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CONGRESS AND U.S. TARIFF POLICY 

HEARINGS 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

APRIL 16 AND APRIL 21, 2015 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

ORRIN G. HATCH, Utah, Chairman 

CHUCK GRASSLEY, Iowa 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

JOHN THUNE, South Dakota 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

ROB PORTMAN, Ohio 

PATRICK J. TOOMEY, Pennsylvania 

DANIEL COATS, Indiana 

DEAN HELLER, Nevada 

TIM SCOTT, South Carolina 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

SHERROD BROWN, Ohio 

MICHAEL F. BENNET, Colorado 

ROBERT P. CASEY, Jr., Pennsylvania 

MARK R. WARNER, Virginia 

CHRIS CAMPBELL, Staff Director 

JOSHUA SHEINKMAN, Democratic Staff Director 

(II) 

(III) 

C O N T E N T S 

APRIL 16, 2015 

OPENING STATEMENTS

Page 

Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman, Committee on 

Finance .................................................................................................................... 2, 39 

Wyden, Hon. Ron, a U.S. Senator from Oregon ...................................................... 4, 41 

ADMINISTRATION WITNESSES

Froman, Hon. Michael, U.S. Trade Representative, Executive Office of the 

President, Washington, DC.................................................................................... 5, 43 

Lew, Hon. Jacob J., Secretary, Department of the Treasury, Washington, 

DC .......................................................................................................................... 7 

Vilsack, Hon. Tom, Secretary, Department of Agriculture, Washington, DC ..... 9 

APRIL 21, 2015 

OPENING STATEMENTS

Page 

Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman, Committee on 

Finance .................................................................................................................. 53 

Wyden, Hon. Ron, a U.S. Senator from Oregon .................................................... 55 

WITNESSES

Donohue, Thomas J., president and chief executive officer, U.S. Chamber 

of Commerce, Washington, DC ........................................................................... 56 

Trumka, Richard L., president, American Federation of Labor and Congress 

of Industrial Organizations (AFL–CIO), Washington, DC ............................... 59 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Donohue, Thomas J.: 

Testimony .......................................................................................................... 56 

Prepared statement with attachment ............................................................. 87 

Froman, Hon. Michael: 

Testimonies.......................................................................................................... 5, 43 

Prepared statement .......................................................................................... 96 

Response to a question from Senator Toomey ............................................... 98 

Hatch, Hon. Orrin G.: 

Opening statements...................................................................................... 2, 39, 53 

Prepared statements............................................................................... 99, 100, 101 

Letter to Congress from chambers of commerce, manufacturing organizations, and farm bureaus, April 22, 2015 ..................................................... 103 

Lew, Hon. Jacob J.: 

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

Prepared statement .......................................................................................... 109 

Trumka, Richard L.: 

Testimony .......................................................................................................... 59 

Prepared statement with attachments ........................................................... 110 

Vilsack, Hon. Tom: 

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

Prepared statement .......................................................................................... 125 

Page

IV 

Wyden, Hon. Ron: 

Opening statements...................................................................................... 4, 41, 55 

Prepared statements............................................................................. 126, 127, 128 

COMMUNICATIONS

American Chemistry Council .................................................................................. 131 

Distilled Spirits Council of the United States, Inc. .............................................. 132 

LeadingAge ............................................................................................................... 134 

National Association of Manufacturers .................................................................. 135 

National Farmers Union ......................................................................................... 138 

21st Century Fox et al. ............................................................................................ 140 

(1) 

CONGRESS AND U.S. TARIFF POLICY, PART I 

THURSDAY, APRIL 16, 2015 

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

The hearing was convened, pursuant to notice, at 10:12 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Orrin G. Hatch 

(chairman of the committee) presiding. 

Present: Senators Grassley, Roberts, Thune, Isakson, Portman, 

Toomey, Heller, Scott, Wyden, Schumer, Stabenow, Cantwell, Nelson, Menendez, Carper, Cardin, Brown, Bennet, Casey, and Warner. 

Also present: Republican Staff: Chris Campbell, Staff Director; 

Everett Eissenstat, Chief International Trade Counsel; Rebecca 

Eubank, International Trade Analyst; Kevin Rosenbaum, Detailee; 

and Sahra Park Su, Fellow. Democratic Staff: Joshua Sheinkman, 

Staff Director; Jocelyn Moore, Deputy Staff Director; Michael 

Evans, General Counsel; Jayme White, Chief Advisor for International Competiveness and Innovation; and Elissa Alben, International Trade Counsel. 

The CHAIRMAN. This hearing will come to order. 

I would like to begin by engaging in a colloquy with my friend, 

the ranking member, to tell the members of the committee and the 

public where things stand. We have had a very positive set of discussions, and we are, in my opinion, close to reaching an agreement on Trade Promotion Authority, Trade Adjustment Assistance, 

and other important trade programs. We are not quite there, but 

I hope and expect that we will be very soon. 

Senator WYDEN. Mr. Chairman, thank you. I agree with your assessment. These have obviously been very challenging negotiations. 

I do believe that we are close to finding common ground. I want 

to be clear, because I know colleagues want to see how we are 

going to spend the day—and particularly the week ahead—that any 

agreement must include not only Trade Promotion Authority but 

other vital issues like Trade Adjustment Assistance and enforcement. 

It may be that the best procedural approach is for these provisions to be passed as separate bills, but the trains absolutely must 

be on parallel tracks, and both TPA and TAA must make it to the 

President’s desk for signature so that one cannot be enacted without the other. 

The CHAIRMAN. I agree to help move these bills on parallel 

tracks. I oppose the TAA program, but, as I said in the past, I understand it is necessary to maintain Democratic support for TPA, 

2 

so, when we have an agreement, I will bring the agreed-upon bill 

before our committee and ensure that it gets a fair vote. I will also 

work with our Majority Leader to make sure it gets a fair vote on 

the floor and that TAA and TPA move in parallel. 

Let me explain how we intend to proceed. If an agreement is 

reached, we will make it available and will brief committee members as soon as possible. At the same time that we work to complete an agreement, this hearing gives us an opportunity to examine TPA, TAA, and other important trade issues, and it gives committee members an opportunity to ask questions of key administration officials and raise issues of concern. 

Senator WYDEN. Mr. Chairman, I have one other suggestion. If 

an agreement is reached soon, I believe the committee should reconvene later today, so that it would be possible to consider the 

agreement in further detail. Is the chairman willing to do that? 

The CHAIRMAN. Yes, that is a good suggestion. Subject to scheduling considerations, we will reconvene the hearing, so this will be 

a continued hearing throughout the day. 

Senator WYDEN. Thank you. 

Senator STABENOW. Mr. Chairman, might I ask a question? 

The CHAIRMAN. Sure. 

Senator STABENOW. Thank you. I assume that that does not 

mean voting today on an agreement we have not yet even seen, 

that has not been reached? 

Senator WYDEN. The Senator is absolutely correct. 

Senator STABENOW. Thank you. 

The CHAIRMAN. The mark-up will be next Wednesday—— 

Senator STABENOW. Thank you. 

The CHAIRMAN [continuing]. Assuming that we have this all together, and I think we will. 

OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. 

SENATOR FROM UTAH, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. Now, the committee will come to order. 

I would like to thank everyone for attending today’s hearing on 

Congress and U.S. tariff policy and offer a special welcome to this 

distinguished panel of witnesses we have before our committee 

today: Ambassador Froman, Secretary Lew, and Secretary Vilsack. 

Each of you gentlemen serves in key positions and makes decisions 

every day on important trade issues, so we really look forward to 

your testimony and appreciate your contributions to this debate. 

My hope is that this hearing will help kick-start the first real opportunity we have had to debate U.S. trade policy in a number of 

years as we get closer to introducing and enacting legislation to 

renew Trade Promotion Authority, or TPA. 

Let me start by stating one simple premise. U.S. trade with other 

countries is a very good thing. Trade creates new opportunities for 

America’s workers, enhances the standard of living for our citizens, 

helps our national security by solidifying alliances with like-minded 

nations, advances America’s values abroad, strengthens the rule of 

law, and helps lift people across the globe out of poverty. 

To effectively achieve these goals, Congress must be an effective 

partner with the administration. Our Nation’s constitutional framework is complex. Article I of the Constitution grants to the ConVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 R:\DOCS\99678.000 TIMD
3 

gress the power to regulate commerce with foreign nations, but Article II grants the President the power to conduct foreign policy. 

I think most would agree that trying to negotiate an agreement 

among many different parties with different priorities and vague 

objectives is an inherently difficult, if not impossible, proposition. 

Most would also agree that it would be even more difficult to reach 

an agreement if the parties are unsure if their negotiating partners 

will be able to put the agreement into force. 

Given those realities, it is pretty easy to understand why TPA is 

so important. No potential trade partner will give our negotiators 

their best offer unless they know what issues matter to us the most 

and whether we can deliver on the final deal. Simply put, for 

America to be able to succeed at the trade negotiating table and 

to set the rules for a fair international marketplace, we have to 

speak with one voice in our demands and provide assurance that 

we will deliver what we promise. 

Now, people have different theories about how to best achieve 

these goals, but there is only one legislative tool with a proven 

track record, and that is Trade Promotion Authority. TPA is the 

most powerful tool in Congress’s trade arsenal. For decades now, 

robust TPA laws have ensured that Congress plays a leading role 

in setting our country’s trade agenda and providing our trade negotiators with the necessary tools to reach the best deals possible. 

Currently, the Obama administration is in the midst of negotiating some of the most ambitious trade agreements in our Nation’s 

history. I commend the administration for that, and these leaders 

here today. But, as I have stated on a number of occasions, those 

negotiations will almost certainly fail if Congress does not renew 

TPA. 

Make no mistake, failure on these negotiations would have a 

negative impact on our economy. More than 96 percent of the 

world’s consumers live outside the United States. In order to be 

competitive, American businesses need to be able to sell more 

American-made products and services to overseas customers. Put 

simply, if we want to create more opportunity and high-paying jobs 

here at home, we need to open more foreign markets to U.S. goods 

and services. 

We should be doing all we can to tear down barriers to American 

exports, while at the same time laying down enforceable rules for 

our trading partners so that we can be sure that American workers 

and job creators are competing on a level playing field. We need to 

be leading the world on trade, writing the rules, and setting standards. If we do not, other countries like China most certainly will. 

We can address all of these concerns by passing strong TPA legislation. Senator Wyden and I, and others on the committee, are 

currently working to do just that. I want to personally thank Senator Wyden for his efforts to help us get as far as we have. I also 

want to once again thank the three Cabinet officials who are here 

to share their views on the role of Congress’s U.S. tariff policy and 

what our work means to our Nation’s international trade agenda. 

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

The CHAIRMAN. We will now turn to Senator Wyden, our ranking 

member, for his opening statement. 

4 

OPENING STATEMENT OF HON. RON WYDEN, 

A U.S. SENATOR FROM OREGON 

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

been good to work with you over the last few months. I look forward, Mr. Chairman, to talking about this more today. I look forward to talking about it extensively over the next week, and then, 

I think it is clear we are going to be talking about it for weeks after 

that. 

This is an issue of such importance that it is essential to provide 

that kind of time, and I know you share my view that, on issues 

like this that really address the future of America’s place in the 

global economy and national security, it takes that kind of deliberation. 

I also want to say to colleagues that this also must include the 

health care tax credit. In other words, it will not just be the Trade 

Adjustment Assistance program in terms of assisting our workers; 

it also is going to have to include a strong health care tax credit. 

Our colleague who has led that fight is not here, Senator Brown, 

but he has been eloquent in talking about what it means for workers, and it absolutely must be part of this agreement. 

For purposes of my kind of brief opening statement, Mr. Chairman, I had town hall meetings in my home State just this last 

week. The one issue that came up again and again was the excessive secrecy—the excessive secrecy—that seems to have accompanied so much of this debate. My view is, if you believe in trade 

and you want more of it, the last thing you should be for is all this 

secrecy that just makes the public more cynical and skeptical about 

what trade is all about. 

So American trade policy needs to be debated openly, and it is 

time to pull it out of the time warp so that it works better for 

middle-class Americans and delivers a new level of transparency. 

The focus of trade policy has to be about creating more red, white, 

and blue jobs and helping Americans climb the economic ladder. 

The same old playbook on global trade does not work for Oregonians; it does not work for Americans. I want to be clear as we 

start this discussion: I will not accept it. 

Now, as Chairman Hatch and I have discussed, we are working 

on a variety of issues that includes Trade Promotion Authority, 

Trade Adjustment Assistance, particularly tougher trade enforcement, and a variety of other important programs. I believe, as we 

begin this debate, it is important to recognize how important it is 

to have a fresh, strong strategy on enforcing our trade laws. 

This is critical to stop rulebreaking countries. Enforcement ought 

to be based on defending American jobs and promoting economic 

growth at home. It is also long past time to raise the bar on enforceable labor standards, enforceable environmental protection, 

and human rights. I am particularly pleased that Senator Cardin 

has led the fight here on human rights and governance and the 

fight for those values that are so important to us as Americans. 

Bottom line: make the system stronger and better for middleclass workers in Oregon and across the country. Those middle-class 

trade policies are going to work best when our workforce is ready 

to compete and when workers have access to job training, financial 

support, and health care. 

5 

At the end of the day, what is going to be different about this 

is, the public has a right to know from this point on what is at 

stake in trade. And we are going to start that, because, before the 

President signs a Trans-Pacific Partnership agreement, it will be 

published for a significant length of time, and that will be directed 

for the first time by law. 

In the future, we are also going to have to make changes to ensure that the public knows, as negotiations go forward, what is in 

those negotiations. So those are some of the priorities that I have, 

Mr. Chairman. I know that this morning’s session, given the interest of colleagues, is a chance to talk about some of those priorities, 

and I look forward to reconvening this afternoon to examine moving ahead in greater detail. I thank you for that opportunity. 

The CHAIRMAN. Well, thank you, Senator Wyden. 

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

The CHAIRMAN. We have three excellent witnesses here today, 

Cabinet-level officials, and we are going to start with Jacob Lew, 

who is the Treasury Secretary. We are very grateful to have you 

here. Then we will go to Secretary Vilsack, the Agriculture Secretary, and then we will go to our Trade Representative, Ambassador Froman. 

So, Secretary Lew, we will start with you. 

Secretary LEW. Thank you, Mr. Chairman. But if I might suggest, if Ambassador Froman went first, it might frame all three of 

our presentations. 

The CHAIRMAN. That would be fine with me. 

Secretary LEW. All right. Thank you. 

The CHAIRMAN. I thought about that too, but then we thought we 

would—— 

Secretary LEW. I appreciate the recognition, and I am happy to 

deliver a statement. 

The CHAIRMAN. All right. 

STATEMENT OF HON. MICHAEL FROMAN, U.S. TRADE REPRESENTATIVE, EXECUTIVE OFFICE OF THE PRESIDENT, 

WASHINGTON, DC 

Ambassador FROMAN. Thank you, Chairman Hatch, Ranking 

Member Wyden, members of the Finance Committee. Thanks for 

the opportunity to testify today. Thank you to my colleagues, Secretary Lew and Secretary Vilsack, for being here. 

Increasing access to foreign markets for U.S. exports through enhanced trade opportunities has long been a bipartisan effort, because trade plays such a critical role in supporting good jobs, promoting growth, and strengthening the middle class in America. 

Closely related to these economic stakes is the fact that sustaining our Nation’s strategic position hinges on our economic 

strength and our ability to lead on trade. The importance of trade 

to America’s economic well-being has never been clearer. Last year, 

U.S. exports reached $2.35 trillion, a record-breaking amount that 

supported an estimated 11.7 million jobs, an increase of 1.8 million 

jobs since 2009. 

With those jobs paying up to 18 percent more on average than 

non-export-related jobs, trade policy has an important role to play 

6 

in raising wages and living standards for the middle class. Partially as a result of our exporting success, our economy continues 

to grow. Job creation is happening at the fastest pace since the 

1990s, and wages are finally starting to rise. 

After nearly 2 decades of decline, factories are opening in this 

country again, manufacturing is starting to return from overseas, 

and we have added 900,000 new manufacturing jobs over the last 

5 years. But we can do better. The playing field is still not level 

for American workers. 

The United States made its decision decades ago to have an economy that is open to the world. Our tariffs are low, and we do not 

use non-tariff barriers to discriminate against foreign countries. 

But when we sell our goods abroad, our businesses and workers 

often face much higher tariffs and countless non-tariff measures. 

Many of these imbalances are in areas where the U.S. is most 

competitive: 50-percent tariffs on certain machinery; 80-percent 

tariffs on autos; up to 400-percent tariffs on certain agricultural 

products. In a world where more than 95 percent of all customers 

live outside our borders, the disadvantages our workers and businesses face are less an inconvenience than an injustice. Fundamentally, our trade agenda is focused on addressing that injustice by 

changing the status quo so that it works better for Americans. 

A critical tool to help us level the playing field for our workers 

is Trade Promotion Authority. During the 8 decades since Franklin 

Delano Roosevelt signed the first version of trade negotiating legislation into law, Congresses of both parties have revised and renewed that legislation 18 different times under Democratic and Republican Presidents alike. But TPA has not been updated since 

2002, and during that time the global economy has changed significantly. Congress now has the opportunity to account for those 

tectonic shifts, as well as the emerging consensus around key trade 

issues. 

Bipartisan TPA will bring us one step closer to delivering trade 

agreements like the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. With those agreements 

in place, American workers, farmers, ranchers, and businesses of 

all sizes will have access to nearly two-thirds of the global economy. That will help make the United States the world’s production 

platform of choice, the premier location for making things not only 

to serve the U.S. market, but for exporting all over the world. 

Within our reach is an opportunity to promote not only America’s 

interests, but also our values. That is why leaders from civil society 

and the private sector have spoken out about the important role 

that trade has in creating American jobs, advancing the global development and anti-poverty agenda, and protecting the environment. 

Trade brings together voices from our agricultural sector and our 

manufacturing and services sector, and it has united Mayors from 

across the country from Tallahassee to Tacoma, from Long Beach 

to Louisville. They understand that the choice we face today is 

clear. It is between a world in which America sets the rules of the 

road on trade and a world in which our competitors do. We cannot 

change the status quo by sitting on the sidelines. 

7 

As we speak, China and others are negotiating an agreement 

that would encompass over 3 billion people. If we allow others to 

carve up markets of the future, our workers and businesses will 

pay a steep price. To drive production in the United States and create good jobs here, we must lead, and we must lead together with 

a unified, bipartisan voice about our commitment to opening markets for our workers, farmers, ranchers, and businesses of all sizes. 

So, with so much at stake, Mr. Chairman, I look forward to continuing to work with this committee and the Congress to pass TPA 

and to advance the broader trade agenda, including renewing the 

Generalized System of Preferences that expired in 2013 and the African Growth and Opportunity Act well before its expiration in September. We also look forward to working with you to renew Trade 

Adjustment Assistance. 

Thanks very much. 

The CHAIRMAN. Thank you, Ambassador Froman. 

[The prepared statement of Ambassador Froman appears in the 

appendix.] 

The CHAIRMAN. We will now turn to Secretary Lew. 

STATEMENT OF HON. JACOB J. LEW, SECRETARY, 

DEPARTMENT OF THE TREASURY, WASHINGTON, DC 

Secretary LEW. Thank you very much, Mr. Chairman, Ranking 

Member Wyden, members of the committee. I am happy to be here 

today and appreciate the opportunity to testify on Trade Promotion 

Authority. The Treasury Department has been working hard on the 

President’s trade agenda and working very hard on bolstering global economic growth and stability. 

Today, exports make up some 30 percent of global GDP, and 

global per capita incomes are over 50 percent higher than they 

were 20 years ago. These macroeconomic gains are due in part to 

the rules-based trading system that boosts U.S. and global exports 

of goods and services and opportunities for American workers, even 

as it raises the standard of living for consumers. 

Reducing trade barriers and securing reforms abroad through 

well-crafted trade agreements benefit both U.S. economic competitiveness and global economic prosperity. First, our firms and workers benefit as our partner countries open up their markets to imported goods and services. 

Second, as countries open up to trade, over time they innovate 

more, invest more, and become more productive. The result is a 

stronger and more stable global economy. That is also important 

for American businesses and workers. 

Trade Promotion Authority is critical in helping secure the substantial economic gains that our ambitious trade agenda and investment agreements can bring. TPA sends a strong signal to our 

trading partners that Congress and the administration speak with 

one voice to the rest of the world on our priorities. We strongly 

agree with members of Congress that unfair currency practices 

need to be addressed. 

Since day one, the President has been clear that no country 

should grow its exports based on a persistently under-valued exchange rate, and currency has been at the top of Treasury’s international agenda. 

8 

We share the goal of moving major economies to marketdetermined exchange rate systems that are transparent, flexible, 

and reflect underlying economic fundamentals. We are working 

tirelessly to address currency concerns, and our efforts, through bilateral and multilateral engagements, have met with considerable 

success. Japan and other G–7 countries have affirmed they will not 

target exchange rates and will only use domestic instruments to 

achieve domestic economic objectives. G–20 members have also 

pledged to move more rapidly toward market-determined exchange 

rate systems and flexibility in order to reflect underlying economic 

fundamentals, avoid persistent exchange-rate misalignments, not 

target exchange rates, and refrain from competitive devaluations. 

The IMF has bolstered its surveillance of its members’ exchange 

rate policy obligations and has begun publishing an external sector 

report that includes estimates of exchange-rate misalignment for 

25 major economies. 

We have made progress with China on exchange rates through 

the U.S.-China Strategic and Economic Dialogue and continue to 

raise the issue regularly with our Chinese counterparts. This has 

contributed to a decline in China’s current account surplus from a 

peak of 10 percent of GDP before this administration took office to 

just 2 percent of GDP last year. The RMB has seen a real effective 

appreciation of nearly 30 percent since China allowed its currency 

to resume appreciation in mid-2010. We will continue to intensify 

our efforts on exchange rates, using the tools and channels that are 

most effective. 

We believe that more progress is needed, and Treasury will continue to engage with Congress on how best to address currency 

issues in a way that is consistent with our overall strategy of bilateral and multilateral engagement, and I look forward to answering 

questions from the committee. 

Thank you. 

The CHAIRMAN. Thank you, Mr. Secretary. 

[The prepared statement of Secretary Lew appears in the appendix.] 

The CHAIRMAN. I might mention that we are going to go as long 

as we can this morning. I have to leave. We have a vote at 11, and 

I have to go over to the House and enroll a passed bill, but we will 

continue. Then we are going to re-continue at 3 today so that we 

can finish this up today, and hopefully everybody will enjoy the 3 

p.m. meeting as much as this morning. 

Senator WYDEN. And, Mr. Chairman, I would just say I appreciate that. I really urge colleagues to be here at 3. I know it is 

short notice, but this will give us a chance to go into more detail. 

I know, after this hearing, there are going to be a number of meetings, and we just want to use the time, particularly over the next 

week in this committee, because we are going to have lots of debate 

after that before it goes to the floor and lots of time on the floor. 

But I want colleagues to have every opportunity to look at what 

I hope will be put together here very shortly. So 3 today, and I appreciate your announcing that at this time, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Secretary Vilsack, we look forward to your testimony at this 

time. 

9 

STATEMENT OF HON. TOM VILSACK, SECRETARY, 

DEPARTMENT OF AGRICULTURE, WASHINGTON, DC 

Secretary VILSACK. Mr. Chairman, thank you very much. To Senator Wyden and committee members, I appreciate the opportunity 

to be here this morning to speak specifically on the benefits of 

Trade Promotion Authority and the trade agreements that are 

being negotiated for America’s farmers, ranchers, and producers. 

Let me start with a bit of history. In August of 1941, Franklin 

Roosevelt and Winston Churchill were off the coast of Nova Scotia 

discussing the development of the Atlantic Charter, a vision for 

post-World War II America and the world. In that charter, they 

agreed as follows in the fourth paragraph, that they will ‘‘endeavor 

with due respect for their existing obligations to further the enjoyment by all States, great or small, victor or vanquished, of access 

on equal terms to the trade and to the raw materials of the world 

which are needed for their economic prosperity, and they desire to 

bring about the fullest collaboration between all nations in the economic field with the object of securing for all improved labor standards, economic advancement, and social security.’’ 

That was the vision in 1941, it is the vision today, and it is one 

that is shared by agricultural groups throughout the United States, 

as reflected in the letter sent to this committee by 70 agricultural 

groups indicating support for the Trans-Pacific Partnership agreement, as well as Trade Promotion Authority. It is also reflective of 

the vision of the eight former Agriculture Secretaries who, in a bipartisan way, indicated their support as well for TPA and TPP. 

And well they should: 30 percent of all agricultural sales are a 

result of trade; 20 percent of all agricultural income is directly related to trade, helping to create those middle-class families we all 

want to support. The last 6 years have been the best 6 years in agricultural export history, supporting nearly 1.1 million jobs. 

Since NAFTA and the free trade agreements subsequent to 

NAFTA, agricultural exports have increased by 145 percent, despite high tariffs in other countries, sanitary and phytosanitary 

barriers, and a strong dollar. Agriculture sees TPP as leveling the 

playing field, reducing tariffs, breaking down SPS barriers, and 

making access to American products more readily available. 

We want to take advantage of the expanding market opportunities in Asia, with a growing middle class that is projected to grow 

to 3.2 billion people in the next 15 years, 10 times the population 

of the U.S. We want America to stay in the game. We do not want 

one-off agreements that America is shut out of. 

We want to balance the Chinese influence, using trade as a strategic opportunity, and we absolutely want to assure high standards 

for both labor and environment, with strong enforcement mechanisms. This is an opportunity, as the President promised to do, to 

essentially renegotiate NAFTA. We see TPA as essential to getting 

TPP done. 

I can tell you, Mr. Chairman, that I have been across the table 

from some of my colleagues, agriculture ministers from states that 

we are currently negotiating with. They are not interested in putting their final or best offer on the table until they are assured that 

whatever trade agreement Ambassador Froman is able to negotiate 

10 

is ultimately provided an up-or-down vote and is not subject to 

modification or amendment. 

We look forward to answering questions as they relate to agriculture, and again, we appreciate the opportunity to be here this 

morning. 

The CHAIRMAN. Well, thank you, Secretary Vilsack. 

[The prepared statement of Secretary Vilsack appears in the appendix.] 

The CHAIRMAN. Ambassador Froman, maybe I can lead off. You 

are working hard to conclude agreements like the Trans-Pacific 

Partnership. Also, you know this committee will carefully review 

any trade agreement you submit to Congress to ensure that you 

achieve our priorities. I intend to bring before this committee a 

Trade Promotion Authority bill that has over 150 negotiating objectives that we expect you to achieve. 

If you would, please tell us how you intend to deliver on Congress’s trade negotiating objectives and how TPA will help you to 

achieve a strong trade agreement or set of agreements that will 

benefit our country. 

Ambassador FROMAN. Well, thank you, Mr. Chairman. TPA is a 

critical tool for moving the trade agenda forward. We have been 

working closely with this committee and other members of Congress, both in the House and Senate, over the course of the negotiations, consulting closely with them to ensure that we have a clear 

understanding of what their expectations are for our trade negotiations, that we have incorporated that into our trade negotiating efforts. 

We have been making progress in the negotiation, and now getting TPA will allow us to move these agreements forward. We have 

benefitted enormously from the input we have received, whether it 

is on market access issues or on rules issues, and we are confident 

that the agreement that we bring back ultimately will meet the objectives set out by Congress. 

The CHAIRMAN. Thank you. I share my colleagues’ concerns 

about countries unfairly manipulating their currency for trade advantage, and I agree that we need to address this problem. But I 

think a unilateral approach is not the answer. 

The TPA bill I introduced in January of 2014 directs the administration for the first time to fight currency manipulations through 

trade negotiations. Would you please take time to explain to me, 

and others here, how you are approaching this issue in the context 

of Trans-Pacific Partnership negotiations? 

Ambassador FROMAN. Well, since we have the honor of having 

Secretary Lew here, why don’t I first defer to him? 

The CHAIRMAN. That would be fine. 

Secretary LEW. Mr. Chairman, we agree with you and with so 

many members of Congress that currency practices are a critically 

important issue. I want to begin by saying that we engage on a 

very, very regular basis in the multilateral institutions—the G–7, 

the G–20, the IMF—and in an intense way in our bilateral relations to make sure that countries understand the urgency of this 

issue, and that they understand that the United States will not tolerate practices that we consider unfair. 

11 

As I mentioned in my opening remarks, we have made substantial progress in those efforts by getting agreements in international 

settings that set rules that drive towards market-determined exchange rates and that create more transparency in terms of our 

ability to see what countries are doing. 

In the context of a trade agreement—obviously we have not seen 

the final text of the TPA that you are working on, but the provision 

that you refer to from the prior bill, for the first time ever, raised 

currency to the highest level of being an objective in a trade negotiation. That sends a powerful signal to the world that strengthens 

our hand when we raise the issue in terms of the importance of addressing it in a fair way. 

I think that there is a question in terms of what the nature of 

an approach would be, and we believe that any efforts that are 

made here should strengthen our ability to be effective and to bring 

the world together to agree with us on treating currency in a manner that reflects the kind of fairness that is appropriate. 

I think that the question of how that is done is a sensitive one. 

It is a challenging area, because there is a line between legitimate 

macroeconomic policies, and things that are truly unfair, that is 

sometimes difficult to define. It is sometimes very clear when the 

line is crossed. We would look forward to working with the committee to explore what kinds of mechanisms we can use to 

strengthen our hand in a way that would make it as effective as 

possible. 

The CHAIRMAN. Thank you. 

Secretary Vilsack, you have frequently been a strong voice expressing the importance of TPA. Now, you have stated that the 

United States will not get the best possible agreement from our 

trading partners unless our partners know that the deal they 

signed with the United States is a deal that Congress is going to 

vote on. 

At the same time, you have noted that Congress always holds the 

ultimate power over any trade agreement: the power to vote it 

down. Will you explain, as you have done so well before, how TPA 

allows Congress to retain its power over trade agreements while 

empowering our negotiators to get the best deal possible for the 

United States? 

Secretary VILSACK. Mr. Chairman, Congress basically sets the 

framework and provides a set of instructions and borders for Ambassador Froman and his team from which to negotiate. They, I believe, have been listening very carefully during the course of the 

last several years to the concerns that members of this committee 

and other members of the Congress have expressed, and I think 

that they are living up to the directive that you ultimately will provide to them. 

Clearly, everyone wants higher standards for labor, environment, 

wants greater enforcement, and I think that there has been no 

question that Ambassador Froman has been engaged in ensuring 

the negotiations are focused on this. 

I would say that it is difficult for someone on the other side of 

the negotiating table to be confident in putting their best offer forward if there is the possibility that members of Congress could 

then subsequently amend or modify an agreement after it has been 

12 

agreed upon by the negotiators. That is why I think it is appropriate to have the balance between a TPA which provides you the 

ability to set instructions—and set the framework and the boundaries, provide Ambassador Froman the opportunity to negotiate— 

and then sufficient time for Congress to review what the negotiated 

agreement is, because then Congress has the opportunity and the 

appropriate power to decide ‘‘yes’’ or ‘‘no.’’ 

The CHAIRMAN. Well, thank you. My time is up. 

We are going to try to hold to a firm 5 minutes. 

Senator Wyden? 

Senator WYDEN. Thank you, Mr. Chairman. Mr. Chairman, I also 

want to note that Senator Casey has done yeoman work on the 

health care tax credit, and I omitted that in my earlier comments. 

Gentlemen, I want to start with this. I have come to feel that opponents of trade deals make a number of very valid arguments. As 

Senator Hatch knows, I have been fighting to change a lot of those 

policies. We have talked about the excessive secrecy, the inadequate enforcement, the inadequate congressional oversight 

through the process. So I want to be clear as we start this, that 

I think opponents have made a number of valid arguments. 

Often they make an argument that I do not think stands up to 

the facts, and I want to go into this in detail. There has been an 

argument presented that somehow trade is no longer about tariffs, 

that America can just get into these foreign markets, and it is really not about tariffs anymore. 

Our research shows that that is not the case. There are substantial tariffs on information technology. Colleagues, there are doubledigit tariffs on American manufacturers, and often there are tripledigit tariffs on American agriculture. So, these are vital American 

industries that can pay good jobs. 

I think Japan is pretty close to a 40-percent all-in tariff on American agriculture. In my home State, we do a lot of things well, but 

what we do best is, we grow things, and we want to add value to 

them, we want to ship them somewhere, because that is a good economic multiplier. 

So I want to start with you on this point, Secretary Vilsack. 

There have been a lot of promises made in the past about trade 

agreements really turning this all around, and it has not panned 

out. I would like to hear you tell the committee this morning how 

you think this time it is going to be different for American agriculture, how this time, under your leadership, under the President’s leadership, the administration’s team, it is going to be possible for more American farmers to sell their products to a growing 

middle class around the world. 

There are going to be millions of consumers around the world, 

and they like buying the Oregon brand, they like buying the American brand. Tell us if you will, because it goes right to this question 

of tariffs, how things are going to be different for American farmers 

trying to sell to a growing middle class around the world. 

Secretary VILSACK. Senator, poultry producers will not face a 

240-percent tariff in Japan for their poultry products. Vegetable 

growers in your State and around the country will not confront 90- 

percent tariffs in TPP nations. Citrus growers will not confront a 

43-percent tariff. 

13 

The reality here is that Ambassador Froman understands that in 

order to secure agriculture support for trade agreements, market 

access has to be fair. The average agricultural export tariff today 

in the U.S. is 1.4 percent, so we are at a significant disadvantage. 

So you are going to see a significant reduction, if not elimination, 

of those tariffs, which provides a level playing field. 

Second, oftentimes countries use sanitary and phytosanitary 

rules to create artificial barriers that are not science-based and not 

rules-based. Those also will be coming down, and we will provide 

strong enforcement if folks decide to use non-scientific and nonrules-based SPS to try to block American agricultural products. 

So there is no question, with an expanding market, reduced and 

eliminated tariffs, and a process for enforcing science- and rulesbased sanitary and phytosanitary barriers, that we are going to increase agricultural exports. 

Senator WYDEN. We are going to want to work with you to really 

flesh out those numbers, because my understanding is the number 

of middle-class households in the developing world by 2025 is going 

to double, and that would bring the global middle class to more 

than a billion households. 

Much of that additional income that that growing middle class 

is going to have is going to be spent on food, so whether it is Oregon wheat or blueberries, our farmers, in my view, are in a position, as the most productive farmers in the world, to sell a lot of 

what they grow to those middle-class consumers around the world. 

So, if you could get to every member of this committee the specifics about the tariffs that they are facing now, and what you envision changing for the future, I think that would be very helpful. I 

am going to go into it some more, colleagues. I have heard that 

there are no tariffs in, for example, environmental goods. That is 

an upcoming, promising American industry. They now face very 

large tariffs. 

I want to make it clear that we are going to have to get into this 

debate in considerable detail, and, if you could furnish that to us, 

Mr. Secretary, that would be helpful. I know my time is up. 

The CHAIRMAN. Well, thank you. Thank you, Senator. 

Senator Grassley? 

Senator GRASSLEY. Ambassador Froman, at the time of the Chile 

and Singapore free trade agreements, there was a special carve-out 

of H–1B visas for those countries. Since then, USTR has consulted 

with the Judiciary Committee, which has jurisdiction over immigration and nationality issues. 

I expect USTR to continue this tradition of consultation; however, we have reason to be concerned about over-reach of this administration and, frankly, I would say future administrations, to 

unilaterally change our immigration laws. 

My question is, could you assure the committee that the TPP 

agreement, or any related side agreement, does not and will not 

contain any provisions relating to immigration, visa processing, or 

temporary entries of persons? 

Ambassador FROMAN. Thank you, Senator Grassley. The answer 

is ‘‘yes,’’ I can assure you that we are not negotiating anything in 

TPP that would require any modifications of the U.S. immigration 

laws or system, any changes to our existing visa system. In fact, 

14 

TPP will explicitly state that it will not require changes in any party’s immigration laws or procedures. 

Senator GRASSLEY. All right. 

Ambassador FROMAN. Now, the 11 other TPP countries are making offers to each other in the area of temporary entry, but we have 

decided not to do so. So, I appreciate the opportunity to clarify 

that. 

Senator GRASSLEY. Yes. And I am going to ask you some more 

questions that kind of bring out some possibilities that maybe are 

not legitimate, but I want to bring them up anyway. According to 

USTR’s website and the outlines of the TPP agreement, countries 

have agreed on ‘‘provisions to promote transparency and efficiency 

in the processing of applications for temporary entry,’’ and then 

‘‘that specific obligations related to individual categories of business 

persons are under discussion.’’ Could you explain? That comes from 

a 2011 memo. 

Ambassador FROMAN. Sure. The text of the temporary entry 

chapter contains commitments on transparency, visa processing, 

and cooperation on border security. They are all good governance 

provisions, and U.S. procedures are already consistent with those 

provisions. There are no changes to U.S. procedures required by 

this chapter. On that last issue, again, that is not an issue that the 

U.S. will be making any offers on. 

Senator GRASSLEY. All right. This may be something for clarification. You have said that the United States is not negotiating immigration changes—you have just said that—but that other countries 

are discussing the issue. If the U.S. signs the TPP, are we bound 

to what other countries have agreed to with regard to temporary 

entry of people? 

Ambassador FROMAN. What other countries are discussing are 

reciprocal arrangements with each other with regard to temporary 

entry, and again the U.S. has decided not to make any offers in 

that area. 

Senator GRASSLEY. All right. Then the last question in this area 

is, if Congress grants Trade Promotion Authority to President 

Obama, could immigration provisions be included in future trade 

agreements, or is that off the table because of Congress’s plenary 

constitutional power over immigration? 

Ambassador FROMAN. Again, we have not seen the TPA bill that 

is being finalized, but it is our expectation that we would not be 

doing anything in this area without Congress’s approval. 

Senator GRASSLEY. All right. Then a short question for Secretary 

Vilsack on country of origin labeling or COOL. I hope it does not 

conflict with anything you have said, but I would like to ask you 

anyway. The WTO is currently reviewing COOL—that was brought 

forward by Mexico and Canada. I am told this is our last appeal, 

and, if we lose again, we will be forced to reconfigure COOL or face 

retaliation from our neighbors. 

I have read in the press that you have said that there is nothing 

more that you could do from an administrative perspective to bring 

COOL into compliance with WTO, so I would like to ask you if you 

could briefly explain why USDA is out of options as it relates to 

this issue. 

15 

Secretary VILSACK. Senator, the COOL legislation passed by Congress directs us to provide labels to distinguish between U.S.- 

produced, processed, slaughtered, and raised beef and poultry products versus those which may involve Canada and Mexico. Because 

of the nature of that law, we are then required to segregate livestock as it comes in to the processing facility. It is this segregation 

that WTO objects to, at least at this point in time. 

Absent a winning of the appeal, we are in a situation where 

there is a conflict between the law and what the WTO says is inappropriate, which creates the opportunity for retaliation. We just 

cannot fix it. We have tried, twice. We just cannot fix it. You all 

have to fix it by either repealing COOL or modifying COOL to create some kind of more generic label. 

Senator GRASSLEY. And I thank you, Secretary Vilsack. Thank 

you, Ambassador Froman. 

The CHAIRMAN. Thank you, Senator Grassley. 

Senator Schumer? 

Senator SCHUMER. Thank you, Mr. Chairman. First, I want to 

thank Secretaries Lew and Vilsack and Ambassador Froman for 

making the time to be with us. I would also like to thank our ranking member, Ranking Member Wyden, for trying to get as much 

time so that we can ask questions and see agreements. I know he 

has tried hard on that. 

But, Mr. Chairman, and you are my dear friend, this process is 

not good. First, we are dealing with an issue that is unique. We 

are supposed to vote on TPA, tie our hands, and not vote on 

amendments before we have seen what the TPP is. I have never 

seen anything like it. 

They say there is no way to do trade agreements otherwise, but 

at the very minimum we ought to be seeing and having ample time 

to discuss the TPA agreement beforehand. To say that we are having a hearing now before we have seen the agreement, or even to 

say we will do it 1 hour after the agreement, is not fair, not right, 

and not adequate on such an important issue. 

So I would like to first ask our three witnesses, if we needed you 

to come back once we see what the TPA agreement is next week, 

would you be willing to do so? You can just answer that ‘‘yes’’ or 

‘‘no.’’ 

Ambassador FROMAN. I will take responsibility for this. We are 

happy to work with the committee in whatever they deem is appropriate in terms of engagement on this issue. 

Senator SCHUMER. So you would be willing, if asked. 

Ambassador FROMAN. I am happy to work with the chairman 

and the ranking member in terms of engagement. 

Senator SCHUMER. Thank you. And I would ask our chairman if 

we could have—not at noon today if an agreement is shown to us 

at 11:30, but at some point—a real hearing on what TPA is, because it is throwing salt in the wound. 

Here we go forward on a procedure that is unique, to put it kindly, which is, you do not see what the treaty is before you tie your 

hands so you cannot amend it. We do not even now know what the 

TPA is going to be like. Not fair. Not fair. You are a fair-minded 

man, Chairman Hatch, and you are a good man, and you are my 

16 

friend, so I hope you would just reconsider, and we could stretch 

out this process a little bit. 

The next question is on the substance—— 

The CHAIRMAN. Well, let me just answer on that. 

Senator SCHUMER. Please. 

The CHAIRMAN. We did have a hearing last year on the bulk of 

what is in this. 

Senator SCHUMER. But we do not have the agreement now. 

The CHAIRMAN. I understand, and we will take that under advisement. 

Senator SCHUMER. Thank you. I very much appreciate that. 

Let me just say, as somebody who at this point is opposed to the 

agreement, it does not help the cause of those who are for it, to do 

this rush-through-type situation in this difficult situation. 

Now, I would like to make a couple of substantive points, first, 

on trade itself. I used to be a supporter of free trade. In fact, I lost 

the AFL–CIO endorsement in my congressional district several 

times because I supported free trade. I have changed. Here is why 

I have changed. Here is why. 

You can make the argument that a trade agreement like this will 

increase corporate profits. It probably will. You might even make 

the argument that it will improve GDP. Maybe it will. But if it 

does not increase middle-class incomes—which to me is the greatest problem we now face in America, which we did not in the 

1990s—I cannot be for such an agreement. Our middle class is 

hurting. All the evidence I have seen says this hurts middle-class 

incomes, and I cannot be for it in that regard. 

Second, we have talked—my dear friend, Ron Wyden, has talked 

about enforcement. I have been in the Congress 35 years. With 

every trade agreement, we talk about enforcement, and we get virtually none. None. We do not get labor enforcement, we do not get 

environmental enforcement. We do not get all the enforcement we 

are talking about, and that is why the deck is so stacked against 

us. It just does not work on a multilateral basis. 

Other countries, particularly China, the most rapacious—they 

are not involved in this agreement, and I agree with the geopolitical goal of getting these countries in our orb, not China’s, although that is not equal to me with middle-class incomes going up 

or down. That is why I am on the other side. 

But China just does not abide by these agreements. They say, we 

are doing what we want, take us to WTO. It will take 6 years. 

First, if you are a little company—I have had companies in my 

area that want to sue WTO, 500-job, 1,000-job companies. They 

cannot. They cannot afford it, and China threatens them. Even the 

bigger companies, they do not agree. 

So I went to the Business Roundtable, and I said, ‘‘I do not agree 

with trade because China steals your intellectual property, manipulates currency, and does not even let you in when you have a good 

product unless it is a 51-percent Chinese-owned company.’’ That is 

why I do not believe in these agreements anymore. 

Now, this is before the Business Roundtable—they are all for 

your bill. Six CEOs ran to the back and told me, you are right, 

keep it up, and this is including major companies and people you 

know. They are all afraid to say anything because China retaliates. 

17 

So, at the very minimum, to make this agreement well, we ought 

to do something—it is in consonance with this agreement. Let us 

deal with China’s rapaciousness. Let us at least do something 

about China. What some of us have proposed, on both sides of the 

aisle, is a strong currency bill, a bill that is unilateral, a bill that 

lets our companies, when they are aggrieved, take action. 

Now, in good faith, the Secretary of the Treasury, Ambassador 

Froman, and Mr. Zients have come to me and said, ‘‘Here is a proposal.’’ The problem with their proposals is they are weak tea and 

will not do anything because they all depend—they give an option 

to our government. 

Every time our government has had an option to call China a 

currency manipulator for 20 years, we have not done it. It does not 

work. The bill we have proposed—I am sorry. Yes, it is; my time 

is up. But the bill we have proposed is strong and unilateral. It 

gives companies that are aggrieved an option for relief, and we cannot have weak tea. 

The CHAIRMAN. Your time is up. 

Senator SCHUMER. I am sorry I went over time. 

The CHAIRMAN. Your time is up, Senator, but I understand your 

feelings. You are going to make an excellent Democratic Leader, is 

all I can say. [Laughter.] 

Senator SCHUMER. As Harry Reid reminds me, it is many months 

away. 

The CHAIRMAN. Yes, that is right. [Laughter.] 

We on the inside know. 

Senator Roberts? 

Secretary LEW. Mr. Chairman, would it be appropriate to take a 

moment to respond to some of the issues that Senator Schumer 

raised? 

Senator ROBERTS. I am going to do that, if you will give me the 

time. 

The CHAIRMAN. He has the time. 

Senator ROBERTS. All right. Then I will be happy to have you respond. Is there any way we can get transparency on that agreement with the Senator from New York and Mr. Reid? [Laughter.] 

Senator SCHUMER. I did not hear what you said. 

Senator ROBERTS. I know you did not hear it. I was just wondering if we could get some transparency with regards to the conversation between you and Mr. Reid on when we can achieve the 

take-over and achieve common sense and all the goals that the 

Senator has espoused on this trade agreement. 

Senator SCHUMER. These Schumer conversations are governed by 

something even tougher than TPA. [Laughter.] 

Senator ROBERTS. All right. I will meet you on the basketball 

court. 

I want to thank the witnesses for coming. I appreciate all the 

work you are doing. Thank you for your work, Mr. Chairman and 

Mr. Ranking Member. I am not sure. Are we going to see this 

agreement at 3, if in fact there is an agreement? 

The CHAIRMAN. We are moving towards that goal, yes. 

Senator ROBERTS. Right. Well, I know you are not quite there, 

but I also know you have never been this far before. 

The CHAIRMAN. That is right. 

18 

Senator ROBERTS. All right. Sorry for the country-and-western allegory. 

I fully appreciate the primary concern of the distinguished ranking member regarding labor, environment, human rights, transparency, currency manipulation. But, if we do not get a bill, if we 

do not get an agreement, all of these concerns become specious, and 

we have all heard those speeches. I would remind everybody that 

any major bill like this may not be the best possible bill, but it may 

be the best bill possible. 

I think we have to get an agreement. If we do not, the responsibility will fall on this committee. Everybody here has testified that 

they are going to work very hard on the very concerns that have 

been raised. I will simply count my distinguished friend, who has 

now, I think, left, I will mark him down as undecided. [Laughter.] 

This may be the only issue where the new Congress and the administration can reach agreement for the benefit, yes of the middle 

class, but of everybody with regards to income. I would invite the 

distinguished Senator from New York—and I apologize for saying 

anything—and also the distinguished Senator from Oregon, who 

actually was born in Wichita, KS, to come out and talk to the 

Dodge City folks who are the wheat growers who have endured 4 

years of drought and say, where is the trade bill? I would also remind the distinguished ranking member of the famous comment on 

another major bill: ‘‘If you want to know what is in it, you have 

to pass it first.’’ 

Now, I hope that we can see it, look at it. I hope we can address 

your concerns. 

Senator WYDEN. Count on seeing it. 

Senator ROBERTS. All right. Well, I share your concerns. 

Let me ask a question of the distinguished Secretary of Agriculture. Tom, thank you for everything that you do. There is much 

concern regarding the E.U. Commission’s consideration of allowing 

individual state preferences on the acceptance of biotech crops, 

even those approved by the Commission following a positive safety 

assessment. 

To me, this regards sound science and practices approved by the 

world’s premier food safety mechanism, the Food and Drug Administration, as well as the science-based approaches at the Department—our Department—and the EPA. It also disadvantages the 

under-served in Europe and the famous middle class by raising 

food prices and, obviously, hurting farmers. 

Now, just last week, Germany’s National Academy of Sciences argued that biotech crops can increase yields, reduce the use of insecticides, and increase farmers’ income. The Academy argues that 

modern molecular breeding techniques are safe and that the cultivation of approved biotech crops presents no risk. I agree with the 

Academy. 

Mr. Secretary, do you believe the U.S. should, or can, consider 

a trade agreement with the E.U. if member states have the ability 

to reject U.S. seeds and commodities cultivated after years of research and investment approved by the U.S. Government? 

Secretary VILSACK. Senator Roberts, we have made very clear a 

number of concerns within Agriculture in the very preliminary discussions on the Transatlantic Partnership, and that is one of them. 

19 

We have been very clear in our belief that biotechnology is an accepted and an important practice for agriculture to expand productivity, to reduce reliance on chemicals and pesticides. We think it 

is critically important to meeting the global food security challenge 

that we will face. 

So my expectation is that we will continue to negotiate very hard 

on that issue, and I would say that we are also deeply concerned 

about recent discussions in this space where individual countries 

not only have the concern about cultivation, but also about feed. 

We will be expressing our objection to that approach as well. So we 

are going to be very aggressive on that issue, as well as on the geographic preference issue. 

Senator ROBERTS. I know my time is up. I apologize to my colleagues. One thing I want to say is, thank you for your advice and 

counsel and your work with regard to COOL. COOL isn’t nearly as 

cool as some people thought it would be, and the WTO stove is hot. 

Now, I know that you have tried every way possible to address 

this, and speaking on behalf of my distinguished chairman—pardon 

me, chairperson—emeritus of the committee, Senator Stabenow, we 

stand ready to fix that with regards to a statutory change, and we 

look forward to working with you. Thank you. 

The CHAIRMAN. Thank you, Senator. Let me just say, I am very 

appreciative of you folks. I am going to have to leave in just a few 

minutes, but we are going to continue this hearing, and then we 

will re-continue it at 3 p.m. So we will go to Senator Stabenow 

now. 

Senator STABENOW. Thank you, Mr. Chairman. 

I do join with the chairman of the Agriculture Committee on the 

issue of COOL. I know, Secretary Vilsack, we are going to work 

through that and figure that one out. I want to thank all of you 

for being here and for the roles you play in so many areas. 

I do have deep concerns about what is in front of us, but I do 

want to start out by thanking the administration and Ambassador 

Froman for the work that is being done on trade enforcement. We 

have had some significant cases around auto parts. Last June, 

WTO, as you know, found that China breached rules regarding 

American automobiles and SUVs and extra-duties. Thank you for 

that. 

Again, China, in August, as it related to rare earth issues, that 

was very important, as well as WTO finding in favor of a dispute 

challenging Argentina’s importation of U.S. goods, and so there are 

a number of things. There are a number of things. 

One of my concerns is that we have been, and the administration 

has been, focused on that, but it is very dependent on a particular 

administration. So having strong enforcement rules in place on an 

ongoing basis is very, very important. 

Let me speak now to something that will be no surprise to any 

of you, and that is to add to what Senator Schumer was talking 

about in terms of currency. We have had multiple conversations on 

this. Senator Graham and I authored a letter a year ago. Sixty 

members of the Senate signed a letter saying we wanted strong, 

enforceable currency language in TPA and TPP. That is a real 

issue in getting all of this passed. I do not know how this passes 

without something strong, both in terms of TPA and TPP. 

20 

I think it is also very important to reiterate—because I know the 

discussion about American policy versus international policy, other 

countries—we know that we have economists from all over the political spectrum, from the Economic Policy Institute, the Peterson 

Institute, former advisor to President Reagan Arthur Laffer, who 

all agree that currency manipulation has cost us millions of jobs in 

the United States. And they also discount this argument that the 

U.S. has manipulated its currency because of our domestic quantitative easing policy that in no way mirrors what China, Japan, 

Malaysia, and others are doing. 

And so, I believe very strongly, as you know, that we need to 

move forward on strong currency language that is enforceable, not 

just wishing and hoping. I know there is a lot of effort going on on 

this, but it needs to be enforceable. 

So let me just ask, and, Secretary Lew, I know this is your bailiwick; I know you bring this up over and over again. But we have 

seen Japan, which is critical, as we all know—we cannot sell automobiles to Japan. Part of this is, I appreciate us opening this up, 

but they have in fact manipulated their currency 376 times since 

1991. So why do we think just moving forward through international forums like IMF will prevent number 377? 

Second, if they say they are not going to do it anymore and this 

is such a big issue for all of us, why can we not, why do we not, 

include enforceable currency disciplines in TPP, so that we have 

confidence, and the business community and workers have confidence, that we are serious about 21st-century trade rules? 

Secretary Lew? 

Secretary LEW. Senator Stabenow, first, as you and I have discussed many times, we agree 100 percent that unfair practices with 

regard to currency need to be opposed, need to be stopped. The efforts that you have described in terms of our engagement on the 

international front, both multilaterally and bilaterally, have had 

real effect. 

So, over the last several years, the last 3 years, I do not think 

that the case could be made that Japan has intervened in a way 

that would meet the standard that you have described. 

Senator STABENOW. Then why not go ahead, I mean, if they are 

not doing it now and they are not going to be doing it in the future? 

Secretary LEW. What have they been doing over the last 3 years? 

They have been engaging in macroeconomic policies, quantitative 

easing policies, that some people characterize as the same as the 

kind of practices that should be barred because they are unfair and 

manipulative. 

I think that the issue is one which, as I understand the current 

draft—I have not seen it, so it is just based on conversation—reflects raising the issue of currency to the highest level it has ever 

had in a trade negotiation, making it one of the principle objectives. 

We would work with you and the committee on the kind of flexible language that would empower us to have those conversations 

effectively. I think the thing that we do have to be careful about 

is anything that would confuse the issue of unfair practices and legitimate macroeconomic policy. 

21 

I understand your question is not trying to get at the legitimate 

macroeconomic policy, but in terms of our engagement with other 

countries, one can understand why they would be concerned if that 

line got crossed, just as we would be concerned were there to be 

any kind of an international agreement that restricted our Central 

Bank’s ability to conduct the monetary policy that it needs to conduct to manage the U.S. economy. 

So I think we agree on the goal. I think the language matters, 

and some flexibility is important in terms of engaging on the international front. 

Senator STABENOW. Thank you. I would just say in conclusion 

that this whole discussion is about whether we are going to export 

our products or our jobs. That is a very big deal right now for 

Americans. 

Thank you, Mr. Chairman. 

Senator ROBERTS [presiding]. Senator Carper? 

Senator CARPER. Thank you. Thanks, Mr. Chairman. 

Gentlemen, thank you all for joining us. I know you have worked 

hard on this. Ambassador Froman, I know, especially worked hard 

on this. 

Senator Schumer has spelled out with great passion and, as you 

know, a lot of heart-felt feeling and thought, his views on currency 

manipulation. I would just ask the Treasury Secretary, at some 

point in time we are going to have to reconcile the differences between those who share Chuck’s views and the administration. 

What can the administration live with? 

Secretary LEW. Well, Senator Carper, we would start out sharing 

a view that we should be together in opposing unfair practices that 

use currency as a way to gain unfair trade advantages, so we do 

not start out with a disagreement on an objective. 

In terms of approach, we do have some concerns, as you know, 

with the countervailing duty proposal. First, there is a very serious 

question as to whether or not it is consistent with our WTO obligations, and that is something that we need to pay serious attention 

to. 

Second, it is a mechanism that would take our current antidumping regime, which is run by the Commerce Department, and 

turn it into a process that is devoted to reviewing currency issues, 

making it more difficult to implement our antidumping rules, 

which are designed to protect U.S. businesses. 

Third, it has the real risk of inviting retaliation and a kind of 

tit-for-tat of defining currency. While we might define it in a way 

that we think is fair and would not include policies like the Federal 

Reserve’s policies, other countries could define it differently. 

Where is there the potential for agreement? I think, because we 

have a significant overlapping concern, we would look to find tools 

that would supplement the current foreign exchange report with an 

additional ability to use objective criteria—things like significant 

bilateral trade surplus with the United States, like a material current account surplus, like persistent one-sided intervention and foreign exchange—to set a standard that could trigger some additional 

actions that we could take that would not have the kinds of problems that we think the countervailing duty proposal has. 

22 

We would look forward to working with members of the committee to see if there is a space there where there could be agreement. I do not think it is appropriate for it to be part of TPA. It 

is not really a set of concerns that are inherently about the trade 

agreements that would be covered by TPA, but it is a set of serious 

concerns. 

As I said both to Senator Stabenow and earlier, we spare no effort in making the case—I am doing it all week with colleagues 

from around the world at the IMF meeting. Even if there is a hint 

of a problem, I am confronting the issue. And we have had significant success. 

Getting the G–7 to agree that countries will only use domestic 

tools for domestic purposes is one of the reasons Japan is not doing 

the kinds of things Senator Stabenow is concerned about. Getting 

the G–20 to agree to move towards market-determined exchange 

rates strengthens our hand when we engage with China, and we 

have had some significant progress with China. I would worry 

about an approach that would undermine our ability to make real 

progress. 

Senator CARPER. All right. Well, thank you very much for those 

responses. 

I have a minute and a half left. I want to go back to Ambassador 

Froman. I do not want to leave without Senator Warner, Senator 

Cardin, or I raising the issue of poultry. Again, from the State 

where we have more chickens per capita than any State of America, I think it is—— 

Ambassador FROMAN. Three hundred chickens per capita. 

Senator CARPER. Well, you have it. You are good! One of you 

mentioned that this is an opportunity. This trade agreement is an 

opportunity to go back and revisit NAFTA and actually fix some 

things in NAFTA. I think one of them may actually deal with our 

inability to sell poultry to our friends up to the north, one of our 

best trading partners in the world, and that is Canada. We just 

have not been successful. 

Tell us how this trade agreement is going to help address this 

issue for us. 

Ambassador FROMAN. Well, thank you, Senator. Before Canada 

joined TPP, we had a series of consultations with them about the 

importance of addressing a number of issues that were not fully addressed in NAFTA, including access to the poultry market. We are 

encouraging our Canadian partners to come to the table on this 

issue. 

We have not yet seen the kind of engagement on agricultural 

market access from them that we would like to see. Certainly all 

TPP parties agreed to achieve a certain level of standards when it 

came to market access, and we are hopeful that Canada will be 

able to achieve that objective as we reach closure with the rest of 

the TPP parties. 

Senator CARPER. We appreciate your efforts. Just do not give up. 

Be vigilant. Thank you. 

Senator ROBERTS. Senator Menendez? 

Senator MENENDEZ. Thank you, Mr. Chairman. 

Let me start off by saying that if we agree that trade is an issue 

with major domestic and geo-strategic implications for the United 

23 

States, then we should at the very least have another hearing after 

reading a TPA bill, which presently is not before the committee. I 

mean, 12 hours’ notice before a hearing is beneath this committee. 

And, as some of my colleagues have said before, we should not fasttrack fast-track. 

While I am glad to see that some of my Republican colleagues 

are so eager to support this piece of the President’s economic agenda by giving President Obama additional executive authority, I am 

concerned that we are rushing too quickly to fast-track trade agreements that will have major economic consequences. 

Now, I know my colleagues know that, in the Senate Foreign Relations Committee, we marked up the Iran Nuclear Agreement Review Act earlier this week. It took a lot of time and a lot of work 

and patience, but the committee leadership made sure that members had ample time to consider the legislation and offer amendments in an open and respectful process. 

So I hope that today’s last-minute hearing is not a sign that TPA 

will be forced through this committee without the open, broadly 

germane opportunity to first consider the bill, and then to offer 

views as to how to perfect it. So I am looking forward to getting 

a chance to actually see the TPA bill currently being negotiated by 

the chairman and the ranking member and having that opportunity. 

So I would like to first ask our witnesses, have any of you seen 

the text of the Trade Promotion Authority bill that is the topic of 

today’s hearing? 

Ambassador FROMAN. We have exchanged ideas over the course 

of the last several months about the various pieces of this package, 

but we have not seen any final package or any final text. 

Senator MENENDEZ. Has anyone else seen any text? All right. 

You are shaking your heads, so for the record that is a ‘‘no.’’ 

So this reminds me of the framework agreement. We have different views of what the agreement is, but we do not have a text 

to be able to define it, so I do not know how one proceeds without 

a text. 

Ambassador Froman, I asked you at our last hearing on the 

broad question of trade, how many jobs do you expect to be created—net jobs, I would say, because in every process of trade there 

are winners and losers—in TPP within the first year, the first 5 

years, the first 10 years? You did not give me any figures, and I 

am wondering if at this point you are in the position to describe 

what they would be. 

Ambassador FROMAN. So, when the agreement is complete, there 

will be a full economic analysis done. I think the most authoritative 

analysis out there right now is probably the one that comes from 

the report from the Peterson Institute that talks about expanding 

exports, when fully implemented, by $123 billion a year, adding 

$77 billion to U.S. GDP, and contributing to many more highpaying jobs. It depends a bit on where you are on the spectrum of 

full employment. If you are not at full employment, then it adds 

jobs. If you are at full employment, then it adds better jobs. So it 

will bend a little bit—— 

Senator MENENDEZ. So we do not have a number on the jobs. 

You are talking about just gross—— 

24 

Ambassador FROMAN. What we know is that every billion dollars 

of exports, additional exports, supports somewhere between 5,000 

and 7,000 jobs, and that those jobs pay, on average, 18 percent 

more than non-export-related jobs in the same sector. 

Senator MENENDEZ. And the loss of jobs? 

Ambassador FROMAN. Well, we have been looking, and we have 

been doing some studies, State by State or in various districts, to 

see, because we have so few tariffs ourselves, so few importsensitive sectors ourselves, where there might be job loss. With our 

average tariff of 1.4 percent and with no—we do not use non-tariff 

measures as a barrier to trade—— 

Senator MENENDEZ. So we do not have an answer on that, exactly. 

Ambassador FROMAN. We do not have a specific answer. 

Senator MENENDEZ. Let me ask you one other thing. We have 

discussed many times my concern about adequate intellectual property protection for U.S. innovators, such as those who are working 

in the life science industry, as part of TPP. 

In New Jersey, the bio-pharma industry represents nearly 70,000 

employees. While many of us do not know yet how we will judge 

the final Trans-Pacific Partnership agreement, I am sure you know 

that one of my priorities remains that we reach 12 years of data 

protection for biologics within TPP, as currently stipulated in U.S. 

law. However, I noticed that the President’s budget recommends 

lowering list standard protection to just 7 years as a matter of domestic policy. 

So, if Congress passes TPA before TPP is finalized, will USTR 

continue to negotiate for a 12-year standard as currently in U.S. 

law, or will it negotiate for the lower standard that the President 

proposes in his budget? 

Ambassador FROMAN. Consistent with past practice where Congress has spoken on an issue of that sort with a number, we have 

tabled that as our proposal, the 12 years for biologics. Around the 

table, you have 5 countries that have zero years, 4 countries that 

have 5 years, 2 countries that have 8 years, and we are at 12 

years. This is one of the outstanding issues still to be resolved in 

terms of where the resolution of the data protection period might 

be. 

Senator ROBERTS. I would tell the distinguished Senator that it 

is my understanding that we will have a full week to chew and digest, if possible, all the details. It is like being in the same church 

pew, and we are all going to sing the same song. We know it is 

going to be ‘‘How Great Thou Art,’’ but we just do not have the 

music. We will get the music. 

Senator MENENDEZ. Mr. Chairman, some of us sing better than 

others, though. 

Senator ROBERTS. I understand that. You can sing in the next 

pew. [Laughter.] 

We have Mr. Cardin next. Thank you. 

Senator CARDIN. Thank you, Senator Roberts. We have different 

views on the Democratic side, I think on the Republican side too, 

on trade issues. But I must tell you I am in full agreement with 

Senator Menendez and Senator Schumer on the process. We are 

talking about legislation that gives up the prerogatives, the normal 

25 

prerogatives, of Congress. We have not had an issue like this for 

over 12 years. 

At the very minimum, there needs to be a public hearing when 

we have the text of the legislation. And it is not just the TPA text, 

it is the TAA text, it is the extension of the tax credits, it is the 

other related issues that I understand the leadership of this committee intends to bring up for action in this committee. 

Mr. Chairman, let me tell you, that hearing must, in my view, 

have a non-governmental panel. I do not know how we could proceed without giving the stakeholders an opportunity to be heard in 

this committee, including organized labor. 

So I just hope you will relate that to Chairman Hatch and the 

committee, but I think that due process of this committee and the 

reputation of this committee requires that we follow that process. 

Senator ROBERTS. I would just tell the Senator that I have not 

been riding this horse, but I do not intend to have it go into a box 

canyon. So we are not going to go in there and ride out when members do not have the full opportunity to discuss everything that 

Senator Menendez and you have discussed. I think we will have a 

full week to do that. If it takes longer, it will take longer. I appreciate that. 

Senator CARDIN. Thank you very much. 

There are several issues, Ambassador Froman, that I would like 

us to be able to address. I obviously do not have the text of the bill, 

so I am at somewhat of a disadvantage. Senator Portman and I 

have brought forward a proposal that deals with the Boycott, Divestment, and Sanctions movement. We do that because this TPA 

agreement will deal with more than TPP. 

It will also deal with TTIP, if I understand correctly. Particularly 

with the European countries, the actions taken with BDS have 

been pretty dramatic. I would hope that we would use this trade 

opportunity to make progress on that, so we are very much interested in that being a principal negotiating objective. I say that— 

and I will give you a chance to respond in a moment. 

The area that Senator Wyden has mentioned frequently that I 

did not hear you mention in your opening comments deals with the 

request I made for principal negotiating objectives for human 

rights. Several TPP countries are challenged in this area. Using 

trade is our best opportunity to accelerate those democratic reforms. I am very hopeful that you have made specific progress in 

your TPP negotiations in these areas. 

I specifically mentioned the various points that relate to progress 

on human rights, to ensure implementation of trade agreements 

and obligations by strengthening good governance, including internationally recognized human rights, the rule of law, including the 

right of due process, the right of fair trial, the right of equal protection under the law, the effective operations of legal regimes of our 

trading partners of the United States through appropriate means, 

including capacity building. 

So my question to you is, can you share with us, before you are 

going to ask us to act on TPA, the progress that you have made 

on these issues specifically? Then secondarily, what enforcement 

can we anticipate will be in the trade agreement, TPP, particularly 

as to the use of dispute settlement procedures or trade sanctions 

26 

if there are violations of the expectations in regards to good governance? 

Ambassador FROMAN. Well, thank you, Senator. Thank you for 

your leadership on this issue. Let me answer you in two parts. 

One, within TPP we are negotiating a range of obligations that 

touch upon these issues of governance, transparency, good regulatory practice, participation, anti-corruption, all of which, as you 

have noted, help contribute to the rule of law and ultimately to the 

promotion of democracy. 

So this has been a key part, one of the key themes of TPP, and 

it cuts across many of the chapters in terms of focusing on governments being transparent about what they are doing and how they 

are doing it, putting on the web all of their regulations, allowing 

for public participation in these processes. 

Those are obligations that are subject to the same kind of binding dispute settlement that the rest of the agreement is, as a general matter. So I think you will find in TPP—and we are happy to 

go through this in detail with you—a whole series of obligations 

that are broadly in that area—— 

Senator CARDIN. And enforcement? 

Ambassador FROMAN [continuing]. And that as a general matter 

are enforceable like the other provisions of the agreement. 

Senator CARDIN. So, if they do not meet these obligations, we 

have an opportunity to take that to dispute settlement resolution? 

Ambassador FROMAN. Right. 

Senator CARDIN. And ultimately trade sanctions? 

Ambassador FROMAN. Correct, as a general matter. Separate 

from the TPP agreement itself, we are using our engagement with 

these countries to press them on human rights issues as well. I will 

just use Vietnam as an example, where there clearly are serious 

human rights issues. From the President on down, at each of these 

meetings that we have with the senior Vietnamese leadership, we 

raise issues, for example, around the release of prisoners of conscience. 

Vietnam has released a number of prisoners of conscience. We 

are continuing to press them to release all of their prisoners of conscience unconditionally. We are pressing them on religious freedom 

and the ability for people to speak out without fear of retribution. 

Because of our engagement on TPP, we are able to have a more 

meaningful dialogue with them about that. 

Senator CARDIN. And I assume no response about BDS means 

you agree with Senator Portman and I that it should be a principal 

term? 

Ambassador FROMAN. Obviously, Israel is a key and vital ally. 

We look forward to learning more about your proposals and working with you. 

Senator ROBERTS. Senator Portman? Let me say that, after Senator Portman, it is my understanding it will be Senator Bennet, 

and then Senator Casey, and then Senator Toomey, with regards 

to the members who are here. Did I skip you, Mr. Brown? 

Senator BROWN. Yes, sir. 

Senator ROBERTS. I did not mean to do that. So, Senator Brown, 

you will be following—— 

Senator BENNET. Mr. Chairman, I think I am next on the list. 

27 

Senator ROBERTS. Yes, I know. Well, I understand that, but we 

have had four on the minority side. Senator Portman has asked for 

consideration that he, like everybody else, has an important meeting, if you could just hold on. 

Senator BENNET. Well, I would defer to the Senator from Ohio. 

I also have meetings that I need to—— 

Senator ROBERTS. Everybody in this room has meetings. 

Senator BENNET. I agree. I was just wondering why we are 

changing the rules. 

Senator ROBERTS. I am not changing the rules. We have had a 

coup, and there is going to be—— [Laughter.] 

We have had four on the minority side. Senator Portman had 

asked if he could be recognized because of this. I agreed to that. 

So I would recognize Senator Portman, with the understanding 

that we are going to go down the line over here on this side, if you 

could just bear with us. 

Senator BENNET. Well, with respect to my other friend from 

Ohio—— 

Senator PORTMAN. Senator Bennet is before I am. 

Senator ROBERTS. I think your name is next, sir. You are Senator 

Bennet from Colorado, a member of the sometimes—— 

Senator BENNET. Your neighbor. 

Senator ROBERTS. Yes. 

Senator BENNET. Thank you. To the west. 

Senator ROBERTS. And member of the sometimes powerful Senate Agriculture Committee. 

Senator BENNET. That is very correct. 

Senator ROBERTS. That is correct. All right. 

Senator BENNET. Thank you. 

Senator ROBERTS. Senator Portman? 

Senator PORTMAN. Thank you, Mr. Chairman, and thank you, 

Senator Bennet. And, Ben Cardin, thanks for your passion on the 

human rights issues, and also on the BDS issue we have been 

working on. I appreciate the answer from Ambassador Froman, but 

I do think this is a critical part of the overall package. We will 

have an opportunity to have a good debate on that over the next 

couple of weeks. This is really economic warfare against some of 

our allies, including Israel. Senator Cardin and I are going to be 

eager to get your support on it. 

Thanks, too, for being here and for the great testimonies this 

morning. You all have talked a lot about the importance of trade. 

I do not disagree with what you said about the importance for us 

to create more jobs and better-paying jobs, and this is critical to 

Senator Schumer’s point about, how do you get more middle-class 

jobs, and how do we increase pay? 

I mean, one way is you export more, because those are jobs that 

are supporting goods and services being sold to the 95 percent of 

consumers outside of our borders. They do pay more. The jobs pay, 

on average, 18 percent more, with better benefits. We want more 

stuff stamped ‘‘Made in America.’’ I think everyone agrees with 

that. 

But we also have to be sure imports are not illegally traded and 

they are fairly traded, and I think that is where the enforcement 

that has been talked about here today is so critically important. We 

28 

are looking for a level playing field, and if American workers, farmers, and service providers can have a level playing field, we will be 

just fine, but we do not see that now. 

So I think that is the concern that, certainly, I experienced when 

I was in your job and that you are seeing. Just quickly, in terms 

of these trade agreements, what percentage of the world do we 

have trade agreements with, in relation to the global GDP or the 

global economy? 

Ambassador FROMAN. That is a good question. I think at the moment it is about 10 percent. 

Senator PORTMAN. About 10 percent of the world we have a trade 

agreement with? 

Ambassador FROMAN. TPP is about 40 percent. 

Senator PORTMAN. So we do not have a trade agreement with 

China, for instance, or Japan, or the European Union. Of that 10 

percent of the world, what percent of our exports did they get? 

Ambassador FROMAN. I would say it is about 30 or 40 percent. 

Senator PORTMAN. It is about 47 percent. 

Ambassador FROMAN. Yes. Something like that. 

Senator PORTMAN. Forty-seven percent, almost half of the exports that come from Ohio and other States—in fact, in Ohio it is 

a little higher than that, it is over half—go to this 10 percent of 

the world. So we want more of that. We want more of our products 

going overseas. But the trick is how to have a level playing field. 

We talked about a lot of those aspects today. 

The one I want to focus on quickly is currency. Secretary Lew 

said we have more work to do. He said we will not tolerate practices we consider unfair. He talked about how we need to be sure 

we are not jeopardizing appropriate macroeconomic policy versus 

intervention. I do not disagree with that. We had a good conversation about this earlier this week. 

What we would like to do—and Senator Stabenow and I intend 

to offer an amendment which I hope the committee can support— 

is to set up a standard within TPA to be able to ensure that currency is not just considered, but that it has teeth, that there is 

some enforceability. As you know, there are IMF and WTO principles on this, so all the countries we are talking to about trade 

agreements are part of this. 

I mean, they are members of the IMF or members of WTO. These 

principles are very clear, but they are not enforceable, so that is 

what we are trying to do. We do think there is a distinction between macroeconomic policy versus what we would consider to be 

intervention, and we will use those IMF principles, follow those 

standards. I think this is one issue where—to the question earlier 

from Senator Carper about how we can find common ground here, 

I think this is the place to find it. 

I will tell you, it is just not fair, because, right now when a country manipulates its currency—we talked about the fact that, although Japan is engaging in macroeconomic policy now, they have 

hundreds of times in the past intervened, as have other countries. 

What happens is, our exports are more expensive, because they 

have artificially intervened. That is not fair to our workers and our 

farmers and our service providers. 

29 

My colleague Senator Brown has been involved in this issue for 

many years, because he, like me, goes to talk to these workers and 

these companies, and they say, wait a minute, we are finally competitive in terms of our energy policy, we are doing everything we 

can in terms of technology, and we are making concessions on our 

pay and our benefits, and yet you are telling me that, as Paul 

Volker famously said, ‘‘In 5 minutes, someone can change exchange 

rates and currency that does away with years of trade negotiating 

successes.’’ It is just not fair. 

In a second, of course, the imports that they are sending to us 

are less expensive. So this is the lack of a playing field that is level 

that we are trying to address. 

The final thing I want to say, quickly, is that it also affects thirdparty countries—in other words, other export markets that we 

have—because those products, whether they are from China, 

Japan, or wherever, are being sold at an advantage in those markets too, meaning that our workers, our service providers, our 

farmers, do not have the opportunity to get the market share that 

they deserve. So we want to work with you on that. 

On the health care tax credit that was talked about earlier, Senator Brown and I have authored legislation on this. We think the 

health care tax credit is incredibly important to have as part of this 

process. We understand it will probably be part of the TAA discussion. That is fine. 

It is very important to about 5,000 Delphi workers in my home 

State of Ohio. It frankly just lets them pay a portion of their health 

bills, and that is the least we can do, because their pensions were 

taken away from them. Their retirement benefits were taken away. 

If they are not on Medicare yet, if they are between 55 and 64 

years old, their pensions were terminated and administered by 

PBGC. It is a bridge to Medicare for them. So, I hope you can support us on that as well. 

With that, thank you, my colleagues, for indulging me and allowing me to intervene. 

Senator BENNET [presiding]. I thank the Senator from Ohio, and 

I now see the opportunity for a real coup. [Laughter.] I just do not 

know if we are going to be able to make the most of it. 

For, I think, probably everybody on this panel, and much more 

importantly for people in our country, the central challenge we face 

has been the decoupling of wage growth and job growth from economic growth that we have seen over the last 20 years. 

One of you mentioned that we have just begun to see median 

family incomes begin to grow a little bit, but that is new—very, 

very new. A lot of that decoupling, I think we would all agree, has 

had to do with globalization. There are other things as well: productivity and technology. But it is clear that globalization has put 

pressure on middle-class wages. I have often heard the administration say that we have learned lessons from NAFTA. This is the 

first time in 20 years we have had the opportunity to negotiate a 

trade deal. 

So I would love to give the balance of my time to the panel to 

address that issue, to go into some detail about what we have 

learned from prior agreements, how this agreement is different, 

and what assurances you can give to the American people that TPP 

30 

is actually going to help middle-class families that are struggling 

with the effects of globalization, and also what the effect would be 

of the alternative, of not passing this trade agreement. 

Ambassador FROMAN. Why don’t I start, and of course invite my 

colleagues to add? Look, Senator, I think you are absolutely right. 

We have seen the impact of technological change, of productivity 

increases, and of globalization on American jobs and American 

wages. Globalization is a real force. 

It is the product of the containerization of shipping, the spread 

of broadband, the emergence of economies like China and Eastern 

Europe from being closed economies to being open economies, and 

the ease of air travel. It is a real force that has an impact on the 

American economy. 

The question is, what are we going to do about it? The risk is 

that people conflate globalization with trade agreements. Globalization is a force; trade agreements are how we shape it. Through 

trade agreements, if we can not only tear down barriers to our exports as we have been talking about this morning—these barriers 

tend to be disproportionately high since our market is open and 

other markets have higher tariffs and have other non-tariff barriers. 

If we can tear down barriers disproportionately, we can increase 

our exports, which we know support jobs that pay more than nonexport-related jobs, therefore dealing with wages, and at the same 

time use agreements to raise standards in these other countries: 

labor and environmental standards, rule of law standards, as Senator Cardin was saying, and intellectual property rights. 

TPP, for the first time ever, will put disciplines on state-owned 

enterprises, government-owned companies, so when they compete 

against our private firms and they get the benefit of subsidies or 

other benefits from the government ownership, if they do not compete fairly against our firms, we will then have a trade action 

against them, whether it is in their country or whether it is in our 

country, for the first time ever. 

TPP, for the first time, will bring to the digital economy rules 

from the real economy, so that there is a free flow of data and information so that companies do not have to move abroad from the 

United States in order to service those markets abroad. 

This is particularly important for small and medium-sized businesses that cannot afford to set up offices all over the world, that 

cannot afford to replicate infrastructure all over the world. TPP 

will allow them to engage through e-commerce, through the digital 

economy, with 95 percent of the customers outside this area. 

The labor and environmental provisions are the strongest of any 

trade agreement, and they are fully enforceable, just like any other 

provision of the trade agreement, including though the availability 

of trade sanctions. To go to a question that Senator Schumer raised 

earlier, we demonstrated over the last 5 years—we brought 19 

WTO actions, half of them against China. We have won every case 

that has been brought to conclusion, as Senator Stabenow noted, 

a number of them in important manufacturing areas. 

These are all things that we can do through TPP. The lessons we 

learned from NAFTA, and the renegotiation of NAFTA that this 

represents, means that we are pulling into the core of the agreeVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 R:\DOCS\99678.000 TIMD
31 

ment labor and environmental provisions and making them fully 

enforceable just like any other provision of the trade agreement, 

which is what folks have been asking for for some time. 

Senator BENNET. Secretary Lew, would you like to answer? 

Secretary LEW. I think Mike covered what I would have said. I 

would just underscore that many of the concerns we raised are, as 

you said in your opening question, related to globalization. The fact 

that trade agreements raise the bar—we already have high standards. The world will be a more competitive place for U.S. goods, 

U.S. services, and U.S. workers if other countries have higher 

standards, so I think it will lead to more middle-class jobs. 

Senator BENNET. Mr. Chairman, I am going to conclude just by 

saying that I want to go on the record sharing Senator Cardin’s 

concerns about the process here, and I appreciate very much the 

opportunity to ask questions. 

Senator TOOMEY [presiding]. Next is Senator Casey. 

Senator CASEY. Thank you, Senator Toomey. 

I will be brief. Number one, I wanted to thank our witnesses, 

Secretary Lew, Secretary Vilsack, and Ambassador Froman. We appreciate your service and the difficult work that you have to do. 

I would first, for the record, incorporate by reference Senator 

Schumer’s remarks about the process. I think this process is wholly 

inadequate in terms of being able to consider such an important 

policy as it relates to both Trade Promotion Authority and trade 

itself. So, that is just for the record, but I think there is a lot of 

agreement, at least on our side, about the process. That does not 

involve our witnesses. 

But I wanted to focus on manufacturing firms. Senator Toomey 

and I represent a State that has had a tremendous loss of manufacturing jobs, not just over a couple of years but really over a generation. These firms get hammered, and have been getting hammered, and often the damage is done before they can even bring 

cases when competitors, foreign competitors, break the rules. I 

think you understand that. I know that most recently the steel industry and other industries have asked for both clarity and stronger enforcement when it comes to enforcing measures for domestic 

industries, and I know you are aware of that request. 

I would just ask—I guess it would be best to ask Ambassador 

Froman. I know we will be coming back this afternoon, but I would 

just ask you, on behalf of the administration, if you are in agreement and if you will be committed to working with the steel industry and others to provide that clarity and stronger enforcement. 

Ambassador FROMAN. Thank you, Senator Casey. We certainly 

agree on the importance of enforcement. You note the steel industry, which has been one of the areas that has taken advantage of 

the enforcement resources more than most. I think, of the 52 antidumping and countervailing duty procedures brought last year, I 

think over 30 of them were from the steel industry. We have been 

in dialogue with yourself and other members of the Senate and the 

House, as well as the steel industry, about how best to perhaps improve our trade remedy laws. We are happy to work with you on 

that. 

Senator CASEY. Great. Thanks very much. That is all I have. 

Senator ROBERTS [presiding]. Senator Brown? 

32 

Senator BROWN. Thank you, Senator Roberts. Thank you very 

much. 

I join my colleagues in my disappointment about this hearing 

today. I am a little incredulous, too, that the chairman and the 

ranking member are not here. I do not ever judge other people’s 

schedules—I know we are all busy—but to give such short notice 

for the meeting is a concern to all of us. I want to talk for a second 

about what this committee has done historically, and it has never 

done what it is doing today. 

Our predecessors took the consideration of this legislation much 

more deliberately. The 1979 Senate Finance Committee held 2 days 

of hearings on trade policy in advance of considering fast-track. 

They held 9 days of meetings with administration representatives 

on the substance, 3 days of consultation with the Ways and Means 

Committee. In 1988, this committee held 6 days of legislative hearings on the Omnibus Trade Act. In 2001, in anticipation of fasttrack legislation coming from the House, the committee held 2 days 

of hearings on that alone. 

Yet today we are meeting for a hearing that was noticed 12 

hours before it began on a bill we have not seen, with witnesses, 

I assume, who know more than we do and, frankly, Ambassador, 

never tell us. Why? So we can rush through a bill that will expedite 

consideration of the largest trade agreement we have ever negotiated. 

Whenever fast-track and other trade bills are finalized, this committee needs to have a legislative hearing on the package before we 

have a mark-up. I do not know if the ranking member and the 

chairman plan to do that. You cannot fast-track fast-track. That is 

a complete abdication of our responsibilities. 

I want to lay out a few other points. First, Democrats will not 

accept massive cuts to TAA, nor will we tolerate separate consideration of TAA which will jeopardize its passage, especially in the 

House. 

Second, there is strong support in this committee, bipartisan, for 

provisions both on fast-track and on our trade remedy laws to fight 

currency manipulation. It has cost our country as many as 5 million jobs. We will not accept watered-down versions in either of 

these proposals. 

Third, the package of bills, as it has been described—again, we 

do not know much—will not do nearly enough on trade enforcement. Any trade package considered by this Congress must include 

strong trade enforcement provisions, including my Level the Playing Field Act, which was written with direct and detailed consultation with this administration’s Department of Commerce, yet we 

can get no action from this administration on including the Level 

the Playing Field Act in this legislation. 

Fourth, we are considering a bill that will change Senate rules 

for the consideration of two massive trade acts. The last time we 

passed fast-track was 12 years ago. A lot has changed in U.S. trade 

policy since then. The legislative process must be open and methodical, for the committee and on the floor, for the trade agreement 

itself. 

If the administration is committed to helping working-class 

Americans, you three will insist on a strong TAA program as part 

33 

of the bill; an omnibus package that includes strong trade enforcement provisions, again, like the Level the Playing Field Act that 

this administration helped us to write; and you will accept strong 

bipartisan proposals to fight currency manipulation. 

Now, my question is this, to the Ambassador: I cannot speak for 

everyone else on this committee, but from my own experience, 

USTR’s consultations with Congress have been—I hesitate to use 

this adverb, but I will—pathetically inadequate. Here are some examples. We asked for data showing the utilization rate of the Korean FTA since it has gone into effect. We have gotten nothing 

from USTR. 

We asked for information used to justify the auto rules of origin 

proposal the U.S. tabled in TPP. USTR gave us nothing. I might 

add, that is where you are able to say—or maybe you are not—that 

you actually did renegotiate the North American Free Trade Agreement. 

We asked for analysis comparing the NAFTA auto rules of origin 

to the TPP auto rules of origin proposals. USTR said they did not 

have it. USTR did say they would provide information from Customs on academic studies that were used to develop the auto rules 

of origin proposal. Two months later, Mr. Ambassador, we are still 

waiting. My staff asked for a meeting on rules of origin in October 

of last year. USTR dragged their feet, they dragged their feet, they 

scheduled it once, they did not show up. We are still waiting for 

an in-depth briefing 6 months later. 

We asked to be kept regularly informed on the negotiations between the U.S. and Vietnam when implementing the agreement’s 

labor standards. It has been 17 weeks since that request; we have 

gotten no update. 

My staff director asked to see the TPP text over recess, after she 

and I viewed it the week before. She was told ‘‘no.’’ To be clear, she 

has appropriate clearance and is bound by the laws of our staff and 

all staff in this situation. So in other words, Nora in my office can 

only go and look at the TPP text with your staff person at USTR 

sitting there, only if I am in the room. We can get access, staff can 

get access to DoD documents, often, to Iran sanctions documents, 

to CIA briefings, but we cannot get access to Trans-Pacific Partnership text. 

Finally, I was one of the 60 Senators who signed the letter urging the administration to include strong enforceable currency disciplines in TPP. It took me nearly a year to get a response from 

the administration, and we have been told by several officials, including yourself, that TPP will include nothing on currency. 

This list is long. It is actually incomplete. I could list a number 

of other things where your office has been totally unresponsive. 

My question is this: is there any legislative text, Mr. Ambassador, that we can include in fast-track that would get you to be 

more responsive to Senators, more forthcoming with meaningful information about the trade negotiations, and that would get you to 

be less dismissive of the U.S. Senate and the U.S. House of Representatives? 

Ambassador FROMAN. Well, Senator, I am sorry that you feel we 

have been unresponsive. We take our responsibilities of consulting 

with Congress very seriously. We consult very closely with the staff 

34 

of this committee, which you have access to, on every proposal before we table it. We have had literally hundreds of consultations 

with the staff of this committee on TPP. 

We have had 51 consultations with your office, including 7 with 

yourself and 44 with your staff on a variety of subjects. But we 

take this very seriously, and we want to do as much as we possibly 

can to encourage the dialogue back and forth, and I am happy to 

address the issues you have raised, either now or later. 

This is a key part, I think, of what TPA is intended to lay out, 

which is, what are the processes for transparency and for access to 

text? I am glad you raised the issue of text, because we made 

changes in the last couple of months. 

As you know, historically, personal staff did not have access to 

text at all. The text was only shared with the staff of this committee and of the Ways and Means Committee, our committees of 

jurisdiction, and of course with members of Congress themselves 

who have the fundamental responsibility for reviewing the text. 

We heard from a number of members of Congress over the last 

couple of months, and the general view was of three things that 

they wanted: (1) they wanted the text to be deposited up here so 

that they did not have to set up an appointment with USTR to 

view it; (2) they wanted to have the text unredacted so that they 

could see the positions of our trading partners, not just the positions of the United States where there is bracketed text; and (3) 

a number of members of Congress and the Senate asked that they 

be allowed to bring their personal staff with them when they are 

able to view the text to help them understand and analyze the text. 

We have accommodated all three of those requests, both in the 

House and in the Senate. So we look forward to working with you 

and with the leadership of this committee and the leadership of the 

Ways and Means Committee. 

Senator BROWN. If I can interrupt, Mr. Ambassador, there has 

been a very, very specific request a number of times from a number 

of us in the Senate that our staffs could go. Ms. Todd and I went 

and spent an hour in the room, and I appreciated her being nearby—as if that is a major concession on a trade agreement that is 

40 percent of the world’s economy. But we spent an hour there. She 

wanted to go back in the 2 weeks after I had returned to Ohio, and 

she was not allowed to go back in spite of repeated requests. 

However, my staff can go and view all kinds of other documents, 

with the proper intelligence clearance, having to do with national 

defense. It just begs the question, this is not—if I could say this, 

this is not smart politics for you and the Trade Representative to 

try to sell this huge agreement to a very cynical, very skeptical 

Senate and a very worried public, because we know—— 

The CHAIRMAN. Senator—— 

Senator BROWN. I am sorry, Mr. Chairman. I want to finish, and 

I am going to, if you will allow me, Mr. Chairman. I did not know 

you were in the room now. I apologize for that. I do not understand 

why my staff director cannot go, just because it might have been 

precedent, why she cannot go in this room in the 2 weeks that all 

of us were gone, that she could not read this text. It just begs the 

question of, what are you hiding? 

35 

Ambassador FROMAN. We are happy to work with the chairman 

and the ranking member on this, and with the Ways and Means 

Committee. 

Senator BROWN. The answer is not ‘‘yes.’’ The answer is not, ‘‘Ms. 

Todd can go in.’’ The answer is, you will work with the chairman 

to continue to stonewall and continue to deny access to this agreement for a staff person in the U.S. Senate. That is your answer? 

The CHAIRMAN. Senator, your time is up, and we are going to 

have to stop there. You have gone twice as long as anybody else. 

Senator Scott, you are next, but Senator Wyden would like to say 

a few words. 

Senator WYDEN. Less than a minute. Less than a minute, colleagues. I know you have been very patient. I just want to be clear, 

on the record, that I think Senator Brown is making a number of 

valid points, particularly with respect to staff access to these kinds 

of materials. This will be the last time—the last time—where this 

kind of restriction on staff access is allowed to take place. 

This goes to the question of whether there is going to be a fairer 

debate and a fairer fight with respect to this discussion. A lot of 

Americans do not think it is fair now. I am committed to changing 

it, committed to work with the Senator from Ohio. I thank you for 

the chance to respond briefly. 

The CHAIRMAN. Well, let me just say this. I think it has been a 

very fair process. We have bent over backwards time and time 

again. Ambassador Froman, you have been up here repeatedly, so 

has Secretary Lew. We are really happy to have you, Secretary 

Vilsack. The three of you are terrific people, working in this area. 

So let us face it, we are never going to satisfy some people who just 

plain, honestly disagree. But there comes a time when you have to 

move ahead, and with that we are going to turn to Senator Scott. 

Senator SCOTT. Mr. Chairman, I think Senator Toomey has an 

event, and I will give him my time and take his. 

The CHAIRMAN. I would be happy to do that, and then we will 

take you after Senator Toomey. 

Senator SCOTT. Thank you, Mr. Chairman. 

Senator TOOMEY. Senator Scott, thank you very much. That was 

very kind, indeed. I am going to try to be as quick as I can here. 

But I would like the panel to just answer directly some straightforward questions, because I know they are on the minds of the 

folks from Pennsylvania. Starting with Secretary Vilsack, agriculture is the biggest industry in Pennsylvania. We produce a lot 

of different agricultural products: dairy, poultry, all kinds of fruits, 

vegetables, corn, soybeans, mushrooms. We do a lot. 

If TPA is passed, and subsequent to that we can pass TPP, is it 

your view that Pennsylvania farmers will export more products 

than they otherwise would? 

Secretary VILSACK. Absolutely. 

Senator TOOMEY. And the simple reason is why? 

Secretary VILSACK. Senator, tariffs come down. 

Senator TOOMEY. Right. So the single biggest thing is, their products become more affordable. 

Secretary VILSACK. More competitive. The second equally important reason is, the SPS barriers are not going to be constructed, or 

they can be torn down more quickly. 

36 

Senator TOOMEY. Right. Non-tariff barriers are eliminated, so 

Pennsylvania farmers sell more products. 

Secretary VILSACK. Yes. 

Senator TOOMEY. Secretary Lew, according to the Department of 

Commerce, exports supported 191,000 Pennsylvania jobs last year. 

A majority of exports are manufactured goods in Pennsylvania. Is 

it your view that if TPA is passed, and then TPP is subsequently 

passed, that Pennsylvania manufacturers will export more than 

they export today, would export more than they otherwise would, 

and that we will have more employment in the manufacturing sector than we otherwise would? 

Secretary LEW. Senator, my view is that if U.S. products compete 

on a more level playing field, where other countries lower their tariffs and have to meet higher standards that we already meet, that 

is a competitive environment that will be helpful to U.S. manufacturers. 

Senator TOOMEY. All right. That is an indirect answer, though. 

Directly speaking, do you think that the TPP will result in more 

manufactured exports from Pennsylvania? 

Secretary LEW. I believe there will be more manufacturing exports. I would not pretend to be an expert about Pennsylvania 

manufacturers, but I believe it would help Pennsylvania manufacturers. 

Senator TOOMEY. Yes. We are a very large manufacturing State. 

If we can manufacture more and sell more overseas, I think that 

follows. 

Secretary Lew, obviously we heard some discussion about the 

controversy around currency manipulation. Specifically, I think 

Senator Schumer has introduced legislation—actually for quite 

some time—that would require currency manipulation to be 

deemed to be an actionable subsidy with respect to our antidumping law. Is it the administration’s view that that provision 

should be left out and should not be included in TPA? 

Secretary LEW. Well, Senator, as I indicated earlier, I think 

countervailing duties based on currency are problematic. They 

might well not be consistent with our WTO obligations, and I think 

there is the risk of retaliation, but we would look forward to working with the Congress on strengthening our remedies, not as part 

of TPA, but in a parallel process. 

Senator TOOMEY. And then just very quickly, my last point—I 

did not hear it come up. Maybe it came up, but I did not hear once 

anybody make the point about how trade has the characteristic of 

providing consumers with a range of choices and lower costs and 

options that are valuable to consumers. We, quite understandably, 

focus as I just did on the virtues of more jobs that are associated 

with exports. 

But, Ambassador Froman, maybe you would like to address this. 

Is it your view that a working-class family benefits from the availability of an affordable choice of whatever the product might be 

that might originate overseas? 

Ambassador FROMAN. Yes. Thank you, Senator. That is certainly 

the case. There have been studies about how the tariff reductions 

over the last several rounds of trade negotiations have added upwards of $10,000 per family to their income when it takes into acVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 R:\DOCS\99678.000 TIMD
37 

count the lower costs of the products that they buy, and it is particularly important for lower-income Americans who spend a larger 

portion of their disposable income on tradeable products like food 

and clothing and shoes. So, by bringing down those barriers, we 

both bring down the cost but also, as you say, increase the availability and the choices that consumers have. 

Senator TOOMEY. Thank you very much. 

Once again, thank you to Senator Scott. 

Senator SCOTT. You are very welcome. 

The CHAIRMAN. Senator Scott, thank you for your patience. We 

will now turn to you. 

Senator SCOTT. Thank you, Mr. Chairman. 

Thank you, Secretary Lew, Secretary Vilsack, and Ambassador 

Froman, for investing so much time on what is a very important 

issue. 

I do have my first question for Ambassador Froman. There is a 

well-known issue with a lack of enforcement and duty evasion, 

looking only at the apparel imports. Of course, this is very important to South Carolina. Last year—there is a conservative estimate 

that about 15 percent of FTA entries are non-compliant. 

This translates roughly to about $500 million in lost revenue just 

in 2014, and that is just with one specific sector. These significant 

enforcement problems exist under the FTAs with only 20 countries, 

and now we are considering an additional 39 countries, which will 

cover about 65 percent of global trading if you add in TPP and 

TTIP. 

How does the administration plan to address the additional resources needed to enforce the terms of these agreements and ensure that the U.S. does not continue to lose billions of dollars under 

current agreements? 

Ambassador FROMAN. Well, thank you, Senator, for that question. It is an important issue. One of the areas that we are negotiating in TPP, and we expect to do in TTIP as well, will strengthen 

our cooperation among Customs officials to avoid circumvention 

and transshipment that has been a problem. 

We have also worked very closely with our colleagues at DHS 

and Customs and Border Protection to ensure that they have the 

resources and the focus for enforcing our trade laws, and I think 

they very much appreciate the significance of that mandate that 

they have. 

Senator SCOTT. Thank you. 

Secretary Lew and Ambassador Froman, one of the challenges 

that I have as I think through the process of approving a TPP 

agreement is that the executive branch, for the last few years from 

my perspective, has really undermined the authority of Congress 

through rulemakings, regulatory measures, and executive actions 

to achieve results that carry the weight of law without it actually 

being a law. I certainly understand that the current TPA proposal 

goes to significant lengths to preserve U.S. sovereignty. 

I am very concerned, however, about the potential to effectively 

change our system of government, change our laws as well, under 

the current proposal. Considering the troubling actions taken already by the White House, I do not see any reason why President 

Obama’s Trade Representatives would not use the trade agreeVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 R:\DOCS\99678.000 TIMD
38 

ments as an opportunity to negotiate otherwise unpopular regulatory changes, whether they be environmental, business, labor, or 

financial regulation. 

My question then is, this TPA is being touted as setting a new 

standard for transparency in trade negotiations that will not allow 

for trade agreements to impinge on U.S. sovereignty. Does Congress not deserve a chance to review whether certain laws and regulations should be negotiated? 

Ambassador FROMAN. Perhaps I can take the first shot at answering that. First, to be absolutely clear, only Congress can 

change the laws. There is nothing that we can do to our trade 

agreement that can change the laws without congressional approval, and we consult closely with Congress throughout this process, throughout the negotiations, and of course through whatever 

the process is that TPA establishes, to get a very clear understanding of the steps that we may have to take to comply with our 

trade obligations, if any. Ultimately, it is only Congress that has 

the power and the authority to make the decision about whether 

to change any laws. 

Senator SCOTT. I will take that as a ‘‘yes.’’ 

Given that response, is it not reasonable for Congress to require 

a full descriptive list of proposed regulations that are going to be 

negotiated? 

Ambassador FROMAN. We have not seen the final TPA bill, but 

certainly, as part of the past processes of TPA, we will have to lay 

out any changes to U.S. law. It tends to be, for example, changes 

to the tariff schedule long before there is any decision by Congress. 

Senator SCOTT. So my concern, obviously, is that, in spite of the 

laws of our land, the executive actions of the administration, the 

regulations, the enforcement of those regulations from a bureaucratic process, have in fact had the impact of law without there actually being law. 

So our concern is, as we move forward in further negotiations 

and empower the President to negotiate on our behalf, that part of 

the negotiation will lead to trade agreements that have imbedded 

in them regulatory coherence that allows for some new set of 

standards that are inconsistent with the laws of the land that will 

be involved or imbedded in those trade agreements. 

Secretary LEW. If I could just add, no agency has the authority 

to make regulations if it is not pursuant to an authority that has 

been granted. So we do take actions like every administration of 

both parties has taken for many, many decades. 

I think the question here about TPA actually goes the other way, 

because TPA is a chance for the Congress to put objectives in front 

of an agreement that comes up for approval. It is a direction to the 

administration that has guidelines in it of what are the issues that 

Congress is telling the administration to weigh heavily in the negotiations, and then ultimately Congress gets to vote on a trade 

agreement. 

So I do not agree with the description of the use of executive authority, obviously, but I do not think the TPA is a case of granting 

that kind of new regulatory authority. 

Senator SCOTT. There is no doubt that the process that we would 

go through to achieve new agreements would require Congress’s 

39 

final authority, final approval. I get that part. The transparency 

and the timeline to understand and appreciate what is part of that 

agreement and having transparency as a part of that process up 

front, is very important for us to consider in yielding more authority and power to the administration. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Well, thank you, Senator Scott. 

I want to personally thank all three of you. You all three have 

served with distinction in this administration, and I just care a 

great deal for each one of you. You, Mr. Ambassador, you have 

taken a lot of guff over the years, and this is a tough, tough job, 

but I do not know of anybody who could do it better than you have 

done it. We have had some very good people in your position, but 

it is a very, very tough job. If we get this done, this is really monumental. We are talking about nearly 80 percent of world trade if 

we get TPP and TTIP both done. Is it more than 80 percent? 

Ambassador FROMAN. It is about two-thirds of the global economy, yes. 

The CHAIRMAN. Yes. I thought it was more than that, but that 

is a lot. I appreciate the hard work that you have done and the 

time you have spent away from your family, traveling around the 

world, debating with others and talking about these matters. 

Secretary Vilsack, I appreciate all you do in the world of agriculture. You have done it with fairness across the board, as far as 

I can see, and I have always had a great deal of respect for you, 

even when you were Governor. Especially when you were Governor, 

I should say. 

Then, Jack Lew, you have been all over the world fighting for 

this administration and this government, and all of that effort that 

you have put forward, I just want to personally thank you for. I 

want to thank all three of you. 

This is a very important time. If we can get this done—and I believe we will; I believe we will have this basically agreed to before 

the end of this day, and I have good reason to say that—then I intend to hold a mark-up next week, and, hopefully, before the end 

of the month, we can have this debated on the floor. Hopefully, 

with your help, we will be able to have enough votes on both sides 

to be able to pass this and put the United States back in the whole 

world as a trading partner that everybody is going to want to trade 

with. 

So I know this has been a long hearing. I know that some of it 

may not have been as pleasant as you would have liked, but I am 

just very grateful for you taking the time and being with us today. 

Thanks so much. 

With that, we will recess until further notice. 

[Whereupon, at 12:15 p.m., the hearing was recessed, reconvening at 3:20 p.m.] 

OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. 

SENATOR FROM UTAH, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The committee is going to come to order. Welcome back. I appreciate everyone who has returned for the second 

half of our hearing on trade policy. 

40 

Ambassador Froman, I especially want to thank you for appearing again today and for staying a little longer. 

I am pleased to announce that Ranking Member Wyden, House 

Ways and Means Committee Chairman Ryan, and I have reached 

an agreement on legislation to renew Trade Promotion Authority. 

We have also reached an agreement on bills to address Trade Adjustment Assistance and to reauthorize and extend some trade 

preference programs, all of which is very important and none of 

which could have been done without the help of our ranking member here. 

I hope that all my colleagues will take the time to carefully study 

these bills. Once they do, they will find that we have been able to 

put together some balanced and effective legislation that will help 

improve the health of our economy and better serve our Nation’s 

hardworking taxpayers. 

The TPA bill contains the clearest articulation of trade policies 

and priorities in our Nation’s history. It includes nearly 150 ambitious high-standard negotiating objectives, including strong rules 

for intellectual property rights and agricultural trade, as well as 

protections for U.S. investment. Many of these objectives break 

down barriers that American exporters face in the 21st-century 

economy, such as regulatory barriers, currency manipulation, and 

state-owned enterprises. 

The bill contains unprecedented consultation requirements that 

will ensure that Congress is an equal partner throughout the negotiations. It also includes new transparency requirements that will 

help the public know and understand what is being discussed before agreements are signed. 

Unlike prior TPA bills, the procedures in our bill guarantee that 

all trade agreements will get an up-or-down vote in Congress. At 

the same time, we included new tools to hold the administration 

accountable, including a procedure that Congress can employ if our 

trade negotiators fail to consult or make progress toward meeting 

the negotiating objectives. This is a strong bill and one that builds 

off the success of previous iterations of TPA. It enhances our efforts 

to expand market access for our exporters and job creators. 

Throughout the process of crafting this legislation, I have worked 

closely with my colleagues, and I would just like to thank all of 

them for their contributions. I would like to thank Senator Portman for his input on trade issues. He has a great background in 

this area, and his leadership on TAA and the health coverage tax 

credit has been extremely important. 

Senator Toomey has been a great partner on enforcement issues. 

The trade bills we are looking at include the strongest language yet 

on enforcement, and that is really because of members like Senator 

Toomey and others and the work that they have done. 

I would like to thank Senator Grassley as well for his leadership, 

especially on agricultural issues. I would also like to say a warm 

thanks to Senator Isakson, who has also been a strong voice for agricultural issues. 

In addition, Senator Isakson has been a leader for years on the 

African Growth and Opportunity Act, and I look forward to working with him to get that renewed along with the Generalized System of Preferences. 

41 

We are lucky to have Senator Burr and Senator Scott on the 

committee. Both have been strong advocates in this process for the 

textiles industry, and I would like to thank them for their work. 

Senator Thune has provided many creative ideas on digital trade. 

I think we have been able to incorporate a lot of them here, and 

I would like to thank him for his contributions. 

Senators Crapo and Coats have been of great assistance on some 

particularly challenging agricultural issues, and I would like to 

thank them as well. 

I would like to thank my colleagues on the other side as well. We 

have been working together. Hopefully we can get enough of our 

Democrat friends to go with us that we might be able to put this 

bill through the Senate as well. 

As I mentioned this morning, we intend to move expeditiously on 

these bills. If we do not act now, we will lose our opportunity, so 

I appreciate the cooperation of all of our members moving forward. 

With that, I will turn the time over to Senator Wyden for any 

remarks that he would like to make. 

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

OPENING STATEMENT OF HON. RON WYDEN, 

A U.S. SENATOR FROM OREGON 

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

you for your graciousness. 

Suffice it to say, colleagues, Chairman Hatch and I have been at 

this, by my count, for over 6 months now, week after week, in effect 

trying to put in place a modern trade policy. The reality is, much 

of the body of trade law was written before there were iPhones and 

people were texting. I look out in the audience and see lots of 

young people, and it is hard to imagine there was even life before 

texting. 

But there was trade law before there was texting, and what we 

have sought to do in this debate is to start to flesh out what a modern trade policy would look like and get us out of this time warp 

where trade law has not kept up with the times. 

There are a handful of areas that I have felt particularly strongly 

about. The first addresses this question of what I consider to be excessive secrecy in the debate about global trade and global commerce. If you believe strongly in trade, as I do, and you want more 

of it, all of this excessive secrecy accomplishes nothing except making people more cynical and more skeptical about trade. 

Chairman Hatch and I—and I thank you for this, Chairman 

Hatch—have put in place some very different policies with respect 

to openness and accountability. I want to be clear, for example, 

that the President of the United States will be required by law to 

publish trade agreements, starting with the Trans-Pacific Partnership, 60 days before he signs them. 

If you take those 60 days and what is probably another couple 

of months, you are talking about 4 months when, finally, the American people and the Congress get to see what is in an actual trade 

agreement. In my view, that will make for a fairer debate, and it 

will make for a fairer fight between people who have different 

views on this subject. 

42 

With respect to enforcement, we take, again, a very different approach. It is designed to respond to Americans who come up to 

their Senators and say, why in the world would you guys work on 

a new trade agreement when you are not enforcing the laws that 

are on the books today? So what we have done is, we have taken 

the bipartisan ENFORCE Act—colleagues on the other side, colleagues on this side—and we have in effect put that in our enforcement section. 

Then we have moved to address a very common concern of both 

business and labor, that the enforcement process is dramatically 

limited and flawed by the fact that people do not really even find 

out in time in order to set in motion the enforcement tools. So we 

have what amounts to an unfair trade alert, unfair import alert, 

where people will get that kind of information so that they can set 

in motion the enforcement tools that they desire. 

Then finally, we are seeking to ensure that Congress is involved 

on an ongoing basis—on an ongoing basis—in the negotiations. 

After many, many months where Chairman Hatch and I had, I 

think it would be fair to say, Chairman Hatch, some spirited discussions, we have set up a process that would allow this committee, 

building on existing law, to turn off fast-track just as it is turned 

on today. 

So, higher standards for trade agreements, tougher enforcement, 

a new level of transparency and accountability, and vigorous oversight, raising the bar for trade deals. If they fall short, if it does 

not meet our standards, Congress can put the brakes on a bad 

deal. 

The last couple of points that I would like to make—I see my 

friend Senator Cardin, the ranking member on the Foreign Relations Committee and a key architect in the historic developments 

this week. He has led the fight for finally—after years of, I think 

it would be fair to say, almost indifference to governance questions 

and human rights—governance and human rights to be right at the 

center of the trade agenda in the future. The reality is, nobody has 

the muscle or the determination to force progress on human rights 

like the United States, and I think that is a real plus. 

I just want to mention an issue that has been especially important to me, and that is protecting the free and open Internet and 

building for the future so as to have priorities that can ensure that 

information flows freely across national borders. 

The last point: no trade deal is going to change U.S. law without 

congressional action. There is going to be no back door for powerful 

special interests to skirt U.S. law. Foreign companies will have no 

more rights in international tribunals than they have in American 

courts. 

Finally, this legislation ensures that, when you have changes in 

the American economy, in Oregon’s economy, there is the opportunity for workers to get job training and financial support and access to health care. Competing in the global economy is a tough 

challenge, it is a national challenge, and that is why this package 

expands the Trade Adjustment Assistance program to include not 

just manufacturing-sector workers, but service-sector workers as 

well, to cover workers hurt by competition from any country around 

the world. It also extends the health care tax credit, and it includes 

43 

preference programs like the Generalized System of Preferences 

and the African Growth and Opportunity Act. 

If we were to talk about everything this package does, we would 

be here until breakfast time tomorrow. There are booming economies around the world that have more money to spend with every 

passing year. I want them to spend it on products that are made 

and grown here. 

So I think that this is the right thing to do here. As Chairman 

Hatch will tell you, these were very, very challenging discussions. 

We have not addressed this issue really since 2002. We are going 

to have a lot more debate on this, colleagues, here in the committee, and on the floor. I think we are on our way to a modern 

trade policy that strengthens the middle class, expands economic 

opportunity, and creates high-skill, high-wage jobs at home. 

Mr. Chairman, I look forward to talking to our witness today 

and, as you and I have talked about, hearing from others as well. 

I thank you very much for your consideration. 

The CHAIRMAN. Well, thank you, Senator Wyden. 

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

The CHAIRMAN. We have with us today again Ambassador 

Froman, the U.S. Trade Representative. Ambassador, you are becoming a very well-known figure to this committee. I would like to 

thank you and welcome you back. I appreciate especially your giving us so much of your time today. 

Would it be all right if we just go into questions, or would you 

care to make a statement? I would be happy to have your statement if you want to make one. 

STATEMENT OF HON. MICHAEL FROMAN, U.S. TRADE REPRESENTATIVE, EXECUTIVE OFFICE OF THE PRESIDENT, 

WASHINGTON, DC 

Ambassador FROMAN. Well, it is good to be back so soon again. 

Let me just say, as I mentioned this morning, Trade Promotion Authority has always been a bipartisan effort, and it is important that 

it is going forward. 

I just want to congratulate the chairman and the ranking member on this package of measures. At first glance—of course we have 

not studied it yet in detail—we see very important developments 

in terms of the negotiating objectives and with regard to the importance of enforceable labor and environmental standards; a balanced 

approach to intellectual property rights, promoting innovation and 

access to medicines, the need to address unfair competition from 

SOEs, to protect a free and open Internet, to address currency manipulation, and to increase transparency; and increased opportunities for congressional oversight and engagement, strong safeguards 

of sovereignty to make it absolutely clear that there can be no 

change of law without congressional approval, and, as the ranking 

member mentioned, the importance of good governance and the 

rule of law, which is so important to promoting human rights and 

democracy. 

We look forward to working with you on this, and I am happy 

to answer your questions. 

44 

The CHAIRMAN. Well, thank you, Mr. Ambassador. I am going to 

withhold any questions, so we will turn to Senator Wyden. 

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

Let us start with this question of the Internet. As you know, Ambassador Froman, in this room I put a hold on the predecessor of 

what are called the PIPA and SOPA bills, these anti-Internet bills, 

and then did everything I could to actually block them in the next 

Congress because I thought that these bills, while well-meaning because we are all against piracy, would do a great deal of damage 

to the architecture of the Internet, and keeping the Internet open 

and free is absolutely critical. 

So I think it would be very helpful to have on the record whether 

the Trans-Pacific Partnership contains provisions such as those in 

these anti-Internet bills, the PIPA and SOPA legislative proposals 

or any others that would damage the openness of the Internet, that 

would harm the cause of net neutrality, any provisions in your 

view that would impede the free flow of information and ideas. 

Ambassador FROMAN. No, Senator Wyden, it does not include 

any of those provisions, and it is very much focused on maintaining 

a free and open Internet. We think that is one of the important 

parts of the TPP agreement. It includes concepts coming out of existing U.S. law, such as safe harbors for ISP liability. Both technology protection measures but also the exceptions to them, such 

as cell phone unlocking, create opportunities for that, the flexibility 

to do that. And it is the first trade agreement that both strengthens copyright but also recognizes exceptions and limitations to 

copyright law, similar to the fair use doctrine that we have here 

in the United States. 

Senator WYDEN. One last question with respect to the Internet 

and the digital economy. Would Congress still be able, if the TransPacific Partnership proposal passed, to change U.S. laws to take 

into account the changing shape of the digital economy? 

Ambassador FROMAN. Yes. 

Senator WYDEN. All right. The other area that I would like to explore at this time is trade law enforcement. You heard me in my 

earlier comments talk about how central this is, both in terms of 

the well-being of American workers and American families, but 

also in terms of the credibility that a new trade policy is going to 

have. 

I want to commend you, by the way, in terms of the number of 

approaches you all have taken with rare earth minerals, the steel 

and plumbing matter, a variety of areas you have made some very 

important headway on, even before these issues are dealt with in 

the context of trade. 

But we have to lock these more aggressive enforcement policies 

into a very different strategy here. In my view, the expansion of 

trade requires an expansion of trade compliance. U.S. businesses 

and workers have to be able to realize that the benefits you actually negotiate ensure that they can compete on a level playing field 

with foreign competitors. 

If the United States concludes the Trans-Pacific Partnership— 

and, as you know better than we do, this is still being negotiated— 

we are going to see an increase in trade with Asia, a region of the 

world where American manufacturers and American farmers have 

45 

repeatedly, repeatedly faced unfair trade practices that disadvantage our workers and disadvantage our families. 

How are you all going to ensure that the Trade Representative’s 

Office has an enforcement strategy that is going to meet these new 

challenges that result from expanded trade? 

Ambassador FROMAN. Well, thank you, Senator. We completely 

agree in what you laid out about the importance of enforcement 

being part of the compact of these agreements. It is not just about 

opening agreements, it is making sure that we fully enforce the 

trade rights that we have negotiated for ourselves, and our trade 

laws. 

I think the first step is to make sure that, in TPP itself, we get 

very good standards across the board that are fully enforceable, 

which makes it easier to bring enforcement actions. We have 

worked internally, as you know, over the last several years to ramp 

up our enforcement efforts. We have brought 19 cases before the 

WTO, half of those against China. Every case we have brought that 

has gone to conclusion we have won, and we are continuing to explore cases. 

The President established the Inter-Agency Trade Enforcement 

Center, which allowed us to bring resources from across the government, from different agencies, to help build better and more 

complex cases in enforcement. It has been very successful to date, 

and we look forward to continuing to build on that. 

We are right now working with our inter-agency partners—Commerce Department, Labor Department, EPA, and others—to make 

sure that we have procedures in place for being able to fully and 

effectively enforce what we negotiate. 

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

that is very important to a lot of Senators, and that is the question 

of the relationship between trade agreements and having stronger 

and better labor standards. 

The President, as you know, has said that Trade Promotion Authority is going to help him conclude TPP and set high standards 

in Asia on labor rights. As you know, the International Labor Organization already sets rules on labor rights, and the countries that 

you are negotiating with have in fact agreed to many of the rules, 

and yet the problems just persist. They just go on and on. Mexico 

is part of NAFTA, and it seems to be falling short when it comes 

to labor rights. 

Why do you believe—and I think it is important as part of this 

hearing—that a new trade agreement is going to help to get these 

countries to actually live up to the higher labor standards, and 

what do you propose to do to make sure that they follow up on the 

promises that are made in TPP on these crucial labor questions? 

Ambassador FROMAN. Well, again, I think first, it is making sure 

that the standards are set sufficiently clearly and at a high level, 

so that we have the five basic ILO principles, but we also have acceptable conditions of work around minimum wage, hours, and safe 

workplace conditions. 

We are working with countries to ensure that they not only agree 

to these ILO principles, but that they have a pathway towards 

bringing their laws into compliance with them and that they also 

have the capacity-building mechanisms under way to ensure that 

46 

they can implement these standards fully, and that is part of the 

process. 

Senator WYDEN. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Senator Isakson has not had his first round yet, so we will turn 

to you, Senator Isakson. 

Senator ISAKSON. Well, thank you, Mr. Chairman, and congratulations to both you and the ranking member for good work on the 

trade agreements. I look forward to working with you, and I appreciate the acknowledgment of my work on AGOA. 

It is to that end that I would like to address Ambassador Froman 

after I express my complete support for Ambassador Froman and 

his forceful and positive representation of the United States of 

America in Europe, in Africa, and around the world. You have done 

an outstanding job. I have seen you in action in Africa; I have seen 

you in action in Brussels. We are lucky to have you doing it, and 

I hope this all comes to a good conclusion for you, and for us too. 

Ambassador FROMAN. Thank you, Senator. 

Senator ISAKSON. As you know, Senator Coons and I have traveled to South Africa over the last 3 years, meeting with Foreign 

Minister Davies. Foreign Minister Davies is in Washington today 

because of our invitation, because there have been artificial barriers to domestic chicken from the United States being able to be 

exported into South Africa. 

They have done arbitrary blockage along the way, and we have 

been trying to use the AGOA extension as a lever to get them to 

come to the table, asking the South African Poultry Federation and 

the United States private-sector poultry people to come together 

and come up with a quota that made sense for both, which we 

think is the right way to do it. 

After my meeting this morning, I think Senator Coons would 

agree with me, we became concerned that this is a matter of ropea-dope with South Africa, that they like to string us out until 

AGOA gets renewed, and they will forget ever talking about it. I 

do not want AGOA to become subject to one country’s trade violations one way or another, but I do want to get on the record two 

points. 

One is, you will have the power, as the Trade Representative, to 

revisit anybody’s participation under AGOA during the course of 

the agreement, is that correct? 

Ambassador FROMAN. We have not, again, seen the final version 

of the legislation, but yes, that is our expectation. 

Senator ISAKSON. Well then, let me ask a third question. If in 

fact it is not in the final version, would you help assist us in putting in language that would give us the authority to do that? 

Ambassador FROMAN. We would be happy to work with you on 

that. 

Senator ISAKSON. Secondly, I understand it is a 10-year agreement. Is that correct, Mr. Chairman, the extension? 

The CHAIRMAN. That is correct, yes. 

Senator ISAKSON. It is a 10-year extension of AGOA, and I congratulate you on that time period. I think that is right. 

Could we possibly, in amending it or dealing with the trade 

agreement, put in, say, a 3-year look-back period where you say at 

47 

the end of 3 years, we will review South Africa, particularly with 

regard to its market access in poultry, or would that be something 

we could not do? 

Ambassador FROMAN. Well, Senator, we first of all very much appreciate you and your colleagues raising the concerns about agricultural market access to South Africa. It is something we have 

raised consistently with the South African government from the 

highest levels on down, and we appreciate working with you on 

that. 

I just met with Minister Davies before coming back up to the Hill 

to review the progress in the negotiations, and I made clear that 

we are not seeing sufficient progress towards resolving the outstanding issues at this point and urged him to take further actions 

to try to resolve our differences. 

If we do not make sufficient progress in that regard, we would 

be happy to work with you on appropriate next steps in the legislation. 

Senator ISAKSON. Well, I would really appreciate it, because it 

would be a shame for the continent of Africa to suffer because one 

participant on the continent just refused to cooperate in negotiations that are, I think, legitimate. 

The last point I will make about the AGOA, Mr. Chairman, is 

that Africa is a continent of 1.5 billion people with most of the 

world’s rare earth minerals, a tremendous amount of natural gas 

and oil, and precious minerals. It is a great continent and can become the continent of the 21st century for America, and trade is 

the key to doing business with those countries, the key to raising 

the standards in Africa, but also opening up markets for the 

United States and our companies. So I commend you. 

Although AGOA is a footnote compared to TPP and TTIP, it is 

a very important agreement for the continent of Africa, for the 

United States, and United States business and investment. So I 

commend you on what you have done for it, and I appreciate it. 

When we get the final text of the bill, I will talk to you about some 

look-back period in the bill if we do not get an agreement out of 

South Africa. 

Ambassador FROMAN. Thank you, Senator. 

Senator ISAKSON. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Thune has not had his first round either. I missed that, so we will turn to you, Senator Thune. 

Senator THUNE. Thank you, Mr. Chairman. Congratulations to 

you and Senator Wyden on working this out. Trade should be a bipartisan issue. It is critically important to our economy. When you 

get a President and leadership in Congress who agree on something when it comes to economic policy, I think everybody ought to 

take notice. I think it is really important that this President and 

future Presidents have the authority, the ability that they need, to 

bring down foreign barriers to American products. 

So, congratulations on your good work, and I look forward to 

working with our colleagues, on both sides on this committee and 

when we get to the floor, on getting this TPA bill through the process and on the President’s desk so these trade agreements can continue and hopefully get completed. 

48 

Ambassador Froman, as you know, I think pretty well, there is 

no greater priority in farm country than making sure that other 

nations cannot discriminate against our agricultural products or 

otherwise unfairly keep those products off the market. These are 

decisions that ought to be left to consumers in those countries. 

Unfortunately, too often we have agricultural producers in this 

country who are seeing access to foreign markets for crops with 

new technology significantly delayed as a result of the foreign approval process, which puts our farmers at a competitive disadvantage. One of the key negotiating objectives in the agricultural section of the TPA legislation that will soon be introduced is intended 

to prevent foreign regulatory approval processes from being used as 

a trade barrier to new agricultural technologies. 

I just want to know, do you agree that strong language on this 

topic in the TPA bill is appropriate, and that addressing these foreign regulatory issues should be a priority when it comes to promoting American farm exports? 

Ambassador FROMAN. Absolutely. As Secretary Vilsack mentioned this morning, tariffs are one issue, but there are several 

issues that block our agricultural exports. These SPS measures, 

and particularly non-science-based approvals or disapprovals of 

biotech products, are one set of serious issues that we are trying 

to take on both in TPP and in TTIP. 

We know it is a sensitive issue. There is a lot of public debate 

about it. Our view is, we are not trying to force anybody anywhere 

to eat anything, but we do think that the decisions about what is 

safe should be made by science and not by politics. 

Senator THUNE. Great. And I hope that that will continue to be 

an area of emphasis for you and the negotiators as we move forward. 

One of the areas that I have been very involved with, as Senator 

Wyden and Senator Hatch, I think, mentioned, both as a member 

of this committee and as the chairman of the Commerce Committee, is the area of digital trade and making sure that other nations cannot restrict data flows across borders that are essential 

today in the conduct of business. 

In December of 2013, Senator Wyden and I introduced the Digital Trade Act, which was designed to set new negotiating objectives when it comes to that area of our trade negotiations. As you 

know, these are cutting-edge issues that have not been in previous 

TPA bills enacted into law, so I am wondering if you could briefly 

discuss—I know you have touched on it a little bit already—how 

important strong rules are in the area of digital trade for American 

businesses, whether we are talking about large multinational corporations doing business around the world or the small business 

person who is using the Internet to sell goods abroad for the first 

time. 

Ambassador FROMAN. No, absolutely. It is absolutely a key part 

of what we are trying to achieve in TPP. In 2002, when the last 

TPA bill was passed, there really was not much of a digital economy. There was not that much going on in the area of e-commerce. 

Over the last 13 years, access to the Internet and e-commerce has 

exploded all over the world, and we see great opportunities for our 

companies and for our people. 

49 

As you suggested, it goes to the issue of the free flow of data and 

information across borders. It also goes to the issue of pushing back 

against localization requirements that some countries have adopted 

around the world that require companies to build unnecessarily redundant infrastructure in a market in order to serve that market, 

creating an incentive to move the businesses from the U.S., for example, to another market in order to access that. These are all key 

parts of what we are negotiating in TPP. 

As you suggest, this is very much an issue that affects small and 

medium-sized businesses. I have met with a number of participants 

in Etsy, for example. These are people who sell products, out of 

their homes sometimes, on the Internet, to people all over the 

world. When they are engaging in e-commerce, they are using software services, computer services, telecommunication services, electronic payment services, and express delivery services. Those are 

all covered by TPP. 

We work on making sure that markets are open to the provision 

of those services so that our small and medium-sized businesses 

using the Internet, using the digital economy, can access the 95 

percent of the customers who live outside the United States. 

Senator THUNE. Good. I am glad to hear that. I appreciate the 

fact that the chairman and his staff worked hard to incorporate 

some of those strong provisions in the TPA legislation that we are 

considering here today, and glad to hear that you are very focused 

on that in the discussions with both the Europeans and our Asian 

partners as well. 

So, keep up the good fight. Let us push this thing across the finish line and hopefully get these trade deals completed and open up 

what I think are some very significant markets to American businesses, manufacturers, farmers, and ranchers. And a lot of people 

in this country would benefit, not to mention, I should say as well, 

American workers who I think are going to benefit enormously 

from the economic growth that we see when we are opening up 

markets abroad. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Thune. 

We will go to Senator Cardin now. 

Senator CARDIN. Thank you, Mr. Chairman. First, listening to 

the summary of particularly the TPA bill containing much stronger 

provisions on labor, environment, and new provisions on good governance, looking at the enforcement issues that were attached to 

this legislation and the other bills we are taking up, I just want 

to first thank you, thank Senator Wyden, for developing a bill that 

tries to take TPA to the next level. I think that is a very important 

accomplishment. 

I want to repeat what I said earlier today, and that is, we just 

got the bill today. I have read up to page 32, and I found an inconsistency with Ambassador Froman’s statement a little bit earlier, 

and I am going to question you on that in a moment. I have not 

read the entire bill, which is 113 pages. I have a bad habit, Mr. 

Chairman. I like to read the bills. I have not read the TAA bill or 

the health care bill or the preference bills or the AGOA bill. I understand that—— 

50 

The CHAIRMAN. What kind of Senator are you that you read your 

own bills? My goodness! 

Senator CARDIN. I learned that at the University of Pittsburgh. 

[Laughter.] 

The CHAIRMAN. He knows we both graduated from there. That 

is great. So I know you do, and you are one of the better Senators 

here. 

Senator CARDIN. Well, my request to you is that I think, for the 

reputation of this committee, I would just urge you to consider a 

public hearing before we mark up, and particularly to give nongovernmental stakeholders an opportunity to be heard. Organized 

labor deserves an opportunity to be able to comment publicly before 

this committee on the provisions that are in this bill, and I would 

just urge you to give that opportunity. 

Mr. Chairman and Ambassador Froman, let me just deal with a 

couple of issues that I mentioned this morning. It looks like the 

BDS, dealing with Israel and boycotts, is not in this bill, so I take 

it from your comments this morning you are prepared to work with 

Senator Portman and I to develop some language that could be 

added to this bill. 

As I explained earlier, we are interested in the TTIP trade agreements, not TPP. If we could work on some language between now 

and mark-up, we would certainly hope we could work together in 

regards to that issue. I take it from your response this morning 

that you are willing to sit down and work with us in that regard. 

Ambassador FROMAN. Yes. We would certainly like to learn more 

about your proposals and are happy to work with you. 

Senator CARDIN. Thank you. 

So let me talk about the human rights areas. What I am trying 

to figure out is the difference between being in section 2(a) and section 2(b), the requirements on the President being in section 3 

rather than section 5, and I know those who are listening to this 

have no idea what I am talking about. 

But I read on page 32 that the dispute settlement enforcement 

applies to principal negotiating objectives, but you mentioned to me 

this morning that the dispute settlement procedures and enforcement applied to the human rights sections. 

I am not quite getting that from what I have read so far, but 

maybe I am reading the language incorrectly. So I like your answer 

the best, that we do intend that these provisions are going to be 

subject to enforcement, including trade sanctions, if they are not 

remedied. 

Ambassador FROMAN. Well, I have not had a chance to read the 

bill, so you have it on me that—— 

Senator CARDIN. I am only up to page 32. 

Ambassador FROMAN. What I would like to do is to walk through 

with you what we are actually negotiating in TPP and the various 

provisions dealing with good governance, transparency, et cetera, 

and talk to you about how the enforcement applies to that. We are 

happy to set up a separate meeting to go through that with you. 

Senator CARDIN. I appreciate that. 

Last weekend I was pretty busy on another matter; this weekend 

I have free time. I assure you, I am going to be looking at this and 

taking you and the chairman at your word that we will have the 

51 

opportunity to get your input so that, if we need modifications, we 

will have opportunity to present those during a committee markup. 

Ambassador FROMAN. Great. 

Senator CARDIN. Thank you. 

Ambassador FROMAN. Happy to do that. 

Senator CARDIN. Thank you, Mr. Chairman. 

The CHAIRMAN. Well, thank you. 

Ambassador Froman, you have been a solid soldier here for so 

many times before the committee. I personally am very appreciative of the efforts that you have made and appreciate you being 

here today, twice. Just one last thing. Please describe how passage 

of TPA will help our trade agenda. 

Ambassador FROMAN. Well—— 

The CHAIRMAN. You have been doing that, but if you can summarize it in a paragraph, I would appreciate it. 

Ambassador FROMAN. Sure. TPA is a critical tool for moving our 

trade agenda forward. It allows us to speak with one voice when 

we sit at the negotiating table with our trading partners and ensures them that the executive branch and the Congress are together on a bipartisan basis to pursue the negotiating objectives. 

So we do view this as a critical tool for moving the agenda forward, 

and I think today’s introduction will have a very positive effect in 

terms of momentum in our current negotiations. 

The CHAIRMAN. Well, thank you. I want to thank you and the 

other witnesses who were here today, and I want to thank all the 

Senators who have taken time out of what I know are really busy 

schedules at this time to take part in this important hearing and 

debate. I would look forward to continuing to work with all of you 

on this matter. 

The committee will stand in recess, subject to the call of the 

chair. Thank you. 

Senator WYDEN. Mr. Chairman, I just want to say ‘‘thank you’’ 

for that. I think you heard how strongly my colleagues like Senator 

Cardin feel about this, and the voices of organized labor. I very 

much appreciate your thoughtfulness. We are in recess, and I look 

forward to working with you on this. 

The CHAIRMAN. Well, that will be fine. We appreciate you, Mr. 

Ambassador, and with that, we will recess until further notice by 

the chair. 

Ambassador FROMAN. Thank you. 

[Whereupon, at 4 p.m., the hearing was recessed.] 

(53) 

CONGRESS AND U.S. TARIFF POLICY, PART II 

TUESDAY, APRIL 21, 2015 

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

The hearing was convened, pursuant to notice, at 10:15 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Orrin G. Hatch 

(chairman of the committee) presiding. 

Present: Senators Grassley, Crapo, Cornyn, Thune, Isakson, 

Scott, Wyden, Schumer, Stabenow, Cantwell, Nelson, Menendez, 

Carper, Cardin, Brown, Bennet, Casey, and Warner. 

Also present: Republican Staff: Chris Campbell, Staff Director; 

Bryan Hickman, Special Counsel; and Jay Khosla, Chief Health 

Counsel and Policy Director. Democratic Staff: Michael Evans, 

General Counsel; Jocelyn Moore, Deputy Staff Director; Joshua 

Sheinkman, Staff Director; and Jayme White, Chief Advisor for 

International Competitiveness and Innovation. 

OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. 

SENATOR FROM UTAH, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. I would like to welcome everyone to the continuation of our hearings on Congress and U.S. tariff policy. 

Today we have a very distinguished panel of witnesses that I 

hope will help us expand the ongoing discussion of our Nation’s 

trade agenda. As everyone here knows, last week Senator Wyden 

and I, along with the House Ways and Means Committee Chairman Ryan, introduced legislation to renew Trade Promotion Authority, or TPA. 

Our intention is to mark up the TPA bill, along with a handful 

of other trade-related bills, later this week. This legislation is a 

long time coming. TPA expired in 2007. While talks for various 

trade agreements have gone on since that time, without TPA in effect, our negotiators have been effectively negotiating with one 

hand tied behind their backs, because they have not been able to 

assure our trading partners that the deal they sign is the one that 

Congress will vote on in the end. Our legislation will fix that. 

I want to thank Ranking Member Wyden for his support and assistance thus far, and also Congressman Ryan as well. We have a 

long way to go, but, working together, I am confident we can get 

there. 

Now, some have expressed concerns about the process by which 

we are moving this bill forward. For example, I have heard arguments that we are moving too quickly without adequate discussion 

or examination. Those concerns are, in my view, very unfounded. 

54 

First of all, the bill on which our current TPA legislation is based 

was first introduced in January of 2014, almost a year and a half 

ago. 

Since that time, it has been available for examination, dissection, 

discussion, and comment. Thousands of organizations have weighed 

in on the merits of that bill, including business associations, organized labor, think tanks, and advocacy groups. Many members of 

Congress from both parties and in both chambers are on record either praising or criticizing that bill. 

Officials in the Obama administration expressed their support 

for it. True enough, in our discussions, Senator Wyden, Chairman 

Ryan, and I made some improvements of that original bill, but the 

fundamentals remain the same, and we have been very transparent as to what the changes really have been. 

Second, in the 113th Congress, the Finance Committee held nine 

hearings on trade, and TPA was brought up in virtually every one 

of them. I know this because, more often than not, I was the one 

bringing it up. One of those hearings was devoted specifically and 

entirely to TPA and included the testimony of witnesses across the 

spectrum, including one representing organized labor. 

Finally, since the 114th Congress convened just about 3 months 

ago, this committee has had three hearings on which trade and 

TPA were major topics of discussion. Today’s hearing is the fourth. 

In other words, this is a well-covered territory for this committee. 

So, while I understand and respect that there are sincerely held 

views on this topic, some of which are different than mine, any arguments that we have been less than forthcoming and transparent 

with this TPA legislation are, not to put too fine a point on it, nonsense. 

I have been in the Senate a long time and I think am generally 

considered to be pretty reasonable. I am certainly willing to listen 

to and consider any genuine concerns that some may have about 

process. I want all sides to be heard, and I want to have a fair and 

open debate, and that is why we are having this additional hearing. By all means, we should have a frank and open discussion 

about these issues, and I hope we will continue to do so today. But 

let us not dress up our position on trade and TPA as concerns 

about process. 

During our hearing last week, I made two assertions about trade. 

I stated plainly that U.S. trade with foreign countries is a good 

thing, and I said that TPA is the best tool Congress has in its arsenal to help influence and facilitate trade. Those are pretty fundamental assertions. 

At the end of the day, people are either going to agree with them 

or they will not. More hearings and weeks of additional delays are 

not going to change many minds one way or the other on these essential issues. With that in mind, I welcome today’s hearing. 

Like I said, we have a very distinguished panel of witnesses. It 

does not get any more distinguished than these two gentlemen who 

are before us here today. I think they will speak to the heart of 

these matters. 

I look forward to a spirited discussion. For my part, I just want 

to make clear, if it is not clear enough already, that I believe Congress should be working hand-in-hand with the administration to 

55 

break down barriers to foreign markets in order to give our businesses and job creators a chance to compete in the global marketplace. 

The United States should be a leader in international trade. We 

should be setting the standards and making the rules. We simply 

cannot afford to sit on the sidelines and let other countries dictate 

where the world goes on trade. Trade is an essential element of a 

healthy economy. 

We should be doing all we can to advance a trade agenda that 

works for America and advances our interests on the world stage. 

I might add that this TPA will cover 11 nations in the TransPacific Partnership plus ours, and 28 different nations in the TTIP 

European partnership plus ours. 

So it involves a high percentage of trade throughout the world, 

and it puts us in a position to be able to do a good job with regard 

to trade and to advance our country in many ways that we will not 

be able to do without this legislation. Now, that is where we are. 

I will just stop right there. 

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

The CHAIRMAN. Senator Wyden, why don’t you give your remarks? 

OPENING STATEMENT OF HON. RON WYDEN, 

A U.S. SENATOR FROM OREGON 

Senator WYDEN. Thank you, Mr. Chairman. Mr. Chairman and 

colleagues, normally I would make an opening statement, the focus 

of which would be to lay out the significant differences between 

this bill and the trade bills of the 1990s. Under normal circumstances, I would detail that before the committee at this time. 

I have talked with Mr. Trumka often about this topic in the past 

and have visited with a number of the members of the Chamber 

to discuss the bill. Given the interest, however, with colleagues on 

the committee in engaging with our two witnesses—and we thank 

them both, Mr. Trumka and Mr. Donohue, for doing it—I will forgo 

any further statement at this time, Mr. Chairman, in the interest 

of my colleagues who are here to ask questions. 

The CHAIRMAN. Well, thank you, Senator Wyden. 

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

The CHAIRMAN. Our first witness is Thomas J. Donohue. He is 

the president and the CEO of the U.S. Chamber of Commerce, the 

largest business organization in the world, representing the interests of more than 3 million businesses across various sectors and 

industries. Mr. Donohue has held this position at the U.S. Chamber since 1997. We have had a lot of experience working together. 

Prior to that, he served for 13 years as president and CEO of the 

American Trucking Association. Earlier in his career, he served as 

the Deputy Assistant Postmaster General of the United States and 

as vice president of development at Fairfield University. 

Mr. Donohue received a bachelor’s degree from St. John’s University and an MBA from Adelphi University. So we welcome you, Mr. 

Donohue, to the Finance Committee. We are honored to have you 

here. We appreciate your willingness to be here today. 

56 

Our second witness today on this panel is Richard L. Trumka. 

Mr. Trumka is president of the 12.5 million-member American Federation of Labor and Congress of Industrial Organizations, or the 

AFL–CIO, the largest organization of labor unions in the country. 

He has held this position since 2009. I might add that this organization has an effect for American citizens all over the world. One 

of my closest friends was the international vice president of the 

AFL–CIO. He has since passed away, but what a great leader he 

was in this world. 

Now, prior to 2009, Mr. Trumka served for 15 years as the AFL– 

CIO’s secretary/treasurer. From 1982 to 1995, he was president of 

the United Mine Workers. Mr. Trumka has a bachelor’s degree 

from Penn State University and a law degree from Villanova. He 

is a tough guy and somebody I have a lot of respect for. These are 

the two top people in this country, as far as I am concerned, to appear at this hearing. 

They have widely divergent views perhaps, but, on the other 

hand, we need to listen to both of them. I want to thank you, Mr. 

Trumka, and Mr. Donohue as well, for joining us here today. Welcome to the Senate Finance Committee. I hope this will not be the 

last time you come before this committee. 

So with that, we will turn to you, Mr. Donohue. You will be the 

first witness. We will take your statement now. 

STATEMENT OF THOMAS J. DONOHUE, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, U.S. CHAMBER OF COMMERCE, WASHINGTON, DC 

Mr. DONOHUE. Thank you very much, Chairman Hatch, Ranking 

Member Wyden, and distinguished members of the committee. As 

you now know, I am Tom Donohue, and I am president and CEO 

of the Chamber of Commerce of the United States. 

I am really pleased to testify today on behalf of our 3 million 

small and medium-sized businesses, State and local chambers of 

commerce, as well as large companies that are members of the 

Chamber and our national federation. 

I am also pleased to be here with my friend, Rich Trumka. We 

appear quite often together on matters of immigration, infrastructure, and a whole lot of things we agree on. When we retire, we 

are going to get a Mike-and-Ike show and go on the road. We think 

we can make a good deal out of it. 

The Chamber strongly supports the Bipartisan Congressional 

Trade Priorities and Accountability Act of 2015, which will renew 

Trade Promotion Authority. TPA is critical because economic 

growth and job creation at home depend on our ability to sell 

American goods and services abroad. After all, 95 percent of the 

world’s consumers live outside the borders of the United States. 

Why does trade matter to our country? In a word, it comes down 

to American jobs. Already, one in four manufacturing jobs depends 

on exports, and 1 in 3 acres of American farms is planted for consumers overseas. All totaled, nearly 40 million American jobs depend on trade. Nearly 400,000 jobs in Utah and 500,000 in Oregon 

depend on trade, just to pick two States at random. [Laughter.] 

These numbers could even be higher, but unfortunately the playing field for trade is not always level. While our market is genVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00060 Fmt 6601 Sfmt 6601 R:\DOCS\99678.000 TIMD
57 

erally open, U.S. exports face foreign tariffs often soaring into double digits, as well as a thicket of non-tariff barriers. 

No one wants to go into a game many points behind before the 

tip-off, but that is exactly what American exporters are doing every 

day. These barriers are particularly burdensome for America’s 

small and medium-sized companies, about 300,000 of which are exporters from the United States. The good news is that America’s 

trade agreements do a great job leveling the playing field, and the 

results include significantly higher exports and new and better 

jobs. 

The Chamber analyzed these benefits in a recent report entitled, 

‘‘The Open Door of Trade,’’ which we would like, Mr. Chairman, to 

enter into the record today. 

The CHAIRMAN. Without objection, it will be entered. 

[The report appears in the appendix on p. 94.] 

Mr. DONOHUE. Thank you. 

Now, here are some of the highlights of that study. America’s 20 

trade agreement partners represent just 6 percent of the world’s 

population. Let me say that again. The 20 trade agreements we 

have around the world represent just 6 percent of the world’s population, but they buy nearly half of America’s exports. 

By tearing down foreign barriers to U.S. exports, these agreements have proven an ability to make big markets even out of 

small economies. U.S. exports to new trade agreement partners 

have grown by an annual average of 18 percent in the 5-year period following an agreement coming into force. That is much faster 

than we typically see in U.S. export growth to other countries. 

The increased trade brought about by these agreements supports 

more than 5 million American jobs, according to a study commissioned by the Chamber. Trade-related jobs also pay well. For instance, manufacturing jobs tied to exports pay wages that average 

18 percent higher than those that are not. The trade balance is a 

poor measure of whether or not your trade policy is successful, but 

we often hear the opponents of trade arguments say that they 

cause deficits. That could not be more incorrect. 

The United States—I am going to say this: please listen. The 

United States has a trade surplus with our 20 trade agreement 

partners as a group. U.S. exports of manufactured goods to our 

trade agreement partners generate revenue of about $55,000 for 

each American factory worker. Many manufacturers just could not 

make payroll without these export revenues. 

For American farmers and ranchers, the stakes are especially 

high. That is because foreign markets often slap the highest tariffs 

on their products, and that is why our agricultural exports soared 

under our new trade agreements. U.S. service exports are also 

growing rapidly and supporting millions of high-wage jobs, even 

though the potential for service industries to export is nearly untapped. 

But to get more of these benefits, Congress must approve TPA. 

The United States has never entered into a major trade agreement 

without it. A simple form of TPA was first enacted in 1934, but the 

latest version expired in 2007. TPA is based on the common-sense 

notion that Congress and the White House must work together on 

trade agreements. 

58 

TPA is how Congress sets priorities and holds the administration 

accountable in trade negotiations. A few people have claimed that 

this is a presidential power grab. I may be uniquely qualified to 

comment on this; after all, the Chamber has not been shy about 

criticizing some actions of the administration when we see overreach. 

But TPA is not about Congress ceding power to the President. 

On the contrary, TPA strengthens the voice of the Congress on 

trade. Without TPA, the administration can pursue its own priorities at the negotiating table and consult with Congress only when 

and if it chooses. TPA lets Congress set negotiation goals and sets 

forth detailed requirements for consultation between the trade negotiators and the Congress. 

What should we do with TPA? We should start by bringing several trade negotiations to a successful conclusion. The Trans-Pacific 

Partnership agreement would open the dynamic Asia-Pacific markets to American goods and services. 

It is critical that we do so, because nations across the Pacific are 

clinching their own trade agreements that exclude the United 

States, denying American exporters access to these very important 

markets. TPA gives the United States a strong hand in writing the 

rules for trade for this important region. It makes us an active 

player, not a bystander, stuck on the outside looking in. 

TPP would affirm and deepen America’s ties to Asia at a time 

when there is a perception that we are pulling back. Then there 

is the Transatlantic Trade and Investment Partnership, which 

would further remove barriers between the United States and Europe. This agreement could not come at a better time. 

Both America and Europe are dealing with struggling economies, 

aging populations, and new competition from emerging nations. 

The United States and the E.U. represent nearly half of the global 

economy. A relationship that huge, eliminating today’s relatively 

modest trade barriers, could bring extraordinarily large benefits to 

both countries. 

According to a study by the Atlantic Council and the British Embassy, the agreement would create 740,000 new jobs in America. 

The Trade in Services Agreement, which we have not talked about 

enough, is another big opportunity, a free trade zone for services 

with 50 countries around the globe. This agreement plays to one 

of America’s strengths: U.S. service companies are among the most 

competitive on the globe. 

From the U.S. business community’s perspective, the negotiating 

objectives laid out in the TPA bill are balanced and ambitious. 

They reflect the evolution in U.S. trade agreements in recent years 

and include the best new ideas in trade policy, and the bill strikes 

just the right balance on intellectual property, which is the lifeblood of the U.S. economy. 

Negotiating objectives have been modernized to reflect our 

changing economy, with new provisions on digital trade and stateowned enterprises, for examples. Importantly, the bill directs the 

U.S. trade negotiators to seek comprehensive agreements, avoiding 

exceptions or carve-outs from those agreements for any industry. 

The Chamber supports the TPA bill’s negotiating objectives on 

currency practices. It says that parties to a trade agreement should 

59 

avoid manipulating exchange rates to gain an unfair advantage. I 

believe the U.S. should continue to press economies to adopt 

market-determined exchange rate systems that reflect economic 

fundamentals. 

In recent years, the G–7 and G–20 economies have affirmed that 

they will not target exchange rates or engage in competitive devaluations, but the notion that you can use trade policy tools to address monetary policy challenges causes concerns in many quarters. 

Here is one, for example. It is not in the U.S.’s interests to enter 

into an international agreement that would handcuff U.S. monetary policy and limit the flexibility of the Federal Reserve to respond to an economic crisis. The TPA bill’s negotiating provision relating to currency reflects a careful and reasonable balance. 

The CHAIRMAN. Mr. Donohue, your time is up. I let you go over 

a little bit. Can you wrap up really quickly? 

Mr. DONOHUE. Oh, sure. 

The CHAIRMAN. All right. 

Mr. DONOHUE. I was going to go as long as I could, it is just 

that—— 

The CHAIRMAN. I did not realize that. I would have interrupted 

you earlier. [Laughter.] 

Mr. DONOHUE. No. Thank you. 

The CHAIRMAN. No, you are fine. 

Mr. DONOHUE. In sum, this is a strong bipartisan bill. There is 

nothing fast about the manner in which it was done, as the chairman indicated. Given the careful balance in many areas, we urge 

all of the members to vote for this and get it through. 

To conclude, the United States cannot afford to sit on the sideline while others set the rules of trade. To create jobs, growth, and 

prosperity, our children need us to set the agenda. Two quick 

points. To open foreign markets to American-made goods and services, we need to renew TPA. Then we have to use the legislation 

to get these trade agreements. Those agreements now being negotiated are going to make a fundamental difference for this country. 

With all our trade agreements, old and new, we need to ensure 

they are enforced. 

Mr. Chairman, Senator Wyden, let me thank you for having us 

here. We will now hear from the other side of the argument, and 

then we can get down to a good discussion. 

The CHAIRMAN. Well, thank you. We surely appreciate your testimony, and we appreciate very much your being here. 

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

The CHAIRMAN. Mr. Trumka, we will allow you a little extra time 

if you need it too. So we will turn to you now and hear your testimony. 

STATEMENT OF RICHARD L. TRUMKA, PRESIDENT, AMERICAN 

FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL 

ORGANIZATIONS (AFL–CIO), WASHINGTON, DC 

Mr. TRUMKA. Thank you, Mr. Chairman. Before I start my oral 

testimony, I would like to submit for the record my full testimony—— 

60 

The CHAIRMAN. Without objection. 

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

Mr. TRUMKA [continuing]. Bipartisan letters signed from the 

House and the Senate urging the administration to do something 

on currency manipulation, and an analysis of the Hatch-WydenRyan TPA bill by Ranking Member Sander Levin. I would like to 

have those submitted for the record. 

The CHAIRMAN. Without objection, they will be placed in the 

record at this point, or immediately following your remarks. 

[The submitted materials appear in the appendix beginning on 

p. 114.] 

Mr. DONOHUE. Excuse me, Rich. Mr. Chairman, there are a few 

materials, like my formal testimony and so on, I know that you 

have—— 

The CHAIRMAN. We will put all of that in the record. 

Mr. DONOHUE. Thank you. 

The CHAIRMAN. You bet. 

Mr. TRUMKA. I would like to start, Mr. Chairman, by stipulating 

that Tom Donohue is an expert on presidents. He goes back to Abe 

Lincoln’s days, so he is ably qualified to be an expert on those 

presidents. [Laughter.] 

I want to thank you, Chairman Hatch, Senator Wyden, and 

members of the committee, and my friend Tom Donohue. The labor 

movement has been advocating for new trade policy for more than 

2 decades, for strengthening labor and environmental provisions, 

for reforming investment rules, for finding the appropriate balance 

in regulatory measures and intellectual property protections, for 

fair rules of origin, and finally, for including meaningful currency 

provisions, among many other issues. 

Far from being opposed to trade on principle, we have supported 

trade deals when warranted. Some examples would be the Jordan 

trade agreement, the African Growth and Opportunity Act, the 

Generalized System of Preferences, and the reauthorization of the 

Import-Export Bank. 

Key to reforming our trade policies, we believe, is abolishing the 

outdated, unaccountable, and un-democratic fast-track process. The 

Trans-Pacific Partnership now being negotiated by our government 

includes 12 countries and about 40 percent of the world’s GDP. The 

TPP is designed to be infinitely expandable, so it could very well 

be the last trade agreement that we negotiate, so it is especially 

crucial that we get the terms of this one right. 

Mr. Chairman, the idea that fast-track lets Congress set the 

standards and goals for TPP—I am not talking about other agreements, but for TPP—is an absolute fiction. The agreement has been 

under negotiation for more than 5 years and is essentially complete, so the instructions that you send them will have no effect 

whatsoever. 

Congress cannot set meaningful negotiating objectives if the administration has already negotiated most of the key provisions. I 

might also add, this would be the worst possible time to pass fasttrack for TPP, because the leverage that you have left for those 

issues that are remaining is right now, and you give that away if 

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61 

age over any remaining provisions by agreeing to fast-track at this 

late date. The administration has ignored Congress’s direct instructions to negotiate meaningful currency provisions and to reform the 

flawed Investor-State Dispute Settlement process. 

Granting fast-track now takes Congress out of the picture until 

the agreement is complete. While all fast-track bills have gone 

through the charade of listing negotiating objectives, there have 

been no consequences when the administration willfully ignores, or 

fails to achieve any or all of those objectives. 

America needs an entirely new trade negotiating authority, not 

minor tweaks at the margin. The Hatch-Wyden-Ryan Bipartisan 

Congressional Trade Priorities and Accountability Act of 2015 falls 

far short of doing that. Congress must not agree to fast-track a 

fast-track bill right now, Mr. Chairman. The time allotted between 

the introduction of the bill, hearings, committee consideration, and 

floor action is really short, and it is a sign that I believe that, if 

it had more time and more people knew about it, more people, not 

less people, would oppose it. 

A new and effective trade negotiating authority must do the following. It must ensure that Congress approves trade agreement 

partners before negotiations begin; create negotiating objectives 

that are specific to the individual trading partners that we are 

dealing with, because they are all different; ensure that Congress, 

not the executive branch, determines whether the congressional 

trade objectives have been met; ensure Congress has effective opportunities to strip expedited consideration provisions from trade 

deals that fail to meet congressional objectives, or to incorporate 

congressional and public participation; increase access to U.S. trade 

policy making, trade proposals, and negotiating texts for Congress, 

congressional staff, and the public; and include a broader trade and 

competitive package that addresses infrastructure, training shortcomings, and reforms tax policies to ensure that all—and I mean 

all—can benefit from trade. 

A few comments about TPP, to the extent that we know. Bipartisan majorities of the House and the Senate have insisted that 

currency manipulation should be addressed, but the administration 

has failed to include any currency provisions in TPP. An Economic 

Policy Institute study said that the U.S. could add as many as 5.8 

million jobs to our economy by eliminating currency manipulation. 

On investment, legitimate and serious concerns have been raised 

by both the left and the right about Investor-State Dispute Settlement, yet the investment provisions of TPP have not addressed any 

of those concerns. 

On climate, without a border adjustment, TPP will not stop manufacturers from closing up shops in the United States and moving 

to TPP countries with no carbon-reduction scheme. In fact, it will 

encourage China, not a member of this agreement, to move dirty 

manufacturing plants to countries that are partners to this and to 

send dirty products back here, to the disadvantage of American 

producers. 

On the labor side, the labor movement has been clear that the 

status quo on labor, the so-called May 10th agreement, needs further strengthening. The May 10th standards were first steps toVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00065 Fmt 6601 Sfmt 6601 R:\DOCS\99678.000 TIMD
62 

wards leveling the playing field for workers, but they did little to 

ensure timely and effective action. 

Let me list some of the problems. The highly touted Labor Action 

Plan in Columbia, combined with the May 10th language protecting workers’ rights, has been totally ineffective. Since that plan 

has been signed, 105 workers have been murdered for trying to exercise their fundamental worker rights in Colombia since the Labor 

Action Plan was implemented. 

Mr. Chairman, we have been told by USTR staff, their general 

counsel, and their Assistant USTR for Labor told us repeatedly 

that murder of trade unionists and violence against trade unionists 

is not a violation of the labor provisions in our FTAs. 

So, when people say this is the highest standard yet, talking 

about labor, you have to excuse me if I am unmoved or I am 

unsatisfied when they tell us directly, without any equivocation, 

that violence and the murder of trade unionists for exercising their 

rights is not a violation of these agreements. Now, we have asked 

for reasonable measures to strengthen the labor chapter, but USTR 

has ignored those requests. They are not there. 

I would also say that the human rights language in the HatchWyden-Ryan bill is not binding. The fact that several very serious 

human rights violators—Vietnam, Brunei, Malaysia, and Mexico— 

are already in the TPP demonstrates that the fast-track objectives 

are ignored or irrelevant. 

In sum, to get this thing right, Congress should not be constrained by misguided secrecy, or speed, or unaccountability of fasttrack. We really urge Congress to reject the outdated and undemocratic process known as fast-track and develop instead a new trade 

negotiating authority for the 21st century. This is going to affect 

40 percent of the world’s GDP. It may well be the last trade agreement that gets negotiated, and the lives of workers are at stake, 

and the livelihoods of workers are at stake here. It is important 

that we get it right. 

I can understand our friend Tom advocating for fast-track and 

TPP. His members have benefitted by it, benefitted greatly. But 

the average working folks in this country have not, and we need 

a different deal. We need to have something that really works on 

our behalf and protects the lives of trade unionists from being murdered, or having violence perpetrated against them, and not be told 

that it does not—does not—violate a trade agreement. 

Mr. Chairman, thank you for the opportunity to speak here 

today, and I look forward to working with you and Senator Wyden 

to strengthen this piece of legislation to make it better for the 

American worker. 

The CHAIRMAN. Well, thank you. Thank you, Mr. Trumka, and 

thank you, Mr. Donohue. We appreciate both of you. We know you 

are busy people. We also know that you are very sincere people in 

your respective areas of the law. 

Senator Wyden, let us turn to you first. 

Senator WYDEN. Thank you very much. Mr. Chairman, I indicated I want to let my colleagues ask their questions. I just want 

to make one very quick point. Mr. Trumka, with whom I agree so 

often, suggested that there would be insufficient public scrutiny of 

TPP. Colleagues, under this legislation, by law, the American peoVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00066 Fmt 6601 Sfmt 6601 R:\DOCS\99678.000 TIMD
63 

ple will have TPP in their hands for 2 months before the President 

signs it, and months more before it is fully debated on the floor of 

the House and the Senate. So with that, I want to let my colleagues ask their questions. 

The CHAIRMAN. Well, maybe I will take back my right to ask 

questions at this point. 

Mr. Donohue, as you noted in your opening testimony, and as I 

have been saying for years now since Trade Promotion Authority 

expired in 2007, other countries, other competitors in the world 

marketplace, have not been resting on their laurels when it comes 

to trade. 

Indeed, there are hundreds of free trade agreements around the 

world that are currently in effect or under negotiation, and the 

U.S. is a party to relatively few of these agreements. In your opinion, what is the cost to the United States if we refuse to pass new 

trade agreements while our competitors press forward with their 

own? 

Mr. DONOHUE. Well, long-term refusal—and we have been at it 

for a while—to pass new trade agreements will basically provide 

markets across the world to our competitors. It will cost American 

workers an ever-growing number of jobs, it will have a measurable 

effect on the economy in the United States, and it will make us far 

less significant in the geopolitical and economic affairs of the world. 

This is the equivalent of going out and resigning from the rest 

of the world. We are going to say that none of this is important in 

terms of how we get our children and grandchildren into the economic system? We are going to say none of this is important in 

terms of what effect we are going to have on the general affairs of 

the world? 

And most of all, Mr. Chairman, 95 percent of the people—and we 

all agree to this—whom we want to sell something to do not live 

in the United States. That is no reason to put together agreements 

that are totally irresponsible, but it is a reason to get out there in 

the marketplace and compete as we have since our founding. A failure to compete is a resignation from the global economy, and the 

results would be one of the great tragedies of our time. 

The CHAIRMAN. Mr. Trumka, let me ask you a question. According to the USTR, average wages in export-intensive industries in 

the U.S. are above those in non-export-intensive industries. USTR 

also tells us that ‘‘with every $1 billion in services exports supporting an estimated 7,000 U.S. jobs, expanded services trade globally will unlock new opportunities for Americans.’’ According to recent Bureau of Labor Statistics data, close to 12 percent of those 

employed in service occupations are represented by unions. 

So, Mr. Trumka, the administration’s data tells us that the free 

trade agreements under consideration will expand exports and create more jobs in export-intensive industries, including services. In 

turn, that means more jobs in sectors with significant union representation and higher wages. 

With this data provided from a Democratic, union-friendly administration, why do you oppose agreements that can expand your 

membership and, more importantly, generate good-paying jobs, including many union jobs for middle-class workers? 

64 

What are your thoughts on that, Mr. Donohue, after Mr. Trumka 

finishes? 

Mr. TRUMKA. Well, first of all, I would like to comment on the 

last question that you asked Tom. 

The CHAIRMAN. Sure. 

Mr. TRUMKA. This is not a choice between TPP and no trade, 

where, if we do not get TPP, we get no trade. That is the way you 

made it sound, and that is the way he answered. There is a lot of 

distance between there. What we are saying is, let us have a good 

trade agreement that really does benefit people. 

Look, the statistics that you quoted will also tell you, for every billion dollars in trade deficit—and we have about $500 billion of 

trade deficit a year—there are several thousand, almost 15,000 

jobs, lost per billion dollars of trade deficit. Now, each one of the 

trade agreements that we have signed so far has encouraged outsourcing and increased that deficit. It is sustaining—$500 billion a 

year takes jobs out of the country. 

I wish we could reverse that and bring it back. I swear, I do not 

know where Tom got his figures earlier that we have a surplus, a 

trade surplus. To have a trade surplus is no figure that I know of, 

because goods and services and everything else has been in deficit. 

So, with a good trade bill, Mr. Chairman, we could create jobs, and 

it could benefit everybody. 

But currently the TPP, as constituted, is not that bill. It does not 

address currency, it does not address the investment provisions, it 

does not address the labor provisions, and it does not address the 

environmental provisions. It does not address ‘‘buy American’’ provisions. There are a number of other things that we have listed to 

try to make this agreement into something worthwhile. 

We have worked for 5 years to try to make TPP an agreement 

that the American worker could benefit from, and precious few of 

our suggestions—fewer than you can count on one hand—even 

made it into the U.S.’s proposal to our trading partners. Obviously 

you cannot achieve something if you do not even propose it and negotiate for it. 

So I would love to work with you to create something better than 

TPP, but a lot better than nothing, because there is a lot of room 

between that. To imply that, if TPP is not passed, we are not going 

to do trade is just a misrepresentation, I believe. 

The CHAIRMAN. Well, thank you. My time is up. I am sorry. 

Senator Cornyn? 

Senator CORNYN. Thank you, Mr. Chairman. 

I come from a State that, in 2013, counted an estimated 1.1 million jobs associated with trade. Just the binational trade with Mexico is estimated to support as many as 6 million jobs in the United 

States. In terms of its impact on small and medium-sized businesses and the people they employ, 93.1 percent of the trade jobs 

were in small and medium-sized enterprises with less than 500 employees. 

I actually believe that one reason why Texas has done better 

than the rest of the country, in terms of its economy and jobs, has 

in large part been because of trade. We have led the Nation in 

overall exports since 2002 in beef, cotton, petrochemicals, machinery, and high-tech electronics. In 2014 alone, Texas manufacturers 

65 

and farmers set new records of exports with nearly $290 billion 

worth of merchandise to buyers around the globe. 

So I believe that this Trade Promotion Authority proposal that 

we will mark up tomorrow represents real progress. The challenge 

I think we have is that, absent Trade Promotion Authority or socalled fast-track authority, we are left with negotiations on behalf 

of 535 individual members of Congress, which is just not feasible. 

What I worry about—and, Mr. Donohue, you have alluded to 

this—is what happens if we do not engage with Asia as on this 

Trans-Pacific Partnership proposal, which we have not seen, by the 

way, Mr. Trumka. I am looking, waiting to see what the contents 

of it are, because I do believe that the impact of trade does not fall 

uniformly. There are things we need to do, and there are things we 

will do with Trade Adjustment Assistance authority to help people 

who are dislocated as a result of trade learn new skills and earn 

higher-paying jobs. 

But, Mr. Donohue, what would be the consequences to the 

United States long-term if we do not do this and, let us say, countries like China step in to fill the void? 

Mr. DONOHUE. I think it is important to first recognize, Senator, 

that we are the largest manufacturer in the world. We are the 

most significant economy in the world. But that reality of what is 

going on around the world sees large—very large—economies getting more efficient, more productive, and more engaged with one 

another on trade. 

If we are not major players in the trading affairs of the world, 

it will have a fundamentally negative effect on our economy, on 

jobs in the United States, and on our influence around the globe. 

Now, Mr. Trumka is a very passionate representative of his 

ideas. I would say just for the record, Mr. Chairman, all of our 

numbers on jobs from this deal or that deal come from the Commerce Department. When I was talking about the significant benefit in jobs in recent trade agreements, it is very, very clear. 

But I think there is another point that we should all look at, if 

you would allow me to make a point. The jobs that are lost in the 

United States in manufacturing, the great percentage of them, they 

go to two countries. They go to a country called efficiency and a 

country called productivity. 

The American business system, which is the most efficient in the 

world, has taken 40-plus percent of the jobs out of the manufacturing process because of information technology, robotics, process 

engineering, and supply chain management. Those 40 percent of 

the jobs are never coming back. 

But the way we get the jobs back, which Mr. Trumka wants, I 

want, and we all want, is we do two things. Number one, we encourage others to come here and produce their products. You could 

go around this country today, and you would find representatives 

of Europe looking for places to build their factories, simply because 

their energy is three times more costly than ours. 

The second thing that we need to do, in a fundamentally efficient 

way, is go out and produce more things in our manufacturing 

plants and in new manufacturing plants that we would build, and 

export them around the world. Those are the only ways to expand 

manufacturing jobs in the United States. 

66 

Senator CORNYN. Mr. Chairman, I was not here when the North 

American Free Trade Agreement was negotiated, but I can tell you, 

in my State it is viewed as a net positive for that region of the 

country, as the Central American Free Trade Agreement is. 

But part of the consequences—I would just close on this point— 

I have visited with Senator Kaine down in Honduras recently. You 

remember the influx of unaccompanied minors streaming across 

our borders and moving into the United States. Our failure to help 

our neighbors provide, not only security, but also to help grow their 

economy where they live does have residual impact on us in ways 

that perhaps we do not even recognize. 

So I appreciate the great work that you and the ranking member 

have undertaken on this and look forward to supporting the TPA 

in tomorrow’s mark-up. 

The CHAIRMAN. Thank you, Senator Cornyn. 

Mr. TRUMKA. Mr. Chairman, might I comment to Senator 

Cornyn? 

The CHAIRMAN. Sure. 

Mr. TRUMKA. Senator, you indicated that we would have to have 

535 different agreements without fast-track. That again is—there 

is a whole lot in between there. I have suggested the following 

things to improve Trade Promotion Authority: ensure that Congress approves trade agreement partners before the negotiation begins; create negotiating objectives that are specific to each one of 

the trading partners, because they are different; ensure that Congress, not the executive branch, determines whether the congressional trade objectives have been met; and ensure that Congress 

has effective opportunities to strip expedited consideration provisions from trade deals that fail to meet congressional objectives, or 

to incorporate congressional and public participation. We also think 

that we ought to integrate this with the rest of the things necessary to make trade work: infrastructure, training, and tax policy. 

So it is not that we are saying you cannot have it, or that you 

should not have it, we are saying this one, the one that you are 

considering, abrogates too much power. You give too much power 

away, and you have no control, particularly over this agreement 

that is almost completely negotiated. 

Mr. DONOHUE. Mr. Chairman, we all recognize that a negotiation 

is a give-and-take. You have experienced it here in your own committee in recent weeks as you, working together, have come up 

with a bill. That is exactly what happens in a trade negotiation. 

The fundamental reality is, we are in a new time. If we fail to 

inject ourselves at the right time, and in a significant way in this 

trading process, those other large and growing countries are going 

to do it on their own. 

I know everybody believes America is so essential, because they 

are, because of technology, because of our value system, and so on. 

To keep that position, we have to enter into these agreements. We 

do not have to give away our value system—we have to deal with 

the things that are important—but there is no way that we can tell 

everybody else, look, just wait about 10 years, we will get our stuff 

together, we will think about it, we will work on it. We have to 

have an expediting system. We have to have a system that lets the 

people who do this every day all day, professionals, bring you the 

67 

results based on what you have told them you want. But tomorrow 

is too late. Today, it is time to move on these issues. 

The CHAIRMAN. Well, thank you. 

Senator Schumer? 

Senator SCHUMER. Thank you, Mr. Chairman. Thank you for 

holding this discussion today. I thank our ranking member for 

pushing hard to get it. I want to thank both of our witnesses. 

Mr. Trumka, my belief is the greatest problem America faces is 

the decline of middle-class incomes. It is harder to stay in the middle class, harder to gain the middle class. I know of almost no one 

who has done more to try to reverse that trend than you, and 

thank you for your good work across the board. 

Mr. Donohue, thank you for your strong advocacy and leadership. 

We have worked together on many issues, immigration above all, 

but also export-import infrastructure, and, most important, you are 

from St. Therese’s Parish in Brooklyn. So, it is good to have you 

both here. 

Well, look. We know the administration, when they try to sell me 

on TPP, it is almost the geopolitics that prevails over the economics, that we want to keep these countries in our orb rather than 

China’s orb. If there is an economic web between them and China 

and not one between us and them, it is hard to do that. I agree 

with that. I agree with that goal. 

With that said, though, if that is one of the main goals of TPP, 

to lure countries away from China’s influence, it makes perfect 

sense, as part of the overall effort within TPP or alongside TPP, 

to deal with China head-on to show them that this is not business 

as usual. China is our most rapacious trading partner. None of the 

other countries in TPP do what China does, which is, not only do 

they manipulate their currency, which has cost us millions of jobs 

and trillions of dollars of wealth unfairly flowing from us to them, 

they steal our intellectual property. That has been documented 

over and over again. 

And probably worst of all, when we have a good product, they do 

not let us in. We are at a new phase. We are doing high-end manufacturing, high-tech stuff. That is our hope and our future. We have 

already had the competition with China on furniture, toys, and 

clothing, sort of low-end stuff. 

But if they start stealing our intellectual property in these areas, 

and then they keep us out or they force us to join joint ventures 

that are 51-percent Chinese government-owned and take all that 

information to build their own industries from their protected market and then compete with us, I do not know of anything that is 

more frightening to me. That will constrain the thing that I believe 

is so important, which is to get middle-class income going again 

like it was in the grand era of America from 1950 to about 2000. 

So I think we can do two things, and I know what China does. 

Let me say, small companies, big companies—I had a small company in upstate New York; they needed a material from China, 

rare earth, 500 jobs. The Chinese told them, if you want those rare 

earths, you have to make your product in China. 

The guy said to me, I know that is against WTO, but I cannot 

spend 5 years not having the goods and going to court through the 

long WTO process. Then I spoke to the Business Roundtable—I 

68 

guess just about every one of them is one of your members—and 

I told them that I thought China does not play fair and it is hurting our big companies. That is why we need currency legislation. 

We need to do more against China alongside, within, TPA. 

The position of the Business Roundtable is against that. That is 

six, six of the major CEOs, all of whom you know, Mr. Donohue, 

and we all know, who came to me and said, keep doing it. We cannot say anything, because China retaliates against us if we say a 

thing. We need that big market. I appreciate that. 

If I were CEO of one of these companies, I might do the same 

thing. But they said, you keep it up. So my goal here is to do something about China, the most rapacious of our trading partners. 

Frankly, I am disappointed. I was very disappointed in the efforts of President Bush, and I am disappointed in the efforts of 

President Obama. I have dealt with five Treasury Secretaries on 

this issue of currency, in particular from Snowe on, and none of 

them has done anything. 

So this mark-up is a unique opportunity to stand, to do something about the rapaciousness of China trade. It is the one point 

in time throughout this TPP process where Congress will have the 

opportunity to show, to China and the world, that it is not business 

as usual, because they are just killing us. They are just taking everything from us, and not in a fair way, in a WTO non-compliant 

way. They just thumb their nose and say, take us to WTO. 

So I say to my colleagues, now is the time, if there ever was one. 

If not now, when? We have been trying for a long time. This is a 

unique opportunity to do something about China. Some of us are 

against TPA, other people are for it. 

But we can all agree—we had 60 people, as Mr. Trumka mentioned, sign a letter saying we ought to do something as part of this 

process with China, and I hope we will. I hope we will. We cannot 

have weak tea. Anything that is just discretionary, that just says, 

well, the administration could do something against China if they 

wanted to—I have been through the wars on this one. 

I have tried every administration. I have spent hours with every 

Treasury Secretary, and they never will say China is a currency 

manipulator because the geopolitical forces are too strong the other 

way. So, unless we have something stronger than just giving to any 

administration, not just this one, more tools, it is not going to 

work. So I hope we will do something on currency, and I know you 

feel that way. 

So my quick questions to each: Mr. Trumka, how do you feel 

about currency manipulation as part of this; and, Mr. Donohue, not 

on this particular bill, which I know you are strongly for, but do 

you believe we should be doing something on currency manipulation, that it is a problem here for our country, China’s currency 

manipulation? 

Mr. TRUMKA. EPI says that currency manipulation alone costs 

this country 5.8 million jobs. If we eliminate currency manipulation, we have a chance to gain almost 6 million jobs. We strongly 

support that and think it needs to be part of the agreement. 

I would also say, though, Senator Schumer, that some of our 

partners in TPP have been identified as currency manipulators. 

69 

Malaysia, Japan, and Singapore have been identified as currency 

manipulators as well. 

Senator SCHUMER. I know. My bill just applies to China, though. 

Mr. Donohue? 

Mr. DONOHUE. Senator, we have debated many subjects, but as 

we know, the China card, so to speak, is an issue that we will be 

dealing with for many years. It is complicated by serious problems 

in China as well, economic problems. 

My view about this bill is that there is a very serious attention 

to currency, as there should be, and it is at a point where I would 

encourage moving ahead without major amendments. In terms of 

dealing with currency outside the bill, there are a lot of things here 

that are important. 

Mr. Trumka said Japan is a currency manipulator. Well, they 

sure were back then, but they have not been for a long time. People 

would accuse the United States of currency manipulation when we 

were dealing with the crises of the recent years, when we were 

handling and managing our interest rates and other factors that 

came out of the Fed. 

The specific challenge that you raise about China is one that we 

will deal with for all of our lifetimes. I am very willing and very 

anxious to talk about other opportunities beyond this agreement to 

get the facts straight, to look for ways to apply more, I will not say 

aggressive, but more successful, pressure on these issues. I understand the point about the theft of intellectual property. 

I would make a point that we are making a little progress, but 

surely not enough. I understand what happens when they decide 

to make a product and do not need us any longer. The China issue 

needs serious discussion. We would like to be a part of it. I do not 

think at this date and this time you can go beyond what we are 

talking about on currency in this bill. 

Senator SCHUMER. Thank you, Mr. Chairman. 

The CHAIRMAN. Well, thank you, Senator Schumer. I want to 

make it clear that I believe this is a serious issue. 

Senator SCHUMER. I know you do. 

The CHAIRMAN. I do not think it should be part of this agreement, which has been very, very fastidiously worked out. But I am 

willing to hold hearings and do appropriate work after we pass this 

bill, if we can get this passed with everybody’s cooperation. 

Senator SCHUMER. Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Cantwell, you are next. 

Senator CANTWELL. Thank you, Mr. Chairman. 

I am always struck, when you two gentlemen are before the committee, that there are many things that you actually agree on. 

Workforce training and Ex-Im Bank seem to be two of those. Do 

I have that right? 

Mr. DONOHUE. Yes. 

Mr. TRUMKA. Yes. 

Senator CANTWELL. So you are both supportive of apprentice programs for job training? 

Mr. DONOHUE. We do not have enough of them. The private sec- tor spends something in the area of $60 billion a year on it. The 

public sector—and Rich and I have talked about this. There will 

have to be a bill for job training and Trade Adjustment Assistance 

70 

to follow all of these trade deals, but we really believe that has to 

be thought out more. We are doing old things in job training. We 

can do new things to train people for new industries, but we both 

agree we need to do those things in the private sector, and in the 

public sector. 

Senator CANTWELL. Well good, because we are proposing some 

new things. But I definitely am a big supporter of TAA and do not 

think that we should be doing TPA or TPP without it. But, Mr. 

Donohue, could you please tell the Republican presidential candidates that they are wrong about the Ex-Im Bank? 

Mr. DONOHUE. Well, thank you. Let me say, Senator, we do not 

do presidential politics. We do every other kind but—— 

Senator CANTWELL. All right. Do you think people who—— 

Mr. DONOHUE. Wait. Wait. We talk to people who are in the public world about presidential policies, and you are damn right we tell 

them. 

Senator CANTWELL. That the Ex-Im Bank should be passed? 

Mr. DONOHUE. I have told probably three of them myself, and we 

have a little plan to have a visit with some of these people in the 

normal course of business and point out what the bank means to 

this country and to American industry, and particularly the thousands and thousands of small companies. 

Senator CANTWELL. Well, I just want to say, with my time, that 

I come from a big manufacturing State, and it has a lot of labor 

members in it, and it has a lot of people who support trade. In fact, 

probably 1 in 3 jobs are related to trade. 

Mr. DONOHUE. At least. 

Senator CANTWELL. So I support having more bilaterals, multilaterals, because a bunch have been done while we have been sitting around not having TPA. But at the same time, I believe that 

we have to have these tools that work together, like the Ex-Im 

Bank and like Trade Adjustment Assistance and investment in apprentice programs and the things that go along with this. So I just 

hope that we can get our colleagues here to understand that it is 

both, and I think you hold a lot of punch to make sure that we get 

these things done. 

Otherwise, then it is only shareholders at the top level benefitting from these deals and not working people. I think that I would 

put up our manufacturing skills against anybody in the world. 

Mr. DONOHUE. Best in the world. 

Senator CANTWELL. And I also do not apologize for our country 

being a leader in aerospace manufacturing and making a great 

product that is worth hundreds of millions of dollars. When people 

talk about Boeing being a lot of the Ex-Im Bank, it is almost as 

if people want us to apologize that we do not make a lot of 

tchotchkes and ship them over to China for them to buy. 

We are lucky we make a very expensive product with a lot of 

skilled workers, and we want people to buy those planes, so I just 

hope people will stop and realize for one second that aerospace 

manufacturing is a lot of jobs in the United States of America. 

Mr. DONOHUE. It is a bad thing to make predictions, because 

then the people you want to work hard let up. The things that you 

have raised, the issues of job training and some of the related 

issues there—and we could talk about community colleges and all 

71 

of that—and the thing you raise on the bank are issues that we are 

pushing very hard, and I feel that we are going to get there. 

Senator CANTWELL. Thank you. 

Thank you very much, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Cantwell. 

We are going to turn to Senator Stabenow next, then Senator 

Warner right after Senator Stabenow. 

Senator STABENOW. Thank you very much, Mr. Chairman, and 

thank you for the hearing. Thank you to both of our witnesses. 

I feel, when we are talking about trade, we always need to start 

by saying that we are in a global economy, we know we are going 

to trade, so this is really about whether we are exporting our products or our jobs. It is a question of policy. 

So we either have something that means we strengthen the middle class and it is a race to the top and we bring other countries 

with us, workers with us, or it is a race to the bottom. I will never 

forget sitting in Greenville, MI with a company that was making 

refrigerators a number of years ago when we were trying all kinds 

of ways to keep them in western Michigan. 

Finally, they turned to us and said, you cannot compete with a 

buck fifty-seven an hour in wages, sorry. I mean, this cannot be a 

race down to that; this has to be a race up. So fundamentally, 

when we are talking about fast-track, let us talk about fasttracking the middle class so that we can make it a race up. 

One of those issues is very much currency manipulation. I know 

my colleague, Senator Schumer, has talked about this, others are 

talking about this as well. Senator Graham and I authored a letter 

with 60 members of the U.S. Senate. That is a pretty magic number, 60 members, who said that we wanted trade agreements to include enforceable currency language. It needs to be in TPA; it 

needs to be in TPP. 

But I am wondering, Mr. Trumka, if you could talk—I know you 

have talked about currency, and the importance of enforcing it, but 

talk more about what this means in terms of jobs, because, from 

the numbers I have seen, we have lost millions of jobs because we 

have not enforced against China, or back when Japan was doing 

it, and they could do it again. So, it seems to me that is a very important part of enforcement. 

Mr. TRUMKA. Absolutely. EPI did a study, and it estimates that 

correcting currency manipulation would create 5.8 million jobs in 

this country. That is almost 6 million jobs with currency manipulation being corrected. If one of the reasons you want to vote for TPP 

is because you want the U.S. to be a world leader, well, China is 

excluded from this agreement. China is a leader in that area, and 

will continue to lead with currency manipulation, and we do nothing about it. 

TPP will not change the rules for currency manipulation between 

us and those trading partners or China and those trading partners. 

It is going to have a dramatic effect and cause a continual drain 

of jobs. Everything that you gain in this agreement by reducing 

tariffs and other things can be obviated overnight by people manipulating their currency. 

I want to say this, Tom. I want to put your mind to rest, because 

I do not like you to worry. The actions of the Federal Reserve do 

72 

not constitute currency manipulation, according to the IMF test, so 

you do not have to worry about that, and that canard can be put 

to sleep for a little while. 

Mr. DONOHUE. Rich, what I said, to be specific, is that others 

would accuse us, because of the use of the Fed to support us during 

the crisis, of manipulating currency. 

Mr. TRUMKA. But you agree it is not currency manipulation. 

Mr. DONOHUE. I agree that it is not in standard terms, and people recently have come out and tried to agree within the international organizations that going ahead and dealing with interest 

rates that way would not be manipulation, and they did it because 

all of Europe has now begun to do that to try to save their own 

economy. 

Senator STABENOW. I think the debate really is, again, foreign 

currency issues versus domestic. We have economists from the 

right and the left who have said, well, it has been done here with 

the Fed. It is not what we are talking about when we are saying 

‘‘currency manipulation.’’ 

I can just say, as we approach not just TPA, but after this TPP, 

the ability to open up with Japan, which right now is closed—I 

grew up with a father who had a car dealership, and my grandpa. 

They could not put a car dealership in Japan. They could not put 

cars in Japan from the United States, cars made in Michigan, in 

Japan right now. So we are trying to open that up. 

But one of the great concerns I have is that we see Japanese 

automakers who have made their whole profit in the past based on 

currency manipulation. Now, let us compete fair and square. That 

is what I am very concerned about as we move forward in all these 

trade agreements. 

Thank you very much, Mr. Chairman. 

The CHAIRMAN. Senator, your time is up. 

Senator Warner? 

Senator WARNER. Thank you, Mr. Chairman. 

Gentlemen, it is great to see both of you again. I guess I want 

to make a couple of points. One, I do fear at times that the analogies back to NAFTA—thank goodness we are in a different world 

at this point. America is much more competitive on manufacturing. 

American energy costs, because of things that you again both have 

supported, like Keystone and others, make us more competitive. 

I think having a trade agreement strengthens our hands in 

terms of attracting jobs. One of the things that Senator Schumer 

and Senator Stabenow mentioned was currency manipulation, and 

I think it needs to be addressed. 

The curious thing is, on currency manipulation, at least in the 

way I read Senator Schumer’s bill, again, this will be a prospective 

tool. But Japan would not be in violation right now on currency 

manipulation. There is even a question of whether China would 

with its current actions. 

Now, should we add more tools to our tool kit going forward, as 

a country that has lost money against companies in China, which 

has manipulated currency? Absolutely. Which has stolen our intellectual property? Absolutely. But the notion of doing nothing right 

now and continuing the status quo would be a disaster for America 

vis-a`-vis China and vis-a`-vis the region. 

73 

I would point out to my colleagues, and I wish Senator Schumer 

were still here, because most of his argument, until he got to currency, was actually, you could argue, in favor of TPA and TPP, because clearly America’s position has weakened, and it seems to be 

retreating. 

I would point out the New York Times article Saturday that 

points out the fact that we as a Congress have not taken up the 

IMF reforms, that we as a Congress have not ended up doing 

Export-Import Bank, that the Chinese have started to create a 

brand-new financial institution that is focused on Asia but ultimately could contest America in terms of the dollar as the reserve 

currency. These are things that, if we want to truly protect American jobs, we ought to be worried about. 

So what do we do? Well, there is 40 percent of the world we are 

talking about here. China is not part of TPP. Who is going to set 

the framework for that region? I believe it ought to be Americanled, and I think the work of the chairman and the ranking member, both in terms of the added transparency, added-on intellectual 

property rights—and I get the fact that the standards are not as 

strong on environment and labor as you would like, but at least 

they are standards, and I believe they are standards that can be 

enforced, which has not been the case in the past. 

If we take these 11 nations and combine them in what I hope 

would be an American-led trading entity, this will give us an ability to actually increase our leverage vis-a`-vis China, which, longterm, I believe we have to watch on every count, in terms of intellectual property theft, in terms of trade advantage, in terms of currency. 

But let us not miss the opportunity for America to once again reassert its national and international leadership in trade, and in a 

way that I believe will actually increase jobs, increase job opportunities. My fear is that re-fighting the battles of the 1990s in 2015 

is not the format we ought to be looking at. 

Let me just close with one question for Mr. Donohue, although, 

Rich, you can come back at me as well. 

Mr. TRUMKA. I would like that. 

Senator WARNER. All right. ISDS. We have folks, members of the 

Senate, who are saying this could open up a whole new can of 

worms. Ambassador Froman has said repeatedly that it does not, 

that there are prudential exceptions in the ISDS language as put 

forward. This is a tool that has not been used a lot in the past. 

There is some question that it is being ramped up and potentially 

could undermine our labor, environmental, and other laws. 

Do you want to make a comment on that, Mr. Donohue? And 

then, obviously, Mr. Trumka gets the last word. 

Mr. DONOHUE. Senator, it is an issue that cannot stand the argument. I mean, it is so much stronger than the argument when you 

look at it. There are 3,000 trade agreements that have these provisions. We have never lost—never lost—one of these issues. They 

have no authority to impede on Federal law. 

If we ever lost a negotiation, it would be the case that somebody 

would have to pay them money. But it has been in trade agreements. It provides a rational way to address issues. The only reason anyone would bring this up as a reason not to do what we are 

74 

about to do here is because they did not want to do it. This argument does not carry water. 

I think it is very important to understand something. I respect 

people—Rich and I disagree 80 percent of the time, but we get 

along pretty well, and I respect his positions. But what is going on 

here is that the people who do not want to do the trade bills, under 

the current circumstance, would like to stop this bill, and it is the 

only way they could do it. 

I think to leave those trade bills on the side of the road, to deny, 

as the Senator from Michigan said, the opportunity to create lots 

more serious jobs in manufacturing and to sell to that 95 percent 

of the people around the world who want to buy our stuff, would 

be a serious mistake. I respect Rich’s really strong views here, but 

I am telling you, he is going to have a hell of a lot more members 

if we do these deals than he is if we do not. 

The CHAIRMAN. All right. Senator, your time is up. 

Mr. TRUMKA. May I respond, Mr. Chairman? 

The CHAIRMAN. Sure. Of course. 

Mr. TRUMKA. First of all, Senator, this is not, again, an issue 

about doing nothing or having TPP. This is about making TPP worthy of every American, and not just Tom’s members, because they 

are going to do really fine. No matter what, they are going to do 

fine, but it is everybody down below who is not. 

When you say, oh, these are some standards and they are better 

than no standards, we were told by the USTR general counsel that 

murdering a trade unionist does not violate these standards, that 

perpetuating violence against a trade unionist does not violate 

these agreements. Excuse me. Excuse me if I am not willing to accept that standard, because I think the country can do better. 

With regard to ISDS, look, this is a special privilege for companies. No individual gets access to ISDS. Tom, we have not lost a 

case yet. We won a couple by technicalities that we should have 

lost. 

There was just a case in Nova Scotia 2 weeks ago, a stone quarry. They wanted to expand a stone quarry, and all around it was 

an environmentally sensitive area. They denied the permit to expand the stone quarry. The ISDS panel said, ‘‘You are entitled to 

damages.’’ They are going to collect because they did not get an extension of their boundaries into a sensitive environmental area. 

This will affect food safety, it will affect the environment. It affects trade unionists, I can tell you that. This is a secret tribunal 

that you cannot control, because, once you give them instructions, 

once that panel is in place, they have the absolute power to do 

what they want to do, and they have interpreted the language that 

you have given them—fair and reasonable economy—beyond any 

stretch of the imagination. 

So, Senator, we can do a lot better, and American workers deserve a lot better, than what we are getting with TPP or with this 

version of fast-track. 

The CHAIRMAN. Senator Casey? 

Senator CASEY. Thank you, Mr. Chairman. I appreciate the hearing. 

75 

I thank Mr. Donohue and Mr. Trumka for being here. I especially 

want to note Mr. Trumka’s Pennsylvania roots. He is using that 

Villanova law degree today, right? 

I am grateful for the opportunity, because it is important that we 

debate this, even an issue that tends to divide the country and 

even divides both political parties between and among themselves 

at times. 

My concern here, with both Trade Promotion Authority and TPP, 

the trade deal itself, is the same concern I had about NAFTA and 

every other agreement since then: what is the impact not just 

broadly on Pennsylvania, that is my first priority, but in particular, 

what does it mean for workers and wages? Unless it can meet the 

test that I set forth with regard to workers and wages, it is very 

difficult for me to support either Trade Promotion Authority or the 

trade deal itself. 

Let me focus, first, on wages. I would argue, and in a very similar way to what Senator Schumer said about the middle class, that 

our central challenge as a country, at least our central domestic 

challenge, is, how do we solve this wage problem? 

There was a recent report by the Economic Policy Institute which 

very graphically, and in a very alarming manner, set forth the correlation between wages and productivity—post-World War II, basically 1948 to 1973, almost perfect alignment. So if productivity was 

up as it was in those years 97 percent, wages went up 91 percent. 

That is the way it ought to work. 

Since 1973, for a whole variety of reasons, not simply because of 

trade obviously, but certainly trade, I believe, is a substantial factor, we have in the United States of America productivity up 74 

percent in those 40 years—1973 to 2013—with wages up 9—not 

91—but 9 percent. Neither political party has come up with an answer to that central challenge. 

Part of this debate, I think, or I should say part of the resolution 

of that problem, is what we do on trade, though it is not the only 

part of the solution. So we see now that a recent paper by economists at the University of Pennsylvania, as well as other universities, found that when workers are displaced by trade and they 

switch jobs, they suffer real wage losses of between 12 and 17 percent. 

So I guess, Mr. Trumka, I would ask you—and some of this you 

set forth in your testimony—what is the best approach in terms of 

using our trade policy to address this wage problem or lack of wage 

growth? 

Mr. TRUMKA. Well, first of all, you have to get it right on trade 

authority, the fast-track authority. I have laid out a series of things 

that would make it right so that Congress has more control and 

can actually certify when they believe that the objectives have been 

met. 

Then, when you look at it, we have laid out a whole chapter. In 

fact, we worked with the European Union in anticipation of TTIP 

and laid out an entire chapter about how to make labor standards 

better so that we do not destroy their standards in Europe or our 

standards here, and I would love to submit that to you. 

Senator CASEY. Thanks very much. 

76 

I want to say for the record as well, you say, in the section of 

your testimony at the very end about labor, and I am quoting here, 

‘‘When you analyze the so-called May 10th provisions and how they 

have fallen short’’—I think very few Americans, very, very few, a 

very tiny percentage of Americans, know the story about what has 

happened in some of these countries to trade unionists. The number of murders in Colombia, you said, was 100 and—— 

Mr. TRUMKA. Five. 

Senator CASEY. A hundred and five. That is evidence enough. 

But even if it does not rise to the level of the gravity of a murder, 

just the intimidation and the threats and the failure to have any 

kind of enforcement mechanism in place, what are we doing about 

that? I think virtually nothing, as a country. So that is where I 

think your proposal, as it relates to giving Congress more of a role 

in terms of weighing in on who these trading partners are and who 

gets into our agreements, is a pretty reasonable and appropriate 

approach. 

I know I am over time. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Menendez is next. 

Senator MENENDEZ. Thank you, Mr. Chairman. 

Let me say at the outset, I think we all have the same goal in 

mind, and that is jobs for our families and markets for our businesses that together build a stronger American economy. Trade 

may offer some new opportunities, but it also brings its challenges. 

We talk about breaking barriers to trade, or ending barriers to 

trade, but I have a broader view of what those barriers are than 

just simply tariffs and regulations. For example, lower labor and 

environmental standards abroad make foreign workers with fewer 

skills less expensive than highly skilled American workers with 

greater expectations for higher living standards. I think the failure 

to protect our intellectual property in other countries leads to cuts 

in the value of our investments and the value of our products in 

international markets. 

So, at the end of the day, for me, I have not just had a kneejerk reaction against all trade bills. I have voted for some when I 

thought the balance was right. But for me, trade bills have been 

about protecting and providing opportunities for my State’s workers and our businesses, in a world where competition is not always 

fair and it is not always open. It seems to me that we should judge 

the standards we set for any trade deal and the deals themselves 

on how well they deliver on those priorities. 

So with that, let me ask you, President Trumka—I heard your 

comments in the office when I was getting ready to come, and I 

know you are very passionate about workers’ rights. I think a barrier to trade is also the inability to enforce the provisions of our 

trade agreements, which I think have sadly not gone in the direction that I would like to see. Those include the provisions of trade 

agreements as they relate to negotiated labor standards. 

So can you talk a little bit—you started with my colleague, Senator Casey—about Colombia, about the lack of enforcement mechanisms, and would you support an amendment that would mandate 

that all countries must meet negotiated labor standards prior to 

77 

any new trade deal going into effect with them, in other words, to 

verify before we trust countries with lax labor standards? 

Mr. TRUMKA. I would. The other thing I would suggest right off 

the bat is that the wage standard that is talked about in most of 

the trade agreements, including TPP, is the minimum wage. It 

does not talk about anything beyond the minimum wage. Vietnam’s 

happens to be 65 cents an hour. 

The lack of enforcement is one of the major problems of labor 

standards and environmental standards. The May 10th agreement 

was a step in the right direction, but it does not get us there. The 

truth is that the Guatemalan situation, where we are dealing with 

gross violations of the ILO standards, has been going on for 6 years 

now with no end in sight. 

Colombia—we have had 105 trade unionists killed since the labor 

action plan was put into place, and there is nothing that they can 

do about it. That is why, Senator, getting the rules right now is so 

important, because no matter how great the enforcement, if the 

rules that you have are inadequate, no matter how great the enforcement, they do not get you there. 

The rules or the standards that are being told to us that are in 

TPP are inadequate to protect American workers and discourage 

American manufacturers and employers from sending jobs offshore. 

So we are all for enforcement, and I am sure Tom would agree that 

we want to eliminate every one of the cheaters that we can, but 

if you do not have the standards to enforce, you cannot get the job 

done. 

Senator MENENDEZ. Well, I agree you need the right standards. 

But even when we have had standards that some of us might agree 

to, we have not had the enforcement mechanisms that actually pursue it. 

Mr. TRUMKA. That is correct. That is absolutely right. 

Senator MENENDEZ. Let me ask you this, President Donohue. I 

have long advocated for strong intellectual property protections in 

any trade deal. Does the Chamber believe that protecting innovation through strong IP protections is an important priority in any 

trade deal? 

Mr. DONOHUE. The Chamber, Senator, has a major, broad system, both international and domestic, for dealing with counterfeiting and the theft of intellectual property. We have put a great 

deal of money in it. We work with individual countries, and we 

work with groups of countries. We have had very significant improvement in about 70 percent of the countries, which are giving 

us a much better protection of intellectual property. 

We are also doing it at home, because you can lose your intellectual property here in the United States faster than you can get 

ready to go to work. The points made about China and others, 

there are still issues where there is a sophisticated way of going 

after your intellectual property. 

Senator MENENDEZ. Let me ask you one final question, if I may, 

Mr. Chairman. The current U.S. standard is 12 years of patent protection for biologics. This is an incredibly important industry in my 

home State of New Jersey, where we are the medicine cabinet to 

the world. 

Do you think that our trade deals should protect that standard? 

78 

Mr. DONOHUE. I do not exactly know the answer to that, but I 

will tell you something. I know more about the protection of biologics and patent deals on pharmaceuticals just in my own family. 

I am dealing with that issue now. I want to do anything I can to 

protect America’s ability to drive the innovation in biologics, pharmaceuticals, and other things that we are doing. You cannot catch 

up with me on that deal. 

Senator MENENDEZ. I am glad to hear that. I know that you will 

have to run after me on that part, so I look forward to working 

with you on that issue. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Senator, your time is up. Let me just say that 

it was Senator Kennedy and myself who drove that 12-year data 

exclusivity, without which we would not have a biologic empire in 

this country. So you are speaking the truth, and I appreciate you 

raising the issue. 

Senator Isakson? 

Senator ISAKSON. Thank you, Mr. Chairman, Ranking Member 

Wyden. I appreciate the opportunity. I have learned a lot from listening to the other questions. I am one who favors doing business. 

I sold houses for 33 years of my life before I came to Congress. I 

never saw the perfect deal, but I made a lot of deals. We had a 

meeting of the minds. This is not a perfect deal, but the question 

I have in my mind is to make sure it is the best deal we can get 

to move forward for our country. 

I give you this premise. Two years ago, Mike Enzi took a mission 

to India. It was called All of America’s Jobs Have Gone to India. 

Do you remember that, Tom, when all the help desks were going 

to India? We went to meet with Mr. Murthy, the owner of Mphasis, 

which is now the largest trading company on the NASDAQ. He has 

an 80-acre campus in Bangalore, India, where he was doing backroom operations for U.S. hospitals and emergency rooms, help 

desks for corporations. 

We asked him this question. We said, Mr. Murthy, all of America 

is so scared all of our jobs are going to India because of what you 

are doing with lower wages, more technology, things like that. 

What would you tell the American people? Why should we not fear 

India? 

He said, ‘‘For a very simple reason. When I started my business, 

I drove an Indian car, I banked with the Bank of India, and I 

drank an Indian soft drink. Today I drink Coca-Cola, I bank with 

Citibank, and I drive a Ford.’’ The point being, when you do business with people, you end up doing business both ways. American 

products were then being sold in India. 

Today, interestingly enough, 12 years later, the help desks have 

come back to the midwestern United States and left India because 

the standards have grown in India for wages, labor laws, and 

things like that, where they are on a comparable playing field with 

the United States. 

So I believe doing business is good for America. I respect the 

middle class. Mr. Trumka, I was in Savannah, GA yesterday, 

where we have a new plant that has come in. Caterpillar has come 

in to Georgia from Japan, where they are now building the tractors 

they were building in Japan. They are building them in Georgia 

79 

and shipping them back to Japan out of the Port of Savannah. 

That is good for manufacturing jobs in Georgia. Those are the 

middle-class jobs. It is very important that we promote jobs and 

promote trade, because 1.2 million Georgians’ jobs are directly dependent on trade. We are now the eighth largest State in the 

Union. We have 10,400,000 people. 

I want to make sure we continue to trade and have a vibrant 

trade policy, not one that looks the other way at currency manipulation, not one that looks the other way at labor standards, but one 

that is realistic enough to continue to do business. Because, if you 

do business with people, you have a better chance to influence 

them than if you do not do business with them. Would you agree 

with that, Tom? 

Mr. DONOHUE. The history of the U.S. economy, from our very 

beginning, was doing business with people around the world to 

bring us products we did not have, innovations we had not yet 

achieved. It has shifted to where we are shifting products and innovations all around the world, which has given us, over time, more 

influence around the world than we otherwise would have had. 

We could sit here for a week and talk about the value of America’s export of ideas and values and products. I think the argument 

on this particular bill here should come down to finally, after all 

these years, putting us in a place to do more of what we have done 

for years, to sell American products, to move American ideas and 

values. I hope we do not screw it up looking for the perfect, or seeking to get rid of this bill because we really do not want to do the 

trade bills. 

Senator ISAKSON. Mr. Trumka, I really have a lot of respect for 

what you do and the people whom you represent. One of the things 

you talked about that meant a lot to me and that I believe in seriously is workers’ rights, and making sure people are treated right, 

and not doing business with people who abuse other people. 

But you have a better way of exporting your values overseas if 

you are doing business with somebody rather than if you are folding your arms and not doing it. One example: Swaziland. Swaziland is in Africa. I do a lot of work in Africa with AGOA, the African Growth and Opportunity Act, which I think this week we are 

going to hopefully extend for 10 years. 

In that, Swaziland was a participant until we learned they were 

beating up and imprisoning their workers for not working hard 

enough or long enough or being productive enough, and we suspended them on a temporary basis. They came back to the table. 

They started treating their workers right, because doing business 

with America was more important than abusing their workers. 

So my point is, and I would like you to respond to this, do we 

not have better leverage by having influence, by doing business 

with people, to encourage them to do better in terms of the way 

they treat their folks, or do we have to insist on it being a part of 

the deal? 

Mr. TRUMKA. First of all, it is important to do business with people, but the rules are important because the rules and the trade 

agreements that you have been talking about have been resulting 

in a $500-billion deficit for this country each and every year, trillions and trillions of dollars flowing out and not coming in. That 

80 

is why it is important to have the rules. It is also important to 

have the rules whenever you engage them to have the ability to 

help correct those things. 

Now, if they are going to agree to the ILO core standards—and, 

quite frankly, if we are willing to agree to the ILO core standards, 

because we have not been willing to do that yet—then you have a 

chance to really influence them and improve their conduct. 

But if all you do is say, all you have to do is comply with your 

minimum wage and then, when they do not even comply with their 

minimum wage, we do not have the ability to influence or change 

it, it goes the opposite way, Senator. 

They look at the United States as perpetuating that bad treatment, not correcting it. We are better than that, and we can do better than that if we write the right rules and we have an agreement 

that we can enforce. Then we can be a positive force for good 

around the world. But this trade agreement will not do that. 

Senator ISAKSON. Mr. Chairman, let the record show I gave both 

sides a chance to make their case. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Brown, you are up. 

Senator BROWN. Thank you, Mr. Chairman. Senator Wyden, 

thank you. Mr. Trumka, Mr. Donohue, good to see you both. 

Mr. Trumka, a lot of people accuse you—and I might add, accuse 

me—of being against trade, of being protectionist, of being stuck in 

the last century, or even the one before the last century. Did AFL 

oppose the idea of TPP from the beginning? 

Mr. TRUMKA. Absolutely not. Quite the contrary. We engaged almost 5 years ago. We have submitted dozens and dozens, a couple 

of hundred, suggested language changes to make the agreement 

better. We did, and still want, to be able to support TPP, but in 

its current standards it falls far short of what is necessary. 

Senator BROWN. So you can see from the amendments that a 

number of us will offer—there will be a lot of them, Mr. Chairman, 

as you may have heard by now, on Thursday, or Wednesday, I 

guess—you can see that this trade agreement, that TPA and TPP, 

could be improved significantly. Would you name two or three ideas 

that you have tried to constructively engage USTR or the staff of 

this committee in to give me just some ideas of where we could do 

much better than we are doing on this? 

Mr. TRUMKA. Well, with regard to TPA, first of all, you need to 

ensure that Congress approves trade agreement partners before 

their negotiations begin, that you create objectives that are specific 

to each individual trading partner, and that Congress and not the 

executive branch determines whether congressional trade objectives 

have been met. 

We have submitted a whole chapter on labor to make it better, 

we have submitted a chapter on currency, we have submitted a 

chapter on ISDS, and we have submitted a chapter on the environment that does not include procurement rules, Buy America, and 

a number of other things that we think could make TPP not only 

a good agreement, but one worthy of the American people. 

Senator BROWN. And little of this has been accepted? 

81 

Mr. TRUMKA. Well, in fact, less than three or four changes have 

even been accepted by our Trade Representative to put them across 

the table. 

Senator BROWN. I heard you said that in your testimony. 

Mr. TRUMKA. They have not been included in our proposal, no. 

Senator BROWN. Well, like you, I have tried to engage in the 

process, both at a member and a staff level with the U.S. Trade 

Representative. I have pushed for currency disciplines, I have 

pushed for better enforcement of labor standards, for improved 

state-owned enterprise language, for modified investor-state provisions, literally more than a dozen items. If I were anti-trade, I, like 

you, would not take the time, I would not bother, I would not get 

my staff to put the time in it takes in this effort. 

USTR claims they have had 51 meetings. Ambassador Froman 

sat where you are sitting late last week. They claim they have had 

51 meetings with me and my staff. That may be true, I do not 

know. We have asked them, though, for the list of meetings, and, 

true to form, they have not responded, as they so often do not, to 

members of this committee, let alone the rest of the House and 

Senate. 

When they do meet with me, it is not to exchange ideas or to rethink how we do things, it is to tell me why I am wrong, that my 

concerns are not valid. The administration has taken this approach 

that you are either with us or against us on trade—nothing in between. I have heard your testimony through all of this about how 

there is TPP, there is present law, and there is something in between that is much more desirable that we could get real agreement on. 

I just wonder why, on trade agreements, when we have seen 

what kinds of permanence they bring and how they affect all Americans, why there is so much hostility to changing the direction of 

trade policy. The American public, as you point out, is pretty cynical about this and pretty skeptical about Congress’s learning nothing, where this TPA, with some minor exceptions, is not much different from the TPA of 10 years ago. It has been 13 years since 

Congress passed fast-track, yet the bill we are considering today is 

fundamentally the same, again, with small, minor, relatively insignificant exceptions. 

I am going to continue my effort tomorrow to improve U.S. trade 

policy. I think we have a real opportunity in this amendment process. My question then for you, Mr. Trumka, the last question, is, 

can you comment in sort of a general, but substantive, way on 

what is at stake if we do not improve U.S. trade policy? What happens to our country? 

I have heard Mr. Donohue’s vision, that the world falls apart, 

more or less, if we do not engage and China takes over the world 

and maybe colonizes the United States. I am not sure where he 

was going with that. But would you give us your view on what actually happens if we do not do this as written today? 

Mr. TRUMKA. TPP is 40 percent of the world GDP, and TTIP will 

be another 20 percent. That means those two agreements will cover 

60 percent of the world’s economy. If it is not done right, you will 

see the continuation of wage stagnation, you will see the continuVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00085 Fmt 6601 Sfmt 6601 R:\DOCS\99678.000 TIMD
82 

ation of a growth in inequality in this country, you will see the 

middle class continue to shrink and get decimated. 

You will also see, eventually, the weakening of our economy, because you cannot continually have a massive trade deficit every 

year that sucks jobs out of the country and not remedy that in 

some way or another. So one way to remedy it is, you stop buying 

other products, I guess. That would create a tremendous hardship 

on our economy and on the American worker, something that none 

of us, I think, wants to see. 

Senator BROWN. Thank you. 

I heard somebody remark around the table—and I will close with 

this, Mr. Chairman; it is not a question, just a quick statement— 

that $1 billion in services trade can translate into 7,000 jobs. That 

is great. It is a little bit, though, like saying the Cleveland Indians 

scored six runs yesterday. Yes, well, but the Tigers scored eight. So, when you talk about $1 billion in services, and that is 7,000 

jobs, what is it when the surplus, when we are buying so much 

more than we are selling—China, $300 billion a year—how many 

jobs is that? I mean, President Bush the first said 13,000 jobs for 

every $1 billion in trade deficit, so it is a pretty significant job loss 

that we continue to add to with one trade agreement after another. 

I will stop there, Mr. Chairman, and thank you for your indulgence. 

The CHAIRMAN. All right. 

Senator Wyden would like to make a comment, then we are 

going to turn to Senator Grassley. 

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

at the beginning because I wanted all of my Democratic colleagues 

to have a chance to speak first. While Senator Brown is here, I just 

want to be clear that I think he has made a very valid point that 

the playbook on international trade has to change. Trade agreements in 2015 have to be very different than trade agreements 

from the 1990s. The President, to his credit, said in the State of 

the Union address that past agreements have not lived up to the 

hype. 

So we have to make sure our trade policies are not part of a time 

warp. All you have to do is recognize that 25 years ago nobody had 

an iPhone, nobody was texting. China was not an economic powerhouse. It is a different world. 

I just want to tick off—and do this briefly, because I did not ask 

any questions earlier, while my colleagues are still here—what is 

different with respect to the legislation that will be considered this 

week and, in effect, the old playbook. 

The first area in which it is different, and I especially appreciate 

Senator Brown focusing on this, is on trade enforcement. Trade enforcement has to focus on protecting American jobs, high-skill 

American jobs that pay good wages. People say, why in the world 

would you be talking about a new trade agreement if you are not 

enforcing the laws on the books? You see that reflected in this legislation. 

For example, it includes the bipartisan ENFORCE Act, Senator 

Brown, colleagues on the other side, Senator Portman and others, 

to go after tax cheats. It includes an upgrade on 301, something 

that I think our friends in Labor have been absolutely right about. 

83 

It includes a measure to have warning bells go off earlier when our 

industries and our jobs are threatened, and to go off more loudly. 

That is number one. 

Number two, with this legislation, the United States is going to 

aim higher in trade deals. In the 1990s, labor and environment 

were basically an after-thought. If you had said back in the 1990s 

you were going to have enforceable labor and environmental issues, 

people just laughed at you. That is not the case any longer. They 

are going to be enforceable. They are going to be imbedded in the 

text, and, for the first time, there will be a new provision to focus 

on human rights. 

Third, I touched on the secrecy question. I could tell you, having 

been a young Congressman in those days, the public and lots of 

people in the Congress were just in the dark about what was being 

debated with respect to trade. Those days are over. The American 

people are basically going to be able to sit at a town hall meeting 

for up to 4 months with the actual text of the agreement so they 

can ask questions of their member of Congress. 

Fourth, the legislation goes further than any trade promotion bill 

to protect American sovereignty. It guarantees that trade deals 

cannot change U.S. law without congressional action. It guarantees 

that foreign companies will have no more rights in international 

tribunals than in American courts today, no back door to let anybody skirt our laws. 

Fifth, this legislation—and Chairman Hatch knows about this, 

because we had a lot of spirited conversations about it—protects 

Congress’s ability to put the brakes on a bad deal. This is not a 

green light for TPP or anything else, but it is an opportunity for 

Congress to stop a bad deal in its tracks. 

The last point I will make responds to why I have been in this 

from the beginning. I think Senator Brown, Mr. Trumka, and others are spot-on in talking about the middle class and how important it is that they get a better break, because wages for them have 

been stagnant for a lot of years. 

Here is the way I am looking at the world, and it was really kind 

of the defining judgment I made in getting into this. In the developing world, the middle class is going to double between now and 

2025. That means there are going be a billion middle-class consumers in the developing world, and I want them to buy our products. I want them to buy our computers, and our eggs, and our 

wine, and our cars. 

In Oregon, they are buying our helicopters and our bikes. That 

is the chance for the American people to get high-skill, high-wage 

jobs. Let us fight here for the Oregon brand and the American 

brand. I think everybody knows we are going to have a spirited debate. We have seen some of it today, and the dust-bowl level will 

go up again tomorrow. 

But I want to tell Mr. Trumka and Mr. Donohue that I am going 

to work very closely with both of you in the days ahead. I am committed to doing this in a way that works for both our middle-class 

families and our businesses. We can get this right. Trade done 

right will be a winner for American families. 

84 

Mr. Chairman, I want to thank you for the opportunity to wrap 

this up and look forward to working with you and our colleagues 

tomorrow. 

The CHAIRMAN. Well, thank you, Senator Wyden. 

Senator Grassley, you are going to be our last questioner. At 

least, I expect you to be the last questioner. 

Senator GRASSLEY. Well, since I was absent, I do not want the 

witnesses, or anybody else to think I do not have an interest in this 

trade issue. I had a hearing on juvenile justice reform in the Judiciary Committee that I chair, and I just got done with that. But 

I thought I ought to come by and speak my support for moving 

ahead on trade agreements. 

To me, it is common sense, when 95 percent of the people live 

outside the United States, and we are an exporting Nation, that we 

should do whatever we can do to get our products into other countries, and particularly countries that have higher trade barriers 

than what we have, and most countries do. Leveling the playing 

field—and that is a phrase we use around this Hill so many times 

it gets over-used—for our exports creates jobs, and those jobs pay 

15 percent above the national average, so it seems to me that is 

something we need to pursue. 

Common sense being that 95 percent of the people are outside of 

the United States, then that 95 percent is where our market is. So 

I want to compliment the chairman and the ranking member for 

moving ahead on this package of bills we have, and particularly on 

giving the President the authority that he needs, and we have 

given it to Presidents on and off since World War II to do what 

they can to level the playing field for American exporters and the 

jobs that are connected with that. 

I yield. 

The CHAIRMAN. Thank you, Senator Grassley. 

This morning, Congress received a letter signed by nearly 300 

State and local chambers of commerce, manufacturing organizations, and farm bureaus urging ‘‘swift action to renew Trade Promotion Authority.’’ So, without objection, this letter will be entered 

into the record at this point. 

[The letter appears in the appendix on p. 103.] 

The CHAIRMAN. Now, let me just say, I want to thank my colleagues for their participation today. And, of course, I want to 

thank our two heavy-weight witnesses for joining us here. I have 

great respect for both of you and have known you for a long time. 

I want everyone to know that I recognize that there are passionately held views on both sides of these issues and that these debates are not easy for anyone. Nobody has had a picnic here. You 

all know where I stand when it comes to trade. I want to convince 

everyone to support TPA. I wish we could report a TPA bill unanimously, but it is pretty clear we are not going to be able to do that. 

Still, Senator Wyden and I have done our best to create both a 

product, and a process on this legislation, that is bipartisan. So far, 

I think we have really been successful, and I think most people 

would agree with that. This is important for our country. It is important for our industry in our country. 

In the end, I think we will have members from both parties supporting our bill. I really want to personally thank Senator Wyden, 

85 

once again, for his help on this effort. It has been a very difficult 

one for him, as it has been for many of my colleagues on the Democratic side. Mr. Trumka, you have not helped him here today very 

much with your criticisms. 

Mr. TRUMKA. Thank you, Mr. Chairman. I appreciate that. 

[Laughter.] 

The CHAIRMAN. Well, I expect nothing less than that from you. 

I have known you a long time, and I have a lot of respect for you. 

But Senator Wyden deserves a lot of credit here. I think it is 

very important that we move forward and that we let the committee function properly. I am looking forward to an even more 

lively discussion and debate tomorrow as we mark up this bill. 

Let me just say that I have tremendous respect for both of you. 

Mr. Donohue, you have been around here a long time. You are no 

shrinking violet, I will tell you. You handle yourself very well, and 

you represent the business community about as well as anybody I 

have ever seen, and I have seen a lot of great business leaders. 

Mr. Trumka, I think you represent the unions very well. You are 

a tough guy, you are a smart guy. Even though we disagree on this 

bill, I have been paying pretty strict attention to you too. This is 

basically your administration that is doing this. I am trying to help 

the President on this bill. I personally think they are right in pushing it the way they have, but I still have the obligation to just tell 

you how much I respect and appreciate you as well. 

I look forward to—we are going to have to find some things we 

can work on together. We have in the past, but I think we have 

to find some things to work on together. I am going to count on you 

to help me to understand that, all right? 

With that, let me just say that I have been really appreciative 

that you both have been willing to stay this long and to answer 

every question anybody has asked. 

With that, we will recess until further notice. Thanks so much. 

Mr. TRUMKA. Thank you, Mr. Chairman. 

The CHAIRMAN. You bet. Thank you. 

[Whereupon, at 12:10 p.m., the hearing was concluded.] 

(87) 

A P P E N D I X 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF THOMAS J. DONOHUE, PRESIDENT AND CHIEF EXECUTIVE

OFFICER, U.S. CHAMBER OF COMMERCE

April 21, 2015 

Chairman Hatch, Ranking Member Wyden, and distinguished members of the 

committee, my name is Tom Donohue, and I am President and Chief Executive Officer of the U.S. Chamber of Commerce (Chamber). I am pleased to testify today on 

the importance of renewing Trade Promotion Authority (TPA). The Chamber is the 

world’s largest business federation, representing the interests of more than 3 million 

businesses of all sizes, sectors, and regions, as well as state and local chambers and 

industry associations. 

In the Chamber’s view, reinvigorating economic growth and creating good jobs are 

the nation’s top priorities. Approximately 17.4 million Americans are unemployed, 

underemployed, or have given up looking for work. Participation in the workforce 

stands at the lowest since 1978, reflecting a significant level of discouragement. 

World trade must play a central role in reaching this job-creation goal. After all, 

outside our borders are markets that represent 80% of the world’s purchasing 

power, 92% of its economic growth, and 95% of its consumers. The resulting opportunities are immense, and many Americans are already seizing them: One in four 

manufacturing jobs depends on exports, and one in three acres on American farms 

is planted for hungry consumers overseas. 

Nearly 40 million American jobs depend on trade, as detailed on the coalition 

website www.TradeBenefitsAmerica.org. Consider the number of jobs that depend on 

trade just in the states represented by senators serving on this committee: Colorado 

(709,000), Delaware (123,000), Florida (2.4 million), Georgia (1.2 million), Idaho 

(195,000), Indiana (796,000), Iowa (448,000), Kansas (392,000), Maryland (790,000), 

Michigan (1.2 million), Nevada (350,000), New Jersey (1.2 million), New York (2.6 

million), North Carolina (1.2 million), Ohio (1.5 million), Oregon (484,000), Pennsylvania (1.6 million), South Carolina (559,000), South Dakota (124,000), Texas (3 million), Utah (374,000), Virginia (1.1 million), Washington (915,000), and Wyoming 

(68,000). 

Another excellent resource on the benefits of trade is www.TradeSupports 

Jobs.com, a website offering extensive information on U.S. exports by state and congressional district, with detailed data on manufactured goods and services exports, 

the direct jobs they support, and the markets for which they are bound. 

A LEVEL PLAYING FIELD FOR TRADE

While the United States receives substantial benefits from trade, there is more 

than a grain of truth in the observation that the international playing field is unfairly tilted against American workers. The U.S. market is largely open to imports 

from around the world, but other countries continue to levy tariffs on U.S. exports 

that in some cases are quite high, and foreign governments have erected other kinds 

of barriers against U.S. goods and services. 

Americans rightly sense that this status quo is unfair to U.S. workers, farmers, 

and businesses. U.S. exporters face higher tariffs abroad than nearly all our trade 

competitors. The United States received a rank of 130th among 138 economies in 

terms of ‘‘tariffs faced’’ by its exports, according to the World Economic Forum’s 

88 

Global Enabling Trade Report. That means U.S. exporters are often at a marked 

disadvantage to our competitors based in other countries. In addition, a thicket of 

non-tariff barriers adds to the burden exporters face. 

No one wants to go into a basketball game down by a dozen points from the tipoff—but that is exactly what American exporters do every day. These barriers are 

particularly burdensome for America’s small and medium-sized companies, approximately 300,000 of which are exporters. The U.S. Chamber believes that American 

workers, farmers, and companies must be allowed to operate on a level playing field 

when it comes to trade. 

BENEFITS OF U.S. TRADE AGREEMENTS

The good news is that America’s trade agreements do a great job creating a level 

playing field—and tremendous commercial gains are the proof in the pudding. The 

U.S. Chamber of Commerce in February released The Open Door of Trade: The Impressive Benefits of America’s Free Trade Agreements, a report which catalogues the 

success of these agreements and makes the case for swift renewal of TPA. 

Following are some of the report’s highlights: 

• America’s 20 trade agreement partners represent just 6% of the world’s population but buy nearly half of U.S. exports. By tearing down foreign barriers to 

U.S. products, these agreements have a proven ability to make big markets 

even out of small economies. 

• U.S. exports to new trade agreement partners have grown by an annual average 

of 18% in the five-year period following an agreement’s entry-into-force. 

• The increased trade facilitated by these trade agreements boosted U.S. output 

by more than $300 billion and in turn supports an estimated 5.4 million U.S. 

jobs, according to an earlier study commissioned by the Chamber entitled Opening Markets, Creating Jobs: Estimated U.S. Employment Effects of Trade with 

FTA Partners. 

• Trade-related jobs also tend to pay well: For instance, manufacturing jobs tied 

to exports pay wages that average 18% higher than those that are not. 

• For those worried about the U.S. trade deficit, trade agreements are clearly the 

solution—not the problem. The United States has a trade surplus with its 20 

trade agreement partners as a group. This includes sizeable trade surpluses in 

manufactured goods, services, and agricultural products. 

• U.S. manufacturers’ exports to trade agreement partners have topped $650 billion in recent years, generating revenue of about $55,000 for each American factory worker. 

• U.S. agricultural exports to trade agreement partners increased by more than 

130% in the past decade and today exceed $56 billion. 

• Topping $700 billion last year, U.S. services exports are growing rapidly and 

support millions of high-wage jobs even though the potential for services industries to engage in international trade is almost untapped. 

• Trade agreements sweep away trade barriers that are especially tough on the 

300,000 small and medium-size companies that account for 98% of all U.S. exporters and one-third of goods exports. 

• Imports play a critical role in the U.S. economy as well. Companies’ imports of 

intermediate goods, raw materials, and capital goods account for more than 60% 

of all U.S. goods imports and help them maintain their global competitiveness. 

TRADE PROMOTION AUTHORITY

To get more of these benefits, Congress must approve the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (‘‘TPA bill’’), which will renew 

TPA. The U.S. Chamber strongly supports this bill and urges Congress to approve 

it swiftly. 

TPA is a critical tool to help Americans sell their goods and services to the 95% 

of the world’s customers living outside our borders. The United States has never entered into a major trade agreement without it. A simple form of TPA was first enacted in 1934, but the latest iteration lapsed in 2007. 

89 

TPA is premised on the commonsense notion that the executive and legislative 

branches of the federal government should work together on trade. The Constitution 

gives Congress authority to regulate international commerce, but it gives the president authority to negotiate with foreign governments. 

TPA allows Congress to show leadership on trade policy by doing three important 

things: (1) It allows Congress to set negotiating objectives for new trade pacts; (2) 

it requires the executive branch to consult extensively with Congress during negotiations; and (3) it gives Congress the final say on any trade agreement in the form 

of an up-or-down vote. The result is a true partnership stretching the length of 

Pennsylvania Avenue. 

While foreign governments may initiate negotiations with the United States without TPA in place, they have historically proven leery of making the difficult political 

choices associated with the final stages of negotiations in its absence. In this sense, 

TPA strengthens the hand of U.S. negotiators, helping them secure the best possible 

deal for U.S. workers, farmers and companies. 

Without TPA, the United States is relegated to the sidelines as other nations negotiate trade agreements without us—putting American workers, farmers, and companies at a competitive disadvantage. According to the World Trade Organization 

(WTO), 398 bilateral or regional trade agreements are in force around the globe 

today, but the United States has agreements in place with just 20 countries. There 

are more than 100 trade agreements currently under negotiation among our trading 

partners. 

The United States cannot afford to stand on the sidelines as foreign governments 

rewrite the rules of international trade and American companies are placed at a 

competitive disadvantage in market after market. If we do, American workers, farmers and companies will pay the price. 

STRONG NEGOTIATING OBJECTIVES

From the U.S. business community’s perspective, the negotiating objectives laid 

out in the TPA bill are balanced, ambitious, and well suited for attaining trade 

agreements that are commercially valuable. They reflect the evolution in U.S. trade 

agreements in recent years and push the envelope to include many of the best ideas 

in contemporary trade policy. 

The TPA bill directs U.S. trade negotiators to seek high-standard and comprehensive agreements. Indeed, U.S. trade agreements must be comprehensive, avoiding 

exceptions or carveouts. Whenever one party in ongoing trade negotiations seeks to 

exclude a given commodity or sector from an agreement, other parties follow suit, 

limiting the agreement’s reach and its benefits. This is not just a matter of tariff 

policy: The TPA bill admirably instructs U.S. negotiators to seek agreements that 

extend their rules to all industries. This sends a positive signal to other governments about the priority the United States ascribes to trade agreements based on 

high standards and comprehensive coverage. 

The Chamber applauds the clear, concise objectives in the TPA bill that give our 

negotiators a mandate to achieve in our trade agreements the same effective protection and balance that are found in U.S. intellectual property law. It is devastating 

for American workers and companies to have their ideas and ‘‘know how’’ copied and 

stolen, or likewise to see our innovations shut out of overseas markets, because we 

either did not have a trade agreement with a key market in place or because that 

agreement lacked the strong protections we need. This bill strikes exactly the right 

balance. 

The TPA bill’s objectives on digital trade and cross-border data flows are another 

example of its modernized negotiating objectives. In today’s global economy, companies often move data across borders as they create new products, enhance productivity, deter fraud, protect consumers and grow their business. This is particularly 

important for services, many of which were considered ‘‘non-tradable’’ before the advent of the Internet. Recent studies estimate that within ten years products and 

services reliant on cross-border data flows will add over $1 trillion annually to the 

global economy, with the United States at the fore. To seize these benefits, U.S. 

trade agreements should prohibit restrictions on legitimate cross-border information 

flows and bar local infrastructure mandates relating to data storage. 

The TPA bill also directs U.S. negotiators to seek rules in future trade agreements 

to ensure that private companies are not put at a disadvantage when they compete 

with state-owned enterprises (SOEs) and other national champions. U.S. negotiators 

90 

are instructed to guard against anti-competitive behavior by SOEs and ensure a 

level playing field. The Chamber applauds these objectives. 

The TPA bill’s negotiating objectives also direct U.S. negotiators to consider how 

goods are produced in the 21st century using global value chains. Today, the goods 

we buy are usually labeled ‘‘Imported’’ or ‘‘Made in the USA’’—with no middle 

ground. However, companies often rely on global value chains that span national 

borders to hone their competitiveness. The United States is a principal beneficiary 

of these supply chains. Making customs and border procedures more efficient and 

enacting other trade facilitation reforms will remove sand from the gears of global 

value chains and enhance U.S. competitiveness. 

The Chamber also supports the TPA bill’s negotiating objective that parties to a 

trade agreement avoid manipulating exchange rates to gain an unfair competitive 

advantage. On this matter, the United States should continue to press economies 

to adopt market-determined exchange rate systems that reflect economic fundamentals, and there are several fora for such discussions. In recent years, the G–7 economies have affirmed that they will not target exchange rates to achieve domestic economic objectives. G–20 members have made similar commitments to avoid persistent exchange rate misalignments and refrain from competitive devaluations. 

The notion that trade policy mechanisms can address monetary policy challenges 

elicits concern in many quarters. To cite one, it is not in the U.S. interest to enter 

into an international agreement that would handcuff U.S. monetary policy and limit 

the flexibility of the Federal Reserve to respond to economic circumstances. Amid 

these concerns, the Chamber believes the TPA bill’s negotiating provision relating 

to currency reflects a careful and reasonable balance. 

As noted, the TPA bill reflects many of the best ideas in contemporary trade policy. Negotiating objectives have been modernized to reflect our changing economy. 

The careful bipartisan compromise on labor and environmental issues included in 

the four most recent U.S. trade agreements is reflected in the TPA bill—with some 

enhancements—not least because it allowed those agreements to attract broad bipartisan support. There is nothing ‘‘fast’’ about the manner in which this bill was 

prepared, and it plainly reflects input from many quarters. Given the careful balance attained in many areas, the Chamber urges Members of Congress to forgo 

amendments and support this bill, which squarely reflects the U.S. national interest. 

THE TRANS-PACIFIC PARTNERSHIP

And how should TPA be used? The first priority is the Trans-Pacific Partnership 

(TPP). 

The booming Asia-Pacific region is a logical focus for America’s trade negotiators. 

Over the last two decades, the region’s middle class grew by 2 billion people, and 

its spending power is greater than ever. That number is expected to rise by another 

1.2 billion by 2020. According to the International Monetary Fund, the world economy will grow by more than $20 trillion over the next five years, and nearly half 

of that growth will be in Asia. 

U.S. workers, farmers and businesses need access to those lucrative markets if 

they are to share in this dramatic growth. However, U.S. companies are falling behind in the Asia-Pacific. While U.S. exports to the Asia-Pacific market steadily increased from 2000 to 2010, America’s share of the region’s imports declined by about 

43%, according to the think tank Third Way. In fact, excluding China, East Asia 

in 2014 purchased a smaller share of U.S. exports in 2014 than it did five years 

earlier, despite a 54% increase in total U.S. merchandise exports in that period. 

One reason U.S. companies have lost market share in the Asia-Pacific region is 

that some countries maintain steep barriers against U.S. exports. A typical Southeast Asian country imposes tariffs that are five times higher than the U.S. average 

while its duties on agricultural products often soar into the triple digits. In addition, 

a web of nontariff and regulatory barriers block market access in many countries. 

Trade agreements are crafted to overcome these barriers. However, Asia-Pacific 

nations are clinching trade deals among themselves that threaten to leave the 

United States on the outside looking in. The number of trade agreements between 

Asian countries surged from three in 2000 to more than 50 today. Some 80 more 

are in the pipeline. Meanwhile, the United States has just three trade agreements 

in Asia (with Australia, Singapore and South Korea). 

91 

This challenge is growing: 16 countries are launching expedited negotiations for 

a trade deal called the Regional Comprehensive Economic Partnership (RCEP). It 

includes Australia, China, India, Japan, Korea and New Zealand—as well as the 10 

ASEAN countries—but not the United States. 

The TPP is America’s best chance to secure a level playing field for trade in the 

Asia-Pacific region. Its objective is to achieve a comprehensive, high-standard and 

commercially meaningful trade and investment agreement with 11 other AsiaPacific nations, including Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam. It also includes Canada, Mexico, Peru and Chile, thus offering 

a chance to integrate existing U.S. trade agreements in the Americas. 

One top U.S. priority is to ensure the TPP protects intellectual property (IP), 

which plays a critical role in driving economic growth, jobs and competitiveness. According to the U.S. Department of Commerce, IP-intensive companies account for 

more than $5 trillion of U.S. GDP, drive 60% of U.S. exports and support 40 million 

American jobs. To build on these strengths, the TPP must include robust IP protection and enforcement provisions that build on the U.S-Korea Free Trade Agreement 

and provide 12 years of data protection for biologics consistent with U.S. law. 

Completing the TPP would pay huge dividends for the United States. The agreement would significantly improve U.S. companies’ access to the Asia-Pacific region, 

which is projected to import nearly $10 trillion worth of goods in 2020. A study by 

the Peterson Institute for International Economics estimates the trade agreement 

could boost U.S. exports by $124 billion by 2025. 

Working closely with the Office of the U.S. Trade Representative (USTR), the 

Chamber has led the business community’s advocacy for the inclusion of strong disciplines in the TPP trade agreement on intellectual property, due process in antitrust enforcement, state-owned enterprises, and regulatory coherence. 

The TPP has the potential to strengthen our nation’s commercial, strategic and 

geopolitical ties across one of the fastest growing and most influential parts of the 

world. It would be an economic shot in the arm, boosting growth and jobs across 

the country. 

THE TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP

As we consider new trade accords with our biggest commercial partners, Europe 

calls out for attention. Indeed, the European Union is by far America’s largest commercial partner. 

Together, the United States and the European Union account for nearly half of 

global economic output, with each producing approximately $17 trillion in GDP. 

Total U.S.–EU commerce—including trade in goods and services and sales by foreign affiliates—tops $6.5 trillion annually and employs 15 million Americans and 

Europeans. 

The U.S.–EU investment relationship is even more impressive. Companies 

headquartered in EU Member States had invested nearly $1.7 trillion in the United 

States by the end of 2013 and directly employ more than 3.5 million Americans. 

Similarly, U.S. firms have invested $2.4 trillion in the EU—a sum representing 

more than half of all U.S. investment abroad. It’s also nearly 40 times as much as 

U.S. companies have invested in China. Because of this unique investment-based relationship, approximately 40% of U.S.–EU trade is intra-industry and intra-firm, 

which means that removing barriers to this trade will substantially boost the competitiveness of our companies in global markets. 

The United States and the Member States of the EU share common values as 

strong democracies with an enduring commitment to civil liberties and the rule of 

law. We uphold similar social, labor and environmental standards in our laws and 

regulations. 

For these reasons and more, the United States and the EU in July 2013 launched 

the TTIP negotiations. The goal is to eliminate tariffs; open up services, investment 

and procurement; and promote regulatory cooperation to ensure high levels of 

health, safety and environmental protection while cutting unnecessary costs. 

The benefits could be immense. The sheer volume of transatlantic commerce is so 

large that eliminating today’s relatively modest trade barriers could bring big benefits. According to the London-based Centre for Economic Policy Research (CEPR), 

the TTIP would boost U.S. exports to the EU by $300 billion annually, add $125 

92 

billion to U.S. GDP each year and increase the purchasing power of the typical 

American family by nearly $900—with similar benefits for Europeans. 

One key goal in the negotiations is to tackle regulatory barriers to trade. Companies selling their products on both sides of the Atlantic incur high costs complying 

with both U.S. and European regulations, even when they are very similar. For example, U.S. automakers run crash tests to comply with U.S. safety regulations but 

must do so a second time to comply with EU standards—and vice versa. Mutual recognition of these regulations would save consumers up to 7% on each car or truck 

and enhance the global competitiveness of U.S. and European companies. 

TTIP also is an opportunity to raise global standards. With a combined GDP of more than $30 trillion, the sheer size of the transatlantic economy will incentivize 

other countries to look to standards set in the TTIP. Accordingly, the United States 

and the EU should establish a high bar in such areas as cultivating the digital economy and combating trade and investment protectionism. 

Indeed, refusing to pursue this agreement would exact a price as other countries 

enter into new trade pacts with the EU. Already, the EU has dozens of trade agreements in force with such countries as Mexico, Central America, Colombia, South Africa and South Korea. It has concluded negotiations for additional agreements with 

Canada, Singapore, Ukraine and others. 

The EU is currently in negotiations with India, Japan, Malaysia, Thailand, Vietnam and the Mercosur bloc. Without a trade agreement in place with the EU, U.S. 

workers and companies could be put at a disadvantage in the giant European marketplace. 

Finally, the TTIP would not benefit the United States and the EU at the expense 

of other nations. In fact, liberalizing transatlantic trade would increase GDP in the 

rest of the world by as much as $130 billion, according to a CEPR study. 

THE TRADE IN SERVICES AGREEMENT

While it hasn’t made national headlines, the United States has joined with more 

than 50 other countries to launch negotiations for a high-standard trade agreement 

in services dubbed the Trade in Services Agreement (TISA). This exciting new accord, covering about two-thirds of the global market for services, has the potential 

to ignite economic growth and job creation in the United States and abroad. 

Services are a clear strength for the United States, which is by far the world’s 

largest exporter of services. U.S. services exports reached $710 billion in 2014, and 

the U.S. services trade surplus reached $232 billion. In addition, services sales by 

foreign affiliates of U.S. multinational corporations topped $1 trillion. Combined, 

total sales of U.S. services abroad reached approximately $1.7 trillion in 2014. 

Contrary to popular misconception, many jobs in services pay well. Approximately 

18 million Americans are employed in business services such as software, architectural services, engineering and project management services, and insurance—all of 

which generate billions of dollars in exports. Wages in these sectors are 20% higher 

on average than those in manufacturing, which employs about 12 million Americans. 

Even so, the potential for service industries to engage in international trade is 

almost untapped. One in four U.S. factories exports, but just one in every 20 providers of business services does so. Just 3% of U.S. services output is exported, according to the Peterson Institute for International Economics. 

The chief goals of the United States in TISA are to expand access to foreign markets for U.S. service industries and prohibit discrimination against American service 

providers in foreign markets. In addition, the TISA will put in place rules to prevent 

regulations from being used as disguised trade barriers that shut out U.S. services 

exports. 

The payoff from the TISA could be huge. Eliminating barriers to trade in services 

could boost U.S. services exports by as much as $860 billion—up from 2013’s record 

$682 billion—to as much as $1.4 trillion, according to the Peterson Institute. Such 

a dramatic increase could create as many as three million American jobs. 

The TISA may not be making headlines anytime soon, but its potential to drive 

economic growth and job creation in the United States and beyond is significant. 

The American business community is committed to working closely with U.S. negotiators, foreign governments and Congress to press for a strong agreement that 

translates this potential to reality. 

93 

THE WORLD TRADE ORGANIZATION

In addition to these negotiations, the U.S. Chamber remains firmly committed to 

the global rules-based trading system embodied by the World Trade Organization 

(WTO). In the view of Chamber members, the U.S. business community needs the 

WTO today as much as ever. Its rules inform national policy at home and abroad, 

and its dispute settlement system commands global respect. 

The multilateral trading system has benefited the entire world. Eight successful 

multilateral negotiating rounds have helped increase world trade from $58 billion 

in 1948 to $22 trillion today. This is a 40-fold increase in real terms, and it has 

helped boost incomes in country after country. 

Renewing TPA could open the door to additional trade agreements negotiated 

through the WTO. While it is not required for the critical expansion of the Information Technology Agreement, TPA will be needed to secure passage of the WTO’s Environmental Goods Agreement now under negotiation. 

The United States and 13 other WTO Members, including China and the 28 Member States of the European Union, last year launched this new initiative to eliminate tariffs on environmental goods. These countries account for 86% of global trade 

in environmental goods. The initiative aims to build on the APEC Leaders’ commitment to reduce tariffs on the APEC List of 54 Environmental Goods to make these 

technologies cheaper and more accessible. 

The Chamber welcomed the initiative. Eliminating barriers to trade in environmental goods such as solar panels, gas and wind turbines, and products to control 

air pollution and treat wastewater is both pro-environment and pro-growth. 

Total global trade in environmental goods approaches $1 trillion annually, but 

some countries currently apply tariffs to these goods as high as 35%, discouraging 

their use. The countries taking part in this initiative have begun to reach out to 

other countries to encourage them to join in. 

OTHER TRADE PRIORITIES BEFORE CONGRESS

In addition, the Chamber strongly supports the AGOA Extension and Enhancement Act of 2015, which would renew both the African Growth and Opportunity Act 

(AGOA) and the Generalized System of Preferences (GSP) and provide continued 

trade benefits for Haiti. 

AGOA benefits not only the economies of sub-Saharan Africa but U.S. companies 

and consumers here at home, but it will expire on September 30, 2015. Moving this 

bill sooner rather than later will avert disruption of trade flows and afford companies the certainty they need to make investments and sourcing decisions. Moreover, 

as the first and only economic policy platform that exists between the United States 

and sub-Saharan Africa, AGOA’s looming expiration weighs heavily on U.S. relations with the region and threatens to undermine the gains that African economies 

have made under this program. 

GSP expired on July 31, 2013. Since 1976, GSP has promoted economic growth 

in more than 120 developing countries by providing duty-free access to the U.S. 

market for thousands of selected products. GSP helps keep U.S. manufacturers and 

their suppliers competitive. Approximately three-quarters of U.S. imports using GSP 

are raw materials, parts and components, or machinery and equipment used by U.S. 

companies to manufacture goods in the United States for domestic consumption or 

for export. The products coming in under GSP generally do not compete with U.S.- 

made goods in any significant way. According to a 2006 U.S. Chamber of Commerce 

study, over 80,000 American jobs are associated with moving GSP imports from the 

docks to farmers, manufacturers, and retail shelves. 

In addition, the Chamber strongly supports efforts to modernize our own borders 

and facilitate trade and travel through customs reauthorization legislation. A bill to 

reauthorize U.S. Customs and Border Protection is long overdue, as the dramatic 

growth of global supply chains has made trade facilitation critical to business competitiveness. 

Technological progress and falling transportation costs—coupled with companies’ 

need to access resources, labor, and markets—have pushed companies to source 

many raw materials, intermediate goods, and other inputs from locations around the 

world. Outdated customs procedures can raise costs for U.S. businesses that rely on 

global supply chains to access these inputs and to reach new consumer markets. 

Making improvements to customs procedures to ease cross-border friction will 

94 

smooth the flow of trade and ensure the timely delivery of inputs and final products. 

Small- and medium-sized businesses would be among the top beneficiaries. 

The Chamber is eager to advance legislation in the 114th Congress to promote 

trade facilitation, modernize customs processes, improve enforcement of customs 

and trade laws, advance cooperation among government agencies, enhance intellectual property rights enforcement, and set the global standard for border management. There is bipartisan support for this legislation, and we urge Congress to move 

this legislation forward alongside the TPA bill. 

CONCLUSION

To conclude, the United States cannot afford to sit on the sidelines while others 

set the rules of world trade. To create the jobs, growth, and prosperity our children 

need, we need to set the agenda. Otherwise, our workers and businesses will miss 

out on huge opportunities. 

We need a laser-like focus on access to foreign markets. We urgently need to 

renew TPA. Then, Congress and the administration should use this legislation to 

pursue new trade agreements to ensure that international commerce is fair. The 

trans-Pacific, trans-Atlantic, services, and WTO trade agreements now being negotiated represent a once in a lifetime opportunity to tear down the walls that have 

shut American goods and services out of foreign markets for so long. 

And with all our trade agreements—old and new—we need to ensure they are 

fully enforced. The trade agreements we enter into are not worth the paper they 

are written on if they are not fully enforced. 

The United States is home to many of the best workers and companies in the 

world. We create many of the world’s most innovative products. We have also got 

tougher competition facing us than ever before. But our productivity is high, and 

our energy costs are going down. The facts show we can compete and win. 

The Chamber looks forward to working with Congress and the administration to 

advance a bold trade agenda to generate growth, opportunity, and jobs. 

Thank you very much, and I look forward to your questions. 

{From the U.S. Chamber of Commerce, February, 11, 2015} 

THE OPEN DOOR OF TRADE: HOW AMERICA’S FTAS FACILITATE THE

EXCHANGE OF TRADE

By John G. Murphy 

Part 2 in an occasional series 

Previously: Assessing the Benefits of America’s FTAs (http://www.uschamber.com/ 

blog/open-door-tade-assessing-benefits-america-s-ftas) 

What are the benefits of America’s free trade agreement (FTAs)? With debate over 

the renewal of Trade Promotion Authority (TPA) now underway in Washington, the 

Chamber is publishing this series of blog posts examining the benefits of the trade 

agreements that TPA makes possible. Here is the full report on the benefits of 

America’s free trade agreement. 

These benefits are most obvious in the booming trade we enjoy with the 20 countries 

with which we have entered into FTAs. While these countries represent just 10 percent of the world economy outside the United States, in recent years they have purchased nearly half of all U.S. exports, according to the U.S. Department of Commerce. 

It should come as no surprise that eliminating tariffs and other trade barriers allows trade to expand. As the chart below indicates, U.S. exports to new FTA partner 

countries have grown roughly three times as rapidly on average in the five-year period following the agreement’s entry-into-force as the global rate of growth for U.S. 

exports. 

95 

Increase in U.S. Exports Since FTA Entry Into Force 

Merchandise Exports, Millions of U.S. Dollars 

FTA Partner Country 

Date of Entryinto-Force of FTA 

Year Before 

FTA Entered 

into Force 

(Baseline) 

U.S.Exports to 

FTA Partner in 

Baseline Year 

U.S. Exports 

to FTA Partner 

Five Years 

Later 

% Increase 

Israel 9/1/1985 1985 2,579.6 3,203.0 24.2% 

Canada 1/1/1989 1988 71,622.0 100,444.2 40.2% 

Mexico 1/1/1994 1993 41,580.8 56,791.6 36.6% 

Jordan 12/17/2001 2001 339.0 650.3 91.8% 

Chile 1/1/2004 2003 2,715.0 11,857.4 336.7% 

Singapore 1/1/2004 2003 16,560.2 27,853.6 68.2% 

Australia 1/1/2005 2004 13,957.9 19,599.3 40.4% 

Morocco 1/1/2006 2005 480.8 1,947.0 305.0% 

El Salvador 3/1/2006 2005 1,854.3 2,433.1 31 .2% 

Honduras 4/1/2006 2005 3,253.8 4,606.4 41 .6% 

Nicaragua 4/1/2006 2005 625.5 981.3 56.9% 

Guatemala 7/1/2006 2005 2,835.4 4,478.3 57.9% 

Bahrain 8/1/2006 2005 350.8 1,249.6 256.2% 

Dominican Republic 3/1/2007 2006 5,350.5 7,346.2 37.3% 

Costa Rica 1/1/2009 2008 5,679.8 7,223.5 27.2% 

Oman 1/1/2009 2008 1,382.0 1,571.3 13.7% 

Peru 2/1/2009 2008 6,183.0 10,101.8 63.4% 

South Korea 3/15/2012 2011 43,461.6 NA NA 

Colombia 5/15/2012 2011 14,335.7 NA NA 

Panama 10/31/2012 2011 8,251.6 NA NA 

Average annual % change in U.S. exports for all FTAs in first five years: 18.0% 

Average annual % change in U.S. exports to the world 2000–2010 (for comparison): 6.3% 

Note: As the U.S.-Israel and U.S.-Jordan FTAs entered into force late in the calendar year, those years are used as the baseline in this table. 

Source: U.S. Department of Commerce. 

Some FTAs have helped produce even more impressive results. U.S. exports to Chile 

and Morocco quadrupled in the five years after FTAs entered into force. This boost 

to U.S. export growth is especially pronounced with more recent FTAs, which are 

front-loaded to eliminate tariffs rapidly, open services markets, and eliminate nontariff barriers more comprehensively than earlier FTAs. 

The trade balance is a poor measure of the success of these agreements, but the 

trade deficit is often cited by trade skeptics as a principal reason why the United 

States should not negotiate additional FTAs. However, taken as a group, the United 

States ran a trade surplus with its FTA partner countries in 2012 and 2013, and 

this surplus likely has grown since then (see chart below). 

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U.S. Trade Balance With FTA Partners 

2011 2012 2013 

Merchandise $(79,918) $(70,820) $(66,612) 

Services $65,841 $70,876 $75,034 

Total $(14,077) $56 $8,422 

Source: U.S. Department of Commerce. 

In fact, the United States has recorded a trade surplus in manufactured goods with 

its FTA partner countries for each of the past five years, according to the U.S. 

Department of Commerce. This surplus reached $27 billion in 2009 and had expanded to $61 billion by 2013. 

However, exports are just one side of the trade equation: Imports provide direct benefits to Americans as well. They mean lower prices for American families as they 

try to stretch their budgets-and for companies seeking raw materials and other inputs. In recent decades, lower tariffs have stimulated U.S. productivity through 

greater competition in the marketplace and brought greater product choices to U.S. 

producers and consumers. According to the Peterson Institute for International Economics, this has brought ‘‘a gain in annual income of about $10,000 per household.’’ 

In fact, half a century of trade liberalization has made it less and less relevant to 

look at international commerce through a mercantilist lens focused solely on exports. North America offers a useful case study: After more than two decades of free 

trade, officials and business leaders in Canada, Mexico, and the United States point 

out with growing frequency that workers and firms across the continent increasingly 

‘‘make things together,’’ employing ‘‘global value chains’’ that cross national borders. 

This approach leads to efficiencies that have proven vital to the global competitiveness of North American industry. In the highly integrated auto sector, for example, 

it is common for cars assembled in the Great Lakes region to cross the U.S.-Canada 

border half a dozen times as they are assembled. In turn, American auto exports 

increased 82 percent between 2009 and 2012, according to the International Trade 

Commission, reaching an all-time high of approximately 2 million cars and trucks 

in 2013. A growing share is headed to Asia, the Middle East, and other locations: 

U.S.-built cars shipped to China have risen nearly sixfold since 2009. 

One study found that ‘‘one-quarter of U.S. imports from Canada consist of value 

added from the United States itself, and a huge 40 percent of U.S. final good imports from Mexico consist of its own [U.S.] value added.’’ As Mexican officials have 

pointed out, ‘‘For every dollar that Mexico earns from exports, 50 cents are spent 

on American goods.’’ 

North America’s mature global value chains reduce costs for businesses and enhance 

their global competitiveness, but there are other examples where U.S. firms are operating with a host of partners in other regions. For example, one recent study 

found that 70 percent of the final retail price of apparel assembled in Asia—and 

sold in the United States—is created by American innovators, designers, and retailers. Further, even though nearly all apparel and footwear sold in the United States 

is imported, these industries employ 4 million Americans. 

The principal rationale for FTAs is to unleash new flows of mutually beneficial 

trade between Americans and the citizens of these 20 countries—and do so in a way 

that is fundamentally fair. On this score, these FTAs have been a dramatic success 

for the United States—as they have been for our FTA partners. 

PREPARED STATEMENT OF HON. MICHAEL FROMAN, U.S. TRADE REPRESENTATIVE, 

EXECUTIVE OFFICE OF THE PRESIDENT

April 16, 2015 

Chairman Hatch, Ranking Member Wyden, Members of the Senate Finance Committee, thank you for the opportunity to testify today. 

Trade plays a vital role in supporting good jobs, spurring growth, and strengthening the American middle class. As a result, increasing access to foreign markets 

for U.S. exports through enhanced trade opportunities has long been a bipartisan 

97 

effort. Closely related to these economic stakes is the simple fact that sustaining our 

strength and influence abroad requires that we lead on trade. Our nation’s economic 

strength and our position in the world hinges on our ability to lead—and to lead 

together. 

ECONOMIC IMPORTANCE OF TRADE

Trade has been one of our strongest engines for prosperity and progress. Since 

World War II, trade liberalization has added significantly to our GDP, boosting average family incomes year after year. These gains have disproportionately benefitted 

low-income Americans, who spend a much greater portion of their income on highly 

traded staples. 

Today, the importance of trade to America’s economic well-being has never been 

clearer. Since 2009, U.S. exports have contributed nearly one-third of our overall 

economic growth. Last year, U.S. exports reached $2.35 trillion, a record-breaking 

amount that supported an estimated 11.7 million jobs, an increase of 1.8 million jobs 

since 2009. With those jobs paying up to 18 percent more than jobs not related to 

exports, trade policy has an important role to play in raising wages and living 

standards for the middle class. 

Partially as a result of our exporting success, our economy continues to grow. Job 

creation is happening at the fastest rate since the 1990s, and wages are finally 

starting to rise. After nearly two decades in decline, factories are opening in this 

country again, manufacturing is starting to return from overseas, and we have 

added 900,000 new manufacturing jobs over the last five years. Last week, we published a report detailing how trade is benefitting all 50 states and highlighting some 

of the small and medium-sized American businesses that are competing and winning in global markets. 

But we could do much better if the playing field were level. Put simply, the 

United States is already an open economy, but others are not. Our average applied 

tariff is only 1.4 percent, among the lowest in the world. In contrast, our businesses 

face much higher tariffs, and countless non-tariff measures abroad. Many of these 

imbalances are in areas where the United States is most competitive: 50% tariffs 

on machinery, 70% on autos, and up to 400% on certain agricultural products. In 

a world where more than 95 percent of all customers live outside our borders, the 

disadvantages our workers and businesses face are less an inconvenience than an 

injustice. 

ADVANCING THE TRADE AGENDA

As global markets continue to grow, so too does the opportunity for American 

workers and businesses. Take Asia, whose middle class consumer population of 525 

million is expected to swell to 3.2 billion over the next 15 years. By 2030, two-thirds 

of the world’s middle class will call Asia home. These countries will be the world’s 

fastest-growing consumers of everything from cars and cosmetics to streaming movies and music to fresh fruit and vegetables, and their governments and businesses 

will be the fastest-growing investors in everything from infrastructure to aircraft to 

satellites. As they grow, the question is, will American workers and businesses get 

a fair shot at serving these markets? Will they be buying Made-in-America products 

or products made elsewhere? 

At the forefront of our trade agenda is TPP, which will cover 11 other countries 

and nearly 40 percent of the global economy. TPP will grow our exports by more 

than $123 billion by 2025, according to one estimate. These exports will support 

many more high-paying jobs. TPP will level the playing field for U.S. businesses and 

workers by establishing the highest standards of any trade agreement in history, 

as well as the first disciplines on state-owned enterprises and on maintaining a free 

and open Internet. 

Equally important, TPP represents a once-in-a-generation opportunity to play a 

leading role in writing the rules of the road for the world’s fastest-growing region. 

That’s why TPP is a central pillar of America’s rebalance to Asia, as Secretary of 

Defense Carter recently noted. By leading on these issues, the United States underscores our commitment as a Pacific power to the region, deepens our alliances and 

partnerships, and establishes standards that reflect our interests and values. We 

can launch a race to the top, rather than be subject to a race to the bottom that 

we cannot win and should not run. 

The stakes become even clearer when you consider the alternatives to American 

leadership on trade. In recent years, Asia-Pacific countries have entered into over 

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200 trade agreements, altering the landscape of trade and putting U.S. companies 

and workers at a disadvantage. 

As we speak, China and others are negotiating an agreement that would encompass over three billion people, most of the new global middle class. This would create a strong tidal pull for investment and a powerful disincentive for investment in 

the United States. If we allow others to carve up the markets of the future—and 

to do so without raising labor and environmental standards, promoting innovation, 

and ensuring fair competition and openness—our workers and businesses will pay 

a steep price. 

The choice we face today is clear. On the one hand, the promise of leading on 

trade includes more good jobs, robust growth, and a stronger middle class. On the 

other hand, the status quo is not only counterproductive, but unsustainable. The inescapable fact is that we cannot protect American workers by ceding our leadership 

and standing by as other nations set the rules of the road. If we want to drive production in the United States, and create good jobs here, we must lead through a 

trade policy that reflects our interests and our values. 

America’s interests extend beyond the Asia-Pacific, of course, and so does the importance of our leadership on trade. During my testimony in January, I discussed 

in much greater depth and detail the efforts that comprise the President’s Trade 

Agenda, whether it is the Transatlantic Trade and Investment Partnership we’re 

negotiating with the EU or the work we’re undertaking in Geneva to further WTO 

negotiations, eliminate tariffs on environmental goods and information technology 

products and increase access for our world class services exporters. 

STRENGTHENING A BIPARTISAN TRADITION

A critical tool for unlocking the benefits of trade is Trade Promotion Authority 

(TPA) legislation. The long bipartisan tradition on this issue began when President 

Franklin Roosevelt signed the first trade negotiating legislation in 1934. During the 

eight decades since, Congresses of both parties have revised and renewed that authority 18 different times for Democratic and Republican Presidents alike. 

Under the modern form of TPA, Congress establishes legislative procedures for 

the consideration and approval of trade agreements, including setting out what objectives should be negotiated and how the Administration will consult with it before 

and during negotiations. 

But TPA hasn’t been updated since 2002. During that time, the global economy 

has changed significantly. State-owned enterprises have increasingly tilted the playing field against our workers and businesses by receiving unfair subsidies while 

competing for the same customers. The digital economy has exploded. Congress now 

has the opportunity to account for the tectonic shifts in the global economy as well 

as the emerging consensus around key issues affecting trade, including labor, the 

environment and innovation policies. 

CONCLUSION

With so much at stake, I look forward to continue working with this Committee 

and the Congress as a whole to pass TPA and advance the broader trade agenda, 

including renewing the Generalized System of Preferences that expired in 2013 and 

the African Growth and Opportunity Act well before its expiration in September. We 

also look forward to renewing Trade Adjustment Assistance, which helps provide 

American workers with the skills to compete in the 21st century. 

Thank you again for the opportunity to testify today. I welcome your questions. 

QUESTION SUBMITTED FOR THE RECORD TO HON. MICHAEL FROMAN

QUESTION SUBMITTED BY HON. PATRICK J. TOOMEY

Question. As we work to promote trade opportunities in Europe and the Pacific 

Rim, I want to raise a significant issue relating to the enforcement of the existing 

free trade agreement between the United States and Morocco. 

In 2014, the Government of Morocco enacted an export quota on Gigartina seaweed. Gigartina is a significant source of carrageenan, a food manufacturing input 

used by several U.S. companies. It is my understanding that the export quota announced in June of 2014 significantly reduces the amount of Gigartina available to 

99 

U.S. companies, which may detract from the competiveness of our domestic food 

manufacturers. Further, my office has been informed that the government of Morocco has provided no legitimate environmental or economic reason to impose this 

quota and it does not appear to be permitted under any multilateral or bilateral 

trade agreement. 

I respectfully request that you investigate Morocco’s export quota on Gigartina 

and, if necessary, seek consultations with the government of Morocco to resolve the 

issue in a manner that is consistent with all relevant WTO and FTA obligations. 

Answer. Morocco’s export quota on Gigartina seaweed has been and continues to 

be a high priority in our bilateral engagement with Morocco. We have raised concerns relating to the export quota with Moroccan officials on numerous occasions, 

both in person and in writing. The issue featured prominently in the U.S.-Morocco 

Free Trade Agreement Joint Committee meeting in February and in a more recent 

meeting between USTR and the Moroccan Ambassador in Washington in June. We 

are working with affected stakeholders and continue—in close cooperation with the 

Department of State, the Department of Agriculture, and the U.S. Embassy in Morocco—to gather relevant facts and to urge the Government of Morocco to provide 

information (including appropriate studies) as to whether there is a legitimate basis 

for maintaining the restrictive export quota. A letter sent in June by the U.S. Ambassador to Morocco to relevant Moroccan authorities is the most recent example 

of this interagency cooperation. The U.S. Embassy in Rabat is also coordinating 

with European Union officials—whose industry is likewise affected by the export 

quota—in order to reinforce our efforts. 

Our next steps in engaging the Moroccan authorities on this issue will depend on 

what we learn from the Moroccans and what we learn from affected stakeholders 

and our own sources about the basis for the Moroccan government’s actions with 

respect to the export quota. 

PREPARED STATEMENT OF HON. ORRIN G. HATCH

April 16, 2015 

WASHINGTON—Senate Finance Committee Chairman Orrin Hatch (R–Utah) today 

delivered the following opening statement at a committee hearing on Congressional 

trade priorities: 

I would like to thank everyone for attending today’s hearing on Congress and U.S. 

Tariff Policy. 

And, welcome to the distinguished panel of witnesses we have before the committee today: Ambassador Froman, Secretary Lew, and Secretary Vilsack. 

Each of you gentlemen serves in key positions and makes decisions every day on 

important trade issues. We look forward to your testimony and appreciate your contributions to this debate. 

My hope is that this hearing will help kick-start the first real opportunity we’ve 

had to debate U.S. trade policy in a number of years as we get closer to introducing 

and enacting legislation to renew Trade Promotion Authority, or TPA. 

Let me start by stating one simple premise: U.S. trade with other countries is a 

good thing. 

Trade creates new opportunities for America’s workers, enhances the standard of 

living for our citizens, helps our national security by solidifying alliances with likeminded nations, advances America’s values abroad, strengthens the rule of law, and 

helps lift people across the globe out of poverty. 

To effectively achieve these goals, Congress must be an effective partner with the 

administration. 

Our nation’s constitutional framework is complex. Article I of the Constitution 

grants to the Congress the power to regulate commerce with foreign nations. But, 

Article II grants the President the power to conduct foreign policy. 

I think most would agree that trying to negotiate an agreement among many different parties with different priorities and vague objectives is an inherently difficult, 

if not impossible, proposition. Most would also agree that it would be even more difficult to reach an agreement if the parties are unsure if their negotiating partners 

will be able put the agreement into force. 

100 

Given those realities, it’s pretty easy to understand why TPA is so important. No 

potential trade partner will give our negotiators their best offer unless they know 

what issues matter to us most and whether we can deliver on the deal. Simply put, 

for America to be able to succeed at the trade negotiating table and to set the rules 

for a fair international marketplace, we must speak with one voice in our demands 

and provide assurance that we will deliver what we promise. 

Now, people may have different theories about how to best achieve those goals, 

but there is only one legislative tool with a proven track record, and that is TPA. 

TPA is the most powerful tool in Congress’s trade arsenal. For decades now, robust TPA laws have ensured that Congress plays a leading role in setting our country’s trade agenda and providing our trade negotiators with the necessary tools to 

reach the best deals possible. 

Currently, the Obama Administration is in the midst of negotiating some of the 

most ambitious trade agreements in our nation’s history. I commend them for that. 

But, as I’ve stated on a number of occasions, those negotiations will almost certainly 

fail if Congress does not renew TPA. 

And, make no mistake, failure in these negotiations would have a negative impact 

on our economy. 

More than 96 percent of the world’s consumers live outside the United States. In 

order to be competitive, American businesses need to be able to sell more Americanmade products and services to those overseas customers. 

Put simply, if we want to create more opportunity and high-paying jobs here at 

home, we need to open more foreign markets to U.S. goods and services. We should 

be doing all we can to tear down barriers to American exports while, at the same 

time, laying down enforceable rules for our trading partners so we can be sure that 

American workers and job-creators are competing on a level playing field. 

We need to be leading the world on trade, writing the rules and setting the standards. If we don’t, other countries—countries like China—most certainly will. 

We can address all of these concerns by passing strong TPA legislation. Senator 

Wyden and I are currently working to do just that. 

I want to thank Senator Wyden for his efforts to help us get as far as we have. 

I also want to once again thank the three cabinet officials who are here to share 

their views on the role of Congress, U.S. tariff policy, and what our work means 

to our nation’s international trade agenda. 

PREPARED STATEMENT OF HON. ORRIN G. HATCH

April 16, 2015 

WASHINGTON—Senate Finance Committee Chairman Orrin Hatch (R–Utah) today 

delivered the following opening statement at a committee hearing on trade priorities 

following the announcement of a bipartisan, bicameral Trade Promotion Authority 

bill: 

Welcome back. I appreciate everyone who has returned for this second half of our 

hearing on trade policy. 

Ambassador Froman, thank you for agreeing to stay a little longer. 

I’m pleased to announce that Ranking Member Wyden, House Ways and Means 

Committee Chairman Ryan, and I have reached an agreement on legislation to 

renew Trade Promotion Authority. We’ve also reached an agreement on bills to address Trade Adjustment Assistance and to reauthorize and extend some trade preference programs. 

I hope that all my colleagues will take the time to carefully study these bills. Once 

they do, I think they will find that we’ve been able to put together some balanced 

and effective legislation that will help improve the health of our economy and better 

serve our nation’s hardworking taxpayers. 

The TPA bill contains the clearest articulation of trade priorities in our nation’s 

history. It includes nearly 150 ambitious, high-standard negotiating objectives, including strong rules for intellectual property rights and agricultural trade, as well 

as protections for U.S. investment. Many of these objectives break down barriers 

101 

that American exporters face in the 21st-century economy, such as regulatory barriers, currency manipulation, and state-owned enterprises. 

The bill contains unprecedented consultation requirements that will ensure that 

Congress is an equal partner throughout the negotiations. It also includes new 

transparency requirements that will help the public know and understand what is 

being discussed before agreements are signed. 

And, like prior TPA bills, the procedures in our bill guarantee that all trade 

agreements will get an up-or-down vote in Congress. 

At the same time, we included new tools to hold the administration accountable, 

including a procedure that Congress can employ if our trade negotiators fail to consult or make progress toward meeting the negotiating objectives. 

This is a strong bill, one that builds off the success of previous iterations of TPA 

to enhance our efforts to expand market access for our exporters and job creators. 

Throughout the process of crafting this legislation, I have worked closely with my 

colleagues and I would just like to thank all of them for their contributions. 

I’d like to thank Senator Portman for his input on trade issues. He’s got a great 

background in this area and his leadership on TAA and HCTC has been extremely 

important. 

Senator Toomey has been a great partner on enforcement issues. The trade bills 

we are looking at include the strongest language yet on enforcement and that’s really because of members like Senator Toomey and their work. 

Senator Grassley, I’d like to thank you as well for your leadership on agriculture 

issues.I’d also like to say a warm thanks to Senator Isakson who has also been a 

strong voice for agriculture issues. In addition, Senator Isakson has been a leader 

for years on the African Growth and Opportunity Act and I look forward to working 

with him to get that renewed along with the Generalized System of Preferences. 

We are lucky to have Senator Burr and Senator Scott on the committee. Both 

have been strong advocates in this process for the textiles industry, and I would like 

to thank them for their work. 

Senator Thune has provided many creative ideas on digital trade. I think we have 

been able to incorporate a lot of them here. I’d like to thank him for his contributions. 

Senator Crapo and Senator Coats have been of great assistance on some particularly challenging agriculture issues, and I’d like to thank them as well. 

As I mentioned this morning, we intend to move expeditiously on these bills. If 

we don’t act now we will lose our opportunity. I appreciate the cooperation of all 

our members moving forward. 

PREPARED STATEMENT OF HON. ORRIN G. HATCH

April 21, 2015 

WASHINGTON—Senate Finance Committee Chairman Orrin Hatch (R–Utah) today 

delivered the following opening statement at a committee hearing on trade priorities 

and The Bipartisan Congressional Trade Priorities and Accountability Act of 2015: 

I’d like to welcome everyone to the continuation of our hearing on Congress and 

U.S. Tariff Policy. Today, we have a very distinguished panel of witnesses that I 

hope will help us expand the ongoing discussion of our nation’s trade agenda. 

As everyone here knows, last week Senator Wyden and I, along with House Ways 

and Means Committee Chairman Ryan, introduced legislation to renew Trade Promotion Authority, or TPA. Our intention is to mark up the TPA bill—along with 

a handful of other trade-related bills—later this week. 

This legislation is a long time coming. 

TPA expired in 2007. While talks for various trade agreements have gone on since 

that time, without TPA in effect, our negotiators have been effectively negotiating 

with one hand tied behind their backs because they have not been able to assure 

our trading partners that the deal they sign is the one Congress will vote on in the 

end. 

Our legislation will fix that. 

102 

I want to thank Ranking Member Wyden for his support and assistance thus far. 

We’ve got a long way to go, but, working together, I am confident we can get there. 

Now, some have expressed concerns about the process by which we’re moving this 

bill forward. For example, I’ve heard arguments that we’re moving too quickly, without adequate discussion or examination. 

Those concerns are, in my view, unfounded. 

First of all, the bill on which our current TPA legislation is based was first introduced in January of 2014, almost a year and a half ago. Since that time, it has been 

available for examination, dissection, discussion, and comment. 

Thousands of organizations weighed in on the merits of that bill, including business associations, organized labor, think tanks, and advocacy groups. 

Many members of Congress from both parties and in both chambers are on the 

record either praising or criticizing that bill. And, officials in the Obama Administration expressed their support for it. 

True enough, in our discussions, Senator Wyden, Chairman Ryan, and I made 

some improvements to that original bill. But, the fundamentals remain the same 

and we’ve been very transparent as to what the changes have been. 

Second, in the 113th Congress, the Finance Committee held nine hearings on 

trade, and TPA was brought up at virtually every one of them. I know this because, 

more often than not, I was the one bringing it up. 

One of those hearings was devoted specifically and entirely to TPA and included 

the testimony of witnesses across the spectrum, including one representing organized labor. 

Finally, since the 114th Congress convened just about three months ago, this committee has had three hearings in which trade and TPA was a major topic of discussion. Today’s hearing is the fourth. 

In other words, this is well-covered territory for this committee. 

So, while I understand and respect that there are sincerely-held views on this 

topic, some of which are different than mine, any arguments that we’ve been less 

than forthcoming and transparent with this TPA legislation are, not to put too fine 

a point on it, nonsense. 

I’ve been in the Senate a long time. And, I think I’m generally considered to be 

pretty reasonable. I am certainly willing to listen to and consider any genuine concerns that some may have about process. I want all sides to be heard and I want 

a fair and open debate. That’s why we’re having this additional hearing. 

By all means, we should have a frank and open discussion about these issues and 

I hope we will continue to do so today. But, let’s not dress up opposition to trade 

and TPA as concerns about process. 

During our hearing last week, I made two assertions about trade. 

I stated plainly that U.S. trade with foreign countries is a good thing. And, I said 

that TPA is the best tool Congress has in its arsenal to help influence and facilitate 

trade. 

Those are pretty fundamental assertions. And, at the end of the day, people are 

either going to agree with them or they won’t. More hearings and weeks of additional delays aren’t going to change many minds one way or the other on those essential issues. 

With that in mind, I welcome today’s hearing. Like I said, we’ve got a very distinguished panel of witnesses who I think will speak to the heart of these matters. I 

look forward to a spirited discussion. 

For my part, I just want to make clear—if it’s not clear enough already—that I 

believe Congress should be working hand in hand with the administration to break 

down barriers to foreign markets in order to give our businesses and job creators 

a chance to compete in the global marketplace. 

The United States should be a leader in international trade. We should be setting 

the standards and making the rules. We simply cannot afford to sit on the sidelines 

and let other countries dictate where the world goes on trade. 

103 

Trade is an essential element of a healthy economy. We should be doing all we 

can to advance a trade agenda that works for America and advances our interests 

on the world stage. 

LETTER SUBMITTED FOR THE RECORD BY HON. ORRIN G. HATCH

April 22, 2015 

The Honorable Mitch McConnell The Honorable Harry Reid 

Majority Leader Democratic Leader 

United States Senate United States Senate 

Washington, DC 20510 Washington, DC 20510 

The Honorable John Boehner The Honorable Nancy Pelosi 

Speaker Democratic Leader 

U.S. House of Representatives U.S. House of Representatives 

Washington, DC 20515 Washington, DC 20515 

Dear Majority Leader McConnell, Speaker Boehner, Democratic Leader Reid, and 

Democratic Leader Pelosi: 

We are writing to urge swift action to renew Trade Promotion Authority (TPA) 

on behalf of the nearly 300 undersigned organizations. Our chambers of commerce, 

manufacturing organizations, and farm bureaus represent millions of companies, 

workers, farmers, and ranchers from every sector of the economy and every state 

in the union. 

Trade agreements negotiated and concluded under TPA help drive economic 

growth and job creation here at home. They enable manufacturers, service providers, farmers, and ranchers across the country to reach the 95 percent of the 

world’s customers who live outside our borders. One in four manufacturing jobs in 

the United States depends on exports, and one in every three acres of farmland is 

planted for consumers overseas. More than 97 percent of the 300,000 U.S. companies that export are small and medium-sized businesses. 

However, the international playing field often is tilted unfairly against businesses 

and workers in the United States. While our market generally is open, U.S. exports 

face significant barriers abroad. Trade agreements tear down these barriers and create a level playing field. They help firms in this country and the millions of workers 

they employ compete successfully overseas. America’s 20 existing trade agreement 

partners represent just 10 percent of the global economy, but purchase nearly half 

of all U.S. exports. 

To expand these benefits, the United States is negotiating new trade agreements 

with some of the world’s largest and fastest-growing economies, including with Europe and 11 Asia-Pacific nations. The United States also is pursuing multilateral 

deals that would reduce barriers to trade in services and environmental goods 

worldwide. However, to realize the potential of these agreements for U.S. jobs, economic growth, and competitiveness, Congress must pass Trade Promotion Authority. 

TPA is a longstanding and proven partnership between Congress and the President that enables Congress to set negotiating objectives and requires the executive 

branch to consult extensively with legislators during negotiations. We urge you to 

act on this essential legislation as soon as possible this year. 

Sincerely, 

Alabama Alexander City Chamber of Commerce 

Birmingham Business Alliance 

Manufacture Alabama 

Mobile Area Chamber of Commerce 

Montgomery Area Chamber of Commerce 

South Baldwin Chamber of Commerce 

Alaska Greater Fairbanks Chamber of Commerce 

104 

Arizona Arizona Chamber of Commerce 

Arizona Farm Bureau Federation 

Arizona Manufacturers Council 

Buckeye Valley Chamber of Commerce 

Chandler Chamber of Commerce 

Gilbert Chamber of Commerce 

Greater Flagstaff Chamber of Commerce 

Greater Phoenix Chamber of Commerce 

Mesa Chamber of Commerce 

Scottsdale Area Chamber of Commerce 

Tempe Chamber of Commerce 

Tucson Hispanic Chamber of Commerce 

Tucson Metro Chamber 

Arkansas Arkansas State Chamber of Commerce/Associated Industries of Arkansas 

California California Business Roundtable 

California Chamber of Commerce 

California Manufacturers & Technology Association 

Camarillo Chamber of Commerce 

Carlsbad Chamber of Commerce 

Cerritos Regional Chamber of Commerce 

Chamber of Commerce of the Santa Barbara Region 

Chambers of Commerce Alliance of Ventura & Santa Barbara Counties 

Corona Chamber of Commerce 

Desert Hot Springs Chamber of Commerce & Visitors Center 

Elk Grove Chamber of Commerce 

Fresno Chamber of Commerce 

Fullerton Chamber of Commerce 

Gateway Chambers Alliance 

Greater Conejo Valley Chamber of Commerce 

Huntington Beach Chamber of Commerce 

Indio Chamber of Commerce 

Irvine Chamber of Commerce 

Irwindale Chamber of Commerce 

Long Beach Area Chamber of Commerce 

Los Angeles Area Chamber of Commerce 

Moreno Valley Chamber of Commerce 

Murrieta Chamber of Commerce 

North San Diego Business Chamber 

Ojai Valley Chamber of Commerce 

Orange County Business Council 

Oxnard Chamber of Commerce 

Palm Desert Area Chamber of Commerce 

Palos Verdes Peninsula Chamber of Commerce 

Pasadena Chamber of Commerce & Civic Association 

Port Hueneme Chamber of Commerce 

Redondo Beach Chamber of Commerce 

Sacramento Metropolitan Chamber of Commerce 

San Bruno Chamber of Commerce 

San Diego Regional Chamber of Commerce 

San Francisco Chamber of Commerce 

San Gabriel Valley Economic Partnership 

San Jose Silicon Valley Chamber of Commerce 

Santa Clara Chamber of Commerce and Convention-Visitors Bureau 

Simi Valley Chamber of Commerce 

South Bay Association of Chambers of Commerce 

Southwest California Legislative Council 

Torrance Area Chamber of Commerce 

Valley Industry and Commerce Association 

Wilmington Chamber of Commerce 

105 

Colorado Colorado Association of Commerce & Industry 

Colorado Business Roundtable 

Colorado Competitive Council 

Denver Metro Chamber of Commerce 

Metro Denver Economic Development Corporation 

South Metro Denver Chamber 

Connecticut Connecticut Business and Industry Association 

MetroHartford Alliance 

Middlesex County Chamber of Commerce 

The Bridgeport Regional Business Council 

Delaware Central Delaware Chamber of Commerce 

Delaware State Chamber of Commerce 

Florida Associated Industries of Florida 

Central Pinellas Chamber of Commerce 

Florida Chamber of Commerce 

Gainesville Area Chamber—Advanced Manufacturing Council 

Greater Boca Raton Chamber of Commerce 

Greater Miami Chamber of Commerce 

JAX Chamber 

West Orange Chamber of Commerce 

Georgia Cobb Chamber of Commerce 

Georgia Association of Manufacturers 

Georgia Chamber of Commerce 

Metro Atlanta Chamber of Commerce 

Savannah Area Chamber of Commerce 

Hawaii Chamber of Commerce Hawaii 

Kauai Chamber of Commerce 

Idaho Boise Metro Chamber of Commerce 

Idaho Association of Commerce & Industry 

Illinois Aurora Regional Chamber of Commerce 

Canton Area Chamber of Commerce 

Chicago Southland Chamber of Commerce 

Chicagoland Chamber of Commerce 

Des Plaines Chamber of Commerce and Industry 

Greater Oak Brook Chamber of Commerce and Economic Development Partnership 

Hoopeston Chamber of Commerce 

Illinois Chamber of Commerce 

Illinois Farm Bureau Federation 

Illinois Manufacturers’ Association 

McLean County Chamber of Commerce 

Northcenter Chamber of Commerce 

Rolling Meadows Chamber of Commerce 

Western DuPage Chamber of Commerce 

Illinois/Indiana Quad Cities Chamber of Commerce 

Indiana Indiana Chamber of Commerce 

Indiana Farm Bureau Federation 

Indiana Manufacturers Association 

Indy Chamber 

Nappanee Area Chamber of Commerce 

St. Joseph County Chamber of Commerce 

Wabash County Chamber of Commerce 

106 

Iowa Ames Chamber of Commerce 

Greater Des Moines Partnership 

Iowa Association of Business and Industry 

Iowa Business Council 

Iowa Chamber Alliance 

Iowa Farm Bureau Federation 

Mason City Chamber of Commerce 

Kansas Fort Scott Area Chamber of Commerce 

Greater Topeka Chamber of Commerce 

Kansas Farm Bureau Federation 

The Kansas Chamber of Commerce 

Kentucky Commerce Lexington Inc. 

Greater Louisville Inc. 

Kentucky Chamber of Commerce 

Northern Kentucky Chamber of Commerce 

Louisiana Chamber Southwest Louisiana 

Committee of 100 Louisiana 

Greater New Orleans, Inc. 

Jeff Davis Chamber of Commerce 

Louisiana Association of Business and Industry 

Monroe Chamber of Commerce 

Natchitoches Area Chamber of Commerce 

New Orleans Chamber of Commerce 

Maine Maine Chamber of Commerce 

Maryland Baltimore Washington Corridor Chamber of Commerce 

Maryland Chamber of Commerce 

Massachusetts Associated Industries of Massachusetts 

Fall River Area Chamber of Commerce & Industry 

Metro South Chamber of Commerce 

United Regional Chamber of Commerce 

Michigan Goodwill Industries of Southwestern Michigan 

Greater Brighton Area Chamber of Commerce 

Michigan Chamber of Commerce 

Michigan Chemistry Council 

Michigan Farm Bureau Federation 

Michigan Manufacturers Association 

Minnesota Dakota County Regional Chamber 

Eden Prairie Chamber of Commerce 

International Falls Area Chamber of Commerce 

Minnesota Chamber of Commerce 

Minnesota Farm Bureau Federation 

St. Cloud Area Chamber of Commerce 

TwinWest Chamber of Commerce 

Mississippi Mississippi Manufacturers Association 

The Chamber and Economic Development Center of Washington County 

Missouri Associated Industries of Missouri 

Missouri Chamber of Commerce and Industry 

Missouri Farm Bureau Federation 

St. Joseph Chamber of Commerce 

St. Louis Regional Chamber 

Montana Kalispell Chamber of Commerce 

Montana Chamber of Commerce 

Montana Farm Bureau Federation 

Montana Manufacturing Council 

107 

Nebraska Columbus Area Chamber of Commerce 

Holdrege Area Chamber of Commerce 

Lincoln Chamber of Commerce 

Nebraska Chamber of Commerce & Industry 

Nevada Carson Valley Chamber of Commerce 

Las Vegas Metro Chamber of Commerce 

Nevada Manufacturers Association 

The Chamber of Reno, Sparks, and Northern Nevada 

New Hampshire Business & Industry Association of New Hampshire 

New Jersey Morris County Chamber of Commerce 

New Jersey Business & Industry Association 

New Jersey State Chamber of Commerce 

Newark Regional Business Partnership 

New Mexico Greater Albuquerque Chamber of Commerce 

New York Albany-Colonie Regional Chamber 

Buffalo Niagara Partnership 

JFK Airport Customs Brokers and Freight Forwarders Association 

Manhattan Chamber of Commerce 

North Country Chamber of Commerce 

Partnership for New York City 

Rochester Business Alliance 

The Business Council of New York State 

The Chamber of Schenectady County 

North Carolina Cabarrus Regional Chamber of Commerce 

Charlotte Chamber of Commerce 

Greater Raleigh Chamber of Commerce 

North Carolina Chamber 

North Carolina Farm Bureau Federation 

Wilmington Chamber of Commerce 

North Dakota Greater North Dakota Chamber 

North Dakota/Minnesota The Fargo Moorhead West Fargo Chamber of Commerce 

Ohio Ashland Area Chamber of Commerce 

Columbus Chamber of Commerce 

Dayton Area Chamber of Commerce 

Licking County Chamber of Commerce 

Lima/Allen County Chamber of Commerce 

Ohio Chamber of Commerce 

Ohio Farm Bureau Federation 

The Ohio Manufacturers’ Association 

Willoughby Western Lake County Chamber of Commerce 

Oklahoma The State Chamber of Oklahoma 

Tulsa Regional Chamber 

Oregon Associated Oregon Industries 

Beaverton Area Chamber of Commerce 

Hermiston Chamber of Commerce 

Klamath County Chamber of Commerce 

Oregon State Chamber of Commerce 

Portland Business Alliance 

Wilsonville Area Chamber of Commerce 

108 

Pennsylvania Chester County Chamber of Business and Industry 

Greater Pittsburgh Chamber of Commerce 

Greater Reading Chamber of Commerce & Industry 

Pennsylvania Business Council 

Pennsylvania Chamber of Business and Industry 

Pennsylvania Farm Bureau Federation 

Pennsylvania Manufacturers’ Association 

Schuylkill Chamber of Commerce 

Rhode Island Greater Providence Chamber of Commerce 

Northern Rhode Island Chamber of Commerce 

Rhode Island Chamber of Commerce Coalition 

South Carolina Fountain Inn Chamber of Commerce 

Myrtle Beach Area Chamber of Commerce 

North Myrtle Beach Chamber of Commerce 

South Carolina Chamber of Commerce 

South Dakota Sioux Falls Area Chamber of Commerce 

South Dakota Chamber of Commerce and Industry 

Tennessee Clay County Chamber of Commerce 

Greater Memphis Chamber 

Johnson City Chamber of Commerce 

Kingsport Area Chamber of Commerce 

Tennessee Chamber of Commerce & Industry 

Texas Dallas Regional Chamber 

Fort Worth Chamber of Commerce 

Greater Beaumont Chamber of Commerce 

Greater Houston Partnership 

Greater Irving Las Colinas Chamber of Commerce 

Lewisville Area Chamber of Commerce 

Lubbock Chamber of Commerce 

North Texas Commission 

Port Aransas Chamber of Commerce/Tourist Bureau 

San Antonio Chamber of Commerce 

Texas Association of Business 

Utah Salt Lake Chamber 

Utah Manufacturers Association 

Vermont Associated Industries of Vermont 

Vermont Chamber of Commerce 

Virginia Dickenson County Chamber of Commerce 

Fairfax County Chamber of Commerce 

New Market Area Chamber of Commerce 

Virginia Chamber of Commerce 

Virginia Manufacturers Association 

Washington Association of Washington Business 

Bellevue Chamber of Commerce 

Bonney Lake Chamber of Commerce 

Economic Alliance Snohomish County 

Ferndale Chamber of Commerce 

Greater Pasco Area Chamber of Commerce 

Greater Spokane Incorporated 

Greater Yakima Chamber of Commerce 

Kittitas County Chamber of Commerce 

Seattle Metropolitan Chamber of Commerce 

Southwest King County Chamber of Commerce 

Tacoma-Pierce County Chamber 

Tri-City Regional Chamber of Commerce 

Washington Council on International Trade 

109 

West Virginia West Virginia Chamber of Commerce 

West Virginia Manufacturers Association 

Wisconsin Eau Claire Area Chamber of Commerce 

Fox Cities Chamber of Commerce 

Metropolitan Milwaukee Association of Commerce 

Oshkosh Chamber of Commerce 

Wisconsin Farm Bureau Federation 

Wisconsin Manufacturers & Commerce 

Wyoming Campbell County Chamber of Commerce 

National American Farm Bureau Federation 

Business Roundtable 

National Association of Manufacturers 

National Black Chamber of Commerce 

U.S. Chamber of Commerce 

cc: Members of the United States Congress 

PREPARED STATEMENT OF HON. JACOB J. LEW, SECRETARY, 

DEPARTMENT OF THE TREASURY

April 16, 2015 

Chairman Hatch and Ranking Member Wyden, and distinguished members of the 

Committee, thank you for the opportunity to testify on Trade Promotion Authority. 

Bolstering global economic growth and stability remains a priority of the United 

States, and the U.S. Department of the Treasury has been working hard over the 

last six years to achieve a high-standard trade and investment agenda that raises 

income and spurs growth. 

Our robust trade agenda—the cornerstones of which include the Trans-Pacific 

Partnership and the Transatlantic Trade and Investment Partnership agreements— 

will expand opportunities for American businesses, create high-quality jobs, and further unlock the macroeconomic gains from expanded trade and investment. 

Today, exports make up some 30 percent of global GDP, and global per-capita incomes are over 50 percent higher than what they were 20 years ago. These macroeconomic gains are due in part to the framework of bilateral, regional, and multilateral trade agreements that are in place and to institutions such as the World Trade 

Organization that have been developed to implement the rules-based trading system. The rules-based trading system facilitates greater openness to trade—boosting 

U.S. and global exports of goods and services and opportunities for American workers—even as it raises the standard of living for consumers, through greater choice 

and access to quality imports. 

Much has changed in the way we trade and invest in the last 30 years. The 

growth of the services sector, the rise of electronic banking and commerce, and the 

major role of state-owned enterprises in some of the most dynamic regions of the 

world—altogether, these trends have expanded the sectors in which U.S. firms are 

investing and competing. At the same time, U.S. firms continue to face market access and fair competition challenges to operating, investing, and exporting overseas. 

Reducing trade barriers and securing reforms abroad through well-crafted trade 

agreements benefit both U.S. economic competitiveness and global economic prosperity. First, our firms and workers stand to benefit directly as our partner countries further open their markets to imported goods and services, including from the 

United States. Second, as countries open up to trade, over time they innovate more, 

invest more, and become more productive; the result is a stronger and more stable 

global economy. That, too, is important for American businesses and workers. 

TRADE PROMOTION AUTHORITY LEGISLATION

Trade Promotion Authority (TPA) is critical to helping secure the substantial economic gains that our ambitious trade and investment agreements can bring, including labor and environmental standards, consumer protections, and benefits for small 

and medium-sized businesses. There are few policy measures that can do more to 

support jobs and deliver sustained high-quality growth than trade agreements, and 

110 

TPA sends a strong signal to our trading partners that Congress and the Administration speak with one voice to the rest of the world on our priorities. 

We strongly agree with Members of Congress that unfair currency practices need 

to be addressed. Since day one, the President has been clear that no country should 

grow its exports based on a persistently undervalued exchange rate, and currency 

has been at the top of Treasury’s international agenda. We share the goal of moving 

major economies to market-determined exchange rate systems that are transparent, 

flexible, and reflect underlying economic fundamentals. 

PROGRESS ON EXCHANGE RATE POLICIES

We are working tirelessly to address currency concerns, and our efforts through 

bilateral and multilateral engagement have met with considerable success: 

We have secured unprecedented commitments in the G–7 and G–20 related to exchange rate practices. Through our leadership, Japan and other G–7 countries have 

publicly affirmed that they will not target exchange rates and will use only domestic 

instruments to achieve domestic economic objectives. 

Likewise, G–20 members have also pledged to move more rapidly toward more 

market-determined exchange rate systems and flexibility in order to reflect underlying economic fundamentals, avoid persistent exchange rate misalignments, not 

target exchange rates, and refrain from competitive devaluations. 

We have successfully pressed the IMF to bolster its surveillance of its members’ 

exchange rate policy obligations. As a result of our efforts, the IMF has begun publishing an External Sector Report that includes estimates of exchange rate misalignment for 25 major economies, and has developed an additional tool for monitoring 

countries’ foreign exchange reserves. 

We have made progress with China on exchange rates through the S&ED, and 

continue to raise the issue regularly with our Chinese counterparts. As part of our 

Strategic and Economic Dialogue (S&ED), China has committed to reduce its foreign 

exchange intervention as conditions permit—and the amount of China’s currency 

intervention has fallen significantly in the last year. This has contributed to a decline in China’s current account surplus from a peak of 10 percent of GDP before 

this Administration took office to just 2 percent of GDP last year. RMB has seen 

a real effective appreciation of nearly 30 percent since China allowed its currency 

to resume appreciation in mid-2010. 

We will continue to intensify our efforts on exchange rates using the tools and 

channels that are most effective. We will build on our ongoing multilateral and bilateral engagement in the G–20, IMF, and U.S.-China Strategic and Economic Dialogue to press countries even harder towards more market-determined exchange 

rates and to secure strong commitments on currency disciplines. 

We believe that more progress is needed, and Treasury will continue to engage 

with Congress on how best to address currency issues in a way that is consistent 

with our overall strategy of bilateral and multilateral engagement. 

PREPARED STATEMENT OF RICHARD L. TRUMKA, PRESIDENT, AMERICAN FEDERATION

OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS (AFL–CIO) 

April 21, 2015 

Mr. Chairman, Senator Wyden, members of the committee, thank you for the opportunity to speak today on behalf of the twelve and a half million working men 

and women of the AFL–CIO on this important topic. 

The labor movement and our allies have been advocating for a Raising Wages 

economy for many years. We don’t believe we can build strong and sustainable economic growth on a foundation of stagnant wages and disempowered workers. And 

a key component of a Raising Wages economy is a new approach to trade and 

globalization—one that puts good jobs, safe products, and a clean environment at 

the center of global economic integration—not enhanced corporate power and profits. 

The AFL–CIO has been advocating for a new trade policy for more than two decades—we have engaged with the executive branch, as well as with Congress, to advocate for progressively strengthening and making more effective our labor and environmental provisions, for reforming investment rules, for ensuring that we have 

111 

found the appropriate balance in regulatory measures and intellectual property protections, for fair rules of origin, and for finally including meaningful currency provisions in trade agreements, among many other issues. 

Far from being ‘‘opposed to trade on principle,’’ we have supported trade deals 

when warranted, such as the U.S.-Jordan trade agreement and trade preference 

programs such as the African Growth and Opportunity Act (AGOA) and the Generalized System of Preferences (GSP). We have supported reauthorization of the 

Export-Import Bank. We have engaged with policymakers in both parties and at 

every level to work toward a new generation of trade policies that will create a virtuous cycle of demand-led growth while strengthening our democracy, protecting 

workers’ rights globally and promoting sustainable global economic development. 

Key to reforming our trade policies is abolishing the outdated, unaccountable, undemocratic fast track process. 

For too long, decisions about trade policy have been made behind closed doors, 

with excessive secrecy. The secrecy tends to serve the policy interests of political 

and economic elites, not the broad interests of the American middle class. American 

workers, farmers, small and medium-sized businesses and domestic producers have 

paid the price. 

The stakes could not be higher. The Trans-Pacific Partnership (TPP), now being 

negotiated by our government, includes twelve countries and about 40 percent of the 

world economy. It is designed to be infinitely expandable—that means that additional countries could join in the future, subject to congressional approval and as 

long as they agree to the original terms negotiated. TPP could be the last trade 

agreement we negotiate, so it is especially crucial that we get the terms right. 

The idea that fast track lets Congress set the standards and goals for the TPP 

is a fiction—the agreement has been under negotiation for more than five years and 

is essentially complete. Congress cannot set meaningful negotiating objectives in a 

fast track bill if the administration has already negotiated most of the key provisions. And Congress will lost crucial leverage over any few remaining provisions by 

agreeing to fast track at this late date. 

To update our trade and economic policies for the 21st century, we must change 

the process that governs the negotiation and passage of trade deals. Today’s ‘‘trade’’ 

agreements are about much more than tariffs and quotas. They affect foreign and 

domestic investment, financial services, food safety, labor rights, environmental protections, Buy American procurement policies, consumer safety, health care, and 

more. These agreements put in place rules that could limit the ability of Congress 

and the states to legislate in the public interest now and for decades to come. Yet 

the public and Congress have too little say in the important details of these deals. 

Through fast track, past Congresses have ceded authority over trade policy to the 

executive branch with virtually no strings attached. While all fast track bills have 

gone through the charade of listing ‘‘negotiating objectives,’’ there have been no consequences when the administration willfully ignores or fails to achieve any or all 

of these. Fast track has failed to include meaningful accountability mechanisms, including tools to turn off expedited consideration when warranted. This cedes important and long-lasting decisions about our economy to a few negotiators in a small 

room in the middle of the night. This is undemocratic. It’s wrong. And it has led 

to disastrous policies for America’s workers and producers. 

America needs an entirely new trade negotiating authority, not minor tweaks at 

the margin. 

The Hatch-Wyden-Ryan Bipartisan Congressional Trade Priorities and 

Accountability Act of 2015 (Fast Track 2015) does not represent a new form 

of trade negotiating authority. It doesn’t meet a single criterion set out by 

the AFL–CIO in its publication ‘‘Time for a New Track.’’ 

Congress must not agree to fast track a fast track bill. The short time allotted between introduction of the bill, hearings, committee consideration, 

and floor action is a sign that this bill cannot stand on its own merits. It 

is losing support fast. It seems that its proponents see their only hope for 

passage is to rush it through before anyone has had a chance to review it 

properly. The American people deserve better. 

A new and effective trade negotiating authority must: 

• Ensure Congress approves trade agreement partners before negotiations begin: Congress should be able to weigh in on whether countries (includVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00115 Fmt 6601 Sfmt 6621 R:\DOCS\99678.000 TIMD
112 

ing those that suppress their wages through allowing or engaging in serious 

labor and human rights abuses) are appropriate partners to receive permanent 

trade benefits. If Congress does not agree with the choice of trade partners, it 

ought to be able to deny expedited consideration to agreements that include 

them. Fast Track 2015 contains not a single opportunity for Congress to reject 

an administration’s proposed trading partners. 

• Create negotiating objectives that are specific to the trade partners involved: Even though the U.S. has amassed historic trade deficits over the last 

20 years and is currently negotiating the TPP with partners that have histories 

as labor and human rights abusers, currency manipulators, over-fishers, or 

transshipment hubs, Fast Track 2015 fails to tailor objectives to the unique situations in the eleven countries involved. 

• Ensure that Congress, not the executive branch, determines whether 

Congressional trade objectives have been met: Fast Track 2015 fails to include an effective accountability mechanism to ensure that Congressional instructions are carried out, leaving the executive branch in the position of essentially grading its own performance. Not surprisingly, no executive branch has 

ever confessed failure to meet Congress’s goals. Congress should have the final 

say on whether negotiating objectives have been met. It could employ a variety 

of tools to help evaluate the deal, for instance by requiring reports from the 

Government Accountability Office, Congressional trade advisors, or from all 

Congressional committees whose jurisdiction would be impacted by the topics 

covered by the trade deal in question. Open hearings would help shed considerable light on the completed deals and help Congress to determine if its objectives were fulfilled. 

On the other hand, an evaluation process solely in the hands of the committees 

responsible for trade policy (Finance and Ways and Means) won’t provide a reliable measurement. It is widely conceded that neither committee is representative of the opinions of the larger body of Congress when it comes to trade. 

• Ensure Congress has effective opportunities to strip expedited consideration provisions from trade deals that fail to meet Congressional objectives or to incorporate Congressional and public participation: Fast 

track, even if it had perfect negotiating objectives, has never provided Congress 

a realistic opportunity to withdraw expedited consideration from deals that fail 

to measure up. For reasons noted above, the process cannot be left solely in the 

hands of the committees responsible for trade, as Fast Track 2015 does. The 

rest of Congress would have to rely on these committees to reject the trade deal 

first (an extremely unlikely possibility given the makeup of the panels) and only 

then attempt to strip expedited consideration from the deal. Leaving the decision solely in the hands of these committees provides no effective opportunity 

to ‘‘strip expedited consideration’’ from a job-killing deal. 

Nor should the process set impossibly high supermajority vote thresholds, which 

Fast Track 2015 also does, by requiring 60 votes in the Senate to strip fast 

track from a bad deal when only 51 are required to vote the deal down. If fast 

track privileges can be granted to a trade agreement on a simple majority vote, 

it should be possible to remove the privileges with a simple majority vote. To 

be clear, the goal of this criterion is not to subject a trade deal and its implementing legislation to an unwieldy process. It is to ensure that bad deals go 

back to the negotiating table instead of becoming bad laws. 

• Increase access to U.S. trade policymaking, trade proposals, and negotiating text for Congress, congressional staff, and the public: Fast Track 

2015 simply locks in current USTR practice, which is unacceptable. Instead, 

Congress should broadly expand the universe of those who have access to U.S. 

proposals and full negotiating texts (optimally, full negotiating texts should be 

available to the public). The 21st century is the Internet age—citizens are accustomed to viewing proposed and amended legislation on line. Trade policy 

should be no different. While USTR analogizes sharing trade proposals to showing a used car salesman one’s bottom line at the outset of negotiations, this 

analogy is inapt. Neither USTR, nor any other rational negotiating partner, 

would put its bottom line in its first proposal; and after the proposal has been 

shared with the negotiating partner, any possible justification for keeping it secret is moot. 

• Be part of a larger trade and competitiveness package that addresses 

shortcomings in existing trade enforcement and remedies and provides 

113 

complementary domestic economic policies that will help ensure that 

all can benefit from trade: Fast Track 2015 contains not a single piece of 

domestic economic reform to help America’s working families thrive under expanded trade. Trade is not a substitute for investing in our own future. To 

work, trade deals require thoughtful complementary policies, including upgrading our ports, airports, roads and rail; investing in education and skills training 

so that workers young and old can benefit from any new jobs that trade creates; 

labor market policies that support working families; renewal of export promotion initiatives, including the Export-Import Bank; extending tax policies to 

promote advanced manufacturing, renewable fuels, and R&D; and fully funding 

well-designed and easy to use enforcement mechanisms to catch and deter trade 

cheats. Enacting trade deals without upgrading our domestic economy will only 

lead to more disappointing deals that undermine jobs and wages for U.S. workers and exacerbate the race to the bottom. 

In short, the proposed fast track mechanisms are inadequate to ensure that the 

major shortcomings in the TPP will be resolved in ways that will benefit, rather 

than harm, working people in the U.S. and around the Pacific Rim. Among the 

numerous issues, the top four remain: 

Currency: Addressing currency manipulation is probably the single most effective action the U.S. can take to create jobs. The fact that currency provisions 

continue to be absent from the TPP is disturbing on two fronts: it is both a glaring policy omission and a procedural concern. In the absence of existing fast 

track legislation, the one trade-related issue on which bipartisan majorities of 

the House and Senate have spoken clearly is currency. Misaligned currency is 

an important contributing factor to the U.S. trade imbalance with China and 

other nations. The Economic Policy Institute estimates the U.S. could add as 

many as 5.8 million jobs by eliminating currency manipulation. Provisions must 

be included in the TPP, and they must be enforceable. Otherwise, the U.S. will 

continue to bleed jobs to China and other currency manipulators. 

Investment: To ensure that the TPP does not skew benefits toward global corporations, it should eliminate Investor-State Dispute Settlement (ISDS). ISDS 

undermines democratic control, and is currently being used to attack public 

health policies in Australia and Uruguay, environmental policies in Canada and 

Peru, and labor provisions in Egypt. Rather than challenge actual takings or 

discriminatory policies, global firms use ISDS to seek compensation for a violation of the nebulous right to ‘‘fair and equitable treatment,’’ which the private 

arbitrators have interpreted expansively. ISDS creates a chilling effect on local, 

state, and national measures and poses an unjustifiable risk to our democracy 

and economy. 

Climate: Currently, U.S. trade policy could undermine both domestic efforts to 

address climate and the administration’s bilateral agreement with China to cooperate on climate change and clean energy. Unless the TPP sets the bar in line 

with the recent bilateral agreement with China, it represents a missed opportunity. Without a border adjustment—to adjust the cost of highly polluting imports so that low-emission U.S. and high-emissions foreign goods can fairly compete—the TPP will do nothing to stop manufacturers from closing up shop in 

the U.S. and moving to TPP countries with no carbon reduction scheme in order 

to sell cheaper, dirtier goods here and around the globe, undercutting not only 

our workers but our efforts to address climate change. 

Labor: The labor movement has been clear from the outset of the TPP talks 

that the status quo on labor (the so-called ‘‘May 10’’ agreement) needed further 

strengthening. The ‘‘May 10’’ standards were a first step towards leveling the 

playing field for workers, but did too little to ensure timely and effective action. 

In 2011, the AFL–CIO joined with labor federations from the majority of TPP 

countries to draft and submit a comprehensive labor chapter that attempted to 

address past shortcomings. To the best of our knowledge, this new model has 

not been incorporated into the agreement. We have no reason to believe that, 

despite being touted as including the ‘‘highest labor standards ever,’’ the TPP 

will include meaningful improvements over ‘‘May 10.’’ The problem with language such as ‘‘highest labor standards ever’’ is that the point of comparison 

is so low—even after the highly touted ‘‘Labor Action Plan’’ in Colombia, workers continue to be killed, beaten, and threatened for exercising basic rights like 

organizing with fellow workers for better wages and working conditions. 

Indeed, the TPP may be too complex to stake out a position ‘‘for’’ or ‘‘against’’ 

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114 

pacts of prior, similarly structured agreements, and broad consultations with 

legal experts from a variety of points of view who have also had an opportunity 

to study the texts. Such discussion, study, and thorough evaluation seems unlikely given the current level of secrecy surrounding the text. Moreover, it 

seems even less likely to occur should Congress accede to fast track authority, 

which will severely limit the time that Congress and outside experts may study 

the text before a simple up-or-down vote is required. Finally, should Congress 

decide that, while the TPP contains some beneficial provisions, on balance it 

presents a risk to the firms, families, and communities of the United States, 

Congress may already have lost much of its leverage to force improvements in 

the deal. 

In sum, to get the TPP right, Congress faces consequential choices that, for the 

good of the country, should not be constrained by the misguided secrecy, speed, 

and unaccountability of fast track. To best safeguard the authority over trade 

policy given to Congress by the Constitution, the AFL–CIO urges Congress to 

reject the outdated and undemocratic process known as fast track and develop 

instead a new trade negotiating authority for the 21st century. 

SUBMITTED FOR THE RECORD BY RICHARD L. TRUMKA

United States Senate 

Washington DC 20510 

January 8, 2014 

President Barack Obama 

The White House 

1600 Pennsylvania Avenue 

Washington, DC 20500 

Dear Mr. President: 

Following the conclusion of another round of Trans-Pacific Partnership (TPP) negotiations, we write to reiterate our serious concern that strong and enforceable currency disciplines have not yet been addressed in the ongoing negotiations and may 

not be included in the final agreement. A well-negotiated TPP has the potential to 

help American businesses and workers, but an agreement that fails to address foreign currency manipulation could further harm the United States economy by leading to a permanent unfair trade relationship. 

Our concern regarding the impact of foreign currency manipulation on America’s 

workers and our economy is not new and is shared by the vast majority of our colleagues. In June, 230 Members of the House of Representatives wrote to you and 

said ‘‘it is imperative that the agreement address currency manipulation.’’ Then, in 

September, 60 Senators sent a similar letter to Secretary Lew and Ambassador 

Froman asking that TPP and all future trade agreements ‘‘include strong and enforceable foreign currency manipulation disciplines to ensure that these agreements 

meet the ‘high standards’ our country, America’s companies, and America’s workers 

deserve.’’ 

Thus far, United States trade negotiators have failed to propose currency disciplines 

in any TPP negotiating rounds, and our written concerns have gone unanswered. 

As you know, Congress ratifies free trade agreements, and we expect our concerns 

to be addressed in a strong and effective manner. On behalf of the 290 Members 

of Congress who expect foreign currency manipulation to be addressed in our trade 

agreements, please update us on what is being done to address our concerns. 

As we stated before, we agree with your goal that TPP should achieve ‘‘high standards worthy of a 21st century trade agreement.’’ However, we cannot conclude a 

truly ambitious trade agreement without the inclusion of strong and enforceable 

currency provisions. We believe the Administration has had adequate time not only 

for internal deliberations about such provisions, but also to negotiate them with our 

trading partners. Likewise, there exists significant congressional support for including currency manipulation provisions in TPP. We look forward to working with you 

to meaningfully address currency manipulation and to make TPP a truly 21st century trade agreement. 

Sincerely, 

115 

Lindsey Graham Debbie Stabenow 

Rob Portman Ron Wyden 

Jeff Merkley Tom Udall 

Christopher Murphy Amy Klobuchar 

John Boozman Charles E. Schumer 

Elizabeth Warren Joe Manchin III 

Al Franken Robert Menendez 

John D. Rockefeller IV Heidi Heitkamp 

Barbara A. Mikulski Claire McCaskill 

Benjamin L. Cardin Jeanne Shaheen 

Mark Begich Christopher A. Coons 

Roy Blunt Carl Levin 

Edward J. Markey Richard Burr 

James M. Inhofe Jerry Moran 

Jeff Sessions Patrick Leahy 

Kirsten E. Gillibrand Daniels Coats 

Saxby Chambliss James E. Risch 

Robert P. Casey, Jr. John Hoeven 

Jack Reed Martin Heinrich 

Tom Harkin Bill Nelson 

Tammy Baldwin Richard Blumenthal 

Joe Donnelly David Vitter 

Mark Pryor Bernard Sanders 

Sheldon Whitehouse Jon Tester 

Sherrod Brown Angus S. King, Jr. 

Susan M. Colins Dick Durbin 

Brian Schatz Mary L. Landrieu 

Mazie K. Hirono Chuck Grassley 

Pat Roberts Barbara Boxer 

Kay R. Hagan Tom Coburn 

Congress of the United States 

Washington DC 20515 

June 6, 2013 

President Barack Obama 

The White House 

Washington, DC 20500 

Dear President Obama: 

As the United States continues to negotiate the Trans-Pacific Partnership, it is imperative that the agreement address currency manipulation. Exchange rates strongly influence trade flows, and, in recent years, currency manipulation has contributed 

to the U.S. trade deficit and cost us American jobs. Incorporating currency provisions in the agreement will strengthen our ability to combat these unfair trade practices and help to create a level playing field for American workers, businesses, and 

farmers. 

Undervalued exchange rates allow other countries to boost exports or their products 

and to impede exports of ours. They also contribute to trade imbalances and market 

access limitations that make it difficult for U.S. companies to compete in foreign 

countries. According to the Peterson Institute for International Economics, a minimum of 1 million American jobs have been shipped overseas as a result of currency 

manipulation alone. The consequences are not singular to the U.S.; misaligned currencies are distorting the entire global economy. 

Despite U.S. efforts to address currency manipulation at the G–20, major currencies 

remain significantly undervalued. Including currency disciplines in the TPP is consistent with and will bolster our ongoing efforts to respond to these trade-distorting 

policies. It will also raise TPP to the 21st century agreement standard set by the 

Administration. More importantly, it will create a level playing field for American 

businesses and workers and prevent more U.S. jobs from being shipped overseas. 

116 

Thank you for your consideration of this letter. We look forward to working with 

you to address undervalued exchange rates in the TPP agreement. 

Sincerely, 

MICHAEL H. MICHAUD SAM GRAVES 

Member of Congress Member of Congress 

JOHN D. DINGELL RICK CRAWFORD 

Member or Congress Member of Congress 

SANDER M. LEVIN MARK POCAN 

Member of Congress Member of Congress 

JOHN CONYERS, JR. DAVID P. JOYCE 

Member of Congress Member of Congress 

WALTER B. JONES DANIEL LIPINSKI 

Member of Congress Member of Congress 

TIM RYAN MARCY KAPTUR 

Member of Congress Member of Congress 

GARY C. PETERS JAMES P. McGOVERN 

Member of Congress Member of Congress 

HOWARD COBLE BILL FOSTER 

Member of Congress Member of Congress 

MO BROOKS CAROL SHEA-PORTER 

Member of Congress Member of Congress 

DAVID LOEBSACK JANICE D. SCHAKOWSKY 

Member of Congress Member of Congress 

JERROLD NADLER BETTY McCOLLUM 

Member of Congress Member of Congress 

STEVE COHEN HENRY C. JOHNSON, JR. 

Member of Congress Member of Congress 

JOYCE BEATTY MICHAEL F. DOYLE 

Member of Congress Member of Congress 

ROSA L. DeLAURO PATRICK T. McHENRY 

Member of Congress Member of Congress 

MICHAEL E. CAPUANO MIKE McINTYRE 

Member of Congress Member of Congress 

GEORGE MILLER SCOTT H. PETERS 

Member of Congress Member of Congress 

PETER J. VISCLOSKY WILLIAM L. ENYART 

Member of Congress Member of Congress 

WILLIAM L. OWENS KEITH ELLISON 

Member of Congress Member of Congress 

GENE GREEN STEPHEN F. LYNCH 

Member of Congress Member of Congress 

CHRIS COLLINS LINDA T. SA ́ NCHEZ 

Member of Congress Member of Congress 

PAUL TONKO ERIC SWALWELL 

Member of Congress Member of Congress 

GWEN MOORE PETER WELCH 

Member of Congress Member of Congress 

DANIEL T. KILDEE H. MORGAN GRIFFITH 

Member of Congress Member of Congress 

JOHN A. YARMUTH BRUCE L. BRALEY 

Member of Congress Member of Congress 

DAVID N. CICILLINE NICK J. RAHALL II 

Member of Congress Member of Congress 

117 

LOUISE M. SLAUGHTER PETER A. DeFAZIO 

Member of Congress Member of Congress 

CORRINE BROWN GREGG HARPER 

Member of Congress Member of Congress 

RAU ́ L M. GRIJALVA CHRISTOPHER P. GIBSON 

Member of Congress Member of Congress 

EDDIE BERNICE JOHNSON KERRY L. BENTIVOLIO 

Member of Congress Member of Congress 

DAVID B. McKINLEY MIKE J. ROGERS 

Member of Congress Member of Congress 

CANDICE S. MILLER MICHAEL G. FITZPATRICK 

Member of Congress Member of Congress 

ELEANOR HOLMES NORTON MARCIA L. FUDGE 

Member of Congress Member of Congress 

ROBERT A. BRADY BRIAN HIGGINS 

Member of Congress Member of Congress 

DANIEL B. MAFFEI DONALD M. PAYNE, JR. 

Member of Congress Member of Congress 

ALCEE L. HASTINGS CHELLIE PINGREE 

Member of Congress Member of Congress 

BILL JOHNSON ALLYSON Y. SCHWARTZ 

Member of Congress Member of Congress 

PATRICK MEEHAN DONNA F. EDWARDS 

Member of Congress Member of Congress 

BILL HUIZENGA ANN KIRKPATRICK 

Member of Congress Member of Congress 

JAMES R. LANGEVIN CHERI BUSTOS 

Member of Congress Member of Congress 

CHARLES B. RANGEL TIM WALBERG 

Member of Congress Member of Congress 

JOHN LEWIS BILL PASCRELL, JR. 

Member of Congress Member of Congress 

BRAD SHERMAN GRACE F. NAPOLITANO 

Member of Congress Member of Congress 

JOSE ́ E. SERRANO KAREN BASS 

Member of Congress Member of Congress 

GRACE MENG TONY CA ́ RDENAS 

Member of Congress Member of Congress 

JANICE HAHN BARBARA LEE 

Member of Congress Member of Congress 

SANFORD D. BISHOP, JR. JOE COURTNEY 

Member of Congress Member of Congress 

LUIS V. GUTIERREZ MARK TAKANO 

Member of Congress Member of Congress 

JOHN F. TIERNEY PETE P. GALLEGO 

Member of Congress Member of Congress 

BETO O’ROURKE ALBIO SIRES 

Member of Congress Member of Congress 

KURT SCHRADER TAMMY DUCKWORTH 

Member of Congress Member of Congress 

ADAM KINZINGER COLLIN C. PETERSON 

Member of Congress Member of Congress 

CHAKA FATTAH CYNTHIA M. LUMMIS 

Member of Congress Member of Congress 

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SUSAN W. BROOKS ROB BISHOP 

Member of Congress Member of Congress 

JULIA BROWNLEY LLOYD DOGGETT 

Member of Congress Member of Congress 

ANN M. KUSTER DAVID SCOTT 

Member of Congress Member of Congress 

AL GREEN MARC A. VEASEY 

Member of Congress Member of Congress 

JOHN P. SARBANES TIMOTHY H. BISHOP 

Member of Congress Member of Congress 

JOE BARTON G.K. BUTTERFIELD 

Member of Congress Member of Congress 

MATTHEW A. CARWRIGHT RON BARBER 

Member of Congress Member of Congress 

ALAN GRAYSON RUSH HOLT 

Member of Congress Member of Congress 

SHEILA JACKSON LEE LOIS CAPPS 

Member of Congress Member of Congress 

C.A. DUTCH RUPPERSBERGER WILLIAM R. KEATING 

Member of Congress Member of Congress 

ELIJAH E. CUMMINGS TOM MARINO 

Member of Congress Member of Congress 

ANDRE ́ CARSON NIKI TSONGAS 

Member of Congress Member of Congress 

LORETTA SANCHEZ ROBERT E. ANDREWS 

Member of Congress Member of Congress 

EDWARD J. MARKEY XAVIER BECERRA 

Member of Congress Member of Congress 

EMANUEL CLEAVER DAVID E. PRICE 

Member of Congress Member of Congress 

FRANK PALLONE, JR. DUNCAN HUNTER 

Member of Congress Member of Congress 

DANNY K. DAVIS TERRI A. SEWELL 

Member of Congress Member of Congress 

JOE WILSON BRADLEY S. SCHNEIDER 

Member of Congress Member of Congress 

JOHN GARAMENDI ROBIN L. KELLY 

Member of Congress Member of Congress 

RICHARD M. NOLAN YVETTE D. CLARKE 

Member of Congress Member of Congress 

DORIS O. MATSUI TIMOTHY J. WALZ 

Member of Congress Member of Congress 

JOSEPH P. KENNEDY III STEVAN A. HORSFORD 

Member of Congress Member of Congress 

WILLIAM LACY CLAY JIM McDERMOTT 

Member of Congress Member of Congress 

DON YOUNG DINA TITUS 

Member of Congress Member of Congress 

JUDY CHU RODNEY DAVIS 

Member of Congress Member of Congress 

MIKE QUIGLEY RICHARD E. NEAL 

Member of Congress Member of Congress 

ADAM B. SCHIFF DEREK KILMER 

Member of Congress Member of Congress 

119 

BENNIE G. THOMPSON BEN RAY LUJA ́ N 

Member of Congress Member of Congress 

MICHAEL G. GRIMM LUCILLE ROYBAL-ALLARD 

Member of Congress Member of Congress 

ELIZABETH H. ESTY TIM MURPHY 

Member of Congress Member of Congress 

GLENN THOMPSON JON RUNYAN 

Member of Congress Member of Congress 

FRED UPTON LOU BARLETTA 

Member of Congress Member of Congress 

MELVIN L. WATT ROBERT C. SCOTT 

Member of Congress Member of Congress 

ED PASTOR FREDERICA S. WILSON 

Member of Congress Member of Congress 

JOHN K. DELANEY RAUL RUIZ 

Member of Congress Member of Congress 

JERRY McNERNEY SEAN PARTICK MALONEY 

Member of Congress Member of Congress 

FRANK A. LoBIONDO HAKEEM S. JEFFRIES 

Member of Congress Member of Congress 

TULSI GABBARD SAM FARR 

Member of Congress Member of Congress 

JAMES A. HIMES ED WHITFIELD 

Member of Congress Member of Congress 

CAROLYN McCARTHY THEODORE E. DEUTCH 

Member of Congress Member of Congress 

JOHN SHIMKUS MARLIN A. STUTZMAN 

Member of Congress Member of Congress 

SUZANNE BONAMICI LAMAR SMITH 

Member of Congress Member of Congress 

MICHELLE LUJAN GRISHAM AMI BERA 

Member of Congress Member of Congress 

NITA M. LOWEY KYRSTEN SINEMA 

Member of Congress Member of Congress 

LOIS FRANKEL ROBERT B. ADERHOLT 

Member of Congress Member of Congress 

MICHAEL C. BURGESS DAN BENISHEK 

Member of Congress Member of Congress 

ROBERT PITTENGER LEE TERRY 

Member of Congress Member of Congress 

JEFF FORTENBERRY JAMES E. CLYBURN 

Member of Congress Member of Congress 

KEVIN YODER HENRY A. WAXMAN 

Member of Congress Member of Congress 

ELIOT L. ENGEL JOHN BARROW 

Member of Congress Member of Congress 

JUAN VARGAS CAROLYN B. MALONEY 

Member of Congress Member of Congress 

DIANA DEGETTE JOHN C. CARNEY, JR. 

Member of Congress Member of Congress 

JACKIE SPEIER PATRICK E. MURPHY 

Member of Congress Member of Congress 

STEVE ISRAEL KATHY CASTOR 

Member of Congress Member of Congress 

120 

ED PERLMUTTER ANNA G. ESHOO 

Member of Congress Member of Congress 

THOMAS E. PETRI CHRIS VAN HOLLEN 

Member of Congress Member of Congress 

GERALD E. CONNOLLY JIM COOPER 

Member of Congress Member of Congress 

JIM MATHESON SUSAN A. DAVIS 

Member of Congress Member of Congress 

BOBBY L. RUSH ADAM SMITH 

Member of Congress Member of Congress 

ALAN S. LOWENTHAL RICK LARSEN 

Member of Congress Member of Congress 

SUZAN K. DELBENE DENNY HECK 

Member of Congress Member of Congress 

GLORIA NEGRETE McLEOD EARL BLUMENAUER 

Member of Congress Member of Congress 

JOSEPH CROWLEY JOHN B. LARSON 

Member of Congress Member of Congress 

Committee on Ways and Means 

Ranking Member Sander M. Levin 

April 16, 2015 

The Hatch-Wyden-Ryan TPA Bill: 

A Major Step Back on TPP Negotiations 

The Trans-Pacific Partnership (TPP) negotiations—the most important trade negotiations in at least 20 years—are at a critical juncture—with many issues unresolved. TPP has the potential to raise standards and open new markets for U.S. 

businesses, workers, and farmers—or to lock in weak standards, uncompetitive practices, and a system that does not spread the benefits of trade. 

Unfortunately, the Hatch-Wyden-Ryan Trade Promotion Authority (TPA) does not 

move us toward a stronger TPP agreement that will garner broad, bipartisan support in Congress. TPP is not where it needs to be right now, and Hatch-Ryan-Wyden 

does nothing to change that. On all of the major issues in the negotiations, the negotiating objectives are obsolete or woefully inadequate. We can’t expect to get the best 

deal if we are not asking for the right things. 

The Hatch-Wyden-Ryan TPA gives up Congressional leverage at the exact wrong 

time. Instead of pressing USTR to get a better agreement or signaling to our negotiating partners that Congress will only accept a strong agreement, the Hatch-WydenRyan TPA puts Congress in the back seat and greases the skids for an up-or-down 

vote after the fact. Real Congressional power is not at the end of the process, it is 

right now when the critical outstanding issues are being negotiated. 

Below is a brief review of the major outstanding issues in TPP, and how the HatchWyden-Ryan TPA bill fails to instruct the Administration on how each issue should 

be resolved. 

How the TPA Bill is a Major Step Back in Improving TPP Negotiations 

Currency Manipulation 

Issue: Majorities in the House and the Senate have urged the Administration to 

include strong and enforceable currency obligations in the TPP, which includes a number of countries that have manipulated their currencies in the 

recent past, such as Japan. Other alleged manipulators, such as Korea and 

Taiwan, have also expressed an interest in joining TPP. 

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1The ‘‘May 10th Agreement’’ of 2007, as initiated by House Democrats, incorporated for the 

first time in history strong and fully enforceable labor and environmental obligations in trade 

agreements and included several other important new rules, including providing a better balance between strong intellectual property rights and access to affordable medicines. 2The TPA bill lumps together labor and environment into one negotiating objective. 

Status: The Administration has not made a currency proposal in the TPP negotiations. 

TPA ↓ The Hatch-Wyden-Ryan TPA bill leaves it up to the Administration to 

decide how to address currency manipulation, and only lays out options that 

the President already has to address the issue—including things like ‘‘monitoring’’ that are already being done. 

Labor Rights 

Issue: Will all TPP parties meet international worker rights standards? 

Status: TPP does not yet have a mechanism to ensure compliance by TPP parties 

that have labor laws and practices that fall far short of international standards contained in the ‘‘May 10th Agreement’’ even though TPP is expected 

to include the May 10th obligation with enforceability through the basic dispute settlement structure in TPP.1

Vietnam presents the greatest challenge we have ever had in ensuring compliance. Workers there are prohibited from joining any union independent 

of the communist party. While the Administration is discussing these issues 

with Vietnam, Members of Congress and stakeholder advisors have not yet 

seen any proposal to address these critical issues. The Administration also 

has not committed to ensuring that all changes to laws and regulations are 

made before Congress votes—or even before the TPP agreement enters into 

force. 

Mexico also presents considerable challenges. Employer-dominated ‘‘protection unions’’ are prevalent, and the arbitration boards responsible for resolving labor disputes are inherently and structurally biased. It is not clear 

whether, how, or when the Administration will resolve these and other 

issues with Mexico. Without their resolution, it will not be possible to say 

that the problems with NAFTA are being fixed. 

TPA ↓ The Hatch-Wyden-Ryan TPA bill does not address what Congress believes 

needs to be done to bring countries like Vietnam and Mexico (as well as Malaysia and Brunei) into compliance with international labor standards. It 

contains only general language in line with the May 10th Agreement.2

Environment 

Issue: Will the TPP environmental chapter ensure a level of environmental protection at least as high as the May 10th standard which directly incorporated 

seven multilateral environmental agreements into the text of past trade 

agreements? 

Status: The TPP environment chapter will look very different from the May 10th 

Agreement. The environment chapter covers a broad range of subjects, ranging from shark finning, to fish subsidies, to trade in illegally harvested 

plants and animals. But the obligations themselves—the ‘‘verbs’’ used—are 

often weak. 

TPA ↓ The Hatch-Wyden-Ryan TPA bill simply lists the seven multilateral environmental agreements from the May 10th Agreement, which is not consistent 

with the approach taken in TPP and is obsolete in providing instructions 

since the TPP is already taking a different approach. The TPA bill also does 

not address whether or how climate change issues should be handled in 

TPP, an issue raised by other countries in the TPP negotiations. 

Investment and Investor-State Dispute Settlement (ISDS) 

Issue: Will the TPP include an investor-state dispute settlement (ISDS) mechanism that provides foreign companies a right of action against other governments for infringing on the companies’ investment rights? Will the TPP include an ISDS mechanism without incorporating any new, additional safeguards to prevent it from being abused? 

122 

There are now more cases of private investors challenging environmental, 

health, and other regulations in nations—even nations with strong and 

independent judicial systems and rule of law. Just last month, an investor 

won a NAFTA ISDS case in which the government of Nova Scotia denied 

a permit to develop a quarry in an environmentally sensitive area. Other 

investment disputes involve ‘‘plain packaging’’ of tobacco products in Australia aimed at protecting public health and pharmaceutical patent requirements in Canada. This issue is receiving heightened scrutiny among negotiators and from a broad-range of interested parties. Some of our TPP partners do not support ISDS or are seeking safeguards to ensure that nations 

preserve their right to regulate. The Economist magazine, the Cato Institute, and the Government of Germany (the birthplace of ISDS) have also recently expressed concerns with ISDS. 

Status: The text of the investment chapter in TPP includes ISDS and is basically 

the same as the model adopted 10 years ago, even though conditions have 

changed dramatically in the past 10 years, and calls for changes to or elimination of the chapter have intensified. Despite proposals to include new 

safeguards in the ISDS mechanism, the Administration has not made any 

attempts to incorporate them. 

TPA ↓ The Hatch-Wyden-Ryan TPA investment negotiating objective is the same 

as it was 12 years ago again and is obsolete. 

Access to Medicines 

Issue: Will the TPP ensure a balance between strong intellectual property rights 

and access to affordable, life-saving medicines, as provided under the May 

10th Agreement? 

Status: Absent some change in course, the final text is likely to provide less access 

to affordable medicines than provided under the May 10th Agreement. For 

example, developing countries will likely be required to ‘‘graduate’’ to more 

restrictive intellectual property rights standards before they become developed—a clear inconsistency with May 10th. There are also a number of concerns that the TPP agreement will restrict access to medicines in the United 

States and other developed countries (e.g., by encouraging second patents on 

similar products, by having long periods of data exclusivity for biologic medicines, by allowing drug companies to challenge government pricing and reimbursement decisions). 

TPA ↓ The Hatch-Wyden-Ryan bill includes additional language on access to medicines that was not part of the 2002 bill, apparently as a nod to the May 10th 

Agreement. But it is unclear what this language means. 

Automotive Market Access 

Issue: Will the TPP finally open Japan’s market to U.S. automobiles and auto 

parts? 

For most of the past 15 years, our trade deficit with Japan has been second 

only to our deficit with China, and over two-thirds of the current deficit is 

in automotive products. Japan has long had the most closed automotive 

market of any industrialized country, despite repeated efforts by U.S. negotiators over decades to open it. At a minimum, the United States should not 

open its market further to Japanese imports, through the phase-out of tariffs, until we have time to see whether Japan has truly opened its market. 

Status: The Administration has not stated a specific period of time for when the 

phase-out in U.S. tariffs for autos, trucks, and auto parts would begin or 

when they would end. The parties are also still working to address certain 

non-tariff barriers that Japan utilizes to close their market. 

TPA ↓ The Hatch-Wyden-Ryan TPA bill broadly states that the United States 

should ‘‘expand competitive market opportunities for exports of goods.’’ 

Such a broad negotiating objective provides no guidance regarding how 

to truly open the Japanese automotive market. 

Rules of Origin 

Issue: Will the TPP incorporate rules that ensure that the benefits of the tariff 

cuts flow primarily to the parties to the agreement and not to free-rider 

third parties that have not signed up for the commitments in the TPP? 

123 

‘‘Rules of origin’’ define the extent to which inputs from outside the TPP region (e.g., China) can be incorporated into an end product for that product 

to still be entitled to preferential/duty-free treatment under the Agreement. 

The rule should be restrictive enough to ensure that the benefits of the 

agreement accrue to the parties to the agreement. Some have argued that 

the automotive rule of origin in TPP should be at least as stringent as the 

rule in NAFTA, given that TPP involves all three of the NAFTA countries 

plus nine others. 

Status: There are a number of rules of origin being negotiated in the TPP for different products, including in the sensitive textile and apparel, agricultural, 

and automotive sectors. Some of the rules are largely settled while others— 

including the rules for automotive products—remain open and controversial. 

TPA ↓ The Hatch-Wyden-Ryan TPA bill provides no guidance whatsoever on any 

rule of origin on any product in the TPP negotiations. 

Tobacco Controls 

Issue: Will the TPP safeguard countries’ ability to regulate tobacco as a matter of 

public health? 

TPP needs to explicitly preserve the ability to regulate tobacco. A number 

of recent international disputes have challenged tobacco measures, including 

multiple disputes (both WTO and ISDS) challenging Australia’s plain packaging scheme for cigarettes. A number of public health groups are concerned 

about the potential of FTAs to roll back legitimate tobacco control measures. 

Status: In 2013, the Administration decided not to pursue a safe harbor for tobacco 

in TPP that it had originally supported. Instead, the Administration tabled 

a proposal that merely confirms that tobacco measures may be subject to the 

normal public health exception in our trade agreements—drawing intense 

criticism from former mayor Bloomberg, the New York Times editorial 

board, and NGOs. 

TPA ↓ The Hatch-Wyden-Ryan TPA bill provides no guidance on tobacco control 

measures, given the Administration the flexibility to include whatever it 

wants, or nothing at all. 

State-Owned Enterprises 

Issue: Will the TPP impose rules on companies effectively run and funded by their 

governments, so that truly private enterprises can compete with them on a 

level playing field? 

In today’s global economy, competition is fiercer than ever. Certain countries 

that rely heavily on state-controlled and state-funded enterprises (also 

known as state-owned enterprises or SOEs) are able to give those champions 

an enormous—and unfair—advantage over private companies that compete 

against them in the marketplace. And, in turn, those SOEs don’t always operate based on commercial considerations, but instead may pursue state objectives such as favoring local suppliers over U.S. suppliers. 

Status: The TPP will include disciplines on SOEs that are expected in language to 

go beyond anything ever included in past trade agreements. But the extent 

to which an SOE provision will help to level the playing field, will be determined by the degree to which parties seek very broad country-specific carveouts for particular SOEs. As concerning, the definition of SOEs is too narrow, allowing enterprises that are effectively controlled by foreign governments (but where the government owns less than 50% of the shares) to circumvent the obligations. 

TPA ↓ The TPA bill provides no guidance on what an acceptable definition of 

an SOE is, or on what kinds of carve-outs are acceptable. 

Agricultural Market Access 

Issue: Will the TPP eliminate tariffs on virtually all U.S. agricultural exports, especially in markets that have been traditionally sheltered from competition 

from trade like Japan’s and Canada’s? 

Status: It appears that the United States and Japan will agree that Japan will reduce tariffs—but never eliminate them—on hundreds of agricultural products, far more carve-outs than under any U.S. trade agreement in the past. 

124 

Canada, on the other hand, has not put any offer on the table for dairy 

products, which is causing some concern in the dairy industry. This concern 

is even stronger given that the dairy industry is not entirely pleased with 

the status of the Japan negotiations, plus the fact that the industry is concerned about an increase in dairy imports from New Zealand. Finally, the 

dairy industry is also closely watching the negotiations over ‘‘geographical 

indications’’ as it relates to cheeses and other dairy products. 

TPA ↓ The Hatch-Wyden-Ryan TPA bill has as its objective ‘‘reducing or eliminating’’ tariffs on agricultural products. (Emphasis added.) Thus, even Japan’s opening offer—to reduce but never eliminate tariffs on nearly 600 

products—satisfied this objective, demonstrating this objective is meaningless. And while former Chairman Camp said that Japanese ‘‘exclusions 

from tariff elimination translate to Congressional opposition,’’ the bill does 

not mention comprehensive tariff elimination even as a negotiating objective, much less as a requirement. 

Food Safety Measures 

Issue: Will the TPP safeguard the ability of regulators to block unsafe imported 

food while also ensuring that U.S. agricultural exporters are not subjected 

to bogus food safety measures? 

Status: TPP will be the first U.S. trade agreement that will include restrictions on 

the kind of measures TPP parties can take to block food imports based on 

alleged safety concerns, reflecting growing, legitimate concerns of U.S. farmers and ranchers. 

We have asked the Administration to confirm that existing U.S. laws, regulations and practices will not be impacted by these obligations. There is also 

a concern that we do not have adequate resources to monitor the safety of 

food imports. 

TPA ↓ The Hatch-Wyden-Ryan TPA bill requires the President to report on any 

changes to U.S. labor laws or practices necessary to comply with the labor 

obligations in a trade agreement. It has no similar provision regarding 

changes to U.S. food safety laws or practices, nor does it ensure adequate 

resources to monitor the safety of food imports. 

The Basic Structure of Hatch-Wyden-Ryan is Flawed 

In addition to the obsolete or weak negotiating objectives, the Hatch-Wyden-Ryan 

TPA does not strengthen the role of Congress once its power is ceded through TPA. 

For example: 

↓ Hatch-Wyden-Ryan relies on the President to certify whether his negotiators 

have met the negotiating objectives that Congress set. It is unacceptable to 

rely upon a President—who negotiated the agreement—to issue a statement 

‘‘asserting that the agreement makes progress in achieving’’ Congressional 

negotiating objectives. 

↓ Hatch-Wyden-Ryan includes a provision that ‘‘creates a new mechanism for 

the removal of expedited procedures for a trade agreement if, in the judgment of either the House or Senate, that agreement does not meet the requirements of TPA.’’ But this is authority that the House and Senate already 

hold. We can always change the rules of the House. Indeed, House Democrats did that when we removed the Bush-negotiated Colombia Free Trade 

Agreement from ‘‘fast-track’’ procedures in 2008. The so-called ‘‘third process’’ would happen after the agreement is finalized and after the implementing legislation is introduced further indicated how meaningless it is in 

providing Congress a real role in the negotiations. 

↓ Hatch-Wyden-Ryan leaves it up to USTR ‘‘to develop within 120 days of enactment written guidance on enhanced coordination with Congress’’ which is 

particularly meaningless given the status of TPP negotiations. 

125 

PREPARED STATEMENT OF HON. TOM VILSACK, SECRETARY, DEPARTMENT OF AGRICULTURE

April 16, 2015 

Mr. Chairman, members of the Committee, I am pleased to come before you today 

to discuss the benefits of agricultural trade, trade agreements, and Trade Promotion 

Authority (TPA) for America’s farmers, ranchers, and producers. 

The Administration fully supports passage of bipartisan TPA legislation. Securing 

TPA is a top USDA priority. That is why I have been speaking publicly and sending 

USDA officials to roundtables around the country to make the case for a trade agenda that merits strong bipartisan support. TPA is a linchpin in finalizing trade agreements that strengthen the U.S. economy through expanding exports, which are critically important to the U.S. agricultural sector. 

Fiscal years 2009 to 2014 represent the strongest six years in history for U.S. agricultural trade, with U.S. agricultural exports totaling $771.7 billion. Agricultural 

exports last fiscal year reached $152.5 billion, the highest level on record. U.S. agricultural exports support more than one million jobs across America. These numbers 

would not be possible without the market access secured in trade agreements. 

Access to export markets is vital to U.S. agriculture. Our producers rely on and 

prosper from access to foreign markets. We export: 

• About half of U.S. wheat, milled rice, and soybean production; 

• Over 60 percent of almond, walnut and pistachio production; 

• More than two-thirds of cotton production; 

• 40 percent of grape production, 20 percent of cherry production and 20 percent 

of apple production; 

• 20 percent of poultry and pork production and 10 percent of beef production. 

Population growth and rising incomes—particularly in the developing countries of 

the Asia-Pacific—are creating significant new agricultural export opportunities. U.S. 

farmers, ranchers, and food processors are well positioned to capitalize on growing 

global demand, especially since the productivity of U.S. agriculture is growing faster 

than domestic food and fiber demand. But to capitalize, we need to break down tariff and non-tariff barriers to allow our agricultural sector to compete on a level playing field. Eight former Secretaries of Agriculture agree. That is why they recently 

wrote to you noting that it is critical for U.S. agriculture that Congress passes a 

bipartisan TPA. The former Secretaries noted how each of them worked hard to 

open foreign markets and support trade agreements that help U.S. farmers, ranchers, and producers thrive. 

Despite our export successes, many other countries’ markets are not as open to 

American products as our markets are to theirs. Trade agreements are the most effective way to eliminate foreign tariffs, unscientific regulatory barriers, and bureaucratic administrative procedures designed to block trade. Trade agreements lead to 

expanded agricultural exports by promoting economic growth, removing trade barriers and import duties, and developing mutually beneficial trade rules. 

Key to our ability to negotiate and implement market-opening agreements has 

been enactment of trade negotiating authority. TPA ensures that the United States 

has the credibility to conclude the best deal possible at the negotiating table. TPA 

ensures common trade agreement objectives between the President and the Congress, and appropriate consultation prior to final Congressional approval or disapproval of a trade agreement. TPA will signal to Trans-Pacific Partnership (TPP) 

and Transatlantic Trade and Investment Partnership (T–TIP) negotiation counterparts that Congress and the Administration stand together on the high standards 

we are seeking at trade talks. 

For U.S. agriculture the opportunities of TPP are clear across the board. Here are 

a few examples where TPP will address tariffs and expand market opportunities for 

U.S. farmers and ranchers: 

• Beef—Japan is the largest export market for U.S. beef, valued at $1.6 billion 

in 2014. Tariffs are as high as 50 percent in some TPP countries. 

• Pork—Japan was the United States’ top pork market in 2014 with $2 billion 

in sales despite high tariffs and a complicated import system, both of which will 

be addressed in TPP. 

126 

• Poultry—Poultry tariffs in the TPP region are as high as 240 percent, and in 

2014, the United States exported over $2.5 billion of poultry to the TPP region. 

• Dairy Products—TPP countries markets for dairy accounted for $3.6 billion in 

U.S. dairy product exports in 2014. 

• Fruits—Tariffs on fruits are as high as 40 percent across the TPP region, and 

in 2014, the United States exported almost $3.1 billion in fresh fruits to the 

TPP region. 

• Vegetables—In 2014, the United States exported almost $5 billion in fresh and 

processed vegetables to the TPP region, and tariffs are as high as 90 percent. 

• Wheat—In 2014, the United States exported more than $2 billion of wheat to 

the TPP region, including to Japan where the United States is the dominant 

supplier. 

• Soybeans and Soybean Products—The TPP region is the fourth-largest export 

destination for U.S. soybeans, accounting for over $1 billion a year in sales, despite tariffs as high as 20 percent. 

• In addition to cutting tariffs, the TPP will include strong sanitary and phytosanitary (SPS) provisions that will improve transparency and scientific decisionmaking to provide expanded access for U.S. products including meat, fresh 

fruits, and vegetables. 

Trade in the 21st century is also about America’s place in the world. The TPP 

is key to markets in Asia and the ability for the United States to play a lead role 

in establishing the rules and terms of trade throughout the Pacific Rim. If we don’t 

get a trade agreement, the world will not stand still; other countries will step in 

and fill the void. They will have their own trade agreements. For those of us in agriculture who are concerned about raising standards, reducing barriers to trade, securing preferential access, and instituting enforcement provisions, the question is 

who do you want writing the rules of the road? I want the United States negotiating 

those rules. 

With TPA, the United States will be able to seal the deal on high standard agreements, like the TPP and the T-TIP, that will help America’s farmers and ranchers 

increase U.S. exports and compete in a highly competitive, globalized economy. But 

don’t just take my word for it, I urge you to speak to your farmers, ranchers, and 

producers. A group of more than 70 agricultural organizations recently sent a letter 

to Congress stating that TPP can become the ‘‘most important regional trade negotiation ever undertaken’’ but for ‘‘TPP to become reality, Congress needs to pass 

TPA.’’ I am committed to working with you in securing a bipartisan TPA. 

Thank you. I look forward to your questions. 

PREPARED STATEMENT OF HON. RON WYDEN

April 16, 2015 

In several town halls I’ve recently held at home in Oregon, the number one issue 

that came up was secrecy. That’s why I felt it was important to start the conversation on this issue as soon as possible. If you believe in trade and you want more 

of it, it doesn’t make sense to have all this secrecy that makes the public cynical 

about what’s going on. American trade policy needs to be pulled out of the time 

warp so that it works better for the middle class and delivers a new level of transparency. This has to be about creating more red, white and blue jobs and helping 

people climb the economic ladder. The same old playbook on trade won’t work for 

Oregonians, so I won’t accept it. 

As Chairman Hatch and I discussed, we are working hard on finding common 

ground on modernizing our approach to trade policy. That includes Trade Promotion 

Authority, Trade Adjustment Assistance, tougher enforcement strategies and other 

important programs. 

There are some very significant goals to accomplish. I believe it’s essential to step 

up our enforcement of trade laws to stop rule-breaking countries more effectively. 

Enforcement should be based on defending American jobs and promoting economic 

growth at home. 

127 

It’s time to raise the bar on labor standards, environmental protection, and 

human rights. No other country will carry the banner and fight for those values like 

the United States. 

It’s important to solidify the support system for workers in Oregon and across the 

country. Middle-class trade policies will work best when our workforce is ready to 

compete and when workers have access to job training, financial support, and health 

care. 

And finally, it’s necessary to build a better process and more transparency in 

trade policy. The public has a right to know what’s at stake in trade negotiations, 

plain and simple. Those are some of the priorities I’m focused on as the committee 

works to find common ground. I look forward to discussing these issues with the 

witnesses here today. 

PREPARED STATEMENT OF HON. RON WYDEN

April 16, 2015 

What’s most important about the package I worked on with Chairmen Hatch and 

Ryan, in my view, is that it builds middle-class trade policies that will heighten 

transparency, expand economic opportunity, and create good jobs here at home. 

Let’s be clear—this legislation will not dust off the same old playbook from decades 

ago. Our approach to trade has been stuck in a time warp for too long. That old 

plan doesn’t work for Oregonians or for everyday Americans across the country. This 

new package is a modern approach designed to help American workers and businesses take on the challenges of the global marketplace. 

It does that by setting higher standards for trade agreements, stepping up tough 

enforcement, and delivering a new level of transparency, accountability, and oversight in trade. In sum, this package raises the bar for trade deals, and challenges 

our negotiators and other countries to meet it. If they fall short and the product 

doesn’t meet our standards, Congress can still hit the brakes on a bad deal. That’s 

something I fought to secure. And this package strengthens the support system for 

American workers and helps ensure our workforce is ready to compete. So with the 

remainder of my time this afternoon, I’d like to run briefly through those highlights. 

First is how this legislation will ensure American businesses and workers—particularly in the middle class—get more out of trade. This package includes a new 

tool to put the focus of trade enforcement back where it belongs—on American jobs 

and growth—and make sure our trading partners live up to their commitments. It 

includes new enforcement provisions to stop foreign companies from making endruns around our laws. And if other countries try to break the rules, it will include 

a new monitoring system to ensure that the warning bells will go off earlier than 

ever before. 

With this package, labor rights and environmental standards will be brought to 

the core of trade agreements and backed by the threat of sanctions, rather than left 

unenforced on the periphery. There will be a new emphasis on human rights in 

agreements. And there will be new priorities set to ensure information can flow freely across national borders, which is crucial in today’s digital economy. Nobody else 

has the muscle or the determination to force progress on those issues like the 

United States does. 

Second, I want to talk about how this legislation creates a better process and 

more transparency in trade policy. Under this package, the public and their representatives in Congress will get real-time updates on what’s at stake in trade negotiations. Every member of Congress will have full access to the text of negotiations 

from beginning to end. And any trade deal will be public for 60 days before the 

president can sign it. 

No trade deal will be able to change U.S. law without Congressional action. There 

will not be any back door for corporations to skirt U.S. law. Foreign companies will 

have no more rights in international tribunals than they have in American courts. 

And with this package, there will be a new procedure to hit the brakes on bad 

trade deals before they reach the Senate or House floor. So this is not a green light 

for any future trade deal that comes along. 

Third, this legislation backs workers in Oregon and across the country by providing job training and financial support and by preserving their access to health 

128 

care. Competing in the global economy is a tough, national challenge. Taking that 

challenge on, it’s absolutely essential to support America’s workers—especially in 

tough times. That’s why this package expands the Trade Adjustment Assistance program to include not just manufacturing sector workers but service sector workers 

as well, and to cover workers were hurt by competition from any country around 

the world. This restores the policy to exactly what was in place in 2013, and extends 

it until July 2021. It also extends the Health Care Tax Credit. 

Those three points are only some of what this legislation does. It also includes 

important preference programs called the Generalized System of Preferences and 

the African Growth and Opportunity Act. GSP will last through 2017 and AGOA 

for a decade. It includes a five year extension of the Haiti HOPE Act. 

A full description of everything this package does to modernize trade policy would 

keep us here till sundown, so I’ll close by saying this. There are booming economies 

around the world that have more money to spend with every passing year. So my 

bottom line is, we should grow and manufacture things here, add value to them 

here, and ship them to consumers in those markets abroad. The package of legislation I’ve worked on with Chairmen Hatch and Ryan will help ensure our trade policies do that in a transparent way that strengthens the middle class, expands economic opportunity, and creates high-skill, high-wage jobs here at home. I look forward to discussing that opportunity with our witnesses today. 

PREPARED STATEMENT OF HON. RON WYDEN

April 21, 2015 

My guiding principle in six months of negotiating with Chairman Hatch and 

working with the members of this committee is that the playbook for trade has to 

change. It’s clear, in my view, that trade agreements in 2015 must be very different 

than trade agreements from the 1990s. The president himself said in the State of 

the Union that previous trade deals haven’t always, ‘‘lived up to the hype.’’ So our 

policies can’t be stuck in a time warp. 

Twenty-five years ago, nobody carried around iPhones. The Internet was not anything close to the economic engine it is today. China was only beginning to develop 

into an economic powerhouse. Container ships were smaller and the world traded 

less. 

It’s a different world today, which is why the legislation the committee is debating 

this week throws out the old playbook. Here’s some of what’s different with this legislation. 

First, it will put the focus of enforcement back where it belongs—on jobs and 

growth here in America. I hear a lot of people ask, ‘‘Why bother negotiating new 

trade deals when the existing trade laws aren’t being enforced?’’ This legislation will 

help make sure the warning bells go off earlier and more loudly when other countries try to break the rules. And it will help stop other countries and companies that 

try to make end-runs around our laws. It will also break down unfair trade barriers 

that are preventing Made in America products from competing on a level playing 

field in overseas markets. 

Second, with this legislation, the U.S. is going to aim higher in its trade deals. 

In the 1990s, labor rights and environmental standards were unenforceable sidedeals in trade agreements. Those side-deals had no teeth, which meant they weren’t 

much good from the beginning. That’s going to change today because labor and the 

environment will be core, enforceable elements in trade agreements going forward. 

Furthermore, there will be a new emphasis on human rights in trade deals. And 

protecting an open Internet and the digital economy will be new priorities. 

Third, this legislation is going to fight the excessive secrecy that causes people 

to be skeptical about trade. If you believe in trade and want more of it, why have 

so much secrecy? Under this legislation, any trade deal will be public for 60 days 

before the president can sign it. Add in the time it takes to move through Congress, 

and that means deals will be public for four or five months. In addition, Congress 

and the public will get real-time updates on what’s at stake in negotiations. That’s 

a new level of transparency. 

Fourth, this legislation goes further than any TPA bill to protect American sovereignty. It guarantees that trade deals cannot change U.S. law without congressional action. And foreign companies will have no more rights in international tribuVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00132 Fmt 6601 Sfmt 6621 R:\DOCS\99678.000 TIMD
129 

nals than they have in American courts today. There won’t be any back door that 

would let corporations skirt our laws. 

Finally, this legislation protects Congress’ ability to hit the brakes on a bad trade 

deal. This bill is not a green light for the Trans-Pacific Partnership or any trade 

deal that comes before Congress. What this legislation does is raise the bar for future trade deals and challenge our negotiators and foreign countries to meet it. If 

they fail, Congress can stop a bad deal dead in its tracks. That’s an important democratic power that I fought to protect. 

I’ll wrap up by saying that the global middle class will more than double in size 

by 2030, with most of that growth overseas. And as I see it, there will be a positive 

link between the strength of America’s middle class and the growing middle class 

around the world. Billions of people, for the first time, will be looking to buy food, 

computers, cars, and hundreds of other products and services. I bet everybody in 

this hearing room would like to see those products and services made and delivered 

by Americans. 

In my view, the legislation under debate this week—and in the weeks ahead— 

is all about fighting for the Oregon brand and the American brand. This is Congress’s best chance to produce middle-class trade policies and fight for American values around the world. And I’m looking forward to debating how best to accomplish 

that. 

(131) 

COMMUNICATIONS

LETTER SUBMITTED BY THE AMERICAN CHEMISTRY COUNCIL

April 21, 2015 

The Honorable Orrin G. Hatch The Honorable Ron Wyden 

Chairman Ranking Member 

Committee on Finance Committee on Finance 

U.S. Senate U.S. Senate 

219 Dirksen Senate Office Building 219 Dirksen Senate Office Building 

Washington, D.C. 20510 Washington, D.C. 20510 

Dear Chairman Hatch and Ranking Member Wyden: 

The American Chemistry Council (ACC) strongly supports current initiatives to expand access for U.S. exports to key international markets. We particularly support 

the Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (TTIP) negotiations as a means to achieve these export objectives. Trade 

Promotion Authority (TPA) renewal is among the most critical trade votes Congress 

must undertake to realize America’s ambitious trade agenda and support expanded 

growth in exports. We urge Congress to renew TPA as soon as possible. 

The business of chemistry in the United States is enjoying an unprecedented boom 

in competitiveness and growth, largely due to the increased supply of low-cost natural gas, a feedstock and a power source for chemical manufacturing. As a result 

of shale gas, more than 229 separate chemical manufacturing investments have 

been announced since 2010, representing a cumulative capital investment of $140 

billion in new chemical capacity. This new capacity will exceed U.S. domestic demand, and will necessarily serve important export markets. Even with the recent 

drop in oil prices, gross exports of chemical products linked directly to natural gas 

are projected to double in the next fifteen years, from $60 billion in 2014 to $123 

billion by 2030, according to a recent report from Nexant, Inc. However, enhanced 

U.S. chemical export performance will depend on many factors, including the U.S. 

pursuing the right trade policies that further strengthen the competitive position of 

the U.S. industry. 

TPA is critical to completing the trade agreements now being negotiated. TPA will 

therefore help open markets and help ensure the U.S. chemical industry can capitalize on its massive export potential. 

The Congressional trade agenda should also include the reauthorization of the Miscellaneous Tariff Bill (MTB). U.S. manufacturers large and small use the MTB’s tariff suspension provisions to obtain raw materials, proprietary inputs and other products that are not available in our nation without incurring unnecessary tariff barriers. Each day that passes without an MTB process hurts American manufacturers’ 

ability to do business. In fact, the failure to pass the MTB has essentially imposed 

a tax on manufacturers of $748 million and economic losses of $1.857 billion over 

three years. The impacts extend to the people and businesses that depend on manufacturing. Ramifications are experienced throughout the supply chain, from the suppliers, to the millions of people who are employed in manufacturing, to the local governments that depend on the spending and tax revenue generated by the industry. 

Any action to reduce barriers to domestic production and increase the competitiveness of U.S. companies must include the reauthorization of MTB. 

For U.S. chemical manufacturers to succeed in today’s global economy, we must be 

able to compete effectively in international markets. For this reason, we support an 

ambitious trade agenda, including TPA and MTB, that deliver enhanced access to 

132 

overseas markets and support the competitive position of U.S. manufacturers. ACC 

looks forward to working with you to ensure that an ambitious trade agenda delivers on its promise. 

Sincerely, 

Michael P. Walls 

Vice President 

Regulatory and Technical Affairs 

UNITED STATES SENATE 

COMMITTEE ON FINANCE 

HEARING ON ADVANCING CONGRESS’S TRADE AGENDA: 

CONGRESS AND U.S. TARIFF POLICY 

APRIL 21, 2015 

STATEMENT OF THE DISTILLED SPIRITS COUNCIL 

OF THE UNITED STATES, INC. 

The following statement is submitted on behalf of the Distilled Spirits Council of 

the United States, Inc. (Distilled Spirits Council) for inclusion in the printed record 

of the Committee’s hearing on Advancing Congress’s Trade Agenda and U.S. Tariff 

Policy. The Distilled Spirits Council is a national trade association representing U.S. 

producers, marketers and exporters of distilled spirits products. Its member companies export spirits products to more than 130 countries worldwide. 

THE IMPORTANCE OF TRADE TO THE U.S. SPIRITS INDUSTRY 

The Distilled Spirits Council and its members have a strong and growing interest 

in trade, from a commercial perspective and from a policy perspective. As a commercial matter, our members have become increasingly reliant on exports to fuel 

growth. Indeed, global U.S. spirits exports have more than doubled over the past 

decade, reaching over $1.5 billion in 2014. This was the eighth consecutive year that 

exports of American-made spirits exceeded $1 billion. The majority of U.S. spirits 

exports are comprised of Bourbon and Tennessee Whiskey, which are recognized in 

several trade agreements as distinctive products of the United States. Exports of 

rum and other spirits also make a significant contribution to the U.S. economy. As 

of 2012, the distilled spirits industry supported 717,000 direct employees. Continuing to expand exports supports current and future employment in the industry. 

133 

1Source: U.S. International Trade Commission TradeDataweb. 

Given the growing importance of export markets to the industry’s long term 

growth, the Distilled Spirits Council has a strong interest in a wide range of trade 

policy matters and has long been a very active supporter of market-liberalizing 

trade initiatives. For example, the Distilled Spirits Council has strongly supported 

multilateral, regional and bilateral trade agreements. We are active participants in 

the business coalitions supporting the negotiations toward a Trans-Pacific Partnership Agreement (TPP) and Transatlantic Trade and Investment Partnership (TTIP), 

have supported Congressional approval of free trade agreements (FTAs) the United 

States has concluded with various trading partners, as well as the granting of Permanent Normal Trade Relations (PNTR) status to China, Vietnam and Russia. 

THE IMPORTANCE OF RENEWING TRADE PROMOTION AUTHORITY 

There is no doubt that past efforts by the United States to open foreign markets 

have contributed to the impressive gains the U.S. industry has made, and continues 

to make, in expanding U.S. spirits exports. Certainly, past grants of trade promotion 

authority provided previous administrations with the necessary leverage to secure 

significant market access commitments from trading partners. 

For example, during the Uruguay Round of GATT negotiations, distilled spirits 

were included in the ‘‘zero-for-zero’’ negotiations, in which the United States and 

European Union agreed to eliminate their respective tariffs on substantially all spirits. The value of U.S. exports to the European Union have more than tripled since 

the Uruguay Round agreements entered into force in 1995, from $184 million to 

$744.5 million in 2014. In addition, the implementation of FTAs has improved access for U.S. spirits exports to several important overseas markets, such as Australia, Canada, Mexico, Chile, Peru, Singapore, Korea, Colombia, Panama and Central America. Since the tariffs were eliminated under the U.S.-Australia FTA in 

2005, for example, U.S. spirits exports to Australia have grown by 70% to $131 million. Australia now ranks as the industry’s fourth largest export market worldwide. 

Such trade liberalizing efforts are critical to ensure that U.S. spirits exports are on 

a level playing field with domestically-produced spirits and other imported spirits. 

Despite these impressive gains, the U.S. spirits industry continues to confront formidable trade barriers, particularly in key emerging markets. India, for example, 

assesses an import tariff of 150% ad valorem on spirits and, as a result, U.S. spirits 

exports to India remain disappointingly low. In 2014, U.S. direct spirits exports to 

India were valued at $3.9 million, accounting for less than 0.3% of all U.S. spirits 

exports. Indeed, U.S. spirits exports to India remain far below U.S. exports to comVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00137 Fmt 6601 Sfmt 6621 R:\DOCS\99678.000 TIMD

041615.001
134 

2Source: Euromonitor International Database. 

parable markets, particularly in light of the fact that India ranks as the largest 

whiskey market in the world, both in terms of volume (1.5 billion liters in 2013) and 

value ($21.6 billion in retail sales in 2013).2 Other emerging markets with strong 

potential for U.S. spirits sales also maintain high tariffs on imports, including Vietnam (45%), which is participating in the TPP negotiations, Thailand (54–60%), and 

Brazil (20%). 

Moreover , international regulatory activities affecting product standards, labeling 

and certification requirements, among other non-tariff measures, have become increasingly problematic for the U.S. spirits industry. As a consequence, our organization devotes considerable resources to monitoring regulatory developments, principally through the notification procedures established under the WTO Agreements 

on Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures 

(SPS). In that connection, the Distilled Spirits Council has submitted numerous detailed comments with respect to proposed TBT and SPS measures that could impact 

trade in distilled spirits. 

Current and future trade negotiations offer an important vehicle to address tariff 

and non-tariff barriers that impede the ability of U.S. spirits exporters to gain a 

foothold in foreign markets. Specifically, negotiations towards a TPP agreement afford an important opportunity to open up key emerging markets, including Vietnam 

and Malaysia, to U.S. spirits exports. However, TPA is essential in order to bring 

these important negotiations to a successful conclusion. Failure to do so will provide 

trading partners with whom the U.S. is negotiating little incentive to make the key 

decisions needed to conclude strong, market-opening agreements, thus leaving U.S. 

companies, including spirits exporters, at a serious competitive disadvantage vis-a`- 

vis our overseas competitors. 

CONCLUSION 

In sum, international trade has become increasingly important to the U.S. spirits 

industry, and the ability of the United States to conclude high standard, comprehensive and trade liberalizing agreements with key partners will help to ensure the 

long term viability of the industry. TPA is absolutely vital to ensure that U.S. negotiators are empowered to conclude the strongest possible trade agreements to address the types of trade barriers that impede U.S. exports of distilled spirits. The 

Distilled Spirits Council, therefore, strongly supports swift congressional approval of 

the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, and 

we stand ready to cooperate closely with Congress in seeking the prompt approval 

of this legislation. 

Thank you very much for your consideration. 

Written Statement of: 

Dr. Peter H. Cressy 

President/CEO 

Distilled Spirits Council of the United States, Inc. 

1250 Eye Street, NW, Suite 400 

Washington, DC 20005 

(202) 682–8870 

Senate Finance Committee 

Congress and U.S. Tariff Policy 

April 21, 2015 

LeadingAge 

William L. Minnix, Jr., CEO 

The Honorable Paul D. Ryan, Chair 

The Honorable Sander M. Levin, Ranking Member 

Committee on Ways and Means 

U.S. House of Representatives 

Washington, DC 20515 

Dear Chairman Ryan and Ranking Member Levin: 

135 

On behalf of LeadingAge, I am writing about our concern over proposed trade legislation that would offset the cost of extending trade readjustment assistance benefits 

with another extension of Medicare sequestration. This offset is simply wrong, and 

we urge you to remove it from the legislation. 

Over the last few years, Medicare payments to post-acute care providers have taken 

a number of hits. The Affordable Care Act applies a productivity adjustment factor 

to the annual Medicare payment update, directly affecting resources necessary for 

good-quality care. Payments to skilled nursing facilities were cut by 11% across-theboard in 2011. Home health care payments are being rebased, which will substantially reduce reimbursement to providers. Last year, Congress enacted value-based 

purchasing for skilled nursing facilities, due to take effect within a few months. And 

the IMPACT Act enacted last year will lead to major revisions in post-acute care 

payment systems over the next few years. 

In 2015, the 2% Medicare sequestration resulted in no payment update for most 

post-acute care providers, since it essentially negated the 2% increase in provider 

costs that the Centers for Medicare and Medicaid Services (CMS) had calculated. 

Medicare sequestration is already scheduled to last a year longer than originally enacted because it was used to offset the cost of restoring cost-of-living increases in 

military pensions. Again, we do not argue with military pension policy, but the offset should not have come from a program providing essential health care coverage 

to seniors. 

As the large baby boom cohort ages, Medicare will face growing cost pressures. We 

also anticipate potential budget legislation later this year that could have an impact 

on the program. If savings have to be achieved in Medicare, they should be directed 

back into keeping it financially stable for the population it is intended to serve. 

Medicare must not be a piggy bank to offset the costs of legislation unrelated to the 

program. Please find other means of offsetting the costs of the trade measure soon 

to come before your committee. 

Sincerely, 

William L. Minnix, Jr. 

President and CEO 

About LeadingAge 

The mission of LeadingAge is to expand the world of possibilities for aging. Our 

membership has a service footprint of 4.5 million and includes a community of 6,000 

members representing the entire field of aging services, including not-for-profit organizations, state partners, and hundreds of businesses, consumer groups, foundations, and research partners. LeadingAge is a tax-exempt charitable organization focused on education, advocacy, and applied research. 

Statement for the Record 

National Association of Manufacturers 

733 10th Street, NW, Suite 700 

Washington, DC 20001 

Senate Committee on Finance 

Congress and U.S. Trade Policy 

April 21, 2015 

The National Association of Manufacturers (NAM) is pleased to provide the following statement to the Senate Committee on Finance on ‘‘Congress and U.S. Trade 

Policy.’’ 

The NAM is the nation’s largest industrial association and voice for more than 

12 million women and men who make things in America. Manufacturing in the U.S. 

supports more than 17 million jobs, and in 2014, U.S. manufacturing output reached 

a record of nearly $2.1 trillion. It is the engine that drives the U.S. economy by creating jobs, opportunity and prosperity. The NAM is committed to achieving a policy 

agenda that helps manufacturers grow and create jobs. Manufacturing has the biggest multiplier effect of any industry and manufacturers in the United States perform more than three-quarters of all private-sector R&D in the nation—driving 

more innovation than any other sector. 

136 

1 It is sometimes argued that hundreds of trade agreements have been negotiated without 

TPA. Those agreements are not the type that open markets overseas or include binding and 

state-of-the art dispute settlement. For example, Trade and Investment Framework Agreements 

provide a useful opportunity for the United States to engage in economic discussions with foreign governments but do not obligate either country to open its market or address barriers. 2Of all U.S. market-opening FTAs, only the U.S.-Jordan FTA was implemented without TPA. 

Notably, the Jordan FTA is much less comprehensive and less developed than our other FTAs, 

and most prominently lacks the state-of-the-art time-limited dispute settlement provisions that 

are found in the North American Free Trade Agreement and all subsequent FTAs. 

The NAM has long championed a robust trade and investment policy to grow 

manufacturing in the United States. At its core, a robust manufacturing U.S. trade 

policy should seek to open markets and level the playing field overseas, improve the 

competitiveness of manufacturers in the United States and ensure the strong enforcement of the rules of the trading system at home and by our trading partners. 

The Committee is marking-up major parts of that robust manufacturing trade agenda on April 22. The NAM’s views on Trade Promotion Authority and the other key 

pieces of legislation contained in the Chairman’s Mark are contained herein. The 

NAM also supports action on the ‘‘American Manufacturing Competitiveness Act of 

2015’’ by Senators Rob Portman (R–OH), Claire McCaskill (D–MO), Pat Toomey (R– 

PA), and Richard Burr (R–NC), that provides an important path forward on the 

Miscellaneous Tariff Bill (MTB) that helps promote the competitiveness of our country’s manufacturers. 

Bipartisan Congressional Trade Priorities and Accountability Act 

The NAM strongly supports the Bipartisan Congressional Trade Priorities and Accountability Act (H.R. 1890/S. 995), introduced last week by Senate Finance Committee Chairman Orrin Hatch (R–UT), Senate Finance Ranking Member Ron 

Wyden (D–OR), and House Ways and Means Chairman Paul Ryan (R–WI). This legislation sets forth the much-needed Executive-Congressional framework to ensure 

that both branches of government work to achieve the strongest possible outcomes 

in our trade agreements. This legislation also provided important updates to the traditional TPA framework, including with respect to priority negotiating issues consistent with the NAM’s priorities. 

TPA is a longstanding and proven procedural partnership between Congress and 

the Executive Branch that facilitates negotiation and approval of trade agreements 

that open markets for manufacturers in the United States. As set out in the new 

legislation, Congress sets forth trade negotiating objectives, increasing Congress’s 

role in shaping international trade negotiations. 

As detailed in NAM’s Trading Up with TPA report, trade agreements negotiated 

under TPA deliver for manufacturers and their employees. America’s 20 existing 

free trade agreement partners account for less than ten percent of the global economy but purchased nearly half of all U.S. manufactured goods exports in 2014. 

New trade agreements would give the more than 256,000 manufacturers in the 

United States—and their more than 12.3 million employees—better access to the 95 

percent of the world’s consumers who live outside the United States. At $11.8 trillion, world trade in manufactured goods is nearly three times the size of the $4.1 

trillion U.S. domestic market for manufactured goods. 

In doing so, strong trade agreements negotiated under TPA would boost U.S. 

manufacturers’ confidence that they can compete on a level playing field internationally. The United States has one of the most open economies in the world. 

America has the lowest applied tariff of any G–20 country according to the WTO, 

with more than two-thirds of all manufacturing imports entering the United States 

duty-free since 2013. But U.S. manufactured goods exports face higher tariffs, nontariff barriers and other unfair trade practices overseas than exports from China, 

Germany, Mexico and other major economies according to the World Economic 

Forum. By eliminating these discriminatory and unfair barriers overseas, trade 

agreements negotiated under TPA will provide substantially greater opportunities 

for businesses and their employees in the United States. 

To negotiate the type of comprehensive, high-standard and market-opening trade 

agreements that have driven export growth and jobs across the country, TPA is essential.1 TPA legislation has been in place and was utilized during the negotiation 

and implementation of the Uruguay Round Agreements creating the WTO and for 

13 FTAs negotiated since 1974.2 Without TPA, manufacturers in the United States 

have been standing on the sidelines while other countries negotiate deals that don’t 

include—and disadvantage—the United States. TPA last expired in 2007, and the 

137 

United States has not concluded any new agreements since then. That is nearly 

eight years ago. U.S. manufacturers cannot afford to wait any longer. 

Action on TPA is vital to ensure that U.S. negotiators can bring home the strongest possible outcomes in both the ongoing Trans-Pacific Partnership (TPP) and 

Transatlantic Trade and Investment Partnership (T–TIP) talks that will set in place 

new and stronger rules to level the global playing field and to engage in major new 

negotiations. Such legislation is also needed for the World Trade Organization Environmental Goods Agreement and Trade in Services Agreement talks and future negotiations. 

Time is of the essence. Other major economies are already negotiating dozens of 

agreements without the United States that could put manufacturers and workers 

in the United States at a significant competitive disadvantage. If Congress does not 

move expeditiously to pass TPA and ensure the United States continues to lead in 

striking trade deals that drive manufacturing growth and job creation, we will be 

forced to sit on the sidelines while other countries negotiate deals that exclude us. 

The Bipartisan Congressional Trade Priorities Act and Accountability of 2015 provides a very strong model to move forward on TPA as soon as possible. Not only 

does this legislation set forth clear and ambitious goals to eliminate tariffs and open 

overseas markets to U.S. goods, services and investment, it also establishes powerful new trade negotiating objectives that address existing and emerging commercial 

challenges to manufacturing growth and exports in markets around the world. 

For the first time in a TPA bill, the Bipartisan Congressional Trade Priorities Act 

confronts the serious and growing problem of forced localization barriers to trade. 

It seeks to eliminate trade distortions and unfair competition from state-owned enterprises and to promote regulatory transparency, procedural fairness and rulemaking based on risk assessments and sound scientific evidence. It includes critical 

new provisions addressing cyber theft and protecting trade secrets and confidential 

business information. 

The legislation would foster manufacturing growth and innovation here in the 

United States. It includes highly important negotiating objectives to establish more 

open and fair trade in goods, improved transparency and protections and enforcement for intellectual property. 

The negotiating objectives also seek to ensure that U.S. property overseas is treated fairly and in accordance with core U.S. due process principles, subject to 

Investor-State Dispute Settlement. As explained this week in a letter from 62 business organizations representing millions of manufacturers and businesses across the 

United States, ‘‘[t]hese provisions promote fairness and the rule of law overseas, 

while helping to sustain and grow the U.S. economy.’’ These provisions provide recourse against unfair and discriminatory treatment overseas. 

Just as importantly, the legislation would restore the vital partnership between 

Congress and the President that facilitates the negotiation and approval of trade 

agreements. It enhances congressional oversight over trade negotiations and, for the 

first time, explicitly confirms and provides that any Member of Congress can access 

negotiating text, submit views and attend trade agreement negotiating rounds. Separate House and Senate advisory groups would oversee ongoing trade talks, including through regular, scheduled meetings. 

At the same time, the Bipartisan Congressional Trade Priorities and Accountability Act will empower U.S. negotiators to bring back the strongest possible trade 

agreements to open markets and level the playing field. Without this authority, our 

trading partners have little incentive to make tough decisions or put their best offer 

on the table. 

From the NAM’s perspective, this legislation provides the type of framework needed to secure new, market-opening trade agreements. The NAM urges Congress and 

the Administration to move forward on the Bipartisan Congressional Trade Priorities and Accountability Act as quickly as possible. For more information, please see 

more information on the NAM’s website. 

Other Trade Legislation 

The NAM also strongly supports the following legislation being considered by the 

Committee: 

• The retroactive extension of the Generalized System of Preferences (GSP) program that provides duty-free treatment to non-import sensitive products from 

developing countries that meet important eligibility criteria. This important legVerDate Mar 15 2010 20:28 Apr 07, 2016 Jkt 000000 PO 00000 Frm 00141 Fmt 6601 Sfmt 6621 R:\DOCS\99678.000 TIMD
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3 ‘‘Antidumping Duty ‘Evasion Services,’ ’’ paper from the United States to the WTO Committee on Anti-Dumping Practices, Informal Group on Anti-Circumvention (17 Mar. 2015), 

accessed at http://documents.nam.org/IEA/G-ADP-IG-W-54.pdf. 

islation, which is contained in the AGOA Extension and Enhancement Act of 

2015 (H.R. 1891), introduced by House Ways and Means Chair Ryan and Ranking Member Sander Levin (D–MI) and Senate Finance Committee Chairman 

Hatch and Ranking Member Levin, is vital for many manufacturers that require manufacturing imports from overseas and helps grow the global competitiveness of the U.S. manufacturing sector. 

• The customs modernization provisions of the Senate Finance Committee Chairman’s Mark that will improve the operations of Customs and Border Protection 

(CSP), cut red tape to prevent delays and improve manufacturers’ ability to participate more competitively in the global economy. The Senate’s proposed bill 

contains many customs modernization provisions that the NAM had sought to 

address problems in customs processing including on key issues such as duty 

drawback modernization, exemption from duty for container residue and protection of intellectual property rights. 

• The Enforcing Orders and Reducing Customs Evasion Act (ENFORCE) provisions of the Senate Finance Committee Chairman’s Mark. This legislation is 

critical to ensure the full and fair enforcement of the trade remedy laws that 

help manufacturers address government-subsidized and other unfair competition. Too often, we hear from our manufacturers that they have spent significant time and resources to utilize the trade remedy rules and obtain 

antidumping/countervailing duty (AD/CVD) orders only to find importers that 

are evading these orders. When manufacturers request that CSP investigate 

these cases of evasion, years often pass with no resolution, hindering the ability 

of U.S. industry to remedy the injury they have suffered from unfair imports. 

As detailed recently by the Office of the United States Trade Representative 3

‘‘the United States has witnessed a dramatic increase in activities expressly designed to evade the application of antidumping duties.’’ Title V of the Chairman’s Mark includes an important remedy to this problem by creating a process 

for CBP to review and act to reclassify imports that have been found to be evading trade remedy orders. This legislation provides basic due process procedures 

for domestic manufacturers, including timelines for CBP to act and the potential for judicial review. 

Conclusion 

In manufacturing communities across America, the gains from trade can and should be increased. The United States achieved a record level of $1.4 trillion in 

manufactured exports last year, but we can do better so that America can expand 

manufacturing and jobs here at home. To improve the global competitiveness of 

manufacturers in the United States and grow our manufacturing economy, the NAM 

urges prompt action on TPA, in addition to the extension of GSP, customs modernization legislation and new ENFORCE provisions that will advance our global 

competitiveness and the full enforcement of our trade agreements and existing domestic trade rules. 

National Farmers Union 

20 F St. NW, Suite 300 

Washington, DC 20001 

TESTIMONY OF ROGER JOHNSON 

PRESIDENT 

NATIONAL FARMERS UNION 

SUBMITTED TO THE U.S. SENATE COMMITTEE ON FINANCE 

REGARDING CONGRESS AND U.S. TARIFF POLICY 

APRIL 21, 2015 

WASHINGTON, DC 

Introduction 

On behalf of family farmers, ranchers, and rural members of National Farmers 

Union (NFU), thank you for the opportunity to submit testimony regarding U.S. 

trade policy and Trade Promotion Authority. NFU was organized in Point, Texas in 

139 

1 Nat’l Farmers Union, 2015 Policy of the National Farmers Union (2015) available at http:// 

www.nfu.org/nfu-2015-policy/2066. 2 USDA Economic Research Service available at 

http://www.ers.usda.gov/topics/international-markets-trade/us-agricultural-trade.aspx. 

1902 with the mission of improving the well-being and economic opportunity for 

family farmers, ranchers, and rural communities through grassroots-driven advocacy. That mission still drives NFU’s work today. As a general farm organization, 

NFU represents agricultural producers across the country and in all segments of agriculture. 

NFU, as directed by its policy adopted by delegates to its annual convention, advocates for fair trade. NFU recognizes that international trade is an important part 

of successful family farming in the U.S., but increasing trade is not an end unto 

itself. NFU policy states, ‘‘Every future trade agreement must address differences 

in labor standards, environmental standards, health standards, and the tradedistorting effect of currency manipulation and cartelization of agriculture markets.’’ 1

The original intent of Trade Promotion Authority (TPA) was to lay out the procedures for notification between the executive and legislative branch and the expedited legislative process for approval. Beyond the procedural components of Trade 

Promotion Authority, and most importantly, the legislation sets forth the objectives 

for any president for negotiating trade agreements. The Trans-Pacific Partnership 

negotiations are largely completed, so there is no need for Congressionally assigned, 

unenforceable objectives. Objective-setting should occur prior to the start of negotiations, not near the end. 

Balancing Trade 

For years, trade agreements have been touted for their ability to open up markets 

for agricultural exports. Agriculture has had the good fortune to fair relatively well 

in trade. Since 1960, U.S. agricultural exports have been larger than agricultural 

imports, creating a surplus in agricultural trade.2 This surplus is important for the 

overall economy because it helps offset the massive overall trade deficit, which totaled over $505 billion in 2014, a six percent increase from 2013. The overall trade 

deficit represents roughly three percent of the U.S. Gross Domestic Product (GDP). 

The trade deficit causes a drag on overall growth of the economy. With a strengthening U.S. dollar, the deficit is likely to grow in 2015, as a strong U.S. dollar will 

encourage imports and reduce exports. 

In the first three years of the Korea-U.S. Free Trade Agreement, remarkably and 

unfortunately, U.S. agricultural exports have stagnated at zero percent, and the 

overall trade deficit with Korea has increased to $12.7 billion, an estimated 84 percent increase. After implementation of the free trade agreement, agricultural exports have failed to increase to Korea, despite increasing six percent overall. When 

even agriculture fails to grow as a result of trade agreements, the overall trade policy must be reevaluated. The U.S. reduced tariffs with Korea, and as a result, more 

Korean products are in the U.S. than the U.S. has shipped to Korea. The deficit has 

negative impacts on jobs and rural communities. 

The massive overall trade deficit exists despite the U.S. having free trade agreements with 20 countries, including major trading partners like Canada and Mexico. 

Because of the significant impact the trade deficit has on the U.S. economy, all future trade agreements, such as TPP and the Transatlantic Trade and Investment 

Partnership (T–TIP), must have the explicit objective of balancing trade. NFU is disappointed this objective was not included in the Bipartisan Congressional Trade Priorities and Accountability Act of 2015. 

Currency Manipulation 

One of the major contributing factors to the massive trade deficit is currency manipulation. Currency manipulation occurs when other countries deliberately lower the 

value of their currencies relative to the U.S. dollar to gain an unfair advantage. This 

uniquely American issue, due to the role of the U.S. dollar in the global economy, 

effectively acts as a subsidy on that country’s exports and a tax on U.S. exports. 

One of the members of the TPP negotiations, Japan, is a major currency manipulator. In a report by the Economic Policy Institute (EPI) evaluating the impact of 

trade with Japan, EPI found that 896,600 U.S. jobs have been lost due to the U.S.- 

140 

3 Economic Policy Institute, Currency Manipulation and the 896,600 U.S. Jobs Lost Due to the 

U.S.-Japan Trade Deficit (2015) available at 

http://www.epi.org/publication/currency-manipulation-and-the-896600-u-s-jobs-lost-due-tothe-u-s-japan-trade-deficit/. 4 U.S. Department of the Treasury, Report to Congress on International Economic and Exchange Rate Policies (2015) available at http://www.treasury.gov/resource-center/international/ 

exchange-rate-policies/Documents/2014-4-15_FX%20REPORT%20FINAL.pdf. 

Japan trade deficit.3 Currency manipulation is the single most significant cause of the trade deficit with Japan, which totaled $78.3 billion in 2013 for goods. 

The issue of currency manipulation is not exclusive to countries with which the U.S. 

does not have trade agreements. In fact, the latest free trade agreement the U.S. 

entered into with South Korea suffers the same issues with currency manipulation 

as Japan. Earlier this month, the U.S. Treasury Department issued its semiannual 

report on international economic and exchange rate policies. In its report, its 

harshest criticism of currency manipulation was reserved for South Korea, not 

China. The report stated, ‘‘Korean authorities appear to intervene on both sides of 

the market but, on net, they have intervened more aggressively to resist won appreciation.’’ 4 The U.S. entered into a free trade agreement with Korea in March of 

2012. The U.S.-Korea Free Trade Agreement (KORUS) used the same failed blueprints of previous trade agreements and failed to include provisions to address currency manipulation. South Korea has, and continues to be, one of the world’s major 

currency manipulators. Currency manipulation has the capacity to eliminate any 

gains in tariff reductions that may be made in free trade agreements. Without 

measures to enforce restrictions on currency manipulation, free trade agreements 

fail to live up to the promises made by their supporters. 

Currency manipulation remains a top concern of NFU, particularly in the context 

of TPP. Members of the TPP negotiations are well known currency manipulators, 

including Malaysia, Singapore, and Japan. With passage of Trade Promotion Authority, Congress eliminates its capacity to ensure that this significant trade agreement contains enforceable measures to address currency manipulation. 

Conclusion 

NFU’s policy book states, ‘‘The measure of the success of a trade agreement has to 

be its benefit to U.S. agriculture and specifically of its producers’ net income. Vague 

promises of ‘market access’ to foreign markets do not offset opening our border for 

even larger amounts of foreign-produced goods to enter our markets. Market access 

does not equal market share.’’ 

Since TPP almost certainly contains no measures to address the trade deficit or currency manipulation and TPA fails to address these major concerns, NFU opposes 

TPA. Congress should maintain its Constitutional authority and review the trade 

agreements in a transparent manner. 

LETTER SUBMITTED BY 21ST CENTURY FOX ET AL. 

April 21, 2015 

The Honorable Orrin Hatch The Honorable Paul Ryan 

Chairman Chairman 

Committee on Finance Committee on Ways and Means 

U.S. Senate U.S. House of Representatives 

219 Dirksen SOB 1101 Longworth HOB 

Washington, DC 20510 Washington, DC 20515 

The Honorable Ron Wyden The Honorable Sander M. Levin 

Ranking Member Ranking Member 

Committee on Finance Committee on Ways and Means 

U.S. Senate U.S. House of Representatives 

219 Dirksen SOB 1106 Longworth HOB 

Washington, DC 20510 Washington, DC 20515 

Dear Chairmen Hatch and Ryan and Ranking Members Wyden and Levin: 

We write in strong support of the Bipartisan Congressional Trade Priorities Act of 

2015 (BCTPA). America’s film and television industry is one of the few that runs 

a persistent trade surplus—over $13 billion in 2013. More broadly, America’s core 

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ica’s biggest trade success stories. Total foreign sales (exports + licensing and royalty revenue) of these industries exceeded $156 billion in 2013—which is larger than 

total foreign sales of many other major U.S. industries, including aerospace, chemicals, and all of agriculture. 

As these numbers show, international markets are already critically important to 

the U.S. movie and television industry and the two million men and women whose 

jobs depend on it. On average, over 60% of film revenue comes from overseas markets. Foreign market sales also provide an important source of revenue supporting 

U.S. television productions. Overseas markets will be increasingly important in the 

future. 

For the U.S. movie and television industry, the intellectual property (IP) chapters 

of U.S. free trade agreements (FTAs) are critical. All over the world, a lack of adequate IP protection is an effective market access barrier for the U.S. creative and 

innovative industries. Many of our trading partners do not provide nearly the level 

of copyright or other IP protections as the United States. The IP chapters help raise 

standards to a basic level of protection for America’s creative and innovative industries—still significantly lower than the level provided by U.S. law, but usually major 

improvements from the standards in the absence of the FTA. 

Other provisions of FTAs are also important. The Services chapters help break down 

barriers to U.S. audio-visual productions such as screen quotas, primetime limits, 

investment restrictions, and distribution limits. The e-commerce and digital trade 

provisions are also increasingly critical. The U.S. movie and television industry is 

already one of America’s biggest Internet industries and will increasingly rely on 

digital distribution channels in the future. 

BCTPA’s objectives provide the right foundation for USTR to negotiate strong agreements for the U.S. creative industries and the millions of workers they employ. We 

urge you to move swiftly to approve the legislation and look forward to working with 

you to help. 

Sincerely, 

21st Century Fox 

NBCUniversal 

Sony Pictures Entertainment Inc. 

Time Warner Inc. 

Viacom Inc. 

The Walt Disney Company 

Æ