers in North 

Korea who are paid $8 a month. 

We cannot simply swallow the idea that this agreement means 

what it says in the summaries prepared by its proponents. And 

those proponents will say that I have misconstrued the agreement, 

but they will make sure that we don’t have binding language in the 

implementing provisions, the legislation. Why no legally binding 

clarification? Because everything I say about the agreement is critical to the South Koreans, and my interpretation of this agreement 

6

is being used to sell this agreement in South Korea. Sixty-five percent made in China, 100 percent made by Chinese labor, free access to the United States, they shouldn’t call it a Korea free trade 

agreement. 

Chairman ROS-LEHTINEN. Thank you. And I am so pleased now 

to yield to the chairman of the appropriate subcommittee, Mr. 

Royce of California. 

Mr. ROYCE. I thank the gentlelady. Let me make a couple of observations. One is that any inclusion of Kaesong produced goods 

would require congressional approval. A number of us wrote to the 

administration not to include Kaesong. When the agreement was 

being negotiated it was excluded despite pressure from Korea. That 

is also the finding of the Congressional Research Service. Let me 

also make the point that this agreement was worked on 4 years 

ago. It has been 4 years that we have been waiting. And in the 

meantime, a South Korean-European Union free trade agreement 

has entered force. It is based upon this agreement. As a consequence of that agreement, this has been a 36 percent increase in 

goods going out of Europe into Korea since July 1st. 

Frankly, we are losing market share because the agreement with 

Europe has gone into force. And our delay here, the administration’s delay, frankly, has meant lost American jobs. You can’t give 

up market share in Korea. If this does not come into play, we are 

going to lose 345,000 jobs here in the United States. That is what 

studies show. This agreement would increase by $10 billion exports. Now, those are job creating exports. And that is 70,000 jobs. 

That is the administration’s figure. That is the Obama administration’s figure. 

This delay is all the more troubling given that it is happening 

with such a close ally, South Korea. And that is another point I 

want to make in this argument here. This is a country we have had 

a defense partnership with for 60 years, and I am not sure that the 

administration grasps the importance of traditional allies, whether 

it is South Korea or Japan or the UK or Israel. At times like this, 

I wonder if they understand that. 

Now, we sit here and we wait for Colombia, Panama, and the Korean for trade agreements, and I am just hopeful that the administration has seen the light, and I am hopeful that they understand 

that of all these trade agreements, we are a party to only two in 

Asia. There are hundreds of trade agreements being cut right now 

by Latin America and by Europe in Asia. And this particular agreement—you know let me just quote from the Congressional Research Service by the way: ‘‘A close analysis of KORUS and the nature of trade flows reveals that unless the Kaesong Industrial Complex is brought into the KORUS FTA—and that would require congressional approval’’—the FTA, frankly, does not include components. 

Chairman ROS-LEHTINEN. The gentleman is given an additional 

1 minute and 10 seconds because I inadvertently gave that time to 

Mr. Sherman. He had me wrapped up in his argument, so I wasn’t 

paying too close attention. 

Mr. ROYCE. Well, if anything, let me add one other element here. 

We have enhanced customs provisions in KORUS. We have kept 

any North Korean goods out of this agreement. It will require conVerDate 0ct 09 2002 15:44 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\WORK\FULL\092311\68448 HFA PsN: SHIRL
7

gressional approval to allow anything more in here. And with the 

enhanced customs provisions that ensures all the more that we 

shut out illicit North Korean goods and components. It is a red-herring argument. I yield back Madam Chair. 

Chairman ROS-LEHTINEN. Thank you very much. My good friend 

from New Jersey is recognized for a minute, Mr. Sires. 

Mr. SIRES. Thank you, Madam Chairperson, for holding this 

hearing. I have some reservations about the South Korean free 

trade agreement, especially when it comes to intellectual properties. But I really don’t have too many reservations with Panama 

and Colombia. I represent a large district of Colombian Americans, 

and I have been to Colombia many times, I have spoken to the 

President even before and I was at the swearing of the new President. And I always raise the issue obviously of labor. And they 

have made some very good strides to try to deal with the labor. Is 

it perfect? No. But as I see what is happening, you have China 

moving in, you have Canada—just signed an agreement with Canada about $1.7 billion. They signed an agreement with Europe. 

We are losing out on some of the markets that we can bring some 

of our goods and create some jobs here. The Chinese, the second 

most studied language today in Colombia in the universities is 

Mandarin, and it is increasing. This is a conversation that I had 

with one of the presidents of the college. So let’s move forward with 

this. I do have reservations about South Korea. But Panama, both 

of these countries have been allies of this country for many, many 

years, and I think it is time though we move forward on these. 

Thank you very much. 

Chairman ROS-LEHTINEN. Thank you Mr. Sires. I would like to 

recognize for a 1-minute opening statement the chairman of the 

Subcommittee on Oversight and Investigations, Mr. Rohrabacher of 

California. 

Mr. ROHRABACHER. Thank you very much, Madam Chairman—

Chairwoman. And let me just thank you for your leadership on 

this, because I will be paying attention to the testimony and to the 

evidence to make up my mind about whether I will be supportive 

of these free trade agreements or not. My motto is free trade between free people, and in this case, Colombia, Panama and South 

Korea are relatively free countries, so I would be inclined, but not 

only on top of that free trade agreements between our countries’ 

free people need to be mutually beneficial, and at least they need 

to be beneficial to the people of the United States or we should not 

be supporting it. We have had a trade status quo foisted onto us 

with China that has cost us almost 3 million jobs, since we gave 

them permanent most-favored-nation status or whatever that is, 

WTO access, and that is intolerable. 

We need to be dealing with that. And I will say the difference 

between Mr. Royce and Mr. Sherman, I will be looking to see which 

one can, the evidence indicates which one is right. And that is a 

very important point. 

Chairman ROS-LEHTINEN. Thank you. Mr. Connolly is recognized 

from Virginia. 

Mr. CONNOLLY. Thank you, Madam Chairwoman. And welcome 

to the panel. I think free trade as an abstract concept is very important to the future of the American economy and generally serves 

8

the economy well, but it is not without problems. And that is why 

I favor the trade adjustments assistance reauthorization. I think 

that is going to be critical frankly if we are going to move forward 

and build a consensus. I also think this hearing, along with other 

avenues of investigation, is going to be important. There are issues 

that must be dealt with. In the case of Korea, we have to be looking at intellectual property; we have to also be looking at nontariff 

barriers that have frankly kept that market from being accessible 

to U.S. goods and products in the past. In Colombia, there are 

human rights issues especially evolving labor organizers that remain to be addressed as far as I am concerned. Those were issues 

I presented to the Colombian Government when I was there a year 

ago. In Panama, most of the issues have been addressed. There 

were some offshore banking issues that Panama was asked to address, and I want to hear in the testimony today how well they 

have done that. So I think we have a long way—we have come a 

long way, but I think there are still some unanswered questions. 

Chairman ROS-LEHTINEN. Thank you so much. Mr. Rivera, my 

friend from Florida. 

Mr. RIVERA. Thank you Madam Chair. We need to move forward 

with these free trade agreements. Colombia and Panama are two 

of the United States largest trading partners. The Department of 

Commerce estimates that 9,000 American companies trade with 

Colombia, most of which are small businesses, and many of which 

employ many of the constituents in my district in south Florida. 

While 90 percent of Colombian goods enter the U.S. duty free, 

American companies still pay tariffs for U.S. goods to enter Colombia. The Colombia FTA would eliminate obstacles and immediately 

boost U.S. exports to Colombia. By passing this trade agreement 

U.S. GDP would increase by roughly $2.5 billion and exports by 

over $1 billion creating thousands of jobs in the United States. 

So while the Obama administration continues to delay free trade 

efforts the European Union and Canada have both finalized trade 

deals with Colombia and Panama. The Chinese are also close to a 

trade agreement with Colombia. And over the last 5 years, China 

has tripled their business with Colombia while we have lost 20 percent market share. It is time to end the rhetoric about free trade 

and time to pass these agreements with Colombia and Panama 

right away. 

Chairman ROS-LEHTINEN. Thank you, Mr. Rivera. The gentleman 

from Rhode Island, Mr. Cicilline is recognized. 

Mr. CICILLINE. Thank you, Madam Chairman. And I thank you 

for convening this hearing. And welcome to our witnesses. I am 

particularly interested in hearing the testimony of the witnesses 

today because I think one of the challenges we face in terms of 

thinking about trade policy more broadly is to ensure that the 

trade policy not only provides for free trade, but that it is fair and 

that it is enforced and that we are not putting American workers 

and American businesses at a competitive disadvantage. 

I think one of those key issues is about the sort of ability of our 

trading partners to comply with our trade agreements. And ranking member Mr. Berman has legislation specifically on the Chinese 

to enforce the requirements of trade and to address the issue of 

currency manipulation when they are not playing fairly. 

9

I think we can’t talk about trade agreements unless we also talk 

about our ability to enforce and the fairness of the agreements as 

well as the free trade. So I welcome the witnesses and look forward 

to your testimony. 

Chairman ROS-LEHTINEN. Thank you, sir. And now would like to 

yield to the chair of the Subcommittee on the Western Hemisphere, 

Mr. Mack of Florida. 

Mr. MACK. Thank you, Madam Chair. And I want to thank you 

for this hearing as well to give everyone an opportunity to ask 

questions or vent or whatever they have to do. But we all know 

that in our desire to create jobs in the United States these free 

trade agreements, especially Colombia and Panama, are job creators for the United States. That is not disputed. In fact, when you 

talk to the Presidents of Colombia and Panama, they will tell you 

too, hey, this is more of a win for the United States for creating 

jobs. And really, Madam Chair, the only thing holding up the free 

trade agreements, the only thing, is the President’s unwillingness 

to send them to the Congress. And with that, I yield back. 

Chairman ROS-LEHTINEN. Thank you, sir. Ms. Buerkle, the vice 

chair of the Subcommittee on Terrorism, Nonproliferation, and 

Trade. 

Ms. BUERKLE. Thank you, Madam Chair. And thank you for calling this very important meeting. And thank you to our witnesses 

today for being here. Many of us came to Congress because of jobs 

in the economy and the need to get this economy back on track and 

create jobs for the American people. And I think the free trade 

agreements are very much the effort to accomplish that. However, 

having said that, I think it is very important that these agreements are fair to our businesses. So I look forward to hearing the 

testimony today and I yield back my time. 

Chairman ROS-LEHTINEN. Thank you, ma’am. And I thank all 

the members for being here, especially because of our late votes 

last night. And now the Chair is pleased to welcome today’s panel 

of witnesses. Mr. Myron Brilliant serves as the Senior Vice President for International Affairs at the U.S. Chamber of Commerce, 

where he is responsible for the Chamber’s global business strategy. 

He previously served as the Chamber’s Vice President for Asia focusing on the promotion of free trade agreements with Singapore, 

Australia and South Korea. In the International Affairs Division 

Mr. Brilliant pioneered the Chamber’s country specific business initiative, which includes recently launched programs with Mexico 

and Israel. Thank you for being with us today. 

Mr. Luis Arguello is the chairman and CEO of DemeTech Corporation. Did I say that right? 

Mr. ARGUELLO. DemeTech. 

Chairman ROS-LEHTINEN. DemeTech Corporation, which is based 

in Miami, Florida and which exports medical devices and surgical 

sutures to over 80 countries. Mr. Arguello is the recipient of several 

prestigious awards, most recently including the 2011 Small Business Exporter of the Year Award for south Florida. Welcome and 

thank you for being with us today, sir. 

Mr. Drew Greenblatt is the president of Marlin Steel Wire Products, a manufacturer of steel wire baskets, wire forming and shield 

metal fabrication which exports to 35 countries. He also serves as 

10

an executive board member of the National Association of Manufacturers and is chairman of the Board of Regional Manufacturing Institute. 

Mr. Greenblatt has testified numerous times to Congress regarding business regulation and global competition. Thank you, sir, for 

being with us today. 

And next we will hear from Ms. Thea Lee, who is the deputy 

chief of staff at the AFL–CIO. She has previously served as the 

Policy Director and Chief International Economist at the AFL–CIO 

and as an international trade economist at the Economic Policy Institute, as well as an editor at Dollars and Cents Magazine. Very 

clever. 

She is a frequent witness on Capitol Hill having testified before 

the House and the Senate. Thank you for being with us today as 

well. We welcome all the testimony. Your prepared remarks will be 

made a part of the record. Please feel free to summarize. Thank 

you. 

We will begin with Mr. Brilliant. 

STATEMENT OF MR. MYRON BRILLIANT, SENIOR VICE PRESIDENT FOR INTERNATIONAL AFFAIRS, U.S. CHAMBER OF 

COMMERCE 

Mr. BRILLIANT. Good morning. I would like to extend my thanks 

at the outset for the opportunity to testify here today. Madam 

Chairwoman Ros-Lehtinen and Ranking Member Berman and 

other members of the Foreign Affairs Committee, it is a real pleasure to be here. The U.S. Chamber of Commerce the world’s largest 

business federation, and as members of this committee understand, 

there is no higher priority facing our Nation today than creating 

jobs and putting Americans back to work, which is why the U.S. 

Chamber of Commerce strongly supports the passage and implementation of the free trade agreements with South Korea, Panama 

and Colombia. With more than 9 percent of the workforce unemployed the biggest policy challenge we face is to create 20 million 

jobs over the next decade to replace jobs lost in the recession and 

to meet demands needed in a workforce that has to grow. 

World trade and expanding U.S. access to global markets will 

play a vital role in reaching this goal. After all, outside our borders 

are markets that represent 73 percent of the purchasing power, 87 

percent of its economic growth and 95 percent of its customers, and 

already 50 million Americans are employed by firms that engage 

in international trade. One in three manufacturing jobs depends on 

exports and one in three acres on American farms is planted for 

hungry consumers overseas. A further note, I would say more than 

97 percent of the quarter-million U.S. companies that export are 

small and medium-size firms. 

For companies large and small, the chief obstacle to reaching the 

goal of doubling U.S. exports by 2014, a goal set by President 

Obama and endorsed by the U.S. Chamber of Commerce, is the 

complex array of foreign barriers to American exports. Those barriers are alive and well. For example, Colombia’s average tariff on 

imports to the United States is 15 percent for manufactured goods, 

and even higher for agricultural products. By contrast the average 

U.S. tariff imposed on imports from Colombia is just 0.1 percent. 

11

And I have similar data on South Korea in my written testimony 

and Panama. The only way our Government, the U.S. Government, 

can entice a foreign government to open its market to American exports is really by negotiating free trade agreements to eliminate 

tariffs on a reciprocal basis. This is just what has been achieved 

in the three FTAs we are talking about today. All three are pro 

growth agreements that will create good American jobs, bolster foreign allies and confirm American’s leadership on trade. 

FTAs have a proven record of boosting U.S. exports. On average, 

the record shows that U.S. exports to new FTA partners, and we 

have 17 partner countries, have grown four times as rapidly in the 

3- to 5-year period following the FTA’s entry into force as U.S. exports the world over the past decade. I want to underscore for the 

committee that the world isn’t waiting for us to pass these three 

FTAs. For instance, in the first month after the entry into force 

with the European Union Korea free trade agreement on July 1st, 

EU exports to Korea had risen 36 percent from their level a year 

earlier. U.S. farmers have already lost $1 billion in sales to Colombia in the 2 years since that country implemented a trade deal with 

Argentina and Brazil. Overall at precisely the time we must work 

together to create American jobs, according to a study by the 

Chamber that has been widely circulated and widely adopted by 

the administration and. 

Members of the Congress, the United States risks losing more 

than 380,000 jobs and $40 billion in export sales if the United 

States continues to delay approval of our pending FTAs. 

In conclusion, the United States needs a laser-like focus on opening foreign markets. This fall, the Congress will have an opportunity to do that with the pending FTAs with Colombia, Panama 

and South Korea. Beyond these three FTAs, the Chamber has also 

supported the bipartisan trade adjustment advance assistance legislation negotiated by House Ways and Means Chairman Dave 

Camp, Senate Finance Committee Chairman Max Baucus and the 

White House. And we are pleased to see yesterday’s vote in the 

U.S. Senate supporting TAA legislation. The Chamber believes the 

resulting bill in the Senate reflects a thoughtful compromise that 

preserves the more effective elements of the five-decade old TAA 

program and eliminates aspects that have proven less effective and 

significantly reduces its cost. 

Madam Chairwoman, at stake is sustaining the United States as 

the world’s leading power. Our ability to exert positive influence 

around the world, our reputation and brand overseas and our best 

hopes for escaping high unemployment, massive deficit and exploiting entitlements require us to look at a more aggressive and forward looking trade policy. As we look to meet these demands, you 

can count on the U.S. Chamber of Commerce to stand tall. We are 

ready to work with members of this committee and with the Congress as a whole to strengthen our support for economic prosperity 

for job creation, and of course, for securing swift approval and implementation of the three outstanding pending FTAs. I look forward to your questions. 

Chairman ROS-LEHTINEN. Thank you very much. 

[The prepared statement of Mr. Brilliant follows:]

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Chairman ROS-LEHTINEN. Mr. Arguello. 

STATEMENT OF MR. LUIS ARGUELLO, SR., CEO & PRESIDENT, 

DEMETECH 

Mr. ARGUELLO. Good morning. Thank you, Madam Chairman 

and all the members of the committee for the opportunity to testify 

before you. I am Luis Arguello. I am President and CEO of the 

DemeTech Corporation. DemeTech is a medical device manufacturer located in Miami-Dade. I am here because 90 percent of my 

revenues are generated through exports. Although we currently do 

not export to Panama and Korea, I ask myself, why? It is certainly 

not due to the lack of determination or sluggish performance of my 

company, as this is something I am always trying to increase. We 

are currently exporting to over 80 countries such as Egypt, Saudi 

Arabia and Libya. We all know what is going on there. This is a 

field that we are trying to raise. And our Vice President last week 

went on a mission to Botswana and to Johannesburg. The reason 

why we do not export to this country is due to the extremely difficulty involved in exporting to these markets. The tariffs currently 

in place are extremely too high and they limit our competitiveness. 

In a global economy, the United States faces increasing competition 

for the jobs and the industries of the future. For example, 10 years 

ago, the U.S. was the top exporter to Korea, but we fell from that 

position because of the stifling tariffs imposed on our products. 

The solution lies in passing the U.S.-Korea trade agreements, 

KORUS. Currently, Korea is the world’s 11th largest economy and 

the United States seventh largest trading partner. Most important 

to DemeTech, Korea is the fourth largest market in the United 

States medical equipment exports. We strive to enter this market, 

but we are not possible to do so with tariffs of 5.4 percent all the 

way up to 50 percent. These tariffs undermine our competitiveness 

preventing a relationship with Korea that will greatly benefit my 

country. 

The free trade agreement will provide us with preferential market access to this fast-growing economy. It is extremely significant 

that we need to implement this immediately. Within 5 years of implementation of the Korean KORUS, more than 90 percent of tariffs on medical equipment exports will be eliminated. This will 

allow DemeTech to create more jobs in south Florida, jobs that Floridians desperately need. The United States Trade Commission estimated that the reduction of the Korean tariff and tariff quotas 

alone will add $12 billion to U.S. GDP and more than 70,000 jobs 

in America. 

We cannot afford to wait any longer because an FTP between 

Korea and the European Union took effect July 1st. This will give 

them preferential access and undermine our country’s competitiveness. Korea is also negotiating agreements with Peru, Australia 

and New Zealand. Reclaiming this preferential access with Korea 

is crucial to the economy. 

Colombia is the second largest market for U.S. exports in Central 

and South America. I would like to give an example of a company 

in south Florida. This company is called Lindeco International. 

Lindeco is selling auto parts to Colombia. In Colombia, they are receiving an increase of 5 to 15 percent sales tariff. They estimate 

25

that if the Korean trade agreement is approved, then they will be 

able to reduce their prices 20 percent. This will give them the opportunity to level the playing field with China with low quality 

equipment. They believe that by lowering the prices, then the Colombian consumers will purchase made-in-U.S.A. instead of purchasing made in China. 

Please, members of this committee, remember that we need to 

push made-in-U.S.A. This company is also very important because 

it is an example with Chile. They used to be a good leader supplier 

in Chile. When Chile passed a trade agreement with Japan, it took 

them 3 years to remove themselves from the Chilean market. 

Thanks that we passed it again a few years ago now, Lindeco is 

back into the market with Chile. 

Panama. Panama is the United States’ 7th largest manufacturing export market in Central and South America. Strengthening 

relationship with Panama is an integral move on our part because 

of the Panama Canal extension, a $5.2 billion project that will double its shipping capacity. Panama has signed a trade agreement 

with Canada and association agreement with the European Union. 

Without the U.S.-Panama Trade Promotion Act, Canadian and European exports of machinery and transportation equipment for the 

canal will have a serious advantage over United States suppliers. 

The TPA will guarantee U.S. firms the opportunity to participate 

on a competitive basis, and this is a prospect we cannot risk to 

lose. In 2009 the U.S. Medical Equipment Center——

Chairman ROS-LEHTINEN. Thank you. If you could just wrap up, 

Mr. Arguello. 

Mr. ARGUELLO. Okay. Medical Equipment employed over 274,000 

workers. We are proud to be part of that. We request that you pass 

this agreement so we can hire more people. 

Chairman ROS-LEHTINEN. Thank you so much. 

[The prepared statement of Mr. Arguello follows:]

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Chairman ROS-LEHTINEN. Mr. Greenblatt is recognized for 5 

minutes. 

STATEMENT OF MR. DREW GREENBLATT, PRESIDENT, MARLIN 

STEEL WIRE PRODUCTS 

Mr. GREENBLATT. Good morning, Chairman Ros-Lehtinen, Ranking Member Berman and members of the committee. I am Drew 

Greenblatt, President and Owner of Marlin Steel Wire. I am particularly pleased to testify today as a member of the Executive 

Board of the National Association of Manufacturers. Marlin is a 

leading manufacturer of custom wire brackets, wire forms and precision sheet metal fabrications, all produced entirely in the United 

States in our factory in Baltimore City, Maryland. Our customers 

come from the pharmaceutical, medical, industrial, aerospace and 

automotive industries. We export to 35 countries. Twenty-five percent of Marlin Steel employees are mechanical engineers or designers. They come up with innovative ideas and that is what propels 

our success at Marlin, that is our secret sauce. 

Like so many manufacturers, my company succeeds through innovation, investment and the hard work of its dedicated employees. 

When I bought the company in 1998, we did 800 grand in sales 

with only 18 workers. Last year was our most successful year yet. 

We did $13.9 million in sales. Today Marlin Steel employs 34 people, and we are up 39 percent year to date, largely because of exports. Manufacturing means jobs. We pay well. The average factory 

in America pays $73,000 a year. Each of our employees has great 

health insurance and we pay for 100 percent of their college education. We have gone over 1,000 days without a safety incident. 

Manufacturing creates solid middle class jobs. American manufacturers of all sizes need an international trade policy that opens 

global markets. 

Congress must enact the pending trade agreements with Colombia, Korea and Panama as soon as possible, and the administration 

must negotiate additional agreements in the Asia Pacific area and 

elsewhere. We need more prospects so we can grow. Tariff and 

market access barriers in overseas markets continue to present 

challenges to us and other American exporters. For small businesses to export more foreign trade barriers must come down. That 

can only happen if we get more trade agreements that will help 

level the playing field, and we have got to get rid of these barriers. 

Opening markets increase my business. One of Marlin Steel’s core 

niches is selling custom stainless steel wire material handling baskets to automakers. And I want to sell these custom wire baskets 

to Korean automakers. 

The U.S. Korea free trade agreement will let us compete on a 

level playing field with wire basket suppliers in Korea. But now 

that EU Korea FTA is in place, I am up against a significant disadvantage with one of my direct competitors in Germany. He can 

sell his products with no tariff to Korean clients, but I still have 

a prohibitive 8 percent tariff when I sell my baskets into this market. That means jobs in Baltimore City. Pass the U.S. Korea free 

trade agreement and I can compete. And I will win in Korea. And 

that means I can hire more out-of-work employees and create more 

jobs in Baltimore. 

30

President Obama wants to double trade in 5 years. That is a 

great idea. This is a way we can make it happen. U.S. trade representative Ron Kirk visited my factory and saw our robots and 

met our people. He believes in Korean free trade agreement. With 

the passage of these three pending trade agreements, our company 

and many thousands of other small and medium-size companies 

will grow because we will have more opportunities. Removing these 

trade barriers with Colombia, Korea and Panama will level the 

playing field for American workers, businesses, farmers and service 

providers. 

I want our company and our employees to grow and prosper. To 

achieve that I have to sell into foreign markets. That is where the 

growth is. Ninety-five percent of the world’s clients are overseas. I 

am here to ask you help me achieve my goals. Our free trade agreements have a proven track record. American manufacturers are already running a trade surplus with these countries in excess of $20 

billion a year. With more agreements, we can run that surplus 

even higher and we can grow more jobs. Thank you, Chairman RosLehtinen. 

Chairman ROS-LEHTINEN. Thank you Mr. Greenblatt, a manufacturer. Go figure. Incredible. In the U.S. and still growing. Wow. 

[The prepared statement of Mr. Greenblatt follows:]

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Chairman ROS-LEHTINEN. Ms. Lee, thank you so much for being 

here. We look forward to your testimony. You are recognized. 

STATEMENT OF MS. THEA LEE, DEPUTY CHIEF OF STAFF, AFL–

CIO 

Ms. LEE. Thank you so much, Madam Chairwoman, Ranking 

Member Berman, members of the Foreign Affairs Committee. It is 

a pleasure for me to be here this morning, and I appreciate the opportunity to testify on behalf of the 12.5 million working men and 

women of the AFL–CIO on this very important issue. As Myron 

Brilliant said, job creation is the number one priority for the AFL–

CIO. It is something the Chamber of Commerce and the AFL–CIO 

share, the goal of creating jobs and addressing the very high unemployment and underemployment that we have. We also support and 

we are delighted to hear about successful manufacturers in the 

United States and successful exporters in the United States. 

However, we do have a difference of opinion about how exactly 

we are going to get there and what role the free trade agreements 

that are before the Congress will play in terms of job creation. We 

would be delighted if it were as easy as signing free trade agreements to get the tens or hundreds of thousands of jobs that have 

been promised by the proponents on both sides of the aisle. But we 

do not share the optimism expressed here, that these trade agreements will generate or support the promised jobs. And we base that 

on three separate facts. First is our experience with past free trade 

agreements, including NAFTA, CAFTA and the big debate, while 

not a free trade agreement precisely, but when China entered the 

World Trade Organization. The same kinds of arguments, the same 

kind of economic models that were made at that time. 

Second, it is our view that the economic models that are being 

cited today and in this debate have an extremely poor predictive 

record. We should not be citing those numbers as though they are 

some sort of factual basis for moving forward because they rest on 

a very, very shaky foundation indeed. 

Third, our analysis of the three particular agreements that are 

in front of us leads us to a very different conclusion about what the 

likely job impact will be on the United States. One of the key 

things that we found in the debate over trade agreements has been 

a conflation of the difference between trade flows and trade barriers and investment strategy. And that is one of the reasons that 

so many of the economic models have completely failed to meet the 

mark, is that they look only at the reduction in tariffs, which is important. Reduction in tariffs and the opening of markets for U.S. 

products is important, but it is by far not the only factor that will 

determine what the ultimate outcome is in terms of trade flows, investment location decisions and ultimately, the job impact on the 

United States. 

We certainly do believe that the United States should engage vigorously in the global economy, but we have a fundamental disagreement over what kinds of trade policy we need to achieve that. 

And our view is that our current trade policy is falling very far 

short. If you look at the records in terms of growing trade deficits, 

growing wage inequality, growing poverty and stagnant wages here 

in the United States and the destruction, to a large extent, the loss 

41

of many, many manufacturing jobs and the middle class of the 

United States, our view is that our trade policy overall has undermined and not supported the creation of good jobs here in the 

United States. 

The ITC models, I think, are very important because those numbers are the ones that are cited most often in support of the three 

pending free trade agreements. And the ITC has an absolutely 

atrocious record in terms of predicting the outcome of past trade 

agreements. They have never actually been right, and often they 

are wrong in so many orders of magnitude and in terms of the sign 

as well that I really believe that we need to look more closely. The 

ITC has missed the investment shift. And I gave one example in 

my written testimony about NAFTA. The two sectors that the ITC 

predicted would be the biggest employment winners from NAFTA 

were apparel and consumer electronics. And that was based on the 

fact that the U.S. tariffs were lower than Mexican tariffs. And so 

the same argument that we have heard here today that if you take 

all those tariffs down it is a no-brainer that the United States 

must, of course, come out ahead. But that wasn’t the case, because 

of course the United States corporations didn’t have an intention 

of exporting a lot of apparel and electronics to Mexico from the 

United States. Instead, they moved their factories and those ended 

up being two areas of the largest job loss. 

In the case of South Korea, it is our judgment that the proposed 

FTA puts at risk tens of thousands of U.S. jobs, mainly in the manufacturing sector. The trade agreement lowers barriers in both 

countries, which is an improvement. But in our view, Korean companies and the Korean Government are more likely to take advantage of lower tariffs to increase Korean market share in the United 

States than are U.S. companies to do the same in Korea. 

Our negotiators have never been able to successfully address the 

myriad of nontariff barriers blocking U.S. access to the Korean domestic market, and it is not clear that this agreement changes that 

basic reality. 

Furthermore, our negotiators did not build in any safeguards 

with respect to currency manipulation, even though this has been 

a problem in U.S.-Korean trade in the past. It was certainly a problem in the case of NAFTA. 

The agreement contains unacceptably weak rule of origin provisions, as Congressman Sherman said, and does too little to protect 

core workers rights in both countries. And we appreciate the improvements in auto market access the Obama administration was 

able to secure, but there are many other sectors that are also at 

risk. 

So looking forward, let me just say quickly, in conclusion, that 

if you look at the trade challenges that we face we do agree with 

Congressman Berman that we need to promote exports much more 

vigorously than we have in the past and we support the idea of an 

export promotion policy. We also support and we think that in 

terms of the potential job impact, we support China currency action 

by both the House and the Senate. And if you look at the $272 billion trade deficit with China this issue is much more important to 

American jobs and to exports and to domestic——

Chairman ROS-LEHTINEN. Thank you, Ms. Lee. 

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[The prepared statement of Ms. Lee follows:]


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Chairman ROS-LEHTINEN. Thank you to all of our witnesses for 

excellent testimony. We will now start the question-and-answer period for 5 minutes each per member. Our failure to move forward 

on these free trade agreements has already had a negative real 

world impact. To take only one example that really hits close to 

home, the higher duties on imported flowers from Colombia have 

put great financial pressure on small businesses, such as florists. 

How much do you estimate that U.S. businesses have already lost 

during this unnecessary delay? And also, if I could ask a question 

related to China. 

We know how aggressive the EU has been, we know how aggressive China has been, all of our trading partners have been eroding 

our U.S. market share. In Colombia China has, since 1993, Colombia was China’s 22nd largest trading partner, now they are second. 

That is quite a jump. And how important is this agreement to preventing further damage to U.S. interest in Colombia? And I would 

start with Mr. Brilliant. 

Mr. BRILLIANT. Well, first of all, thank you for the chance to respond to those questions. I have already said that in the case of 

Colombia we have seen a loss of about $1 billion in sales for our 

farmers since Colombia initiated their trade agreements with Argentina and Brazil. So I think it has had a direct impact already. 

How much we have lost in manufacturing in other areas is unclear, 

but no question. 

And then, of course, the stats have also been cited with respect 

to the European agreement with South Korea. I noted the 36 percent figure where Europe has exported 36 percent more in July 

than they did the previous July. Our increase is only 3 percent, so 

we are losing market share in South Korea at this time. I would 

also say that every month that goes by, we are going to lose sales, 

and once those sales are lost, it is hard to get them back. And so 

the quicker we move to ratify these FTAs, the better off we are. 

The data demonstrates that we are going to find ways to export increasingly when you lower tariffs and when you eliminate nontariff 

barriers. 

With respect to China, look, I share the concern of many in this 

room, including Thea Lee, that we have an unfair trading relationship with China, which is why we believe we have to tackle the 

issues with China. But sitting on the sideline on free trade agreements is not the answer. If we fear China’s rise around the world, 

economic rise, then we need to address that, one, in our relationship with China, but two, by expanding trading opportunities for 

our companies. 

Chairman ROS-LEHTINEN. Thank you. Mr. Greenblatt, and then 

we will go Mr. Arguello. 

Mr. GREENBLATT. The way to grow jobs is to sell more, the way 

you sell more is if you have more clients, more prospects. If you 

give me 100 million more people to sell to, and that is the population of these three countries, 90 million, I am going to sell more 

baskets, I am going to hire more people that are unemployed in 

Baltimore City. Regarding China, they are manipulating their currency. It is out of control. It is wrong. We shouldn’t tolerate it. The 

Mexican peso floats, the Canadian dollar floats. These are fair trading arrangements, these are good things. The Chinese currency 

47

should not be manipulated like that, and I think we want trading 

partners that let their currency flow. 

Chairman ROS-LEHTINEN. Thank you, sir. Mr. Arguello. 

Mr. ARGUELLO. Madam Chair, I compete with China all over the 

world. All over the world, the Chinese situation is something that 

we have to face. As a representative of the medical device industry, 

we strive in made-in-U.S.A. product with a certain quality that 

China cannot deliver to the rest of the world. 

Nevertheless, having said that, price is an incentive in purchasing and in competition. In many markets throughout the 

world, we are constantly being requested a 10 or 15 percent discount on our rates on our prices in order to get the tender or to 

get the job, to get the contract. In the medical device industry, 10 

to 15 percent is not a margin that we can freely give. If the tariff 

imposed on that country is on that same rate between 5 and 15 

percent I have a winner right there because that is the discount 

that I am being asked, especially with a market like Korea and a 

market like Colombia. So once again, when we go out on the medical device industry we go made-in-U.S.A., we can guarantee a life, 

we can guarantee we have a first-class product. That is what the 

world wants. So the elimination of these 5, 10, 15 percent will give 

us a winner. For this reason I am not all that concerned with 

China. 

Chairman ROS-LEHTINEN. Thank you very much. And I hope that 

Mr. Berman is right that this will be the last congressional hearing 

ever. And because we will be——

Mr. BERMAN. Ever? 

Chairman ROS-LEHTINEN. On this issue before we go to markup 

and before we pass these bills. Mr. Berman is recognized for his 

questions. 

Mr. BERMAN. Well, thank you very much, Madam Chairman. If, 

in fact, the KORUS agreement allowed South Korea to claim that 

products or components for products manufactured in the Kaesong 

industrial complex could be deemed as South Korean, and therefore 

come into this country notwithstanding our trade sanctions policies, I would, on that basis alone, without regard to any other 

issue, think this was a fundamentally flawed agreement. But the 

fact is that is not the truth; that is a bogus argument. 

Mr. Royce is right. Unless the executive branch and the Congress 

decide that notwithstanding our trade sanctions, notwithstanding 

North Korea’s nuclear weapons program, notwithstanding its proliferation policy, notwithstanding its slave labor policies, the executive branch was going to go along with a South Korea decision and 

allow this to be considered a South Korean project they would have 

to change the law. Congress would have the final word. Arguments 

to the contrary are bogus. Whatever one’s views on these agreements or on the foreign policy implications of the agreements, we 

should not hang on a bogus argument to justify our positions. 

There is no need to. There are good cases to be made on both sides 

of this issue. 

Ms. Lee, I would like to just turn in my remaining time to your 

interesting distinction between trade flows and investment flows. I 

think you made it quite clear. You didn’t say, but implied, that 

generally other countries’ tariffs on our products are, for the most 

48

case, higher than our tariffs on their products, and therefore agreements which simply reduce tariffs would promote more exports and 

be in our interest. But then you said something I thought is the 

real point here: Look at what they do in the context of investment 

flows. The disadvantages to America from the enhanced ability to 

invest in manufacturing by American companies and American investments in these countries end up quite offsetting the economic 

benefits of the lower tariffs. Is that a fair synthesis of your much 

more detailed and elaborate explanation? 

Ms. LEE. Yes, Congressman, that was the point I was trying to 

make, which is that we focus a lot on the trade barriers, the tariff 

barriers coming down. But, in fact, a lot of the motivation for some 

of these trade agreements is in the investment chapter and some 

of the other chapters that make U.S. investment overseas much 

more secure, give extraordinary protections and rights to investors, 

including the right to sue governments over regulations they don’t 

like or that impinge on their profits or their expected profits. And 

so that change in reducing the riskiness of investment overseas is 

a key piece. We tend to have, and I would argue in this country 

a somewhat dishonest conversation about trade agreements because the whole discussion focuses on opening markets, and there 

is nothing wrong with opening markets. 

The labor movement is completely in favor of opening markets 

and selling more products overseas. But we have conflated this discussion by also putting into play issues that are important to 

multi-national corporations that they lobby hard to include these 

extraordinary investment protections. A lot of small domestic businesses and some small farmers are actually on the same side as 

the labor movement on these issues. 

Mr. BERMAN. Let me just interject here to ask, Mr. Brilliant, 

what is your response to this, because we certainly observe that following these agreements, there is a great deal of investment in foreign manufacturing by Americans to produce products to come into 

the United States. 

Mr. BRILLIANT. Well, it is a complex question, but let me try 

to——

Mr. BERMAN. You’ve got 45 seconds. 

Mr. BRILLIANT. First, manufacturing output in the United States 

has grown 70 percent since 1990. We have had a decline in employment in the manufacturing sector, but not an output. That is an 

efficiency issue as much as it is anything else. The second point I 

would make is we want to encourage foreign investment as well as 

investment by U.S. companies in our economy. That creates jobs, 

it is good for our country, but there are tax and regulatory challenges to that front, not trade challenges. 

And the third point I would make is that, look, when we produce 

overseas, only about 10 percent of what we are producing overseas 

comes back to the United States, so it is for selling into these markets which are growth markets for our companies. So we could talk 

to you at length that investment is not the challenge that she is 

trying to describe in the context of these FTA agreements, it is an 

opportunity. 

49

Chairman ROS-LEHTINEN. Thank you very much. Thank you, Mr. 

Berman. I would like to recognize Mr. Duncan, who will then recognize another one of our colleagues. 

Mr. DUNCAN. Thank you, Madam Chairman. I would like to yield 

my complete 5 minutes to the chairman of the Trade Subcommittee, Mr. Royce. 

Chairman ROS-LEHTINEN. Mr. Royce is recognized. 

Mr. ROYCE. I thank you, Mr. Duncan. I wanted to make a couple 

of points. And the one I started with is one that I don’t know that 

we have really focused on as we go back to the Kaesong issue. And 

that is, the United States has a sanctions regime in place against 

North Korea, so any imports from North Korea require U.S. Government approval. And according to CRS, ‘‘this restriction includes 

finished goods originating in North Korea as well as goods that 

contain North Korean-made components.’’ That sanctions regime is 

in place here in the United States. Second, any inclusion of 

Kaesong-produced goods would require congressional approval. I 

just don’t see many votes for that here in the House; I don’t see 

any. I don’t support that. Third, when this bill came up originally, 

we went the extra mile because for those of us that are trying to 

close Kaesong. We wrote the administration not to include Kaesong 

when the agreement was being negotiated and it was excluded 

from the agreement. 

So on every front there are those barriers. But I did want to 

make the point that we recently had an amendment that I authored on the whole issue of North Korea. This passed the House 

unanimously as part of the agricultural appropriations bill that 

would call for the administration not to deliver food aid to North 

Korea. 

Now, that pull for food aid does help North Korea. This argument is a red-herring argument. But the food aid that’s delivered 

into North Korea does get into the hands of the regime. I would 

hope that those that are worried about bolstering North Korea 

focus on a reality, and that is, we are in danger of helping North 

Korea, but it is through that food aid program. 

Another point I wanted to make, and I would just ask Mr. Brilliant to comment on this, is the fact that the tariffs that are going 

to be lowered are primarily tariffs that advantage the U.S. market, 

but is going to bring more, make it possible for us to ship more 

goods and services into the Korean market. 

Can you discuss how KORUS lowers tariffs more for U.S. goods 

than Korean goods? Could you walk us through that? 

Mr. BRILLIANT. Well, that is an absolutely correct point. On average, our agricultural imports into South Korea face about a 54 percent applied tariff. Certainly our tariff rates in the United States 

are much lower than that. Secondly, the average tariff rate on 

manufactured goods going into South Korea is about 6.2 percent. 

Again, we are much lower than that here in the United States. So 

where we see a reduction or elimination, which is what is going to 

happen from the implementation of the free trade agreement, we 

are going to see an increase in trade there. And we have already 

seen unfortunately a displacement with Europeans coming in and 

selling there. South Korea is already our fourth largest beef market. 

50

Let’s extend that further and let’s find a way to continue to grow 

trade. I want to make one point on Kaesong because it has been 

said the President of the United States issued an executive order 

saying we are not going to import anything illegally. The Congress 

has jurisdiction over this issue as well. But let’s not forget the 

South Koreans don’t want to do that either. The South Koreans 

have had two attacks by North Korea in the last 18 months. It is 

not in their interest to encourage it, and it is not in the interest 

of the U.S. business community either. So let me put that on the 

record. 

Mr. ROYCE. I appreciate that. I want to go to another point. Asia 

accounts for half of the world’s economy. The U.S. has underwritten security in that region while Asia has pursued economic integration. As they say in Asia, ‘‘The business of Asia is business.’’ 

The U.S. Chamber looks at this and they see 168 trade agreements 

in force in Asia and we are a party to only two of those, as I mentioned earlier. We are a party to Singapore and Australia. What 

does that mean for our economic competitiveness? What does that 

mean for our economic future? As you have laid out, what could be 

adjusted by this Korean trade agreement? 

Mr. BRILLIANT. Congressman, as you know well, we can’t stand 

still, global trade is not standing still, so we have got to expand beyond these three FTAs. That is why the TransPacific partnership 

is important, that is why the U.S. Chamber has introduced ambition in the EU-U.S. partnership, and that is why we do need to 

hold accountable partners to play by the fair games of international 

trade. We need free and fair trade and we need to expand to the 

markets. 

Chairman ROS-LEHTINEN. Thank you so much. Thank you Mr. 

Duncan and Mr. Royce. Mr. Sherman, the ranking member on the 

Subcommittee on Trade is recognized. 

Mr. SHERMAN. The first time I had a hearing on trade U.S. Trade 

Representative Barshefsky came in and testified that if we could 

find a deal that increased our exports by $1 billion and increased 

our imports by $2 billion, that would be a $3 billion win. Those 

who constantly bleat exports mean jobs should at least follow up 

with imports cost jobs. Now, my colleague from Virginia who has 

left talks about trade adjustment assistance. Let’s find a single Republican Member of this House that will say that we can appropriate money for trade adjustment assistance without cutting 

money on health care, education and other domestic priorities. We 

will have to divert the money that we are spending to meet the 

challenges our families face now in order to deal with the additional challenges that the Korea and other free trade agreements 

would bring. 

The old days of trade adjustment assistance coming from magic 

money, that is gone. And any Democrat that talks about trade adjustment assistance needs to find a Republican that says it won’t 

mean cuts in health and education. Now, some 20 minutes has 

been spent in this room criticizing my opening statement. Let me 

respond. I said goods that are 65 percent made in China come into 

this country duty free under the agreement. None of my critics disagree at all. I say that the 35 percent finishing work done in South 

Korea doesn’t have to be done by South Korean workers, it can be 

51

done by Chinese guest workers living in barracks. Nobody disagrees. Let the record show. 

And finally, I say that while those Chinese guest workers have 

to be paid the South Korean minimum wage, the employer can deduct for barracks living and bring that wage down to virtually 

nothing. None of the critics have a response. Then I talk about 

goods 65 percent made in North Korea. Leave Kaesong aside. Any 

part of North Korea. And we are told, well, American executive orders prevent us from allowing those goods into our country. True. 

The rest of my argument was ignored. Once we bar those goods at 

our ports we are in violation of the agreement. What happens when 

America is found or is threatened with successful sanctions because 

we are in violation of our trade agreements? The executive branch 

backs down. That is what happened with the Iran Sanctions Act. 

The European oil companies were in violation, the Europeans 

threatened us with WTO, and even to this day, not a single European oil company has faced the slightest sanction under the Iran 

trade agreement. 

We have seen this movie before. We know that the executive 

branch will back down. But let’s say they don’t. Let’s say they have 

backbone. Let’s say the bill that I have co-sponsored with the chairwoman’s bill actually passes and becomes law. Then we will have 

the backbone to violate this agreement, the Koreans can then impose sanctions and take away all the benefits. They may even target Mr. Greenblatt’s firm and say his wires are among those sanctions. 

So any concession the South Koreans made in the agreement can 

then be taken back. No disagreement with any of that. It is not 

whether the goods come in. That would have to be decided by the 

executive branch or if we pass the bill by Congress. It is whether 

we face sanctions when we bar those North Korean goods. Under 

the rules of origin, the South Korean seller has a right to bring in 

the goods, 65 made in North Korea, 35 made in South Korea. 

Now let’s talk about these special labor camps. What does annex 

22(b) say? None of my critics actually quote the language or cite 

the provision. Legislative approval is required. Now, what does 

that mean? Well, for the Libya action legislative approval meant 

talking to key congressional leaders. Sometimes congressional approval means asking Congress whether they want to pass a resolution of disapproval once a regulation is adopted. So I asked the administration and the proponents, why not have clarifying language 

on this. The answer was we will give you clarifying language in a 

press release but nothing legally binding. Why? Because in Korea, 

they are telling their legislature that this will be handled and 

Kaesong goods will come in and South Korean companies will make 

billions of dollars paying $8 a month to workers and selling into 

the U.S. market. 

So I think that most of what I said in my opening statement was 

not even criticized at all in the 20 minutes taken by my critics. 

Sixty-five percent China, 35 percent Chinese workers. 

Chairman ROS-LEHTINEN. Thank you, Mr. Sherman. Mr. Rohrabacher is recognized, the chairman of the Subcommittee on Oversight and Investigations. 

52

Mr. ROHRABACHER. As I said in my opening statement I will be 

very interested in finding out who is correct in their assessment, 

and let me just note that Mr. Sherman over the years, I have found 

that he is very diligent and very responsible, so I pay attention to 

him when he says something like this, and I want to know who is 

right, whether Mr. Sherman is right or Mr. Royce is right. Maybe 

our friend from the Chamber can tell us, and then I will ask our 

friend from Labor to tell us. Is Mr. Sherman right that if you have 

items that are coming to us from South Korea, that are made 65 

percent in North Korea, that they are not barred from entry into 

our market. 

Mr. BRILLIANT. Again, I am going to rely on what the administration says, which is that they have no intention of allowing any importation of goods——

Mr. ROHRABACHER. I don’t care about the intention. Intention is 

the biggest weasel word. 

Mr. BRILLIANT. I am not responsible obviously for it. 

Mr. ROHRABACHER. No. In your reading of the agreement——

Mr. BRILLIANT. My reading of the agreement is that there will 

be no importation of goods or services or technology from North 

Korea. 

Mr. ROHRABACHER. Permitted. 

Mr. BRILLIANT. Permitted. 

Mr. SHERMAN. Will the gentleman yield. 

Mr. ROHRABACHER. I certainly will. 

Mr. SHERMAN. My point is that if we stick to our guns the way 

the administration intends then we will be subject to sanctions by 

the South Koreans and we will lose much of the benefit of the 

agreement. 

Mr. ROHRABACHER. Is that correct? 

Mr. BRILLIANT. His point is do we have an enforcement mechanism, not whether or not the agreement itself allows for the importation. 

Mr. ROHRABACHER. No. If we stop those goods will we then be 

in violation of our understanding of our current status quo agreement with Korea? 

Mr. BRILLIANT. I am going to let the U.S. Government respond 

to this. I think that is a good question for the U.S. Government, 

not for the U.S. Chamber of Commerce. 

Mr. ROHRABACHER. I think that when we are asking how policy 

is going to affect our economy I think you are shirking your responsibility, just like the Chamber shirks its responsibility in trying to 

deal with the Chinese when they manipulate the currency so we 

have a flow of wealth into a Communist dictatorship like China. So 

listen, I like the Chamber a lot for a lot of what you do, but sometimes on these trade issues we end up seeing certain business interests not the American people being represented by what you are 

saying. As far as I am concerned what is happening with China 

has been a disaster for the American worker. Three million of them 

are out of jobs because of this. What about Labor, do you agree 

with what Mr. Sherman is saying? 

Ms. LEE. I think there is a lot of troubling uncertainty in the 

agreement about the treatment of goods from Kaesong and that 

some of that is deliberate on the part of the South Korean GovernVerDate 0ct 09 2002 15:44 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 F:\WORK\FULL\092311\68448 HFA PsN: SHIRL
53

ment. The agreement does not actually mention products from 

North Korea. It doesn’t say they can or can’t come in. I think that 

creates a problem. This is a problem that Congressman Sherman 

talked about. It is certainly the U.S. Government’s intention not to 

allow products from North Korea to come in, and we have sanctions 

policy, that would, as was quoted by Mr. Royce——

Mr. ROHRABACHER. Well, intention. But intention——

Mr. BERMAN. Will the gentleman yield. 

Mr. ROHRABACHER. Excuse me, but I am trying to get to the bottom of it. Intention is not as important as what the outcome will 

be. Mr. Sherman will certainly agree that intention, you know, intention, what is the actual outcome? Is it that we are going to be 

put into a position that we will have to act because we are then 

in violation of another agreement with South Korea? 

Mr. SHERMAN. Will the gentleman yield. 

Mr. BERMAN. Will the gentleman yield. 

Mr. ROHRABACHER. I will yield to Mr. Sherman. 

Mr. SHERMAN. Under an agreement a product that is 65 percent 

made in North Korea but 35 percent made in South Korea is a 

South Korean good. 

Mr. ROHRABACHER. Correct. 

Mr. SHERMAN. And has a right to come into the United States. 

Mr. ROHRABACHER. Is that your reading of this agreement? 

Mr. BRILLIANT. That is not my reading, but it is not my call. It 

is the administration to defend or describe the terms of the rules 

of origin. 

Mr. BERMAN. Will the gentleman yield. 

Mr. ROHRABACHER. Yes I will. 

Mr. BERMAN. Part of the agreement is an annex that both parties 

have agreed to. To deem the Kaesong industrial complex a South 

Korean outward processing zone on the Korean peninsula, that is 

what this annex 22(b) addresses, it sets a process out where both 

sides have to agree. And you are right, the intentions are not the 

answer, it is what is the law and the rules. And for the U.S. to 

agree to that, Congress would have to sign off. It is in our power 

to stop that from happening. 

Chairman ROS-LEHTINEN. Mr. Rohrabacher is reclaiming his 

time. 

Mr. ROHRABACHER. Let me just suggest I am listening very closely, and in principle I would like to support the free trade agreement. I believe in free trade between free people, but if Mr. Sherman is correct this isn’t going to work to the benefit of us and it 

may work to the benefit of North Korea, a vicious dictatorship. 

Chairman ROS-LEHTINEN. Thank you very much. Thank you, Mr. 

Rohrabacher, whose time has expired. And I am pleased to yield 

5 minutes to the gentleman from New Jersey, Mr. Sires. 

Mr. SHERMAN. Mr. Sires, could I have 15 seconds of your time? 

Mr. SIRES. Absolutely. 

Mr. SHERMAN. Mr. Berman was talking about the Kaesong Industrial plan. We were earlier talking about all of North Korea, 

any good made anywhere in North Korea whether we do anything 

special with Kaesong or not, if it is 65 percent made in North 

Korea, 35 percent made in South Korea it counts as a South KoVerDate 0ct 09 2002 15:44 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 F:\WORK\FULL\092311\68448 HFA PsN: SHIRL
54

rean product under this agreement. I yield to the gentleman from 

New Jersey. 

Mr. SIRES. Well, I will be much simpler than that. Are you comfortable with the reforms that Panama has made in its financial institutions for America to deal with Panama? 

Mr. BRILLIANT. The banking tax issues have been addressed to 

the satisfaction of the administration and to the satisfaction of the 

business community. 

Mr. SIRES. And I was just wondering, here, you know I know 

there have been a lot of changes in Colombia, because I have been 

going there for many, many years, and obviously the labor issue is 

still very pronounced. Can you tell me what other changes they 

could possibly make to continue so we can support this? 

Ms. LEE. Thank you so much for the question, Mr. Sires. There 

have been some improvements in Colombia, there is no question 

about it. The new administration has been really forthright about 

putting in place more protections, more inspectors and some more 

provisions. The Labor Action Plan that was negotiated several 

months ago contain some really important provisions. Our issue is 

that the timing is still problematic. It is too soon to say whether 

the action plan is working. We would like to give it more time. 

Right now, actually the first couple of months have not been that 

encouraging. We are in constant contact with our trade union counterparts in Colombia. And first of all, the number of murders since 

the action plan was put in place has actually increased. There have 

been 22 murders so far this year of trade unionists that were active. And of those, 15 since the action plan was put in place. We 

have also understood that there are some real implementation 

problems with the action plan, that some of the proposed meetings 

and legislative changes have not been fully implemented, that the 

protection schemes are not fully in place, that there have been 

death threats that have been not acted upon. So we still remain 

very concerned about the situation for trade unionists in Colombia 

at this date. 

Mr. SIRES. But progress has been made. And my concern is here 

we have a country that has been a friend of the United States, they 

are signing all different agreements throughout the world, including places like Canada who we certainly respect their labor laws, 

and certainly Europe, and I think just the longer we wait, the 

worse it becomes for us. Like I said, I haven’t heard anything yet 

for me to support the Korean trade agreement, but I have seen the 

changes that Colombia has made. 

There are about 200,000 Americans, I think, living in Panama 

today. I don’t know if anybody can agree with me with that. Somebody told me that figure. I haven’t really checked it. But these 

countries are our partners. And the longer we wait, the less jobs 

we create here. I mean, Mr. Arguello wants to compete, we want 

to create jobs here. At least the intent of Colombia has been good 

in terms of trying to deal with the issues that are concerning labor. 

Even the Vice President is a labor leader. 

Ms. LEE. Well, 22 assassinations so far this year do not give us 

the confidence that this is a place that is safe for workers to exercise their basic human rights at this time. 

55

Mr. SIRES. I agree with you 100 percent, but they have come, I 

think, a long way from where they were. 

Ms. LEE. Can I just state, the argument that we would make is 

that once the agreement is passed we lose a certain amount of leverage in this discussion. And that has been something we have 

heard from the Colombian Government officials privately. 

Mr. SIRES. Why would we lose leverage? Wouldn’t we have more 

leverage if we have a partner? 

Ms. LEE. Once the vote takes place by the Congress, then a lot 

of the pressure is taken off. And that is something we saw certainly 

in Central America and Guatemala where the murders of trade 

unionists increased after CAFTA. 

Mr. BRILLIANT. If I could just briefly comment. First of all, the 

President of the United States has said that there has been 

progress on the action plan that the President and President 

Santos agreed to. But not just the President of the United States, 

the International Labor Organization has said that. And some of 

the leading organizations in Colombia, including Colombia’s national labor school, have endorsed it. So let’s take their word at it 

as much as anyone else. 

The second thing is the murder rate in the District of Columbia 

is seven times that of the murder rate that we are talking about 

in Colombia. And so let’s be in perspective here that things have 

improved significantly in Colombia. And I would just say that there 

is more, as Thea Lee knows, labor unions have grown significantly. 

Chairman ROS-LEHTINEN. Thank you very much. Thank you, Mr. 

Sires. And Mr. Rivera of Florida is recognized for 5 minutes. 

Mr. RIVERA. Thank you, Madam Chair. My first question is for 

Ms. Lee regarding the same issue of the labor leaders in Colombia. 

Have you talked, or your organization, any representatives from 

your organization, spoken with or met with Colombian labor leaders on this issue? 

Ms. LEE. Thank you so much for the question, Mr. Rivera. In 

fact, we talk to Colombian labor leaders probably every day or 

every week about this issue. And they are not monolithic, just like 

the labor movement in the United States is not monolithic. 

Mr. RIVERA. Who have you spoken to recently? 

Ms. LEE. I personally am not having the conversations. We have 

a Solidarity Center, the AFL–CIO has a sister organization Solidarity Center office in Bogota. 

Mr. RIVERA. Who has your solidarity center spoken to recently? 

Ms. LEE. Rhett Doumitt is our solidarity center staff that heads 

that office. He speaks to the head of the three Colombia labor federations and to rank and file workers. I personally was in Bogota 

a couple of years ago. 

Mr. RIVERA. Hold on. Slow down for a moment. Who has the solidarity center spoken to recently? 

Ms. LEE. They speak to ENS, the Escuela Nacional Sindical. As 

I said, the heads of all the labor federations, as well as rank and 

file workers in Colombia. 

Mr. RIVERA. Hold on 1 second. 

Ms. LEE. I don’t have the names with me, but I could send them 

to you. I can send a long list of names. 

Mr. RIVERA. I would like to know the names. 

56

Ms. LEE. I would be happy to provide that. I don’t have them 

right here. 

Mr. RIVERA. Thank you. I would like all the names of who your 

organization in terms of labor leaders in Colombia who they have 

spoken to. And in particular, want to give you two names, Luis 

Fernando Cadavid, who is the president of the garment, Organized 

Labor for Garment, the production sector in Colombia, and the 

leader of the manufacturer and services confederation. Those two 

labor leaders in particular, which are two of the largest labor 

unions in Colombia, I would like to know if your solidarity center 

has spoken with them and when was the last time they spoke with 

them. Because when I was in Colombia earlier this year, as part 

of a congressional delegation, we met with them in Colombia, and 

they expressed support for the Colombian free trade agreement. 

So my question is you may not have the names, but the ones that 

you have spoken to, have you received any expressions of support 

from labor leaders in Colombia for the Colombia FTA? 

Ms. LEE. Yes. We occasionally do speak to labor leaders in Colombia who support the agreement. But the vast majority of the 

federations and the unions and the workers that we have spoken 

to are still in strong opposition to the agreement. They are working 

with the action plan and they are working with the government to 

put it in place but they still have some significant doubts. We had 

a delegation of Colombian labor leaders here a couple of months 

ago who were very articulate. 

Mr. RIVERA. If the vast majority of the labor organizations that 

you spoke, the leaders that you have spoken to are opposed, I 

would like to know the names. 

Ms. LEE. I would be happy to provide them with you. I will get 

back with your staff and provide you a list. 

Mr. RIVERA. So the names of who you have met with, who you 

have spoken to. 

Ms. LEE. Absolutely. 

Mr. RIVERA. And those that you say are the vast majority that 

are opposed, the leadership, the leadership. 

Ms. LEE. The leadership represents the federations of the three 

large Colombian——

Mr. RIVERA. Yes, right. So we have three large Colombian names, 

so I am assuming two out of those three you have spoken to and 

oppose it. I would like to know the names of those individuals who 

you say are the majority that oppose this agreement. Because my 

understanding directly hearing from the leaders of those organizations is that they support the trade agreement with Colombia. Will 

you just get me that information because I would very much like 

to reconcile that discrepancy? 

Let me ask you one last question. I have got a news report here 

from June where it says President Barack Obama faces waning enthusiasm from unions as he prepares for his 2012 reelection bid according to Richard Trumka. Is that the president of your organization? 

Ms. LEE. That is. 

Mr. RIVERA. It says,

‘‘Trumka said union members are frustrated by Obama’s support for free trade agreements. Labor leaders said they would 

57

withhold financial support in next year’s election from candidates who haven’t sided with labor leaders.’’

And he is quoted here as saying, during the campaign Obama 

made significant promises to do an inventory of the trade agreement. He has obviously forgotten that promise. Is it a common 

practice to threaten to withhold support from the President of the 

United States if he doesn’t side on your issues? 

Ms. LEE. We have a respectful disagreement with the President, 

and it is important for us to express the reasons for that disagreement. We have expressed it in person and in other ways as well. 

Mr. RIVERA. So withholding, threatening to withhold political 

support on this issue of trade agreements, that you consider to be 

part of your persuasive tactics. 

Ms. LEE. I would not call it a threat. What I would say is that 

the labor movement has staked out a more independent political 

position in recent months. And that is an important one where 

every candidate, whether it is the President of the United States 

or a Member of Congress. We are asking them to earn our support, 

to stand with us on issues that are important to us. I don’t think 

there is anything unusual in that. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Rivera. Mr. 

Connolly of Virginia is recognized.

Mr. CONNOLLY. Thank you, Madam Chairwoman. And I must say 

to my friend from Florida, Mr. Rivera, I find it remarkable that you 

would ask that question of the representative of the AFL–CIO and 

not the same question of the representative of the Chamber of 

Commerce. Maybe my friend isn’t aware of the fact that the Chamber of Commerce used itself, allowed itself to be used and actively 

used itself to spend millions of dollars against Members of Congress and candidates for Congress because they didn’t agree with 

the Chamber’s agenda. 

So I commend my friend for asking the question and surely hope 

that he will make sure in the future it is balanced, because it is 

a common practice not only with labor but with the business community as well. Having said that, let me ask the panel, and perhaps Mr. Brilliant, in the past there have been real serious concerns about the efficacy of trade understandings with Korea, ostensibly a free market but lots of nontariff barriers. 

It just so happens that the guy who inspects U.S. imported automobiles has the flu and can only do a few cars a week and golly 

gosh darn, that is why they can’t get in the market. It is not a formal tariff by law, but the practice had prevented clearly some U.S. 

goods, especially automotive. 

Now, I am informed by Korean officials, by U.S. officials, those 

are days in the past, we have worked that out, and as a matter 

of fact there is much freer access to the Korean market. From the 

Chamber’s point of view, how would you assess U.S. access to the 

Korean market? 

Mr. BRILLIANT. Well, currently Korea has been one of the more 

closed markets to U.S. products and services. We have a good 

healthy trade relationship, but it should be much stronger given 

the size of the market and potential for us to sell there. So the fact 

that there have been trade barriers has been an inhibiting factor 

in the economic relationship, which is why when I was president 

58

of U.S. Korea Business Council, I then tracked down Rob Portman 

outside the State Department when he was Ambassador of USTR 

and said we should be pursuing a free trade agreement with South 

Korea. We have got all kinds of barriers, including in the auto 

area, services, and, of course, high tariffs that we could eliminate 

through a free trade agreement, which is why we are here today, 

to endorse it and support it. There is no question we will expand 

our sales to that market. 

Mr. CONNOLLY. And you are satisfied from the business point of 

view that those impediments of the past have, in fact, been addressed in the pending agreement and with other understandings 

with the Korean Government. 

Mr. BRILLIANT. Like most trade agreements you make compromises. But the overwhelming pieces of this FTA will produce 

not only a reduction in tariffs, because we will see an elimination 

of most tariffs, but we will address a lot of the nontariff barriers, 

including the issues of intellectual property which are very important to our membership. 

Mr. CONNOLLY. Thank you. And can I ask you just one more 

question. In the back and forth between Ms. Lee and my colleague, 

Mr. Sires, on Colombia, clearly, and I know you did not mean to 

imply, that given the fact that, say here in the District of Columbia, the homicide rate compares unfavorably, if you will, with Colombia, you did not mean to imply that somehow we should therefore minimize or be unconcerned about the apparent targeting of 

people in Colombia in the past, is that not correct? 

Mr. BRILLIANT. Look, any time someone dies, it is a sad thing, 

so there is no question about that. What I am trying to give you 

is a scale of reference. It is not as significant as is often stated. 

Mr. CONNOLLY. Right. I was trying to give you an opportunity, 

however, to clarify that one should not interpret from what you 

said any lack of concern nonetheless. 

Mr. BRILLIANT. Absolutely. 

Mr. CONNOLLY. Yes. And would we not agree that if there were 

evidence of deliberate targeting, let’s say of, for example, labor organizers, that would be a concern as we undertake consideration 

of this treaty—of this agreement. 

Mr. BRILLIANT. It is always a concern when employees of any 

company are targeted or when labor union activists are targeted. 

Mr. CONNOLLY. Ms. Lee, when I was in Colombia last year, I met 

with the then-President of the country and with the Attorney General. I presented a list of names of disappeared and murdered, 

some of which go back a number of years, but some of which were 

fairly recent. Is it the impression of your organization that progress 

has been made but they are still struggling, or do you think that 

frankly past practices have not changed? And I know my time is 

running out. 

Ms. LEE. Progress has certainly been made since the late 1990s 

and early 2000s when there were around 200 trade unionists murdered a year. But the number of murders increased in 2010 over 

2009. And as I said, there have been a disturbing number of murders this year. 

59

Chairman ROS-LEHTINEN. Thank you, Mr. Connolly. Mr. Mack, 

the chairman of the Subcommittee on the Western Hemisphere is 

recognized, and he has some videos to show us. Mr. Mack. 

Mr. MACK. Thank you, Madam Chair. And before we start the 

video, I want to say this again. The only thing stopping the passage 

of the free trade agreements is the unwillingness of the President 

to send them to the Congress. The support for the free trade agreements is here in the Congress in a bipartisan way. So the only 

thing keeping us is the President of the United States. Play the 

clip. 

[The video was played.] 

Mr. SHERMAN. Madam Chair——

Mr. MACK. I am sorry. So we are still waiting? So the President 

for over—well, for at least 2 years has been saying we got to do 

it, we got to do it. And you just heard him talking about the importance of the free trade agreements, yet all he has to do is send 

them to the Congress, all he has to do is send them to us. The story 

here is this: We continue to turn our back, backs, on our friends 

and our allies. 

And this is just another example where you have Panama and 

Colombia who have stood with the United States, who have been 

partners with the United States, who have been allies to the 

United States. You know, when we took—we went on a codel, and 

one of the meetings we had was the President of Panama and we 

talked about this issue. Do you know what he said? He goes, at this 

point, I mean, it is really more to benefit the United States than 

Panama. Panama is looking at it because they are tired of hearing 

from the Hugo Chavezes of the world, what has being a friend of 

the United States gotten with you lately. I think what is really concerning to me is that the President over and over and over and 

over again says, we got to pass this now, we got to pass that now, 

we got to do this, we got to do that, talks about this, talks about 

that, but then there is no action. 

And the frustration is, not only here in the Congress, but with 

our friends around the world, is they continue to hear the President say that he wants to strengthen the relationships with our allies, but the President continues to sit on his hands and does not 

do what is right. It is long time overdue that these free trade 

agreements haven’t been brought to this Congress. The President 

knows it, Secretary Clinton knows it, and it is time that they act. 

Send us the agreements, they will pass. Thank you. 

Chairman ROS-LEHTINEN. Thank you, Mr. Mack. Mr. Cardoza is 

recognized from California. 

Mr. CARDOZA. Thank you, Madam Chair. Madam Chair, in my 

congressional district we have unemployment rates of upwards of 

20 percent. I have been here almost 10 years now. There has been 

a number of these agreements that have come through Congress. 

Everyone promises that they will create jobs in agricultural regions 

like mine. Every time there has been, well, we have taken care of 

the different problems in the issues that you have raised, Mr. 

Cardoza, and things will be better this time, and every time it has 

not worked out that way. 

I will just use one example of where in the last free trade agreement that was put through with Peru, there was a provision, or I 

60

guess it was the Andean free trade agreement, there was a provision in the bill that protected asparagus or was going to—Senator 

Stabenow and I, the two areas of the country that grow the most 

asparagus were very concerned about it. Now they oftentimes import asparagus to have the festival in Stockton. The reality is those 

kinds of things have not worked to protect agriculture. 

And so I come to these agreements open but skeptical on almost 

every front. And I am going to ask a question in just a second to 

have you respond. I am going to say one more statement, and this 

is to Ms. Lee. I have had a, probably a 90-percent record or higher 

in support of labor since I have been in Congress. I traveled to Colombia and I met with labor leaders there. And I have to say that 

the argument about how they are persecuted currently I found as 

questionable as the help that we get on the other side. The witnesses that we saw the day that we traveled to Colombia were not 

credible to me. And I have said that to my friends in Labor several 

times. And so I have skepticism on both sides of this issue. I think 

that there is oftentimes overselling on both sides. And I just raise 

that frankly and I would like to have answers. The question I have 

to my friends from businesses, we have heard a lot today about the 

benefits of these agreements and what they will bring. Can you describe any potential negative repercussions to agricultural products? Because I will tell you, they told us that the North American 

free trade agreement wasn’t going to affect food processors in my 

district, now half of which have left the country. 

Mr. BRILLIANT. Well, I just comment, first of all, the agricultural 

community stands behind all three free trade agreements. 

Mr. CARDOZA. They always do and they always go right to 

slaughter. 

Mr. BRILLIANT. They stand behind it because they are going to 

export more to these markets. They are also seeing, as I told the 

committee earlier, we have already seen a loss of sales to Colombia 

of $1 billion since 2009. That is a direct impact on our economy. 

I don’t have the figures for your district, but I can tell you that certainly when you lower tariffs in the agricultural area, you are 

going to find ways to expand your sales, your export sales. And 

that we have a 54 percent tariff rate on agricultural products sold 

into South Korea, which will be eliminated through the free trade 

agreement. 

Mr. CARDOZA. I understand, sir, but let me just follow up. Every 

time we do these things they tell us how we are going to export 

more and then there is phytosanitary or customs barriers. Every 

time we have gotten the short end of the stick. I mean, I just have 

to say that I understand the arguments and all my guys buy into 

it all the time. And then they don’t get their products in and they 

come complaining to me that it didn’t work out like to they had 

planned. 

Mr. BRILLIANT. Well, let me just add this piece, which we have 

not talked about today. First of all, I agree about phytosanitary 

standards and other kinds of barriers at the border, which is why 

this agreement does try to address that. And it also tries to provide 

a more vigorous trade enforcement mechanism, a dispute resolution process which is really frankly new in this FTA, which I think 

can add some muster to ensuring we get enforcement of the deal. 

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Because you are right, it is not just about tariff cuts. But we didn’t 

just get tariff cuts in this deal, we did get improvement in terms 

of standard rulemaking as well. 

Mr. CARDOZA. Anybody else? 

Ms. LEE. In terms of your criticism of the Colombian labor leaders that you met with, it is a big country, it is a complicated country, it is a violent country with a terrible history. And I would certainly put in one counterargument to what Mr. Brilliant said about 

DC is a violent place and a lot of people get murdered. The murders of trade unionists are people who have been targeted for their 

trade union activity. 

Mr. CARDOZA. Well, I asked those questions while I was there 

and they couldn’t justify those in most of the cases. 

Chairman ROS-LEHTINEN. Thank you, Mr. Cardoza and Ms. Lee. 

We will be voting 14 votes and a 10-minute motion to recommit in 

just a few minutes, so I will try to get through the folks. Ms. 

Buerkle, the vice chair of Subcommittee on Terrorism, Nonproliferation, and Trade will be recognized. 

Ms. BUERKLE. Thank you, Madam Chair. I am going to yield my 

5 minutes to the gentleman from California, Mr. Rohrabacher. 

Mr. ROHRABACHER. Thank you very much. And perhaps I yield 

to Mr. Rivera the first 30 seconds of that. 

Mr. RIVERA. Thank you, Chair Rohrabacher. I just want to respond to my friend, Mr. Connolly, who stated earlier regarding organizations making threats against those that don’t support their 

agenda. Of course, every organization supports those who support 

their issues. Much less frequent are organizations that make a blatant threat stating that if someone does not do X on an issue be 

prepared to face Y consequences. I would suggest it is a much more 

persuasive tactic to focus on the merits of an issue rather than just 

issuing threats. And that was the point of my question, I think, 

going forward. Hopefully we will focus on the merits of this issue. 

Thank you, Mr. Rohrabacher. 

Mr. ROHRABACHER. Yes. And reclaiming my time that has been 

yielded to me, which I appreciate very much. From the hearing, I 

have been paying attention to what everybody has been saying, and 

let me just thank you for making that last point about Colombia, 

because in the last 100 years Colombia has gone through incredible 

violence, and people may or may not be in the labor movement or 

may or may not own a plantation, but they are caught up in a cycle 

of violence that is beyond labor management agreements and understandings there. 

I have bought on to what our friends at the Chamber, at least 

on this issue, our friends at the Chamber are saying in terms of 

the Colombia and Panama free trade agreement, that in fact we 

are talking about lowering tariffs on American products, which will 

be the—the ultimate result will be that. In fact, madam, you 

verified that when you told me that the labor leaders in Colombia 

were opposed to it, which must mean that it was going to be beneficial to our workers in the United States rather than necessarily 

the Colombian workers. I am here to represent the interest of the 

American workers, not whether or not it benefits the Colombian 

workers or not. In this case, it is probably going to be a win-win. 

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But certainly lowering the tariffs on our products for Colombia and 

Panama is a very laudable goal. 

However, with that said, let me reaffirm that I believe in free 

trade between free people, and our record in China, including the 

Chamber’s record, has been horrible. We have seen the greatest 

transfer of wealth from our country to a Communist dictatorship 

and over the last 10 years a voluntary transfer of wealth to that 

country at the expense of the people of the United States of America. Three million jobs have been lost here due to people setting up 

their plants and investing in China. 

Free trade doesn’t work with countries that are run by cliques, 

by a dictatorship. That is why I am so concerned about the South 

Korean free trade agreement. I want to know whether Mr. Brad 

Sherman’s observations are accurate or not. If they are, I will oppose it, because what it indicates is that people are manipulating 

this free trade agreement to the point that things can be made essentially in North Korea 65 percent and can end up in our marketplace. Now, let me tell you there are very few countries that I consider to be lower on my scale of admiring their governments than 

China, but North Korea is one of those. 

North Korea is worse than Communist China. And this is something we have got to get to the bottom of. It is not in the interest 

of the American people to have an agreement, that in some way 

after all the avenues are taken for all the agreements and how you 

decide what is coming into the United States, where you have a 

product in which 65 percent of what that product is all about is 

slave labor and bolstering the economy of a vicious dictatorship, 

which is bad for our own workers, bad for our economy and a horrible statement about what we believe in as Americans. Please go 

right ahead. 

Mr. BRILLIANT. Let me make two quick points: First of all, this 

agreement does not allow for imports from Kaesong, we know that. 

That is clear. The second is it doesn’t allow for content rules. And 

I need the U.S. Government to verify that. But the reality is what 

he is saying about 65–35 percent is not in the agreement. The second point I would make is on China. I remember coming up to see 

you in the 1990s on this issue, so I know where you stand. We may 

have some differences, but I think that we have more in common 

now than you might——

Chairman ROS-LEHTINEN. Thank you very much. The time for 

the gentlelady is done. Mr. Meeks of New York is recognized, the 

ranking member on the Subcommittee on Europe. 

Mr. MEEKS. Thank you, Madam Chairman. Let me just say 

quickly, first of all, where as I basically have agreed with Mr. Mack 

on the trade agreements, but where he says he was waiting on the 

President to send them up, I must say that I was waiting on President Bush to send them up also, and they never came up. And 

we—and I think that President Obama has done some things. We 

are waiting on TAA, and hopefully it will be here and we will get 

these agreements up soon. I am a proponent of it. 

Secondly, let me though, at the same token, to Mr. Rivera’s statement, that the threats by AFL–CIO president, I was just looking 

at what President Trumka said following the President’s statement. I just read through it thoroughly. I don’t see where he has 

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threatened the President at all. In fact he is supporting the President talking about putting people back to work. So there is no 

threat when the President included the trade agreements in his 

speech. I am looking at his statement. I don’t see where he says 

I am not going support the President or anything else. And I can 

tell you, as a Member of the House who is a strong supporter of 

Colombia and the free trade agreements, that I have never been 

threatened by the AFL–CIO. 

We have had a disagreement on this. We have sat down and 

tried to talk out and hash out our disagreements. I know that they 

don’t see it on the way we do. But threatened? No, I can’t say that 

I have been threatened on this agreement by the AFL–CIO, so I 

think that charge has absolutely no bases, in fact, in that regard. 

That being said, we do have differences of viewpoints in regards, 

especially to Colombia. When I look at the fact that Colombia labor 

unions have rose from 850,000 in 2002 to 1.5 million in 2009, an 

increase of about 75 percent, when I look at the fact that the International Labor Organization agrees that Colombia has made huge 

progress, and I know Ms. Lee has acknowledged that also, and so 

much so that it dropped Colombia from its list of countries subject 

to labor rights monitoring in June 2010. 

And I have been back and forth to Colombia probably as much 

as anybody in Congress and am very happy to talk to, when I 

talked to labor leaders in Colombia, especially with regard to the 

Labor Action Plan, how they were waiting for a long time for this 

kind of plan to come and they were praising President Obama for 

its inclusion. 

But that being said, what I wanted to change and just ask the 

question about briefly, because we are here in the Foreign Affairs 

Committee and I would like to talk about the Foreign Affairs implications of the trade agreements given this committee’s jurisdiction. 

And trade is never about economics, it is also about our relationships with other nations and allies, it is about strengthening rule 

of law, it is about deepening ties. In fact, a recent report from the 

Council of Foreign Relations said it well, Trade has been and remains a strategic instrument of American foreign policy. It binds 

together countries in a broad and deep economic network that constitutes a bulwark against conflict. And all three of these pending 

agreements are with nations that are key allies in critical areas of 

the world. 

So, my question to all of our panelists is how does the trade 

agreements, as you see them, how do they fall in on our foreign affairs with our foreign affairs agenda? And does it further those 

goals? I know that the expertise is in the economic realm, but this 

is the Foreign Affairs Committee. So I throw that out to all of our 

panelists. 

Mr. BRILLIANT. I will be brief here. I am going to have the honor 

to have President Lee come over to the U.S. Chamber on the week 

of the 13th when he is here for a State visit. And I can tell you 

that we will weaken his presidency, we will weaken South Korean 

relationship if we don’t advance our free trade agreement with that 

country. So it is much more than just an economic relationship. It 

is buttressing an already existing ally and making it a stronger relationship. That is critical given what is going on in East Asia, not 

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just the economic world, but all the changes that are taking place, 

the transformational changes. So I agree 100 percent with the Congressman that these FTAs are much more than just trade agreements. They are very much an instrument of our foreign policy. 

Mr. MEEKS. Ms. Lee? 

Ms. LEE. If I could say, I think it is more complicated than 

whether we just support the current leader of a country whether 

we do an FTA. I think Mr. Rohrabacher mentioned before the fact 

that the labor unions, many of the labor unions in Colombia are 

opposed to the agreement. That is also true of many of the trade 

unionists in Korea as well. And one of the reasons is that some of 

these agreements are controversial, that the perception on the 

ground in mixed. There have been big demonstrations on the 

ground in both Colombia and Korea against the free trade agreements because the perception is that it is the United States and 

multinational corporations coming in. I know in Colombia there are 

some concerns about—this comes from the Colombian Department 

of Agriculture itself—about whether the agreement will displace a 

lot of agricultural production because, as people have said many 

times, Colombia is lowering its own tariffs, and the U.S. is not 

changing its market access very much. 

Chairman ROS-LEHTINEN. Thank you. I am sorry. The time is up, 

and the bells have rung for 14 votes. And before adjourning this 

hearing, I would like to take a moment to highlight the contributions of one of our staffers, Robyn Wapner, who is a member of our 

committee majority staff. She has been working hard promoting 

the passage of the Colombia and Panama FTAs, and promoting 

U.S. interests in the Western Hemisphere. Robin is leaving us to 

return to her home State of California. And while I know that her 

family is very glad to have her back home soon, we will surely miss 

her. She is a wonderful professional and a terrific person. So 

Robyn, Godspeed on your journey home, and don’t forget us. And 

with that, thank you, panelists, thank you, audience. The committee is adjourned. 

[Whereupon, at 11:34 a.m., the committee was adjourned.] 

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